Mitsui: Three Centuries of Japanese Business 0834800802

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MITSUI

MITSU

————

THREE CENTURIES OF JAPANESE BUSINESS byJOHN G.R OBERTS

foreword byCHITOSHI YANAGA

©

NewYork-WEATHERHILL : Tokyo

Thedesign usedonthebinding andchapter-opening pagesisa modern version of theemblem usedbyEchigoya. Thiscrest,consisting oftheideograph for“three’’ (mitsu)enclosed ina stylizedformoftheideographfor “well”(i),is read “Mitsui.”Theproprietors ofthiscrest,MitsuiC

Co.,Lid., havegenerously

extended permission for itsuseinthisbook.Reproduced ontheendpapers isa woodblock printfromtheseriesTotoMeisho(FamousPlacesinEdo)by AndoHiroshige(1797-1858).Thisprintis titled“‘Surugacho’”’ andshows

Mitsui’s Echigoya, withMount Fujiinthebackground.

First edition,1973

Published byJohnWeatherbill, Inc.,149MadisonAvenue,NewYork,New York 10016,witheditorialofficesat 7-6-13Roppongi,Minato-ku,Tokyo

Copyright undertermsoftheInternational bycopyright 106,Japan.Protected inJapan. andfirstpublished Printed allrightsreserved. Union; LibraryofCongressCataloging in Publication Data:Roberts,JohnG.| Mitsui:threecenturiesof Japanesebusiness./ Bibliography:p. | 1. Mitsuizaibatsu.2. Businessand politics—Japan.I. Title./ HD2907.R62| 332.1/0952/73-9856/ 1sBN0-8348-0080-2

Contents

Foreword,byChitoshi Yanaga Authotr’s Preface NH WH

BB

Om

NA

FromSwordto Soroban EchigoyatheShunned

TheSourceofHappinessIsPrudence “RememberWeAreMerchants’”’

LegacyoftheBarbarians TradeofBloodandGuile TheManfromNowhere

onTD PickingtheWinner

ByAppointmentto theEmperor

Foundations inBankingandCommerce

Capitalism,JapaneseStyle TheZaibatsuBuilders DiplomacybyOtherMeans TheBestLaidPlans... AFootholdontheMainland TheTwoFacesofMitsui

WhichWaytoUtopia? TheClaninAllItsGlory

WhomtheGodsWouldDestroy ChallengingtheWorld TheHonorableMeninPower

TheWaveoftheFuture

CracksintheFoundation

NotNecessarily toJapan’sAdvantage Ashes,Ashes,AllFallDown

AlltheKing’sMen

NewWineinOldBottles

vil x1

13 23 36 43 50 64 /3 8) 105 116 129 144 160 175 185 200 to 240 259 281 301 a2F 341 365 388 408

V.

LIBRARY UNIVERSITY fia CONCORDIA OR97211 PORTLAND.

vi.

CONTENTS

28 TheRebirthofMitsuiBussan 29 BehindtheCurtain 30 Japan,Unlimited

429 439 469

Appendixes A. MitsuiConstitution of1722 B. MitsuiConstitution of1900

492 504

Epilogue:TheTurningWheels

493

C. TheMitsuiMainFamilyc. 1900-1945

D. SomeFamily TiesintheMitsuiConcern E. TheMitsuiGroupin1973

Notes Bibliography Index

Photographs

1-24 FromSwordto

Soroban

25-67 ‘TheManyFacesofMitsui

510

312 514

521 d31 539

following page114 Jollowing page290

Foreword

AvTHEENDOFWorLDWar IILin1945Japanwasa shambles.Herindustrialproductionhaddropped to a mereforty percentof whatit had beenat itspeak.Thewhole nation seemedto bein a state of stupor inducedbythedefeat,aswellasby thelossofoldbeliefs,lovedones, homes,and livelihoods.Peoplewere dyingof starvationon the streets.It wasgenerallythoughtthat Japanhadbeenreducedto a fourth-ratepower.Eventhe Japanesethemselvesbelievedthat the chancesofregainingtheir former statusas a majorw orldpowerwere they nil.Yetoncetheyaccepteddefeatand its inevitableconsequences,

theirwar- . tothetaskofrebuilding singlemindedly appliedthemselves devastated land. Notimewasloston self-pity,regretoverthemistakeofwaginga

hopelesswar,or hatredoftheconquerors.Withresilience,determination, and accommodation,the nation quickly lifteditself fromthe ashesofdefeat.Inthespaceofa meredozenyears,it achievedthepositionofleading shipbuilderin the world. In a spanof lessthana generation, Japan’seconomicrecoverywascomplete.Shebecametheworld’s thedreamsofhermostrabid thirdgreatindustrialpower,surpassing during theheyday ofmilitarismin the1930s. ultranationalists Needlessto say, the tense and fluid internationalsituationimme-

bythestrugglebediatelyfollowingthewar,whichwashighlighted

tween the Communistand Free Worlds,playedanimportant partin

However,noeconomicmiracle Japan’srapideconomicresurgence. traditions,histhedeeply-rooted without wouldhavebeenpossible ortechnicalandorganizationalskillsoftheJapanese toricalexperiences, people. Froman economicpointofview,Japanis no longerconsidereda non-Westernnation.Technologicallyadvancedfarbeyondthe con-

groupedwith sheisinvariably andpotential, finesofAsiancapabilities advanced nations.Despiteherindustrially Western,ratherthanAsian, status,sheisdecidedlymoretraditionalandAsianinthenonmaterial aspectsof life, such as thought, behavior,and values,all of which

athomeand activities andindustrial hereconomic influence profoundly abroad. is an impressivestudyof ofJapaneseBusiness Mitsui:ThreeCenturies vit

Vill ~ FOREWORD

howtheHouseof Mitsuibegananddevelopedintoa hugeeconomic

empire.Morethananyothercorporateentity,Mitsuisymbolizes continuityandchangeandrepresents theeconomic growthanddevelopmentof Japanduringthepastthreehundredyears.Furthermore, it is

orzaibatsu,whichemerged theprototypeof thepowerfulcombines,

in thelatenineteenthcenturyandservedas instrumentsof national policyinthebuildingofa modernindustrialJapan.Assuchtheywere thehandmaidensin thegovernment’sprogramof modernizationand industrializationalongthelinesofWesterncapitalism.

Thefounderof the Houseof Mitsuishowedrareforesightin thefamily’ssamuraistatustobecomea mervoluntarily abandoning Startingoutasa smallbrewery formakingsakéand chant,orchonin.

soy,thenexpandingintoamodestdraper’sshopandmoneyexchange, Mitsuieventuallybecamea hugeconglomerate encompassingpracticallyeverytype of businessand industrialenterprise:banking,

construction, insurance, shipping,foreigntrade,retailmerchandising, paper,glass,elecengineering, mining,brewing,textiles,chemicals, tronics,optics,andrealestate. In additionto itsvariousenterprises,Mitsuibecamethefiscalagent inOsakaoftheTokugawa governmentneartheendoftheseventeenth century,continuinginthiscapacity formorethana centuryandahalf. Buttowardthe end of the feudalregime,it founditselfin serious

Torectifythesituation, it difficulties broughtonbymismanagement.

recruitedMinomuraRizaemon,a managerofuncommon ability,who not only injectednew vigor into its operationsbut turnedthem around, and laid solidfoundationsfor a greateconomicempire. Through an efficientinformationnetwork,Minomuralearnedof the

battle sharplydeclining fortunesofthebakufu,wellbeforethecrucial hebegancultivatingintimate ofToba-Fushimi in 1868.Whereupon

relationswiththefutureleadersoftheanti-bakufu forces,notablyIto, Inoue,andYamagataof Choshu.AftertheMeijiRestoration, Mitsui

forcesandhelped toraisewar severeditsrelationswiththeTokugawa toputdowntheresistanceof fundsneededbytheMeijigovernment thedie-hardbakufusupporters. Followingthedemiseofthefeudalregimein 1868,theHouseof

Mitsuiprovidedvaluableexpertiseandresourcestowardthebuilding ofthenewJapan.It respondedto theurgentcallofthe Meijigovernmentandfurnisheddesperatelyneededfundsforitsoperations. Asthe govetnment’sfiscalagent, it receiveddeposits,disbursedfunds, handledtrade,andevenissueditsownpapercurrency,sinceitscredit wasbetter than the government’s.It wasno accident,therefore,that

Mitsuiwasregardedasthe defactoMinistryofFinanceoftheMeiji

oftheBankofJapanin1882.By government untiltheestablishment

FOREWORD-

ix

helpingto putthenation’sfinances ona soundbasis,Mitsuinotonly

wonrecognition, butactuallyworkeditselfintothefinancial structure ofthegovernment.Theintimaterelationship whichwasassiduously developedbetweenMitsuiandthegovernment provideda modelfor otherenterprises. Mitsui’ssuccesswasbasednotonlyonitspolicyofrecruitingtalent, whichincludedtheadoptionofpromisingyoungmenintothefamily,

butalsoonitsabilitytoobtainvaluable advanceintelligence regarding

the government’smoves,as wellas to maintainclosetieswiththe government.Amongtheinnovationswhichhavebeenattributedto Mitsuiaresalesonastrictlycashbasis,emphasisonsmallprofitperunit andlargesalesvolume,whichstillischaracteristicofJapanesebusiness

operations, auniqueconceptofthetradingcompany, andthefounding

of thefirstJapanesechamberof commerce. Mitsui’svariousrolesinwarandpeacearewell-known tohistorians ofJapanesebusiness.It hasparticipatedin thedevelopmentofManchuria,Korea,andChinaandintheexpansion ofJapan’stradeandin-

fluence,botheconomic andpolitical,invariouspartsoftheworld.Its far-flungactivitieshaveenabledit to gatherallkindsofvaluableinformation,not onlyforits ownbusinessoperations,butalsoforthe governmentin itsformulation ofpoliciesandconductofdiplomacy. In the phenomenaleconomicrecoveryfollowingthe war,Mitsui workedcloselywithothercombinesto amelioratethe harsh,if not

vindictive,occupation policywhichcouldhaveresulted inthecompletedissolution ofthezaibatsu.Thus,representatives ofthezaibatsu effectivelyfunctionedasa moderatinginfluenceto restrainoverzealous occupationofficialsfromtotallydismantling Japan’seconomicstructure.Thesesamerepresentatives convincedJohnFosterDulles,the personalenvoyofthepresident,thata generouspeacetreatywouldinsureJapan’sroleasareliableallyoftheUnitedStatesintheFarEast.It wasno surprise,therefore,thatDullesmetwiththeJapaneserepresentativesaswellasthe SupremeCommanderfortheAlliedPowers, GeneralDouglasMacArthur,in the MitsuiBuildingin downtown Tokyo,thecitadelof zaibatsuprestigeandpower. InexplainingthepostwarresurgenceofJapanasa first-rateeconomic

power,theauthorreveals theclosecollaboration betweenthegovernmentandthebig-businessestablishment.Healsoshowshowdecisions werereachedandpoliciesformulatedin informalsocialgatheringsof small,intimatecliquesatteahousesaswellasintheexecutive suitesof

bigbusinessandhighgovernment officials. Adetailedaccountofthe Miikecoalminers’ strikeprovides insightintothemodusoperandiof big businessin dealingwithlabortroubles.The authoralsofollows closelytheeventswhichgeneratedthestronganti-Kishisentimentsin

x

= FOREWORD

thenation,resultinginthecancellationofPresidentEisenhower’s projectedvisitin 1960.

Thisoutstanding workon thehistoryoftheHouseofMitsuiis valuablereadingforthoseinterestedinthe developmentof Japanese businessaswellasthe postwarriseofJapanastheworld’sthird in-

dustrialpowerof thetwentiethcentury.

CHITOSHI YANAGA Professor Emeritus of Political Science

YaleUniversity

Author’sPreface

WHENI WAS ALITTLE BOY, I wasbundledoffto Sundayschoolregular-

ly,clutching asmallpinkenvelope containing afewnickelsanddimes. Sincetherewasacandystorelurking betweenhomeandthePresbyterianchurchof myparents’choice,theenvelopedidnotalwaysarrive unopened.Butsincethecontribution wasintendedforthesuccorof pitiableJapaneseheathens,conscienceovercamecravingas oftenas not,andI assumethatsomeof themoneywaseventuallyusedforthis purposeby “our man in Tokyo,” the ReverendAugustReischauer. Afterthatinitialexposure,myattitudetowardJapanpassedthrough thestagesof indifference,disapproval,hatred,andagainto pityand indifferenceuntil, in 1959—severaldecadesand

two wars later—I

landedin Japanasa tourist.Observingthefeverishreconstructionof

thecitiesandthesignsofeconomicexpansion onallsides,I found myselfintellectuallyandemotionallyunpreparedto assesstheresults ofmyboyhood’s smallinvestment.Whatwasoneto thinkof allthis vigorous,determinedactivity,in

whichgreatmassesof peopleseemed

to actas one?Pitywouldhavebeenimpertinent, indifferenceincon-

andwonderwoulddo. Onlyastonishment andhatredabsurd. ceivable, I realizedforthefirsttimethata uniquekindoffermentbeyondmy comprehensionwasin progress,andthatI hadbettersetaboutre-

pairingmyignorance.

Theleastanswerable of myquestionsrelatedto thenatureof the

What bywhichtheywerebeingdirected. forcesatworkandthemeans it?Atthetime,agreat kindofashowwasthis,andwhowasrunning

confrontationbetweentherightandtheleftinJapanwasshapingup, Butit andit waseasyto becomeconfusedbypoliticalsuperficialities. essentially camefroman wassoonapparenttomethatthepropulsion

unitedpeople, andthatdespitetalkofsocialupheaval, guidance ofthe in firmlyinthehandsofa smallelitecalledzaskai nationremained Asa steptowardunderstanding elsewhere. Japanand“bigbusiness” theprocessesinvolved,I beganto studyandwriteabouttheeconomy,© finance,andindustryforpublicationsin Japanandabroad. In thelate1960sMitsuiBussanKaishainvitedmeto writea history

ofthevenerableMitsuiconcern. Rashly,I acceptedbecauseI thought itwouldbeagoodchancetolearnsomething aboutJapaneseeconomic xt

Xll + PREFACE history. The result, born from sore travail, was a seriesof fifteen

articlescalled““TheMitsuiStory’’thatappearedin MitsuiTradeNews

between1969and1972.Onthebasisofresearchconducted forthat project(inwhichMitsui Bussancooperated fully)Ibegananindepend-

entwork,theoutcomeofwhichis Mitsui. I shouldliketo emphasizethatthisis notan ‘authorizedhistory.” AlthoughofficialsofseveralMitsuicompanieshavebeenmosthelpful inprovidinginformation andreferences,theselectionofmaterialand theopinionspresentedherearemyown.No memberof anyMitsui companyhasseenanypartofthemanuscript, andthereforenoonebut myselfcanbe heldresponsible for anyerrors,omissions,or other faultsthatmaybefoundin thesepages.AndalthoughMitsuiBussan haskindlypermitteditsfamiliaremblemto beusedasa decorationin thebook,it mustnot be construedasbeingan endorsementof this historyor ofanythinginit.

InJapan,thefamily nameprecedes thegivenname,andthatcustom hasbeenobserved inthisbook.Thespelling ofnamesisalwaysaprob-

lembecausetheymustbe transliteratedfromideographsthat may havemanyreadings.Furthermore,Japaneseareaccustomedto changingtheirnamesforvariousreasons.InrenderingnamesI havetriedto usethe readingandspellingpreferredby the personconcernedand havealsousedthenameunderwhichthatpersonisorwasbestknown. Honorifics,usedinvariablyin

Japan,havebeenomittedhere.

Inassemblingandevaluatinghistoricalmaterial,I hadtocopeasbest I couldwithanoverabundanceofopinionsanda dearthofhardfacts.

Eveninascertaining thenumberofdeathsresultingfromtheGreat

KantoEarthquakeof 1923,onefindsseveral“authoritative” figures, alldifferent.Until1945Japanwasa closedsociety,inwhichfreedomof inquiryandexpressionwereseverelylimited,andcredencewasbased uponauthorityratherthanveracity.Yetto hedgeeachfactwithdisclaimerswouldbe undulycumbersomein a bookof thiskind,so in mostcasesI havegiventhedataorversionsofeventsthatI considered tobethemostvalid,withoutqualification. I entreatthereaderto view cautiouslytheportionsdealingwithprewarhistory.Somesmallparts ofthebookhaveappeared,indifferentforms,intheFarEasternEconomacReview, Burroughs ClearingHouse,Corporate Financing, andtheMeanjin

Quarterly,

In preparingtowritethisbookI havetalkedwithscoresofpersons connectedin somewaywiththe elevenMitsuifamiliesor withthe Mitsuigroupofenterprisesbearingtheirname.Ishallciteonlya few

individuals whoarerepresentative of theirparticularorganizations,

whileextendingheartfeltthanksto otherswhohavebeennolesshelpful.

PREFACE -: Xi¢ilt

Particular thanksareduetoMitsuiHachiroemon Takakimi, present

the Mitsui headof the mainfamily;MitsuiTakasumi,chairmanof Foundation,andMrs.Mitsui;MitsuiReiko,whois compilinga history of the House; Mitsui Takamitsu,heir of Hachiroemon; Mitsui Takanaru,headof a branchfamily,and Mrs.Mitsui.

OfthoseconnectedwiththeMitsuifamilies,I wishto thankShirane

handlingtheImperialHousehold’s aformervice-minister Matsusuke, a finances;MinomuraSeiichiro, descendantof a famousmanager

of the Mitsuiconcern;andMinomuraTomoyuki,alsoa descendant. Of specialhelphasbeen thehistorian YamaguchiEizo,custodian of the Mitsui familyarchives.For generalinformationabout Japanand its historyI am beholdento NishiHaruhiko,formerVice-minister

his sonTeruhiko,HonoraryConsulofIreland of ForeignAffairs;

in Japan; ShiraiKuni,proprietorof the Yamaguchiteahouse,at whichtheleadersof modernJapanhavecongregatedsincethe Meiji era; andSakamotoMoriaki,anexpertonthehistoryof the Satsuma clan.

of Mitsuienterprises (nowelderstatesmen) Formerhighofficials of withinterestandbenefitareSatoKiichiro whomIhaveinterviewed MitsuiBank;formerfinanceministerMukaiTadaharu;TashiroShigeki of Toray Industries;and NiizekiYasutaro,MizukamiTatsuzo, and

TanabeShunsukeofMitsuiBussan.AtMitsuiRealEstateDevelopEdoHideo;andatMitsukoshi, mentI learnedmuchfrompresident andchairman OmotoShimpei President OkadaShigeru. frompresident KurataOkito,of MitsuiMiningandof MitsuiMining& Smelting, respectively,wereespeciallygenerouswiththeirtime.At MitsuiBussan I had veryenlightening conversationswithpresidentWakasugi Sueyuki;SakurauchiTakeshi,thenadvisertothe board;and Ogino Inaddition,I talked Sachu,generalmanagerofthefinancedepartment. superintendentsof Mitsui withnumerousdirectors,managers,and

Mining,Mining&Smelting,Aluminum,Petrochemical,Shipbuilding & Engineering,Bussan,Bank, and other companies of the group,

aredeeplyappreciated. andhelpfulness whosecourtesy

Among thoseunconnected with Mitsuibut deservingof special

thanks are Takahata Seiichi,former chairmanof the Nisshotrading

company,and EleanorHadley,a notedauthorityon Japaneseollithe arcanaof JapanesepoliticsIwish gopolies.Forearlyguidancein to thanksociologistShibataTokue,DirectoroftheGeneralPlanning Government;theorist andCoordinationBureau,TokyoMetropolitan For IchiyoMuto;historianDavidCondé;andeditorUyenoKazuma. M itsuKurotaki I patientassistancein research, expressmythanksto theForeignCorrespondents ou,FuruyamaEiji,andthelibrarystaffsof editorialhelp Japan.Constructive Houseof ClubandInternational

xiV + PREFACE

hasbeengivenbyMartin DavidsonandRebeccaDavis.Andfinally, I offermydeepestgratitudetoMidoriYamakawa forherableand

energeticresearch,translation,and

bookcouldneverbeencompleted.

generalhelp, without whichthis

MITSUI

| - FromSword to Soroban

MITSUI ISTHEWORLD’s OLDEST large-scalebusinessenterprise.The MitsuifamilyopeneditsfirstshopfiveyearsbeforethePilgrimslanded

inNewEngland,andestablished a bank—still operatinginthesame location—in 1683,adecadebeforetheBankofEngland wasfounded. Late in the 1860s,soon after the CivilWar in the United States,the

Houseof Mitsuigaveindispensablehelpto the revolutionarieswho

toppledtheancientmilitaryregimeinJapanandloosened theshackles offeudalism. FromthenonMitsuiwasintheforefrontofJapan’seco-

nomicmodernization, andbytheearlytwentiethcenturyitwasa dominantpoliticalforcein thefast-risingnation. Thepowerandreputationoftheconcernreachedfullmaturityafter

theFirstWorldWar,andin

the nineteentwentiesandthirtiesthename

Mitsuiinspiredrespectandawe,or hatredandfear,throughoutthe

Japaneseempire.TheskiesaboveJapan’scitiesdarkenedwiththe

smokefromMitsui’smillsandfactories.Theriversgrewturbidwith theoutpouringsfromtheirmines,metalrefineries,andpulpmills.The

earthshookfromthevibrations oftheirhydraulic presses,piledrivers, andblastings. Mightyshipsglided downtherampsofMitsui dockyards to jointhefleetofMitsui vesselsplowingthroughremoteseas,bringing tawmaterialsforMitsuiindustries,or carryingawaythegoodsthey producedin quantitiesthatat firstastonishedandthenappalledthe world. Fromthenorthernfrontiersin Hokkaidoto Kyushuin the south Japanesemen,women,andchildrentoiledinMitsui’sforests,fisheries, andplantations.Theylaboredceaselesslyin thestiflinglabyrinthsof Mitsuiminesand in smallworkshops,wholesalehouses,docks,ware-

houses,lumberyards,and quarriesownedor controlledby Mitsui. Universitygraduatescompetedfiercelyforemploymentintheofficesof Mitsuibanksandinsuranceandcommercialhouses,themostpuissant

andprestigious inthenation.

Althoughthepeoplemayhavebeenunaware ofit,alargeshareofthe necessitiesandluxuriestheypurchasedwereproducedordistributedby Mitsui,andperhapsoneoutofeverytenJapanesewasdependentupon

3

4.

MITSUI

aMitsuienterpriseorsubsidiaryforthewageswithwhichtobuythem. In Japan’scolonies—Formosa, Korea,andSouthSakhalin—aswellas inManchuriaandpartsofChinaproperMitsuioperatedthemostproductiveconcessions, andimportedtheirproductstoJapanorexported themto othercountries.Mitsuiwasthemainbackerandbeneficiary

oftheSouthManchurian Railway, thelargestsingleprivate enterprise intheJapaneseempire,andsponsoredarmiesofmercenaries forthe

penetrationandpacificationofChina.Mitsuisuppliedarmsandmoney firstin 1912for SunYat-sen’srevolutionto overthrowtheManchu dynastyandthenin 1932to restorethesamedynastyin Manchuria— whichMitsuihadoncenearlysucceededin buyingoutrightfromcor-

ruptChinesepoliticians.

MitsuiBussanKaisha,knownabroadas

Mitsuiand Company,

spannedthe globe with its trading and shippingnetwork, through whichit handledabout forty percentof Japan’sexportsand imports.

MoteextensiveandbetterorganizedthantheJapaneseforeignoffice,

it conducteddiplomacyforthegovernmentandgatherednotonly thatwas butpoliticalandmilitaryintelligence information commercial

oftenof decisiveimportanceto thenation. In 1905,duringthe Russo-JapaneseWar,managersof Bussan’s branchofficeinShanghaifollowedthemovementsof theczar’sBaltic

and totheJapanesehighcommand, accurateinformation Fleet,flashed enabledtheimperialnavyto winoneof thegreatestseabattlesof moderntimes.Duringthe FirstWorld WarMitsuiBussan obtained advancedmilitaryaviationtechnology by purchasinga largeAmerican aircraftmanufacturing plantandvirtuallymonopolizedsalesofaircraft inJapanfora longtimethereafter.Two decadeslatercodedmessages

plantedinBussan’stradereportsfromHonolulu helpedJapanese intelligenceto keepabreastofthedispositionandmovementsofthe PearlHarborup to themorningof UnitedStatesNavy’swarshipsat December7, 1941.Throughoutthe

SecondWorld War Mitsuimen,

as intelligenceofficers(andotherofficersdissecretlycommissioned guisedasMitsuiemployees),workedforthefatherland whereverthe

branchesservedasvirtual tooperate.Bussan’s waspermitted company

appendagesof the militarygovernmentin the vastbut short-lived “GreaterEastAsiaCo-ProsperitySphere.” MitsuiwasJapan’slargestprivatecontributorto charitableinstitutions,hospitals,schools,andpatrioticorganizations.Its paternalistic manufacturingandminingenterprisesadoptedsomeof themostadvancedlaborpracticesof theWest,andtheiremployees enjoyedthe bestwagesandworkingconditionsin the country.Yetthe Mitsuis werehatedas exploitersandprofiteers.In the 1930stheirhighest

executives wereadvised towearbulletproof vests,andtwowhoignored

FROMSWORDTO SOROBAN= 5

this counselwereassassinated—bymembersof secretsocietiesthat weresubsidizedbyotherMitsuiexecutives.It wasMitsuithatprovided bothpreciousradiumforcancerresearchin Japanandopiumforthe pacificationof occupiedregionsin Asia.Mitsuifactoriesmadethe

dyestuffs forthecolorfulJapanese fabricsthatgainedworldwide favor; but,whennationalpolicydictated, thesameplantswereconverted to theproductionof militaryexplosivesandchemicalweaponsforwars

ofaggression.Mitsui’sleaderswerethemosteffectiveopponentsof

communismin Japan,anda Mitsuisubsidiarysupplieda majorshare

oftheweaponsusedbytheczaristregimeinitsfutileefforttocrush

the Russianrevolution.The sameweapons,ironically,wereinstrumentalin assuringthevictoryof Lenin’sBolsheviksandestablishing theSovietUnion. | Controllingas it did oneof the majorprewarpoliticalpartiesin

Japan,Mitsuicouldinfluence legislation, arrangetheappointment of friendlycabinets,andmakeitsimprintuponforeignpolicy.Independentlyorincollaboration withotherzasbatsu, orfamily-controlled financialcliques, it couldoftenthwartpower-hungry bureaucrats andmilitarists,promotenecessary administrativereforms,andoustincompetent governments.Itsofficials,usingeconomicleverage,alsohadthepower to suppressreformmovements,smashunions,imprisonor liquidate agitators,andsecureimmunityformiscreantswithintheirownranks. Theirhatchetmenincludedcabinetministers,militaryofficers,police chiefs,newspapereditors,andbossesofterroristsocieties,whowould stopat nothingin supportingtheinterestsoftheirprotectors.

Mitsui’s tradeandoverseas investment programs boostedthenation’s

powerandprestige,smoothingthewayforits expansionin foreign marketsandgivingit accessto vitallyneededrawmaterials.Among the zaibatsuMitsuistoodout as an advocateof peacefultradeand

international goodwill,yetitsdecisionssometimes fueledtheflames

ofwaranddetermined the riseor fallofforeigngovernments. Thefourlargestzaibatsuownedabouttwenty-fivepercentofJapan’s corporateassets,and just two of themwereresponsible for threefourthsofJapan’soverseasinvestmentsduringtheheightofJapanese

imperialism. Standingheadandshoulders abovetheotherswasMitsui, whosesprawlingempireembracedeverysignificantsectorofindustry, finance,andcommerce,andemployedasmanyasthreemillionpeople domesticallyandoverseas. AttheheadofthisempirewastheMitsuiholdingcompany, which undera successionof namesruledits vassalbusinessesin muchthe

samewayastheTokugawa shogunshadexactedobedience fromthe

feudallordsof Japan.And,likethoseshoguns,whogovernedinthe nameoftheimperialcourt,themaincompany wassubjectto a higher

6 « MITSUI

authority.Inthiscasethe“emperor” headingthemainfamily wasBaron MitsuiHachiroemon,a

direct descendantof the Mitsuiwho had

foundedtheHousethreehundredyearsbefore.TheprincesinthissovereignHousewerethe headsof the ten branchfamilies,whowere boundtogetherby a formalconstitutiondatingfromthe establishment’ssecondgeneration.Thisunusualdocumentprescribedexplicit responsibilities,duties,policies,andbehaviorexpectedofeachindivid-

ual,aswellastheunalterable hierarchyofthefamilies,theirsharesin theproceedsofthebusiness,andthenatureofofficial andpersonalre-

lationshipsto be maintainedamongthem. Theperpetuationofafamily’sfortuneandpositionbyawrittencode isnotunusualin theworld,orevenin Japan.Whatdistinguishedthe Houseof Mitsuifromotherwealthyandinfluential familieswasits tapiddevelopmentintoa nationalinstitutionanditstenureof quasiofficialstatusthroughthetumultuouseventsof modernhistoryuntil itsenforcedcollapsein 1945.Inthisrespectthereisa strongsimilarity betweenMitsuiandtheEuropeanhousesof RothschildandKrupp, whoseactivitiesalsowerecloselyboundupwiththefortunesofempire.

ButtheMitsuiinfluence emergedmuchearlier, andseemstohavebeen

motepervasivethanwasthatofanyEuropeanor Americanfinancial

house.WithoutthesupportofMitsuithemomentous Meijirevolution

of 1868couldscarcelyhavesucceeded,andin thesubsequentdecades ofthenation’smetamorphosisMitsuiwasthefoundationuponwhich the modernJapaneseeconomywasbuilt.The rolethat individual

Mitsuisplayedinthosedevelopments isuncertain,buttheirparticipa-

tionwasconsideredtobesoessential thatcollectivelytheybecamevirtualhostagesof thestate. TheparallelbetweentheHouseofMitsuiandtheimperialfamilyof Japanisstriking.Itsoriginswereshroudedinthesamekindofofficial mythology,andits structureandregulations wereelaboratedbythe

samelegalauthorities whorationalized thejuridicalbasisofimperial

rule.In timesofperilitscontinuation wasassuredbygovernmentintervention;itsmatrimonialalliances(eventuallywithsomeoftheem-

peror’srelatives)werearrangedwithequallyfinediscrimination; and thepersonalactivitiesofitsmembersusuallywereimmune fromscru-

tinyandcriticism.Attheheightofitspoweritsleaders—whose positionswerehereditary—weresupervisedby the sameelderstatesmen whosurroundedtheemperor,andthedecisions ofits administrators weresubjectto theirveto.Likepersonagesoftheimperialhouse,the Mitsuis’chiefswereseldomseenbyanyoneexceptpeersoftherealm, highexecutives,or membersof theirhouseholds. Theirfaceswere knowntothepubliconlythroughofficialportraits,andtheiractivities onlyfromcarefullycensorednewsreports.Butthe featuresof two

FROMSWORDTO SOROBAN« 7

Mitsuis,likethoseofEmperorMeiji,wereknowntoeveryliterate oftheHouseasa major Japaneseandreveredbymany:thefounder intheprimarywasportrayed Takatoshi, MitsuiHachirobei enterprise, schoolreadersissuedtoeveryboyin thecountry;andthelikenessof hisremarkablemother,Shuho,appearedinsimilarbooksforgirls.Accompanyingthepictureswerehomiliesextollingthethrift,enterprise, asexamplesto be diligence,andforesightofthoseworthies,presented followedby everyuprightyouth.

