2017 Volume 63 Issue 2 Pages 136-147
The institution of trade associations played a significant role in the formation of characteristic rural textile production areas during the prewar period. In these areas, textile industries as well as administrative authorities required trade associations, organized by all the local traders concerned, to correct the mass production of inferior goods. These independent efforts for quality control could nowhere be seen as clearly as in private associations which were not subject to supervision by any administrative authority. By a comparison of major habutae* silk production areas, this paper intends to demonstrate both theoretically and empirically that no trade association could achieve its initial objectives without private regional approaches to quality control.
Grades of habutae silk, an important export, could be much more reliable when refined fabrics were inspected than when raw ones were inspected, because the market for raw fabrics was structurally the same as what economists term “the market for lemons,” (by which Americans mean inferior used cars.) In Fukui Prefecture, more and more non-official associations began dealing with refined fabrics in the 1890s in order to reduce transaction costs. After that, the grades inspected by the local trade association became more and more reliable even overseas. In Ishikawa Prefecture, on the other hand, grade inspection was placed under the control of the local government when the existing trade association was divided in 1898. This market intervention was eventually successful, but new trade associations could not clear the market of inferior fabrics on their own due to the lack of private regional approaches to quality control.
In Fukushima Prefecture, the local trade associations tried to make grade inspection much more efficient by the expansion of dealings with refined fabrics instead of raw ones. However, business dealings with raw fabrics in the market place were convenient for those farmers around Kawamata Town whose secondary job was to manufacture habutae silk, so the local government kept market intervention to a minimum in the 1900s. After the rapid introduction of the power loom, some full-time manufacturers established a private association in 1911 and began dealings with refined fabrics through its direct sales depot in Yokohama. Other private associations were subsequently established in Kawamata Town, and the local government urged all private associations to become united into one under the supervision of the Ministry of Agriculture and Commerce. Thanks to direct dealings with refined fabrics through this united association, not only did grade inspection begin to work well, but also rural part-time manufacturers could continue dealings in raw fabrics in the market place.
