Mitsuhiko Kimura

Colonial Development of Modern Industry in Korea,
1910-1939/40*
Mitsuhiko Kimura**
Abstract
Under Japanese rule, the Korean economy under went momentous change, so much sothat, from a global perspective, it constituted an exceptional case in the first half of the20th centur y. Between 1912 to 1939, traditional primar y industr y (mostly agriculture)shrank from about 70% to about 40% of GDP, meanwhile, the proportion of mining andmanufacturing industries combined in the total economy grew significantly, from about 5% toabout 20%. In short, it represented a rapid transition from a primarily agricultural economy
to a primarily non-agricultural one. During this transition, the agricultural sector itself
underwent change. The policies of the Government-General and the development of themoney economy led to improved farming techniques and changes in crop selection. Overall
agricultural production increased steadily. In the meantime, industrialization in Korea beganwith small and medium-sized plants that simply processed raw materials. Then, as early as
the 1910s, modern industries arose, particularly ironmaking plants. From the 1920s until
1930s, a private-sector enterprise built a large-scale chemical industrial complex founded on
development of power plants. What must be emphasized here is that the colonized people
themselves contributed widely to industrialization in Korea. Koreans positively responded toexternal stimulus and took the initiative in following Japanese models and learning skills inbusiness and industrial technologies, thereby demonstrating entrepreneurship of their own.

Korea lacked modern industr y when it was annexed by Japan. How did the Korean
economy change under Japanese rule?
Changes in Koreaʼs industrial structure clearly indicate economic transformation.
According to recent estimates, agriculture, forestry, and fishery (as calculated by theamount of value added) accounted for approximately 70% of GDP (Gross Domestic Product) in
1912 (Table 1). This percentage declined decade by decade to about 40% in 1939. In less than 30
years, then, traditional primary industry (mostly agriculture) shrank to less than half the total
economy in terms of value of products. Conversely, the proportion of mining and manufacturingindustries combined in the total economy grew significantly, from about 5% to about 20% during
the same period.
In this article I will examine changes in, first, the agricultural sector and, second, the mining
and manufacturing sector over the period from annexation in 1910 until 1939/40.

*

This article is an English version of Kimura, Mitsuhiko.“Kindai sangyo no hatten [Development ofmodern industry].” Chap. 2 in Nihon tochika no chosen: tokei to jissho kenkyu wa nani wo kataruka. [Korea
under the rule of Japan: what statistics and empirical research tell us]. Tokyo: Chuokoron-Shinsha,
2018.

** Mitsuhiko Kimura is Professor of Economics and Economic History at School of International Politics,
Economics and Communication, Aoyama Gakuin University.

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Colonial Development of Modern Industry in Korea, 1910-1939/40

Table 1 Proportion of Total GDP by Industr y (based on nominal prices)(%)
Agriculture, forestry

Mining andElectricity, gas andand fisherymanufacturing

construction

Services

1912

68.1

4.9

1.9

25.1

1920

61.8

7.4

2.7

28.1

1930

49.0

9.4

6.3

35.3

1939

41.1

18.6

9.1

31.3

Note: Figures show a three-year average centered on the indicated year.
Source: Kim Nak-Nyeon, ed., Shokuminchi-ki chosen no kokumin keizai keisan [Economic growth in Korea 1910-1945], 315.

1.

Agriculture

Growth of Production
While the agriculture, forestry, and fishery sector shrank in relation to other sectors, its products
grew. From 1912 until 1939, agricultural production (in terms of real value added) rose by
an average of 1.9% annually (Kim Nak-Nyeon, op.cit., 406, table I-6). During the same period,
agricultural products in Japan grew at a much lower rate, 1.0% (Ohkawa et al., Choki keizai tokei 1:
Kokumin shotoku [Long-term economic statistics 1: National income], 228, table 26).
The coverage of the original statistics issued by the Government-General of Korea in the
1910s was limited. Therefore, estimates of the growth rate of Korean agricultural products
from 1910 through 1919 are based on many assumptions that might result in overestimation.
Even when we disregard this early period and limit our assessment to the years 1920 to 1939,
however, we still find a high average annual growth rate of 1.5%. Such rapid growth is rarely foundelsewhere unless a vast area of new land is being cleared or large labor surplus is available.
Rice accounted for the largest proportion of total agricultural output in value. Throughout theperiod of Japanese rule, rice accounted for more than 40% of it almost every year, with a peak of
54% occurring in 1934.

Rice Production
In the early 1910s, the annual amount of rice produced in Korea stood at around 12 million koku (1koku = 180 liters). It subsequently grew rapidly, reaching 27 million koku by 1937. Since cultivatedland area increased less than 15% during that period, the increase in production is mainly
attributable to greater productivity per unit area. By 1937, production per tan (about 991.7 square
meters) had reached 1.6 koku, an increase of over 80% compared with the beginning of the period.
Geographically, the largest gains in productivity accrued in northern Korea. Because of theadded factor of expanded cultivated area, rice production in northern Korea grew more sharply.

Improved Varieties of Rice
Before annexation, the Resident-General of Korea in 1906 established the Research Station ofModel Agriculture (which later became an Agricultural Experimental Farm) in Suwon, near
Hanseong (present-day Seoul), where they initiated research on the selective breeding of rice.
Satellite stations and seed nurseries were also established throughout Korea. After annexation,
the Government-General selected superior varieties from these facilities, distributed them tofarmers free of charge, and provided guidance on cultivation methods for them.
The main varieties selected at the time included Wase-shinriki (originally from Kumamoto
Prefecture; features high yields even with little fertilizer; also known as Sou-shinriki); Kokuryomiyako (originally from Yamaguchi Prefecture; high-quality rice well-suited to manufacture of24
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Mitsuhiko Kimurasake); and Tama-nishiki (originally from Tochigi Prefecture; high-quality rice featuring drought
resistance).
At the time of annexation, the dissemination rate of these improved varieties of rice in Korea
was virtually nil. Subsequent dissemination occurred quickly, however, exceeding 50% by 1920. In
that year, improved varieties accounted for 62% of total output of rice.
It is said that the Government-General went so far as to mobilize police officers to disseminate
the improved rice varieties. However, such rapid dissemination could not have been achieved
solely through gover nmental guidance (or “ coercion ” ). At the time, the gover nmentalorganization established was neither strong nor systematic enough to implement such a program
throughout Korea. Therefore, the rapid dissemination that did occur can only be explained by apositive response on the part of local producers.
Compared with native ones, the improved varieties of rice from Japan afforded Korean
farmers higher incomes. In addition to higher yields and more stable crops, the superior qualityof the new varieties commanded higher prices in the rice market.

Active Participation of Korean Farmers
Tenant farming was already widespread in Korea before Japan came on the scene. In the 1910s,
about 70% of all farming households were either combined owner/tenant farmers or pure tenant
farmers, with about half of the arable land area cultivated by tenant farmers. Of all rice paddies,nearly 70% were cultivated by tenant farmers.
Many Korean landowners were repor tedly absentee landlords who had no interest in
managing their farm and even did not live in local villages. Before annexation, the actual workof running some of the farms fell to Japanese who lived in Korea. They bought Korean land andleased it to tenant farmers to cultivate crops with an emphasis on rice. In the rice belt of southern
Korea, there were Japanese individuals and companies who owned anywhere from several
hundred to several thousand hectares of rice fields. The largest company of this type was Toyo
Takushoku Kabushiki Kaisha (the Oriental Development Company), a national enterprise of theJapanese Empire founded in 1908.
It was only natural that these Japanese landowners would be first to adopt the improved
varieties of rice. Their main objective was to maximize their income by exporting the rice theycollected as rent from tenants to the home market in Japan.
Even as late as 1920, however, Japanese living in Korea owned only about 10% of the total
cultivated rice area in Korea. This fact suggests that Koreans also played a part in widely
disseminating improved varieties of rice. Behind the scene was there a rapid growth of the money
economy. Korean farmers gained a strong incentive to acquire cash as manufactured goods
entered Korea from Japan, taxes and other governmental fees were levied, and commercial
fertilizers came on the market. In Korea, rice was by far the most important cash crop. Therefore,
it hardly comes as a surprise that once Korean farmers understood the advantages of improved
varieties of rice as a means to earn cash, they would spontaneously make the transition to those
improved varieties. Whether the impetus came from the landowners or the tenant farmers
may have depended on particular circumstances. In either case, Koreans responded to market
opportunities newly opened to them.
This response to market opportunities was not limited to Korea. The same phenomenon
can be found in many parts of Asia and Africa in the 19th and 20th centuries. In Southeast Asian
countries such as Burma (Myanmar), Thailand, and Indochina, rice production burgeoned withthe expansion of the export market. In those cases, so-called peasants who were seeking to gain
cash transitioned from traditional rice cultivation for self-support to expanded commercial riceproduction (Myint, Kaihatsu tojokoku no keizaigaku [The economics of the developing countries],
38–43).
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Colonial Development of Modern Industry in Korea, 1910-1939/40

