Chapter 12
The Failure of Coalition Politics

General MacArthur was always more intrigued by American political maneuverings than by Japanese politics. By 1947 his control in Tokyo was so sure that it did not seem to make much difference who was prime minister. Neither the departure of Yoshida nor the advent of a Socialist gave him any qualms. In fact, he and his GS were heartened that a humanitarian liberal was taking over the helm of state as the new democratic constitution came into effect.^[1]

Katayama Tetsu was a sixty-year-old successful attorney who had been elected to the Diet three times before the war. A Presbyterian who believed "democratic government must be permeated by a spirit of Christian love and humanism," he was quite lacking in the cunning of many politicians. His grip on power was tenuous from the start because his cabinet was an ill-assorted coalition of Socialists, Democrats, and members of the People's Cooperative Party and his party held only a slim plurality in the lower house. To avoid attack from the powerful right and probably out of concern for American sensibilities about pure socialism, Katayama excluded the left Socialists from his cabinet and was compelled to split it almost evenly between right Socialists and Democrats, who were barely distinguishable from Liberals in political outlook. He wrote later that MacArthur suggested at an early meeting that he talk to Communist leader Tokuda about a united front of the Socialists and Communists. Katayama understandably did nothing about this far-out idea.^[2]

The new National Diet was far more representative of the people than the old Imperial Diet. SCAP believed it would no longer encounter the niggling opposition to change and the laissez-faire economics espoused by Yoshida and the conservatives. It hoped the road to political reform and economic democracy would now be smoother. Indeed, Katayama was willing to cooperate with SCAP and even eager to do its bidding.

Katayama lasted eight months as prime minister, from June 1947 to February 1948. Despite his high hopes and tireless efforts, he made little headway in raising production, lowering inflation, or wiping out the black market economy. His one big push—to nationalize the coal industry—marked the high point of socialist endeavor in Japan's modern history. MacArthur told Katayama on September 18, 1947, that the Diet was free to act as it saw fit on this matter, adding that Japan should try to boost coal production to its wartime peak of dose to 50 million tons a year. Well watered down by the Diet, Katayama's coal bill, passed in December 1947, in effect established government supervision, not control, over the industry. Coal production mounted steadily in the following years, but not because of the insignificant coal law of 1947.^[3]

SCAP also pressed Katayama to adopt two controversial reforms: to break up large "economic concentrations" and to decentralize the police. Late in the summer of 1947 ESS received a copy of FEC-230, the U.S. antitrust proposal. At the same time the FEC was studying it, ESS called in two senior Japanese from the ESB and told them immediate action was necessary to implement an "order" from Washington entitled "Elimination of Concentrations of Economic Power." The moderately socialist Katayama cabinet was so disturbed that the prime minister wrote a letter to MacArthur on September 4, 1947, asserting that although the government supported the principle of deconcentration, the new proposal was "even more stringent than the law enacted in Germany." SCAP was unyielding, however, and pushed for quick approval.^[4]

Before the bill was enacted, Secretary of the Army Kenneth C. Royall "directed" MacArthur to ensure that it was amended to contain certain modifications Washington wanted. MacArthur reluctantly instructed the Japanese to make the amendments as well as a significant change the Japanese wanted: insertion in the title of the word excessive . The bill was passed late on December 9, 1947, with two SCAP officials on the floor of the Diet and the parliamentary clock stopped to enable negotia-

tions to finish before the Diet session ran out of time.^[5] The Law for the Elimination of Excessive Concentrations of Economic Power, or the Deconcentration Law, was probably the most contentious piece of legislation passed during the occupation; SCAP and Washington disagreed about the plan, as did SCAP and the Japanese. Yet it proved to have a far-reaching effect on at least a few industries in Japan. For example, the law led to the split of Japan Steel Company into two companies, Fuji and Yawata, which brought about intense competition in the steel industry. This ended when the two were reunited in 1970 to form Nippon Steel Company, one of the largest in the world.