ThefirstMitsuishopwasestablished notbyHachirobei butbyhisfather,SokubeiTakatoshi,whoseclaimto famelayin hisforesightand coutagein renouncinghisrankasa samurai,or warriot-aristocrat,to

becomea lowlytradesman. Sokubei’s forebearshadbeenprovincial lordsofminorimportancebutofsubstantialestate.Itis difficultto tracetheirpedigreeformorethana fewcenturies,becauseclass-consciousJapanesehavealwaystendedtocherishflatteringlegendsabout theirorigins.TheMitsuisarenoexception: inprewardays,whenhistorywastheirhandmaiden,theirobliginggenealogiststriedseriouslyto tracetheclan’sancestrybacktotheFujiwaras, who,liketheemperors, wetelegendarydescendants of AmaterasuOmikami,the SunGoddess. Accordingto onelegend,a memberoftheFujiwarafamilywhowas

namedUmanosuke NobunarileftKyotoabouta.p.1100(duringthe periodofthefirstcrusades inEurope)to takeuphisabodeinnearby OmiProvince.Thenewsettler,whilelookingoverhisproperty,extendingalongthe shoreof LakeBiwa,discovered that it hadthree wells.In oneofthemhefound a treasurein goldcoins.To commemoratethisgoodfortunehechangedhisnameto Mitsui,whichmeans “threewells.” TheMitsuis’history,asdistinguished fromtheirmythology, seems to beginlateintheMuromachi period,ataboutthetimewhen,onthe othersideoftheworld,Christopher Columbuswasaskingtherulersof

PortugalandSpaintofinancehisvisionaryprojects.Atthattimethe

Mitsuiswereretainers,withsamurairank,of theRokkakubranchof the Sasakiclanin Omiprovince.ThoseSasakis,famousas warriors, belongedtotheOmiGenji,descendantsofMinamotoYoritomo(1148-

99).Thatmilitary genius,havingdefeated thedominant Tairaclanwith thehelpof Sasaki’ssamurai,hadbeenappointedby the emperorin 1192as thefirstsedi-tai-shogun, or “barbarian-quellinggeneralissimo,” andhadintroduced thebakufu,thesystemofgovernment byshoguns, whichthereafterwouldcontrolJapan.Threehundredyearslaterthe Sasakiswerestillfirmlyensconcedin theirOmistronghold. Amidthe anarchythatprevailedduringmostyearsfrom1300to

8 « MITSUI

1600,everysamurai homehadtobeanarmedcamp,andthefamily unittookontacticalaswellassocialimportance. Kannonjicastle,for-

tressof the Sasakilords,wasbesiegedrepeatedly,andneighborsless stoutlydefendedwerein constantjeopardy.TheMitsuis,smallin statuteanddelicateinbuild,owedtheirsurvivaltothepoweroftheSasaki daimyo,whomtheyapparentlyservedas administratorsratherthan fighters.Evenso,theMitsuismusthavebeenofratherhighrank,for lateinthefifteenthcenturytheywereabletomarryoneoftheirdaughtersto Takahisa,a youngersonofLordSasaki. Becauseoftheneedforcontinuity andsolidarityinthefamily,it had becomecustomaryforafathertobequeathhisentireestatetohisoldest ormostcapableson,or,ifhelackedanaturalheir,toadoptasa sonthe

husbandofoneofhisdaughters.Suchanadoptedheir,oryoshi,was SasakiTakahisa,whobecameheadandprotectoroftheMitsuihouse.

Takahisabuilt a castleat Namazue,east of Lake Biwa,where the

Mitsuislivedasa pettydaimyoclanundertheaegisoftheSasakiwar-

lords.Littleisknown ofTakahisa’s descendants duringtheiroccupancy ofNamazuecastle,butassamuraitheymusthavefollowed thecodeof

knighthoodknowntodayasbushido.‘Thisinflexible andungentlebrand ofchivalry,introducedbyTakahisa’sancestors,theMinamotoshoguns, emphasizedcourageinbattleandloyaltyto one’sliegelordevenatthe sacrificeof one’sfortuneandfamily,withdeathbyseppuku, or ritual disembowelment,asthecompulsory alternativeto dishonor.Thetrue

watriorhadtoshowindifference inthefaceofdanger,hardship,love, anddeath.UnlikeEuropean knights,a samuraiwasforbiddentodis-

playsentiment,andin hisausterityhe wascontemptuousof material gain.Hisrewardsforenduringa spartananddangerouslifewerethe prestigeofbeingnearthetoplevelinarigidlystratified society,andthe

privilegeofwearingtwoswords,thetemperofwhichhewasfreeto testupontheunresistingfleshofpeasants,craftsmen,merchants,or outcastswheneverhesawfit. Provinciallifeinthosedarkageswasneithercomfortable norsecure,

for one neverknewwhena

band of samurai,bellowingdefiance,with

swordsflashingandtorchesalight,mightswaggerintoa villageor manor,to leaveit a blazingshambles.Forthosethick-skinned gentry

bloodshed wasthebadgeofmanliness, andindividualmayhemorin-

discriminatemassacretheverymeatandmarrowoflife. The mostbloodthirstywarlordof the sixteenthcenturywasOda Nobunaga,a minordaimyowhonursedthehighambitionofbringing

allofJapanunderhissway.Inhisrampage throughcentralJapanhe

trampledoveranyoneoranythingthatlayinhispath.Tocurbtheinfluenceof the Buddhistwarrior-priests,whothenheldgreatsecular

FROMSWORDTO SOROBAN+ 9

everyoneof oftemplesablazeandslaughtered power,hesetthousands theirdefenders. advancethroughOmion AmongthosewhoimpededNobunaga’s his marchtowardKyotowerethe Sasakisand theirvassals,whose

martialskills,valor,andfortifiedcastlesavailedthemnothingagainst the savageryof the invaders.DuringNobunaga’sonslaughtsixteen castles,includingthoseofthe Sasakisand the Mitsuis,wererazedor

and captured.ThefewsurvivorsoftheSasakiclanweresubjugated, Sasakivanishedfromtheannalsof RokkakuHouseof thereafterthe Japan’shistory. theprudenceforwhich TheMitsuis,meanwhile,weredemonstrating House,Takayasu, headofthe The latertheyweretobecomerenowned.

to danger,toldhisservants LordofEchigo,sensingtheapproaching wereportable,andfledwiththem,hisfamily, packwhatevervaluables ofthe anda fewretainers.Withphenomenalluck(anothercharacteristic acrosscentral Honshuto Ise Bay,and Mitsuis),theymadetheirway whereas atlengthfoundrefugenearthepeacefultownofMatsusaka, anunemployedsamuraiTakayasuhad plentyoftimetothink upon this

lessoninthedisadvantages ofbushido. in1568OdaNobunaga WithinadecadeafterthedefeatoftheSasakis

hadsubdued mostofJapan, andafter his death thetaskofunification by hisablestgenerals,ToyotomiHideyoshi waspursuedsuccessively followersand andTokugawaIeyasu.ButrivalrybetweenHideyoshi’s

camps.The thecountryintotwowarring Ieyasuonceagaindivided men 160,000 camein 1600,whentwomightyarmies—about showdown

inall—joinedinbattleatSekigahara, nearNagoya.Ieyasuwontheday, ruler tookfortythousandheadsastrophies,andemergedasundisputed ofJapan.Byredistributingthe fiefsin sucha waythathismostloyal wasquestionable, vassalscouldkeepwatchoverthosewhosereliability with consultation hepreventedanyeffectivechallengetohis rule.In Japan’swisestscholarsheestablishedthe Tokugawashogunate,the governmentthatenduredfrom1603until1868. Adetachedbut interestedobserverofIeyasu’svictoriesandreforms of the Takayasuwhohad wasMitsuiSokubeiTakatoshi,eldestson a gentlemanofleisureif not ofafflubeenLordofEchigo.Apparently Matsusaka,a market center for the in ence, Sokubeihad taken root partofMiePrefertileandrelativelyprosperousIseProvince,nowa wasneara busy forMatsusaka arustic, fecture.Buthehadnotbecome stoppingpointforpilgrimsjourportfor coastaltradeandwasalsoa neyingto the GrandShrinesofIse,thenasnowthemostsacredplace ofworshipforbelieversinShinto.Sailors,pilgrims,andtravelingmerandfromthemSokubeiwas chantsbroughtnewsquicklytoMatsusaka,

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abletojudgethetrendofthetimes.Healsotookoccasional tripsto Edo(nowcalled Tokyo),whereIeyasu hadbuiltanenormous castleas

headquartersforhistightlyorganized bakufugovernment.WhatastonishedSokubeimostwastherapidgrowthofthetownlyingoutside thewallsofleyasu’sfortress,whichwassometwomilesin diameter, andtheevermoreimportantrolethattradewasplayinginthelifeofthe

bakufu’spopulouscapital.

Officially,commercewasconsidereda parasiticoccupation,and the

chonin, themerchantsortownsmen,occupieda socialrankjustonestep abovethee/a,theoutcasts,whowerenotclassified ashumanbeings. Sumptuarylawsprohibitedthe choninfromwearingfineclothing,

usingcertain formsofspeech, orlivingindistrictsofthecitythatwere inhabitedbysamurai. Butduringthesixteenth century,despitealmostconstantwarfareand politicalchaosnationally,workersin agriculture,industry,andtrade hadshownconsiderableimprovementin theamountsandqualityof

theirgoods.Aslocalwarlords broughtweakerneighborsundertheir sway,feudalunitywasstrengthened andinternalcommerce wasfos-

tered.Concurrently, thetraditionalsystemofbarteringriceforhandicraftsandothercommoditieswasbeinggraduallysupplantedbytheuse ofmoney.Burdenedbythecostsofwarfare,daimyoborrowedtomeet expenses,andprosperouscommoners,not onlymerchantsbut land-

holdersandpriestsaswell,becamemoneylenders.

AAs themoneyeconomydeveloped,themerchantclassgrewinnumbersand,despiteformalkindsofdiscrimination, wastoleratedandeven on occasiongivenofficialstatus.Thebestappointmentsfellto those whohadhelpedTokugawa IeyasubeforetheBattleof Sekigaharaby

providinghistroopswithsupplies oncredit.InEdoaswellasinOsaka

—thecommercialcenterofwesternJapan—theyeventookpartincity administration.Thoselong-sleevedquartermastersto thebakufuenjoyedastatusfaraboveothermembersoftheirclass,andtheirpositions hadtheadvantage of beinghereditary. Fromsuchobservations,andtheunfortunateexperiencesofhisown family,Sokubeiformulated anoriginalvisionofJapan’sfutureandthe Mitsuis’placeinit.Hecouldseethat,ina countrythoroughlypacified bya centralgovernment,theroleofthewarriorclassinevitablywould wane.The likelihoodof warswith other countrieswasremote,since

Ieyasu,alarmedbothbythesusceptibilityofhiscountrymento the Christianreligionandby the powerof Europeanships,hadbegun

tighteningtheexclusion lawsdirected againstforeigntradersandmissionaries.Sokubeicouldalsoseethat underthe orderlytuleof the

bakufuagriculture, industry,anddomestictradewouldthriveand

thatdespiteanyrulesto thecontrarythosepeoplewhowerequalified

12 « MITSUI

toengageinbusinesswouldriseinpowerandaffluence.Reputedtobe theshrewdestandmostubiquitousmerchantsinJapanwerethemenof Omi,hisancestralhome,andof

Ise,hisadoptedone.It

wasnot unrea-

sonabletobelievethat,insuchasettingandwithamodestamountof

capital,a Mitsuicouldalsosucceedin business.Atsomepointin his cogitationsuponthesemattershemadethesecretresolution, breath-

takingbutperfectlylogical,toexchangehissamurai’s swordsforthe

soroban—the abacusof a Japanesetradesmen. Hischoiceofatimeforreachingthatdecisionwasmostappropriate, if notprophetic.In 1616,thefinalyearof hislife,Tokugawa leyasu eliminatedthe lastcontenderfor supremacyandlefthisworthyson Hidetada,whohadsucceededhimasnominalshogunelevenyearsearlier,securelyin commandoftheunifiedempire.In thesameyearall portsexceptNagasakiandHiradowereclosedto Europeanships,asa measurefor regulatingforeigntradeandpreventingtheconquestof

Japanbythoseaggressive Europeans. Atthissignificant timeinhistory SokubeimadeatriptoEdo.Uponhisreturn,perhaps withhisimaginationinflamedby theprosperityhe hadseenthere,he assembledhis household—hiswifeShuho,severalchildren,retainers,and

servants—

toinformthemoftheirimpending descenttoplebeianstatus.Histask wasnotmadeeasierbythemutelyaccusingpresenceofanexceptionally largesuitof armor,oncewornbyhismorecourageous ancestorsand broughtfromOmiduringNobunaga’sonslaught.Butnowtherewas nodaimyotowhomtheMitsuisowedfealty,andasheadoftheHouse, Sokubei’sfirstdutyto hisancestorswasto repairitsfortunes.Bowing tothefamilyshrineandclappinghishandssmartly,heexplainedhisintentionto sacrificetheMitsuis’hallowedbutemptyprivilegesforthe

sakeoftheirmaterialwelfare:““Agreatpeaceisathand,”hedeclared solemnly. “TheshogunrulesfirmlyandwithjusticeatEdo.Nomore

shallwehaveto livebythesword.I haveseenthatgreatprofitcanbe madehonorably.I shallbrewsakéandsoysauce,andweshallprospet."

Thissimplespeech,madein1616,andrecordedinthefamilychroniclesmorethanthreehundred yearsago,marked thebeginningofthe Mitsuis’financialempire.

2 - Echigoya the Shunned

INFEUDAL JAPANpoliticaland militaryactivitycentereduponthe

strongholds oftheshogunandhisvassals, wholivedassumptuously as

thericeyieldsoftheirfiefspermitted.Attheircastle-courts,surrounded bymazesofwallsandmoats,theyassembledretainers,soldiers,craftsmen,concubines,andservants,whoseneedsandfanciesengendered trade.Marketsgrewupoutsidethecastlewallsanddevelopedintopopuloussettlements.In justthatwaytheancientChineseideographfor

“market”hadcometorepresent “town”or“city,”aswell.Thecastle townofMatsusaka wasfortunate inbeingundertheprotection ofadaimyowhoheadedtheKiibranchoftheTokugawa familyandenjoyed thebakufu’sfavor.LordKii’scourtiersandretainersreceivedample stipends,andlocalbusinesswasfurtherenhancedbythesteadystream

ofpilgrimstravelingtoandfromIse’sshrines.MitsuiSokubei could

nothavechosena betterstartingpointforhiscareerasa chonin. Thebrewingofsakéandofsoysaucearerelatively simpleprocesses, requiringonlya smallamountofcapitalanda fewworkerswhoknow thetraditionalskills.Sokubei’sbrewerywasdifferentfromothersonly

it Echigo-donoPeoplebegancalling inbeingrunbyaformersamurai. no-sakaya, LotdEchigo’ssakéshop,because hisfatherhadbornethat title.The appellationsuggeststhat Sokubeiwasrespected,but that commonersweresomewhatin aweofthisaristocratic brewer.Atany tatetheywereslowto patronizehisshop,andbusinesswaspoorat first.Whatlittleofit therewasEchigo-donomanagedbadly.Although

withfigures hewasclumsy hewasadeptatlightverseandcalligraphy, andevenwotseat drummingup trade.

It washis wife Shuho,the daughterof a successfulmerchant,who

stoodbetweenSokubeiandfailure.Althoughshehad marriedhim whenshewasonlythirteenyearsold,andbeganto bearchildrensoon afterward,shefoundtimeto participateinbusinessaffairsandshowed remarkableaptitudeasshematured.Unencumberedwithsocialpretensions,shecouldtalktocustomersintheirowndialectandgainedfavor withtheirservantsbyofferingthemteaortobaccowhentheycameon errands.Onmarketdaysfarmersfromthecountrysidewereina festive

13

14 - MITSUI

mood,andpilgrims andotherwayfarers werealways thirstywhenthey arrivedinMatsusaka. UnderShuho’s cajoling,customersattheshop

oftenspentmorethantheyshouldhaveandhadto borrowmoneyfor thejourneyhome,leavingtheirvaluablesassecurity.Fromthispractice it wasonlya shortsteptopawnbroking, a businesssheestablishedasa sideline.Interestonloansandincomefromsellingunredeemedpledges turnedouttobemoreprofitablethanbrewing,andEchigo-dono’sshop

begantoprosper.

Takingwarningfromtheprodigalityofothers,Shuhocultivatedthe

traitforwhichsheisbestremembered—thrift. Asayoungmotherwith foursonsandfourdaughtersto providefor,sheservedveryfrugal meals,andnoonewasallowed toleaveuntilhisricebowlwasempty. Even when she could affordsilk she and her childrenwore cotton,

whichwasgrown,spun,andwovenintheIseregion.Everyyoungster wastequitedto contributeto thewelfareofallbydoingusefultasks,

whichformedthemostimportantpartofhismeagereducation. WhenSokubeidiedprematurely in1633hiswidowfoundconsola-

tioninreligionandwork.Risingatdaybreak, shewouldbatheincold waterandprayto theBuddhaandto Shintodeitiesbeforestartingher day’slabors,whichextendedwellintothenight.Despiteherprofes-

sionalconviviality intheshopsheledanincreasingly austerelifeprivately,andherfrugalityearnedherareputationformiserliness. Shuhoworshiped frequently atthetemples,buttoavoidwasting time sheandhermaidswoulddoabitofscavenging onthewayhome.They

would collectdiscardedsandalsand

horseshoes,which were woven

fromstraw,to beusedasfuelor compost.Paperstrings,withwhich menandwomentiedtheirhair,werepickedup, spliced,andwound

intobigballsforuseintheshop.

In Shuho’shouseholdnothingwaswasted.The leesfromthesake andsoyvatswereconvertedintoediblebyproducts, ordurewassaved

for fertilizer,clothingwas

handeddown until it was threadbare,and

evenbrokenutensilswereputto someunexpecteduse.Thusabottom-

lessvatwasconverted intoacistern,andaleakywoodendipperbecame aflowerpotstand.Insuchaneccentric matriarchy, Sokubei’s children, thefirstgeneration ofMitsuicommoners, acquiredthevaluesthatwere tobringfortunetohisdescendants. ThemostflourishingmarketinJapanwasEdo,whoseinhabitants—

calledEdokko—were renownedasspendthrifts.Manymerchants of

OmiandIsejoinedtherushtotheshogun’s capitalonthesoundtheory thata foolandhismoneyaresoonparted.WhenShuho’seldestson, SaburozaemonToshitsugu,wasthoroughlytrainedat Matsusakashe senthimtoEdowithcapitalto opena draper’sshopcalledEchigoya. Assistedby the third son, SaburobeiShigetoshi,he wasnot long

ECHIGOYATHE SHUNNED « 15

inestablishing hisownbusiness house,whichintimewasknown asthe “nail-puller,” orAuginuki, Mitsuifromtheshapeofhisemblem. The secondson,SeibeiHiroshige,wasadoptedinto

anotherfamily,leaving

theyoungest,HachirobeiTakatoshi,at hometo assistShuho. Hachirobei,bornin 1622,showedconspicuoustalentfromchildhood,andit wouldhavebeennaturalforhimeventuallytoinheritthe

business ofEchigo-dono inMatsusaka. ButShuho, sensing thathecould becomeagreatmerchant,senthimtoSaburozaemon inEdoasanapprenticewhenhewasonlyfourteen yearsold.Hachirobei provedtobe soablethatthebrothers soonopeneda secondshop,alsocalledEchigoya.The lesstalentedShigetoshireturnedto Matsusakato help Shuho,and Saburozaemonwentto Kyototo organizea cloth-put-

chasingsystem.ThisleftyoungHachirobei inchargeoftheEdoshops,

whichhemanagedwithgratifyingsuccess. Onthenationalscenethenewbakufuregimewaseffectingdramatic changes,manyofthemunintentionallyfavorabletothemerchantclass. ThethirdTokugawashogun,Iemitsu(whoruledfrom1623to 1651), tookextrememeasuresto curtailallforeigninfluences.Havingclosed thecountrytoforeigntrade,heforbadeJapanesetoleavethecountry,

uponpainofdeath.Toensureisolationhemadeit a crimetobuild

shipslargeenoughforoverseasvoyages,andheestablishedmonopolies to handlethetightlycontrolledforeigncommerceconductedthrough thelastopenport,Nagasaki.Foreignmissionaries landinginJapanwere

puttothesword,andatleasttwenty thousandJapanese Christians who stageda revoltinKyushuweremassacred. Whenanembassy ofPortu-

guesecameto askfora restorationoftradeprivilegestheirshipwas burnedandfifty-sevenoftheintrudersweredecapitated.Suchfanatical isolationism,althoughcostlytotheeconomy,protecteddomesticproducersandtradersagainstcompetitionfromforeignersandthenation fromconquest. Iemitsuwassuspiciousevenof hisownvassalsand,beginningin 1634,enforcedthesystemof sankinkotai,underwhichtheywetetequiredto spendseveralmonthsofeachyearin Edo.Whena daimyo returnedto hisowndomainhehadto leavehiswifeandchildrenbehindas hostages.Thissystemmadeit necessaryforeachdaimyoto buildaresidenceinEdoandmaintaina full-timestaffthereaswellason hisfief.Onhistravelstoandfromtheshogun’s courthehadtobeaccompaniedbya retinueofa sizeanddegreeof elegancebefittinghis rank.Allthiswasruinouslyexpensive,asIemitsuintendedittobe,and thedaimyohadnorecoursebuttoborrowmoneyfromthemerchants. Suchbusinessusuallywasprofitable, butrisky,becauseachoninhadno

legalwaytocompel adaimyotopayhisdebts. Astheyearspassed, Hachirobei observed thebusiness worldcannily

16 + MITSUI

anddeveloped hisownideas.Hesaw,forexample, thatthepeoplewho

flockedin fromalloverJapanto becometownsmenwerecoalescing intoa newandprosperousclass.Yettradition-mindedmerchantslike Saburozaemonconcentratedtheirsaleseffortsuponthearistocrats,to whomtheywereforcedto extendliberalcredit.Hachirobeilongedto beindependentandto trynewideas,butevryo—trestraint orreserve— kepthimfromcompeting withhiselderbrother.‘Then, whenhewas twenty-eight,hishopesweredashedbythedeathofShigetoshi,which obligedhimto returnto MatsusakaandhelptheagingShuhorunthe familybusiness. Echigo-dono’sbreweryandpawnshopweretoohumdrumto hold theinterestofanEdochonin,soHachirobei setupa sidebusinessasa moneylender.Thishewaswellabletodo,forduringhisfourteenyears in Edohe hadsavedaboutfifteenhundredryo,equivalent to nearly sevenhundredandfiftypoundssterlingin silver.(Atcertaintimes

duringtheTokugawa periodaryowasequivalent toaboutonepound sterling,but thediscrepancymustbenotedbecause,byinternational standards,silverwasgrosslyovervalued in Japan.)For the modest sumof sixtyryohe boughttheestateof anothermerchant.Thenhe tookawife,Jusan,whohadbeenpickedforhimbyShuho.Hisfifteen-

year-oldbride,a merchant’sdaughterlikeher

mother-in-law,wasen-

ergeticandlevelheaded. Havingestablished hisownhouse,intowhich sonsanddaughters wereborninquicksuccession, Hachirobei waswell launchedasa provincialbankerwitha reasonably promising,if not exciting,future.

ShrewdoperatorssuchasHachirobeilearnedto spreadtheirrisksin variousways,formingsyndicateswiththeirrelativesandfellowmer-

chants,orborrowingshort-termcapitalfromtemplesandshrinesand relendingit todaimyo.Hachirobei alsolearnedthetricksofricetrad-

ing.Thedaimyousuallyrepaidtheirloansinrice,butlaterwouldfind it necessaryto borrowricewithwhichto paythe stipendsof their samurai.Byvariousmanipulations familiartoexperiencedcommodities speculators,themerchantscausedthemarketto fluctuatewidelyand,

withforeknowledge ofpricechanges,managedto turnneatprofits bothways,inadditiontothehighratesofinteresttheycharged.AnotherphaseofHachirobei’s businesswaslendingmoneytofarming

villages,withmortgagesascollateral,fordevelopingvirginland,handicraftworkshops,or newagriculturalproducts.In thissensehewasa pioneerindustrialcapitalist.

Asthe“greatpeace” foreseen bySokubeisettledoverthelandinthe

mid-seventeenthcentury,the MatsusakaMitsuis’fortunegrewsubstantially.Jusanraisedsixsons,allofwhomlisteneddutifullytoHachirobei’slecturingandheededhiscounsel.Oneofthemwrotein later

ECHIGOYATHE SHUNNED~- 17

years:“Soju[Hachirobei’s posthumous name]saidthatifoneloaned ten[units]ofsilverat1.2percentamonth,itwouldbedoubled infive

years,andinfiftyyearswouldbecometenthousand[units].Therefore, oneshouldmakethe mostof evensmallamounts,for evena petty clerkcouldbecomea millionairein time.” Hachirobeididnotalwaysfollowhisownadvice,however.Hehad

oftenwarnedhiselderbrotherSaburozaemon againstlendingtodaimyo,andthelatterhadcometothebrinkofbankruptcy byignoring theadmonition. YetHachirobeicontinuedto lendmoneyto thelord Kii—perhapsbecausea refusalwouldhavebeenmore hazardous thantheloanitself.Thatpreeminent daimyo,as headof oneof the

threeTokugawa families fromwhichashoguncouldbeselected, wasa telativelygoodrisk,of course,butHachirobeiwasstillworried.Al-

thoughtheTokugawa domainsproducedalmostone-thirdofthenation’srice,the extravaganceof the shogun’scourtandthe follyor knaveryof hisministerswereleadingthe nationto ruin.Merchants knewthat someofficialswere embezzlingvast sums; in fact, one of

them,afteralifeofflagrantprofligacy, hadprovidedhimselfwitha coffinofsolidgold.Iemitsusetdownsevereregulations tocurbthe

extravagancesof others,butwhenhediedhisownlavishwayof life wasrevealed.AtEdoCastlethereweresomanyretainersthatlemitsu’s successorfounditnecessarytodismissthreethousandofthem—mostly females. In 1673,whenHachirobeiwasfifty-oneyearsof age,he reacheda decisionnolessboldandpropheticthanthatofhisfather:fromnowon hewouldnotriskhismodestfortuneuponthewhimof anydaimyo. LikeSokubei,hewoulddareto

followthetrendof thetimesanddevote

himselftobusinesswithcommoners. Havinghismother’sblessing, he movedtoKyotowithhisfamily andopenedabusinessdevotedinitially to theprocurementof fabrics.Leavinghiseldestson,Takahira,in charge,hetookhissecondsonto Edointhesameyearandopeneda smallshopina goodlocationadjacenttothemismanaged“nailpuller” establishmentof hislatebrother.Herehebeganto sellthefashionable

Nishijinbrocadesandothersilkspurchasedin Kyotoor elsewhere.

Whentheshopswererunningsmoothly,helefttheeveryday managementtohissixsonsandspentmostof histimetravelingandstudying businessconditionsin general.(Todaywewouldcallthatmarketresearch.) HisEdoshop,calledEchigoya afteritsdefunctprecursors,fronted onHoncho-dori,wherethemoststylishdrapers’shopswereclustered. Thosemerchantssoldgoodsmainlyto daimyoorupper-classsamurai familiesbyshowingsamplesor actualboltsof clothatthecustomers’

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ECHIGOYATHE SHUNNED - 19

incentivetocaterto sucharistocrats, whosettledtheiraccounts only twiceayearatbest.Tocompensate forthisdeficiency, Hachirobei laid

inlargestocksat Kyotoandsoldthemat wholesalepricesto smaller merchantsin the provinces.Theprofitmarginwassmall,but rapid turnoverandpromptpaymentmadesucha systemworthwhile.

ThecostlyfabricshandledbythemerchantsofHoncho-doriwere soldonlybythewholepiece,sufficient to makea kimono,andthis practicelimitedtheirsales.Hachirobei, awarethattherewasquitea lot

ofcashjinglinginthecoinpouchesofthecommonpeople,wasseeking newwaystoexpandthemarket.A preciouscluecamefromoneofhis

clerks,whopatronized thepublicbathsandenjoyedlisteningtothe chatterofthefemale bathers.Afavoritetopicofconversation, hetold

Hachirobei,wascloth:womenwereespecially eagertofindsmallpieces thatcouldbeusedformakingpouches,personalornaments,orcovers fortreasuredobjects.Sincenomerchantwasfoolishenoughtocutinto

aboltforsuch a triflingsale,women hadtobesatisfied withexchanging remnantsleftoverfromkimono-making.

WhenHachirobeihadmulledoverthisbit ofinformation,heconceiveda daringexperiment:hewouldsellclothin anylengthdesired. Forthisprivilege,hesoondiscovered,customerswerewillingtopaya muchhigherunitprice.Andsincehiswholesale businessenabledhim to maintainan exceptionallyattractivevarietyof stock,customers

flockedtohisestablishment. Encouraged bytheirenthusiastic response,

heagainfloutedtraditionbysellinghismaterials—notonlypiecesbut wholelengthsaswell—forspotcashonly. Thelatterinnovationwasresentedbyaristocrats,butit reducedhis creditriskssignificantly, andhadotheradvantagesaswell.Bypurchas-

ingoncreditandsellingforcash,Hachirobei wasabletoemployhis capitalmorebrisklythanhiscompetitors. Sinceheknewwherehe stoodatalltimes,hewasableto calculatecostsmoreprecisely,reduce hismarkup,andsellat fixedprices.Thiseliminatedhaggling,a time-

honoredbuttime-wasting custom,andgavethepurchaserassurance thathewasnotbeingcheated. Theefficacy ofHachirobei’s newmeth-

odswassoonapparent.Withina yearafterhisarrivalin Edohehad prosperedsoimmenselythatheopeneda newshopinthesamestreet, havingsixtimesthefrontageoftheoldone,andemployedsomefifteen clerks,fiveapprentices,andseveralservantsat bothstores. Predictably,Echigoya’sunorthodoxmethodsfirstirritatedandthen

infuriatedcompetitors.Theirragereachedtheboilingpointwhen Hachirobeisnatcheda big orderfor crepefromhis rival,Matsuya. Havingviolateda gentlemen’sagreementagainstunderselling,the

Mitsuiswereostracized bythemerchants’ guildandbeforelongEchigoyawasknownas“theshunned.” Someenvious rivalstriedtoincite

20 - MITSUI

theclerksto revoltagainstHachirobei, buthisstaffremainedloyal.

Thenthoseadversariesboughta housenextdoorto Echigoya,builta toiletclosetotheMitsuikitchen, andlettheirsewage overflowintoit. Hachirobeitriedto changethe location,whichhe alreadyhadoutgrown,butwheneverhefounda suitablebuildinghistormentorsmanagedto preventhisleasingit. FinallyHachirobeidiscovereda housefor salein Surugacho,near

Nihombashi, andboughtitsecretly. Whentheremodeling ofthatnew shopwasnearlycompleted,therewasa disastrousfire,oneofthefre-

quentconflagrations knownas“theflowers ofEdo.”AllofHoncho’s high-class shops,alongwithEchigoya, wereburneddown;butHachirobeiwasabletoopenhisnewestablishment inSurugachoalmostimmediatelyandenjoyedatremendousadvantagethereby.Soonafterthe fireHachirobeifirstputuphisfamoussignboard, stillpreservedinthe Mitsui museum,announcingGenkin,Kakenenashi—cashonly,

fixed

prices. ThehistorianAraiHakuseki,a contemporaryofHachirobei,wrote inhisbookShimsho, a collectionofessays:“EchigoyaofSurugachohas twostoresinEdoandanauthorized exchangehousefortheshogunate. Oneofthestoresdealsin drygoods[presumablysilks]andtheother

sellscotton.Itis saidthatthetwostoreshavecombineddailysales amounting to1,000ryo,or360,000ryoayear,onacashbasis.” Bythattimeatleastsevenmerchants hadbeguntoimitate Echigoya’s methods.Someadopteditsemblemandevenitsname,whichwasbecomingalmostagenerictermforthecash-payment,one-pricestyleof

merchandising. AfterthemovetoNihombashi, Mitsuistopped using the“nailpuller”’ crestanddesigned anewone,whichhassurvived with slightmodificationtothepresent.Anadditional motiveforthechange wasthefactthatthefounderofEdo’sfamousYoshiwara brotheldistrict,ShojiJin’emon,useda familycrestalmostidenticalwiththatof theMitsuis,whichin itsturnwasappropriated byanothernotorious

whoremaster. Thismusthavebeenhumiliating to theMitsuis,who werereputedfortheirsobrietyandrectitude.Buttherereallywasno escapefromimitators:alaterbrothelkeeperinYoshiwarausedtolure thecheapskatetradebydistributing a handbillbearingapicturequite similarto Echigoya’ssign,advertisingladiesof the nightfor “spot cash,at fixedprices.”

TheSurugachositewasconsidered themostattractivecommercial

locationin Edo.It wasso namedbecauseon cleardaystheviewof MountFujiresembledthat seenfromSurugaProvince(nowcalled ShizuokaPrefecture).Asbusinessswelled,Hachirobeiaddedlinesof merchandise,especiallycheapercottonsandpongee,appealingtofam-

iliesoflower-ranking samuraiandto commoners of slendermeans.

ECHIGOYATHE SHUNNED - 21

Asthepremisesexpanded,Echigoyabecameoneofthesightseeing

featuresof thecity,whosepopulationhadreachedhalfa millionby 1700.Theshopwasafavoritesubjectforpainters,andinspiredaseeminglyendlessseriesofcoloredwoodblockprints.Originalimpressions

ofsuchprintscanstillbefoundinTokyo’s curioshops, whichindicates thattheeditionswerequitelarge. Longbeforetheconceptofadvertising hadmadeitsimpact uponthe West,Hachirobeiandhissonsweremastersofindirectpersuasion.The weatherin Edo beingunpredictable,Echigoya’scustomersnot in-

frequentlyweresurprisedbyrainstorms.ThisgaveHachirobeithe ideaoflendinghiscustomers oiled-paper umbrellas. Onrainydaysthe streetsofcentralEdoblossomed withthem,eachoneconspicuously

emblazonedwiththe Mitsuimark.Hachirobei alsobefriendedplaywrights,authors,andpoets,whoshowedtheirgratitudebyfurtherenhancingMitsui’spublicimagein bothspeechandwriting.

