Govt ⇒ began to exercise control over Japans industry ⇒ esp. Zaibatsu Govt ⇒ believed ⇒ competition between Zaibatsu was wasteful ⇒ feared they would seek to make profits → sometimes at the expense of the country. example: they might choose to not build a railway ⇒ which would have improved Japans transport network ⇒ because it was unprofitable.
Prevent this ⇒ govt ⇒ passed Principal industries control law in 1931 → made it legal for Zaibatsu to form cartels ⇒ limit competition and regulate production and prices of products they sold. Cartels ⇒ were set up ⇒ in Japan’s heavy industries ⇒ including ship building, electric power, textiles and coal mining
at first > govt mostly left management of cartels ⇒ to heads of zaibatsu
- However govt began to become more directly involved ⇒ and even controlled these cartels 1936 → officials and military commanders in cabinet → brough electric power industry under direct govt control
Zaibatsu chefs ⇒ furious ⇒ fought the measure bittly ⇒ efforts were in vain Further state control continued ⇒ 1937 ⇒ govt introduced 5 years plans ⇒ setting targets for production in various industries.