There were, however, notable differences. These countries had large undeveloped areas, andthe increase in rice production depended on the cultivation of newly cleared land. During thattime, productivity per unit area declined.
One reason for this decline was that no changes occurred either in the varieties of rice being
grown or in cultivation methods. Also, clearing operations started with fertile land with a goodwater supply and gradually expanded to land with less and less advantageous characteristics(Wickizer et al., Monsuun ajia no beikoku keizai [The rice economy of monsoon Asia], 256;
Watanabe, Kaihatsu keizaigaku kenkyu [Development economics], 37–43).
In short, Korea was a special case because the development of the money economy not only
led to increased cash crop production but also triggered a change in cultivation methods (as was
also the case in Taiwan under Japanese rule). As a result, Korean farmers showed a more active
and innovative response to market opportunities than did farmers in Southeast Asian countries.

Increased Input of Fertilizer and Sanmai Zoshoku Keikaku
Research on improved varieties of rice was pursued continuously. In the late 1930s, Ginbozu
was the most commonly planted variety in southern Korea. This was a high-yielding variety
introduced from the Hokuriku region in northern-centered Japan.
In northern Korea, a variety called Rikuu no.132 that originated in Akita Prefecture was
widely planted. It was not only high-yielding but resistant to cold-weather damage and blight. It
is well known that Kenji Miyazawa, who as a famous farmer/poet, provided agricultural guidancein the Tohoku region in northeastern Japan where cold-weather damage was almost an annual
event, worked diligently to disseminate this variety, which also was deemed delicious and highly
prized in the marketplace (and is the forerunner of Koshihikari and Sasanishiki varieties today).
Most improved varieties of rice required large amounts of fertilizer, and the consumptionof fertilizer in Korea increased significantly under Japanese rule. This included self-supplied
fertilizer (green manure, compost, etc.) and commercial fertilizer (fishmeal, oil cake, chemicalfertilizer, etc.). Consumption of ammonium sulfate (a type of nitrogenous fertilizer) in particularincreased in the 1930s. This development was closely related to the construction of modern
fertilizer factories in Korea, as will be discussed below.
Despite these advances, far less fertilizer was consumed by ordinary farmers in Korea than
was consumed by farmers in Japan, even in the 1930s.
In 1920, the Government-General initiated Sanmai Zoshoku Keikaku (Rice Production
Development Program), with the purported goals of meeting growing demand for rice in Korea,
boosting the economies of farming families, and contributing to a solution to food shortage
problems in the Japanese Empire.
The program set the ambitious goal of pursuing land improvement policies (improving
irrigation, converting land use, and clearing new fields) and improvements in agricultural
practices as a whole to increase annual rice production by 9.2 million koku (an increase of 60%
compared with 1920) within 15 years.
Implementation did not proceed as planned, however, primarily for the following threereasons: rising prices inflated construction costs; interest rates on anticipated loans were higher
than expected; and the special corporation slated to serve as the implementing agency was neverformed.
The Government-General started over with a revised program implemented in 1926. Like
its predecessor it was ambitious, with the goal of increasing annual rice production by 8.2
million koku in 14 years. The content of the revised program, however, was more refined, callingfor direct government intervention to arrange large amounts of low-interest funding for land
improvement and the purchase of fertilizer. Also, the program established two land reform
agencies: Chosen Tochi Kairyo Kabushiki Kaisha (Korea Land Improvement Company, a half26
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Mitsuhiko Kimura

public, half-private entity) and a land improvement division within Toyo Takushoku.
Starting in the 1930s, farmers in Japan who were suffering economically from a serious
recession strengthened their opposition to the impor tation of Korean rice. This made it
unavoidably necessar y to reduce the goals of the revised program to increase Korean riceproduction and resulted in the dissolution of the land reform agencies above.
There is much debate concerning the political background, significance, results, andeconomic impact of Sanmai Zoshoku Keikaku. I will not explore it in detail here. I simply pointout that rice production in Korea increased from about 14 million koku to 18 million to 19 million
koku between the years 1920–21 and 1931–32.
Sanmai Zoshoku Keikaku is considered a first large-scale agricultural development plan in theJapanese Empire (Tohata and Ohkawa, Chosen beikoku keizai ron [Rice economy in Korea], 12).
It was formulated and implemented by the Government-General, indicating that the latter was not
simply an administrative organ, but also a large corporate entity that promoted the developmentof rice production as an industry.

Complementar y Policies Pursued by the Government-General
Quality assurance is critically important if a cash crop is to be well-received by the market, and
the Government-General made serious efforts in this area as well. In its unimproved state, Koreanrice had many defects such as incomplete dryness and contamination by husks, straw, dirt, andakamai (a wild, old variety of rice colored red). For this reason, Japanese rice distributors wereautonomously conducting grain inspections in open ports even before annexation.
In 1915, the Government-General promulgated regulations that placed rice inspection underprovincial authority. In 1917, the regulations were revised so that inspections were paid out ofprovincial budgets. In 1932, the further step was taken of opening grain inspection centers andmaking the inspection of rice for export a national operation.
Concerning packaging, the Government-General in 1927 issued kamasu (straw bag) inspection
regulations designed to improve bag quality and ensure uniformity. In 1932, specifications forstandardized straw bags were established.
The Government-General also promoted rice storage operations. Rice sales tended tobe concentrated in the fall and winter after har vest, during which time lower prices wereunavoidable. Modern storage facilities were necessar y both in rice-producing regions and at
ports where rice was loaded, both to maintain rice quality and to adjust the selling period.
In 1930, the Government-General announced a plan to construct rice storage facilities in
Korea, which formed the basis for the establishment of Chosen Beikoku Soko Kabushiki Kaisha(Korea Rice Storehouse Company). The purpose of the company was to construct and operate“commercial” rice storehouses at ports and “agricultural” rice storehouses in rice-producing
regions, as well as providing low-interest financing secured by stored rice. Under the plan,
construction of the commercial rice storehouses proceeded rapidly; by 1933, they had a combined
capacity of 1.6 million koku.
Before harvested rice reaches consumers, it must be husked and polished. This processing
was done by private companies; the Government-General was not directly involved in it until
the latter stages of World War II. I will explore the issue of rice processing in a later section
discussing manufacturing industry.

Stagnation in the Production of Other Food Crops
Under Japanese rule, production of barley, millet, and soybeans, which were main dry-field foodcrops, stagnated, because of a low dissemination rate of improved varieties and a decline inproductivity per unit area.
The Government-General did not show much interest in non-rice crops. It did not formulate
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Colonial Development of Modern Industry in Korea, 1910-1939/40

a field improvement plan until 1931, and even then it was much smaller in scale than the plan
formulated for rice.
Soybeans were useful to farmers as a cash crop. The native soybeans cultivated in Korea werealready of a high quality and were liked in Japan as raw material for tofu, miso, and soy sauce.
They were the preferred market choice even over the well-known soybeans grown in Manchuria.
In the second half of the 1910s, the export of Korean soybeans increased dramatically (from500,000 koku in 1914 to 1.3 million koku in 1919). This reflects the influence of World War I, when
the soybean market exploded. Exports remained at a high level in subsequent years, to the point
where exports represented 20–30% of total Korean soybean output by the 1930s.
If soybeans were a good cash crop, why did production not increase when the money
economy developed in Korea?
Regional observation reveals that, while soybean production declined in southern Korea in the
1920s and 1930s, it increased slightly in northern Korea. It is not easy to ascertain the reasons forthis relative waxing and waning between regions, but it may be due to farmers in northern Korea
responding to market opportunities, thus planting more soybeans. On the contrary, farmers inthe south turned to another cash crop, cotton, which promised greater profits than soybeans, as I
will discuss below.
One food crop of f the general trend above was potatoes, the production of which rose
substantially beginning in the 1910s. The center of potato production was in the eastern partof northern Korea. Compared with other crops, potatoes were highly productive per unit area,
serving as an important food crop for poor farmers.
Finally, maize production also increased in the 1930s, mainly in the western part of northern
Korea. One reason for this, which I will discuss in more detail later, is that a modern cornstarch
factory was built in Pyongyang that used maize as a raw material, thereby raising the market
price for it.

