This paper aims to grasp the Japanese government railways' freight operations during the interwar period as an integrated ‘transportation system’, and clarify how it was formed and developed. The ‘transportation system’ here means an integration of policies and measures adopted for freight operations. The analysis covers even the role of individual managers who contributed to freight business reforms, corresponding appropriately to different circumstances at each stage of business procedure.

The government railways' freight organization was composed of traditionally separated‘line’ and ‘staff’ sectors, and the former was divided into two: the ‘transportation’ division in charge of train operations, and the ‘wagon distribution’ division in charge of distributing empty wagons and collecting loaded ones. After the 1907 railway nationalization, the new government railways badly needed a nation-wide unified freight system. Moreover, rapid growth of demand due to the boom during the WWI urgently required efficient use of transport capacity. However, the ‘line’ sector hardly coped with the changing circumstances in the 1910s, despite some improvements in ‘staff’ sector. In particular, wagon distribution was controlled by old managers of former private railways, continuing decentralized operations.

The 1919 transportation disruption revealed the defects of the old system, and establishing a truly centralized system became the most urgent challenge. Finally, the new Wagon Distribution Division was founded under the Transportation Department of the Ministry of Railways, and skilled experts were called to Tokyo to serve the new headquarters. Frequent adjustments and clear transportation planning were made possible by this reform. Ryukichi Nakayama, an eminent bureaucrat of the Railway Ministry, led the entire reform process and served as the first chief of the new division.

Through this reform, a centralized wagon distribution system was established, leading to clear separation of ‘line’ and ‘staff’ sectors, and from this time onward, the rail freight‘transportation system’ at each period was shaped through cooperation and occasional confrontation between the newly established ‘line’ and ‘staff’ sectors.

This paper examines the influence of foreign alliances on competitive advantage in the Japanese record industry prior to World War Ⅱ. In pre-war Japan, the main industry competitors were Nihon Chikuonki Shokai (NCS), Nihon Victor Chikuonki (NVC), Nihon Polidor Chikuonki (NPC), King Record (King), Teikoku Chikuonki (Teikoku), and Dainihon Chikuonki (Dainihon). NCS and NVC had alliances with companies in the United Kingdom and the United States, while NPC and King partnered with German record companies. In contrast, Teikoku and Dainihon remained purely Japanese companies, without foreign affiliations.

What benefits did the record companies receive from their foreign partnerships? And, how did the alliances influence the strategies of their counterparts?

As concerns Western music recordings, the companies with foreign alliances maintained a formidable competitive advantage throughout the pre-war period. On the other hand, for recordings of Japanese music, technological disparity between firms with foreign alliances and solely Japanese firms were essntially erased, and the latter rose to competiveness with the former, especially in the so-called “ryukoka” (Japanese popular songs) market. Thus, the foreign-allied-companies were forced to focus on Japanese music more than ever, this in turn accelerated the expansion of the Japanese music records market. In this context, foreign-partnered companies, such as NCS and NVC, made important contributions to “the golden age of ryukoka”.

Until the beginning of the 1930s, the keys to competitive advantage in the Japanese record industry involved the introduction of new technologies and the sale of Western music records, based on alliances with foreign companies. After the mid-1930s, however, the capability to produce and sell records of Japanese music played a larger role in determining competitive advantage within the industry.