In the mid to late 1800s, while Japan was in the thick of the Meiji Restoration, huge banking and industrial corporations known as Zaibatsu came to the forefront of the Japanese economic picture. The major 4; Mitsui, Mitsubishi, Sumitomo, and Yasuda, quickly became very powerful through very friendly tax policies and other assistances that pushed them to a favorable position with the Japanese government. These corporations, especially Mitsui, also performed many deeds to help the government, particularly converting taxes that were paid in rice into money for the Shogunate. (1) They profited greatly from this, and soon these 4 companies controlled 1/4 of the entire Japanese economy. For many decades to come, the zaibatsu would remain very friendly with the Japanese governments, especially because of their funding of government projects, particularly with the military.

In the 1920's and 30's, when the rest of the world was suffering through huge economic depressions, these firms actually made more money, by purchasing a huge amount of dollars in fear of the government lessening the value of yen; when the price went down, the zaibatsu made an enormous amount of money (in some cases, $50 million), and this outraged the Japanese republic (2). A huge wave of national criticism came upon these big businesses, and this reached its height in March 1932, when a group known as the Blood Brotherhood assassinated the managing director of Mitsui, the largest zaibatsu of all. The zaibatsu knew they had to change their shrewd business dealings, and focus more on the good of their country and particularly to improve their public image. Mitsui led the way for all of the other major zaibatsu, with the help of its new director, Ikeda Seihin. His major goal was, as he said during an announcement in 1932, "We will no longer remain identified with callous moneymaking schemes, but Mitsui will make its corporate name synonymous with giving" (3). All major zaibatsu began to give to charitable organizations, as well as give money to the unemployed of Japan, and the Mitsui even started their own charity. It seemed as if these corporations were really trying to mend their image in Japanese society.

The Japanese public was not very fond of these conglomerates, as it seemed that they would use any and all ways possible just to make more money. While everyone in Japan was suffering through an economic slowdown that brought about much poverty and unemployment these zaibatsu executives were "making out like bandits." And because of their very friendly relationship with the government, they were able to profit much more from new government policies that would actually hurt the rest of the nation. When it was learned that the Mitsui had made $50 million off of the government reducing the value of yen, this was the last straw. The public was absolutely furious, as well they should have been, and this led to the assassination of the Mitsui director. These corporations were viewed as "beasts of profit that preyed upon worker and consumer alike" (4), accusations that came the loudest from radical right wing groups, such as the Blood Brotherhood. The Japanese military also had a strong dislike of the "old" zaibatsu firms, and they tended to support some of the newer corporations in the 1930's, such as Nissan. Even after the strides made by the firms to be more friendly and giving to the public, the zaibatsu were still looked at with a glaring eye by the military, and much of Japanese society as well. However, they did completely change their old, greedy ways, and agreed to work together with anyone that the army or government wished them to.

1 Thayer Watkins, "The Zaibatsu of Japan" [http://www.sjsu.edu/faculty/watkins/zaibatsu.htm] 1/30/02

2 James L McClain, A Modern History of Japan (New York:W.W. Norton & Company, 2002)432-436

3 Ibid., 435

4 McClain, 433

1 Quinn Technology Portfolio [http://www.quinntech.com.au/portfolio.htm] 2/1/02

2 The Mitsubishi Companies [http://www.mitsubishi.com/index_e.cfm] 2/1/02