What troubled Blakemore more than anything else, however, was meeting the bordello’s Japanese madam, whom he interviewed for three hours in the course of his research. The madam, it was plain to him, was a product of the upper classes. She was a middle-aged woman with a dignified, cultured manner who spoke very elegant, beautiful and polite Japanese – what Blakemore, one of the few American GHQ staffers to speak the language of the people they were supposed to be governing, described as a ‘joy to listen to’. In fact, she had been the daughter of a wealthy family that had lost everything in the war, and now, penniless, she had to resort to prostitution to survive and support her children. When she spoke in English, however, her refined ladylike image disappeared. What came out of her mouth was a horribly foul concoction of obscenities she had learned from talking to GIs. ‘Ottasmadda you,’ she asked Blakemore at one point. ‘You no likee fuckee? You cherry boy?’ If that was an example of MacArthur’s new Japan, Blakemore wanted no part of it.
Ultimately even official US policy was driven, in good part, not by ideology but by financial interest and the profit motive, although that particular facet of Occupation history was not commonly known at the time. Consider the political U-turn SCAP took in 1947, along with its social one. After a year of fevered reform during which SCAP purged some 200,000 people who had held responsible positions during the war – military officers, politicians, government officials and businessmen – while encouraging labor unions to form, Occupation policy was dramatically altered in what was known as the Reverse Course. The purged were unpurged, union activity restricted, and many other changes repealed.
The Reverse Course was ostensibly prompted by national security concerns – the rise of Communism in China, the onset of the Cold War with the Soviet Union, and subsequent fear of a Communist Japan (a prospect that, however, did not necessarily instill fear in all Japanese). Almost overnight, the new goal of the Occupation became one of making Japan a ‘bulwark against communism’, as opposed to the previous one of creating a ‘showcase of democracy’.
What most people did not know until much later was the role men from Wall Street played in it all, orchestrating, behind the scenes, a major lobbying campaign to revive the former prewar economic structure. Known as the Japan Lobby in some quarters, it was run by a semisecret group of American individuals affiliated with the Rockefellers, the Morgans and other large US multinationals that had substantial prewar business interests in Japan, long-standing close ties to leaders of the zaibatsu (financial combines), and, it went without saying, powerful connections in Washington. Its members included Secretary of Defense James V. Forrestal, who was also president of the large investment house Dillon, Read; William H. Draper, undersecretary of the army and future vice president of Dillon, Read; and presidential advisor John J. McCloy, the Rockefeller dynasty’s main lawyer and ‘foreign affairs minister’. These men argued that American interests lay in maintaining a highly concentrated economy in Japan under an industrial elite capable of managing it, who would make Japan a country fully capable of supporting itself, sharing some expenses with Uncle Sam in protecting Asia from the Reds, and also a country that would be attractive to American capital investment.
An early highlight of the Japan Lobby’s campaign was a December 1, 1947, Newsweek cover story, ‘Far to the Left of Anything Now Tolerated in America’, which helped bring great pressure on leaders in Washington to change SCAP policy. On the cover was California Senator William Knowland, a highly vocal defender of free enterprise, who had been critical of a radical zaibatsu deconcentration plan before the Diet known as FEC-230, in which hundreds of large companies would be broken up and awarded to the unions. (It was a plan supported by MacArthur, who held the industrial conglomerates partly responsible for the war and who had already ordered the fragmentation of Mitsui Bussan and Mitsubishi Shoji, Japan’s two largest trading firms.)
‘If some of the doctrines set forth in FEC-230 had been proposed by the government of the USSR or even by the Labor Government of Great Britain,’ Knowland remarked, ‘I could have understood it. It was unbelievable to me that such a document could be put forward representing the government of which I am a part.’
The magazine had relied on reports compiled by a longtime Tokyo lawyer to the US multinationals named James Lee Kauffman, who had taught at Tokyo’s Imperial University before the war and whose clients included Standard Oil, which had been selling its wares in Japan since the late 1800s, and General Electric, which had had deep ties to the Mitsui zaibatsu since the nineteenth century and had helped electrify Japan. (American companies had held three-quarters of all direct foreign investment in Japan, led by GE’s holdings in the Mitsui-affiliated Tokyo Shibaura Electric, better known as Toshiba.)
