The Formation of Monopoly by the Japan Spinning Industry before the First World War : The Cartelization of the JCSA and China

Abstract

The subject matter of this study is to exmine the pattern of cartelization by the Japan Cotton Spinners Association (JCSA) before the First World War. Japan's cotton spinning industry, which had become highly dependent on export markets after the Japan-China War, was regulated by the deterioration of export market conditions since 1897 as well as financial stringencey in the domestic economy. This industry was then also regulated remarkably by the speculative transactions of the domestic traders of cotton yarn and the Chinesse merchants which had immoderately influenced the price of cotton yarn. The move towards the cartel arrangement by the JCSA was thus required as a counter-measure to the above-mentioned business recession, and it was promoted by the government and Mitsui Bussan. In this respect, the government had undertaken the 'Reduction of Production Plan' as a policy to limit to domestic supply of cotton yarn, while Mitsui Bussan had put the 'Export Promotion Policy Policy for Cotton Yarn and Cloth' forward with an aim to counter operation of Chinese merchants. These measures were supposed to limit the domestic supply of cotton yern by the expansion of the export, and therefore, to regulate the price of cotton yarn. However, the arrangement for cartelization after the Japan-China War was subjected to limitations. The formation and the continuation of such cartel had been impeded by the conflict of interests arising out of the differences in the rate of export dependency and the desire to secure one's own market territory among the members of JCSA. Blessed by the business boom during the Japan-Russia War, the JCSA gained such an oligopolistic position that it could be controlled by certain number of leading enterprises with regards to the policy decision-making process. As a consequence, the major leading enterprises gradually intensified their cartel activities, and reorganized the JCSA for the formation and the continuation of internal cooperation. On the other hand, however, this arrangement was the process that restrained gradually the low-ranking minor enterprises from voicing their views and suggestions. Under the background of such cooperative arrangements, the cartel activities of JCSA became to result in wider practical impacts. Above all the regulation of the price of cotton yarn through the export promotion policy was important, and this activity has substantially reduced the dominance of Chinese merchants in foreign trade. In addition, to secure the market in China was necessary for the stabilization of cotton yarn price at high level through the export promotion policy. The JCSA changed therefore its character into a positive pressure group against the national policy about China. This process shows the emergence of imperialist character of the JCSA with such a cartel arrangement.