Police reform remained a sensitive issue throughout the occupation. The Home Ministry had tightly controlled the prewar police, whose many duties involved law enforcement, tax collection, election observation, customs enforcement, census taking, intelligence gathering, and thought control. The police commanded the respect and even the obsequiousness of the general public. In late 1945 Japanese requests to SCAP to approve increases of the size and arms of the police, then numbering 93,935 persons, were rejected.^[6]

MacArthur moved cautiously on police decontrol, waiting for the Japanese to come up with their own plan. By the summer of 1947 police reform had become one of the more notorious footballs of the occupation, as Whitney's GS and Willoughby's G-2 fought to determine not only which section would make occupation policy but also what kind of police forces Japan should have. G-2 experts wanted larger and more centralized police. GS advocated only a small increase in the numbers of the police and bitterly opposed any centralization. As on several other occasions, GS instructed the Japanese to deal only with it on police matters. Willoughby wrote an interoffice memorandum on August 24 referring bitterly to "this new inexperienced government, completely under the thumb of the Government Section."^[7]

Prime Minister Katayama discussed the subject with General MacArthur on August 26 and submitted a reform proposal on September 3, which GS found objectionable. GS and G-2 met nineteen times in the next two weeks and finally agreed on a compromise plan. MacArthur's letter to Katayama, dated September 16, 1947, provided for total police forces of 125,000 divided into two parts. One would be the national rural police of 30,000 operating in rural areas and small towns; it would have centralized units at the national level only for limited purposes such as the setting of standards and some forms of training. The other would be the autonomous local forces totaling 95,000 in cities

and towns of more than 5,000 in population; the result would be about 1,600 independent municipal police forces. Public safety commissions. would be set up at both the national and local levels. The prime minister could take control of the police forces if he proclaimed a state of nation-. al emergency, which would have to be ratified by the Diet within twenty days. The Police Law embodying the principles enunciated by the supreme commander was enacted by the Diet and went into effect on March 8, 1948.^[8]

The official GS report paid tribute to the Police Law as typical of "the relationship that existed generally between the government and the headquarters in reaching solutions to Japanese problems."^[9] In fact, the resolution of the police issue was a tribute to the power of GS to win over MacArthur, thus overwhelming the experts in G-2 and compelling a reluctant Japanese government to go along.

In 1954, two years after the occupation ended, the Yoshida cabinet amended the Police Law to organize all police into forty-six prefectural police forces, despite strong left-wing opposition. It called for a national public safety commission and prefectural commissions to supervise these forces and established a police agency at the national level to formulate operational standards for the entire country.

The Diet passed a maritime safety agency law on April 15, 1948. Japan actually maintained maritime control units throughout the occupation, an embryo navy that was never disbanded. The law established a new agency, modeled after the U.S. Coast Guard, to handle patrol and safety functions in coastal waters, with water police functions divorced from normal civil police activities. The personnel strength of the new force was 10,000. The ACJ debated the bill at the instigation of the Australian member, thereby stirring MacArthur's ire at this implied criticism of his policy.^[10]

On December 31, 1947, the Diet formally abolished the Home Ministry. Long the most powerful civilian agency of the government, the ministry embodied the centralized and oppressive bureaucracy of prewar Japan, although its officials were generally considered to be among the most efficient in the government. GS had come to believe early in the occupation that the Home Ministry would have to be radically restructured but finally decided to abolish it and parcel out its functions to other agencies. Some observers have noted that a number of officials of the presurrender Home Ministry were never purged or reentered the government to serve in important positions. They were, of course, relatively young in the earlier period, and the bureaucratic

institutions they now work in are very different from the old Naimusho. Many of these carryovers proved to be effective and moderate bureaucrats.^[11]

Katayama set up the Labor Ministry on September 1, 1947. It included a women's and minors' bureau, which has played a key role in advancing the rights of women and children in postwar Japan. From the start of the occupation Japanese and American women had worked together to advance the cause of women's rights. Their efforts were crowned by inclusion of several provisions in the constitution of 1947. Later legislation provided further protections. There had been considerable support for a separate ministry for women and family matters, and setting up a bureau within the Labor Ministry was the compromise.^[12] Equality of the sexes as promised in the 1947 constitution is still a long way off, but opportunities for women in politics, government, business, and education are steadily expanding.