Beforetheendoftheseventeenthcentury,Mitsui’sstaffofseveral hundredemployees enjoyedagoodmanyfringebenefits thenscarcely knowninJapanorelsewhere. It isrecordedthatemployees wetete-

quiredto workforonlya specifiednumberofhours,andweregiven regularrestperiodsduringthecourseofeachday.Somethoughtwas givento healthandsanitation,anddecentdormitorieswereprovided.

Echigoyagaveclerkson-the-job traininginmanners,speech,andpersonalappearance; andforthosewithsenioritya rudimentary profitshatingsystemwasestablished. Tokeeptrackofsuchalargevolumeof business,Hachirobeioriginateda formof double-entrybookkeeping similarto thatusedin Europe.

AsEchigoyaflourished Hachirobei setupbranchestablishments in KyotoandOsaka,anticipating thechainstoresystempopularized in America about1860 bytheAtlantic&PacificTeaCompany. However,

a competitor,Iseya(whichalsooriginatedinMatsusaka),seemstohave anticipatedEchigoyabysettingupa chainoftextileoutletsinallthe

wardsofEdoevenbeforetheMitsuis beganbranching inearnest. Echigoyawassituatedalmostexactly whereitsdirectdescendant, themainMitsukoshi DepartmentStore,standstoday,inTokyo’s centralNihombashi district.Antedating JohnWanamaker’s emporium in Philadelphiabyalmosttwohundredyears,Echigoyamayhavebeen theworld’sfirstdepartmentstore.In 1700itwasJapan’slargeststore,

justasMitsukoshiistoday.ButEchigoyawouldbequiteunfamiliar

tomodernshoppers,whoexpectquickservice.Thecustomers,ducking in underthezoren,theshortcurtainshungin doorways,foundthem-

selvesinagreathall.Araisedplatform coveredwithsweet-smelling tatamiwasitsonlyfixture. Greetedpolitelybyoneofthechiefclerks, customers wouldremove theirwoodenclogsortheirsandals andtake

22, « MITSUI seatson themattingor uponsilkcushions.Theclerkwouldengage

theminlightconversation asteawasserved.According tothestatus or interestsof the customer,the chatterwouldturn

to art, literature,

poetry,sometitillatingscandalinvolvinga populargeisha,or a new playattheKabuki-za.Onlyaftersuchnicetieshadbeenobservedwould the customerbe expectedto turn his attentionto boltsof material broughtfromthewarehouse byapprentices. EchigoyaattainedgreatfameduringtheGenrokuera(1688-1704),

reachedfullflower. whenthecultureofthenewurbanbourgeoisie

Thewealthof thechoninhadevokedthe so-calledfloatingworld— refinedbutevanescentpleasuresthatinspiredartists,poets, ukiyo—of

playwrights, andnovelists.ThiswasalsothehighpointofKabuki, thetheaterof chonin,in whichthegloriesandtragediesof samurai

lifewerepresented.Oneof themosttalentednovelistsof theperiod wasIharaSaikaku,sonof an Osakamerchantand authorof Néhon

book (Japan’sEternalTreasureHouse).Thistrue-to-life Eitai-gura describesleadingmerchantsofthedayandrelateswittilythewaysin whichtheymadetheirfortunes.

Of Echigoya, Saikakuwrote: “At Surugacho,a man namedMitsui

Kuroemon[Hachirobei]openeda shopof 9 kenby40 ken [roughly

system. fixed-price thecash-payment, 54feetby239feet],adopting Thereareforty-oddclerks,eachengagedin a differentcategoryof

business.Forexample,oneis handlingbrocade,twomenareselling [asmoothsilk],onein in Aabutae silksfromHinoandGunnai,oneis men] saya{atexturedsilk].Onesellshakama[askirtlikegarmentfor

one-inch andanotherwoolens.Thusdivided,theysellvelvetby makea tweezercase,of red satin squares,brocadelargeenoughto costumesarereenoughto covera spearinsignia.Whenceremonial quiredin a hurry,theshopletsthe servantswaitandhasthe regalia madeup immediatelyby severaldozensoftheirowntailors.... To fromothers,withhis lookat the shopowner,heappearsnodifferent

eyes,nose,andlimbsintheusualarrangement;butheisclever ofa reallybigmerchant.”® business.Thisisanexample

3 - TheSourceof HappinessIsPrudence SEVENTEENTH-CENTURY JAPAN,disdainfullyalooffrom the outside worldandsociallyconstrainedin theweboffeudalism, is mistakenly believedto havebeena backwardcountry.Actuallyit wasrelatively

advanced,comparingfavorablywithElizabethanEnglandeconomicallyandwiththeCelestial Empireculturally. Therewereinnumerable

lawsandregulationsto preventchange,yeta neweconomicsystem wasstirringwithinthebodyoftheold;andanewbourgeois class,with itsmatchingculture,wasassertingitselfwithbrashdisregardforsocial barriers.

AtthetimeHachirobei appeared uponthebusiness scenetheground-

workfor industryhadalreadybeenlaid.Handicrafts werewelldeveloped,andeachprovinceproducedits ownspecialtiesin amounts exceedinglocalrequirements.Thelevelof technicalcompetencewas

high,anddivision oflaborintheworkshops madeproduction reasonablyefficient. Transportation bylandandseawasslowbutadequate. Thesankin-kotaisysteminstitutedbyShogunlIemitsu in 1634had improvedthe highroadsleadingto Edofromdifferentpartsof the

country.Anda well-organized distributionsystemmadeiteasyto exchange agricultural andindustrialproductsformoney. Therehadbeenasteady advanceintheyieldsoffarms,andricewas moteplentiful thanithadeverbeen.Butthedaimyo, tomeetmounting expenses,exactedlargerand largersharesof the peasants’crops— usuallyfiftypercentor more—andreducedthericestipendsallotted totheirsamurai.Thecrushingpovertyofthecountryfolk drovemore andmoreyoungmento thecitiesto seekemployment,andthewives anddaughtersof impecunioussamurai,likethoseof peasants,eked out a livingin domesticindustries.Underthesecircumstancesmet-

chantswereabletoaccumulate capitalthatwasnotlaggardinmating withtheemergingproletariat to begetmoreenterprises.

ThusHachirobei’s world,although feudalinconceptandstructure,

showedmanyresemblances totheprecapitalisticeconomiesofEurope. Fromhisphenomenalsuccessinbusiness,onecanassumethatHachiro-

beihada basicunderstanding ofthisparadoxicaleconomyandthe 23

24 + MITSUI

richopportunities it offeredfor the future.Butbeinga realist,he recognizedthatthebigsumsofmoneyneededforincreasing tradeand industrywerestilllockedin thecoffersof thebakufu.Healsoknew thatmerchantswerestillat themercyof aristocratsandthatwithout officialpatronagehecouldlosehisfortuneovernight. Theshortestroadto securitywasto becomeanofficialpurveyorto

thegovernment.In thosedaysthebakufuprocureditsfabricsand apparelfromsixhousesofgofuku-shi (something like“kimonomasters”),whoseappointmentwashereditary.Breakingintothismonopolywasnextto impossible,butthesagacious Hachirobeifoundaway to do so.Oneof hisrelativesfromMatsusaka,agochampionnamed Doetsu,wasbeingemployedto playexhibitionmatchesandteachthe gameto bakufuofficials.Doetsu’sworkbroughthiminto contact withLordMakinoNarisadaof Bingo,an influentialadviserto the Edocourt.Hachirobei persuadedDoetsuto put in a goodwordfor

Echigoya, andthismadeitpossible forhimtobecomeacquainted with Makino.Hehewedto hispurposesodiligentlythatatlast,in 1687, “theshunned”Echigoyawasappointeda supplierof clothto the bakufu. | AtthistimeHachirobei’sresidencewasinKyoto,sohedelegatedhis eldestson,Hachiroemon Takahira,to managethe businesswiththe bakufuin Edo.Takahiramusthavedonehisworkwell,fortwoyears later,in 1689,the Mitsuisweremadepurveyorsof

apparel,ornaments,

andpersonalaccessoriesto ShogunTsunayoshi.In thispositionthey heldthehighestrankattainablebytownsmenandweregivena suitable dwellingwitha frontageof thirty-sixfeet. Thehonorwasgreat,ofcourse,andkimonomastersusuallybasked

complacently intheirprivilegedstatus.ButtheelderHachirobei ridiculedthemasnotbeingrealbusinessmen. “Don’tforgetthatweare merchants,” heusedtotellhissons.“Ourtradeisthemostimportant thing;official businessisjustanornament.”Thiswarningreflected the factthatpurveyingto theshogunwastroublesome,andsometimesunprofitable,becauseoflongdelaysinpayment.Nevertheless,Hachirobei acceptedeverypreferment,profitableor otherwise,witha showof

gratitude,andhismotivesareeasilyguessed:merchants, importuning clientstopaytheirdebts,madepowerfulenemiesandneededpowerful protectors;suchambitiousschemesasthoseofHachirobeicouldnotbe realizedwithoutinfluentialconnections;andthe timelyinformation necessaryforsurvivalinthoseuncertaindayscouldbestbepickedupin

courtcircles. Theintelligence ofmostinteresttoHachirobeiwasthatconcerning thecirculation ofmoney,themediumsoessential totrade.Evenbefore movingtoSurugacho hehadmanaged asmallexchange houseadjacent

THE

SOURCE

OF HAPPINESS

IS PRUDENCE

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25

toEchigoya,andin1683,aftercombating theguildfortenyears,he

waspermittedto establishhisown.Sincethemoney-changersofEdo wereconcentratedaroundSurugacho,hewascontinuallyin touchwith fluctuationsintherelativevaluesofgold,silver,copper,andironmonscripissuedbydaimyo.Within ies,aswellaswiththedubioussortsof

calledryobrokerages, similarexchange eightyearshehadestablished

Osaka,wherethebakufu’s gaeya,in Kyoto,theimperialcapital,andin ryogaeya,Hachitobeiwas treasurywaslocated.Withthisnetworkof ableto eliminatethehighcommissionshehadbeenchargedforsettling

hisaccountswithsuppliersandtocollectsuchfeesfromfellowmerchantswholackedsimilar exchangefacilities. Evenin thosedaysthe ryogaeyawereperformingthebasicoperationsof modernbanks,acceptingdeposits,grantingloansagainstcollateral,discountingnotes,andissuingtradevouchersthatalsoserved as banknotes.SuchvouchershadonlylocalcirculationuntilHachisystem. robeiexpandedthebusinessintoanationwidebill-of-exchange

in hisoperations,andto insureprobityheplaced Hewasscrupulous ofoneofhissons, underthemanagement eachofthethreeryogaeya withthestipulationthatthepositionwastobehereditary. TheMitsuis’ reputationwassounblemishedthattheir“wrappedmoney,”bearing thesealandsignatureoftherespective manager,usuallywasaccepted

atitsfacevaluewithoutbeingcounted. Mostsignificant forthefortunesoftheHousewasHachirobei’s idea system.In 1691,whenhis of reformingthebakufu’smoney-transfer Osakaexchangeshopwasopened,theHouseofMitsuibecameanofficialmoney-changerforthebakufu’streasury.Fromthenonbanking wasHachirobei’smainbusiness,and althoughthe Echigoyashops

continuedtogrowapace,hisplansweredevoted tohighfinancerather thantomerchandising. Hehadlongobservedthat,whileEdo’smerchants boughtfoodstuffsandmerchandisein Osakaandsentmoneytherein return,the

government wascollecting taxesfromthesameregionandsending the

coinstoEdo.SuchtransfersofcurrencyweremadebywayoftheTokaido,thehighroadfromEdotoKyoto,andtrainsofhorsesladenwith senryobako, theboxescontainingonethousandryoof goldor silver, couldbe seenpassingeachother—goingin oppositedirections.This cumbersomeandredundantmethodwasalsodangerous, inasmuchas highwayrobberywasnotuncommon.

Hachirobei’s reputationwassogoodthathewasabletopersuade the

treasuryofficialsto adopthissystem,alreadyperfected,ofsendingremittancesbymoneyorder insteadofbycash.Thereafter,asmoneyaccumulatedin the treasuryit wasloanedto Osaka’smoney-changets. Theyin turnloanedit to merchants,whousedthefundsto purchase

26 + MITSUI

commodities forshipmenttoEdo.Whendeliverywascompleted the

wholesalersinEdowouldpaythelocalrepresentativeoftherespective ryogaeya,whowouldthenrepaytheoriginalloantothebakufuinEdo. Atfirstthetreasuryallowed60daysforrepayment,butlaterextended theperiodto aslongas150days,withoutinterest.Thustheexchange brokerswereabletorelendthemoneyathighinterestratesandtomake a generousprofitfromthissimpleoperation.

Naturally,allthebigryogaeyawereanxioustogeta shareofthis

business,but onlytwelvewereappointedas o-kawase, or honorable money-exchangers, in 1691.Tenof themformeda partnershipcalled Junin-gumi,the ten-mancompany;and the eldestMitsuison,Hachiro-

emonTakahiraofKyoto,andhisbrotherJicoemon Takatomi,repre-

sentingtheEdoheadquarters, constitutedthe ninin-gumi, or two-man company.Laterthiswasexpandedintothesannin-gumi,or three-man company,whentheirbrotherGennosuke of Osakawasappointedto thegroup. Thosethirteenmoney-changers,actuallybankersbythen,wereelevatedto a specialstatuswiththebakufu’saccounting agency,being listedin officialgazettesandprivilegedto greettheshogun’s familyat the ceremoniesof the NewYear.Thiswasthe greatesthonorever

accorded membersofthedespisedmerchantclass;butmoreimportant to theagingHachirobeiwasthefactthathissonswerefirmlyen-

trenchednearthesourceofpoliticalpower. NotthatHachirobeisoughtanyshareofthatpowerforhisdescendants.TheproudSasakishadcrumbledbeforethemightofOdaNobunaga,justasintheirturnthefamilies ofOdaNobunagaandToyotomi HideyoshihadbeeneclipsedorexterminatedbytheTokugawas.Other choninmayhavedreamedofequalitywiththesamurai,inordertoseek politicalcareers,butnotHachirobei.Whathewantedwaswealth,and motewealth.Yethisesteemformoneywasnotevidenceofmeremegalomaniaor greedforpossessions.Luxuryandostentationwereasdis-

tastefultohimasdissipationandlechery;positionsofhonorwereas merebaubles; andeveneconomic powerwasonlyameanstoanend. Theelusivetreasurehesought,ashadTokugawaIeyasubeforehim,

waspermanence—the perpetuationofhisline,unchallengedforagesto come.In the politicalrealmthe imperialfamilyandthe Tokugawa shogunshelda monopolyuponpermanence,butwhycouldnotamerchantfounda financialdynastyno lessenduring? Asthe seventeenthcenturydrewtowarditsclose,Hachirobei was ableto viewthe resultsof hiseffortswithconsiderable satisfaction. Fromhisheadquartersat Kyotohe supervisedprosperousshopsand exchangehousesin Japan’sthreemajorcities,aswellastheoriginal

establishment inMatsusaka. Butbythenhisguidinghandwasunnec-

THE SOURCEOF HAPPINESSIS PRUDENCE=

2/7

essary,foramongtheelevensons(nottomention thefivedaughters)

producedby Jusanthereweresixwhomhe consideredqualifiedto catryon the business.Theywerecapableandwellschooledin the patriarch’smethodsandprinciples. Buttherewasno guaranteethat theywouldnot becomecompetitiveamongthemselves,andin his

twilightyearshepondered overthecomposing ofalastwillandtesta-

mentthatwouldpreservetheintegrityandsolidarityofthehouse. Beforehisdeathin1694hereadthedocumenttohissonsanddaughters,explaininghowhisestatewastobeshared.Ratherthanleavingit alltotheeldestson,aswouldhavebeencustomary, hedesignatedeach

offiveyoungersonsastheheadofanewhon-ke, ormainhouse,who wouldinheritafixedshareofthefortune.Twoothersonsandan

adoptedson-in-lawwereto beendowedalso,andheorderedthemto setupbranchorassociate families.Butnonewastobefullyindependent,forallninehousesowedfealtytotheheadoftheseniorhouse. Thisinnovationgaveriseto a systemofnomenclaturethatiscom-

plexevenforJapan,wherefamily namesareexceptionally baffling. In

feudaltimestheclanwecallMitsuiwasknownpublicly asEchigoya.As wasthe casewithmostof the world’scommoners,the choninwerenot

entitledtobearsurnamesthatmightbeconfusedwiththoseofsuperior classes.The Mitsuis,likeothermerchants,usedthe

tradenameof their

shopasakindofsurname. Butsincetheywereofsamurai lineagethey weteentitledtoretaintheiroldsurname ofMitsui.Thiswasusedprivatelybyallexceptthreeoftheassociate families,whichboreinstead

thenamesOnoda,Nagai,andIeharauntiltheMeijiera. ThegivennamesofmaleMitsuis usuallybeginwiththecharacter taka(highor tall),afterSasakiTakahisa,the mostfamousof their presumedancestors,andthiscustomhasprevailed to thepresentgeneration.ThusHachirobei’sfavoritesonswerenamed,in orderof arrival,Takahira,Takatomi,Takaharu,Takatomo,anotherTakaharu,*and

Takahisa.Takahira(alsocalledSochikuEchigoya Hachirobei)borethe nameHachiroemonbecausehewastheeldestsonofHachirobei, who

wasnumbereight(Aachi) amongShuho’s progeny.Hachiroemon be-

* OnemaywellaskwhythereweretwoTakaharus. The“haru”’oftheelder

Takaharu’snamewaswrittenwitha differentcharacterfromthatofthe

youngerone.For mostcharactersusedin writingJapanesenamesseveral vatiedreadingsarepossible,andthe “‘correct”’ onedependsuponthewhim

oftheparentsorofthebearer.Thecorrectreadingofsomenamescannot bedeterminedunlessonehasheardthempronounced orseenthemwritten in phoneticcharacters.Therefore,thereis wildconfusionin thetransliterationofhistoricalnames,complicatedbythefactthattheJapanesecommonly changedtheirgivennamesor eventheirsurnamesat crucialpointsin their lives,andalwaysreceiveda newoneafterdeath.

28 - MITSUI cametheusualhereditarytitleoftheheadoftheseniorhouse.Other

Mitsuifamilyheadsalsohadtitularnamesindicating theirbusiness

positions.SaburosukerantheKyotoexchangeshop,andJiroemonand GennosukehadthesamefunctioninEdoandOsaka,respectively.The suffix-sukeoriginally meantvice-manager,and-emon,helper.

In addition,eachfamilyhadanameindicating thelocationofits

residenceanditsrankin thehierarchy.Forexample,theseniorhouse wascalledKita-ke(Northfamily),thefirstmainfamilyIsarago-ke, and thesecondShimmachi-ke. ThusthenameMitsuiSaburosukeTakaharu of Shimmachi-kemeant “Takaharu,heir

of the Mitsuis’Shimmachi

family,headingthe exchangeshopin Kyoto.”Thepositionaltitles (Hachiroemon,Jiroemon,andsoon)werenotrigidlyhereditary,being passedfromonefamilyto anotheras occasionrequired,but such changeswerenotcommon. Fortunatelyfor Hachirobei’splans,his eldestson Hachiroemon

Takahiraprovedtobea worthyheir.Recognizing that,withoutthe

guidanceofhisfather,theninehouseswouldneedsomecontrolling

organ,heestablished theMitsuiOmotokata, orgreatmainheadquarters,

toregulatetheaffairsofthegroupofhousesthatcametobeknownas Mitsui-gumi.Thewordgumimaybetranslated as“company”or “‘association.”” BeforeJapanesecorporatelawwascodified,gumiwasthe usualdesignationfora familyenterprise. ThedescendantsofHachirobeihavebeenreferredtorathergenerally

as a family,household,house,clan,tribe,

or gumi,but for an under-

standingoftheMitsuistructureanditssignificancesomemoreprecise

definitions arenecessary. InoldJapanthefamily,nottheindividual, was the socialunit. It was also the economicunit, and theoretically,

onlyitsheadcouldownproperty, transactbusiness, ormakedecisions

affectingthefamilyanditsmembers.Thehousehold,however,included unrelatedpersons,notonlythewivesofsonsbutalsothosepeoplewho weteeconomicallydependentuponthe family,suchasclerks,servants, wotkers,and their respectivefamilies.Sucha unit wascalledan ze,or

house.Allmembersofthehouseweredependentuponthehead,who wasusuallytheeldestsonofhispredecessorortheadoptedhusbandof theeldestdaughter.Whenyoungersonsmarriedtheyestablished their ownhouses(unlesstheywereadoptedintoanotherfamily), anddaughtersbecamemembersoftheirhusbands’houses.The

house,then,wasa

gtoupofpersonsboundtogetherbyobedienceto thehead,whose authorityderivedfromthefounder. Therelationship betweenthehead andthemembers, baseduponthecodeofancestor veneration andfilial piety,wassimilartoifnotidenticalwiththatbetweentheemperorand hissubjects. Ordinarily,the officialtiesbetweenthe headof a houseandhis

THE SOURCE OF HAPPINESS

IS PRUDENCE

: 29

marriedsonsanddaughters,otherthanhisheir,wereweak.Consan-

guinitydidnotmeanmutual responsibility amongrelatedhouses;once

asonhadleftthehousehewasindependent(andusuallyself-supporting as well),exceptthat filialpietyrequiredhimto be attentiveto his patentsandto assistthemin timeof need.Otherwise,theeconomic telationshipimplicitin thehouseconceptwasno longerobligatory. Naturally,thetiesofaffectionwerenotsubjecttoanysuchprescription. TheuniquefeatureoftheHouseofMitsuiwasthefactthatHachitobeicombinedthe housesof his sonsintoa morecomprehensive economicunit,makingallofthemobedientto onehead,representing thefounder.Whathedid,ineffect,wastoformasuperhouse,composed

notofindividuals butofhouseswhoseunifyingelementwasacommon ancestry.Bydoingso,hemadepossible theformationofa corporate body,orgumi,capableofengagingincapitalistic enterprisewithina feudaleconomy.Mitsui-gumiwas,to someextent,a joint-stockcorporationof limitedliability.Thatis to say,thehousescomposing it

couldunitepartoftheirassets forlong-range endeavors ofconsiderable scaleyetstillsurvivethebankruptcyofjointbusinesses,sinceone housewasnotlegallyresponsibleforthedebtsofanother. In the feudalperiodsuchhouse-laws appliedonlyto the samurai class,forwhoseperpetuationtheywerecodified.ButbecauseHachirobei’sforebearshad beenmembersof the nobleSasakihouse,he was

familiar withitsrulesoforganization andadapted themtohismerchantclassfamilywithspectacularresults,bothforthe Mitsuisandforthe futureeconomicstructureofJapan. Mitsui-gumi,thishouseof houses,wasstructurally a partnership

builtuponmutualtrustandcooperation.Theshopsandexchange housesweremanagedindependently andweresharedaccordingto tule.Employeesofoneestablishmentwereconsideredtobeemployees ofall.Theincomeofeachfamilywasfixed,andnonewasallowedto exceedit. Insteadof accumulatingcapitalseparatelythe sixbrothers pooleditinOmotokata,whichtheyownedjointlyandfromwhichthey couldborrowoperatingfundsatseven-to ten-percentannualinterest, dependingon the amount.Andto Omotokatatheyturnedin fixed

dividends rangingfromseventeen totwentypercentoftheannualnet incomeofallthebusinessescomprising Mitsui-gumi. Because theMitsuisweremeticulous bookkeepers andkeptimportantdocuments eversincetheendoftheGenroku era,orthebeginning oftheeighteenth century,thedetailsoftheiroperations canbelearned bystudyingthehugeparchment-bound ledgersofhand-laid paperstill perfectlypreservedintheMitsuiBunko,amodernfireprooflibraryand

museummaintained bythefamilyinTokyo.Scholars, including mem-

bersofthefamily,frequentlyconsultthesetomestodiscoverorverify

30 - MITSUI

factsconcerningJapan’spoliticalandeconomicdevelopment.Mitsui’s

recotdspresumably arerepresentative ofmethodsemployed byleading merchants oftheirtimes,buttheymusthavebeenbetterkeptthanwere thoseoftheaverage merchant, because Mitsui-gumi hadbeenappointed

in 1707to handlethe government’saccounting. Fromthecompany’srecords,writtenclearlybymanydifferent hands, onediscoversthatbusinessin Tokugawadayswassystematicallyand rationallyorganized.TheMitsuis,employingtheirowndouble-entry

system,keptofficialbooksof atleasttwokinds:oneforhalf-yearly

settlementsof short-termloans,interest,dividends,andsuchitems;and

anotherforthe “grandsettlement”thatwasmadeeverythreeyears. ThelatterwastheoccasionforbalancingaccountswithOmotokata.An interestingfeatureofthissettlementwasthepaymentofabonustoemployeesamountingto onepercentof theprofitthathadbeenretained duringtheperiod.Whetheror notthiswastheoriginofJapan’spres-

ent-daybonussystem,it indicatesthatincentivepaywasalreadya partofMitsui’sbusinessstyle. Ofimmeasurable importance tothedurabilityofMitsui-gumi wasits

systemof reserves,whichkeptit afloatwhenothercompaniesfoundered.Thetermstheyusedto describetheirreservesareunfamiliartoday,butonecanimaginethecontingenciesforwhichtheyweredevised.

Atthetopwasthe“shop’sfoundation”reserveforworkingcapital.

Therewerealsoa reserveto coverpaymentsof principalandinterest uponborrowings;a “lay-aside”fund(perhapsfor defrayingunanticipatedexpenses);and finally,the “‘cellarsilver,”a hoardof coinsand

bullionto be dugup onlywheneveryotherresourcehadbeenexhausted.

Foralmosteighteen yearstheo-kawase, astheofficial money-changers werecalled—the competitors’ junin-gumi andtheMitsuis’ sannin-gumi —monopolized thegovernment’s currency-transfer business,usingits interest-freemoneyfortermsof fivemonthsbeforehavingtorepayit. Inaddition,theywereentrustedwithexchangingnewcurrencyforold

andwithreceivingproceedsfromthesaleofgovernment-owned rice fortransfertoEdo(alsowithoutpayinginterest).

Butthedisclosure ofhugepeculations bytreasuryofficialsaroused thesuspicionsofthebakufu’sauthorities.In1709theyissuedaperemptoryorderto thethirteeno-kawaseto paybackat onceallthemoney theyhadborrowed.Thosewhohadnotpreparedforsucha senseless

andmerciless movewereunable tocomply,ofcourse,andanumberof

themwereruined.Mitsui’ssannin-gumi,however,drawinguponthe resourcesof Omotokata,and perhapsevendiggingintothe “cellar silver,”camethroughthatcrisisnicely.

It isdoubtfulthattheMitsuisweretakenbysurprise.Sincetheir

THE SOURCEOF HAPPINESSIS PRUDENCE°* Al

appointmentaso-kawasetheyhadimprovedtheirstandingwithLord ministers.It wasperhapsthrough Makino,oneofShogunTsunayoshi’s the his interventionthat MitsuiJiroemonhadbeenelectedchiefof withthe 1702.Thisposition,andhisconnection fiscalagentsinEdoin shogun’scourt,musthaveprovidedJiroemonwithsomehintthatthe fortified Atanyrate,suchexperiences loanswouldbecalled. bakufu’s attacks. surprise against everyprecaution policyoftaking Mitsui-gumi’s to the demonstrated period of thepost-Genroku Thevicissitudes andpowertheywerestillat choninthatdespitetheirrisingprosperity One themercyofa corrupt,irrational,and oftenvengefulgovernment. Keian, byYodoya was thatfounded families merchant ofthewealthiest a watcontractorforHideyoshi.Inthe Genrokuerathe Yodoyaheir cuta finefigureinthe“floating Saburoemon(alsoknownasTatsugoro) freelyhisprofitsfromtradinginlumberand world”ofOsaka,spending riceand making loans to daimyo.Floutingthe sumptuarylawste-

hefrequentedthepleasurequarters quiringchonintodressmodestly, wearingwhitesilkkimonointowhichhis familycrestwasworked the loanswerecalledin, In 1709,whenthetreasury ostentatiously. entirefortuneandthehousewasbanished Yodoya’s bakufuconfiscated by probablyengineered fromOsaka,Kyoto,andEdo.Thisdownfall, other to warning asa served hisdebt, in deeply whowere daimyo choninto beeveronguardagainstvanityandcomplacency. ofthedaymaybegaugedbya Thewealthoftheleadingmerchants According fromYodoya. ofthepropertyconfiscated partialaccounting jeweled included50pairsofgoldscreens,3 to onemodernhistorian,it toy ships,373carpets,13,266poundsof“liquidgold,”273 large preciousstonesand innumerablesmallstones,2 chestsof gold, 3,000

ryoworthof ryo),120,000 oban(largegoldcoinseachworthabout9 poundsofsilver,150boats,730warehouses, othergoldcoins,7million 17 treasurehouses,160 granaries,92 houses and shops, 367 acresof

ricestipendof55tons.’ cypressforest,andanannual Duringthis periodthe bakufu’sworseningfinancialplightwas In theKantoearthquakeof aggravatedbya seriesofnaturaldisasters. 1703some150,000peoplein Edo died,and in 1707-8MountFuji

Latera hundredsofsquaremilesofrichfarmland. erupted,devastating tidalwavesweptoverthesoutherncoast largepartofKyotoburned,a of Kii Province(in present-dayWakayamaPrefecture),and floods ruinedcrops in the fertileprovincesaround Kyoto,Nara, and Osaka. Rehabilitationcostswereenormous,andto replenishthe treasury, thebakufuresortedtothe debasealreadydepletedbyembezzlement, mentofmoney.

confusionand overa longperiodhadcaused Frequentrecoinages alonethe issue Inonenew inthecurrency. publiclossofconfidence

32 + MITSUI

valueofgoldone-ryo coinswasreduced byhalf,andofsilvercoinsby three-fourths. Sincegoldwasthemaincurrency ofEdoandsilverthat of Osaka,therewasmonetaryconfusionin additionto inflation.By 1720manymerchantswerefailingundersuch difficulties,and the

Mitsuisalsosuffered seriousreversals. Fortunately,thesharingoflosses throughOmotokataenabledthemto weatherthestorm,whichlasted fouryears.

Hachirobei’s sons,whomightbecalledtheoriginators ofscientific management inJapan,triedseriously toanalyzethesuccesses andfailuresof the chonin,andto drawguidingprinciplesfromthem.Such

inquiriesledto the writingofChoninKokenroku (Merchants’Observations),theoldestsurviving literaryworkofa Mitsui.WrittenbyTakafusa,a grandsonofHachirobei,it isa collectionof anecdotesabout wealthymenwho wentbankrupt.The lugubrioustales,toldto the authorbyhisfatherTakahiraandbyseveralshopmanagers andclerks, citedexamplesofmerchantswhohadlosttheirfortunesthroughreligiousfanaticism, personalextravagance,lendingto daimyo,overweeningambition,andsimilardeparturesfromsensiblestewardship. Oneofthe storiesis aboutHachirobei’selderbrotherSaburozaemon, withwhomhehadservedhisapprenticeship. Saburozaemon,headof theshort-lived“nailpuller”Mitsui,owedhisfailuretohavingbrought uphissonsasgentlemeninsteadof asmerchants,encouragingartistic endeavorssuchastheNohdrama,andassociating withfrivolouswast-

rels. The originalKokenroku probablywascompletedin1719.It is no longerin the possessionofthe family,but thedateis knownbecause oneledgershowsthat on a certaindaya quantityof paperwaspurchasedto makehand-writtencopiesforthe clan.It wasnot published

then,butwasborrowedbyothermerchants whohadtheirowncopies made,andit becamequitefamous.Morethantwentysuchmanuscript versionsarepreservedin theMitsuiBunko.In theMeijierait finally waspublished,with numerouserrors,and widelydistributed.