Dissemination of Upland Cotton and Growth of Sericulture
Cotton was first cultivated as a summer crop on the Korean peninsula in the 14th and 15th
centuries, prior to its introduction to Japan. Cotton cultivation grew during the Edo Period(1603–1867) in Japan, but quickly declined after the Meiji Restoration (1868) in the face of cheap
imports. The Japanese government formulated policies designed to bolster, if only by a little, theproduction of raw cotton in regions under its control for use in Japanʼs rapidly growing cotton
textile industry.
In 1905, Menka Saibai Kyokai (the Cotton Cultivation Association) was founded in Tokyo,
which established a seed orchard for upland cotton and a ginning mill in Korea. Upland cotton,
which originated in South America and was improved in the United States, accounted for most of
the raw cotton being cultivated globally at the time. The value of yarn spun from upland cotton
was higher than that of yarn made from Korean native cotton.
After annexation, in 1911, the Government-General initiated its first six-year plan for thepromotion of cotton production, which focused on replacing native cotton by upland cotton insouthern Korea. This plan was extended one year and completed in 1918. By that year, the areaof land planted with upland cotton had increased to about 94,000 chobu (1chobu = 0.992 hectares)
close to the 100,000 chobu anticipated by the plan. During the same period, the area under native
cotton cultivation declined from about 60,000 to about 36,000 chobu.
The second ten-year plan for the promotion of cotton production began in 1919. Major goalsof this plan were to grow cotton by clearing new land for cultivation and converting existing
fields to cotton and to increase yield per unit area by improving cultivation methods, with afocus on upland cotton in southern Korea and also native cotton in the western part of northern
Korea. In 1928, the final year of the plan, the cultivated area for upland and native cotton reached
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Mitsuhiko Kimura

approximately 140,000 and 70,000 chobu, respectively.
During the period implementing the plan, however, the price of raw cotton declined,
preventing the anticipated targets from being achieved. The price continued to decline after
the term of the plan, prompting the Government-General to suspend further efforts to expand
cultivated area and concentrate instead on increasing production entirely through improvements
in yield per unit area.
After the Manchurian Incident in 1931, a stable supply of raw cotton became even more
important for the Japanese Empire. The Government-General accordingly formulated a new plan
designed to increase both the amount of cultivated land devoted to cotton and the yield per unit
area. In the 1930s, yield per unit area did not improve substantially, but the cultivation of uplandcotton did expand, particularly in the western part of northern Korea.
Overall, upland cotton had a higher yield in terms of monetar y value per unit area thannative cotton. Its yield was even higher than that of the competing crop of soybeans, with some
exceptional years. Upland cotton offered Korean farmers the long-term prospect of higher
income, which explains why they converted their fields from native cotton and soybeans to uplandcotton.
Thus, the development of Korean cotton crop under Japanese rule resulted in more than a sixfold increase in total production by the end of the 1930s as compared with the early 1910s.
Agricultural statistics for Korea show large increases in cultivated area and production
amounts for many crops in the 1910s. It is difficult, however, to judge whether these increases
actually occurred or whether, in those early years, insufficient surveys created apparent gains.
Two crops that showed relatively high production values were daikon (horse radish) and hakusai(Chinese cabbage). In both cases, however, production leveled off from the 1920s on.
Sericulture grew steadily throughout the period of Japanese rule. After annexation, theGovernment-General promoted sericulture by spreading improved breeds of silkworm andpromoting mulberry cultivation and silkworm breeding techniques. In 1925, it formulated a 15year plan to increase cocoon production by one million koku. Under a series of policies, there wasa substantial increase in the number of cocooneries, the area of mulberry orchards, and the total
output of cocoons. Farmers were engaged in sericulture as a rare side business for earning cash
income.

2.

Mining and Manufacturing: A Sudden Rise from an Undeveloped State

Growth Rates and the Policies of the Government-General
From 1911 until 1940, Korean mining and manufacturing industries grew sharply. In terms of realvalue added, the annual growth rate averaged about 12% for mining and 9% for manufacturing.
Expansion was especially rapid in the 1930s, with annual growth rates approaching 20% and 10%,respectively.
It is generally said that the Government-General adopted toward the manufacturing industry
in Korea suppressive policies in the 1910s, passive in the 1920s, and active in the 1930s. It is
certainly true that, compared with the agricultural sector, the Government-General did not havemuch interest in industrialization in Korea in the 1910s and 1920s.
However, it cannot be said that the 1910s were an era of suppression. Many researchers
mention the Company Ordinance as the main basis for suppressive policies. Promulgated by theGovernment-General in 1910, it required official permission for a company to be established.
According to the “suppressionist,” the purpose of this Ordinance was to prevent the developmentof commerce and industry in Korea, particularly Korean-owned capital. They stress that many
applications to establish companies submitted by Koreans were rejected. But this view is simply
the result of a misreading of the data. In fact, a high percentage of applications for company
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Colonial Development of Modern Industry in Korea, 1910-1939/40

formation submitted by Koreans were approved.

Rice Husking and Polishing Plants Distinctive to Korea
Small and medium-sized businesses typically start up not as fully formed companies but insteadunder individual management. The first businesses to form in this manner in Korea were rice
husking and polishing plants.
Traditionally, Korean rice farmers did not husk their own rice. They either sold theirunhusked rice to huskers or polished their rice directly from the husked state (producing halfpolished rice known as kanpaku, “Korean white”) and sold it. After husking, the huskers either
sold the unpolished brown rice to polishers or polished the rice themselves.
The husking and polishing industry in Korea rose before annexation when Japanese nationals
established small-scale plants in rice distribution areas and at ports. Unhusked rice was more
expensive to transport, and insufficient dryness of half-polished rice made it prone to rot. This
made it important to husk and polish the rice before it was exported, a task that Japanese ricetraders took upon themselves.
Koreans emulated the Japanese, entering the field. In 1912, there were 67 husking/polishingplants (with either ten or more employees, or motorized operations) run by Japanese nationals,
and 23 run by Koreans in all of Korea. Japanese-owned plants had an average of 30 employees
and Korean-owned plants had an average of 11. The plants were mostly of small-scale, but among
Japanese-owned plants there were some that employed more than 200 workers.
In Japan, the usual practice was for farmers to husk their own rice using their own equipment
and sell the resulting brown rice to retailers. The retailers polished the rice and sold it toconsumers. Thus Japan and Korea were different in this regard. The Korean practice of husking
and polishing rice in factories was distinctive and contributed to reduced processing costs andmore uniform quality of the product, which increased market value of Korean rice. However,
because Korean farmers entrusted husking operations to independent plants, they were forced toaccept lower prices for the rice they harvested.
Husking and polishing operations grew in tandem with increased rice production and export.
In 1932, there were 1,156 husking/polishing plants operating in Korea that employed five or moreworkers: 373 of them were operated by Japanese nationals, and 783 of them by Koreans. Although
the average size of the Korean-owned plants was smaller than that of the Japanese-owned plants,
their total number was higher than that of the Japanese-owned plants.
Among Japanese-owned plants, some large plants emerged with a rice polishing capacity thatexceeded one million koku per year. The largest of these was Chosen Seimai Kabushiki Kaisha(Korea Rice Polishing Company) operated by Heitaro Kato, a native of Yamaguchi Prefectureborn in 1881. Kato was called the “king of rice polishing in Korea.” (Kato was also the founder ofKanemi Soko (Kanemi Storehouse), which precipitated a mass poisoning known as the “rice oil
disease incident” in Japan in the 1960s.)
In 1935, more than 30,000 workers were employed in rice husking and polishing plants in
Korea.