During the short term of the Katayama cabinet, the Diet passed six of the permanent laws to implement the new constitution. The most significant items were the revised civil and criminal codes. The revised civil code, which became effective on July 1, 1948, enshrined into law the concepts of the dignity of the individual and the equality of the sexes. According to the official GS report, it was the Japanese who made the decision to radically alter the old family system, even beyond what the new constitution required. The eagerness of many Japanese legal experts in the early days of the occupation to adopt different ideas, often of Western origin, was one of the surprising aspects of that era. One is tempted to say that the Americans were not the only New Dealers in postwar Japan. The revised criminal code abolished adultery as a crime because the Diet did not want to make it equally punishable for both sexes. Provisions regarding libel and defamation were rewritten. The code protected the rights of defendants and witnesses much as in U.S. practice and circumscribed the authority of judges to conduct trials, which had been all but absolute.^[13]

Japan has no trial by jury. Jury trials had been tried experimentally in the prewar period, but the test was considered a failure. The Japanese are not comfortable sitting in judgment on their fellow men and women. Western concepts of right and wrong, legal and illegal, are much tempered in their view by human feelings such as sympathy, regret, or a sense of obligation. The occupation did not try to tamper with these deep-rooted traits.

MacArthur's greeting to Katayama on May 24 spoke of "spiritual

implications.... For the first time in its history, Japan is led by a Christian leader.... It reflects the complete religious tolerance which now dominates the Japanese mind and the complete religious freedom which exists throughout this land." Noting that two other Asian Christians were at the head of their governments, Chiang Kai-shek in China and Manuel Roxas in the Philippines, the supreme commander suggested that this "offers hope for the ultimate erection of an invincible spiritual barrier against the infiltration of ideologies which seek by suppression the way to power and advancement. This is human progress."^[14]

Washington policy guidance spoke of religious freedom but said nothing about promoting Christianity. The general was nevertheless attentive to opinion back home on religious matters, as several incidents testify. On one occasion in late 1947 he received a letter from a Christian missionary complaining that "our own American government ... informed the Japanese Government that Christianity is to be placed on the same plane with their own religion (in other words that it is no better than idolatry) and that it must not be favored ." MacArthur's office drafted a reply that he believed "that Japan will become Christianized. Every possible effort to that end is being made."^[15]

Lieutenant Colonel Donald R. Nugent, whose job as chief of CIE included religion, advised MacArthur that his section was not in fact making "every possible effort" to Christianize Japan, its policy being a maximum of freedom of religious belief. MacArthur said that so long as no religion or belief was oppressed and the legal treatment of all religions was equal, the occupation had every right to propagate Christianity and to give it every assistance. The general added that visiting church dignitaries asserted that the CIE had a "stiff-necked attitude of impartiality and did not show sufficient enthusiasm in the propagation of Christianity." Nugent said he would orient his staff about the point of view of the commander in chief.

MacArthur received a flock of letters a few months later from Christians in the United States criticizing a Japanese textbook containing the assertion that "today we cannot believe in all that is written in the Gospel (the Birth of Christ, the miracles he achieved, and his resurrection)." CIE reprimanded the author and publisher, suspended new printings of the book, and set up checks to prevent recurrence. MacArthur sent a virtually identical reply to all the critical letters describing what had happened and stating in regard to Christianity in Japan that "a whole

population is beginning to understand, practice and cherish its underlying principles and ideals."^[16]

