In the early 1950s, "industrial rationalization," i.e. renovation and modernization of industrial equipments became the focus of the industrial policy as well as the corporate strategy. In this paper, I explored its historical background and implication. Estimating the vintage of capital stock from 1916 to 1964, I found that the wave of investment during the war brought about a sharp spike in the time-series of the vintage. At the same time, equipment-level vintage data on the iron and steel industry indicate that the vintage distribution in 1949 had a spike reflecting the wartime investment wave. "Industrial rationalization" can be interpreted as a measure to prevent a potential surge of the average vintage due to the vintage spike caused by the wartime investment wave. Through an analysis of establishment-level data of steel-making, it was confirmed that increase of the vintage gave a substantial negative impact on labor productivity. JEL