Large-Scale Coal Development
Anthracite
In 1907, the Resident-General of Korea established Heijo Kogyosho, a mining office in Pyongyang,for the purpose of development of anthracite. After annexation, the Government-General took
over operation of the enterprise and installed more equipment for coal extraction. Because mostof anthracite in Pyongyang took the form of coal dust, much of it was transported after extraction
to the Briquette Manufactory of the Japanese Navy in Tokuyama, where it was processed into
briquettes.
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In 1922, management of Heijo Kogyosho was transferred from the Government-General to
the Japanese Navy in response to the latterʼs request to emphasize the mining of Pyongyang
anthracite. When the transfer was made, the Navy renamed Heijo Kogyosho as the Pyongyang
Mining Division of the Naval Fuel Arsenal. In the 1920s, the Navy relocated part of briquette
manufacturing equipment from Tokuyama to Pyongyang, thus increasing the production capacity
there.
In 1928, the Pyongyang Mining Division achieved a coal output capacity of 140,000 tons per
year, the highest output of any coal mining operation in Korea. In the same year, the Division
manufactured 45,000 tons of briquettes, representing nearly half of all briquette production in
Korea. During this period, nearly all of the briquettes came to be consumed in Korea to heat
homes and power railway boilers.
In 1936, administrative reforms resulted in yet another change in the name of the mining
office, Mining Division of the Naval Fuel Arsenal.
At the time, anthracite reserves in Pyongyang were estimated at between 500 and 600 million
tons, an amount considered to be virtually limitless. Some might wonder about the link between
the ancient capital of Pyongyang and coal production, but in fact the city had the nickname “CoalCapital” because of its location over a vast coal field.
In the private sector, Chosen Muentan Kabushiki Kaisha (Korea Anthracite Company) was
founded in 1927, in which Mitsubishi Seitetsu (Mitsubishi Iron and Steel Comapany) was themain investor. The company always maintained close ties with the Government-General as it
mined anthracite in and around Pyongyang and manufactured briquettes.
Some of the highest quality anthracite in Korea was found at Ryuto Kogyosho (a mining officein Ryongdung) in Pyeonganbuk-do in the northwestern part of northern Korea. This mine wasdeveloped by Katakura Shokusan (Katakura Industrial), affiliated with Katakura Seishi Boseki(Katakura Silk Reeling and Weaving Company). The unlikely connection between silk andcoal can be explained by the suitability of anthracite as a means of heating cocooneries. Thus,
anthracite contributed to the development of Korean sericulture. In 1935, Ryuto Kogyosho was
producing about 60,000 tons of coal per year.
Anthracite was mined in southern Korea as well. Two mines in particular, located in theeastern part of southern Korea (the southern part of Gangwon-do), were well-known producers:
Sanchoku Tanko (a coal mine in Samcheok) and Neietsu Tanko (a coal mine in Yeongwol). The
former was operated by Sanchoku Kaihatsu (Sanchoku Development), a subsidiary of Nichiden
Kogyo (a power company in Japan) established in 1936; the latter was operated by Chosen
Denr yoku (Korea Electric Power Company), a member of the Toyo Takushoku group. Coal
reserves at Sanchoku Tanko were said to be enormous, totaling several hundred million tons; it
was also the only mine in Korea that produced anthracite in non-dust form. For this reason, thecoal from Sanchoku Tanko was mainly used in the production of carbide and castings.

Soft (Smoky) Coal
Most soft coal in Korea was low-grade (low-carbonization) lignite, not the kind of high-quality
coking coal found in Hokkaido and Kyushu. The soft coal produced in Korea was primarily
used to power locomotives, but some was also sold for home heating. Compared with Japanesecoal, Korean coal had a high chemical content that resulted in high reactivity with hydrogen.
Therefore, it drew attention in the 1930s as a raw material for the manufacture of synthetic oil(liquid fuel made by crushing coal and adding hydrogen).
Production of soft coal in Korea was almost entirely limited to the north. Its development wasundertaken by several big companies and sole proprietorships, including Meiji Kogyo (Meiji
Mining) and Chosen Yuentan Kabushiki Kaisha (Korea Soft Coal Company).
Meiji Kogyo began developing coal and gold mines in Korea around the time of annexation. It
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obtained mining rights in Anju, Pyeongannam-do (in the southwestern part of northern Korea)
and began developing a coal mine there in 1912, with reserves estimated at 50 million tons. The
Anju coal mine was the first in Korea to pursue mechanization with the introduction of electric
drills and drainage pumps manufactured by the German company Siemens in 1928. It produced
lignite for home and railway applications.
Another successful mine operated by Meiji Kogyo was the Sariwon coal mine, which was also
located in the southwestern part of northern Korea, in Hwanghae-do. The company obtainedmining rights in 1914 and opened the mine in 1931. The coal produced there was of nearly thesame quality as coking coal, featuring good combustibility, strong thermal power, and cleanburning that made it suitable for use in furnaces and boilers.
Chosen Yuentan Kabushiki Kaisha was established in 1939, when small and medium-sized
soft coal mines formed a consortium capitalized at ¥15 million through mediation efforts by theGovernment-General aimed at increasing coal production. The participating companies were:
Hokusen Tanko, Toyo Takushoku, Totaku Kogyo, and Aso Kosan, all of which contributed
their mines as in-kind investments. Operations centered on the Kogonwon coal mine in
Hamgyeongbuk-do in the northeast. This, along with the Sariwon coal mine and the Yuseon coalmine (discussed in more detail below), was one of the main soft coal mines in Korea. In 1935,
it had 3,000 employees and produced 30,000 tons of lignite annually. The quality of the coal was
high, with a high calorific value of 6,000 to 7,000 calories per gram and low ash and sulfur content,
making it a popular choice for railway and home heating use.
Among sole proprietorships, Iwamura Kogyo was particularly successful. It was founded by
Choichi Iwamura, a native of Kumamoto Prefecture (1881–1948) who resided in Korea. In 1938,
Yamaichi Shoken (Yamaichi Securities) bought a 40% stake to create a stock company capitalizedat ¥10 million. Iwamura Kogyo operated several mines in northern Korea, including the Yuseon
mine in Hamgyeongbuk-do. The Yuseon mine was one of the best in Korea in terms of both
quality and quantity of the coal, which was sold for use in home heating and railway (express
locomotives) applications.