Many letters from the United States inquired about the progress of Christianity in Japan. The original CIE draft of a reply to one of these letters stated there were about 200,000 Christians in Japan. Fearing the "old man" would consider this figure too low, a staff officer added a zero before submitting the letter to the general for signature. Although he signed the letter, MacArthur reportedly thought that the figure of 2 million was too low and said later that 4 million might be more accurate. MacArthur's intense interest and hope for a Christian revolution began to taper off, however, and after 1949 it was rarely mentioned. The number of Christians in Japan increased by about 10 percent during the occupation, to a total of about 390,000, or 0.5 percent of the population.^[17]

By the beginning of 1948 the divisions in the Socialist Party were steadily widening. Katayama's leadership was under challenge from both the left and right. In January the left wing decided to support a budget-breaking supplemental allowance for public workers. The defection of the leftists was largely due to differences over economic policy and dissatisfaction with the "middle-of-the-road" policies of the Katayama cabinet. Soon after, the purge of Hirano Rikizo, the minister of agriculture and one of the party's right-wing leaders, dealt another hard blow to party unity. It was widely known that Kades of GS had been pressing the Japanese to purge Hirano. According to one gossipy account by a Japanese historian, Hirano had committed two sins in the eyes of GS: he had given support to Yoshida in earlier interparty negotiations and had maintained good contacts with G-2. Several years later Whitney authorized his judicial expert, Alfred Oppler, to intervene directly with the president of Japan's Supreme Court to deny Hirano's appeal from his purge decision.^[18] The breakaway of the Democratic Party group in Katayama's coalition delivered yet another blow. This was formalized on March 15 when former prime minister Shidehara Kijuro and thirty of his supporters joined Yoshida and the Liberals. The Liberals soon renamed their party the Democratic Liberal Party, although cynics claimed they merited neither adjective.

By early February Katayama had decided to resign. He paid his farewell call on MacArthur on February 9. The general reportedly suggested he might go before the Diet and seek reelection, but the prime minister did not take up this suggestion. MacArthur then issued a state-

ment praising Katayama for his "conscientious and patriotic leadership" and commenting that the outgoing cabinet had "been confronted with the serious political, economic, and social dislocations which are a natural consequence of the war and defeat." He added in regard to the selection of the next government that "the occupation will continue to regard the determination of such internal political issues as a responsibility of the representatives of the Japanese people."^[19]

MacArthur told Ambassador Gascoigne on February 10 that "imbued as Katayama was with the highest ideals, he had been the victim of his own inherent modesty and patriotism." Katayama "had repudiated the policy of his own party to serve the interests of the nation" and "had endeavored to make the four-party coalition a reality but had failed owing to Yoshida's obstructive and selfish tactics."^[20]

On February 10, 1948, Katayama called on the emperor and submitted his resignation. Two questions then arose: whether the emperor, whose sole constitutional function in such situations was to attest the documents involved, should have received the prime minister's resignation and whether Katayama had acted in accordance with the constitution, which provided clearly that the house could be dissolved only at the end of its four-year term or when a no-confidence resolution had been passed.^[21] These issues became a subject for heated debate in the press and in political circles.

Yoshida had been working hard since he left office to build up his party and strengthen his own leadership. In the ten months he had been out of office, he had traveled around the country learning to be a politician and building political support. The enticement of the Shidehara faction away from the Democrats had been a major coup, encouraging Yoshida in his belief that two major parties might emerge in Japan— one conservative and the other left of center. In this way, he thought, Japan could develop a government strong enough to implement policy and avoid having constantly to placate warring political factions.^[22]

The Socialist Party had failed to lead the nation, much as the conservatives had failed nine months before. It had done the nation a service by trying to provide left-of-center leadership, giving labor and left-wing forces an opportunity for a practical test of their policies. But after this one experience, the Japanese people were reluctant to give the party another chance.

