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Technological Innovation and the Development of Transportation in Japan

Title: Chap. 6: Transportation during Wartime (1938-1945): Roads
Author: Yamamoto, Hirofumi
Publisher: United Nations University Press
Published Year: 1993
Table of ContentsMain Text (PDF version)

Chap. 6: Transportation during Wartime (1938-1945): Roads

The Wartime Motor-Vehicle Industry

The overwhelming dominance of Japan Ford and Japan GM on the motorcar industry had continued since the 1920s, but a turning point was reached with the May 1936 enactment of the Motor Vehicle Manufacturing and Enterprise Law. The motivation behind this law was military. As international tensions were heightening in the final years of the depression, the armed forces wanted to rapidly set up a domestic system for the production of motor vehicles that could be used for military needs. In order to build such a system, the government gave permission to certain companies to produce at least 3,000 vehicles a year. The government would provide these companies with favourable tax treatment and would loosen the restrictions on procurement of funds. The law also set a restriction on the scale of foreign producers, limiting the number of vehicles. Japan Ford could produce to only 12,360 vehicles a year and Japan GM to no more than 9,470 vehicles. Another step to reduce the power of foreign competition in the Japanese market was to raise the duties on imported parts.
The companies authorized for vehicle production in September 1936 were Toyoda Automatic Loom Works (which became the new Toyota Motor Manufacturing in August 1937) and Nissan Motor Company, both of which began planning for production. The number of vehicles rapidly increased after that with the refurbishing of Nissan's Yokohama plant and the construction of Toyota's Koromo plant. By 1940, Japan had almost perfected its domestic system centred on the production of military lorries, but production rapidly declined from 1943 on with the worsening shortage of materials. Japan Ford and Japan GM had been seriously hit by the drop in the yen rate and the December 1936 increase in tariff duties. The subsequent adoption of the Law for Temporary Measures on Imported and Exported Goods in September 1937 imposed a harsh set of import-export controls that made it difficult for the foreign competitor companies to stay in business in Japan. Indeed, production ceased in 1939. And, the military-inspired domestic motor-vehicle manufacturing system, too, collapsed as Japan suffered defeat in the war.

Consolidation of the Road Transport Industry

The Showa Depression forced the companies in the road transport industry to consolidate and reorganize, and the subsequent periods of preparation for war and war itself further tightened the system of state control and unification.
The country gradually tightened its control over railroad freight handling during the latter half of the 1930s, when Japan's international relations soured with its instigation of the Manchurian Incident in September 1931, withdrawal from the League of Nations in March 1933 and from the London disarmament conference in January 1936. Using the so-called two laws on small transport, the Small Transporters Law and the Nippon Tsuun Kabushiki Kaisha Law (Nittsu Law), both enacted in April 1937, the government was able to consolidate various small companies into Nippon Tsuun (Nittsu).
The Small Transporters Law and the Nittsu Law were closely linked laws used to control the small transporters (railroad freight handlers). The Small Transporters Law instituted a system of licences for these members of the transport industry, thus creating controls where once free entry in the market was the rule, to prevent the flooding of the market with small operators, and the Nittsu Law established a semi-governmental company that would oversee and unify all small transporters in the nation. Nittsu was established on 1 October 1937, with the government providing \8 million of the \35 million capital and Kokusai Tsuun and six other major companies providing a \16,245,000 investment in kind; the National Railways Mutual Aid Association provided \9.5 million and Kokusai Tsuun and the six converted their pure assets into investment in kind and disbanded at the end of September. As a result, the liquidation of all accounts current, issuance and withdrawal of freight receipts, and all prime contractor work performed by the seven companies. were taken over by Nittsu, and freight handlers at all stations came under Nittsu control. But, fearing the wrath of the existing operators, the government issued licences to all operators before the Small Transporters Law was enacted, giving a total of 7,789 operators as of 31 March 1938, 60 per cent of whom handled 5,000 tons or less of freight per year. The Railway Ministry then began a move to concentrate the operators into one company per station, and, under its direction, this goal was reached for 90 per cent of the stations by June 1941 (totalling 5,010 operators). The move to absorb these operators into Nittsu began in September, and with it, the beginning of Nittsu's monopolistic hold on the railway freight-handling (small-operator) business.
Table 3. Motor-vehicle production (1937-1945)
Table 4. Standard-lorry, bus production for military and civilian use
Table 5. Share of Nittsu in small transport operations (1939-1946)
Table 6. Sectoral rate (%) of restrictions on gasoline consumption (1938-1941)
After the outbreak of the Sino-Japanese War in July 1937, motor-vehicle operators, i.e. the operators of buses, taxis, and lorries, were faced with growing shortages of gasoline, vehicles, and spare parts, as well as with strict state control that required a switch to alternate fuels and also abolished competing routes and reorganized and consolidated existing companies. One such control was the restriction on gasoline consumption that started in March 1938. The situation was getting tougher every year (table 6), and the embargo on oil exports to Japan that was placed by the United States in August 1941 shut down almost the entire fuel allocation to bus, hired car, and taxi operators. The rate of reduction for lorries was less than that for buses and taxis, but by 1941 fuel allocation had been slashed 75 per cent, and most lorries had to rely on substitute fuels.
The move to reorganize and consolidate operators was done quickly so that fuel and materials could be conserved and efficiently used. We can get some idea of what was going of from tables 7 and 8, which show that the Railway Ministry's orders of August 1942 led to a drastic consolidation in bus routes. The consolidation reduced the number of operators in 1945 to one-tenth what it had been in 1936.
Because of the importance of lorries in military transport, an even more drastic reorganization and consolidation was made of lorry operators, a business in which the size of individual companies was almost always very small. The first government-ordered consolidation of September 1940 and the second of December 1942 represented extremely large policy moves that reduced the number of companies to one-eightieth of what it had been.
Table 7. Trends in bus route operation (1936-1945)
Table 8. Trends for motor vehicle freight transport operators (1939-1945)
Table 9. Trends in motor vehicle transport power (1936-1945)
Despite these various measures, however, the supplies of fuel and materials worsened as the war turned against Japan, and the operating rate for buses, taxis, and lorries dropped every year. Looking at the figures for those years, we can see that from 1943 on, the operating rate is less than 40 per cent (table 9). By the time of Japan's surrender, only one-fourth the 1936 number of vehicles were operable.