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California Had Its Own Zaibatsu in Early Days

April 08, 1990

I found Michael Schrage's article ("Applying Zaibatsu Principles in the U.S.," March 8) fascinating.

I had just read a history of Bechtel Co. ("Friends in High Places" by Laton McCartney) that commented that the Bechtels and other companies associated with the six companies in the Boulder Dam project made up a California zaibatsu. They clearly fit Schrage's description of the "developmental conglomerate," associating more informally than formally, pooling resources and jointly pursuing projects of a scope that none could do alone.

Furthermore, they did this at a time when California and the West were short of capital and when Western companies were at a political disadvantage for securing federal contracts or Wall Street financing.

I have always been dissatisfied with discussions of this group that tried to fit them into the traditional "robber baron" or "military/industrial complex" models (although in the postwar period Bechtel, at least, certainly conforms to the latter image). This approach, somehow, seems to miss the creative and critical role that they played in California's emergence as a modern industrial state.

LESLIE M. ZOMALT

Solvang

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