In his memoirs published in 1969, Katayama recounted an event that has never been satisfactorily explained. In a private meeting before the prime minister resigned, MacArthur made a "statement on the rearma-

ment of Japan." Katayama said that because he was personally opposed to rearmament and strongly in support of the no-war clause in the constitution, he did not feel he could respond in any favorable way to the general's suggestion. Nishio Suehiro, Katayama's top strategist, and Sone Eki, his diplomatic adviser and often his interpreter, stated they had no information about any such meeting with MacArthur or about advice from U.S. headquarters that Japan should "consider" rearmament.^[23] Certainly MacArthur opposed Japan's rearmament at that time. It was not until 1950, when the Korean War broke out, that the general entertained any argument from his own government that Japan should increase its defense strength. Nevertheless, by early 1948 Washington was rethinking Japan's role, and Tokyo was soon to feel the pressure.

The resignation of Katayama violently shook the uneasy political equilibrium within the Socialist-Democratic coalition. Yoshida Shigeru, abiding by classic parliamentary principles, argued that there should be a new general election of if not, that the leading opposition party—his Liberals—should form a cabinet. GS did not welcome the prospect of another Yoshida cabinet, however. The British ambassador quoted Colonel Bunker, MacArthur's aide, as saying that GS would do everything "to make it as difficult as possible for Yoshida to return to power."^[24]

In this fluid situation Ashida Hitoshi was able to build on the same three-party coalition—Democrats, Socialists, and People's Cooperatives—that had elected Katayama. On March 10, 1948; one month after Katayama left office, Ashida became prime minister. It took him two weeks to form his cabinet, which included two left Socialists. He had fought off Yoshida's challenge, but the old diplomat had made a good scrap of it. Some of Yoshida's supporters wanted him to join the coalition, but he fended them off. He was confident that another election was coming up and that his party would win.

General MacArthur did not endorse Ashida, as he had Yoshida and Katayama. A GS spokesman did state on February 24 that the election of Ashida had been "thoroughly democratic" and then rather incautiously suggested that perhaps the Diet should clarify the "true position of the Emperor" as a ceremonial symbol of the state without political power. This comment brought the emperor's interpreter, Terasaki Hidenari, running to Bunker to ask what SCAP had in mind. It was not clear whether the emperor was concerned, or only his protective servitors. MacArthur told Bunker not to get into the matter and that "no criticism of the Emperor" had been intended.^[25] Some concern re-

mained, however, that Katayama, by presenting his resignation to the emperor, may have conferred on the Tenno a degree of political power not sanctioned by the constitution.

With SCAP blessing, Ashida was safely ensconced in high office. The new prime minister had some assets for the job. A handsome and well-educated man, his diplomatic and legal background added breadth and sophistication to his political talents. He was more urbane and polished than Yoshida, and his command of English was stronger. From 1933 to 1940 Ashida had served as president of the Japan Times & Mail , an official organ of the Japanese Foreign Office and the voice of Japan for the English-speaking community. After the war it was renamed the Nippon Times and then the Japan Times . A GS memorandum of 1947 asserted that the editorial policy of the paper had "consistently and enthusiastically supported the government's program of naked aggression and ruthless exploitation in Asia." Nevertheless, Ashida had been able to escape being purged, mainly because the Japanese media subcommittee set up to examine purge cases felt that the Japan Times & Mail had only insignificant influence on popular attitudes because it was published in English.^[26]

Ashida, however, was something of a trimmer more eager to win influence than to advance good causes. Nor did he succeed in establishing good relations with MacArthur, who considered him "slippery" despite his skill in organizing his cabinet.^[27] The supreme commander's harsh judgment was somewhat surprising because Ashida tried mightily to curry favor with senior SCAP officials. The new prime minister got Whitney to write him a letter on April 3, 1948, asserting there was no basis for a new election at that time and supporting steps to increase attendance at Diet sessions.^[28]

Ashida's first months in office seemed promising. He was active and successful on several fronts. He met with Under Secretary of the Army William H. Draper, who had obtained a large congressional appropriation in early 1948 for assistance to Japan as well as a loan of $600 million to enable Japan to buy U.S. cotton. Cotton textiles had been Japan's prime prewar import-earning industry and served as the flagship of its postwar industrial revival. Ashida pushed the ESB draft of a five-year economic development plan. His grip seemed strong.

