Ch 26 - Coup d`état and International Rivalries

Fukoku Kyohei

In its effort to "enrich the country, strengthen the military," Japan's ruling oligarchs relied on the country's traditional system and values to establish institutional social and economic reforms and develop a constitution modeled after Germany's Prussian constitution.

After suppressing the Satsuma Rebellion in 1877, the Meiji government settled more comfortably in office and began paying more attention to issues of economic growth and expansion than to reforming national institutions and consolidating its own power. The economy was not in good shape. The four years of fighting uprisings between 1874 and 1877 had been a sobering experience for the ruling oligarchy. Putting down the rebellions drained the national treasury, led to serious inflation and forced land values and badly needed taxes down. Mortgage foreclosures, land confiscation and tenant farming increased. Faced with a rising tax burden, the vast majority of farmers could barely hang on to their land. Government debt in 1876 had soared to 55 million yen and showed no signs of abating. Rice prices skyrocketed and the value of government bonds plunged. Inflation fueled wild land speculation.

Despite the economic problems, or maybe because of them, the call for a representative government in Japan continued, marking the start of a major trend. Itagaki Taisuke, the powerful Tosa leader who resigned from his Council of State position over the proposed Korean adventure in 1873, became a major proponent of representative government. Rather than start yet another rebellion over the matter, Itagaki established a school and political movement devoted to the creation of a constitutional monarchy and a legislative assembly. He and others criticized the oligarchy's unbridled power and called for the immediate formation of a representative government. Although the government did not oppose parliamentary rule, when confronted with demands for "people's rights," it reverted to seeking ways to control the political situation. New laws passed in 1875 prohibited the Japanese press from criticizing the government or discussing national laws.

In 1878, just three years after the Osaka Conference, the Conference of Prefectural Governors established elected assemblies. Within two years, assemblies had also emerged in a number of towns and villages. Although limited in their authority, they represented a move in the direction of representative government at the national level. Dissatisfied with the pace of reform, Itagaki Taisuke organized his followers and like-minded democratic proponents into a national organization in 1878 known as the Society of Patriots (Aikokusha). Just two years later, delegates from twenty-four prefectures held a national convention to establish the League for Establishing a National Assembly (Kokkai Kisei Domei).

From May to August 1880, the Korean Observer Mission toured Japan and visited schools, industries, shipyards, mines, arsenals, mints, hospitals, and prisons in and around Kobe, Osaka, Yokohama, and Tokyo. Korea's secret inspectors, known as "the gentlemen's sightseeing group," caught a "snapshot" of a nation undergoing a major transformation on a grand scale. Unable to see beyond their own deeply ingrained Confucian beliefs, the majority of members in the Korean Mission could not find a way to objectively judge the results of what they witnessed. In the end, the Koreans went home with a less than approving impression of the Meiji Restoration.

By late 1880, the Meiji Senate (Council of Elders) had produced its first draft constitution. Okuma Shigonobu, one of the architects of the draft document, insisted upon a British-style government with political parties and a cabinet organized by the majority party, answerable to the national assembly. He proposed its implementation in March of 1881, called for elections to be held by 1882, and called for a national assembly to be convened by 1883.

Okuma's proposition triggered a political crisis within the government that centered on the form of the constitution, not whether or not there would be one. His draft proposal proved far "too progressive" and "too English" for the Meiji oligarchs, who did not like the idea that the proposed constitution ceded so much power to a legislative body. They leaned toward more conservative measures that would ensure their continued power in government. They rejected Okuma's draft not because they opposed a constitution, but because they did not think the British constitution model suited Japan.

Urged to do so by the Meiji oligarchs, on October 12, 1881, the Emperor issued the Imperial Rescript on the 1890 Opening of the National Diet, promising the Japanese people a written constitution and parliament within nine years. From the release of this rescript until the final promulgation of the Meiji Constitution (formally, the Constitution of the Empire of Japan) in 1889, political disputes gradually decreased.