Absorbingthelessonstaughtbyhardtimes,Takahira, theheirofold

Hachirobei, foundthewisdom ofhisfatherfullyvindicated. Inorderto establishthatwisdomasthe foundationofMitsui-gumiandof its

gtowingenterprises,he decidedto drafta constitutioncodifyingthe preceptsandprinciplesthathadbroughttheHousesafelythrough its firstandsecondgenerations. Takahiraworkedon the document,purportedlyaredraftof his father’swill,inhissparetimefor a decade,andpromulgated it as his ownwillin 1722,the centenaryof Hachirobei’sbirth.Accordingto familylegend,Takahira,theninhisseventiethyear,assembledtheheads of the fivemainbranchfamilies,showedthemaquiverof arrows,and

THE SOURCEOF HAPPINESSIS PRUDENCE - 33

brokeoneoftheshafts intwo.Thenheboundsixarrows togetherand invitedhisbrothersin turnto breakthesheaf.Nonecould,andthe

truthoftheancientparablewasdemonstrated onceagain,asaprelude tothefirstreadingoftheMitsui&aken, orhouseconstitution. The generalclausesrepeathomiliesthat mighthavebeenapplied beneficiallybyanyone.Forexample,clanmemberswereadmonished

topromotethemutualwelfarewithoneaccord,tobeconsideratein theirrelations withoneanother, torespectthoseinauthority andshow kindnesstosubordinates.“Thriftisthebasisofprosperity,” theywere

told,“butluxuryruinsaman.”Theywereemphatically andrepeatedly

warnedagainstreligiousexcesses.“Itisone’sdutytobelieveinthegods andBuddhaandfollowthelawsofConfucianism,” thekakenadvised,

butnottodonateexcessive sums.“Instead ofwastinggoldandsilver on

templesandshrines,youshouldmakeappropriatecontributionsto the poorandsuffering, andyouwillberewardedten-thousandfold.” Therewerealsosomesimplebut pithybusinessprecepts,stating essentially: Bediligentandwatchful,or yourbusinesswillbe takenawayby others. Farsightednessis essential:do notmissgreatopportunities bypur-

suingtrivialonescloseathand. Avoidspeculation ofallkinds,anddonottouchuponunfamiliar linesofbusiness. Callingforveryspecial emphasis weretheselection andtreatment of thechiefclerks orshopmanagers—whose designated rolewastoguard

thebusinessoftheHouse,giveappropriate advicewhennecessary,and correctblundersmadebytheirmasters.Clanmembetswereadjuredto keepaneyeonyoungerclerksandtrainworthycandidates forresponsiblepositions,beingcarefulnot to overlookanymenof talent.The numberofhiredmanagerswastobelimitedtosixorseven—threefrom Kyoto,twofromEdo,andone(orperhapstwo)fromOsaka—presumablyto preventanylocalcliquefromgainingtoomuchinfluence. The Mitsuis’concernfortheirretainerswasshownintheclauseproviding

that“aconsiderable amountofsilvershallbesetasideasareserve fund

forthebenefitofelderlyemployees ofthehouse”suffering frommisfortuneor calamities. Themainbodyoftheconstitution, however,wasdevotedtoregulationspreservingsolidarity,harmony,andrectitude,aswellasassuring

fairdealingamongfamilymembers.Themostimportantofthesecan besummarizedasfollows: DescendantsoftheHouseshallforeverobeytheseruleswithoutfail. Theheadoftheseniormainfamily,Hachiroemon, shallberegarded asheadoftheHouseandobeyedasifhewerea parent.

34 - MITSUI

Whenthereisnocompetent heirtosucceed Hachiroemon, asonmay beadoptedfromamongothermembers oftheHouse,orafemalemay succeedashead. | Boysof the familiesareto be apprenticedat theageof twelveor

thirteen,servingat Kyoto,Edo, andOsakaand learnthe rudimentsof

thebusinessuntiltheageoftwenty-five.Bytheageofthirtythey

ateexpected to becapableof managinga shop. The sharesof houseassetsshallbe allottedto memberfamiliesas specified(seeAppendixA),but 10ofthe220sharesshallbe setaside fordeserving offspringotherthantheheirs.Daughtersofthefamilies

aretobemarriedtosonsofMitsuiclanmembers wheneverpossible, butatetobegivensuitabledowriesotherwise. Secondandyoungersonsshallbe allowedto establishfamiliesat aboutthirtyyearsofage,if theyareconsideredsufficientlycapable;in suchcasestheymayusethebusinessnameEchigoya, butnotthesur-

nameMitsuiwithoutspecial permission. It willnotbenecessaryto establishanymorebranchorassociate families. Threecapable oldermembers aretobeappointed aschiefdirectors of theHouseto overseeallthebranchshops.Monthlymeetingswiththe managersofallshopsareto beheldfordiscussion ofimportantbusi-

ness.

Housemembersare not encouragedto entergovernmentservice

becauseit mightcausethemtoneglect familyaffairs.“Donotforget thatwearemerchants.Youmustregardyourdealingswiththegovetor mentasa sidelineof yourbusiness.” To preventrivalryamongthe families,Takahiraestablishedthe

hierarchyofthesixmainbranchesandthreeassociate familiesforall time.Although thenumberoffamilies waslaterexpanded fromnineto eleven,andthetitle““Hachiroemon” passedtoothermainfamilies on severaloccasions,thishierarchywasobserveduntilthemid-twentieth centuryandundoubtedlysavedtheclanmanytimesoverfromdeadly feudsor dissolution.Provisionalsowasmadeto punishmiscreantsby expellingthemfromthefamilyandsendingthemintothepriesthood, alongwithprofligatesincapableofcaringfortheirfamilies. Fortunately,Hachiroemon Takahiralivedfor fifteenyearsafter readinghis“‘will,”’andwasableto setanexampleforhisbrothersas

ofmylife.. . I “Duringtheremainder inoneoftheclauses: elucidated

shallsaveasmuchasI can. . . andsuchsavingswillbedepositedwith

thechiefaccountant. Theexactsumofsuchsavings shallbesubmitted to meformyperusalonceayear.Theamountdepositedduringthe yearshallbehanded tomeattheearliestpossibledateafterthethirdof Januaryeveryyear.”

Whileinstructing hiskinsmenintheorganizationandauditingof

THE

SOURCE

OF HAPPINESS

IS PRUDENCE

= 35

theirfinances,hewarnedthemaboutoverexpansion, dispersionof

resources,andrashlending.“Whenlendingmoney,oneneedsa solid

mortgage,”hewarned.“Iftheborrowercannotrepayinduetime,

recognizehislimitations.Onemaylosesomemoney,butthatisbetter thantoincura biggerlosslateron.”Butasforlendingto daimyo,he wasdeadsetagainstit,foreventhegreatLordKiioftheTokugawaline

eventually haddefaultedona debttoHachirobei. “Donotlendtodaimyo,” Takahirawarned.“Thelenderdevelops an

obsequiousattitude,andrecoveryofthemoneyisdifficult.Ifoneforms an unsoundrelationshipwitha daimyoandgetstoodeeplyinvolved, one’sshipwillsinkfromtheheavyload.” ManyofTakahira’spreceptswereignoredorviolatedatonetimeor another,butoneofthemwasobserved withoutanyknownexceptions: “Neverforgetthe kindnessof tenka-sama[thehonorablemenin power],forwhensocietyispeaceful,businesscanbecarriedonsafely. Thoseofthesamebloodshouldneverforget4o-on[repaymentofkindness]andgratitudetowardthestate.Tenka-sama’sdecreesshouldbe

carriedoutfaithfully, evenbythelowestemployees.” Tothislastadmonition aprofoundsagacity maybeimputed. Atthe

timeit waswritten,tenka-sama(anepithetwhichcanalsobetranslated as“thesovereign ofallthingsunderheaven”)wastherulingshogun.

ButTakahirasaidnothingabouttheshogunortheTokugawa family thatmonopolizedthesupremeposition.Perhapshe wasdisillusioned bythedefaultingofLordKii,orbythecorruption ofthebakufu,orby the aberrationsof the successiveshogunsandtheirsycophants. Or possibly,beingof the literati,he hadacquiredenoughawarenessof historytorealizethattheZeno,oremperor,inKyoto,althoughvirtually

analmsman oftheTokugawas,wasalsoapotentialtenka-sama. WhateverTakahiramayhavebeenthinkingwhenhecodifiedthe Houselaw,itstwodominantthemes—permanence andflexibility— comethroughmostclearly.Hishomelyphilosophywasfurtherrefined intheyearsremainingto him,andwhenhediedin 1737heleftto his heirahangingscrolluponwhichhehadinscribedtheessenceofhisexperience:““Thesourceofhappinessisprudence.”

4 . “Remember WeAre Merchants”

A GAME POPULAR AMONG JAPANESE CHILDREN andknowntheworld

overisjankenpon, inwhichtwoormoreplayersextendtheirhandssi-

multaneouslytosymbolizerock,scissors,orpaper.Rockcanbreakscissors,scissorscancutpaper,andpapercanwraprock,andateachturn thelosersareeliminated.Thisgamesuggeststheclasssystemoffeudal

Japan,withrockrepresenting thepeasants,scissorsthetwo-sworded men,andpaperthemerchants. Infact,samuraiusedtheterm“paper people”inreferringtothechonin,althoughtheywerelearning totheir discomfiture thatpapercouldwrapsteelblades aswellasrocks. Thethreeclasses,allvictimsofthesocialsystemin whichtheywere trappedbylaw,becamemutuallyembitteredbecausethestrugglesof

eachtosolveitsproblems separately aggravated theplightoftheothers. Ieyasu’s“greatpeace”haddeprived thesamuraiof opportunities to

performgloriousdeeds,andthemoneysystemthatwasbeingawkwatdlysuperimposeduponthe country’sagriculturaleconomyput themat the mercyof the merchants.Butbothsamuraiandchonin classeswereparasiticuponthepeasants,whowereplungedintoever

deepermiseryandoftenresortedto violenceagainstthemerchants,

to becutdowninturnbythesamurai.Thepeasants’ onlyalternative wasto jointheurbanchoninandbecomemerchantsthemselvesifthey couldsaveupalittle capital.Butwithsofewchannelsforenterprise

leftopento thembythebakufu,theincreasingly numerouschonin competedintenselywithinthenarrowmarket, andfewescapedruin. Ofthesurvivors,thosewhomigrated fromIseProvinceweremost ubiquitous—or at leastthemostnoticeable.In theearlyeighteenth centurytherewasa saying:“Thecommonestthingsin Edoare Ise merchants,Inarishrines,anddogturds.”’Thisjuxtaposition indicates

thelowesteeminwhichpeopleliketheMitsuiswereheld.

Themerchants,subjectto persecutionor the confiscationof their propertybythebakufuandoftencheatedbydaimyoorsamuraidebtors, alsosufferedpillageandarsonat thehandsof outragedpeasantsor mobsofhungrytownsmen.Toprosperinsuchaworldtheyhadtobe

cringinglyobsequious towardtheirsuperiors,ruthlesslycompetitive

36

“REMEMBERWE AREMERCHANTS

«+37

withtheirequals,andpitilesslygraspingintheirdealingswithpeople

morehelplessthanthey.In short,theaccusations heapeduponthe JewsofEuropeappliedequallyto themerchantsofJapan—andfor

thesamereasons. | TheMitsuis,beingthemostsuccessful, wereprobablyamongthe leastloved.Unlikesomanyoftheircolleagues,whosharedthefoibles

andweaknesses ofthechoniningeneral,theyseemtohavebeenpuritanicalandalmostobsessively diligent.Considering theexigencies of the age,onecouldscarcelyexpectthemto havethrivedotherwise. Whatis surprisingis theevidencethat,despitethelowliness oftheir callingandtheirrelentlesspursuitofprofit,theymadesomeveryrespectablecontributionstotheculturallifeofthenationand,indirectly, to itspoliticalmetamorphosis. TheMitsuiswereenjoinedby theirHouse’sregulationsto avoid extravagantcontributionsto templesandshrines,butthereis noreasonto suspectthat theywerelesspiousthantheircontemporaries.

WhilelivinginMatsusaka, Hachirobei hadfrequently visitedtheGrand ShrinesofIse.Aftermovingto KyotohejoinedtheIse-ko,theIse

pilgrims’association,andmadea visitto theholyplaceseveryyear.

Asprivilegedpurveyorsto thebakufuheandhissonshadaccess alsototheouterprecincts ofthehallowedimperialcourt,contributed towarditsupkeep,andservedasbearersoftheo-mikoshi,theportable

shrines,thatwereparadedthroughKyoto’sstreetsduringShinto

festivals.Aftertheirbrushwithbankruptcy in the1720stheydonated fundsfor enlargingthe compoundof MimeguriJinjain Edo and

buildinganannexin whichtheirtutelarygodsEbisuandDaikoku

wereenshrined.Theseweretwoof the traditional“SevenGodsof Luck”worshipedbytownsmen,alongwiththefox-messengerof the Inarishrines.

Sincethegoodwillofthetownspeople hadbeenthebasisofthe Mitsuis’fortune,whichfluctuated withthegeneralprosperity,their patronageoffolkshrinesandthegodsofluckmayhavebeenaform ofinsurance, orattheleasta soundbusiness policy.Fortheirpersonal worship,however,theyfavoredthemoredignified Tendaisectofpan-

theisticBuddhism, introduced fromChinaintheninthcentury.Hachirobeiandhisdescendants worshipedatShinnyo-do, a Tendaitemple upona hilltopin Kyoto,andwereentombed there.In theloftymain hall,builtin the seventeenthcentury,are severalsplendidlycarved

altarsencrusted withgold.Ina secluded cornerbehindthemainaltar aretheancestralshrinesoftheMitsuis,behindwhoseportalsstand rowuponrowofgold-lacquered woodentabletsbearingthenamesof allthedeceased heirsfromHachirobei onward.Thesearerankedstrictly accordingto theprecedenceofthebranches:theheadfamily,Kita-ke,

38 « MITSUI

in the center,is flankedby thehon-ke,or mainbranches,whilethe

collateral branchesareplacedina separatecompartment.

Asimilarhierarchyisobservedintheadjacentgraveyard,overlooked bya statelypagodaandshadedbyhugecryptomeriatrees.Theheadstonesofthefirstandsecondgenerations standona slightlyelevated terrace,withthoseofHachirobeiandJusanat thecenter.

Inthistimelessplace,towhichthedinofmodernKyoto’straffic scarcely penetrates, sometwelve generations ofMitsuissleepinordered ranks,eachinhisproperstationindeathasinlife.Among themare no statesmen,soldiers,or professionalmen.One,longago,became

a Buddhistpriestafterretirementfrombusiness,andothersearned respectfortheiraccomplishments inseveralavocations. Butallofthem, truetoHachirobei’s teachings, weremerchants first,andindulged other aspirationsonlyafterhavingdischargedtheirobligationstothefamily, the clan,andthe state.In thatwaytheyfoundthe permanencefor whichthefounderhadyearnedandstriven.

As theyprospered,the chonindonatedgenerouslyto theirfavorite templesandshrines,therebypayingmostofthecostsof a renaissance in religiousartandarchitecture.Theyalsoinvigoratedtraditionalart

forms,suchasNoh,whiledevelopingnewones—notably Kabuki, whichreached itspeakofcreativeness abouttwohundredyearsago. BeforethattimeMitsuiJiroemonTakanariemergedas a recognized

writerofjoruri,orballaddramas forthetheater.Underthepenname

KinoJotaro(takenfromhismasterKinoKaion,a composerofcomic tanka,ot versesof thirty-onesyllables),he collaboratedin writinga

historicalplaythatisstillintheKabukirepertoire. Anothercoauthor wasthefamousUteiEmba,a carpenterwhohadbecomea popular reciterofthecomicstoriescalledrakugo. In the Tokugawaperiodpeopleassociatedwiththe theaterwere ostracizedbythe“‘betterclasses.”It istruethatjoruriandrakugowere

considered morerespectable thanKabuki,butstillit wasunusualfor thescionofa prominentmerchantfamilytoconsortwithstagefolk. Theexplanation isthatTakanari tookupthetheater onlyafterabandoninghisbusiness career.Hecoulddosobecause aconflicthaddeveloped amongtheMitsuifamilies overa questionable businesstransaction. Threatened bythebakufu,theyhadhadtofindascapegoat. SoTakanati,ayoungersonandthus“expendable,” assumedresponsibility for theunpleasantsituationandresignedhispositionaschiefoftheryogaeyainEdo.Onlythen,whenhenolongerrepresented Mitsui-gumi, didhefeelfreeto indulgehisinterestin thetheater. Whilecherishingtheprestigetheyenjoyedwithintheirownclass,

theMitsuisstillheededthefounder’sreminder—‘“‘we aremerchants”

“REMEMBERWEAREMERCHANTS+ 39

—andmadenopretense ofbeinganything else.Duringthetimeswhen manychonin wereeagertomarrytheirsonsanddaughters intosamurai

families(afeatthatcouldbeaccomplishedbyfinancialmeans)Mitsuis marriedonlychonin,preferablyotherMitsuis,as recommendedby

theirconstitution,untiltheclasssystemwasabolishedofficially in 1870. Theirtastes,however,becameincreasinglyaristocratic.Severalpoets

of Mitsuibloodwonrecognitionin theirlifetimes.In theplasticarts the Mitsuiswerepatronsof manyof theleadingpainters,including

HiroshigeandUtamaro.Oneofthegreatestamongthoseartistswas Maruyama Okyo,laterapainterfortheimperial court,whointroduced newandlastingstylesderived fromChineseandEuropeanexamples. Someofhiscreationsarestillprizedpossessions oftheheadfamily. TherenownedceramistEirakuHozen,whosepotterymadeforthe teaceremonyisnowpriceless,wasanotherMitsuiprotégé. TheMitsuis’interestinscholarship beganbyaccidentratherthan throughinclination. Inthelateeighteenthcenturyit sohappenedthat MitsuiTakakage, headingoneofthetwobranchfamilies thatremained inMatsusaka, livednextdoortoa scholarnamedMotoori Norinaga. TheheirofanIsemerchant housethathadrecentlybecomebankrupt in Edo,Motooripracticedmedicinefora livelihood,butdevotedmost of histimeto study,andto writingandlecturing upon theJapanese classicsthataftercenturiesofneglectwerebeing discoveredagainby the great scholars.Oneof his specialinterestswas GenjiM onogatari,

centurybyMurasakiShikibu,a lady-innovelwrittenintheeleventh

waitingat theimperialcourt. Indifferentasa physician,Motooriprovedtobeoneof Japan’smost

When hisearlydisciples. wasamong importantthinkers,andTakakage oftheoutstanding attheurging Motoori, hewasinhismid-thirties KamonoMabuchi,undertooka prodigioustask.Thiswas classicist becamea forty-eightthewritingoftheKojikiDen,whicheventually of compilation aneighth-century upontheKojiki, commentary volume Japanese“history,”folkwisdom,andmythology.The KojikiDen, whichtookthirty-fiveyearsto complete,isregardedasoneofJapan’s outstandinghistoricalandliteraryworks,andthe Mitsuistake con-

supportofMotoori financial prideinthefactthatTakakage’s siderable Norinagahelpedtomakeitpossible.Oneof theirdearestpossessions toTakakagebyMotoori, anoldertypeofkoto,presented isa wagon, witha messageofcommendationattached. Usingthemostadvancedmethodsofphilologyandlinguisticsthen

theoriginalmeaningoftheKojtki, known,Motoorisoughttoestablish withevents whichheacceptedas theholywritofShinto.Beginning

thathappenedbeforethedawnofJapanesehistory,theKojikirecounts

40 - MITSUI

the creationandthefoundingof theimperialhouseuponordersof

theSunGoddess, Amaterasu. Suchstudies weregratifying tothepeople ofIseandKiiprovincesbecauseoftheirstronginterestintheGrand ShrinesatIse,whichwerededicatedto Amaterasuherselfandto the

spiritsofothersoftheimperial ancestors.

Motoori’sexhaustivestudy,althoughconductedmoreor less“‘scientifically,”” wasessentiallya revivalofhalf-forgottenmythsandsuperstitions.YetultimatelytheKojikiDenandotherwritingsof its kind

hadanextremely significant impactuponJapan’s politicaldevelopment andhistory. Sincethe triumphof Ieyasuin 1600his bakufugovernmenthad sedulouslyfosteredthemyththattheTokugawasruledbydivineright. Theimperialhousepresumably had delegatedfullauthorityto the Tokugawashogunsforalltime.Theemperor,althoughformallyre-

verted asthechiefdeityofShinto, actuallylivedupontheparsimonious charityoftheshogunate.Surrounded byhereditarynobles,heplayed theroleofhighpriestinhollowritualssymbolizing thecontinuityof

thedynastyandhencethelegitimacyofTokugawarule. Thebakufupaidlittleheedto Shintoitself.Theofficialideologywas

a mixtureofimportedBuddhistandneo-Confucian preceptssuperimposeduponanativeculture thatinitselfwasviewed disdainfully by conservativescholars,whofoundtheirinspirationin theChineseclassics.TheTokugawaswereinterestedonlyinthepermanenceof their tule and discouragedany objectivestudyor creativethoughtconcerninghistoricalor socialmatters.

Indifferent tothepublicweal,thebakufu didlittletorelieve suffering fromsuccessive disastersandpestilences. InMotoori’stimethegreat famineof Temmei,whichlastedfrom1783to 1787,is estimatedto

havereducedthepopulationbya million.It issaidthatinthecastle townofHirosakiinnorthernHonshueightythousand peoplestarved to death,afterhavingeatenallthedogsandcatsinthevicinity.In manyvillagestherewasnota singlesurvivorto burythedead,whose

corpseswereconsumed bybirdsandbeasts.

Suchhardships,aggravatedby officialcorruptionandspeculation,

provokednumerousandviolentrevolts.DuringtheTemmeifamine, whenthepriceofricetripled,thereweremorethanonehundredand fiftyuprisingsamongpeasantsandtownsmen. Concurrently,intellectualswerebeginningto questionnotonlythe

virtueandadministrative competence oftheTokugawas butalsotheir

interpretationsof historyandthe legitimacyof theirreign.Almost forgottenclassicsofJapanesehistory,mythology,andliterature—the NihonShoki,Japan’soldestofficialchronicles, andthe Man’yoshu an-

thologyofpoetry,aswellastheKoj#ki—wete studiedtorediscoverthe

“REMEMBERWE AREMERCHANTS

°- 41

spiritualessenceofJapaneselifeandthepreceptsforbenevolentrule thathadbeenlostundertheTokugawadespots.Thisledgradually toa revivalofancientJapaneseidealsandethics,especially thoserelatedtothesupremacyoftheimperialhouse.Independentstudiesalong theselinescoalescedintoa movementknownaskokugaku,or national

learning,ofwhichMotooriNorinagawasthebrightestexponent.Implicitinkokugaku wasthesuspicion thattheTokugawas wereusurpers andthattheirviolationofeternallawslaiddownbythegodshad causedJapan’sdecay. TheTokugawaswerenot obliviousto the situation,andsomeof themweretryingtodiscoverwhathadgonewrongwiththeirformula. In 1787,whenthe Temmeicrisiswasat its peak,TokugawaHarusada,

daimyoofKii,summonedMotooriNorinagatoaskhisopinionsand

adviceuponproblemsrackingthenation.ThisinspiredMotoorito writeTheSecretBookoftheJeweled CombBox,dedicatedto Harusada, in whichhe developedhisviewsonsocialunrest,theeconomicproblemsof the severalclasses,and the natureof commerce.Thiswas

perhapsthefirsttimethata Tokugawahaddeignedto consulta nationalistscholar,andtheeventwasdoublysignificant becauseMotooriwasa memberofa choninclassbybirthandtraining.Inhisyouth hehadbeenadoptedbyandapprenticed to a papermerchant.Finding businessdistasteful,hehadturnedtoreligiousscholarship,whileapplyingthepracticalknowledgeandempiricismofcommerceto hisintellectualtasks. Motoori’steachingsmusthaveseemedshockingly radicalto the

daimyo,aswellastothenumerouschoninandpriestswhoattended hislectures.Henotonlyattackedtheirtraditional beliefsinBuddhism andConfucianism but wasstronglycriticalof the principlesand methodsuponwhichtheirprosperity rested.Concerning privatepropertyheasserted that,althoughAmaterasu Omikamiandtheimperial householdhadentrustedthe affairsof stateto the Tokugawasand administrationoftheprovinces to thedaimyo,“‘nopeopleina fiefare privatepeople,andnolandisprivateland,”sinceeverything andevery-

onebelongedtotheemperor.

Hesawgreatinjusticesincommerce,andchidedrichmerchantsand

people”didallthework. while“lower forlivinginidleness aristocrats Particularlyreprehensiblein Motoori’sviewwasthealliancebetween

businessandgovernmentthatwasthecornerstoneofMitsuipolicy frombeginning toend.Thedonationofmoneytothegovernment for theirwealth therichfurthertoincrease “willenable advantage business that andwilldogreatharmtothepoor,”hesaid.“Evensomething if it is shouldbewhollyprohibited wouldhelptherulers’finances harmfultothelowerpeople.’”!

42 - MITSUI

Theimmediate effectofMotootri’s teachingupontheMitsuis, several ofwhomwereincluded amonghisfivehundred disciples, isnotrecorded.ThediariesofTakakage,no scholarhimself,giveonlysuch

informationas “TodayI attendedMotoori’slecture,”or recordthe

master’svisit,inhisroleasphysician, toanailingMitsui.Therecan belittledoubtthatexposure totheideasofJapan’s pioneer“economic adviser”hadsomeimpactupontheirthinking, eventhoughtheyap-

pliedhis preceptsinreverse.(Amodernparallelisfoundin mostof present-dayJapan’scapitalistleaders,who wereinfluencedin their universitycoursesbyMarxistprofessors.) Moresignificant,however,

wastheearlyawareness, inculcated intheirdisciples byMotootiand othernationalscholars,thattheTokugawaswereusurpersandthat the imperialfamilycouldofferto the oppressedpeopleof Japana morallyacceptable alternativeto the tyrannyofthe bakufu.

5 - Legacyof the Barbarians

oneof unprecedentedgrandeurandprosCENTURY, AFTERITSFIRST

itsvitalitysapped perity,theTokugawashogunatewentintodecline, eachclass structure Inthefeudal change. bya futilestruggleagainst by heldtogether monolith andeveryindividualin it waspartofa mercantile Yettheburgeoning relationships. indissoluble presumably economy,in obedienceto its owninexorablelaws,hadalreadyaltered

of incapable Thebakufu,organically thenatureofthoserelationships. metsuccessive conditions, changing to adjustingthesocialstructure and criseswith strongerdosesof the sameold medicine—tyranny isolation.

AtthebeginningoftheTokugawaperiod,whichlastedfrom1603

to 1868,Japanhad beenarelativelyadvanced, outward-lookingcoun-

try,readytoclaimarespectedplaceamongtheworld’snations.But remoteness, madeallthemorepossibleby hergeographical seclusion, intellectualgrowthat a time paralyzedJapan’ssocialcreativityand theWesternworld wastransforming revolution whentheindustrial asJapanstagThen, expansion. forglobal itscountries andpreparing Asiato trade Southeast of upmost naviesopened nated,European andcolonization.In thefirsthalfofthenineteenthcenturytheBritish establisheda solidpositionin China,whiletheRussiansbeganreaching acrosstheSiberianwildernessto developnew territoriesatthemouth of the AmurRiver,little morethanfivehundredmilesfromthe shores ofJapan.

orpoliticalreasonsalltheEuropeannavalpowers Forcommercial relationswithJapan,andexploratory amicable weretryingtoestablish frequent.TheRussianempire,intent visitsbyforeignshipsbecame a friendlyJapanon needed KoreaandManchuria, upondominating ofa Russianadvanceinto itseasternflank.TheBritish,apprehensive China,hopedtoforestallit bywooingtheJapanese.TheUnitedStates,

by inregionspreempted wasata greatdisadvantage asa newcomer, EuropeansandsawvirginalJapanasitslastchanceto stakea claim Japancould closestneighboracrossthePacific, inAsia.AsAmerica’s be a navaloutpostofgreatvalue;butundercontrolofhostilepowers 43

44.

MITSUI

it couldalsobea threat.Japan’s portswereneededassupply bases for Americanmerchantmen andwhalers;tradeprospects, though

unevaluated,were

enticing; and for zealousChristianmissionaries

therewerethosemillionsofheathensknowntobesusceptibleto conversion. Japanwasdoublyinvitingbecause ofitssuspectedvulnerability. AsE.H.Normanhaspointedout:“Inthemiddleofthe19thCentury JapanwasasweakascontemporaryBurmaorSiam,facingthemodern worldwithoutallies,withouta fleetor modernarmy,withnomonies in its treasury,its industrystillhandicraft,its tradenegligible,its povertyprofound.””! ThearmieschargedwithdefendingJapanwerevitiatedby a peace thathadlastedtwohundredandfiftyyears.WhenCommodorePerry’s menlandedin 1853theyencounteredwarriorscladin armormade of silk,leather,andthinplatesofmetal,verysimilarto thatwornby SasakiTakahisainthefifteenthcentury.Gunswerein commonuse,

butmostofthemwererelicsofpastEuropeanwars,muzzleloading

flintlocks,muskets,and such,whileothertroopswerearmedwith swords,spears,andbows.Thiswasthe sameyearin whichSamuel Coltstartedthemassproductionofsmallarmsat Hartford,Connecticut.Fromtheviewpointofthe“DutchScholars,” whichcoincidedin thisrespectwiththatoftheexponents ofnationalism,thebakufuhad betrayedsacredNipponbymakingit impotentto repeltheonslaught of thebarbarians.

Perryassumed thatthereluctance oftheshogun’srepresentatives to

accepthis reasonabletermswasdue to ignoranceor to encrusted

tradition,notrealizingthathewasforcingthemto makea choice betweentwoformsofcommittingsuicide—a daggerinthebelly,or

slowpoison.Theyknewthatrefusalof Perry’stermswouldleadto eventualattackeitherby the UnitedStatesor by Europeanpowers. Yetacceptanceofthosetermswouldbeusedbythebakufu’s enemies to inflamemalcontentsofallclasses. Thedaimyowerealmostequallydividedoverthe

courseto be taken,

sowithcharacteristicJapaneseambivalence thebakufu“harmonized” theopposingviews.Bygoingthroughthemotionsofsigninga treaty,

theywouldgaintimeforrebuilding theirdefenses alongmodern lines;

concurrently,theywouldusetheirnewcontactswiththe

Westto

learnitsmilitaryscienceandthendriveouttheinterlopersonceand forall.Bysuchreasoning theytriedtoreconcile abreachintradition, represented byatreaty,withtheirresponsibility forexpellingthebarbarians. Undertheseinauspiciouscircumstances JapanandtheUnitedStates

LEGACYOF THE BARBARIANS= 45

concluded theTreatyofKanagawa, Japan’sfirstdiplomatic recogni-

tionofaWesternpower,onMarch31,1854.Thisso-called woodand watertreatygaveAmericansshipsaccessto twominorports,Shimoda andHakodate,andtherightof refugeandsupply.It alsoauthorized theinstallationofa UnitedStatesconsul,if andwhensuchanofficial

wasneeded. Usingthisexcuse (andmuchtotheanguish ofthebakufu), TownsendHarrisarrivedinShimodatwoyearslater,demandinga residence,an audiencewiththe shogun,the conclusionof a commercialtreaty,andtheopeningofmoreports. Eventually,in December1857,hewasreceivedat Edo Castlewith fullceremony;andafterhavingto enduremorethananotheryearof

bureaucratic obstructionandinfuriatingevasions,in 1858hewona TreatyofAmityandCommerce thatprovidedforfreedomoftrade,

theopeningofKobeandYokohama (bothseaportsadjacenttoJapan’s largestcities),andthe rightof residencefor Americansin the open

ports,aswellasinEdoitself. TheJapanesehadbeenassuredthattradewouldbringthenation greatbenefitsandstrengthenthegovernment,butitsimmediateeffects

aftertheopeningofYokohama in1859wereworsethaneventhepessimistshadimagined.At firstfewerthanfiftyCaucasianslivedin the

newinternationalsettlement,builtandmaintainedat government expense. Butaswordofthesingularopportunities forprofitcirculated abroad,thenumberoffortuneseekersmultiplied.Conspicuousamong themweredrifters,sots,andbrawlingsailors,whoquicklyconfirmed

Japan’sworstsuspicions aboutthebarbarians.

HardlymoreagreeabletotheJapanese wereforeignmerchants,who

sniffed outtheweaknesses inthecountry’s economy andexploited them

withoutmercy.Theyfoundthemostseriousflawin itscurrencysystem.Thebakufu,havingbeenout of touchwithworldfinancefor centuries,had manipulatedcoinagevaluesarbitrarily(andnaively),

withtheresultthattheexchange ratebetweengoldandsilverwasone to five,or oneto six,whereasin foreignmoneymarketsit wasabout oneto fifteen.Thestandardinternational currencyin EastAsiawas

theMexican dollar,asilvercoinminted inHongKongandtheUnited States,aswellasinMexico.Undertreatyprovisions theexchangerate

inJapanwassetatthreesilverbuforoneMexican dollar.TheJapanese goldkobancoin(worthoneryo)costfourbu. Shrewdbarbariansimmediatelysawthat withan outlayof 100dollarsa mancouldbuy 300buandexchange themfor75koban.Then,whenexported,those 75kobanwouldfetchat least150dollars,andasmuchas270dollars, dependingupontheirgoldcontent.