Ashida's running start at the helm of government was greeted in the summer of 1948 by a potent letter from MacArthur calling for restrictions on the bargaining rights of government employees. The government had 2.5 million employees, about 1 million of whom were in gov-

ernment enterprises like the railway. Government workers were the most highly organized in Japan, making up about 40 percent of all union members and the most active group in politics.^[29]

The bureaucracy had received no special attention during the first two years of the occupation, unlike the other pillars of the old order in Japan—the military, politicians, and big business. An effort was soon made to remedy this oversight. A U.S. civil service mission headed by Blaine Hoover, the president of the Civil Service Assembly of the United States and Canada, arrived in Japan in late 1946 to survey the situation. His solutions were 100 percent American. His June 16, 1947, report to MacArthur made two key proposals: establish a powerful central personnel agency and pass laws that (1) would give civil servants the right to organize but not to bargain collectively or to strike and (2) would empower government enterprise workers to organize and bargain collectively but not to strike. Government employees other than those in enterprise operations were already prohibited from striking by the Labor Relations Adjustment Law of 1946, although this provision was not strictly enforced.

When Prime Minister Katayama and his senior advisers learned of the Hoover recommendations on June 1, 1947, they felt consternation. These proposals would all but destroy the bargaining powers of the government workers, who were a powerful force in the Socialist movement. Yet there was little they could do about Hoover's recommendations. The drafting of a new bill went ahead, and much of the Hoover plan was embodied in a revision of the National Public Service Law (NPSL) passed by the Diet on October 21 while Hoover was in the United States. But the revision omitted the plan's key provision prohibiting strikes and collective bargaining by government workers, both civil servants and those in government enterprises, a compromise that SCAP sections were willing to accept, perhaps because they did not agree with Hoover's tough position. Hoover was incensed when he got back in November and set about to repair the damage.

By the early summer of 1948 new labor troubles were boiling. The settlement of the strike threat of early 1947 had left government workers dissatisfied with the wage increase they had received. The average pay of government workers was ¥2,900 a month (about $12), whereas pay in the private sector was about ¥5,087 (about $20). Work stoppages, slowdowns, refusals to work overtime, and similar tactics became frequent. As early as March 29 General Marquat had issued a memorandum banning a threatened strike by communications workers

and citing MacArthur's general strike ban of January 31, 1947, as his authority.

With Whitney's support, Hoover argued that all government workers had a responsibility to the public to refrain from strikes and coercive collective bargaining, with any disputes to be settled by the national personnel authority. James Killen, the labor expert in ESS, argued that workers in government enterprises should have the right to bargain collectively but not to strike. It is noteworthy that the Japanese constitution of 1947 provided in Article 28 that "the right of workers to organize and to bargain and act collectively is guaranteed."

The two sides put the issue up to the supreme commander. In a unique resort to staff action, MacArthur held an all-day meeting with a half dozen senior staff officials on July 21, 1948. He listened carefully as Hoover and Killen presented their cases and asked many questions. Kades had dug up a quotation from Franklin D. Roosevelt that made an impression on MacArthur: "A strike of public employees ... looking toward the paralysis of government by those who have sworn to support it, is unthinkable."^[30]

At the end of the meeting MacArthur said he reserved his decision. The next day he sent Prime Minister Ashida a letter dearly embodying the view of Hoover and GS: "The paramountcy of the public interest is ... of foremost consideration and corollary thereto is the need that safeguards be erected to ensure that the lawful authority of the government as the political instrument to enforce the people's will as expressed in the body of public law be only challengeable at the polls as provided under well-established democratic practice."^[31]

The letter then proposed some major bureaucratic surgery: remove the bulk of the government enterprise workers, who were employees of the railways and of the salt, camphor, and tobacco monopolies, from. the civil service and place them in public corporations under mediation and arbitration procedures and split the Ministry of Posts and Communications into two ministries to handle postal services and other communications functions. MacArthur's decision was thus a compromise. Public workers would not have the right to strike or bargain collectively, but public enterprise workers would have the right to collective bargaining without the right to strike.