Early Development of Iron Mines and Establishment of Steelworks
Dating to the 1910s, iron mine development got an early start in Korea and formed the basis forthe construction of several steelworks. Immediately after annexation, the company Mitsubishi
Goshi Kaisha (Mitsubishi Joint Company) purchased an iron mine in Kyomipo, Pyeongannam-do(near the Taedong River) in the southwestern part of northern Korea. It subsequently continued
to purchase nearby iron mines as well as anthracite coal mines in the same province and planned
the construction of a steelworks.
Masatake Terauchi, the Japanese Army general who served as the first Governor-Generalof Korea, played a leading role in this process. Through the mining bureau of the GovernmentGeneral, Terauchi helped Mitsubishi conduct mine sur veys and smoothed the way for the
disposal of large tracts of land owned by the Japanese Army in Kyomipo. He also encouraged
development by leasing to the company 400,000 tsubo (1 tsubo = 3.3 square meters) of property
that had been earmarked for railway use, and by waiving tariffs on imported construction
supplies.
The construction of the ironworks in Kyomipo (Kenjiho Seitetsujo) began in 1914, but work
was substantially delayed by the outbreak of World War I. The facility was finally completed
in 1918, and two blast furnaces with an annual production capacity of 50,000 tons each wereactivated. In the previous year, Mitsubishi had established Mitsubishi Seitetsu (headquartered inTokyo), which was capitalized at ¥30 million. The operation of Kenjiho Seitetsujo was entrusted to
Mitsubishi Seitetsu.
Kenjiho Seitetsujo introduced the most advanced technologies available at the time,
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including byproduct recovery furnaces. In 1919, an open-hearth furnace and rolling equipment
manufactured by Mitsubishi Shipyards in Nagasaki and Kobe were added to create a fully
integrated production system ranging from pig iron to finished steel. A major purpose of
production of the steel material was to supply Mitsubishi shipyards with steel plate and largescale section steel for naval vessels. In 1921, the facility began producing high tensile-strength
steel plate for naval applications. In the same year, it raised pig iron production to 83,000 tons,
steel production to 51,000 tons, and steel material production to 30,000 tons.
Subsequently, an economic downturn and a reduction in Japanese Navy forces resulted ina considerable decline in the steel market. In response, the company suspended operations at
the steelmaking division of Kenjiho Seitetsujo until 1933. Even during that time, however, theproduction capacity of its pig iron division increased, reaching 150,000 tons in 1931. This wasmore than that of Kamaishi Seitetsujo in Japan, and slightly more than 20% of the production
capacity of the largest steelmaking facility in the Japanese Empire, Yawata Seitetsujo.
In 1934, Nihon Seitetsu (Japan Iron and Steel Company) was created when Mitsubishi
Seitetsu joined a large consortium of steel companies. The operation of Kenjiho Seitetsujo was
entrusted to the new company at that time. Immediately after Nihon Seitetsu was formed, a plan
was formulated to expand the production facilities of all the companies under the consortiumʼsumbrella. The blast furnaces at Kenjiho Seitetsujo were renovated (Furnace No. 1 was removed
and replaced by a newly constructed 120,000-ton furnace), and a new coke oven and a byproductplant were constructed. In 1934–35, open-hearth furnaces Nos. 2 and 3 started their operations.
In the eastern part of northern Korea, the Riwon iron mine began operating in the mid-1910s
for the purpose of supplying Yawata Seitetsujo with iron ore. The ore mined at Riwon was ofrelatively high quality, with an average iron content of 50–55%, and reserves were estimated atseveral tens of millions of tons. In 1927, the planned extraction amount was 80,000 tons.
The Riwon iron mine had large amounts of fine ore that could not be processed with a blast
furnace. To utilize it, Nippon Koshuha Jukogyo (Japan High-Frequency Heavy Industries) was
founded in 1935. The new company built a factory in Songjin, not far from Riwon, and began
making steel (special steel in particular) from fine ore using its electrical furnace technology.
The Musan iron mine was said to be one of the largest iron mines not only in Korea but all of
East Asia, with estimated reserves of 1.5 billion tons. Located deep in the northeastern part ofnorthern Korea, it was hard to access and full development did not begin until the second half ofthe 1930s.

Large-scale Nonferrous Metal Refiner yDuring the rule of the Resident-General, Kuhara Kogyo (Kuhara Mining Company) began ageological survey of Korea. Kuhara Kogyo was the precursor of Nippon Kogyo, a leading mining
company in Japan before World War II. It is one of the predecessors of todayʼs JXTG Holdings Inc.
Beginning in 1915, Kuhara Kogyo aggressively pursued the development of gold, silver,
copper, lead, and zinc mines in northern Korea. It also planned the construction of a refinery forprocessing gold, silver, and copper ore. The new plant was sited at Chinnampo (on the outskirtsof Pyongyang), which was convenient for shipment by sea. Construction began in May 1915 andoperations began in October of that year. Initially, the plant had a production capacity of crude
copper at 216 tons per month and employed 1,400 workers.
Facilities at the refinery were subsequently expanded, including the completion in 1936 of a
600-foot (183-meter) chimney, the tallest in the world at the time. In locations such as Ashio and
Besshi in Japan, smoke from metal refineries had caused serious damage to forests and farms.
The tall chimney was intended to prevent the same kinds of problems from occurring in andaround Chinnampo.

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The Forgotten Munitions Plant
There was a munitions plant in Pyongyang when Korea was under Japanese rule. After WorldWar II, this fact was forgotten not only by the general public but also by most scholars of modern
Korean history. Because the plant was under the direct control of the Japanese Army, no records
of it were included in materials that would ordinarily be viewed by those scholars, particularly
the publications of the Government-General. The annual administration report of the GovernmentGeneral of Korea does not mention the plant at all, and industrial statistics announced by theGovernment-General do not include the outputs at the plant.
The Pyongyang munitions plant, however, was not a secret facility. Located near the center ofPyongyang, it was familiar to city residents before WWII. Built in 1917, the plant was originallycalled Chosen Heiki Seizosho and was attached to the Tokyo artillery arsenal. Subsequently, it
underwent two transformations before becoming Heijo Heiki Seizosho under the jurisdiction of
the Kokura arsenal of the Japanese Army armory in 1936.
The main products of the plant included artillery shells, aircraft bombs, rolling stock, leather
goods, hemp-made weapons, and materials for the manufacture of instruments. Nearly 200
workers were employed at the plant in 1923, but this number subsequently increased, reaching
about 450 by 1936. In that year, armories in Japan employed thousands (one in Osaka had morethan 8,000 workers). Compared with them, the workforce at Heijo Heiki Seizosho was quite
small. Also, compared with the standard size of ordinary factories in Japan, the plant was only of
medium size, without particular distinction. In the Korean context, however, it was counted as alarge factory.

The Growth of Onoda Cement
Immediately after annexation, a primar y cement maker in Japan, Onoda Cement, set about
establishing operations in Korea to meet anticipated growth in demand for cement for railway,
road, harbor, and other construction projects. Limestone, an ingredient in cement, could be foundin vast quantities in various regions of Korea, particularly in the north.
Completed in the suburbs of Pyongyang in 1919, the new Onoda Cement plant had cuttingedge equipment for the time, with an annual production capacity of 34,000 tons. In later years
Onoda Cement expanded its Pyongyang plant and built two more in the eastern part of northern
Korea: the Wonsan plant in 1928 and the Komusan plant in 1936.
In the second half of the 1920s, the combined supply capacity of the Pyongyang and Wonsan
plants exceeded Koreaʼs total demand for cement. Onoda Cement therefore restricted production
at these plants and set its sights on selling its products in Japan and Manchuria.
The competitors of Onoda Cement, Ube Cement and Asano Cement, countered Onoda ʼsbusiness strategy by constructing large plants in Korea in the second half of the 1930s (Ube in
1936, and Asano in 1937, both in the western part of northern Korea).

The Development of the Silk Industr y and the Cotton Spinning and Weaving
Industr y
Katakura Seishi Boseki was founded in 1920. Its predecessor, Katakura Gumi, made plans to enter
the Korean market after the Sino-Japanese War and initiated a survey of Korean sericulture andsilk industries. After annexation, Katakura Gumi established forestry divisions in several locations
in northern Korea. In 1913, it opened a cocoon purchasing office in the southern Korean town ofDaegu, and went on to build a silk-reeling factory there in 1918.
In 1919, the silk company Yamaju Gumi, which was based in Shinshu, Japan, also built afactory in Daegu. In the same year, Jotaro Yamamoto, who began his career at Mitsui Bussan(Mitsui & Co.) (and later served as the president of the South Manchuria Railway Company),
teamed up with Ozawa Gumi and other companies in Shinshu to establish Chosen Kiito Kabushiki
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Kaisha (Korea Raw Silk Company) which, like the others, set up operations in Daegu. Thus,
Daegu became the center of mechanized silk reeling in Korea.
In 1927–28, Katakura Seishi Boseki established more factories in Seoul, Hamhung (in theeastern part of northern Korea), and Jeonju (in the western part of southern Korea) (In Seoul,
the company purchased an existing small factor y and expanded it). At about the same time,
Gunze Seishi, Toyo Seishi, and Zenhoku Seishi (the latter two affiliated with Mitsui Bussan) also
built factories in Korea.
Koreans also established silk-reeling companies and built factories. Two of the more
prominent Korean-owned companies were Chosen Seishi and Chunan Seishi. The former was
founded in 1919 by a nobleman who belonged to the Korean aristocracy prior to the Japanesecolonial period; its factory was located in Seoul. The latter was founded in 1926 with a factory
located in the central part of southern Korea.
Many other small-scale factories were set up throughout Korea under both Japanese andKorean ownership and management. At the end of 1934, there were 84 mechanized silk-reelingfactories operating in Korea with workforce of five or more employees. Forty percent of them,that is, 34 factories, were operated by Koreans and 19 of those were located in Daegu.
In the area of cotton spinning and weaving, Chosen Boshoku Kabushiki Kaisha (Korea
Spinning and Weaving Company) was established in 1917 by Utaro Noda (who participated in
the founding of Miike Boseki), Kyohei Magoshi (who used to work at Mitsui Bussan), Jotaro
Yamamoto, and others. The company set up operations in Pusan and built a large spinning andweaving factory there in 1922.
In 1919, the Kim family, who had vast landholdings in the western part of southern Korea,
established Keijo Boshoku Kabushiki Kaisha (Keijo Spinning and Weaving Company). The
company bought and operated a small factor y that previously belonged to Keijo Orihimo
Kaisha, which was set up in 1910. The factory subsequently achieved remarkable growth. Keijo
Boshoku also built cotton ginning plants and dyeing plants all over Korea and became one of thepreeminent Korean-owned companies. Underlying this growth was generous financial support
provided by Chosen Shokusan Ginko (Korea Industrial Bank), a half-public, half-private financial
institution founded by the Government-General (Eckert, Nihon teikoku no moshigo [Offspring of
Empire], 123–140).
In the 1930s, two of Japan ʼs major cotton spinning and weaving companies, Toyobo andKanebo, built factories in Korea.
One example of a Korean-initiated small to medium-sized business in the cotton weaving
field was a factory in Pyongyang that made knitted socks. It was founded by a Korean resident
in Pyongyang in 1906, who introduced machinery from Japan. The sock-knitting industry grew
sharply in the 1920s and had 33 cotton sock plants operating in Pyongyang by 1934. Nearly allof them were small plants that employed fewer than 50 workers, but three of them grew in scale
having 100 –200 workers.

