Katakura and Gunze's Position in the High Quality Raw Silk Market in the 1930's

Abstract

This article aims to demonstrate the dominating position held by Katakura & Co., Ltd. and Gunze Silk Mfg. Co., Ltd., in other words the market monopoly by these two companies, in the high quality raw silk market (especially for stockings) in the 1930's. During the panic in the Showa era Katakura and Gunze accomplished high degrees of production centralization of top quality raw silks and subsequently the market monopoly based on the introduction of multi-ends reeling machines together with the monopolized supply of best cocoon secured by special contracts with farmers. After the panic period the two companies continued to dominate the raw silk market throughout 1930's. The following is a brief description of the development paths of these two companies in the 1930's. During the panic in the Showa era Katakura established a purchasing system of cocoons by special contracts and achieved a real mass production system by multi-ends reeling machines. On the other hand, at the beginning of the Showa era Gunze had already possessed both superb techniques and top quality cocoons. Then at the end of the panic period Gunze was quick to introduce multi-ends reeling machines into filatures and consequently it could further increase the production of high (especially best) quality raw silks. As a result, two markets, that is, W.14 d. high quality raw silk market for stockings and 21 d. high quality raw silk market for fabrics were monopolized by these two companies at the end of the panic in the Showa period. Among their monopolized markets, in particular, Katakura had its market power over the best quality raw silks of W.14 d. and W.21d., whereas Gunze had its competitiveness over the best quality raw silks of Y.21 d.. The monopolized markets, especially the high quality raw silk market for stockings, brought a large sum of premiums to both companies. And accordingly they could gain fast profits (-monopoly profits). After the panic era, Katakura and Gunze bred and distributed new and improved silkworw races to sericulturists with special contracts. On the one hand technical guidance to the sericulturists was reinforced and on the other hand inefficient sericulturists were dismissed. Moreover, they increased multi-ends reeling machines. Specialization in producing W.14 d. high quality raw silk and it further grading up were pursued by both companies. As a result, the two companies continued to monopolize the high quality raw silk market for stockings since the panic era. In this market, in particular, Gunze had its market power over the best quality raw silks and Katakura had its strength over the high quality raw silks of "3A-2A" grades. Gunze and Katakura monopolized the high quality raw silk market for stockings and consequently could receive a large sum of premiums. And accordingly they could gain fast profits (-monopoly profits).