Zaibatsu From the outset, Meiji Japan embarked on the large-scale project of revamping its political and administrative

organs along with the development of various industries.According to Mansel G. Blackford (The Rise of Modern Business in Great Britain, United States, and Japan) the political change that accompanied the Meiji period hurt many of the large merchant houses.They declined in significance.On top of that, the currency reforms,especially the adoption of national currency based on yen,reduced their importance as money-changers. The Japanese merchants lacked the zeal to take up industrial ventures and so the lead was initially taken by the Meiji government.But later on, many willing enterprenuers among traditional merchants indulged themselves in this work.In return, these merchants received financial assistance from the government and were offered state mines and other industrial subsidiaries.In any case, the sale of these state enterprises facilitated the evolution of certain wealthy merchant families in the later more diversified form known as Zaibatsu (familyowned business groups).According to Peter Von Staden (BusinessGovernment relations in pre-war Japan) the sale of state-owned enterprises to the rich merchants not only marked an alliance between government and big business to industrialize Japan but also impacted the making of industrial policy. Large, vertically integrated, single-industry corporation in Japan called Zaibatsu became poweful in industry and other business fields in the turn of the 20th cent.The zaibatsu provided an impetus to Japan to compete effectively with other nations.According to Mansel G. Blackford these industrial and financial business conglomerates were more diversified than big businesses in Great Britain and United States.The zaibatsu were composed of manufacturing ventures (lightindustry such as silk-reeling and cotton spinning and heavy industries such as ship-building,chemicals, and iron and steal-making),mining ventures, a bank to finance these concerns, and a trading company to sell the products overseas. Japan's Zaibatsu developed in several ways.A few such as Mitsui evolved from Tokugawa merchant houses.Mitsibushi, grew out of enterprises closely connected to the fortunes of the government organization.Other zaibatsu like -"nissan" or "new zaibatsu" were formed in the 1920s and 1930s and were closely associated with the

japanese government's efforts to build up heavy industries for military purposes.Before the First World War eight major Zaibatsu emerged --Mitsui,Mitsubishi,Sumitomo,Yasuda,Asano,Okura,Furukawa,and Kawasaki ---- the first four of which were known as the Big Four.By the early 1920s zaibatsu controlled much of the mining, shipbuilding,banking,foreign trade, and industry of Japan.Altogether, Zaibatsu accounted for about one-quarter to one-third of Japan's GNP by the close of the 1920s. Of the 'Big Four' :Mitsui, Mitsubishi,Sumitomo,Yasuda ---the two enterprises Mitsui and Mitsubishi had attained an unprecedented fame in the sphere of economy.Let's first delve deep into the development of Mitsui and Mitsubushi.Mansel G. Blackford argues that Mitsui and Mitsubishi typified common trends in the evolution of Zaibatsu in Japan.Mitsui began as a merchant house in Tokugawa period.While, Mitsubishi was one of the new enterprises of the Meiji period.Despite differences in their inception these two companies became Zaibatsu in the Meiji period and continued as leading businesses in Japan today. Mitsui endeavored to back the Japanese government during the Meiji Restoration.In return they got Government funds as a reward in 1870s and 1880s.This major source of revenue lasted until 1887 which had reinforced Mitsui company and helped in the transition of Japanese industrialisation.New leadership was also important in Mitsui's success.Hikojiro Nakamigawa, an enterprenuer, was associated with the making of newspapers and rail-roads in the 1880s.He was made the vice-president of Mitsui bank and the head of the Mitsui combine.He was not at all a member of the Mitsui family.He imposed centralised management over the Mitsui enterprises.Nakamigawa reorganised Mitsui Bank, Mitsui Bussan, Mitsui Mining, and Mitsui Wearing Apparel as paternership companies, all of which were owned by Mitsui family.At the same time mitsui family emerged as a powerful board of directors that influenced all important decisions for the different partnerships.Nakamigawa took Mitsui to the cusp of glory and success.He followed two other policies to bring Mitsui to a new level.He purchased industrial and mining companies.He also gave training to new men to run the Mitsui enterprise.In 1909 the central managing organ, the board of directors, was re-organised as the Mitsui Gomei company,a general partnership owned by Mitsui family.Throughout Mitsui comapny saw a volatile career but still maintained its stronghold in the field of business and economy.