Pulp and Paper Industr y Led by Oji Seishi
Oji Seishi (Oji Paper Company) became the driving force of the pulp and paper industry in Korea.
The ample conifer forests on the banks of the Yalu River enticed Oji Seishi to set up operations
in Korea at an early date. In 1917, the company founded a subsidiar y called Chosen Seishi,
which constructed a pulp mill in the following year in Sinuiju, located on the border between thenorthwestern part of northern Korea and Manchuria. The mill produced sulfite pulp and groundpulp from raw wood, and supplied its products to paper mills operated by Oji Seishi in Japan.
The Government-General supported Chosen Seishi and preferentially sold governmentowned lumber grown and harvested in the Yalu River basin to the company. The Sinuiju pulp mill
had a site area of 210,000 tsubo and an annual production capacity of 10,000 tons, making it one of35
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the largest factories in Korea. After experiencing a downturn following World War I, the mill in
Sinuiju was further expanded in 1925 and began to produce rolled paper.
Furthermore, Oji Seishi undertook to develop virgin forest in Hamgyeong-do in the easternpart of northern Korea. In 1935, it established a subsidiary called Hokusen Seishi Kagaku Kogyo(Hokusen Paper and Chemical Industry), which constructed a mill in Kilju in the eastern partof northern Korea. This was the first mill in the world to produce rayon pulp (an intermediatematerial for chemical fiber) using larch wood as raw material.
The Kilju mill had an annual production capacity of 25,000 tons, which was more than that ofcompetitive pulp mills operating in Japan. In 1937, the Kilju mill accounted for 36% of all rayon
pulp produced in the Japanese Empire. Rayon textiles were one of Japanʼs main export products
at the time, and the Kilju mill served an important function as an intermediate material processor.

Shitagau Noguchi and the Development of Large-Scale Electric Power andChemical Plants
After annexation, the Government-General actively conducted surveys on hydroelectric powersources in Korea. The first round of surveys was implemented from 1911 until 1914; the second
from 1922 until 1929; and the third was initiated in 1936. Each round resulted in an expansion in
the number of hydroelectric power sources amenable to development. Most of them were on the
Yalu and Tumen rivers and their tributaries in northern Korea.
In 1926, Shitagau Noguchi (1873–1944) founded Chosen Suir yoku Hatsuden Kabushiki
Kaisha (Korea Hydroelectric Power Company) with a capitalization of ¥20 million and began
hydraulic development on the Pujon River, a tributary of the Yalu River. Noguchi was originally anengineer from the electrical engineering department of Tokyo Imperial University, but became anentrepreneur in 1908 with the establishment of Nippon Chisso Hiryo (Japan Nitrogen Fertilizer
Company), which manufactured chemical fertilizer.
The Pujon River flowed to the north of the Kaema Plateau and converged with the Yalu
River. Noguchi planned to change its course through watershed modification to achieve largescale power generation. The first step was to build a dam to flood valleys and create an artificial
lake along the river. The next task was to dig water transmission tunnels through the mountains
to drop water from the reservoir into the Japan Sea. Noguchiʼs inventive idea was to utilize thedifference in elevation between the reservoir and the ocean to generate electricity. He further
planned to construct power plants in four locations.
The huge scale of electric power development on the Pujon River was unprecedented in theJapanese Empire. To initiate it, it was necessary to construct a railroad for material transport. The
first power plant was finally completed in 1929.
Using the same methodology, Noguchi was also engaged in development of power sourceson the Changjin and Hochon rivers, two other tributaries of the Yalu River. Construction of power
plants on these rivers began in 1933 and 1937, respectively. The scale of both of these projects
surpassed that of the Pujon project.
Noguchiʼs ultimate goal was to build a chemical fertilizer plant in northern Korea that would
have access to ample and inexpensive electrical power. He invested ¥10 million to establish
Chosen Chisso Hiryo Kabushiki Kaisha (Korea Nitrogen Fertilizer Company) in 1927 (whichmerged with its parent company, Nippon Chisso Hiryo, in 1941), and began the construction of aplant in Hungnam (in the eastern part of northern Korea), which was completed in 1929.
The Hungnam plant was comprised of facilities engaged in ammonia synthesis, electrolysis,ammonium sulfate manufacture, machiner y manufacture, and catalysis. It had an initial
production capacity of ammonium sulfate of 400,000 tons annually, which far exceeded that of
Nippon Chisso Hiryoʼs plants in Japan (in Nobeoka and Minamata). Unlike the equipment in
the plants in Japan, which had mostly been imported from Europe and North America, all of
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the equipment in the Hungnam plant (except the nitrogen separator) had been manufactured
by Japanese companies (including Yasukawa Denki, Fuji Denki, Shibaura Seisakusho, Kobe
Seikosho, and Hitachi Seisakusho). Thus, the construction of the Hungnam plant provided astrong stimulus for the development of machinery industry in Japan.
Pyrites are essential for the manufacture of sulfuric acid, and these were procured frommines in Japan and throughout Korea. The main source in Japan was the Yanahara mine in
Okayama Prefecture; in Korea in the 1930s, pyrites were mainly mined in the northeastern part.
To promote the development of pyrites mines in Korea, Noguchi invested ¥1 million to establish
Chosen Kogyo Kaihatsu Kabushiki Kaisha (Korea Mining Development Company) in 1929.
After its founding, the Hungnam fertilizer plant continued to expand. In addition to ammonium
sulfate, its output was diversified to include ammonium sulfate-phosphate, superphosphate oflime, lime nitrogen, and other products, which it shipped in large quantities within Korea and to
Japan.

A World-Class Chemical Industrial Complex
Noguchi constructed another chemical plant, in Pongung, about 4 kilometers away from the
Hungnam fertilizer plant. It began processing soybeans in 1936. Construction was completed on alime nitrogen facility in July of that year, enabling the mass manufacture of caustic soda (sodiumhydroxide), ammonium chloride, carbide, lime nitrogen, and other products.
The manufacturing method for caustic soda was perfected at the Nobeoka plant in Japanand involved the electrolysis of salt using the mercury process. The caustic soda was shipped toaffiliated chemical plants.
The manufacturing of ammonium chloride was initiated with the intention of making effective
use of the chlorine that was produced through the electrolysis of salt. In Korea, ammonium
chloride was either sold as fertilizer or purified and sold to manufacturers of batteries. Chlorine
was also used as a raw material in the manufacture of hydrochloric acid, bleaching powder, andliquid chlorine. It was rare even in Japan for a single plant to manufacture multiple chemical
products simultaneously through the rationalized use of salt.
Limestone, a raw material used to make carbide, was transported by freight cars to the plantfrom a limestone quarry owned by the company located north of Pongung. When there was a
shortage, the rest was procured from Onoda Cementʼs Wonsan plant.
At the Pongung plant, the large amounts of powdered carbide generated as a byproduct of
the carbide manufacturing process were simply thrown away. To avoid such waste, technology
was developed that enabled the utilization of powdered carbide, which provided the basis for theconstruction of branch facilities dedicated to the production of acetylene, acetylene black, andglycol. Acetylene black was sold primarily as a material for making printing ink and rubber filler.
The branch facility for glycol added hydrogen to acetylene to produce ethylene, the base material
for manufacturing glycol. Other products made from acetylene included butanol and acetone.
Glycol, butanol, and acetone are basic chemical products used to make solvents, synthetic resins,
pharmaceuticals, and other products.
Noguchi built one related factory after another to create a huge chemical industrial complex
in Hungnam. This complex was counted as one of the greatest in the world.
Noguchi also pursued urban development in Hungnam, including the construction of a harborand housing. This was a unique feature of industrial development in Hungnam: a private-sector
entrepreneur was engaged in development of infrastructure and factory construction at the sametime.