As pressure mounted for some sort of constitutional model, Okuma Shigonobu and others who wanted a constitution began forming political groups to lobby for their favorite model. Meiji leaders from Satsuma and Choshu led by Iwakura Tomomi and other conservatives borrowed heavily from the Prussian constitutional system under Bismarck. In 1881, Itagaki Taisuke helped create the Liberal Party (Jiyuto), which favored French political doctrines. In 1882 Okuma Shigonobu established the Constitutional Progressive Party (Rikken Kaishinto), which called for a British-style constitutional democracy. That same year, conservative government bureaucrats and local government officials established the pro-government Imperial Rule Party (Rikken Teiseito).

In 1882, the State Council sent Vice Minister of Industry Ito Hirobumi to Europe as head of a Constitutional Study Mission to investigate various forms of constitutional government. He rejected the United States Constitution as "too liberal" and the British system as too unwieldy. Its parliament had too much control over the monarchy. He also rejected the French and Spanish models as tending toward despotism. Having spent most of his time in Berlin, Germany, Ito drew heavily from German legal and political philosophers, men who were explicit in their antagonism toward Enlightenment ideas. He was particularly impressed by the teachings of Lorenz von Stein, a Viennese legal scholar whose theory of a "social monarchy" which placed the paternal Emperor well above the clash of political interests where he could show care for all his subjects. Ito found Bismarck's Germany to be an interesting combination of democracy, welfare, and authoritarianism all rolled into one, a newly created empire that closely resembled Meiji Japan. The Prussian constitution became Ito's model for Japan.

After studying various European constitutional systems Ito returned to Japan in 1883. He wrote: "The situation in our country is characterized by the erroneous belief that the words of English, American, and French liberals and radicals are eternal verities [truths] ... I have acquired arguments and principles to rectify the situation." The Meiji government entrusted him with the arduous task of drafting Japan's constitution. He explicitly set out to shape a constitution that would oppose the ideas of the European Enlightenment. The following year, Ito Hirobumi took charge of the newly created Bureau for Investigation of Constitutional Systems.

Ever since 1873, the Meiji government had operated within the framework of an ordinance that created a supreme body of the Imperial Court. In 1884 the Meiji Emperor reconstituted a Japanese aristocracy, elevating daimyo and favored officials to the dignity of prince, marquis, count, viscount, or baron. The old structure changed completely on December 22, 1885, with the creation of a new, more modern cabinet system. Ito Hirobumi, appointed to the post of Prime Minister, announced the Imperial Cabinet as a new administrative mechanism centered on the Prime Minister and various Ministers of State. The effect was to transform the bureaucracy into an efficient servant of the crown. The new cabinet included a Prime Minister and Ministers of Foreign Affairs, Home Affairs, Finance, the Army, the Navy, Justice, Education, Agriculture-Commerce, and Communications. Apart from the Imperial Cabinet, there was the Minister of the Imperial Household. Among these cabinet positions, two stood out as key contributors to the long-term success of the Meiji Restoration:  Education and Finance.

While Ito Hirobumi was in Paris on his Constitutional Study Mission to Europe, he had occasion to meet with Mori Arinori, one of Japan's most influential and iconoclastic proponents of Western ideas during the late 19th century. During their discussions about Japan's future government, Mori explained his own ideas about education. He stated his belief that achieving national development and prosperity required an improved educational system. His opinions left a strong impression on Ito and after Mori's return to Japan in May 1884, Ito appointed him as a Special Assistant within the Ministry of Education and put him in charge of formulating Japan's education policy.

Prime Minister Ito appointed Mori Arinori as Minister of Education. With this appointment, centralization and more traditional, nationalistic values became key features of Japanese education. Guided by the idea that national interests and education were inseparable, the 1886 Ministry of Education Organization Order, issued on February 27, 1886, stated in its first article, "The Minister of Education shall administer the affairs having to do with education and learning." In an opinion paper presented to the new Cabinet, Mori wrote,

"If we aim at having our country stand equal to the great nations of the world, if we aim at carrying on forever the great endeavor called the Meiji Restoration, if we aim at becoming a strong nation, it is necessary to develop and create a base for the nourishment of an unexcelled spirit among the people."

