The was a

political scandal In politics, a political scandal is an action or event regarded as morally or legally wrong and causing general public outrage. Politicians, government officials, party officials and lobbyists can be accused of various illegal, corrupt, uneth ...

in the early

Shōwa period Shōwa may refer to: * Hirohito (1901–1989), the 124th Emperor of Japan, known posthumously as Emperor Shōwa * Showa Corporation, a Japanese suspension and shock manufacturer, affiliated with the Honda keiretsu Japanese eras * Jōwa (Heian ...

Imperial Japan The also known as the Japanese Empire or Imperial Japan, was a historical nation-state and great power that existed from the Meiji Restoration in 1868 until the enactment of the post-World War II 1947 constitution and subsequent forma ...

which brought about the collapse of the administration of

Prime Minister A prime minister, premier or chief of cabinet is the head of the cabinet and the leader of the ministers in the executive branch of government, often in a parliamentary or semi-presidential system. Under those systems, a prime minister i ...

Saitō Makoto Viscount was a Japanese naval officer and politician. Nussbaum, Louis-Frédéric. (2005)"Saitō Makoto"in ''Japan Encyclopedia'', p. 809. Upon distinguishing himself during his command of two cruisers in the First Sino-Japanese War, Saitō rose ...

in 1934.

History and background

In June 1933, the ''Banchokai'', a group of young investors, purchased 100,000 shares of

Teijin is a Japanese chemical, pharmaceutical and information technology company. Its main fields of operation are high-performance fibers such as aramid, carbon fibers & composites, healthcare, films, resin & plastic processing, polyester fibers, produc ...

(a leading rayon and textile firm) from the

Bank of Taiwan The Bank of Taiwan (BOT, , see below) is a commercial bank headquartered in Taipei, Taiwan. It is owned by the government of Taiwan. History The Bank of Taiwan was established as Taiwan's central bank in 1899, during Japanese rule. ...

at a price of ¥125 per share. The stock steadily rose in price, reaching ¥200 per share by the end of the year, and rumors began to arise in the editorial pages of various newspapers that the ''Banchokai'' had somehow managed to manipulate the market. Working with this unsubstantiated rumor, ultrarightist officials in the

Ministry of Justice A Ministry of Justice is a common type of government department that serves as a justice ministry. Lists of current ministries of justice Named "Ministry" * Ministry of Justice (Abkhazia) * Ministry of Justice (Afghanistan) * Ministry of Just ...

accused officials in the

Ministry of Finance A ministry of finance is a part of the government in most countries that is responsible for matters related to the finance. Lists of current ministries of finance Named "Ministry" * Ministry of Finance (Afghanistan) * Ministry of Finance and Ec ...

and members of Saitō Cabinet of conspiracy with the Bank of Taiwan to permit the ''Banchokai'' to purchase shares at an artificially low price in return for bribes of cash and stock. In April 1934, the Ministry of Justice ordered the arrest of the Vice-Minister of Finance, director of the Bank of Taiwan and president of Teijin. On receiving word that a number of cabinet ministers were also scheduled to be arrested, Prime Minister Saitō dissolved the government on 3 July 1934. Soon afterwards, thirteen more officials were arrested on charges of corruption.

Consequences

After a lengthy trial, all sixteen defendants were cleared of all charges, and the entire set of stock transactions involving Teijin shares was found to be free of fiscal irregularities. However, the Japanese public in general was left with a strong impression on extensive corruption in high levels of government and finance, which further eroded public confidence in both

liberal democracy Liberal democracy is the combination of a liberal political ideology that operates under an indirect democratic form of government. It is characterized by elections between multiple distinct political parties, a separation of powers into ...

and in the

capitalist Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, price system, priva ...

system. This image was encouraged by the right-wing '' Kokuhonsha'', led by

Hiranuma Kiichirō was a prominent right-wing Japanese politician and Prime Minister of Japan in 1939. He was convicted of war crimes committed during World War II and was sentenced to life imprisonment. Early life Hiranuma was born in what is now Tsuyama C ...

, who was also chief prosecutor in the trial. Indirectly, the Teijin Incident contributed to an increase in violent terrorist attacks by secret societies such as the ''

Sakurakai was an ultranationalist secret society established by young officers within the Imperial Japanese Army in September 1930, with the goal of reorganizing the state along totalitarian militaristic lines, via a military coup d'état if necessary. The ...

'' and League of Blood against leading figures in government and finance. It also contributed to attempted military coup d'etats, such as the February 26 Incident, against the perceived corruption of civilian rule.

History and background

Consequences

References

Further reading