Noguchi’s Other Projects

Noguchiʼs projects extended beyond Hungnam. In 1932, he built a coal carbonization plant in the37
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town of Yongan in Hamgyeongbuk-do in the northeastern part of northern Korea. Using lignite
available nearby, the plant manufactured gasoline from tar and produced methanol and formalinfrom water gas. Formalin is a base material used to make explosives and carbolic resin (Bakelite).
The plant in Yongan included chemical facilities, machiner y manufacturing facilities, and an
inhouse thermal power plant. The power plant burned semicoke and supplied power not just to
the plant but, through an electric power company (Chosen Denki), to surrounding cities.
In 1935, on the basis of technological development in Yongan, Noguchi founded Chosen
Sekitan Kogyo (Korea Coal Industr y Company), a new firm capitalized at ¥10 million thatengaged in direct coal liquefaction. While operating the plant in Yongan, the company built in1936 another plant in Aoji, in the extreme northeastern corner of northern Korea, near theborders of Manchuria and the U.S.S.R.
The plant in Aoji featured such cutting-edge equipment as high-efficiency gas generators
and Japanʼs first 5,000 hp gas compressors capable of generating 240 atm of pressure each. Allof the important equipment at the plant was manufactured by Japanese companies, including
Kobe Seikosho, Hitachi Seisakusho, and the Kure naval arsenal. For raw material, it used lignite
obtained from a nearby company-owned mine. Technological development was avidly pursued
by engineers from the naval fuel arsenal in Tokuyama. They were joined by Professor Yoshikiyo
Oshima of Tokyo Imperial University, an authority on fuel science. At its peak, the plant had a
production capacity of 50,000 tons of liquefied coal per year.
Research and commercialization of liquid fuel made from coal had already been undertakenby the Germans, British, and Americans. In Japan, it was the Navy that first showed an interest,with the Japanese government formulating “the summar y plan for the promotion of artificial
petroleum” in 1936 and implementing the “national liquid fuel policy” from the following year. In
this context Noguchi pursued the commercialization of liquefied coal in Korea.
Noguchi gathered many talented engineers and guided them as they introduced anddeveloped advanced technologies. Funding was initially provided by Mitsubishi Ginko (MitsubishiBank), with later financing provided by Nippon Kogyo Ginko (The Industrial Bank of Japan) andtwo of Koreaʼs main financial institutions: Chosen Ginko and Chosen Shokusan Ginko.
Noguchi was intimately connected to the Government-General, particularly close to Kazushige
Ugaki, the sixth Governor-General. Ugaki had a strong interest in Noguchiʼs enterprises andassisted in their development.

The Overlooked Machine Industr y
It is widely said that the machine industry languished in Korea under Japanese rule, but this is
not true. It did grow during the colonial period, although not as flamboyantly as the other sectors,
particularly the chemical industry (as described above).
Many of the Japanese companies that built metal and chemical plants in Korea added
machinery manufacturing facilities where they produced and repaired the machinery they used.
Because these machine shops did not take the form of independent companies or factories, theyhardly ever appear in the statistics and data of the time. Nevertheless, they played an importantrole in Koreaʼs industry.
The machine plant in Hungnam was the largest machine manufacturing facility in Korea. It
was constructed in 1928, at the same time that the Hungnam fertilizer plant was built. It expanded
as the chemical industrial complex in Hungnam developed, and manufactured, renovated, andrepaired the chemical machiner y needed by the industrial complex. Nearly all of the newly
designed machines were manufactured at this plant. It possessed a full complement of equipment
comparable to that of an independent machine manufacturing company, including electric
furnaces for casting, large hammers for forging, various lathes, and presses for manufacturingcans.
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The Railway Bureau of the Government-General also operated machine manufacturing
facilities throughout Korea. The largest of these was the Gyeongseong plant, founded in 1905.
This plant started out as a small railway repair facility but gradually expanded. In 1927, it started
producing steam locomotives. By 1939, it had 854 machine tools and a workforce of 1,700 skilledlaborers (of which 595 were Japanese).
Two powerful independent machine manufacturing companies should also be mentioned:
Chosen Shoko and Ryuzan Kosaku.
Chosen Shoko Kabushiki Kaisha (Korea Industrial and Commerce Company) wasestablished in 1919 by Seishichiro Nakamura, a Japanese national living in Korea. Born in 1872
in Nagasaki Prefecture, Nakamura founded Nakamura Gumi, a sea transport company. Active
in many commercial and industrial fields, including civil engineering, oil, fertilizer, machinery,ironworking, shipbuilding, and transport, Chosen Shoko was known as the “Mitsui Bussan of thePeninsula” and was the predecessor of Sankyu Inc., a modern-day general distribution company
based in Kyushu. Its first plant was built in Chinnampo in 1910, and engaged in the manufacture
and repair of mining and refining machinery.
Ryuzan Kosaku Kabushiki Kaisha (Ryuzan Manufacturing Company) was an ironworks
founded in 1919 by Tsunejiro Tagawa, a native of Shimane Prefecture who was born in 1884.
Af filiated with the Railway Bureau, it grew quite large by the 1930s, operating plants in
Gyeongseong and Incheon that manufactured locomotives, rolling stock for passenger and freighttrains, and various other railway equipment.

Rubber Processing, Fish Oil Manufacture, and Agricultural Product Processing
Star ting in the 1920s, r ubber processing plants (mainly for r ubber boots) flourished inPyongyang. Nearly all of them were small-scale enterprises owned by Koreans, although severalof them developed workforces to 100 people or more. In 1939, there were 13 rubber processing
plants in Pyongyang, only one of which was Japanese-owned. Two of them had workforces inexcess of 200 people.
The fish oil business prospered with the growth of the sardine fishing industry. In 1923, large
schools of migrating sardines suddenly appeared off the eastern coast of Korea. In response,
Japanese nationals introduced Japanese-style purse seine fishing using motorized boats,giving birth to a burgeoning sardine fishing industr y. In the first half of the 1930s, Japanesecompanies founded modern fish processing plants near fishing harbors: Chosen Chisso ʼs oil
plant in Hungnam and a plant of Chosen Yushi (Korea Oil and Fat Company) in Chongjin. These
plants produced large volumes of sardine oil (used in the manufacture of soap, foodstuffs, andpharmaceuticals) and fish meal (for fertilizer).
Meanwhile, many Korean-owned small-scale plants for fish-oil processing sprang up,
numbering more than a thousand by the late 1930s. At that time, Korean sardine oil accounted forthree-quarters of all sardine oil produced in the Japanese Empire and was an important resource
for the oil industry both in Japan and Korea.
Reaching its peak in about 1940, the Korean sardine fishing industr y was said to be on a
global scale. Subsequently, the sardines stopped migrating near Korea and the industry rapidly
declined, bringing an end to the fish-oil processing.
A noteworthy development in the field of agricultural product processing in Korea occurredin 1931, when Nippon Corn Products built a corn processing plant in Pyongyang. The company
was a subsidiary of an American company (with some investment by Mitsubishi). Introducing
American-style machine technology, it processed corn grown in Korea and Manchuria to makesuch products as cornstarch and dextrose. The cornstarch was important both as food (mixed
with rice, wheat, and barley) and for industrial applications, including newly developed ones suchas pigment and gunpowder manufacture. The Pyongyang plant won reputation to be the largest
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agricultural processing plant in Asia.

