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Second was the success of rising standard of living and spreading education in creating a mass society. This, at one level, was a positive trend. Japan in the 1920s was more nearly democratic than at any time in its history before the allied occupation of Japan after World War II. But the creation of a mass society does not lead necessarily to peace. Even democracies can start wars.
Third was the Western, and particularly American, immigration policy, toward Japan. The United States government practiced blatantly anti-Japanese immigration policies, much of which developed out of the growing importance of California in American politics.
Anti-Japanese feeling was rampant on the West Coast of the United States (and later led to the arbitrary imprisonment of over 100,000 Japanese-Americans during World War II). This stimulated the Roosevelt administration to negotiate a "Gentlemen's Agreement" with Japan in 1907-1908 to limit Japanese emigration to the United States. It also played a role in the passage of the Immigration Exclusion Act during the Coolidge presidency in 1924, which excluded all Japanese immigration into the United States, even from Canada. Added to this, Japanese immigrants to the United States were prohibited from naturalizing as American citizens. And the powers, when they negotiated the Treaty of Versailles in 1919 which established the League of Nations, rejected a Japanese/Chinese proposal to add a racial equality clause to the treaty.
Fourth was Western foreign policy toward Japan. The United States, which had encouraged Japan's activities up until and through the Russo-Japanese War, began to see Japan as a potential threat. The Philippines, part of America's empire from 1898, was much closer to Japan than to the United States. Hawaii, another American colony, was also vulnerable to a strong Japanese naval presence in the Pacific.
The fifth portent was the newly developed Anglo-American rapprochement during World War I. Britain and the United States, after a century of estrangement, realized as they defeated Germany in 1918 that they had similar foreign policy interests. The two English-speaking powers engineered the Washington Treaty of 1922, and the subsequent London Treaty of 1930 which extended the naval armaments ratios to other categories of ships, both to set up an overall security system in the Pacific and to provide cover for Britain to terminate its alliance with Japan. Under the treaty, Britain would be required to maintain neutrality if Japan and the United States went to war. The Anglo-Americans reasoned that Japan would not need the alliance if it were part of a regional security arrangement. One British historian has written that the abrogation of the Anglo-Japanese Alliance in 1922, which the Japanese took as an insult equal to the anti-immigration law, provided the stimulus that began to turn Japan from cooperation to autonomy, and thus to World War II.
But the façade of cooperation continued to work in the 1920s, largely because key politicians like Takahashi, and Hamaguchi Osachi (1820-1931) and Shidehara Kijūrō (1872-1951), leaders of the Democratic Party (Minseitō), the other major political party of the 1920s, were committed to the cooperative policy of the Washington Treaty System. (To finance ministers like Takahashi and the Democratic Party's Inoue Junnosuke this policy had the added benefit of allowing Japan to maintain fiscal probity by avoiding a costly naval arms race).
1929 brought a bomb-shell to the region, and in fact to the world. In October the New York stock market crashed, and the Great Depression ensued. By 1931, reduced demand and thus reduced investment in new technology and facilities led to unemployment, underemployment and falling incomes.
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