Thisdollar-bu-koban trickbecamean obsessionamongtheforeigners;andevendiplomats, including Harrisandmembers ofhisstaff,

46 - MITSUI

playedit to amplifytheirsalaries.Thebakufutriedclumsily to read-

justthecoinageinorderto stopsuchplunder,butsucceeded onlyin stoppingtradeentirelyandantagonizing theforeignpowers,whoinsistedupontheirtreatyrights.Before thecurrencymatterwassettled suchadrainageofgoldhadoccurredthatJapan’smonetary systemwas

disrupted.Sporadicdemandforexportcommodities, andexcessive suppliesofimportedgoods,caused wildfluctuations inprices.Sudden changesin thepriceof riceaffectedthewholeeconomy,imposing severehardships uponpeasantsandpoorertownsmen.Suchfluctuationsweremanipulated by merchantsto thedisadvantageof daimyo andsamurai,whoseincomesweremeasuredinriceandseemedalways to shrinkwhenconvertedintomoney. Sincetradeintheopenportswasmonopolized bytheforeigners and conductedthroughofficialchannels,it broughtlittleprofitto native merchantsand noneto the bakufu,saddledasit waswithastronomical

expensesrelatedto theforeignincursion.Incomefromdutieswas minimal becauseHarrishadincluded inhistreatyaclauseallowingfor-

eignersto setthetariffrates,whichofcoursetheykeptextremely low. Thisprovisionmadeit impossibleto protectdomesticindustryand inviteda floodof cheapfactory-madeforeigngoodsthatruinedin-

numerable handicraftenterprises uponwhichthefamilies ofpeasants andimpoverished samuraihaddependedfortheircashincome. Theseeconomicwoeswereno lessdistressingto theMitsuis,with whombusinesshadbeen goingbadlyfora longtime.Ordinarily, the misfortunesoftheupper classesbroughtadvantagesto themerchants, but latelytherehadbeen toomuchmisfortune. In the1840sdebtsof thedaimyohadrisenso alarminglythatfullythree-fourths oftherice

cropsenttoOsakawasowedinadvance asinteresttomoneylenders, Baddebtshadmountedcommensurately, andamongtheexchange

housesit wasestimatedthattwentypercentoftheircapitalstagnatedin

theformofuncollected loans. Forthetwopreviousdecadescalamities hadbeenstrikinginrelentlesssuccession. DuringtheTempoera(1830-44)cropfailureshad

broughtrepeatedfamines,someso severethat the streetsof many townswerelitteredwithunburiedcorpses.Whenthebakufudidnothingto alleviatethepeople’ssufferings,a scholarlypoliceofficialnamed OshioHeihachirowasspurredinto action.Realizingthe futilityof

persuasion, heconceivedthedesperateschemeofstaginga revoltin

Osaka,seizingthe wealthof the merchants,andusingit to finance

a peasantmilitiastrongenoughtochallenge thebakufu.Inorderto

begintherebellionandfeedhisfollowers—amongwhomwetesamurai and ronin,or lordlesssamurai,as well as townsmen and farmers—he

soldhisbelovedbooksandmanuscripts.

LEGACYOF THE BARBARIANS-

4/7

Beingamanofconscience,Oshiofirstpetitioned thebakufuand someof todistribute suchasMitsuiandKonoike, leadingmerchants, he ignored were pleas Whenthese granaries. thericefromtheirbulging secretlydistributedswordsto hisfewhundredcohortsand,onFebruhislittlebandfor an assaultuponOsaka’s ary19,1837,assembled mercantiledistrict.“Firstwemust killalltheofficials whohavemade

“andthenwemustgoonto slaughter hecommanded, thepoorsuffer,” alltherichmen.” oftheplot,butthepolicewereso Thebakufuwasfullyinformed incompetentandcowardlyinthefaceof anarmedmobthattherioters wereableto run wildthrough the streetsfor hours.The revoltcen-

suchenorwhichyielded ofthemerchants, tereduponthewarehouses mousamountsoftreasure that the rebelswereunable to carry allofit

away.Asthelootersstruggledwithbalesofriceandboxesofsilver, theshopsandwarehousesweresetafire,andsoonflameswereraging acrossthe city.The rebels,immobilizedby theirgreed,wereeasily must, dispersedbysoldiersfromthelocalgarrisonand,asheknewhe

seemtohavebeen TheMitsuisandtheirproperty Oshiokilledhimself. in But thelossesof merchantsandhouseholders almostunscathed. whichlastedthree forintheconflagration, generalweretremendous, days,abouteighteenthousandshopsandhomesweredestroyed. bakufu Therevolt,whichspreadtootherareas,arousedthestupefied kind.Intheso-called ofa counterproductive toaction,unfortunately citieswas thatfollowed,hungerin the overpopulated Temporeforms gobackto the farms.Luxrelievedbyorderingsurplustownsmento uriouslivingwas prohibitedby strictersumptuarylaws.Andsince

the andcausedscatcities, commercestifledproduction monopolistic guilds—were orwholesalers’ corporations ¢onyaz—trading centuries-old systemwas withtheresultthatthecommodity-distribution abolished, : crippled. got worse,even Businessstagnated.Afterthebarbarianslandedit oneveryside,people forMitsui.Withfinancialdistressanduneasiness retailtradedeclined justweren’tbuyingpiecegoods,andEchigoya’s feudalcustom dangerously.Inflationhadraisedpersonnelcosts,but

executive anyone.DuringthesetrialsaMitsui-gumi forbadedischarging

wrotein the company’slogbook:“No businesspaying,onlyexpendituresswelling.”

Thebakufubecameinsatiablyhungryformoneyandleviedforced tappedfor Mitsui-gumi, loansoffearsomesizeuponthemerchants. putupa strongerprotestthanusual,explainryoearlyin1859, 200,000 Mitsui’sbusiness ing:“BeforeandsincethearrivaloftheBlackShips, hadbeendeclining,andexpensesareincreasingbecauseofearthquake

wasgreaterthantheentirecapital andfire.’Theamountdemanded

48 - MITSUI

oftheHouse’sdry-goodsshopsandamounted to morethantwenty-

fivepercentofthetotalassetsenteredin Mitsui’sbooks. Thelevycouldnotberefusedoutright becauseMitsui-gumiwasstill doinga gooddealofofficialbusinessfor thebakufu.Furthermore,the Housestoodtogainconsiderablebenefitsbycooperating.Forexample,

afterthesigning oftheTreatyofAmityandCommerce theEdoMitsuis hadappliedsecretlyforpermission toopenabranchexchange shopin

Yokohama.Whentheyprovedthemselvescompliantabouttheloan, theaccountingmagistraterespondedto theirpetitioninthesereassuringterms:“‘AsforeignpowersarecomingtoJapaninMay,1859,and

onlytheMitsuiscoulddealwithforeigncountries whoareeagerto trade,theshogungraciously allowstheopeningofa shopthere.”

Japanesemerchantsstillwereforbiddento engagein foreigntrade directly,butthebakufuwasanxiousto conductbusinessefficiently at Yokohamaasa demonstrationof theshogun’ssincerityin enforcing thetreaties.TheMitsuisseemto havebeenwillingto assistinthisen-

deavorbecause familiarity withtradeintheopenports(untilthena monopoly ofthebakufu)wouldputtheminafavorable positionifand

whenprivatetradebecamepermissible. Theprojectseemstohavebeenreasonableinconcept,butthewayin whichitwascarriedoutindicatesthatinthecenturiessinceHachirobei’s

deaththeunityoftheclanhadsuffered.IntheEdoshopstherewere twoinfluential butcompeting banto,orclerks,SaitoJunzoandSakurai Yohei.Theformerfavored thenewventure,butSakuraiopposedit

becauseitcontravenedtheprovisionintheMitsuis’constitutionagainst beinginvolvedin unfamiliarbusiness.Out of deferenceto Sakurai, Saitoagreedtoestablisha dry-goodsshopinsteadofaforeignexchange house.Butthenhe usedit as a frontfor exchangeoperations,thus

achieving hispurpose.TheEdoMitsuismusthaveknownwhatSaito

wasdoingandacquiesced in hisplan,but apparentlyheproceeded withoutconsultingOmotokatain Kyoto,a surprisingomission,and

onethatcausedserioustroublelateron. TheYokohamabranchwasindeedalegitimateretailshop,asattestedbyaledgerentrydescribing itsfirstsalestoforeigners. OnJune

2,1859,thedaytheportopened,aRussianandanAmericanstoppedin andboughtsomebrocades.Theymusthavefoundthepricesrightand passedthewordaround,foronthefollowing daytwoAmericansorderedsomuchmaterialthatithadtobebroughtupfromKyoto.Eventually,however,thebranch’smainbusinesswasthecustodyoftreasury fundsinYokohamaandKanagawa,actingasofficialmoney-changer in far-offHakodate,andhandlingreceipts,payments,andtaxesinnearby Yokosuka,whereanironworkshadbeenbuilt.Suchbusinessshould

havebeenconducted byaregularmoney-exchange shop,ofcourse. The

LEGACYOF THE BARBARIANS-

49

confusionresultingfromthehybridestablishment wasdescribedby Saito’sstepson:“WehadtogobackandforthbetweenYokohamaand Edo,andwerequitebusy.Because theportwasnewlyopened,alarge amountofmoneycameinandout,andmostofitwaskeptattheYokohamabranch.ClerksfromtheEchigoyagofukuten[draper’sshop]took careof thebusiness,andon thesidetheyalsoloanedmoneylikean

exchange house.Butwemademistakes inmoneylending andasthings wentonlikethisit wasquiteunsatisfactory becauseit lookedasifa merchantwashandlingofficialbusiness.”

Thepersistence ofsuchadangerousanomalyindicatesthatOmotokatawaseitherignorant oftherealstateofaffairsornolongerableto exercise control.Theprecisereasonforthisfailureofleadership isnot apparent,butthereisnoreasontobelievethattheMitsuiswereimmune to the generaldisarrayanddesperation that convulsedJapanas the shogunatestruggledagainstits impendingdoom.

6 - Tradeof Bloodand Guile

TOWNSEND HARRIS, HAVING OPENED Japan’sdoorsto trade,waseager to openitsmindto theinestimableadvantagesofcommerce.Heknew thattheJapanesepeople,aftertheirlongseclusion,wouldbeindelibly impressedwiththemanifestationsoftheWesternworld,andhehoped

thathisowncountrywouldbethemodelforJapan’srenaissance. Throughthegoodoffices oftheshogun’s/airo,otchiefminister, Lord Ii Naosuke,whohadbeeninstrumental in concludingthe Treatyof AmityandCommerce,Harrisarrangedthata GrandEmbassybesent to Washingtonin 1860to exchangeratifications. A missionof nearlyeightydaimyoand samuraiwastransported acrossthePacificto SanFranciscoaboardanAmericanside-wheeler, crossedtheIsthmusof Panamabyrailway,andproceeded by shipto

theUnitedStates.InWashington itsmembersmetPresidentJames

Buchananandhiscabinet,gotagoodlookatsomeoftheachievements of a Westernsociety,andincidentallymadea sensationalimpression upontheAmericanpublic.BeneaththewindowsoftheirroomsatWillard’sHotel,neartheWhiteHouse,asnewspapersreported,hundreds

ofwomenandgirls,“handsomeandprettilydressed,havebeen... throwingupbouquets,candyandallsortsofnick-nacks, callingout

‘Japonee,Japonee!givemea fan,won’tyou?’””? NewYorkwasenraptured bytheexoticvisitorsin theirelegantapparel,and theirceremonial processionattractedhugethrongs.One

spectator, WaltWhitman, wasinspired towritethepoem“ABroadway Pageant,”’ partofwhichdeclared: OvertheWesternseahitherfromNiphoncome, Courteous,theswarth-cheek’dtwo-swordedenvoys,

Leaningbackintheiropenbarouches, bare-headed, impassive, Rideto-daythrough Manhattan. Thoughtfuleffortsweremadetoarousetheenvoys’interestinAmerticanscience,technology,government,andthenavalandmilitaryarts. Thenobleguestswereunexpectedly responsive,askingmanyquestions, takingnotes,andkeepingdetaileddiaries.Oneofthemoststudiouswas

50

TRADEOF BLOODAND GUILE -: 51

OguriTadamasa,Lordof Bungo,whowasallowedto observethe

operationoftheUnitedStatesMintatPhiladelphia inpreparationfor

teorganizingJapan’santiquatedcurrencysystemand,bysodoing,unwittinglyrevivingtheebbingfortunesoftheMitsuis. Whentheembassyreturnedto Japan,however,therewasnorejoic-

ing.Theincreaseof Yokohama’s foreignpopulationhadgenerated

a groundswellof xenophobia,andanyoneassociating withthe barbarianswasregardedsuspiciously. Theoutlanderswhohadflockedto thetreatyportwerenota prepossessingbreedonthewhole,andeven at besttheygrateduponJapanesesensibilities.AsSirErnestSatow,

thenayounginterpreter fortheBritishdiplomatic mission,observed: “Theyaffronted thefeelingsofsamuraibytheirindependent demeanour,sodifferentfromthecringingsubservience towhichtherulesof

JapaneseetiquettecondemnedtheJapanesemerchant.’”? Theirlustfor goldandgrog,andtheirintolerable assumptionof superiority(seeminglyconfirmedby the resultsof businessdealings

withJapanese, inwhichforeigners usually won),goaded patrioticsamuraiintofury.Thosewhowerenotstirredbyfeelingsofnationalism werestillforcedtorecognizetheeconomicdisadvantages offoreign trade,as domesticindustriessuccumbedto the assaultof cheaper products.It wasalsowidelybelievedthatforcibleconquestof Japan by oneor anotherof the barbariannationswas only a matterof

time. Forevilsrealoranticipated, patriotsblamedtheshogun,whohad admittedtheforeignersagainstthewishesoftheemperor.Soonafter thedepartureoftheembassytoWashington,thetairo,LordIi,wasassassinatedbynationalists,whoseslogan“‘Sonno! Joi!’”,—Revere theEm-

peror!ExpeltheBarbarians!—was onthelipsofdiscontented samurai

androninthroughoutJapan.

In 1859,the yearthat Yokohamawasopenedto

foreigntrade,three

foreignersanda Japaneseinterpreterweremurderedincoldblood.A

conflagration destroyedalargepartofthesettlement,andsoonafter-

wardtheFrenchLegationinEdowasburned.InJanuary1861,Town-

sendHarris’secretary, theamiableHenryHeusken, wasambushed by roninandslashed todeathinEdo,andinJulytheBritishLegationrepulsedanattackbyabandofronininwhichtwoEnglishmenwere killedandtwowounded.

Rumorandpanicignitedthetinderofpublicdiscontent. Inflation

andcropfailureprovokedmorepeasantuprisingsin thecountryand ticeriotsin the cities.Smugglingandhighwayrobberywerewidespreadand,aspolicepowerdisintegrated,propertiedpeopleentrusted theirsafetyto bosseswhocontrolledgangsofarmedoutlaws.Theoccasionalviolenceagainstforeignerswasasnothingcomparedwiththe

52 - MITSUI

subversive plotting,assassinations, andinternecine fightingthatpara-

lyzedthebakufu. | MuchofthedisorderthatshatteredthelongpeaceoftheTokugawa

periodwascontrived andexecuted byradicalintellectuals ofthesonnojoipersuasion. Someofthemweremotivated bya sincereloathingof foreigners, butthemoresensibleamongthem,entertaining a wholesomerespect fortheWestanditsachievements, usedantiforeignism as a clubwithwhichto batterthebakufu,theprincipaltargetof their hatred.

Themostformidable opponentsoftheshogunateweretheSatsuma andChoshu4a, orclans,insouthernandwesternJapan.Because the Ieyasu daimyoofthosefiefshadnotralliedtothebannerofTokugawa

beforetheBattleofSekigaharain 1600,theirdescendantshadbeenregardedas unreliableelementseversince.Withoutrepudiatingtheir or “outsidehan,” vowsof fealtyto theshogun,thoseresentfulsozama,

withinsolentdisregardforhisauconductedtheiraffairs nevertheless thority.

Satsuma,withits capitalin Kagoshimaat the southeasterntip of Kyushu,held suzeraintyover theRyukyu Islands,whichservedas a of bridgefortradewithChina.RemotefromEdoandtheinterference thebakufu,Satsumahadevadedthe

fulleffectofthe seclusionlaws,and

hadadoptedrelativelyadvancedindustrial throughforeigncontacts methods, improved itsnavalandmilitary arms,andamassed somecomlocatedalongtheStraitsofShimomercialcapital.Choshu,strategically

forshippingbetweentheInlandSeaandNagasaki, noseki,thegateway

hadalsoprosperedfromtradebaseduponawell-organizedagricultural

andhandicraft economy andhaddeveloped itsmartialcapacities beyond thosecountenanced bythebakufu. Tosa region—notably Thesetwohan,andafewothersinthewestern muchin comon theislandofShikokuandHizennearNagasaki—had

mon.The daimyothemselvesandtheirhereditary ministersin most caseshadsuccumbedto theinanitionof languorousTokugawacourt youngersamuraiof life,andtheirpracticalaffairswerehandledby vigorand ability.Manyof thelatterwereadherentsofthe national andsupported learningtaughtbyMotooriNorinagaandhissuccessors, the principlesofsonnojoi.Wantingto reformandmodernizetheir provinces,theychafedundertherestrictionsandinterferencesof the

andfinancialdealingstheykeptinclose bakufu.In theircommercial andthoseofthebigcitiesaswell. merchants contactwiththeprovincial ofthenationa mundanelot,probablywereskeptical Themerchants, alistideologies,buthavingsufferedgrievouslossesfromtheforeignincursion,anddespairingofanybenefitsfromforeigntradeunderthe

TRADEOF BLOODANDGUILE

«+53

bakufu,theylistenedsympathetically to thesamuraiwhoadvocated

sonnojoi. Thetozamasamurai,manyofwhomwerestationedinKyototoshare thedefenseoftheimperialcourtwithmenfromtheotherhan,found kindredspiritsamongthe&uge, thenoblesat thecourt.Embitteredby

theshabbytreatmenttheyhadreceived fromtheTokugawa usurpers, thekugealsoresponded tothenationalistteachings. Thus,therewas formingavaguecoalition ofthemostmilitantsamuraiofthewestern

han,merchants,andcourtnobles—allcallingforexpulsionoftheforeigners,curbingof the bakufu,anda correspondingincreasein the poweroftheimperialcourt.

Amongandwithinthetozamahantherewereschisms reflecting thoseofnational scope.Theradicals weremoving towardapositionof tobaku,ovetthrowof thebakufu,whileconservativesfavoreda more

moderatecourseofkobu gattai,otunionoftheshogunate andtheimperialcourt.Satsuma andChoshu,longrivalsforthefavorofKyoto, weredividedoverthisissue.InChoshu thetobakucontingent wasascendant,whilethe kobu-gattaiadherentsdominatedSatsuma.Varia-

tionsofthisideological splitcaused factionalstruggleswithinthehan andarmedclashes betweenthemastheyviedforphysical controlover

thecourtandthepersonoftheemperor,whoseimportance asatalismanofpowerwasrising.

Mostinjuriousto theshogunatewerethedepredations ofradical

samuraiandroninagainsttheforeigners, whoseenvoyswerelosing patiencewiththebakufu’svacillationaswellasitsweaknesses.In1862,

whenAnglo-Japanese relationswerethusstrained,a freshoutrage broughtmatterstoahead. OnafineSeptemberafternoonanEnglishmerchantnamedRichard-

sonwentridingoutofYokohamawithtwocolleaguesanda lady

friend.HeadingtowardEdoonthebroadTokaido,theyencountered

thevanguardofa daimyo’s procession movingintheoppositedirec-

tion. Richardson,a newcomer,wasunfamiliarwith

road etiquetteand

failedtodismount orleavethehighway aswasobligatory whenapet-

sonageofhigherrankwaspassing.Thepersonageinquestionhappened to be ShimazuHisamitsu,the actualleaderof Satsuma,whosesamurai

wetenotoriousfortheirbelligerence.WhenRichardson,ignoringall

warnings, persistedinridingagainsttheoncomingprocession, heand hispartywereattackedby Satsuma’s swordsmen. Richardsonwas slashedmortallyandthetwo menwithhimwereseverely wounded. TheangryforeignsettlersandtheirtroopsinYokohama clamored forimmediateretaliation,andSatsuma’swarriorsweteequallyready

forbattlewiththebarbarians. Theoutbreakofwarthenandtherewas

54 «©MITSUI

pteventedbytheleadersof bothsides,whomanagedto restrainthe hotheads.TheBritishchargéd’affaires decidedprudentlythattheissue wasa diplomaticoneto behandledbyGreatBritain’sForeignOffice, andconfinedhimselftolodginga sternprotestwiththeJapanesegov-

ernment. Butwhiletheforeign envoysstillfumed, thebakufu’s impotence was demonstratedagainwhenunidentifiedarsonistsdestroyedtheBritish Legation,newlybuiltandjustreadyforoccupancy. In thefollowing

MarchLondon’s termsforsettling theRichardson affairreachedYoko-

hama.TotheconsternationofthebakufuinEdotheBritishdemanded,

inadditiontoaformalapology,thepayment of100,000 poundssterling

asapenalty.Satsumawastoexecutethosesamuraiwhohadcommitted theoffenseandtopayanadditional 25,000poundscompensation. The ForeignOfficemadeitclearthattheonlyalternative waswar. Thebakufuprocrastinatedinreplyingtothesedemandsandusedthe

timegainedtoprepareforhostilities.Concurrently, thesonno-joiextremistsmaneuvered theimperialcourtintoissuinga futileorderfor theexpulsionofforeigners.Thebakufu,unabletorefuseanimperial command,reluctantlysettheexpulsion dateforJune25of thesame yearand,whilestillnegotiatingwithBritain’senvoys,madesecretpreparationsto enforceit.ThesemovesbecameknowntotheBritish,who

respondedbystrengthening theirfleetandissuinganultimatumthat theshogunatepay,withintwentydays,the100,000-pound indemnity togetherwith10,000poundsalreadydueforcompensatingthefamilies of victimsof earlierattacks.Astensionsmountedseventeenforeign

warshipsandsixmerchantmenwereassembledforthedefense of residentsinthetreatyports.

Thisdisplayofpowerhadthedesiredeffect.Atthelastminutethe bakufucapitulated anddelivered totheBritishchargéd’affaires thesum of440,000 Mexican dollars—most ofitpractically confiscated fromthe merchantsofOsaka. Theforeignenvoyswereassured,unofficially,thatthebakufuhad

abandoned itsplanstocarryouttheorderforexpulsion, andtheindem-

nitywasregardedasa tokenoftheirsincerity. Butofficiallytheorder wasstillineffect,andontheappointed daytheincorrigiblesamuraiof Choshutookindependent actionto enforceit. TwoChoshuvessels firedupontheAmerican merchantmanPembroke passingthroughthe Straitsof Shimonoseki,andin succeedingweeksotherforeignships

wereattacked there. TheWesterndiplomats, realizing atlastthatthebakufuwasunable to controltheoutsidehan,nowadopteda policyof conciliatingthe shogunatewhilechastisingitsinternalenemies.In JulyAmericanand

Frenchmerchantmen destroyed twoChoshugunboatsandsomeforts

TRADEOF BLOODANDGUILE

- 55

atShimonoseki,butthestraitsremained closed.Then,earlyinAugust, theBritishsenta navalsquadronto Satsumato exactpaymentofthe additionalindemnityandthepunishment of Richardson’smurderers. Thedemandwasrejectedratherinsolently,sotheBritonsrighteously

bombarded Kagoshima, Satsuma’s castletown,setting a considerable partofitablaze,andthenburnedseveralshipsforgoodmeasure. Itwas nota clear-cutvictory,sincetheBritishsuffered manycasualties and, batteredbyawildtyphoon,decidedtowithdraw.ButthedemonstrationforcedSatsumato recognizethesuperiorityof Westernnaval powerandto meetBritain’sterms.

ShimazuHisamitsuof Satsuma,alreadyneck-deepin debtto the

Osakachonin,hadno suchsumas25,000pounds.Buthedidhavea resourcefulhelperinthepersonofOkuboToshimichi,anopportunistic youngsamuraiwho alternatedbetweenradicalismand moderation. Havingswungbacktoamoderatepositionatthetime,hewasonspeakingtermswiththebakufu’s officials.Hewenttovisitoneofthehigher

councilors, ItakuraKatsukiyo, LordofIga,andargued thatthebakufu, beingresponsiblefor havingadmittedthe foreigners,shouldpay Satsuma’sindemnity.

Itakura,awareoftheimpoverished bakufu’sfinances (atonetimeit

hadlittlemorethan20,000ryoinitstreasury), wasstubborninhisre-

fusal,butOkubowasadamant. Takinghiscuefromthebakufu’s extortionisttactics,he senttwoswordsmento Itakura’sresidencewiththe

informationthat,unlessthe“loan”’wasforthcoming,theBritishchargé d’affaireswouldbeassassinatedimmediately.Itakurawavered.Sucha deedwouldnot merelyhumiliatethe bakufubut couldmeanwar againsttheforeignpowers.Yetto arrestOkuboand hisbullieswould

antagonizeSatsumaandinflamethehan’sradicals.Hegavein,and

promisedOkubothathewould“‘borrow”themoneyfromtheMitsuis

—whohadprovided a sizableshareofthe110,000-pound indemnity thebakufualready hadpaidtotheBritish. Caughtinthesqueezebetweeninvasionandinsurrection, thebakufu

yieldedto itscriticsandinstituteda numberof reforms.Forone,the sankinkotaiwasreducedtoa tokenhundred-daysojourninEdoevery threeyears,andthefamiliesofdaimyowerenolongerheldin Edoas hostages.Thisrelievedthedaimyoofa heavyfinancialburden,butit alsogavethedissidentsamongthemmoretimeandresources fortheir machinationsagainsttheshogun. In 1861,to furtherthekobu-gattai policyofunitingJapan’sembat-

tledfactionsthroughareconciliation betweentheimperialcourtand theshogunate,thefifteen-year-old ShogunIemochihadbeenwedded totheemperor’ssister.Butperversely, theKyotoloyalists sawthisas anattemptbythebakufutosecureimperialsanctionofthetreaties,so

56 - MITSUI

farstubbornlywithheld.Thekobu-gattai strategyfailedandtheshogunate,bereftofapolicy,driftedhelplessly. Throughtheinterventionoftheradicalstheyouthfulshogunwas

forcedtoaccepta “guardian”(ineffect,aregent)amenabletotheguidanceoftheimperialfactions.ThiswasTokugawaHitotsubashi Keiki (alsoknownasYoshinobu), sonof theultranationalistLordofMito. Anableandreasonably enlightenedyoungman,Keikiwasresponsive

toadvisersworkingtowarddomestic harmonyandconciliation ofthe Westernpowers.Butparadoxically, theshogunhimself,undercoer-

cionfromimperialistsin Kyoto,justthenwassettinga newdatefor the finalexpulsionof Westerners.Theextremists, pressingtheirad-

vantage,obtainedanimperialorderthatShogunIemochishouldvisit Kyoto,presumablyto reachanunderstandingwiththeemperorconcerningthetreaties.Thiswasthecrowning humiliation,fornoshogun

haddeignedto visitthesovereignduringthepasttwohundredand thirtyyears. In March1863,the “barbarian-quellinggeneralissimo”’ startedhis journeydowntheTokaido,escortedbythreethousandbrilliantly caparisonedretainersandtroops.TheEdomerchants weretappedfor contributionsas a matterof course,and the Mitsuisrecordedin their

ledgeranitemoftenthousand ryo“forsending offtheshogun.” There wassomeconsolation, however.Echigoya wasstilltheleading purveyotofclothtothebakufu,andthemakingofuniformsandceremonial attireforthejourneykepttheshopprofitably occupiedforweeks.But soonafterthisrespitefrombusinessdoldrumsa deeperdepressionset in.TheshogunhadintendedtostayinKyotoforonlytendays,buthis

opponents founditusefultokeephimthereundertheircontrol andhis advisers inastateofconfusion. SothereIemochi remained, languishing

amidthe refurbishedsplendorsof NijoCastle,monthaftermonth. Kyotohadbecomethearenaofaction,leavingEdoapoliticalvacuum. Theforeignenvoys,whowerenotpermittedtovisitKyoto,hadtodeal

withpowerlessunderlingsleftbehindin Edoandcouldlearnlittle aboutthefateful decisions beingmadeintheremote imperialcity.Antiforeignsamuraiandroninnowswarmed intothecapital,shattering itstranquillity by theirmurderousassaultsuponmoderates andeven fellowradicalswhohadadmittedtheinevitability ofintercoursewith

foreigners. Tocurbthezealotsthebakufuorganized mercenary units ofsoshi,politicalbullies,recruitedfromamongtheflotsamofronin, gamblers, thugs,anddesperadoes whoroamedthetroubledland.Their influxbroughta certainprosperityto thecity,butasthepolicecowered beforethe swashbucklers,robbery,looting,andarsonbecamethe

orderoftheday.

TRADEOF BLOODANDGUILE

: 57

Themoteimportantchonin,beingintouchwithstewardsofthe tozamadaimyoandalsounderthebakufu’s protectionassuppliersand fiscalagents,weresparedthesedepredations. ButtheMitsuis,from theirvantageinKyoto—oneoftheirmansionswasadjacentto Nijo Castle—sensed thecalamitouseventsthatwereaboutto happenand

triedtofindthepoliticalconnections thatwouldbringthemthrough

safely. Intheearlypartof1863theloyalistsfromChoshuwerestillsecurely entrenchedatcourt.Workingthroughcertainkugesecretlyalliedwith

theircause,theycouldgainimperial backingfortheirundertakings, howeverrash.Itwastheywhohadcoerced thecourtintoordering the bakufutoexpelthebarbarians. Evenmorequixotic wastheirprogram formobilizinganimperialexpedition, withtheemperorridingatits head,to sweeptheinterlopersoutofJapan.Sucha movewastantamountto havingtheemperortakeoverthe officialfunctionsofthe shogun,whileleavingChoshusupreme.

Theemperor,wellindoctrinated bysonno-joi nobles,gavehisbless-

ingevento thisdeviousscheme.ButafterChoshu’svirtualdeclarationofwarat Shimonoseki,andthedebacleofSatsumaatKagoshima, hismajestygrewmorecautious.Realizingthatthecountryhadbeen

saddledwithanuntenable foreignpolicy,hecooledtowardthenobles beingmanipulated byChoshu’s hotheadsandshowedincreasing favor to thoseof moderateinclination.Satsuma,chastenedby theBritish, hadtakenleadershipof thekobu-gattaimoderatesandbeganto gain

theimperialfavorthatChoshuwaslosing. Choshu’scontinuedplotsandprovocations outragedSatsumaand its temporaryally Aizu, a pro-Tokugawahan in northern Honshu,

whosedaimyowasthenmilitarygovernorof Kyoto.Suspecting(or inventing)a Choshuconspiracyto recoverits positionby treachery, SatsumaandAizuleadersinformedthe

emperor—indirectly,of course,

fornotevendaimyocouldapproachthatgodlybeingin person—and

wonhispermission totakeforciblecountermeasures. Accordingly, on September30,1863,theystageda coupd’étatandsequestered the palace.Civilwarwasavoided whenSatsuma producedanimperial edict forbidding violence, andChoshu,whoseprotestations ofreverencefor theemperorwereunsurpassed, waspersuaded towithdrawitssoldiers. ButtheSatsuma-Aizu coup,thoughbloodless, endedthelongTokugawapeace. Fortwoandahalfcenturies politicalchangeinJapanhad beeneffectedgraduallyby meansof sycophancy,intrigue,andsubtle treachery.Butafterthisconfrontationthekeyto supremacywasto be nakedmilitarypower.Ominously,Choshu’smentookwiththem,in to sonnojoi,withthe defianceof thecourt,sevennoblessympathetic

58 - MITSUI

clearindicationthattheywouldreturnto reinstatethemat courtby forceofarms.