From ship-building to coal mining and banking,insurance to heavyscale industries Mitsubishi represented an important industrial and financial business conglomerates.The doyen of this large comibe was yataro Iwasaki.It came into being in 1870.Mitsubishi also prospered in aircraft and navy during the world war-ii.According to Max Hastings (Retribution,New york, Vintage,pg-413) Mitsubishi were involved in the opium trade in china during the world war-ii.Like Mitsui, Mitsubishi was the largest business combine that is still maintaing its legacy in the present day. Besides, the Sumitomo group traced its origin to a bookshop in Kyoto in 1615.Even today it is guided by spiritual precepts.It was the copper smelting and smithing business which made Sumitomo group famous.By dint of merit and improved technology the sumitomo group reached the pinnacle of success.In addition, copper mining also became their business. Yasuda zaibatsu was a financial conglomerate owned and managed by Yasuda family.The pioneer of Yasuda family, Yasuda Zenjiro, amassed huge pelf and established the Third National Bank in 1876.He formed the Yasuda bank (later known as Fuji Bank) in 1880 which became the centre of Yasuda Zaibatsu.According to Dominici, Gandolfo (2003). "From
Business System to Supply Chain and Production in Japan". p. 13. Yasuda consolidated his empire in banking and finance, specializing in backing small and medium-sized traders and industrialists. In 1880, Yasuda founded the Yasuda Mutual Life Insurance Company[ (now Meiji Yasuda Life Insurance). In 1893, the Yasuda zaibatsu absorbed the Tokyo Fire Insurance Company, later renamed the Yasuda Fire and Marine Insurance Company. According to Morck, Randall; Nakamura, Masao (2004-07-14). "A Frog in a Well Knows Nothing of the Ocean: A History of Corporate Ownership in Japan" The Yasuda focus on banking was narrowed by the merger of eleven Yasudacontrolled banks into the Yasuda Bank in 1913. The post-merger bank was by far the largest of all the zaibatsu banks.

Other than these leading 'Big Four' other zaibatsu also flourished in the restricted fields.Furukawa in copper and electric power; shibusawa in banking and engineering,kawasaki in locomotives,ship-building,and steel products;Asano in cement and steel; okura and Kuhara in mining

and engineering etc.According to William Lockwood (The Economic Development of Japan) the big four were distinguished not only by their size but also by the spread of interests through industry,commerce and banking. of strategic importance were their powrful banks which in turn gave them tremendous influence throughout Japanses economic life.In the s new zaibatsu emerged.There was an influx of japan's economic elements in China.They were connected with the supply of modern arms and ammunition to Japan's army during the occupation of Manchuria. The significance of Zaibatsu in the sphere of Japanese economy cannot be denied.The zaibatsu were the heart of economic and industrial activity
within the Empire of Japan, and held great influence over Japanese national and foreign policies. The Rikken Seiyukai political party was regarded as an extension of the Mitsui group, which also had very strong connections with the Imperial Japanese Army. Likewise, the Rikken Minseito was connected to the Mitsubishi group, as was the Imperial Japanese Navy. According to

Allinson, Gary D. Japan's Postwar History. Ithaca, New York: Cornell University Press, 1997 by the start of World War II, the Big Four zaibatsu
alone had direct control over more than 30% of Japan's mining, chemical, metals industries and almost 50% control of the machinery and equipment market, a significant part of the foreign commercial merchant fleet and 60% of the commercial stock exchange.

In the hindsight, trading companies called 'sogo-shosha' developed that considerably contributed towards the improvement of Japanese economy.These trading companies evolved to handle the foreign trade of Zaibatsu.The Mitsui Bussan and Mitsubishi shoji helped in conducting the overseas commerce.Mansel G. Blackford argues that these trading companied not only handled Zaibatsu commerce but also worked for the development of Japanese economy. Now the crux of the matter is that why did these highly concentrated Zaibatsu rise to such prominence in Japan.According to Alexender Gerschenkaon (Economic backwardness in Historical Perspective), it was due to their relative 'lateness' in their emergence like Germany and Russia.Gerschenkaon argues that in some late ventures, the state takes up the pivotal stand.But in case of Japan, the industrialization involved hybrid of state projects and huge private combines. However, Andrew Gordon (A Modern History of Japan from Tokugawa

Times to the Present) argues that the process of industrialisation began from the Tokugawa period.So it is fair to conclude that the seeds of industrialisation were embeded within Japan's economy even before the Meiji period.It was during the Meiji period that they got new reinforcements from the Government which had accelerated the pace of the new enterprises.Certain Zaibatsu like- Yasuda, Mitsui and Mitsubishi had magnified their wealth by buying depreciated Meiji paper
money that the government subsequently exchanged for gold.Thus, by accumulating profuse wealth they had enlivened their business ventures.Gradually, the race for industrialization began.The Zaibatsu began to dominate the economic scene of Japan; at the same time they influenced the making of industrial policy.Thus, Japan, in consequence, became virtually invincible in political,economic and military fields in the Pacific region.