In 1870, the Japanese government decided that government-owned factories and mines be privatized by way of public auction. As a result, the Ministry of Industry (Kobusho 工部省), which had from 1869 been promoting the development of all kinds of industries through a policy of government supervision and guidance, found its very existence being questioned. In this paper, the author examines how Industry Minister Sasaki Takayuki and other officials, in their attempt to formulate a policy to deal with this crisis, influenced or disturbed the political and business communities in Japan at that time (i.e., from 1871 to 1875). The authors finds that : 1.Ministry of Industry officials endeavored to improve income and expenditures balances in order to prevent privatization. 2.These measures were unsuccessful due to the over-presence of government enterprises. 3.The Ministry of Industry then attempted to bring about a gradual, safe transition of the enterprises it had developed over to private management. 4.Ministry officials successfully approached such politically affiliated zaibatsu as Mitsubishi to take over such enterprises as the Nagasaki shipyards. 5.The Ministry's involvement with these business groups gave rise to opposition from both political and business circles. 6.Minister of Finance Matsukata Masayoshi set his sites on transferring to his authority the export-oriented coal mine at Miike, and foreign currency producing gold mines at Sado and Ikuno, in an attempt to improve Japan's monetary and fiscal positions. 7.This attempt gave rise to severe conflict between the Ministries of Industry and Finance over how to regulate coal production at Miike. What the above investigation shows is how attempts by the Ministry of Industry to protect the interests of politically powerful zaibatsu gave rise to political and economic conflict during the early 1870s.
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