Thewellspring ofsonno-joinationalism inChoshuwasaschoolestablishedbyayoungmilitary instructornamedYoshida Shoin.Anintellectualprodigy,hehadquicklyabsorbedtheChineseclassics thatwere stillthestockin tradeof orthodoxscholarship;but he wasmoteat-

tractedtothenationallearning,notablytheworksoftheMituis’erst-

whileteacherMotooriNorinaga,whichconvincedhimthatJapan wastrulythelandof thegodsandthattheemperorwasits rightful sovereign.YoshidabelievedthattheTokugawas,havingbetrayedhis majesty’strust,hadneglectedthecountry’sdefensesandexposedit to the depredationsof inferiorbreedsof men.Moreover,the bakufu, ctavenlyshirkingitsduty,hadstoopedto parleywiththealiens,and soonthoseintruderswouldtryto subjugatetheJapaneserace.It was

thedutyofeveryloyalJapanese, heinsisted,toreimplanttheancient virtues,purgethecountryofforeignersandtheirinfluences, andrestoretheemperor tothesupremacy ordainedbythegodsforageseter-

nal.OnlythencouldsacredNipponattainits destinyandassertits leadershipin theworld.(Prophetically,YoshidaalsoadvocatedsubduingKoreaandannexingManchuria,Formosa,andthePhilippines.) Suchweretheteachingsofthisprovincialmessiah,whohadaprofound impactuponhiscontemporaries,inspiredthetwentieth-centurymilitarists,andisa hallowedfigurestillinJapan’snationalistpantheon. Yoshidawasfanaticallyantiforeign,but notignorantlyso.Having

delvedintoforeignbooks,hehadlearned muchaboutthenewmilitary technologyandthewayit wasused.Beinginformedaboutforeign

affairs,heknewhowtheBritishhadfirstgoneto Chinato trade,then

introduced opiumasameansofsavingtheirgoldandsilver, andfinally subjugated thegovernment thathadtriedtoabolishthebanefultraffic. HopingtosavehiscountryfromthefateofChina,Yoshidaroamed Japanasaronin,spreading thesonno-joigospelandhatchingplotsto

realizeitsaims. HeknewthatwithoutscienceandtechnologyJapanwouldbehelplessbeforetheWesternoffensive, sohedecidedtogoabroadandstudy them.In 1854,withelaboratebut transparentsecrecyreminiscentof

TomSawyer’s,heboardedoneofCommodorePerry’sshipsinthe deadofnightandpleaded tobetakentoAmerica. Rebuffed, hewasset ashoreandarrestedbythebakufuforthecrimeofhavingattemptedto leavethecountry.Afterbeingreleasedfromprisonthroughthelenien-

cyofhisdaimyo,hewasallowedtostarta school,atwhichhetaught thesonno-joiphilosophy alongwithhisownbrandofthemartial arts admixed withConfucianism. Themostspirited oftheyoungersamurai

TRADEOF BLOODAND GUILE : 59

attendedhisclasses,andwereconqueredbyhisferventpatriotism, devotiontotheemperor,andbeliefinJapan’s futuregreatness. From hisschoolinHagi,a castletownnorthofShimonosekiinChoshu,came a groupofmenwitha newunderstandingofJapanesehistory,social conditions,andpoliticalprocesses.Despitetheirunrealisticprogramof excludingallforeigners,theyhadagenerallyaccurateviewoftheworld —andespeciallyof Japan’salarminginsecurityasa targetof imperi-

alism.Aboveall,theyespoused a coherentnationalpolityandwere sustained byanunshakeable conviction thatitwouldeventually prevail. Yoshida,oneofthefirstmajorexponents oftobaku,theoverthrow oftheshogunate, wasexecutedin 1859forhispartinanassassination plotagainsta bakufuofficial.Buthisformerstudentsintensifiedtheir

efforts,inconcertwithloyalist samuraiandroninofotherhan,totopple theTokugawadynasty.Theywereringleaders in theassaultsupon foreigners andthedestruction oftheirlegations, ingoadingtheirhans’ antiforeignfeeling governmentsintodefyingtheshogun,andinflaming withintheimperial court.Itwasthoseprophets ofmodernmilitarism whoestablishedinJapantheprinciple,notyetdisproved, thatpolitical

powergrowsfromthebarrelofagun.

AmongthebrightestalumniofYoshida’sschoolwereItoHirobumi andInoueKaoru—tousethenamesbywhichtheywereknowninlater Shimonoseki years.In May1863,thirteenmonthsbeforetheeventsat andKagoshima,theyandthreeotheryoungsamuraiof Choshure-

in orderto to leaveJapansecretly permission ceivedtheirdaimyo’s

studyinEngland.Theirpurposeingoingwastoacquiretheknowledge necessaryforcarryingouttheirsubversiveplansandforstrengthening themilitaryandeconomicpotentialofJapan. ArrangementsfortheirpassagefromYokohama weremadebyan

Englishmerchant,ThomasGlover,andclearedwithhisconsulate

there.Thefiveadventurers,allintheirearlytwenties,embarkedunder coverofdarknessaboardashipownedbyJardine,MathesonandCompany,themostpowerfultradingfirmintheOrient.At Shanghaithey whosedescenweremetby Jardine’sagentWilliamKeswick(oneof dantsis todaychairmanof the samecompany)andput aboardtwo London-boundsailingships.Theirintentionwasto learnsomething aboutnavigationwhileenjoyingthecomfortsofbeingpassengers,but becausetheycouldnotexpressthemselvesinEnglishthefivelandlub-

berswereputto workasapprenticeseamenaboardtheirrespective ships. ItoandInoueweremortified bytheirdemotion to cooliestatusand

foundtheincessant toilandcoarsefoodanalmostunbearable hardship. Yetevenintheunremittingadversitythatcamewithsailingbeforethe masttheyneverstoppedthinkingabouttheplightofJapanand,inpas-

60 - MITSUI

sionatediscussions, refiningtheirplansforitssalvation. Mutualsupport pulledthemthroughthe four-monthvoyageand strengthenedthe

bondsoffriendshipthatenabledthemtoweatherpoliticalstormsin

lateryears,whenIto wasJapan’smostillustriousandlongest-serving primeminister,andInoue,statesmanextraordinary,managedthena-

tion’sfinances andforeignaffairswhilealsoguiding thedestinies ofthe HouseofMitsui.

AAsojournof severalmonthsin London,withvisitsto shipyards, arsenals,andfactories,convincedthefivesamuraistudentsthatJapan faceda longperiodof developmentbeforeit couldcompetewith Westernpowersin eitherwarorpeace.Theywereaghastwhennews

ofChoshu’sattacksuponforeignvessels,andofKagoshima’s ordeal,

reachedLondon.Earlyin1864,asthesituationinJapanworsened,they learnedthatanalliedfleetwasbeingassembledto attackShimonoseki, andthatChoshu’s leaderswereeagerto acceptthechallenge.Ito and Inoue,hopingthattheymightbeableto divertChoshufromsucha

foolhardycourse,sailedforJapanwithoutdelay. Whentheyarrived atYokohama theyfoundanimposing armadaof seventeen foreignwarships andsomeseventhousand troops.Received bytheBritishMinister,SirRutherfordAlcock,theyurgedhimto

ponetheattacklongenoughforthemto

post-

attempta peacemissionto

Choshu.Hadheknownthatthoseeloquentyouthsweremembers of thebandthathadburned hiscountry’s newlegation lessthantwoyears

previously,hewouldhaveturnedthemout,buttheirgentlemanly behaviorarousednosuspicion.Becausehewasanxioustoavoidunnecessarycarnage(whichwouldhaveprovokedcriticism fromtheliberalsat homeinBritain),Alcockdecidedtogivethemtimetotrytheirluck.

WithBritishhelpItoandInouelandedontheshoreoftheirnative provinceandproceeded overlandindisguise.ReachingtheheadquartersofLordMoriMotonari, theninYamaguchi, northeastofShimonoseki,theyweregivenanaudience andspentmanyhours,talkingover

a mapoftheworld,explaining Japan’svulnerability andthefollyof Choshu’s makingarmedresistance tooverwhelmingly superiorforces. Thedaimyowasimpressed withtheirlearningandsympathized with theappeal,butotherleadersofthehanremainedobdurate,andeven

suggestedthatthewould-bepeacemakershadsoldoutto theenemy. Attheriskofbeingassassinated theypersistedin theirargumentsfor severaldays,but to no avail.Afterreportingtheirfailureto British

representatives waitingaboardawarshipneartheStraitsofShimonoseki,theyreturnedto Yamaguchi,heavy-heartedbutfullypreparedto

dieforChoshu. It seemedtothemthattheirfellowdisciples ofYoshida,whowere theninchargeofthehan’smilitaryforcesandinfluencedthepoliciesof

TRADEOF BLOODAND GUILE - 61

itsgovernment, werecaught inthegripofasuicidal mania.Notcontent withhavingtwistedthelion’stail,thereby provokingcertainretaliation bysea,theyhaddecided—even astheenemywaspreparing itsattack— to seizetheImperialPalacebyforceand“liberatetheemperorfromhis evilcounselors”sothathecouldleadagrandoffensive againstthebarbarians. .

Buoyinguptheconfidence ofthezealotswastheirarmy,whichthey hadrevolutionized. Insteadofleavingallthefightingto aristocratic swotdsmenandsubordinatetroopsarmedwithbowsandspears, Yoshida’spupils—severalof whomwereto be futureleadersof the nation—hadrecruitedcommoners,trainedthemto userifles,andor-

ganizedthemintomilitiaunits,insomeofwhichpeasantsmarched

besidesamurai.Thenewunits,calledshotaz, wereledbythemostradical

samuraiandindoctrinated withthesonno-joi philosophy ofYoshida,as wellaswithYamato damashii, thefightingspiritofoldNippon.Shoutingdowntheobjectionsofwisermen,theultraradicalswonpermission tosendtheirtroopstoKyoto.InAugust1864severalcrackunitssailed uptheInlandSeato Osaka,andfromtheremarchedin fullbattlere-

galiatotheoutskirts ofKyoto.Theytookpositions soclosetothecity thattheflickeringoftheircampfirescouldbeseenfromthewatchtowersofNijoCastle.Thisadvance initselfindicated theimpotence of thebakufuandtheirresolution ofthecourt. Choshu’sfinalappealfortheemperor’spardonforitsearlieroffenseswasrejected, anditstroopswereordered towithdraw.Although theywerehopelesslyoutnumbered,the“loyalist”shotairemaineddefiant,rememberingYoshida’sprecept,“Itisunworthyofasamuraitobe overlyconcernedwiththeconsequenceswhentheactionitselfisvirtuous.”

Theyattacked fearlessly, foughtwithsuperhuman ferocity,andmanagedtoreachtheHamaguri-mon, the“Forbidden Gate”ofthepalace, whichonlytheemperorwasallowedtouse.Therethebattleragedfor hoursastheinhabitantsofneighboringquartersfledwiththeirportable treasuresto thesurroundinghills.MostoftheMitsuis’ homeswerein

thecentralpartofthecity,justsouthoftheImperial Palace.Warnedin advance, theirhouseholds hadbeenevacuated tosaferprecincts, leaving servantsandguardstowatchoverthetightlyshuttered dwellings, of-

fices,andshops. TheMitsuielders,informedof developmentsby courier,assumed thataftertheshootingwasoverthesituationwouldsettledowntowhat passedasnormalinthosechaoticdays.ButinthebattleChoshu’s guns setfireto a buildingwithinthepalacecompound.Theimperialfire

brigadewasunabletofunctioninthebattlezone,anda briskwind spreadtheflames,whichsweptsouthwardthroughtheheartofKyoto.

62 - MITSUI

Intheconflagration some38,000 dwellings weredestroyed. Fiveofthe sixmansionsofthemainMitsuifamilies wereburnedtotheground,

togetherwiththeirbusinessbuildings.Othermerchantfamilieswere

similarly stricken.Thedisasterwasnottotalonlybecause personsof

propertykepttheirvaluables,artobjects,anddocuments—astheystill

dotoday—infireproofAura,storehouses withthickearthenorstone

wallsfittedwithirondoorsandshutters.ThustheMitsuissavedtheir accountbooksdatingbackto theseventeenthcentury,Motoori’sgifts to Takakage,andpricelesspaintingsandscrollsthatarestillin their

possession. Therewasalsothecellarsilver, burieddeepunderground. Buttherewasnoinsurance onthebuildings, andthefinancial blowwas stunning. Choshu’szealotsweredefeated,of course,and,afterburyingmanyof

theircomrades,thesurvivorsstraggledhomein utterdisgrace.Before

theyhadtimetorecover,newscamethatthealliedfleethadsailedf Yokohama,amidgreatrejoicing of its foreigninhabitants, to give

Choshua thrashing. TheblunderatKyotohadbroughttheChoshuleadersto theirsenses,

andtheysentIto Hirobumiposthastetothealliedfleet’sanchorage neartheentrancetotheStraitsofShimonoseki to makea truce.Buthe

atrived too late, and by middaythe fleet of fifteenBritish,French,

Dutch,andAmerican vesselswasunderway.AtShimonoseki,Inoue

Kaorusawtheapproaching enemywarships withdismay.Choshu’s attillerymen hadnotbeeninformed thatatrucewasbeingsought, and theyintended tostartshooting assoonasthevessels camewithin range. It tookInouetwohoursto persuadetheartillerycommanders to hold

theirfire.Thenhe set out in a smallboat,but whenhe reachedtheallied

flagship andannounced thathisgovernment wasreadytonegotiate, he wastoldthattheshipswerealready movingintobattlepositions and

thattheissuewouldbesettlednowwithguns,notwords. At tenminutespastfourin theafternoonof September5, 1864,an exchangeofcannonfirebegantheBattleof Shimonoseki.It provedto bedevastatingto theChoshuforts,butscarcely touchedtheattacking

vessels.Althoughthestraitswereonlyamilewideatmost,thefleet wasabletokeepoutofrangeandmostofthedefenders’ shotsfellshort oftheirmarks. Onthethirddayofthebattle, whichwipedoutChoshu’s coastaldefensesbutcosttheattackersonlyeightmendeadandthirty

wounded,ItoandInouecamealongsidetheflagshiptomakearrange-

mentsforthedaimyo’s formalsurrender.A weeklatertheseinsepar-

ables,whosestockhadrisengreatly sincetheirabortive peacemission,

assistedtheirsuperiorsin negotiatingtheConventionofShimonoseki, underwhichChoshuagreedtomeetverystiffterms,includingthepaymentofanunspecified sumasindemnity.

TRADEOF BLOODAND GUILE - 63

TheBattleofShimonoseki, whichwashighly instructive forJapanese patriots,hadotherimportant consequences. Choshu,bysigningapact

withforeigners,hadlostitsclaimtomoralsuperiorityovertheshogunate, and its favoritecry, “expelthe barbarians,”’becamemeaningless.

Havingenteredintodirectrelationswithforeigners,SatsumaandChoshuhastenedto usetheirnewconnections asa meansofintensifying

pressureupontheshogun.Theallieshelpedmatters bydemandinga

preposterousindemnityof threemilliondollars,whichChoshu,with itssmallrevenues,wasunableto pay.Theshogunate,alreadysinking underthe expensesof militarypreparations,diplomaticmissions

abroad,maintenance andsupervision oftreatyports,andindemnities forrepeatedattacksonforeigners, hadto assumeresponsibility for Choshu’sdebt,too. Thisseriesof shocks,precipitatedby thewell-meaningAmericans andaggravatedbyEuropeandiplomatsandtraders,broughtdespairto thechonin,whoseenforcedloansto thebakufuhadincreasedbeyond allreason.HowtheMitsuisreadthoseominoussignscanonlybecon-

jectured.It isimprobable thattheyrecognized thelong-range benefits

eventuallytobegainedfromallthistumult.Thefactthattheirprincipal roleinthemomentouseventsoftheearly1860swastokeeponpouring preciousgoldintoa bottomlessbagmaybe sufficientto explaintheir ebbingloyaltyto thebakufuandtheireventualalliancewithitsmost

implacable enemies,thenationalists ofChoshu.

7 -«TheMan fromNowhere

THETWILIGHT OFTHESHOGUNATE, knownin Japanas the bakumatsu,

fascinateshistoriansbecauseit releasedtheforcesthatweretomodernizeJapan.ButfortheMitsuisitwasthemostharrowingtimetheywere evertoexperience.HeadingtheHousethenandformanyyearsthereafterwasMitsuiHachiroemonTakayoshi,*eighthconsecutiveheirof

founderHachirobei. Duringhislifetime Takayoshi wascalledKofuku, whichmeans“fortunate,”andhewasindeedtheluckiestMitsuiofall, threadinghiswayamongthepitfallsandambushesofthebakumatsuas thoughpersonallyguidedbythefoxdeityoftheInarishrines. Anurbaneandsensitiveman,he wasa devoteeof chanoyu, thetea ceremony,a perceptivecollectorof art, anda creatorof tapestrylike

sensat,collagesmadefromswatchesof silk(anaccomplishment for whichlaterhewonnationalrecognition). Hiscultivationandsociabilitymadehima welcomeguestat thecourtsoflocaldaimyoanda popularfigureinchoninsociety,butthepersonalqualitiesthatenabled himto emergeunscathedfromtherough-and-tumbleepisodesofthe

bakumatsu upheavalaremoredifficult to detect.

Hisdescendant,MitsuiReiko,whohasdoneintensiveresearchinthe family’shistory,providesoneclueto his success.“Ourgrandfather Kofuku,”shetold the author,“wasa broad-mindedman:he hadgood

foresightandaneyeforselecting people.”

ItisafactthatKofukuwonareputation formakingboldandcorrect decisionsthatinfluenced thedestinyofJapan,aswellasthatofthe

HouseofMitsui.Howmuchofthepraisehemaydeserveisamatterof opinion,butthereisnodoubtthathis“eyeforselecting people”saved theclanina timeofconfusionandpanic.Forwithouttheservicesof MinomuraRizaemon,hispersonally-appointed obanto(literally,“great

clerk,”butactuallychiefmanager), theMitsuinamewouldhavepassed intoobliviona centuryago. * ThenameHachiroemon wasalwaysgivenbyOmotokatato theMitsuiin eachgenerationwhowasselectedtoleadtheentirehouse.UsuallyHachiroemonwasthe eldestsonof the Kita-ke(northfamily),whichwassupreme

amongthehon-ke,ormainfamilies.

64

THE MANFROMNOWHERE

~ 65

Theastonishing changesin Minomura’sfortunesandstationillus-

tratetheplayofsocial forcesthatloosened feudalclasstiesanddoomed

theshogunate. If wecanbelievehisowncolorfulaccount,Minomura wasbornofsamuraistockyetservedasacommonlaborer,fish-dealer’s

apprentice, lackey,peddler,andmoney-changer, beforeemerging inhis thirtiesasabankerand,eventually, themosteminentbusinessexecu-

tiveofhisday. Inhismemoirs,dictatedduringhislateryears(itisbelievedthathe wasilliterate,or nearlyso),he saidthathisfatherwasa samuraifrom northernHonshuwho,havingincurredthewrathof hisfellowwartiors,becamea ronin.Hisonlyson,thefutureMinomura, wasleftan orphanat theageof seven. Aftera poverty-strickenboyhoodinKyushuandKyoto,theyoung man,whoseoriginalgivennameis unknown,but whoat thattime calledhimselfKimura,becameanitinerantlaborerinearlyadolescence. Inhisnineteenth yeartheroad-wearyKimuraturnedupinEdo,where

hefoundasteadyjobaslive-inapprentice toadealerindriedsardines.

Or sohe said,laterin life,althougha morewidelyacceptedversion statedthathisemployer wasa money-changer.Possiblyneitheristrue, for “themanfromnowhere,”as he hasbeencalled,inventedmany detailsofhispast,perhapstoconcealalowlyoriginorothermattershe preferredto haveforgotten. Whateverhis adventuresmayhavebeen,he wasa conscientious worker.Uponcompletinghisapprenticeshiphewasrecommendedby hismasterforthepositionoffootmanat themansionofOguriTadataka,a lordlyretaineroftheshogun.In thishumblepositionKimura wasfrequentlyinthecompany ofOguri’sheir,Tadamasa,*andthetwo

formedanaffectionate andenduringrelationship. A confectioner namedMinogawa Rihachi,ownerofa shopcalled Kinokuniya,wasimpressedby the personalityandcleverness of the

youngfootman andofferedhimhisdaughterinmarriage.Kimuraacceptedandthusbecame theyoshi,oradoptedson-in-law andheir,of Minogawa. Itwasastepdownward socially fromtheOgurimansion to

theconfectioner’sshop,butthemoveearnedhimtherespectable name Minogawano Rihachi,thefirstof severalappellationshewasto take duringhisclimbfromobscurity.JustastheMitsuiswerecalledEchigoya,a cognomenderivedfromthenameoftheirshopinEdo,sowere RihachiandhisadoptivefamilycommonlycalledKinokuniya.Hisjob wasto peddletheconfectionsmadebythefamilyand,ashecalledon customers,carryinghisbasketsofsweetsandthesteelyard forweigh-

* AsLordofBungo,Tadamasa visitedtheUnitedStatesin 1860,a member

ofJapan’sfirstdiplomatic missiontotheWest.HealsoheldthetitleofLord ofKozukeandwascommonlyknownasKozukenosuke inhislateryears.

66 - MITSUI

ingthemout,helearnedtherudiments ofbusinessandcultivated friendshipswith tradesmen.Withinten yearshe had accumulated enoughcapitalandexperienceto gointobusinessforhimself. Intheearly1850s,atthetimewhenPerrywasorganizing hisfirstexpeditionto Japan,Rihachi,thenthirty-twoyearsold,boughtan interestina tinymoney-exchangeshop.Laterin thedecadeheattracted

theattentionofMitsui’s managers byhisshrewdness duringthetimeof confusion andanxietyinthemoneymarket,asthebakufumanipulated

thecoinageto copewiththegolddraintheforeigners werecausingat Yokohama. Rihachisuddenlyshowedanunaccountableinterestinbuyinga cer-

taintypeofkoban(anelongated goldcoin)minted intheTempoera,a

dozenyearspreviously.Whenheranoutofcashhepawnedhishoard toborrowfundswithwhichheboughtmoreTempokoban,repeating theprocessasoftenashiscapitalpermitted.Withina shorttimethe bakufu,havingsecretlydebasedthecurrency,announceda changein ratesthatnearlytripledthevalueofRihachi’s coins. Rihachithen got an introductionto the Mitsuiryogaeya,which, despitehavingthebestprivateintelligence systeminJapan,remained ignorantoftheimpending valuechangeuntilthedayit wasdeclared. WhenRihachicameinwithhisheavybagsofgold,a rippleofastonishmentspreadamongthemembersoftheryogaeya. In a veryshorttime hiscoupbecameknownto obantoSaitoJunzo,themostinfluential

employee oftheMitsuis’Edoshop.

FromthenonRihachiwasa familiarfigurearoundtheMitsuiryo-

gaeyaandwasgiventhenicknameKinori(madefromtheinitial soundsof Kinokuniyano Rihachi).It didn’ttakeSaitoverylongto

learnthat Kinori wasacquaintedwith Oguri Tadamasa,who, having

succeededhisfatherasLordofBungo,wasnowanimportantofficial inthebakufu’saccounting department.It wasprobablyduringoneof

Kinori’sfrequentvisitstoOguri’shomeintheKandadistrict ofEdo, neatKinokuniya, thathehadpickedupthetipabouttheimminent revaluation ofthekoban. Rihachi-Kinori’s relationship withtheMitsuisduringthenextfew yearsisobscure.Theyhadnoreasontotrusthim,because undoubtedly hewasaninformantforOguri.However,theiroperations werepredicateduponexploitingtalent,gleaningadvanceinformation,andcurryingfavorinhighplaces.SotheypatronizedKinori,perhapsinthehope thathemightrenderthema significantservicesomeday.In thisthey werenotmistaken, althoughtheyhadto waitseveralyearsbeforethe opportunityarrived.

WhileupstartRihachi prospered inmysterious ways,thefortunes of long-established chonincontinued tosagundertheincreasingweight

THE MANFROMNOWHERE~-

67

At fellupontheMitsuis. ofthoseburdens offorcedloans.Theheaviest

thesametime,thefoundationsofthehousewerebeingeatenawayby Theweakestpointin thestructurewas thetermitesof mismanagement. the Yokohamagofukuten,whose anomalousfiscaloperations,insti-

Notonlyweretheshop’s havebeendescribed. tutedbySaitoin1859, dry-goodsclerksplayingfastandloosewithpublicfunds,buttheextheirloans in silverandhadoverextended ecutivestoowerespeculating to silkmerchants.

asthedemandforbothraw Silkwasthemainexportcommodity, silkwormblightthat swept fiberandsilkwormeggsboomedaftera were throughEuropeinthe early1860s.TheJapanesesilkmerchants goodrisksbecausetheirguildhadbeengranteda monopolybythe bakufu.But takingadvantageof the generalconfusion,somesilkanarrangeproducinghanbegansellingdirectlytoforeignmerchants, mentthat wasadvantageousto bothparties.The bakufu,seeingits

exportof revenuethreatened,imposedstrictercontrols,bannedthe trafficsoheavilythatproducers eggs,andtaxedtheraw-silk silkworm

were couldnolongermakea profit.Asaresultthenativesilkmerchants unabletorepaytheirdebtstoEchigoya. camefrom byEchigoyaatYokohama Sincethemoneybeingloaned customsrevenues,it hadto beremittedto the shogunate’streasuryat ofmisfeasanceandbadlucktheshopfound regularintervals.Because ofthebakufutreasury,awareofthe itsshortagesmounting.Officials unsavorysituation,seemtohavebeenusingit asgroundsfor blackreductionin theforcedloansbeing mail.WhenEchigoyapleadedfora unlessMitsui levieduponthe chonin,treasuryofficialshintedthat ofall repayment compliedthe governmentwoulddemandimmediate House’sassets. publicfunds or, if necessary,wouldconfiscatethe

longneglectofthisdangerousconditiondefiesunderOmotokata’s Kofukuwastooprestanding,unlessitisassumedthatHachiroemon inEdo theoperations inKyototosupervise withtheturmoil occupied andYokohama.OrhadheandtheotherMitsuifamilyheadscomposing Omotokatabecometoo effeteto copewithit? Whateverthereason, accumulatedduringthecentheyhadallowedtheirreserves,carefully turies,to dwindleto perilouslylowlevels. Aprincipalcauseofthebakufu’splight,andhencethatofthechonin, wastheintransigenceoftheChoshuhan,whichhadcausedtheMitsuis Nowatlast,exhausted suchgrievouslossesintheKyotoconflagration.

subduedbythebakufu’s defeats,Choshuwaseasily bythreesuccessive Satsuma,was forces.Yetthe victoriouscommander,SaigoTakamoriof

Inhissympathy withtheloyalistcausehe himselfanardentnationalist. strength recovered termsthatChoshu laiddownsuchmildsurrender bywhichYoshidaShoin’s rapidly.Aftersomeelaboratemaneuverings

68 - MITSUI

disciples gainedleadership inthecivilaffairs ofthehan,theformidable shotaiunitswereagainbeingtrained fora comeback. Oneofthemostpowerfulmenin thebakufu’sgovernment was

OguriTadamasa,who,havingusedthe

knowledgegainedin Philadel-

phiatoimproveJapan’scoinagesystem,waspromotedtotheposition offoreignaffairscommissioner. Profoundlyloyaltotheshogun,hehad

beendissatisfied whenChoshuwaschastisedsolightlyafterhaving occasioned somuchdistress,andhehadbeenoutragedwhenthehan refusedtoaccepteventhemildpunishment imposeduponitbySaigo.

Moreover,it wasnolongera secretthatthenewBritishMinister,Sir

HarryParkes,hadbeencultivatingthefriendshipof Satsumaand Choshu,whowerereceivingcontrabandmilitaryequipmentofadvanceddesignfromEnglishmerchants.If neglected,thissmuggling couldmakethetwohaninvincible. Oguri,whowasalsocommissioner of thearmyandnavy,decided

thatnotimeshouldbelostindealingChoshua blowfromwhichit

wouldneverrecover.The FrenchMinisterconcurred.Havingim-

ptovedrelationswiththeshogunate,Francehadpromised financial

assistanceandevenmilitarysupportagainsttherebellioushanif they werewanted.WithFrenchhelpthe armywasbeingmodernized, a

strongfleetwasbeingbuilt,andanavaldockyard andfoundry hadbeen established atYokosuka.Tobringotherrecalcitrant daimyobackinto line, the shogunateattemptedto

reimposethe sankin-kotaisystem;

andasanassertion ofthebakufu’sauthority,theshogunhimselfwent toOsakaattheheadofalargearmyandestablished hisheadquarters

there. | In anticipationof his departuretherewasa flurryof businessat

Mitsui’sEchigoya,followedbya deadcalmasthebakufu’sactivity

shiftedto theOsakaregion.Westerndiplomatswerepressingrelentlesslyforboththeopeningof theportat Hyogo(nowcalledKobe) andtherightofresidence innearbyOsaka.Infact,theyhadofferedto canceltheindemnitydemandedfromChoshuifthoseconcessionswere

made.Butthebakufu, fearingreprisals fromhanopposed totheopen-

ing,strainedeveryresourceandpaidthefirstinstallment of 500,000 dollarsata timewhenpreparationsforthepunitiveexpeditionagainst Choshuweredepletingthegovernment’srevenue.

Earlyin1864theMitsuis hadbeensqueezed formorethanamillion

ryo.Laterthatspringtheyhadtohandovermorethan40,000pounds of silver,worth150,000ryo.Fromtheendof 1863to themiddleof 1866theHousewasforcedto “lend”thebakufuat least3.5million ryo.Reelingfromthesesuccessive raids,Omotokatacalledforanemergencyaccounting,whichrevealedanappallingsituation.AtYokohama

THE MANFROMNOWHERE

~ 69

Echigoya’s public-funds accountshowedshortagesof110,000ryoand of10,000dollarsinforeignsilver.Butforcedloanstothebakufu hadso depletedthecentralreservesthateventhisrelatively modestsumcould

notbeadvanced byOmotokata,andtheothershopscouldofferlittle assistance. As a last recourse,HachiroemonKofukuinstructedthe Osaka

gofukutentoborrowasmuchaspossible fromformerclerkswhohad established businesses oftheirown.Itwasthecommonpracticethen, asit stillis,to rewardanemployeeforlongandfaithfulservicewith theprivilegeandeventhemeansof settinghimselfupindependently inbusiness.Naturallysuchassistanceincurreda lastingobligationof

gratitudetotheoriginalhouse.Byanappealtoconscience, Omotokata gleaned50,000ryo,tobeheldasanemergencyfundto staveoffthe

bakufumomentarilyincaseit shoulddemandimmediatesettlementof accounts.Buttheonce-mightyHouseofMitsuiwascloseto ruin,for thecollapseoftheEdoEchigoyawouldundoubtedlybringdownallof

theaffiliated shopsandOmotokata aswell. SuchwasMitsui’s situationwheninmid-August theshogun’s long-

awaitedpunitiveexpedition reachedChoshuandlauncheditsoffensive. Theenormousexpenseofthecampaignwaslaiduponthebacksofthe merchants,of course,and the commissionerof finance—theversatile

Oguriwearingyetanotherof his officialhats—informed the Osaka exchangeshopthatthe Mitsuiswereexpectedto providea loanof 500,000ryo.Thiswastentimestheamountheldin theiremergency reserve,andwouldmeantheirliquidation unlesssomewaycouldbe

foundtoevadeit.Onepossibility wastomakea directappealtothe bakufuforaremissionofthelevy.Butthiswouldhaverequired Echigoyato discloseitsirregularitiesat Yokohama, a coursethatmight havebeenworsethanbankruptcy.

Omotokatahada numberof verysoundexcusesfor a delayand usedthemsuccessfully.Whilethematterwasstillunderdeliberation, Ogurihitupona planformitigatingthefinancialpanicbroughtonby theChoshucampaign.Hissolutionwasto lendEdo’smerchantsthe revenuesfromthe customsofficeat Yokohama,acceptingtheirinventoriesas collateral.TheMitsuis(whohadmadesucha messof governmentbusinessintheforeignsettlement)wereorderedtohandle thedisbursements.ThisassignmentterrifiedOmotokata.Alreadyclose

toinsolvency fromtoomuchgovernment business, theHousewanted nofurtherentanglement withtheunpredictable bakufu. Itistruethattheyhadprosperedfromtheirgovernmentcommissions ingoodtimes,butnow,in badtimes,thehazardsweretoogreat.Of

thejunin-gumi, thetenfiscalagentsappointed inthe1690s,allbuta

7

*®MITstt

of Bankerswhosurvivedthebadtimes—and fewhadgonebankrupt. those Mitsui,Ono, Shimada,and Konoikewerethe

most conspicu-

ous—hadbecomesocautiousaboutloansandcreditsthatlessermer of chantswerestarvedforoperatingfunds.Thereforethefulfillment was imperativeit Oguri’splanto advanceloansagainstmerchandise

Furthermore, wastobeprevented. ofEdo’seconomy thetotalcollapse

theMitsuis’peculiarsituationmadeitsuicidalforthemto antagonize Oguriby refusingto cooperate. the Onlya miraclecouldextricatethemfromthetighteningjawsof

wasobantoSaitoJunzoof trapin whichtheywerecaught,andit Echigoyawhoachievedit whenheenlistedtheservicesof“Kinorisan.”Doingso tookno greatimagination,sinceKinokuniyaRihachi wasaregularclientoftheEdoexchangeshopandpersonallyacquainted

with its director,MitsuiJircoemonTakaakira,whomhe

sometimesac-

companiedonjauntsto thecountrysideorto housepartiesattheestates

ofminordaimyo. It wasnotinkeepingwithMitsui’sdignitytoaskfavorsofanupstartlikeRihachi.Buthisinfluence withthecommissioner offinance

meantmuchmorethandignity,soSaitoswallowedhisprideandpaida

visit to Rihachi.The detailsof their conversationare unrecorded,but

advice,aswellashisinterthereis littledoubtthathesoughtRihachi’s

to onestory,Rihachiwasdeeply ventionwithOguri.According andbySaito’strustinhim.Itis bytheplightofhiscolleagues touched

probable,however,thattheambitiousbankersetaveryhighpriceupon his services,for what he gotfrom themwas far beyondanyofferthe Mitsuishadeverdreamedof making.

soitwas tomostofthefamily, hadbeenastranger UntilthenRihachi decidedinEdothathebetakentoKyotobytwohigh-ranking bantoto Inthe presenthisplan,oratleastthepartofitthatcouldbediscussed. heads,Rihachi Kofukuandfiveotherfamily presenceofHachiroemon scheme.In orderto premodestlyexplainedhis precedent-shattering

theexchangebusiness, venta repetitionofpasterrors,hemaintained, andprivatelendingaswell,shouldbeseparatedfromtheEchigoya gofukuten.Furthermore,all governmentcommissions shouldbe

ot officialbusinessestablishment, handledby a separategoyodokoro, placeddirectlyunderthesupervision of Omotokata.In otherwords, the monolithichousewasto

be divided,so that if a failureoccurredin

onelineofbusiness,asseemedmorethanpossible,theotherbranches

neednotbedraggeddownwithit. Rihachimadeafavorable impression, andthemeritofhisideawas proposedbySaitothroughhis Butthecondition recognized. generally envoys—that Rihachibeappointedmanagerof thegoyodokoro— seemedimpossible to accept.AJapanesebusinesshouserarelyem-

THE MANFROMNOWHERE-

71

ployed“outsiders” forsuchimportant jobs,whichwereentrusted only tomenwhohadentered thefirminyouthandworked theirwayupthe ladderunderthescrutinyoftheirelders.Thistraditionis sodeeply

ingrainedthatit persiststoday. Yetnoneof the Mitsuiswantedto handlethe riskygovernment businessat sucha time,andwhobut Rihachiwouldbe bothable enoughandacceptableto the commissioneroffinance?Then,too,they

musthavethought,thisnewmanmightsomehow workuponOguti’s sympathiesto reducetheamountsoftheloanshehadlevied. ThedecisionrestedwithHachiroemon, whohadbeenmeditating upontheHouse’svicissitudesandprobablyhadrefreshedhismemory concerningitsconstitution.Accordingto onearticleofthatrespected

document,theessentialroleofamanagerwastoguardthebusiness of

the House,giveappropriate adviceif the mastererred,andcorrect blundersalreadymade.Buthisobantohadbecomecareless,givenunsoundadvice,andcompoundedtheirmasters’errors.Perhapsthisbold

Rihachi,whohadimproved hisfortunewhileallabouthimotherswere losingtheirs,wouldbeabletosetmatters aright.

