The aim of this paper is to present the entrepreneurial activities of local enterprises during the pre-war period by analyzing the fund raising approach of Chichibu Railway Co., Ltd. between the early 1900s and mid 1920s. The funds raised were instrumental in the railway company's success in large-scale capital investments like the electrification and electric actuation of their train carriages in a short period of time. In conclusion, it was evident that the 2nd generation manager, Sadakichi Kakihara was not only able to expand business activities in the local areas, but also actively do so in Tokyo and raised funds with highly favorable standings.
For the funds raised between 1900 and 1907, it was necessary to have collaterals for small sums of money borrowed at high interest rates for a short period from small-scale local banks situated along the railway lines that were concurrently run by the board of directors. The board of directors had to use their own securities or the company's stocks as collaterals. However, by relying solely on the local banks, it was unable to provide sufficient funds for the railway construction. It was during 1907, when Kakihara became the manager that he took the initiative to approach Tokyo's Eiichi Shibusawa for loan financing and the two entered into an agreement. The debt financing terms of Shibusawa, who had connections with banks in Tokyo, were such that there was sufficient funding with low-interest rate for the construction of the railways. In addition, the loan was for the long term.
Subsequently, with regards to financing for the electrification works of the railway, Kakihara then raised funds from Bushu Bank which had been inaugurated as an external board. Although Chichibu Railway Co., Ltd. was able to increase profits, retained earnings for the company were reduced because of the increase in corporate dividend ratio. Due to Kakihara's business activities making inroads into Tokyo, success in large-scale capital investment with the funds raised was made possible.

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The purpose of this article is to observe the effects of land-use regulation on industrial agglomeration, focusing on the machinery industry in Tokyo, and to investigate the net outcome of the merits of industrial clustering and the land-use regulation.
In Japan, city planning started in the 1920s. Zoning is one of the measures of city planning, which classified areas into those for residence, commerce, and industry. For manufacturers, it was restrictive in the sense that limits of factory size were imposed in the residential and commercial areas. In Tokyo City, there were six wards where machinery factories had been agglomerated for more than 20 years. Out of them, only two wards were designated as the industrial areas and most industrial areas located in counties surrounding Tokyo City. Consequently, many manufacturers resisted to the zoning, which made the government ease the regulation.
Econometric analyses show that designation as residential, commercial and undecided areas, especially residential area, had a negative effect on the size of factory and the number of entries. On the other hand, despite of the negative effects of zoning, according to the documents which the manufacturers filed for petition, they hesitated to move to the counties outside Tokyo City. They complained that in the counties infrastructures were lacked and access to the labor market and supporting industries was difficult. These facts indicate that the merits of industrial clustering, especially the external economy, which Alfred Marshall emphasized, significantly affected the location decision of manufacturers in prewar Tokyo. As a result, zoning failed to expel factories from areas not for industry in Tokyo City.
On the other hand, in the counties, unlike in Tokyo City, zoning succeeded to concentrate factories into the industrial areas, to some extent. That was because the start of zoning preceded the formation of clusters in counties.

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