Mori Arinori stressed an education that encouraged patriotism and moral principles in students. Under his guidance, the Ministry of Education undertook the training of all teachers and school inspectors, appointed school principals and controlled the curricula and textbooks. It even began to shut down some of the country's private schools.

Matsukata Masayoshi, the deputy head of the Bureau of Tax, traveled to Paris, France, in early 1878 to supervise the display of Japanese exhibits at the Paris Exhibition. The trip proved to be a formative educational experience. While in Europe, Matsukata examined the National Bank of Belgium, witnessed the collapse of the bimetallic Latin Monetary Union and learned that Germany had successfully based its gold standard upon the French indemnity paid in the aftermath of the 1870-1871 Franco-German war. Having grown up in a climate of national mobilization, he concluded that Germany had successfully triggered a financial revolution based on warfare.

Matsukata Masayoshi became Minister of Finance in 1881, at a time when Japan's businesses were starved for capital, inflation was on the rise, paper yen had lost 45 percent of its face value, silver money had become increasingly scarce, and the urban masses were in distress. Matsukata, perhaps Japan's first policy maker to grasp the meaning and functioning of modern finance, began to oversee a radical program of austerity and private enterprise. He established the Bank of Japan in 1882, which took over the issuance of money from the government. He bought back millions of depreciated yen and empowered the Bank of Japan to restrict the issue of paper currency, raised taxes on commodities, and promoted a national savings campaign which channeled capital into a modernizing economy. Inflation dropped dramatically over the next three years. Matsukata Masayoshi became Japan's most enlightened financial planner of the nineteenth century. His extensive knowledge of financial affairs and his reformation of Japan's monetary system set the course the country's financial health for almost two decades.

Reforming the financial sector turned out to be the most important part of the Meiji policy to encourage private business. In 1882, Matsukata' made a dramatic move when he announced a plan to slash government spending. With the exception of military plants, all government-owned industrial enterprises would be privatized. Japan's infant industrial base - coal mines, iron mills, textile plants, steamship lines, and the like - went on the auction block to be sold, usually at bargain prices. Economic development in Meiji Japan differed from that of Tsar Alexander III's Russia in one major respect;  while the Russian government busily nationalized industries, the Japanese government busily divested itself of industrial enterprises to relieve the budget. At the very time Russia was jumping into "state capitalism" with both feet, Japan endeavored to jettison it.

For the Meiji leadership, industrialization became a national priority. They changed the social and political environment in Japan to encourage economic growth and directed all government actions toward achieving that goal. In the areas of education, the legal system, property rights, commerce, finance, and infrastructure, the Meiji government helped industries not by intervening in their affairs, but by staying out of their way. It responded to local and international economic and political conditions by initiating a variety of fiscal incentives to encourage development.

Economic growth required capital and lots of it. Instead of turning to the age-old disastrous policy of raising taxes on everyone in sight, Japan turned to the true life-blood of international wealth;  foreign trade. Once Japan opened up to the West, people were no longer forced to make do with a limited choice of available resources. They could do business with whomever they wished. This had a dynamic impact on the Japanese economy. Imports not only stimulated consumer tastes and desires, but cheap imports from India and China forced inefficient Japanese crafts people to either improve or go out of business. Merchants who had long enjoyed guild monopolies and failed to adapt to rapidly changing markets went broke. The loss of business in one area made people and capital available for new business opportunities elsewhere.

International trade not only integrated Japan's economy into the regional and global economy, it also had a dramatic effect on Japan's port cities. Nagasaki was one of the first cities to benefit because the few Japanese who knew anything about international business lived there. In 1880, Yokohama became home to Japan's only foreign exchange dealer, the Yokohama Specie Bank. Western technology was typically shipped to Yokohama, which also handled the majority of Japan's silk exports. Osaka became the center of the Japanese cotton trade and drew entrepreneurs from Tokyo, China and the West. A wide range of important industries found a home in Osaka, including cotton spinning mills, a paper mill, a steel mill and a tannery. By 1885, Osaka held an estimated 10 to 12% of Japan's industrial capital.

