all that activity is beyond description.'
When the Western nations returned to the world ~ and Asian - market, the high-cost enterprises, grown under war conditions, could hardly compete. The large and on the whole efficient firms adopted stiff rationalisation measures and, while expanding out put, reduced employment. The unemployed and now city-based labour force had to take whatever was available in the small sweat shops while others returned 'home' to the villages aggravating the problems there. The differential structure between the large, efficient firms with access to capital - or their own capital supply - and the many small establishments with low wages and a marginal existence, became stronger. We need not go into details: there were two spurts during this period, the one after the TokyoYokohama earthquake of 1923, the other in 1929 prior to the American big crash. The government shied away from the rigor ous deflation measures which would have forced industry to rationalise and become competitive.3 In 1920 the Hara Cabinet launched a fourfold expansion programme: expansion of arma ment, railways, industry and education. But keeping the high-cost enterprises alive did not solve the problem and finally, in 1927, a banking panic broke out caused by the efforts to solve the tech nically bankrupt Suzuki Conglomerate. The Bank of Taiwan had to close its doors and in a chain reaction thirty-six other banks had to close, among them the large Fifteenth. The government had to declare a banking moratorium of three weeks. Now many small banks merged with larger ones, the total of independent banks decreased from 1,417 in 1926 to 876 in 1929, with heavier concentration in the zaibatsu banks than ever. The outbreak of the Great Depression in 1929 finally motivated the Hamaguchi Cabinet to adopt a serious deflationary policy. In the following year (1930) the gold standard was restored (at a too high 2 : 1 parity), exports were, rather unsuccessfully, promoted and pro duction was rationalised. This led to massive unemployment and fall in prices. During 1925-29 prices had dropped already by 20 per cent; they fell during 1929-30 by another 17 per cent and in 1930-31 by 15 per cent. Among the victims of this drastic fall of prices were also the farming population with rice and raw silk falling by a large margin. In 1931 there were 1.3 million unem ployed, while many others were disguised unemployed in the many small sweat shops and as returnees to the villages where they shared the misery with their relatives without registering as unemployed.