Prime Minister Ashida moved immediately to carry out MacArthur's instructions. A cabinet ordinance issued on July 31 put them into operation pending legislation by the Diet. This was the famous cabinet order 201, which Japanese liberals interpreted as another move to the right by the United States and the supreme commander.^[32]

The MacArthur letter of July 22 set off small bombs in many bastions—within SCAP, in the Japanese government, in Washington, and on the international diplomatic front. On July 30 Killen resigned as head of the ESS labor division after issuing a press statement that the proposed revisions of the NPSL were "ill-advised and will retard a healthy labor movement." Killen told the political adviser on August 9 that the Communists would make big gains as a result of MacArthur's action, but he put more of the blame for what had happened on Whitney and Hoover. The political adviser reported that on July 30 "the general appeared a bit worried about his letter to Ashida." MacArthur said he had "a great deal of factual material prepared" if the Soviets questioned his action. They soon did.^[33]

The SCAP letter became an international issue when the Soviet Union challenged it in both the ACJ and the FEC. A key Soviet argument was that the FEC had authorized political activities by labor unions, whether government employees or not. This objection was heard with some sympathy by representatives of the Commonwealth nations, but the United States was firmly opposed. The Soviet objections won no converts.

The Australian and British governments believed that government workers should be entitled to some form of collective bargaining or arbitration. A majority in the FEC seemed to support an Australian proposal that in effect could have given the strike right to government enterprise workers, but Australia did not press for a vote in the face of adamant U.S. opposition. The Commonwealth attitude enraged MacArthur. When he met with the British ambassador in Tokyo, "for the better part of an hour the general was in such an uncontrollable temper that it was almost impossible to reason with him." When told of the concern of Foreign Secretary Ernest Bevin, a powerful leader of the British Labour Party, that the legislation proposed by the Japanese should provide for collective bargaining including arbitration, MacArthur complained bitterly that "in the most enlightened democracy in the world, the United Kingdom, it was not realized you could not give the same rights as were enjoyed in Britain to a backward, feudalistic nation such as Japan."^[34]

MacArthur encountered his most serious opposition in the Army and State departments in Washington, which recommended greater flexibility in the treatment of public enterprise workers.^[35] This was the nub of the issue: should government workers be entitled to some kind of collective bargaining in labor disputes? MacArthur and Whitney said no. Both Ashida and Yoshida were on their side.

In concert with SCAP, the Japanese government worked out and later in 1948 enacted the Public Corporations and National Enterprises Labor Relations Law. It set up five government enterprises, including the alcohol monopoly, and two government corporations, or kosha , including the national railways and the tobacco and salt corporations. In 1950, when the Post and Communications Ministry was divided into two ministries—postal services and telecommunications—the Nippon Telephone and Telegraph Corporation was created as a third major public corporation. The employees of the five government enterprises and three public corporations did not have the right to strike under the new law but did have the rights to organize and bargain collectively. MacArthur hailed the amended NPSL as "a major victory for those who seek integrity of government over those who would leave the government prey to minority subjugation."^[36] Yoshida and his Democratic Liberal Party passed all of the legislation flowing from the MacArthur letter soon after they returned to power in October 1948.