The prosperity of commercial centers stimulated Japanese agriculture, where up to 80% of Japanese worked. The closer farmers were located to a commercial center, the more they tended to specialize in the production of such cash crops as cotton, silkworms, oil, sugar and tea. The growth in commerce also stimulated the emergence of cottage industries that produced cotton textiles, raw silk, sake, soy products, paper and tatami. The production methods were primitive, but the existence of these small industries prepared large numbers of Japanese for work in modern industry.

Japanese officials became impatient with private sector growth. Okubo Toshimichi, perhaps the most influential Meiji minister, believed that the government should play a considerable role in revitalizing the economy. He made a series of proposals in 1874 that dealt with industrial policy that stated in part that there was no instance when a country's productive power was increased without the patronage and the encouragement of the government and its officials. Okubo believed that government could accelerate economic progress through industrial promotion, also known as, "be bold and spend a lot of money on new technology."

Following Okubo's proposals, the Meiji government got involved in numerous capital-intensive industries:  a postal service between Tokyo and Osaka, a telegraph system and a rail network, a glass factory, a cement factory, shipbuilding, brick production and silk manufacturing. According to one official report, by the mid-1870s, the government owned 75 miles of railways, 52 civilian factories, 51 merchant ships, three shipbuilding yards, and two munitions factories.

Meiji government officials thought that money and technology were enough. They were wrong. Government-owned businesses lost money because the government lacked the detailed knowledge required to master the myriad details of running a successful business. Without an ability to handle the details, no government could succeed. Furthermore, the government had no clue how to create value. They could not demonstrate to entrepreneurs how to make a profit using technology. Japan's government enterprises wasted vast amounts of scarce resources which handicapped more promising agricultural and private industrial ventures.

Private companies built nearly twice the distance of railroads across Japan as the government and did it at half the cost. The government spent millions of yen on modern machinery to modernize iron mines and still ended up closing down the operation because they couldn't handle the technical difficulties. Although government leaders considered shipyards as essential to national security, they couldn't manage to get the Nagasaki shipyards to do more than minor repair work. They couldn't even turn a profit in a traditional Japanese business like silk production. The failure of government enterprises acted like a brake on the national economy.

The Meiji government tried subsidizing a select group of private industries in the belief that it would help encourage economic development. They helped numerous samurai start businesses, but the same problems arose. Success required knowledge which was beyond their capacity to master, regardless of how smart they were. Being a samurai had nothing to do with business success. Having early success in a port city or as head of a successful cottage industry did. In one survey of fifty successful Meiji entrepreneurs, five were in Nagasaki before age 20;  five were in Yokohama;  six were in Osaka;  27 were in Tokyo. Only 13 of the fifty had no experience in these cities. Most of Japan's subsidized businesses failed when the economy suffered a massive deflation between 1881 and 1885.

Taking the idea of direct subsidies to promote business even further, the Meiji government directly supported the creation of large-scale family-owned enterprises with monopolistic positions and awarded them lucrative government contracts. These companies evolved into giant business conglomerates known as zaibatsu, or "financial cliques." Minomura Rizaemon, who backed the Meiji Restoration early on, earned Mitsui lucrative contracts to provision the Imperial Army. Iwasaki Yataro, who founded Mitsubishi Industries, became perhaps the wealthiest Meiji entrepreneur through its government shipbuilding contracts. Hirose Saihei, with considerable help from the government, transformed Sumitomo from a stagnant copper monopoly into a successful trading company which handled copper, coal, tea and silk. Yasuda Zenjiro went from carrying out financial operations for the Shogunate to lead Japan's fourth largest industrial and financial combine.

Despite their size and the world attention they garnered however, the zaibatsu neither dominated nor played a significant role in the growth of Japan's economy. Favoring these firms at the expense of others did little more than force consumers and taxpayers to pay more than they might have in an open market. Ironically, the majority of income growth and economic productivity came from agriculture and small-scale cottage industries built on traditional foundations. In 1912, at the end of the Meiji era, nearly 60% of Japanese still worked in agriculture and the nation's largest exporters were unsubsidized cotton and silk producers.

