Haruhito Takeda,Nihon Sandogyo Shi (A History of the Japanese Industry)

Reviewed by Masaru Udagawa Hosei University

Haruhito Takeda's Nihon Sandogyo Shi(A history of the Japanese Copper Industry)is a detailed study of the development of cop per mining in Japan between1870and1930.The author divides his study into three distinct time periods:1870-1890,1890to the end of World War I,and1918-1930. For each of these periods,he examines how the developing copper mining industry established a capitalist managerial system,and how what was done in the industry led to the emergence and consolidation of a particular kind of industrial struc ture.The author has selected the copper industry for a number of reasons.First,copper was,after raw silk and cotton goods,Japan's most important export commodity prior to1918and thus was a vital source of the foreign currency that was so necessary for Japan's growth as a modern industrial state.Second,most of the major made copper mining one of their industrial cornerstones before World War II,and the industry in fact often served as the basis for the zaibatsu's efforts at diversification. I would like to summarize what the author has to say with regard to the aforementioned three periods.His focus for the period1870-1890 is on the two-fold policy toward mining operations adopted by the new government.The first aspect of this policy was the establishment of a legal framework for the mining industry.Initially,the government took steps to guarantee that mines were publicly operated for the benefit of the state;but the government altered its policy as privately run mines began to flourish,and in1890recognized the right of private citizens to run mines freely and to assert claims over mining areas.The second aspect of this policy was the public administration of large mines and the subsequent sale of these mines to private entrepreneurs. Following the ,the new government took over the management of(and the revenues from)the large mining operations set up shortly before by the and by a number of feudal lords;but it gradually sold off these mines to private parties in the1880s in order to extricate itself from its own financial difficulties

210 and to encourage the growth of investment opportunities for private entrepreneurs.At the same time,the government was able,as a result of its policies,to bequeath to these entrepreneurs the technical and managerial expertise it had sought so eagerly to import from the West when the mines were under public management.The importance the Meiji government attached to mining and the measures it took to pro mote the industry in general explain the speed with which the copper mining industry,in decline at the time of the Restoration,was able to assume so vital a role in the export market.By1890,private industry in general was thriving in Japan;and amid this prosperity,three major copper mining operations―those of Sumitomo,Furukawa and Mitsu bishi―had been established. For the period between1890and1918,the author examines how the export-orientedcopper industrydeveloped as a large-scalecapitalist industry.Inthis context,the importation and widespread adoption of pyriticsmelting after1909had an especiallypronounced effecton the industry.First,thenew technique was substantiallycheaper,quicker and more efficientthan earliermethods had been;improvements in smeltingin turn led to more efficientand more mechanized excavation techniques.One resultof the changes in production methods was a declinein the use of the internalcontract system that untilthen had played an important rolein the mining industry,andan increasingten dency for the mine owners themselves to handle mine operations directlyand to institutetheir own organizationalimprovements.Sec ond,the introductionof pyriticsmelting prompted the increaseduse of convertersand electricfurnaces for the smeltingprocess,and thiscon tributedto improvements in the qualityof export copper.And third, pyriticsmelting made itpossible for producers to run a varietyof min ing operationsat one time;as a result,major industrialistsbecame increasinglyinvolved in the industry,and the market for ore expanded considerably. The riseof new mining entrepreneurswas another important fea ture of the period.Fujitaand Kuhara in particulartook advantage of the pyriticsmelting technique to buy up,refineand market ore extract ed by others.Theiroperations grew rapidly,andin time they dominat ed the industry along with Mitsubishi,Sumitomo and Furukawa . These fivecompeted furiouslyduring the boom years of World War I, and itwas during thistime thatthey matured as capitalistenterprises. For the period after World War I,the author examines to what extent monopolistic enterprises were developed in the copper mining industry,dominated as it was by the aforementioned five companies.

211 Japanese copper producers losttheir international competitiveness in the severe depressionthat followed the war;heretoforean exporter of copper,Japan now found itselfimporting the ore as domestic produc ers were overwhelmed by competitionfrom cheap,mainly American, copper.Beyond that,however,Japan'scopper mining industryhad its own internalproblems.Domestic copper producers competed vigor ously to rationalizetheir operations;but there were limitsto what they could do in thisrespect,and during the interwarperiod many medium and small-scaleproducers simply closed theirdoors.The disappear ance of these producers effectivelyincreased the monopolistichold on the industryenjoyed by the zaibutsuenterprises,which were able to restore a degree of harmony between labor and management and increasethe productivityof theiroperations substantially.These com panies requested that the government increaseimport dutieson cop per ingotand,in an attempt to keep pricesstable,set up theirown sales cartels(orcooperated in such activities).Inso doing,they solidified theirgrip on the domestic copper market. In his examination of Japan's copper mining industry,Haruhito Takeda has discovered and analyzed a wealth of primary source mate rial to produce an authoritative study.The mere fact that no substan tive examination of this important industry has ever been done adds to the value of this work's contribution to our knowledge of Japan's economic and business history. As noted above,the author chose to look at Japan's copper mining industrybecause of the industry'srole in the acquisitionof foreign cur rency during the Meiji period and because copper mining was an important part of zaibatsu operations.My own feelingis that the author has done well in hisanalysis of the firsttopic,less so in histreat ment of the second.Given the important researchon the zaibatsuthat has been done in recentyears,and given the author'simpressive qual ificationsto handle the subject,Iwish that hisexamination of the role of copper mining operationsin the formation,growth and evolution of the zaibatsuhad been a bit more comprehensive.I would also have preferred to see a more detailedconsideration of the motives and objectivesof those entrepreneurswho ran the copper mines,and of how the response of individualentrepreneurs to changing externalfac tors affectedthe way the mining industrywas actuallymanaged.A deeper analysisof these topicswould have enabled the author to pro vide us with an even more dynamic and vividhistorical portrait of the copper mining industry.Theseshortcomings notwithstanding,Takeda has clearlywritten an outstanding work,one that I recommend

212 enthusiastically to students(particularly foreign students)of Japanese economic and business history.

Translated by Stephen W.McCallion

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