Hachiroemonrealized,too,thathehadbeenremissinobserving the articlewhichinstructedthemasterstokeepaneyeupontalentedyounget men,“withoutanyoversights,”andto trainthemostpromising of themasmanagers.BecauseofhiscarelessnesstheHousehadnoobanto ofsufficientmettletosaveitnowintimeoftrial.CouldRihachiprevent theultimatedisaster?It wastheobviousintentionofthefounderthat youngermenoftalentbedrawnfromtheregularstaff,buttheemploymentof an outsider,evenonein middleage,wasnotdefinitelypro-

hibited.Afterconsidering theunknownperilsthatstilllayahead,

HachiroemondecidedthatRihachiwasindispensableand appointed

him,attheageofforty-five,asmanageroftheproposedgoyodokoro. TheminutesoftheOmotokata meetingat whichthisdecisionwas madeareprosaicenough.DatedNovember2, 1866,theentrystates

thattwobantooftheEdoexchange house“accompanied amannamed Minogawa Rihachi,whowasappointed inchargeofthismatter,”after

havingbeendulyevaluated.Buta letterdispatchedto Edobyspecial messengerindicatesthattheconferencetoucheduponsomepointstoo delicatetobeputintowriting.Announcing thedepartureofRihachi andhis companionsfromKyoto,the writerconfided:“It willtake twelvedaysontheTokaido.If theyarrive[inEdo]safely,theywilltell youthe secretdetailsof thematterswehavediscussed, sopleasebe alert.” Throughthischainofcircumstances KinokuniyaMinogawaRihachi, bornKimura,andalsoknownasMinogawa Kinori,wonhisunprece-

dentedappointment, aswellasapermanent name.Forhisexalted posi-

72 * MITSUI tionamongmerchantsandhisassociationwiththemenin power,the “manfromnowhere”neededa newnamethat wouldconcealhis plebeianpast.Perhapsasanencouragement toloyalty,hewaspermitted to takewi,thefirstcharacterofMitsui.To

thatheaddedwofromMino-

gawa(thenameof hisadoptivefather),andmurafromKimura(the

nameofhisrealfather). AndhechangedhisgivennametoRizaemon, whichhefeltwasmoredignified thanRihachi.Soequipped,andwith the prayerfulbackingof his newemployers, MinomuraRizaemon proceededto shoreupthedecrepitHouseofMitsuiagainsttherising

typhoonofthebakumatsu.

8 - Picking the Winner

OFTEN, AFTER Awar,thosewhofailedto supportthewinningside openlyclaimtohavedonesosecretly andsparenopainstoprovethat theyhadpreferred thevictorsevenbeforethewarbegan.Inthewakeof theMeijirevolution Japan’sleadingmerchants andtheirclaques made a casethat,althoughtheirhouseshadbeenformallyalliedwiththe shogunate andfavoredbyit,theirtruesympathies ofcoursehadalways beenwiththeimperialcourt. TheMitsuis’protestationsofpriorloyaltyto theemperorwereperhapsthemostconvincing.SincethedaysofHachirobeitheyhadbeen

Kyotopeopleat heart,registeringthebirthsof theirchildrenand

buryingtheirdeadthere.Theycontributedregularlyandin

seemly

amountsto thefestivalsforwhichthecapitalwasfamous.Theyfinancedtheimperialcourt’smodestprojects forconstructionandimprovementwheneverthebakufu’sdolewasinadequate; andwhenthe greatImperialPalaceburnedin1855theysupplied alargepartofthe fundsforrebuilding it.Theyalsomademuchofthefactthattheyhad beenpatronsofMotooriNorinaga,greatestofthenationalscholars. “Motooriandhisfollowersbreathedintolargenumbersof their countrymenthe spiritof devotionto the ImperialFamilyandthe exaltationoftheJapanesegenius,’!asE.H. Normanwrote,andare givenmuchofthecreditfortheeventualoverthrowoftheshogunate andtheabolitionoffeudalism. | Of moreimmediatesignificancewerethe cashcontributionsthe Mitsuisandotherchoninmadetotheemperor’scause.Mosthistorians agreethatthosewerevoluntary,butanotedJapaneseeconomicscholar,

HonjoEijiro,whileadmitting thatthewarsoftherestoration were thechonin,insistedthatthey foughtandwonwithfundssuppliedby wereobtained bycoercion.? Thereisevidence tosupportbothopinions, butcommonsenseleadsto theconclusionthatthechonin(liketheir

counterpartsin Europe, the Fuggers and Rothschilds,and like the

RockefellersandMorgansin the UnitedStates)madea practiceof establishingthemselvesin thefavorof morethanone contenderfor theirsentiPower.TherecordshowsclearlythattheMitsuis,whatever

Fi

74 « MITSUI

mentsmayhavebeen,kepttheirmainstakeuponthebakufu’s number untiltheveryendof the Tokugawaregime,althoughtheywere hedgingwithsubstantial sidebetslaidupontheopposition.

UnfortunatelyforthefactsofJapanese history,theprudenceofthe peopleinvolvedandthe highincidenceof naturaldisastersin Japan haveremovedallbuta fewtracesoftheMitsuis’collaborationin the

intriguesattendingthecollapseofthebakufu.Recordswerekept;and someofthemmusthavebeendangerously revealing, becauseanumber

ofthoserelatingtothegestationandbirthofJapan’scapitalisteconomy weresecretlyentrustedbytheMitsuisto MinomuraRizaemon.They remainedunderseal,presumablyunread,in the Minomurafamily’s storehousein Tokyountil1923,whenit wasdestroyedbytheKanto earthquake. It isprobablethatnomanoutsidethegovernmentknewmoreabout the clandestinetransactionsduringthebakumatsu andtheMeijiup-

heavalthandidMinomura. Asthebrainbehind Japan’smostinfluential

privateenterpriseandthecommanderofitsresources,heextendedhis investigationsintothehighestcirclesofboththecourtandtheshogunate and was also privy to the machinationsof those who, in truth,

managedtousurpthepowerofboth.Undoubtedly thedocumentsin

hispossessionwouldhavehelpedto interpretthereasonsforsomeof thealmostincredibleeventsthattookplaceinthosecrucialyears.But becausetheexposureofcertainstateorprivatesecretswouldhaveunraveledthefabricofthecarefullywovenMeijimythologyandincurred thewrathofthepersonages whosepowerandwealthweresupported byit, theevidencehadto besuppressed. In partialcompensationforthatloss,theMitsuis’passionforcompilingbusinessinformation, and theirorderlinessandexactitudein recordingit, havelefta voluminouscollectionof ledgers,letters,instructions,agreements,andchroniclesthatmiraculouslyhaveescaped

bothnaturalandman-made disasters.Fromthesesources it isknown

thattheMitsuishadestablishedbusinessrelationsoflongstandingwith theantishogunateSatsumaandChoshuhanandwereacquaintedwitha numberoftheiragentsor stewards.In 1866,forexample,twoprominent Satsumaloyalists—Saigo Takamoriand KomatsuTakewaki— calledattheMitsui’smainshopinKyoto.Asa pretexttheyaskedtoexamineararepieceofChinesecalligraphyknowntobeinHachiroemon’s possession.Saburosuke’schiefclerk,recallingthe

incident,wrotethat

the twosamuraiwereextremelypoliteto Hachiroemon,asif talking withtheirmaster.ThereafterrelationsbetweenMitsuiandtheSatsuma loyalistsdeepened.Othernamesappearingin the Mitsui’svisitors’ booksofthoseyears,withoutcommentasto thenatureoftheirbusiness,werethoseofGotoShojiro,aretaineroftheKochihanandlatera

PICKING THE WINNER-:

75

cabinetminister;MutsuMunemitsu, a samuraioftheKiihanwhowas

thatredoubtablepair, as foreignminister; to servewithdistinction Inoue Kaoru and Ito Hirobumiof Choshu;and court noble Prince

IwakuraTomomi.Allthesemenperformed indispensableservicesin overthrowingthebakufu,andtheirvisitstotheMitsuisbecamemore

frequentasthecrisisapproached. ofloyalistplottheringleader wasIwakura, Ofgreatestimportance tersin Kyoto.Havingservedtheemperorasapage,hehadrisentoinarrangingthemarriageof fluenceincourtcircles.Then,forhisrolein theemperotr’ssisterto theshogun,hehadincurredthewrathofthe radicalsat court. Accusedof beinga bakufusycophant,he hadbeen

forfiveyears.Likemostofthekuge,hehada orderedintoseclusion intoa it, heturnedhisresidence Tosupplement verysmallincome. notsubwere thekuge that ofthefact den,takingadvantage gambling broughthimintocontactwith jecttosearchbythebakufu.Thissideline ronin,whomayhave wereloyalist manyofwhom gamblers, wandering aneagerconhebecame anyevent, At convertedhimtoradicalism. and espionage toconduct hewasable clientele a spirator,andwithsuch possiblyguerrilla-typeoperationsalloverJapan.

extendinginto Thebanishedprincestillhadlinesofcommunication the imperialcourt—indeed, into the emperor’s bedchamber—for workingcloselywithhimwasthekugeNakayamaTadayasu,whose his majesty’sfavoriteconcubineand the mother daughterYoshikowas ofhissonMutsuhito.Iwakurawaslinkedmoststronglywiththehanof Choshu,but he also maintainedclose contactwith Satsumathrough Okubo Toshimichi,who, with his boyhoodfriend SaigoTakamori,

han’saffairs.Itwasrecognized wasrapidlygainingcontroloverthat

only thatthosetwohanhadenoughpowertooverthrowthebakufuif

Choshu’sradicalshatedtheir theywouldworktogether.Unfortunately, Iwakura,helpedby irreconcilable. rivals,andthefeudseemed Satsuma bytheBritishdiplomats roninfriendlytobothsides(andindependently

andmerchants),workedtirelesslytoeffecta reconciliation.In 1866the two contendinghan reached an agreement—theso-calledSat-Cho alliance—thatmeantdoomfortheTokugawas. This alliancewas concludedby Okubo, Saigo,Komatsu,and Kido Koin. These men, with their Satsuma-Choshucomradesand a few

othersfromthe han of Aki, Tosa,and Hizen,werethe oneswho

theshogunate,and organizedandexecutedthecoupthatoverthrew

whomonopolizedthetoppositions inthenewgovernmentfor several

ofthefactmaybe,nearly thesignificance Whatever decadesafterward. allofthemareknowntohavebeeninconsultationwiththeMitsuisor theMeijirevolution,which theirbantoduringthethreeyearspreceding is misleadinglycalleda “restoration.”

76 + MITSUI

It wasthepolicyoftheMitsuis nottoskimpwhenthestakeswere

high.Havingappraisedthesepatriotsandtheirchancesofsuccess,the

Housetreatedthemgenerously. Onechronicler, writinginthe1930s, stated:“When welookatswordplay onthestageandscreen, weoften forgetwherethemoneycamefrom.Butevenloyalists oftheMeiji Restoration couldnotlivewithouteating,soexpenses fortheirlivelihoodsalonemusthavebeengreat.Besides, expenses fortheirpunishing thebakufuandpayinggeisha. . . wereenormous.OfcourseSatsuma

andChoshuhadfunds,butwealthymerchants, includingtheMitsuis werebehindthem.” Minomura’s relationships withthosedissidentsamuraiandnobles beforehejoinedMitsuiarenotclear,butitissignificant thattheirconnectionwiththe housebecameconspicuousin the yearhe wasap-

pointedobanto.One

of his descendantssaidthat Minomurawasquite

closeto thosestatesmen-to-beandthatwhentheyvisitedMitsuihe

wastheonewithwhomtheyusually conferred. Topreservesecrecy, Minomura wouldtakehisvisitors forawalkinthegarden,wherethey couldconverse withoutfearofeavesdroppers, forspieslurkedeverywhereandmostof themattersbeingdiscussed wouldhavebeenextremelycompromising.

Minomura’s connections withtheloyalistsamuraiandnobleskept theMitsuiswellinformed abouttheiractivities andplans.Atthesame timeMinomura himselfwasavaluable soutceofinformation aboutthe

bakufu,inasmuchas hispositionas chiefof Mitsui’snewofficefor handlingofficialfundsbroughthimintofrequentcontactwithLord Oguriin Edo.

Anothersourceofusefulintelligence wasMutsuMunemitsu, a tetainerofLordKii,whowasamember oftheTokugawafamily.While

completinghisstudiesinKyoto,Mutsuhadbeenlivingasa shosei—a

combinationhouseboyandprotégé—inthe householdof Mitsui SaburosukeTakaaki,heir of HachiroemonKofuku.Mutsualsohadan

entreeatnearbyNijoCastle,theshogun’sheadquarters inKyoto. Commanding ashedidtheseandotherimportant sourcesofintelli-

gence,Minomuramayhavebeenaswellinformedaboutthedeveloping situationasweretheconspiratorsthemselves;andhesurelyknewmore thanthebakufudid,despiteitselaborate espionagenetwork.Thereis nothinginallthistoprovethatMitsui-gumi wasanactivepartytothe loyalistconspiracy,but thisis preciselythekindof informationthat

wouldhavebeenmostcarefully concealed bytheMitsuisandtheir

friends,for obviousreasons.Furthermore,the rewardsthat Mitsui ultimatelyreceivedfromthesuccessfulplotterswerefaroutofpropor-

tiontotheirrecordedcontributions. Thesefactsandprobabilities lead

PICKING THE WINNER + 77

tospeculation thattheMitsuismayhavebeenmoredeeply involvedin therevolutionthaniscommonlysupposed.

TheMitsuis’motivescanbeguessedfromanappraisalofthesituationin whichtheywerecaught.It willbe recalledthatMinomura’s friendOguri,ministerofthearmedforces,hadriskedeverythingupon sendingasecondpunitiveexpedition againstChoshu.Butthecampaign

wentbadlyfromthestartbecause themenofChoshuhadbeenarmed withmodernweaponsandshipsbytheBritishandbecause Satsuma

(presumablythe mainstayof the bakufu)wasin secretalliancewith Choshu.In 1866the bakufu’sforces,whichhad

beensent to chastise

Choshu,werebeingdefeatedignominiouslyonallfronts.Thedeathof

ShogunTokugawa IemochiinSeptember gavethebakufu apretextfor suspending hostilitieswithoutadmitting defeat.Buttheshogunate’s government wasleftinperilouscondition,havingtoloadthecostsof demobilizingthepunitiveexpeditionuponanalreadyprostrateeconomy.(It wassoonafterIemochi’sdeaththat LordOguriimposed

uponMitsuitheforcedloanof500,000 ryo,anddesignated theHouse to administerthereliefloansin Edo.)

Meanwhile, a shortageoffoodandconsequentpriceincreases attributedtospeculation provokedriotsinEdo.Ledbypriests,angry

mobsattackedmoney-changersandmerchantsof riceand saké.In November,immediatelyafterMinomuraRizaemonreturnedto Edo

fromKyotowithhisnewnameandposition, a terribleconflagration razedthegreater partofYokohama, including thecustomshousefrom whichhewasto drawfundsforthosereliefloansto distressedmerchants.LessthanthreeweekslateranotherfireguttedtheNihombashi districtin Edo,destroyingsomanystructuresthat,

someonecalculated,

iftheyhadbeenplacedsidebysidetheywouldhaveextended more

thanthirtymiles. The lossesto Mitsuimusthavebeensevere.But the confusion resultingfromthoseevents,compoundedbya reorganizationin the

bakufuaccompanying theaccession ofanewshogun,gavetheMitsuis agoodexcuse forfurtherdelay inpayingthemoneydemanded byLord Oguri.Then,earlyin1867, whilethepopulace wasobserving theNew Yearholidays, thedeathofEmperorKomeiagainplunged thenation intoofficial mourning,duringwhichtimebusiness wassuspended. ThecauseofKomei’sdeathisstillamootpointamonghistorians.A

mostknowledgeableBritishdiplomat,SirErnestSatow,recalledin

his

memoirs, published in1921:“Rumoutattributedthedeceasetosmall-

pox,butseveralyearslaterI wasassuredbyaJapanesewellacquainted withwhatwentonbehindthescenesthathehadbeenpoisoned.He wasby convictionutterlyopposedto anyconcessionsto foreigners,

78 «©MITSUI

andhadtherefore beenremoved outofthewaybythosewhoforesaw thatthecomingdownfalloftheBaku-fuwouldforcethecourtinto

directrelationswithforeignpowers.”4 Anotherpossiblemotivefor assassinationlayin thefactthatEmperorKomeiwasfavorablydisposedtowardthe newshogun,TokugawaHitotsubashi Keiki,and thereforewouldnot approvethe extremeantibakufupolicyof the loyalists. Japanesehistorianstodaygenerallybelievethat the “smallpox” responsiblefortheemperor’suntimelydeathattheageofthirty-seven wasactuallya poisonadministeredat thebehestof PrinceIwakura.*

Theevidence tosupportthisbeliefisscanty,butthemotivesthatmake it probablearecompelling: forexample, thereplacement ofKomeiby

the pliablefourteen-year-oldPrinceMutsuhito,whocouldbe dominatedbyradicalsopposedto thebakufu,enabledtheSat-Choalliesto obtainthe “imperialedicts”theyneededfor legitimizingtheirsub-

sequentcoupd’état. Inanyevent,although noonewouldaccuse theMitsuisofhaving takenapartintheregicide, thedeathofEmperorKomeimarked the

turningpointin theirdecliningfortunes. It mightappearfromallthisthattheMitsuiswerecommitted tothe

imperialcause.Yetthefactremainsthatevenwhiletheywereintensifyingtheircollusion withtheloyalists theywerealsokeeping in the goodgracesofthebakufu.Whenthefifty-day periodofmourning for thedeademperorwasover,Minomura paida visittohisbenefactor Oguriandpresenteda letterof proxyfromHachiroemon Kofuku. Thereis no recordof hisarguments forthebakufu’sleniencytoward hisemployersin thematterofthatenforcedloanof500,000ryo,butas

oneofMitsui’s clerksnotedcryptically, “nota smallamount ofmoney

wasspentontheproject.”Regardlessofpecuniaryinducements,however,Oguristoodto gainmorefroma viableandgratefulHouseof Mitsuithan froman embitteredbankruptone,especially sincehe neededitshelpina newfinancialmaneuver.Sohegraciouslyreduced theamountofthelevyfromhalfa millionryoto a mere180,000ryo, payableineasyinstallments.HealsoledMinomurato understandthat

nofurtherloanswouldbedemanded forthetimebeing.Noissuewas

made,apparently,ofthemissingcustoms-houserevenuesattheYokohamaofficeofEchigoya,andthenameofMitsuiremainedimmaculate.

Correspondence pursuantto thistransactionindicatesthatit was

*TheJapanBiographical Encyclopedia, 1964-65 (pp.2011-12) statesthatPrince

Iwakura“‘issaidto haveengineeredthe murderby poisoningof Emperor Komei,whoseantiforeignstandwasthe onlygreatobstacleto theultimate openingofthecountryto foreignintercourse.”

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unorthodox,to saytheleast.A letter,addressed to “theHonorable Commissioner” (presumably intendedfor Oguri’sunderlings)and

endorsedbyMinomuraRizaemon,warned:“Weherebyacknowledge thesubmissionofthewrittenauthorization,whichwasdulyforwarded to [o]motokata-sama.

“However,weweresecretlyorderedthatif theabovementioned matterofapardon shouldleakouttothegeneral public,thoseinvolved

withtheuseof thesealwillbeaffected,sothateachoneof youshould keepit in mindneverto let it be knownoutside;it shouldonlybe knownamongus.”5

AfterthistriumphMinomuta enjoyedthefullconfidenceofthe Mitsuis,andbecausehewasusuallyathandwhenimportant matters werediscussed peoplecalledhim“Hachiroemon’s shadow.”Byhis

masterfulorganizationandmanagement,thegoyodokoro—whichhe eventuallydevelopedintoMitsuiBank—soon showedenoughprofitto salvageotherbranchesofthebusiness.Theworstofthestormhadbeen

weathered, butthetrickiestsailinglayahead. Thenewshogun’s progressive reforms,especially hismodernization ofthebakufu’smilitaryforces,dismayed therebels.PrinceIwakura

wrote:“TheactionsofthepresentShogunKeikiareresolute,courageousandofgreataspiration; heisa strongenemynottobedespised.”

AndKidoKoinwarned: “Iftheopportunitytorestorecourtgovernmentisnowlost,andtheleadistakenbythebakufu, thenitwilltruly

beasif onewereseeingtherebirthofIeyasu.”’TheBritish,whohad donesomuchto strengthenKeiki’senemies,nowreconsidered their strategy.Iftheshogunprovedableto meettheirrequests,therewould

benopointinfomenting rebellion againsthim.Alsotheyfeared losing groundtotheFrench, whowereendeavoring tomakeKeiki’s regimea SUCCESS. MinomuraRizaemon,too,wasfullyawareofthesepossibilities. And liketheBritishminister,hehadnotbecomeso deeplyinvolvedwith

theloyaliststhatretreatwasimpossible. Furthermore,theMitsuiswere moreheavilyobligatedthaneverto thebakufuandcarefully avoided anyshowofingratitude.Rizaemon,objectivelystudyinghisintelligence reports,sawthattheshogunatewasbynomeansto

becountedout,and

hewaspreparedto greeta victorybyeitherside.

LordOgurididnothesitateto takeadvantageoftheMitsuis’indebtedness tohim.Ingreatneedoffunds,heendedthecenturies-old

banonpapermoneyandorderedtheissueofnotesconvertibletogold, forlocalcirculation.Butwithpublicconfidenceinthebakufuata low ebb,heneededthegoodnameof Mitsuito ensureacceptanceof the goldnotes.Thusredemption of the bakufu’sfirstpapermoneywas

guaranteed byMitsui-gumi, whichineffectservedasanationalbank

80 - MITSUI fortheTokugawaregimewhileat the sametimefinancingarrangementsforits overthrow.It wasthroughsuchopportunism thatthe Houseearnedthenickname“double-dealingMitsui,”appliedfordec-

adesafterward whenevera Mitsui-controlled companywascaughtin equivocal businessdealings.

Despitethefavorableimpressionhehadmadeontheforeigners, the newshogunwasunableto establishhisinfluenceoverthe daimyo, withoutwhosetroopshecouldnothopetoremaininpower.Andafter

theaccession ofPrinceMutsuhito totheimperialthrone,withthestyle andtitleofEmperorMeiji,thecourtradicals, undertheguidanceof Iwakura,acceleratedtheirmachinationsto seizecontrolofthenation. OnlythendidtheMitsuisshowanyovertsignofdissidence.Inpreparingfor the openingof Hyogoport, LordOguriorganizedthe HyogoShosha,Japan’sfirstjoint-stockcompanyaftertheEuropean pattern.Its functionwasto conductforeigntradeandto issuemore

papermoneytofinancetheport’soperations. Leadingmerchants were invitedtoparticipate, andthemostprominent,MitsuiHachiroemon, wasappointedpresidentof thecompany.Mitsuigoyodokorohadno alternativebut to handlethe currencyissue,but uponMinomura’s adviceHachiroemondeclinedthehonorofheadingthetradingfirmor

ofinvestinginit.Asaresult,subscriptions byothermerchants wereso paltrythatthecompany wasstillborn.Mitsui’srefusaltotakethelead wasinperfectaccordwiththepositionofPrinceIwakuraandhisSatChocohorts,whoprivatelyfavoredopeningOsakaand Hyogoto foreigntradebutfoughttopreventthatfromhappening aslongasthe bakufuremainedin power.

SincethefoundingoftheirHouseithadbeenthestanding policyof theMitsuistoshowspecial respecttothelordsofKii,whosepatronage atonetimehadbeenofgreatvalue.Forcenturiestheyhadobserved the customof greetingceremoniouslythe incumbentdaimyoof Kii wheneverhevisitedKyoto.ButLordKiiwasa Tokugawa,andasthe

Mitsuisveeredtowardanopenly neutralposition theyabandoned the ancientformality. WhenHachiroemon Kofukuwasaccusedof disrespectfordoingso,hepleadedill-health andbeggedLordKii’sforgiveness,butwiththatunmistakable neglectofdutythealienation of theHouseofMitsuifromtheTokugawas wasdeclared,mostsubtly.

Intheautumnof1867therichlyvariegated foliageinthegardensof NijoCastlebroughtnojoytotheyoungshogun.Heknewthatdespite hisearnesteffortshehadfailed,anditcameasnosurprisetohimwhen, lateinOctober,hewaspresentedwithathoughtfullywordedmemorial.

Composed bysomeofthemoremoderate imperialists oftheTosahan, itrecommended thatheresignhispositionforthesakeofpeace. “There

PICKING THE WINNER - 81

isendlessmeritinaman’sknowingwhentohavedone,”Carlyle had written,andKeikishowed thismerittoacreditable degree.InNovemberheannounced hisdecisionto yieldthereinsofgovernment to his sovereign.Assumingresponsibilityfor the unhappysituationwhich haddevelopedsincetheforeigners hadenteredthecountry,he said,

“,. . ifauthorityisrestoredtotheEmperor,andmattersofhighpolicy aredecided byHisMajesty afternational deliberations, thenbyunityof thoughtandeffortthecountry canholditsownwithallthenations of

theworld.”’8 | Thechangewasnottobemadeinsuchagentlemanly way,however.

Themenaboutto takecharge,althoughmostofthemwerestillin theiryouth,wereseasonedsoldiersbearingthescarsofbattlesand skirmishesinwhichtheyhadlostmanyoftheircomrades. Theywere notcontentwitha resignationthatleftthebakufuinchargeofthenation’sadministration,eventemporarily,andtheTokugawa familyin possessionofvastdomainsfromthewealthofwhichtheycouldrebuild

theirpower.TheSat-Cho loyalists weredetermined tosmashtheTokugawa’sbakufusystemfromtopto bottom,andhadmadeelaborate planstodojustthat.Theircampaign toseizecontrol wasalready under way,andgainingirresistiblemomentum. In Julyof 1867the Sat-Choleadershadmetat PrinceIwakura’s

residence, signeda pacttocarryoutacoupd’état,andbeguntotrain theirarmedforcesintensively forthispurpose.Earlyin November, whentheylearned ofKeiki’simpending resignation, theysentOkubo posthastetoIwakurawithapetitionaskingtheemperorforauthorizationto overthrowthe bakufu.ThroughPrinceNakayama, the em-

peror’sgrandfather andtutor,Iwakurareceivedwrittenorderstothis effectandpassedthemsecretlytotheSatsumaandChoshuleaders.By thetimeKeikiannounced hisresignationasshogun,cracktroopsof

bothclanswereontheirwaytoKyoto,whereunitsof severalsympatheticdaimyowerestationedto “protect”thecourt. Thusalready therewasinexistence an“imperialarmy,”andserving it discreetly as quartermaster wastheHouseofMitsui—which wasstillofficial purveyot andbankertothedyingbakufu.

Sincethebakufustillheldthenation’spursestrings,aswellasits administrativeoffices,thecourtcoulddonothingwithitshypothetical power.As the firstanniversary of the lateEmperorKomei’sdeath

approached, PrinceIwakura requested fundsfromShogun Keiki,who

wasstillinresidenceatNijoCastleinKyoto,ostensiblyforthepurpose ofconductingappropriatememorialservices.Butallhecouldgetfrom theshogun’streasurer,LordOguri,wasapittanceofonethousandryo,

sohehituponanotherstratagem.OnDecember23,astheChoshu forceswereapproaching Kyoto,heorganizeda “donation-accepting

82 - MITSUI

office,”orkinkoku suitosho. Itsrealpurposebecameapparentthreedays

later,whenanimperialmessengercametotheimposingnewresidence of MitsuiSaburosuke,head

of the exchangehousein

Kyoto, with a

noticethatread:“‘Astheshogunate returnedthereinsofgovernmentto theemperor... theimperialcourtistakingovernationaladministration.Sincetheshogunatehasyettohandoverthestatetreasury,however,theimperialcourtiswithoutsavings,soa procurementofficeis beingsetup.... Thereiseveryindicationthatfightingmaybreakout atanytimebetweentheimperialandshogunateforces,anda shortage

ofmoneyforgeneralexpensesandmilitaryfundsisfeared.Yourorganization haslongbeenprovidingexchangeservicefortheimperial court.Youarerequested totakechargeoftheprocurement office.You mustmakeeveryeffortin theimperialcause.’” Thisbluntdemand,unsignedbutpresumablysentbyIwakura’sorder,madeit necessaryatlastfortheHouseofMitsuitodeclarefulland

openallegiance toonesideortheother,andafamily conference was convenedimmediately. SinceMinomura alreadyhadacquaintedhis

employerswiththesituationanddeclaredhisintentionto partfrom LordOgurionceandforall,therewaslittleneedfordiscussion. The timefordissimulationwasover,andit wasagreedthatMitsuiwould

backtheimperialsideexclusively. Saburosuke wasreadywhenarepresentative ofthe“imperialtreasuty”(whichdidnotexist)called athismansionlatethatevening witha

summonsto appearat thepalace.Hewaswearinghisformalkimono embellishedwiththe“foureyes”oftheSasakicrest,andashestepped intothepalanquinprovidedforhimhecarriedaheavyparcelwrapped,

asisthecustom,ina heavysilkcloth.Escorted bylanternbearersand

swordsmencladinarmor,hewasbornetotheappointed placeandwas receivedalmostobsequiouslybycourtofficials.Theyofferedhim,as headoftheKyotoMitsui-gumi,thepositionofexchangeagentforthe imperialgovernment.Theyalsorequestedhimto takechargeofthe

organization forsoliciting donations forthecourt.Showing thehumilitypropertohisstatusasachonin,Saburosuke acceptedtheappointmentsgracefully.Thenhe unwrappedthe lacqueredboxhe had brought.It containedonethousandgoldryo—quiteprobablythefirst privategiftofferedto thenewimperialgovernment. Saburosuke’sassignedtaskwasto solicitfundsfromOno-gumiand

Shimada-gumi, whowerestillreluctant toprovokethebakufubyaidingitsenemies.Meanwhile the“donation-accepting office”hadbeen setupatonegateoftheImperialPalace,andotherwealthypeoplewere contributingto it. KumagayaKyuemon,a merchantfriendofPrince Iwakura,gaveonethousandryoandonehundredandfiftypairsof

PICKING THE WINNER = 83

futon,otpaddedsleepingquilts,forthesoldiers thenswarming intothe

city.AtempleinNarasentonethousandbalesofrice,andthepowerful BuddhisttempleNishiHongan-jiinKyotodonatedthreethousandryo. Thegeneralpublicalsohelped,supplyingtenthousandpairsofstraw sandals,severalthousandricebowls,and

quantitiesof foodstuffs,raw

cotton,andcharcoal. Thesevoluntary giftsamounted tonearlyforty thousandryoincash,inadditiontocontributions inkind;incontrast, OnoandShimada, merchants whoseprestige wasovershadowed only byMitsui’s,madea“poormouth”andproducedonlyonethousandryo betweenthem.Theirparsimonythenwastobecomea causeforintense regretlater.