The Meiji Restoration was not so much a sudden break with the past as it was a change in the direction of development. The key factor underlying Japan's rise as an industrial power was its ability to bridge the past and present. Begun as a reform movement led by powerful daimyo and later by the government, Meiji Japan established institutional reforms that relied heavily on Japan's traditional system and values to stimulate the economy and strengthen government and military power.

As the secret deliberations of the constitutional drafting committee headed by Ito Hirobumi neared completion, thoughts turned to who would ratify the document and how would it be done. Reverting to the precedent of a council of advisors to the emperor, the Emperor Meiji established the Privy Council through an imperial ordnance issued on April 28, 1888, to judge the draft constitution in the name of the emperor. Ito Hirobumi was named president of the new council.

Similar in nature to England's Privy Council and other western supreme courts, the Meiji Privy Council had both judicial and executive functions, but held no power to initiate legislation. The Council, which remained in existence until 1947, advised the emperor on important matters including the Constitution of the Empire of Japan, constitutional interpretation, proposed laws, proclamations of martial law and declarations of war, treaties and other international agreements, matters concerning the succession to the throne and other matters submitted by the emperor.

In its final form, the Meiji Constitution borrowed heavily from the Prussian Constitution of Germany, which created a conservative system of government in which the monarch, the aristocracy and the military retained most of the power. The final sessions on ratification of the new constitution were held in secret. Public agitation over the secrecy prompted the government to give more power to the police. Yamagata Aritomo, a Choshu native who had been the key figure in centralizing the police, led the effort to maintain order and crack down on political activity.

On February 2, 1889, the traditional date of the anniversary of the founding of the Japanese imperial dynasty, the Meiji Emperor promulgated the Constitution of the Empire of Japan as his gift to the Japanese people. The new constitution, an amalgam of German authoritarianism and Shinto national piety, marked a great step forward for Japan. It described the Emperor as "sacred and inviolable" and the source of all legislative power, and emphasized obedience to authority and subrogated individual rights to the benefit of the state.

The constitution established the Imperial Diet, a bi-cameral legislature composed of a House of Representatives and a House of Peers. Peers were appointed by the emperor from among the new nobility created by the oligarchy. Representatives were popularly elected by male voters over the age of 25 who met the property standard by paying ¥15 per year in taxes. The criteria limited the pool of eligible voters to just 1% of the population.

Under the constitution, the emperor became the source of all authority. He held the power to declare war, make peace and treaties;  the power to set up the administrative branch of government;  the ability to veto legislation and suspend the Diet, and to issue emergency orders or laws when the Diet was not in session. He also held unlimited power to issue regulations for the execution of laws. The legislature received broad powers, including the right to approve and enact the national budget. Cabinet ministers were responsible to the Emperor, not the Diet, and of course the Emperor was supreme commander of the Army and Navy.

The Meiji Constitution, though well-balanced and displaying all the trappings of a western democracy, created an oligarchical, authoritarian and paternalistic government. Even though it was promulgated in the name of the emperor and ostensibly given to the people, the new constitution created a government of oligarchs, by oligarchs and for oligarchs. The constitution guaranteed some basic individual freedoms and did grant some rights like freedom of speech, but only so long as the exercise of those rights did not threaten public order. Despite the inclusion of certain freedoms, the emperor remained the centerpiece and final authority of the state, with a loyal bureaucracy responsible ultimately to the Meiji throne. Nevertheless, the Meiji Constitution represented a completely Japanese creation written by Japanese aware of their own traditions and history that incorporated new concepts introduced from the West.

Either by design or oversight, the Meiji Constitution had one glaring flaw;  it failed to put controls on the military. The Emperor had the explicit power of direct, supreme command of the armed forces with no oversight by the Cabinet or the Diet. To further strengthen the authority of the state, the Supreme War Council was established under Chief of Staff Yamagata Aritomo, founder of the modern Japanese army. He commanded a German-style general staff system, had direct access to the emperor and had the freedom to operate independently of the army minister and civilian officials. The consequences of this arrangement would prove to be disastrous for Japan in subsequent years.