Kauffman, in documents first circulated to allies in the Departments of State and Defense, who then funneled them to the news media in Washington, painted a bleak picture of a socialized economy under FEC-230, one in which so many experienced executives would be purged from their jobs that the only people left to run the banks and other corporations would be ‘lowly clerks’:
If you have ever seen an American Indian spending his money shortly after oil has been discovered on his property you will have some idea of how Japanese workers are (already) using (new) labor laws …
You can imagine what would happen in a family of children of ten years or less if they were suddenly told that they could run the house and their own lives as they pleased … Were economic conditions otherwise, I am convinced Japan would be a most attractive prospect for American capital.
The lobby was formally established as the American Council on Japan in 1949, and it brought to bear enough pressure to ensure that its goals were readily achieved. Only nine of the 1200 concerns targeted for possible dissolution under FEC-230 were ever the subject of SCAP action, the old wartime ruling class was effectively restored, and the zaibatsu industrial combines allowed to regroup. At the same time, some 20,000 leftists or Communists – the very people the GHQ had been wooing at the start of the Occupation – were put out of commission by the G-2 intelligence wing with the help of several hundred once-purged members of Japan’s infamous Tokko-keisatsu, or Thought Police, who had been allowed to return to action, so to speak.
By 1952, all prewar investments in Japan by US companies had been fully recouped, all prewar Japanese bonds held by ACJ-affiliated companies had been repaid with interest, and all property lost or damaged from 1941 until 1945 had been compensated for – meaning that many US corporations ended up making a tidy sum on the war.
The above foreign investors went on to stake out strong positions in the form of joint ventures in key Japanese industries, including petroleum refining, aluminum, electrical machinery, chemicals and glass. They were led by the Rockefeller group, which over the fifty years following the war would be involved in more combined enterprises with Japanese companies than any other multinational. The Tokyo branches of the Chase Manhattan Bank and Bank of America were tapped to become major business financiers in Japan, allowed to extend credit in amounts equaling the Japanese national budget.
All in all, for some parties on both the highest and lowest rungs of the social ladder, the Occupation turned out to be a very profitable exercise. And the entangled web of veiled, mutually beneficial cooperation that underlay the whole process, sometimes bringing together the unlikeliest of bedfellows, was now in place. It would reveal itself often throughout the rest of the century.
2. Occupation Hangover
The special relationship between the United States and Japan begun during the Occupation entered a new phase with the signing of the Mutual Security Treaty on April 28, 1952, which formally terminated SCAP rule. Officially hailed in Tokyo as ‘fair and generous’, it gave Japan her freedom and stipulated that America provide Japan’s defense. Yet ordinary Japanese, perhaps, found little reason to cheer. Under the terms of the treaty, Japan had been forced to commit herself, reluctantly, to America’s hard anti-Communist stance vis-à-v
is the Soviet Union and China and allow the stationing of 120,000 US troops on 150 bases dotting the Japanese isles. The country, in effect, remained occupied, and over the next several years a string of unpleasant occurrences served to remind the people of that fact. In November 1953, a Tokyo pimp drowned after three American soldiers threw him into a central city canal. In a similar incident the following month a Japanese salaryman lost his life. Then, in 1954, it was the Lucky Dragon affair, in which a Japanese fishing boat was irradiated accidentally by a US atomic bomb test in the Marshall Islands, causing the eventual demise of the ship’s captain. These outrages were followed by successive episodes in 1957 and 1958, when bored military sentries discharged their weapons and accidentally killed off-base Japanese.
Equally annoying may have been the bombardment of propaganda delivered in Japanese and English by the Voice of America and the activities of the various US intelligence agencies, who maintained a close surveillance over the people they were supposed to be protecting. The VOA had initially reported, for example, that the captain of the ill-fated Lucky Dragon died from a ‘liver ailment’ (not atomic radiation as was later confirmed). It also issued other nuggets of disinformation such as the following:
Today, let’s report on war brides. In the past ten years, over 5,000 war brides have gone to the United States. They have all gotten used to a new land and a new environment. They have nice, kind loving husbands and cute children and are spending each day happily.