SCAP was not yet through with government workers. Having ensured that government employees were deprived of the right to strike and bargain collectively, Blaine Hoover embarked on one of the more bizarre operations of the occupation. He planned a series of examinations to determine whether those holding or applying for senior positions in the civil service had the necessary qualifications. The uneasy Japanese tried to get the exams postponed, but General Whitney said no: "In Allied countries there has been criticism of the Japanese higher bureaucracy for the role they played in the planning and the preparing and in the leadership of the war."^[37]

The tests, held in mid-January 1950, put 2,649 positions on the line. Virtually every incumbent applied, along with about 5,000 outside aspirants. The exams were to probe knowledge, technical information, and adaptability for work in the civil service. The imaginative Japanese cooked up the term paradise examinations to describe the relaxed conditions under which the tests were to be given: the examinees could smoke, drink tea, and eat their lunch, and no time limit was imposed. A total of 7,432 persons took the exams. A SCAP report stated that 25 percent of the tested officials lost their jobs; another source put the failure rate at 30 percent; other sources put it much lower. Many who took the tests thought them reasonable and fair. The tests were never given again.^[38]

Although SCAP is often criticized for doing little to reform Japan's bureaucracy, it did in fact carve up government personnel and agencies rather considerably. Of government employees, 1,809 were formally purged. Many thousands more were either fired or forced to resign,

most of them in the opening months of the occupation: 4,800, nearly all police officials, were fired from the Home Ministry in October 1945 as a result of the bill of rights directive; 115, 778 teachers resigned under pressure from the Education Ministry, and 5,211 more were in effect purged; Yoshida fired 7,500 nationalists in the Foreign Office. Of the twelve cabinet-level ministries in existence at the end of the war, the Japanese abolished three—the Army and Navy ministries and the Ministry of Greater East Asia. The cabinet quickly converted another, the Munitions Ministry, into the Ministry of Commerce and Industry, which became the Ministry of International Trade and Industry in 1949. With SCAP approval the Home Ministry was abolished in 1947, and its functions were parceled out to other agencies; and the Justice Ministry was reorganized. Several new ministries were set up during the occupation, such as the Labor Ministry, the Ministry of Welfare, the Ministry of Postal Services and Communications, and the Ministry of Transportation. All criticisms to the contrary, the bureaucracy was extensively pruned, and the structure of many ministries was significantly revised.^[39]

In the summer of 1948, when the national public service issue was being debated and the new legislation enacted, one of the biggest political scandals in modern Japanese history was welling up and engulfing many prominent victims. The Showa Denko (Showa Electric) Company, Japan's largest manufacturer of fertilizer, had obtained huge loans from the Reconstruction Finance Bank (RFB), a government financial institution set up in 1946 with occupation blessing to help finance development projects. The RFB had got the reputation of lending money without adequately checking the reliability and creditworthiness of recipients. Public prosecutors began an investigation of RFB's connections with Showa Denko in May 1948, seized company documents, and in June arrested its president on charges of having bribed government officials. Among those arrested were a former finance minister in the Katayama cabinet and a senior Finance Ministry official, Fukuda Takeo, who was later acquitted and in 1976 became prime minister of Japan.

Next the deputy prime minister, Nishio Suehiro, was arrested on a charge of having received a bribe of œ1 million (about $3,300). The day after, October 7, the cabinet decided to resign. On December 7 Ashida himself was arrested. All told, sixty-four persons were arrested and charged with having received some œ6 million (about $20,000) in bribes.^[40]

It was rumored that an even larger amount had been used to in-

fluence foreigners, meaning members of the occupation. That officers in GS were a favorite target of the rumormongers was ironic because only a few months earlier Kades had induced the government to make a thorough, but eventually fruitless, investigation of the "hoarded goods scandal," which involved possibly as much as $2 billion worth of military supplies and equipment illegally diposed of at the end of the war.^[41]

In 1958 Ashida and Nishio were finally acquitted after ten years of trials, an example of the excessively protracted judicial proceedings that are so frequent in Japan. In the end, of the sixty-four persons arrested, only two were convicted and sentenced to prison terms. Almost none of the money allegedly used for bribes was ever traced or even accounted for.

Documentary evidence does not indicate that the Shoden (as Showa Denko was known) case was of much concern to SCAP or that its officials were involved.^[42] What is dear is that Shoden was the coup de grace for coalition government. Thereafter, the power of the Democratic Liberal Party and its leaders grew steadily, buoyed by a huge wave of popularity for Yoshida Shigeru.