The Siemens Scandal: A Tale of Naval Corruption in 1914 Japan

In January 1914, Japan was rocked by a scandal that would reverberate through its political landscape, involving key figures from the Imperial Japanese Navy, the British industrial titan Vickers, and the German conglomerate Siemens AG. This scandal, known as the Siemens Scandal, emerged during the late Meiji and early Taishō periods and ultimately led to the downfall of Prime Minister Yamamoto Gonnohyoe's cabinet.

Kickbacks in Shipbuilding

The roots of the scandal lay in Japan's ambitious naval expansion program during the late Meiji and early Taishō periods. To bolster its maritime capabilities, Japan entered into numerous contracts with European firms for the procurement of advanced warships and weaponry. Siemens had secured a dominant position in these naval contracts by offering a clandestine 15% kickback to the Japanese naval authorities responsible for procurement decisions.

However, the situation took a dramatic turn in 1914 when the British firm Vickers, through their Japanese agents Mitsui Bussan, proposed an even more enticing deal. They offered a 25% kickback, sweetening the pot with a hefty sum of 40,000 yen directed at Vice Admiral Matsumoto Kazu, the former Chief of the Navy Technical Department. This deal was specifically tied to the procurement of the battlecruiser Kongō.

Upon discovering this lucrative offer, Siemens' headquarters in Germany dispatched a telegram to their Tokyo office seeking clarification. An expatriate employee named Karl Richter, working for Siemens in Tokyo, saw an opportunity. He stole incriminating documents revealing Siemens' prior payment of a 1,000-pound sterling bribe to the Japanese navy, aimed at securing a wireless contract. Richter sold these documents, along with a copy of the telegram, to the Reuters news agency before fleeing back to Germany.

Breaking of the Scandal

On January 21, 1914, the London Daily Telegraph broke the story, detailing the unfolding scandal and the criminal proceedings against Karl Richter. The Japanese press, led by the Asahi Shimbun, quickly picked up on the story, bringing it to the attention of the public and raising it within the Diet through the Rikken Doshikai political party. The Army and Navy Intelligence Services, along with the Kempeitai, launched immediate investigations into the allegations.

The scandal only deepened when the Japan Weekly Chronicle reported that Admiral Fuji (Fujii Terugoro) of the navy procurement office admitted to receiving payments from Vickers totaling 210,000 yen between 1911 and 1912. While the legality of these payments under Japanese law was questionable, they were undoubtedly illegal under the British Prevention of Corruption Act, 1906.

In Germany, Karl Richter was apprehended for his theft of the sensitive documents and subsequently sentenced to two years in prison. Meanwhile, Hermann Kessler, head of the Siemens subsidiary in Japan, faced public accusations in the German Reichstag by Karl Liebknecht but managed to avoid charges.

Japanese Political Fallout

The scandal ignited widespread public outrage in Japan, culminating in large-scale demonstrations in Tokyo during early February 1914. These protests turned violent on February 10 and 14, with the largest gathering attracting around 50,000 people. The navy, supported by Prime Minister Yamamoto, had previously demanded a massive increase of 70 million yen for its budget. However, such an increase was met with resistance as it threatened to impede the anticipated business tax reduction.

Despite not being directly implicated in the bribery, Prime Minister Yamamoto found himself in the crosshairs of public dissatisfaction. He was summoned to explain the allegations before the House of Peers. In an attempt to placate the situation, Minister of the Navy Saito Makoto proposed a reduced budget request of 30 million yen, but this failed to quell the scandal's intensity.

As the scandal persisted, both houses of the Diet refused to approve the 1914 Navy budget on March 24, 1914. With the cabinet facing a vote of censure in the lower house, Yamamoto resigned that same day, causing his entire cabinet to collapse. A court martial subsequently demoted Yamamoto and Saito Makoto, both former Admirals. Several leading members of the navy procurement department received prison sentences, while Vickers and Siemens faced heavy fines and were banned from future contracts. However, prosecutor-general Kiichirō Hiranuma refrained from prosecuting some implicated navy officers, perhaps to preserve the navy’s reputation.

Further damage to Yamamoto's cabinet came when influential politician Hara Takashi withdrew his support. Although Takashi anticipated that his Rikken Seiyūkai political party would fill the ensuing power vacuum, it was Ōkuma Shigenobu who ascended as the new prime minister.

Sources

• Hoare, J.E. (1999). Britain and Japan: Biographical Portraits, Vol. III. RoutledgeCurzon. p. 190. ISBN 1-873410-89-1.
• Bowman, John (2000). Columbia Chronologies of Asian History and Culture. Columbia University Press. p. 150. ISBN 0-231-11004-9.
• Haley, John Owen (1998). The Spirit of Japanese Law. University of Georgia Press. p. 63. ISBN 0-8203-2022-6.
• Cornelius, Goop (17 December 2021). "Kessler, Hermann". Historisches Lexikon des Fürstentums Liechtenstein (in German). Retrieved 3 November 2023.
• Sims, Richard (2001). Japanese Political History Since the Meiji Renovation 1868-2000. Palgrave Macmillan. p. 115. ISBN 0-312-23915-7.

Wikipedia URL: Siemens scandal