Sometimes we are asked about racial prejudice against negroes in the U.S. Well, America is a free and democratic country and there is no such thing as discrimination. There’s no difference between black and white. Both lead abundant lives.
Letters of protest sent to the VOA regarding the inaccuracies of broadcasted reports were passed on to CIA offices in the US Embassy, where they were placed in a special file for potential troublemakers, who were then ‘interviewed’ by American intelligence. Other forms of thought control included the US State Department ban on export to Japan of films like John Ford’s Grapes of Wrath and Tobacco Road, as well as others that dealt with social injustice in America. On the other hand, proceeds from those films the United States did allow to be shown, such as Roman Holiday, The Greatest Show on Earth and Shane, were funneled to anti-Communist groups in Japan to circumvent yen–dollar conversion restrictions. (Revenue from petroleum sales was used in the same way, as was that from sales of the Japanese-language edition of Reader’s Digest.)
That aside, it was business as usual. Most sectors of Japanese industry, back in the hands of prewar owners, were busy churning out, at first, armaments, munitions, equipment, supplies and other military-related products to support the conflict in Korea. Then they moved on to other types of industrial manufacturing, thanks to a well-educated workforce willing to toil twelve to fifteen hours a day and to careful government direction of investment.
As early as 1956, Japan would pass Britain to become the world’s leading shipbuilding nation, led by Mitsubishi Heavy Industries and Ishikawaharimajima. A firm called Sony would already be making portable transistor radios, and the textile, steel and mining industries would be competing internationally.
Although Tokyo was still a dusty, rubble-strewn city where homeless ex-soldiers vied with street urchins for handouts and graduates of Japan’s esteemed Tokyo University drove cabs (Renault cabs because there were no domestic autos), the economic recovery was especially noticeable during the year-end holiday season, when Japanese business corporations held thank-you banquets for suppliers, clients and workers to reward them for their devotion. Faced with a rare opulent buffet and all the alcohol he could consume for free, the impoverished, malnourished employee (whose average waist size was estimated to be about twenty-four inches) would gorge himself and inevitably wind up getting sick on the way home – which inspired a popular haiku of the time:
Christmas,
Stars in the heaven
Vomit in the street
In 1952, 1953 and 1954, the list of all income earners, Japanese or foreign, as reported by the National Tax Office, was topped by the aforementioned Blakemore, a self-confessed Japan addict who, after translating the Japanese Civil Code into English, had set up a private commercial law practice on the Ginza, taking on many of the clients of the ACJ’s James Lee Kauffman, who willingly provided the introductions. He represented General Electric, RCA, International Nickel, and Dow Chemical in joint ventures with big Japanese firms. Blakemore hobnobbed with the likes of John Foster Dulles, John D. Rockefeller III (one of the five brothers indirectly controlling the Standard Oil and Chase Manhattan Bank empire and the largest single foreign investor in Japan), Shigeru Yoshida, who was prime minister of Japan from 1948 to 1954, and the Crown Prince.
To some Japanese, the tall rangy Oklahoman embodied the ideal image of the American, the one they saw in the popular TV series Father Knows Best. He lived with his wife, a graphic designer with the State Department named Frances Baker, in a newly built American-style house that stood on land in central Tokyo purchased at bargain basement prices. There was a big, modern, American-style kitchen and a huge refrigerator stocked full of food. Blakemore’s dogs, a pair of blooded Irish setters, ate better than most Japanese.
Tokyo was a city brimming with opportunity of all sorts where there were also thousands of other gaijin – ex-Occupationnaires, carpetbaggers, drifters on the make – whose presence caused many Japanese observers to bemoan the transformation of Tokyo as a ‘miserable colonial city’.