An Over view: Mining Output, Total Number of Plants, Proportion of Heavy andChemical Industries
From annexation in 1910 until 1935, coal production increased dramatically from 80,000 tons to
2 million tons per year (Table 2). Iron ore production increased from 140,000 tons to 230,000
tons. Production of graphite (used to make desiccants, steelmaking crucibles, and electrodes),barite (the source ore of barium sulfate, a chemical additive), tungsten (for making metal alloys),and various other minerals also increased. The district of Kanggye in Pyeonganbuk-do in thenorthwestern part of northern Korea was known worldwide as a source of vein graphite.
Other products that do not appear in the same table include rare minerals such as antimony
and mica, which were mined in the 1920s. In the 1930s, extraction began at a magnesite mine in
Tanchon in Hamgyeongnam-do in the eastern part of northern Korea. It had one of the largest
magnesite reserves in the world, estimated at several hundred million tons of high-grade ore.
The total number of industrial plants in Korea increased approximately from 300 to 6,500
between 1912 and 1939 (Table 3). This increase was particularly evident among Korean-owned
plants, which first surpassed the number of Japanese-owned plants in 1932. Although most
Korean-owned plants were quite modest in size with fewer than 50 employees, some relatively
large plants also developed, with 15 plants employing 200 or more workers by 1939. A large partof the Japanese-owned plants were also small and medium-sized, but their average size was larger
than that of their Korean-owned counterparts. Japanese-owned plants accounted for 90% of alllarge-scale plants, far outnumbering those owned by Koreans.
Not only did industry as a whole experience growth, but the proportion of total industrial
output accounted for by heavy and chemical industries (machiner y, metals, and chemicals)
increased largely from only 6% in 1911 to 12% in 1920, 17% in 1930, and 40% in 1939.

Table 2 Outputs of Main Ores
(1,000 tons)GoldandsilverCopper Zinc

Iron
(pig
iron)

PyriteGraphite Coal

BariteFluorite Tungsten Quartz Alunite

1910

10.3

0.4

―

140.4
(―)

―

0.8

78.5

―

―

―

―

―

1915

8.8

0.0

8.1

259.2
(―)

―

0.5

229.1

―

―

―

―

―

1920

21.5

―

3.4

447.2
(85.2)

―

11.2

289.0

―

―

―

28.8

―

1925

17.0

1.0

3.5

351.4
(101.9)

―

14.1

622.3

―

―

―

75.9

―

1930

13.4

5.6

3.8

532.5
(151.4)

―

20.1

884.1

6.1

2.3

0.0

47.3

11.7

1935

58.1

1.6

2.2

228.2
(147.8)55.6

45.1 1,991.2

11.0

9.7

0.9

38.7

81.5

Source: Chosen sotokufu tokei nenpo: Showa 6 nen [Statistical yearbook of the Government-General of Korea: 1931],
182–185; Chosen sotokufu tokei nenpo: Showa 10 nen [Statistical yearbook of the Government-General of Korea: 1935],
149–151.

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Mitsuhiko Kimura

Table 3 Number of Plants by Size and Nationality
No. of
Employees

1912
Japanese-owned Korean-owned

1932Japanese-owned Korean-owned

1939Japanese-owned Korean-owned(Factory
Workers)
5-49

159

87

1,887

2,445

2,040

3,731

50-99

(77.9)
27(92.6)
3(92.5)
82(97.7)
40(80.1)
231(95.2)
135

100-199(13.2)
11

(3.2)
2

(4.0)
33

(1.6)
12

(9.1)
150

(3.4)
38

200-

(5.4)
7

(2.1)
2

(1.6)
39

(0.5)
5

(5.9)
125

(1.0)
15

Total

(3.4)
204

(2.1)
94

(1.6)
2,041

(0.2)
2,502

(4.9)
2,546

(0.4)
3,919

(100)
(100)
(100)
(100)
(100)
(100)
Note: Figures for 1912 indicate plants that employed 10 or more people or that utilized motors. Figures for 1932 and1939 indicate plants with facilities that employed five or more factory workers or plants that employed five or morefactory workers at all times. Figures in parentheses indicate the proportion (as a percentage) of the total number ofplants accounted for by plants of the indicated size.
Source: Umemura and Mizoguchi, eds., Kyu Nihon shokuminchi keizai tokei [Economic statistics of former Japanesecolonies], 52.

3.

Participation of Koreans in the Remarkable Development

Transition to Non-agricultural Economy
Under Japanese rule, the Korean economy under went momentous change, so much so that,from a global perspective, it constituted an exceptional case in the first half of the 20th century. In
short, it represented a rapid transition from a primarily agricultural economy to a primarily nonagricultural one.
During this transition, the agricultural sector itself underwent change. The policies of theGovernment-General and the development of the money economy led to improved farming
techniques and changes in crop selection. Overall agricultural production increased steadily.
Industrialization in Korea began with small and medium-sized plants that simply processed
raw materials. Then, as early as the 1910s, modern industries arose, particularly ironmaking
plants. From the 1920s until 1930s, a private-sector enterprise built a large-scale chemicalindustrial complex founded on development of power plants.
The Government-General pushed construction of infrastructure such as transportation andcommunication networks and simultaneously supported industrial development in several sectors
from the earliest days after annexation. The scope of those activities was expanded in the late
1920s and thereafter.
From the perspective of comparative economic histor y, such industrialization as seen in
Korea never occurred in Western colonies. This contrast between Japanese rule over Korea
and Western colonization is particularly evident with regard to the construction of hydroelectric
power plants on a scale beyond those in the home country, as well as the giant industrial complex
based on them.
What must be emphasized here is that the colonized people themselves contributed widely
to industrialization in Korea. It is true that the Government-General and Japanese nationals(both companies and individuals) led the way and official policy coupled with Japanese financing,technology, and know-how played central roles. But at the same time, Koreans positively
responded to external stimulus and took the initiative in following Japanese models and learning
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Colonial Development of Modern Industry in Korea, 1910-1939/40

skills in business and industrial technologies, thereby demonstrating entrepreneurship of theirown. The remarkable development achieved was thus the result of the combined efforts of thecolonizer and the colonized.
From this point of view, the shortcomings of the so-called “colonial dependence theor y”
become apparent. On the basis of Marxian economics, the dependence theory has had a strong
impact on researchers and other intellectuals interested in colonial history. It focuses attention
on the relationships of dominance/subordination and exploiter/exploited that play out between
a colonizing countr y and its colony. Such a view reduces the colonized to a group of totally
powerless people, ignoring the positive contributions they make to economic growth.
Today, Mar xism is in decline, but the emotionally charged issues of inflicting/suffering
harm and atonement have gained currency, and the deeply rooted dependence theory has been
maintained. This perspective, however, cannot ultimately explain the changes in the Korean
economy from the 1910s through the 1930s.

The Small Presence of Chinese
Finally, what merits consideration is that Chinese nationals (ethnic Chinese born in Qing Chinaor the Republic of China) made up less than 0.5% of the total population in colonial Korea. Thisdistinguishes Korea from the colonies in Southeast Asia, which all had a relatively large presenceof Chinese.
In Southeast Asia, the western colonizers lived in limited districts, especially urban locations,and tended to work either in administration and international trade or on plantations. In thesecountries, Chinese tended to work as laborers in agriculture or civil engineering projects, orin enterprises operating in such fields as commerce and transportation or small to medium
enterprises in food-processing fields like rice polishing, or in marginal administrative positions.
In these capacities the Chinese supplemented the economic activity and reign of the Westerncolonizers. Thus, new economic opportunities were monopolized by the hard-working andadaptive Chinese, and, as a result, the colonized population was unable to free itself from work
centered on traditional agriculture.
This phenomenon did not occur in Korea, where the economic activity of Chinese nationals
was limited to such small areas as vegetable farming and China-related trade. Had there beena larger Chinese population in Korea, it would probably have been much more difficult for
Koreans to participate in new business ventures. Indeed, they may well have been placed below
the Chinese in the economic pecking order. The lack of Chinese influence, then, should not bedismissed, as the past literature did, in the issue of industrialization of Korea under Japanese rule.

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