This paper overviews the industrial organization in Japan in the late nineteenth and the early twentieth century. Using comprehensive plant-level data, I made clear the market structure of the manufacturing industry in 1902. It was found that the level of market concentration in Japan was substantially lower than that in the U.S., which Nutter (1951) clarified. One of the reasons of the low concentration is that Japan had comparative advantage in the industries where the capital-labor ratio was low and the minimum optimal scale was small. Another reason is that in Japan many of the modern industries emerged in the late nineteenth century and still before the phase of firm shake out. Indeed, in the cotton spinning industry, we confirmed that fierce shake out of firms took place after 1900. Meanwhile, in the Japanese manufacturing industry, cartels increased in the 1900s. We analyzed the role of the cartel in the cotton spinning industry to find that it gave a substantial impact on the supply function of the cotton yarn.