One of them was American Ted Lewin, a thickset, flashily dressed man in his fifties, of Asian extraction it was rumored, who traversed the ruined city in a black Cadillac limousine, one of the few deluxe cars in a sea of Army jeeps and three-wheeled trucks. Lewin, a mobster formerly associated with Al Capone, introduced casino gambling to the Japanese.
Gambling was illegal in Japan and had been for centuries (the old shoguns had believed that such a ban was necessary to maintain order among the populace, even though they themselves occasionally invited the bakuto into the castle for a private gaming session). Indeed, the only type of public wagering allowed was on thoroughbred racing under the aegis of the Ministry of Agriculture and on municipally sponsored bicycle and motorboat races established after the war specifically to raise needed revenue for local government. In fact, the Japanese authorities took the anti-gambling laws so seriously they once blocked a raffle at the American Club.
But Lewin, who had been in and out of Asia since the 1930s – he had managed the Riviera Club in Manila and had reportedly maintained a business relationship with the Japanese Imperial Army there during the early stages of the war – had a fairly good idea of how things worked in Japan. He had paid a $25,000 bribe to a certain Japanese politician, one of the first recorded post-Occupation bribes, and that was enough for the concerned authorities to look the other way while he opened up an operation on the Ginza.
The set-up looked like something out of a Warner Brothers movie. On the first floor was a nightclub restaurant, with a Filipino band, called the Club Mandarin managed by Lewin’s Taiwanese unwitting landlords. On the second, down a narrow back corridor near the restrooms, was the casino. There was a peephole, several levels of guards, and double-layered walls enclosed by iron shutters. In the inner sanctum stood a big Las Vegas – quality roulette wheel, as well as craps, blackjack and baccarat tables. Thanks to the patronage of the diplomatic crowd, Japanese politicians, and assorted black market gang bosses, several hundred thousands of dollars changed hands there every night.
Lewin also opened another club, the Latin Quarter, in Akasaka, noted for its red curtains and risqué entertainment. As one Japanese journalist wrote, describing live sex shows and rampant drug use, ‘It was a real 100% American style club, meaning that the mood was one of freedom and that it operated outside the law.’ Lewin’s Latin Quarter partner, Yoshio Kodama, was a former operative in the Japanese military who had taken part in the rape of China. His floor manager was an ex-CIA
agent named Al Shattuck, a tall, rugged, bespectacled man in his thirties who, as shall be seen, was about to become famous in Japan – but in a way that he perhaps never imagined. Shattuck’s Japanese assistant was a veteran of naval intelligence. Lewin’s chauffeur and interpreter was a Korean-American from Hawaii with ties to the Tokyo-based ethnic Korean gang Tosei-kai.
Lewin’s political contributions in high places served him well. Although police closed down his casino twice in widely publicized raids, each time, after a short interval, Lewin was back in business in a new location in the same general vicinity – operating under the Mandarin moniker. He was later reported to be involved in gunrunning, drug smuggling and prostitution as well. It was only after a phony stock scheme was uncovered in which Lewin swindled Japanese and Chinese investors out of hundreds of millions of yen that he wore out his welcome.
That other notorious foreign operation of note, Lansco, remained in business, continuing to generate profits by going into the pachinko business, a craze that swept Japan at the time. Pachinko was a form of early American pinball, introduced to Japan in the 1920s as a crude candy store game, which produced various prizes. Due to the space limitations Japan faced, the machine had evolved into a compact, upright, glass-fronted apparatus using tiny silver steel balls. The player sat in front of the device and by manipulating a lever propelled a rapid succession of balls up to the top of a board covered with a maze of steel pegs, the idea being to maneuver them into special payoff slots producing bonus balls redeemable not for free games but for prizes. In the postwar era, the prizes became daily necessities like coffee, canned fruit, sugar, soap and domestic cigarettes like Golden Bat. Since it cost so little to play and was the essence of simplicity itself, the popularity of pachinko skyrocketed. By 1953, there were over a million machines housed in some 50,000 pachinko parlors, all filled to capacity, day and night. Critics complained the pachinko boom was creating a nation of idiots and that it also increased the crime rate. Indeed, people were so eager to try it, they would literally steal for the money to play.
Tokyo Underworld Page 4