Since1864theChoshu armyhadbeenbanished fromKyoto,and

obediently,it remainedencampedoutsidethecity.Butonthesecond dayof1868,bytheoldcalendar,thegovernmentoftheChoshuhanwas pardonedbyimperialdecree,andKidoKoinleditstroopstriumphant-

lyintoKyotoonthefollowingday.Meanwhile Iwakurasummoned severalfence-straddling daimyotoaconference atwhichherevealed the existenceoftheemperor’sordersto overthrowthebakufu,thereby gainingtheirsupport.According toprearranged plan,theloyalist units surroundedthepalaceasSaigoandKidodisplayedtheirauthorization torelievetheshogun’sforcesthenonguard.InsidethepalaceIwakura,

inthepresenceofthebewilderedboy-emperor, proclaimed the“ImperialRestoration,”togetherwiththe

decisionthat HitotsubashiKeiki,

thefifteenthandthelastoftheTokugawa shoguns,wasto relinquish

allhispositionsandtitlesandthattheTokugawafamily,exceptfor wasto surthosefewofitsmemberswhohadsidedwiththeloyalists, renderitsvastdomains totheimperialcoutt. Incredibly,thisdecreewasacceptedbytheshogun,whowithdrew

fromNijoCastlewithhisdisgruntledfollowersafewdayslaterand bytroopsof the headedforOsaka.NijoCastlewaspromptlyoccupied imperialgovernment,nowunderthecontrolofprincesIwakuraand

a fewhereditaryretainersoftherebelclans,anda SanjoSanetomi, dozen“countrysamurai”from Satsuma,Choshu,andneighboring

provinces. Thiswasveryconvenientforthenewlyappointedcourtbankers,the Mitsuis,whoestablishedtheirheadquartersat Saburosuke’smansion justacrossthe moatfromNijoCastle.The factthat theMitsuisand theirhiredmanager-general,Minomura,werepersonallyacquainted withmostifnotallofthe “honorablemeninpower”wasevenmore gratifying. in theirposition,however:witha Therewasoneseriousweakness

looming,thehonorablemenin power watof unknowndimensions

84 - MITSUI

neededenormoussumsofmoney,immediately. AndtheMitsuis,who hadbeentryingsohardforsolongtoberelieved ofallofficial business, nowfoundthemselves saddledwiththeobligationto refillthenew government’snearlyemptytreasury.

9 - ByAppointment to the Emperor ONTHEFIRST DAYOFYEAR ONEoftheMeijiera,*theMitsuihouseholds,havingsuspendedallbusinessactivitiesforthelongNewYear

holidays,gatheredattheirrespectivemansionsforquietcelebration, rest,andcommunion withthespiritsoftheirancestors. Butthecus-

tomarysilenceofKyotowasbrokenbythetreadofmarching feet,the poundingofhooves,andtherumblingofwheelsovercobblestones,as theemperor’ssoldiersrushedtodefendKyotofromapproachingene-

mies.Theshogun,yielding to theprotestationsofhisretainersand loyaldaimyo whoweredetermined tofightforthewealth andpowerto

whichtheywereaccustomed, hadmobilizedan armyat Osaka.His forces,whichoutnumberedtheemperor’stroopsbyfiveto one,were marchingonKyoto,anda longsiegewasexpected.

Theimperial armylacked almosteverything exceptzeal,butsuchwas thestrengthofcustomthatYuriKimimasa, Iwakura’s financial assistant

inchargeof“acceptingdonations,”hadlockedhisofficeandtakenhis customaryfive-dayNewYear’sfurlough.Inconsequence,thefeasting at MitsuiSaburosuke’shomewasinterruptedbythearrivalofa mes-

sengerfromthecourt,whopresented anurgentrequestformoney. TheMitsuimenwithdrewreluctantly to thecountinghouse,where,

lateintothenight, thejingleofcoinsandtheclickingofsorobancould be heard—perhapspunctuatedby an occasionalsighas Saburosuke watchedthefirm’s“cellarsilver”depletedonceagaintoprotectarisky investment.Beforedawnof the seconddaya squadof soldierscom-

mandedbyayoungartillery captainarrivedwithahandcartandhauled

thetreasure—abouttwothousandryo—toimperialarmyheadquarters. This,andpresumably similarcontributionsfromothermerchants,

enabledthe imperialtroops—aided by superiororganization and tactics—to routthebakufu’s armyinthebriefbutdecisive battlefought atTobaandFushimi, justsouthofKyoto.Victorygavethem a breathingspelltoconsolidate theirforcesandenough prestigetocommand * Accordingtothelunarcalendar,butlateinJanuaryof1868bytheWestern

styleofreckoning.

|

8D

86 - MITSUI

supportinwesternJapanwhilegatheringstrengthforconqueringEdo andthenorth.Butthewarwasjustbeginning, andtheneedformoney wascrucial.Torelyuponpublicgenerosityatthatjuncturewouldhave beenfatuous,andthe “donation-acceptingoffice”regressedto the

bakufu’sfavoriteexpedientofextractingforcedloans.Announcing thisdetestedpolicyastactfullyaspossibly,YuriKimimasaorderedthe

followingproclamation tobeposted:

“ConcerningtheRestoration,variouspreparationshavebeenmade butfinancialdifficultiesremain.In caseof necessity,thegovernment willconductaninvestigation,soeveryoneisrequestedto keepmoney

onhand.Therefore, youateadvisedtorefrainfromtransferring large

sumsofcash. January,1868,TheImperialDonation-Accepting Office”? Thiswasactuallythedeclarationofa moratoriumonfinancialtransactions,intendedtofreezethefundsofmerchants sotheycouldbecom-

mandeered bytheemperor’s government. It wasaimeddirectly atthe Mitsuis,whoweremostactiveinthemoney-orderbusiness.Forif

Mitsui-gumiwereto cashallnotespresentedforpaymentit wouldbe shortoffundsneededforthefinancialoperationsoftheimperialcoutt. TheMitsuishadtheunhappytaskoftryingto convinceothercynical merchantsthatthenewforcedloans,unlikethoseofthebakufu,would

bepaidbacksometime,somehow.Whetheror notanyonebelieved

them,theymanagedto collectmorethanfourhundredthousandryo, enoughto meetemergencyneeds.In appreciation,the accounting magistratetreatedMitsuiSaburosuketo a repastat whichmutualloyaltywaspledgedin saké.Gratefulat havingsurvivedyetanotherfi-

nancialordealandhavingsavedfaceonceagain,theMitsuis, together

withtheShimadasandtheOnos,donatedanadditional tenthousand

ryoonthefollowingday.

Butthemoratorium wasonlya stopgapmeasure.Immediatelyafter

the Battle of Toba and Fushimi,Prince Iwakura calleda business

meetingattendedby Okubo,YuriKimimasa,andotherministersto

establish arealtreasury. Mostofthem,unaccustomed tohandlingmon-

ey,wetethinkingin verysmallterms.ButYuri,whohadbeenentrustedwithmanagingthe newgovernment’sfinances,entertained gtanderideas.HereasonedthatsincetherewerethreemillionhouseholdsinJapanthenationshouldbeabletoraisethreemillionryowith-

outdifficulty. Thishypothesis beingagreedupon,theyworked outa planto extractthatsum—not fromthepeopleasa wholebutfrom wealthymerchants.Afterthinkingaboutthe criteriaof wealth,they decided:“Inforeigncountries,thosewhopossesstwosteamshipsand

fiftyboatsareconsidered merchants ofordinaryscale.’”

BYAPPOINTMENTTO THE EMPEROR-

8/7

Toreassurethechonin,theypromised:“IntheMeijiRestoration, thosehouseswhoremainloyalwillsurelyprosper.” Butsincedisloyaltywouldbeanationaldisgrace,thenamesoftheleadingmercantile houseswereto beplacedupontherollsofpossibledonors,justasa precaution.Threebookslistingtherichchoninof Kyoto,Omi,and OsakawerepreparedbyMitsui,servingasthegovernment’s informant.

OnthisbasisYurisummoned onehundredmerchants whowereconsideredbestabletocontribute andapprisedthemoftheirduty.

Mitsui-gumiwasofferedtheprivilegeofcollectingthemoneyfrom the otherhousesbut wasnot veryconfidentof success.Aftersome pteliminaryinquiriesSaburosukesubmittedthefollowinglettertothe imperialcourt: “Beit known,withduereverence:

“Weherebyacceptyourhonorable order.Weshalldoourbest, althoughthreemillionryoisagreatsum.Asordered,weshalltryto collectfromboththeupperandlowercategories. Butamongthefa-

mousOsaka merchants therearemanywhoseshopsareclosed, ortheir

businessessuspended.Sopleaseconsiderthisto avoidunpopularity.

Sinceweareofficially appointedmoney-changers, wehaveoftenlent

money[tothecourt].Weshalltryto persuadethosewhoarenotwill-

ing.”8

Thereseemsto benoauthenticrecordoftheresultsofthissqueeze,

butaccording tooneaccountitwasoversubscribed inlessthanayear. Thecreationofsuchalargenational“loan”inthefaceofwidespread distrustofthenewgovernmentwasanimpressive demonstration of Mitsui’s influence. Althoughtheclaimhasneverbeenmade,thename ofMitsuiseems tohavebeenaspotentasymbol inthefinancialworld aswasthatoftheimperial houseinthepolitical realm.Thismayexplain why,timeaftertime,totteringMitsuienterprises wererescuedfrom collapsebythebakufu,aswellasbyitssuccessor regime. Thesehigh-handedmaneuversof theimperialgovernmentcaused muchanguishandnotinfrequent ruinamongthemerchantclass,but

forsomechoninthebenefits faroutweighed thelosses.Forexample, earlyin 1868the leadinghousesof

Mitsui,Ono, and Shimadawere

appointedtomanagethecollectionanddisbursementoftaxrevenues,a privilegethatenabledthemto extendtheirbusinessactivitiesand,no

lessimportant, tousetaxfundsonhandforsupporting currentoperations.Thusevenwhentheirownliquidcapitaldeclined to thevanishingpoint,theywereableto recoupswiftlybydeftmanipulationof publicmoney.

TothepeopleoutsideKyototheexistence ofanimperialgovernment

88 - MITSUI

wasnomorethan a rumorbecauseit hadnotyetshownitsfaceinthe provincesandthe countryside.Hopingto projectanimageofpower, Iwakuraorganizedachimbu,orpacificationexpedition,nottouseforce againstthepeoplebutjustto letthemknowthatthegovernment had

themeansofdoingsowhenever itmightbenecessary. Fivethousand troopsmarched offinsplendidarrayfromKyoto,butranoutoffunds

almostimmediately.Iwakuracouldnotrequisitionmoneyor supplies fromthepeoplealongtheroutewithoutlosingface,soheappealed to

theMitsuis.Theysuppliedseveralthousandryo,buttooktheprecau-

tionofassigning to thechimbutwoaccountantsasquartermasters.As theexpeditionmovedeastwardbyfitsandstartsthoseunhappybanto spentmostoftheirtimetravelingbackto Kyotowithemptystrongboxesandrejoiningthehungrytroopswithfullones. ZigzageingthroughcentralHonshu,thechimbucrossedthemountainsandapproachedEdo,thestrongholdofpro-Tokugawasentiment, whereIwakurahopedto makethegreatestimpression.Encampedon

theMusashi plains,hismenwereonlyaday’s marchfromEdo,readyto occupyitwhenthecircumstances permitted.Butagain,tohisdiscom-

fiture,suppliesranshort,andtheimperialtroopscouldnotverywell haveenteredthecityasbeggars.Lackinganyalternative,heissuedan otderto theMitsuiclerksfora thousandbalesofpolishedriceto be storedinEdoinreadinessforthearrivalofhischimbu.Themoneyfor

purchasing itwasofcoursetobeadvanced byMitsui-gumi. Whenthe clerksacceptedthisorderwithouthesitationhewassodelightedthathe summonedthemintohispresenceandcommendedthempersonallyfor theirspirit. It wasnot an easyassignmentto purchasefoodforfivethousand

enemytroopsintheveryshadowofthebakufu’scitadel,butMitsuigumimanaged todoit andstoredthericeinoneofthefirm’swarehousesatFukagawa alongtheSumida River.Whentheyreported back

to chimbuheadquarters,Iwakurashowedhisgratitudebyinvitingthe HouseofMitsuitoprovideanadditionalonehundredthousandryofor thecampaign,whichwasapproachingaclimaxasthemainbodyofim-

perialtroopsapproached fromthedirectionofKyoto.

Iwakura’srequestput theMitsuisin a tightspot.Thesituationin Edowasbecoming chaoticandtheexchangebusinesswasparalyzed. Unableto borrowfromestablished ryogaeya,the Mitsuissentout clerkstoborrowcashfromsmallshopkeepers, andamassed35,000ryo,

allinsilverzchibu piecesworthabitmorethan a shillingeach.Ifraising thismuchmoney onshortnoticewasdifficult, delivering ittoIwakura’s

headquarterswasevenmoreso.Edowassurrounded bythebakufu’s

troopsindefensive positionsandambushes, andwayfarers werebeing harassedbyirregularsandmarauders.Anycargonotconfiscated by

BYAPPOINTMENTTOTHEEMPEROR =: 89

thebakufuwouldprobably havefallenpreytorobbers.Mitsui’sresourcefulclerkswerenottobethwartedsoeasily,however.Onthe SumidaRiver,especially whereit passedbetweenMukojimaand Yoshiwara’sbrothelquarters,thereweremanypleasurecraftforrent.

Thosesmall,roofedboats,somefittedwithslidingscreensforthe

sake

ofprivacy,wereusedinfineweatherforoutings,bathingparties,or

discreetdalliance,oftenwithgeishaorcourtesans.Butinthemonthof Marchtherewaslittledemandfor

them,and one of the boatmenwas

easilypersuadedto takea partyofrespectablydressedmerchantsona longcruise.

Ontheeveofdeparture Mitsui’semployees wrappedthebagsof silverinstrawmattingandhidthemundertheflooringoftheboat.

Threeclerkswereaboardwhenthefloatingtreasury,ladenwithapproximatelyatonandahalfofsilver,headedupstream inthemorning. Buttheydidn’tlooklikeclerks,andmuchlesslikeconspirators. Tothe casualobservertheyseemedtobecarefreegentlemenona holiday,and

whenotherboatscamewithinhailing distance thetriostrengthened the

illusionbypouringsakeforeachotherandsingingtipsily.Nevertheless,theboatwasstoppedbya bakufupatrol,andtheboatmanwas askedwhysucha craftwithonlya fewpassengersrodesolowin the

water.Theamateur smugglers thoughtthattheirgamewasended, and oneofthemreportedlaterthathis“liverwaschilled” withfear.But, somehow,theytalkedtheirwayout of the trap,andat lastarrived safelyat their destination,near Iwakura’sheadquarters,with

their

preciouscargo.’

Despitethesefinancial difficulties, withintwomonthsafterseizing powertheSat-Chogrouphadorganizeda powerfularmyandthe bakufu’spositionhadbecomehopeless.Butin Edosomediehards,in defianceofthedeposedshogun’swishes,weredeterminedto resistthe imperialists.Leadingtheirreconcilables wereLordOguri,thenminister ofthe bakufu’sarmedforces,andEnomotoTakeaki,commanderofits

navy.Enomotorefusedto surrenderthe fleetand withdrewit to Hokkaido,continuingfromtherethewarat sea.Oguri,equallyobsti-

nate,gathered remnantsofthebakufu’sarmyandformed a threethousand-man militiaunitcalledtheshogitai. BythentheMitsuis presumably hadseveredtheirbusinessconnectionswiththebakufu.Butin Japan

theacceptanceof favorsincursalifelongobligation,calledgiri,the fulfillment ofwhichisasbindingasisdutytoone’sancestors.Minomura’ssenseofobligation towardhisbenefactor Oguriwasparticularly strong.Thus,evenaftertheformalsurrenderofEdoto theimperial forces,Mitsui-gumi gavefinancialsupporttoOguri’sshogitai,although theirfortunewasstakeduponthevictoryofitsenemies. Thissupportwasunavailing,however.EntrencheduponUenohill

90 - MITSUI

(nowincluded inTokyo’sUenoPark)theshogitai foughtamemorable butlosingbattle,in whichmostof Kan’eitemple,enshrining the guardiandeitiesof theTokugawadynasty,wasconsumedbyfire. Oguri,Lordof Bungo,wouldstillnot admitdefeat.Escapingfrom Edowithsomeofhismen,hemadehiswaynorthwardto joinother

holdouts,butwascapturedandbeheaded. Thisexceptional instanceofdrumheadjusticewastragicandalsoun-

fair,forthenolessintransigent Enomotoandotherbakufustalwarts werepardonedandbecameprominentstatesmenoftheMeijiera.Itwas alsoshortsighted, becauseOgurialoneknewthe answersto many

questionsthatpuzzledthebakufu’ssuccessors. Onemystery,stillunsolved,wasthedisappearance oftheshogun’srumoredtreasure,ac-

cumulatedsincethedaysofTokugawa Ieyasu.It isgenerallybelieved that Ogurihadtakenthe precautionof hidingit in the mountains duringthe bakumatsuperiodandhopedto useit for supportinga

countercoup inthenameoftheTokugawas. Sincehisdeathtalkabout theshogun’shoardof goldcoins,believed tobeworthhundredsof millionsof dollars,hasluredinnumerabletreasurehunters,who

have

literallyriddledthelowerslopesof MountAkagi,in GummaPrefecture, whereOguriwasslainandwherethe goldis supposedto lie

buried.*

AfterEdowaspacifiedit wasrenamedTokyo,meaning“easterncapi-

tal,” on December3, 1868,andthe shogun’sspaciouscastlewas reno-

vatedforoccupancybytheyoungemperorandhiscourt.InNovember 1868,whenmilitaryoperationsin the northernprovinceshadbeen

completed, EmperorMeijiemerged fromseclusion inKyotoandmade thefour-hundred-mile journeytohisnewcapital.Hisgrandprocession

to Tokyowasactuallya proclamationof theimperialgovernment’s legitimacy,andnoexpensewassparedtomakethetriumphimpressive. HisMajesty’spalanquin,borneby sixteenrobustmen,wasescorted alongtheTokaidoby onethousandnobles,lords,samurai,andfoot

soldiers,allwearingtheirmostsplendidattire.

Oneofthosesaidtohaveaccompaniedtheemperorwashistreasurer,

MitsuiSaburosukeTakaaki,sonandheirofHachiroemonKofuku.The

privilegewascostly,inasmuchasthehousehadbeentappedforfifty

thousandryotodefrayexpenses ofthejourney.Butitwasasbreadcast uponthewaters,forthetransferofthecourttoTokyostartedaveri* MostpersistentofthetreasurehuntersaremembersoftheMizunofamily,

descendedfromhereditaryretainersoftheTokugawas,whohavebeendiggingtrenchesandtunnelsonMountAkagiforthreegenerations, according toTanakaYoshihiro,writingintheMainichi DailyNews, January3, 1973.

BYAPPOINTMENTTO THE EMPEROR-

91

tableboominthenewcapital. Althoughthesophisticated Edokkoin genetalwereunenthusiastic aboutbeinggoverned by“countrysamutai,”theywantedto looktheirbestfortheoccasionandspenttheir moneyfreelyatTokyo’sstores,includingEchigoya,onclothes,ornaments,andotherextravagancesforthewelcoming on November26. Themilitarycampaignofthecivilwarandtheemperor’sjourneycost

theMitsuisatleast250,000 ryoinadditiontoallthecontributions they hadmadebeforetheRestoration. Yettheimperialtreasuryremained empty,and the merchants,disillusionedby the newgovernment’s abuseoftheoldsystemof levyingloans,wereunresponsiveto pleas formorefunds.Becausetheirdistrustwasparalyzingtheeconomy,the

government decidedtoissuepapermoney asameansofrepaying funds alreadyborrowedandofprimingtherustypumpofbusiness.This papercurrency, calleddajokansatsu, otfinance-ministry notes,wasmade byawoodblockprinterwholivedinoneoftheMitsuicompounds.The reputablecompaniesof Mitsui,Ono,andShimadaweredelegated to

distributethenotesinaccordance witha plandevisedbyYuriKimimasa:eachofthethreehundredlordsofthecountrywasallowedto borrowoneryoforeachkokuofriceproduced uponhisland,without interestif repaidwithinfiveyears. Thosefinance-ministrynoteswerenot convertible,andtheironly guaranteewastheimperialchrysanthemumcresttheybore.Theywere

accepted fairlywellintheKyotoareaandinOsaka, wheremerchants weteaccustomed to handlingpapercurrency,butwerespurnedby peopleinTokyoandthenorth,whotrustedonlyhardcash.Whenthe decisionwasmadeto movetheimperialcapitalto Tokyo,it became imperativeto establisha soundmonetarysystemthere,andthiscould

notbedonewithoutthehelpofTokyo’smerchants.Apparently it wasMinomura whosawtheonlywaytowintheircooperation. Ina

lettertoKido,a leadingmemberofthegoverningjunta,Okubowrote: “Wehavediscussed raisingmoneyandforcedloans.Concerning the propositionbyMitsuiandothersaboutcirculating themoney,Mitsui, Kashima,etc.willsoonstudyitamongthemselves.AMinomuraRizaemon,proxyofMitsui,hasguaranteed circulationofpapermoney,and

thelike-minded merchants willdotheirbest.’

Minomuraproposedthatthegovernmentorganizetherichchoninof Tokyoand,bypromisingappropriatebenefits,persuadethemtoundertakecirculationoftheunpopulardajokansatsu.Naturally,hisemployers

wereto beat thecenteroftheoperation.Fourleadingmerchants, advisedbyMinomutra, agreedthatinordertoinspirepublicconfidence inthepapermoneyit shouldbedistributed togetherwiththefamiliar

goldandsilvercurrency whenitwasputintocirculation. Asanincen-

tive,thosemerchants whohandledthenewmoneywereto

receivea

92 - MITSUI

commissionforeverynotepassed.Accordingly,anofficialbureauwas establishedwithMitsuiSaburosukeandtwoofhisassistants incharge. Tokyo’smerchantswerepersuadedto acceptthis plan,and within eighteenmonthsforty-eightmillionryoinpapermoneywereputinto citculation.Suchwasthe precariousbeginningof Japan’smodern

currencysystem. Nevertheless, thegovernmentlackedthecoinandbullionneeded bothforpayingitsdebtsabroadandespecially forbackingitsdubious

cutrencyat home.Consequently, severalbig merchantsweresummonedto a meetingwheretheyweregivena shockingultimatum: theywereto supply860,000ryoin goldor silverat once,inexchange forpaper.ThelargestquotafelltotheMitsuis,whoweteinstructedto providea totalof300,000ryo.Theyalsoweredelegated to collectthe quotasfroma dozenothermerchantsbeingheldresponsible for the remainderof the sum.Minomuraconvincedthe treasurythat the

Mitsuiscouldnotproducesomuchmoneyondemand, butagreedto advancefiftythousandryo.Howtheydidit isa mystery,butonthe appointed daytheypaidthefiftythousand ryo,togetherwithtenthousandmore from Ono and Shimada,and sometens of thousandsthat

ostensiblywere“donated”bythepeopleof Tokyobutactuallywere advancedbyMitsuiwithoutinterest.

Forthissignalservice tothegovernment fourMitsuifamilyheads—

Hachiroemon,Jiroemon,Gennosuke,andSaburosuke—wereawarded fivehundredbalesof riceeach,appointedofficialaccountantsto the government,andgrantedthesamurais’privilegeofbearingtwoswords —anhonorthattheirancestorSokubeihadforswornhappilytwoanda

halfcenturiesearlier.

TheMeijileaders,mostofwhomwerestillintheirearlythirties,were

drivenbytheambition tomodernizeJapan’sinstitutions sothenation couldbecome strong,remain independent, andcommand respectinthe world.Blandlyignoringthefactthatnotlongagotheyhadbeeninthe vanguardofthemovementtoexpelthebarbarians,theyexhortedtheir countrymento imitatethosesamebarbariansasa patrioticduty.More

ot lessunitedinfealtytotheirjuvenilegod-monarch, theyplunged

impatientlyaheadwitha hostofreformsaffectingeveryaspectofpub-

liclife.

Theirmostcriticalproblemswereeconomic.Japan’speoplesub-

sistedmainly upontheproductsofagriculture,inwhichsomeeighty percentofthemwereengaged. Sincetheincome perpersonwasonly aboutsixty-five dollarsayear,theaccumulation of capitalevenfor

agriculturaldevelopmentwaspainfullyslow.Industrywasstillalmost entirelyin the handicraftstage,transportationwasrudimentary,and

communications wereprimitive.Becausethedivisionofthecountry

BYAPPOINTMENTTO THE EMPEROR«

93

intoapproximatelythreehundredsemiautonomoushanprecludedthe effectiveapplicationofanyuniformprogramofdevelopment,feudalism andeverythingit entailedhadto beabolished.Thedaimyo.ofChoshu wasthe firstto returnhisfiefto theemperor.Otherdaimyowhose

clansmen hadbeenmostactive intherestoration agreedtodothesame andsigneda memorial, composed byKido,whichstatedinpart:“The placewhereweliveistheEmperor’s land,andthefoodwhichweeat is grownbytheEmperor’smen.Howcanwemakeit ourown?We nowteverentlyofferupthelistofourpossessions andmen,withthe

prayerthattheEmperor willtakegoodmeasures forrewardingthose towhomreward isdue,andfortaking fromthemtowhompunishment isdue.. . . Letalltheaffairsoftheempiregreatandsmallbereferredto huon,** Thisdeclaration,likemanyofthosemadeinthenameoftherestora-

tion,seemstohavebeentakenalmostverbatim fromworksbythe Mitsuis’ oldteacherMotoori,orbytheChoshuprophetYoshidaShoin, whointurnhadbased theirthoughtsandwritings uponJapan’s earliest classics. Inthiswayreformsthatotherwisemighthavebeenregarded asextremelyradicalweregiventheauraof unimpeachableauthority andwereaccepteddutifully,if not withenthusiasm. In 1869allthedaimyoofferedtheirfiefstotheemperor.Withinapetiodoftwoyearstheprefectural systemwasestablished,replacingthe hundredsofhan,andthefeudalordercrumbled,clearingthewayfor thecreationofnewandcentralized nationalinstitutions. Mostsignificantwerethelegalabolitionofclassdistinctionsandthe

liberationofthepeopleto followoccupations oftheirchoice,travel

freely,marryastheywished,andbuyorsellland.Manyobstructionsto commerceandindustrywereremoved.Japanesewereencouragedtogo abroadforstudy,foreignerswereinvitedto cometo Japanandwere

paidwelltoteachorpractice theirspecialties, andthegovernment took an activerolein importingforeigngoods,apparatus,andmanufac-

turingplantstofamiliarize thepeoplewithmodernindustryandits

products. Theburdenoffinancingthoseinnovations,togetherwiththecostsof armaments,payinginterestonforeigndebts,andcompensating about 400,000joblesssamurai,wasalmostunbearable.In 1868,thefirstyear of the Meijiera,the governmentspenttwenty-five millionyen,althoughordinaryrevenuewasonly3.5millionyen.(Theyen,at that timeapproximatelyequivalentin valueto the UnitedStatesdollar, replacedtheoldryodenomination inthatinaugural year.)Forcedloans andotherborrowings fromJapaneseandforeignmerchantsamounted

to 5.4millionyen,leavinga deficitofaboutsixteenmillion,which

increasedbyanothertenmillionin 1869.Partlyin orderto meetthis

Muroran steel works

Tokyo

shipbuilding

Kamioka

nonferrous metals

Kyoto

Tamano

silkweaving Kobe banking,textiles

Ol petrochemicals Yokohama eavy machinery

shipbuilding

Kawasaki

=

heavymachinery

——

Hiroshima heavy machinery

Nagoya textiles,woolens

vel" Yuta

shipbuilding, heavymachinery

—

Kushikino gold Makurazaki ‘tea

TheMitsuis inModern Japan

BY APPOINTMENT

TO THE EMPEROR

= 95

emergencythe governmenthadstartedissuingthosenonconvertible

banknotesthattheMitsuishelpedtopromote.Butbecausetheirex-

changevalueagainstspeciequicklydroppedby nearlyone-half,the financialsituationremainedverydelicateindeed,andtheeconomywas floundering. :

AtthecenterofpowerinJapanwastheso-called Sat-Chooligarchy,

consistingofOkubo,Saigo,MatsukataMasayoshi,andKurodaKiyotakafromSatsuma, andKido,Ito,InoueKaoru,Yamagata Aritomo, and KatsuraTarofromChoshu.Thesedaringmen,togetherwith OkumaShigenobuof Hizen,ItagakiTaisukeof Tosa,and,later,the noblemanfromKyoto,SaionjiKimmochi,dominatedJapan’ssucces-

sivegovernments from1868untilaftertheMeijieraendedin1912.

MostintimatelyassociatedwiththeMitsuiswasInoueKaoru,who servedthegovernmentundervarioustitlesasan all-aroundadminis-

trator. Inoue,likeso manyof the other newleaders,had takenhis ap-

prenticeshipasyonin,orbusinessmanager,forhishaninChoshu.It was

quitenaturalthattheyoninshouldhavecloserelations withthemerchants,andit hasbeensaidwithsomereasonthatbasically theMeiji Restorationwasa consequence ofthecoalitionbetweenyoninand

chonin.It maybeassumedthattheMitsuis’houseruleofcultivating the“honorablemenin power”firstdrewthemto Inoue,justasthey

hadbeendrawntoOguri,hisrecentpredecessor inthebakufu.Butin

thislatertimethe attractionbetweenInoueandtheMitsuiswasmutual,

becausethefinancialsituationwhichconfrontedInouewasunimaginablycomplex,andnonebutthebigmerchants andtheirbantocould understandhowtodealwithit.Inadditiontosustaining therisingflood ofits owndepreciatingbanknotes,thegovernmentundertookto re-

deemthedifferent kindsofscripthathadbeenissuedbymanyofthe formerhan,allofwhichbrought theamountofpapermoney incitculationto almostonehundredmillionyen.ThusInoueandhisstaff recruitedforthenewMinistryofFinancepracticallywallowedinmore

thansixteenhundreddifferentkindsofpapernotes,aswellasindebasedgold and silvercoinsfrom assortedperiods,and

copper,brass,

andironcoinsofthemostdiverseshapes,sizes,andprovenance—not to mentioninnumerablecounterfeitsin allcategories. The currencyproblemwasameliorated somewhatafterIto Hirobumi,alsoservingasavice-ministeroffinance,returnedin1871froma visitto theUnitedStates,wherehehadstudiedtheAmerican money system.Hepersuadedhisgovernmenttoadoptthedecimalsystem(the

yenbeingvalued atonehundredsen)andsupervised theestablishment ofa modernmintin Osaka. The Mitsuiswereappointedagentsfor the mint,underInoue’s supervision,to exchangenewcoinsorbullionforoldmoney.Forthe

96 - MITSUI

purposeMitsui-gumi setupofficialmoney-exchange officescalledgoyo

kawase-zain Yokohama,Kyoto,Osaka,Kobe(the new namefor Hyogo),andHakodate.Suchclosecollaborationbetweenthetreasury andMitsui-gumibroughtcomplaintsfromrivalsto theeffectthatthe MinistryofFinancewasactuallylocatedintheMitsuiheadquartersat Surugacho.Thebarbwasnot unjustifiedfor,in 1872,soonafterthe mintopened,theMitsuiswereauthorizedtoissueabouttenmillionyen worthof convertiblenotes,naturallyat an attractiveprofit.Mitsui-

gumi’sgoyokawase-za furtherextended itsactivitiesto handlemoney exchanging foraboutseventy-five localgovernments inthenewprefectures. SuchafriendlyrelationshipbetweenthegovernmentandtheMitsuis wasblamedonInoue,whohadextendedhisinfluence intoeverydepartmentof thecentraladministration,althoughhe wasonlya vice-

minister.Hisself-aggrandizement, financialaswellaspolitical,was especially repugnantto SaigoTakamoriofSatsuma,anidealistwho despisedpoliticalchicanery andpersonalcovetousness. Whenhewas invitedto a partygivenbyInoueforPrinceIwakuraandotherstatesmen,Saigoexpressedhisfeelingswithhisusualbluntness. Pouringa cupof saké,heofferedit to hishost,sayingloudly:“Thisisforyou, Inoue,thebantoofMitsui.”Inoueseemednotto beoffended,butthe

remarkalarmedotherswhosensedgrowingcleavages intheSat-Cho ranks. Tensionswererelievedsomewhatbythedepartureof a missionto theUnitedStatesandto Europewiththedoublepurposeoftryingto gainrevisionsoftheunequaltreatiesthathadbeenthrustuponJapan

bytheWesternpowersinthe1850sandofobservingWesternsociety inordertoimproveJapanese institutions. Themission,whichdeparted latein 1871,washeadedbyPrinceIwakuraandincludedforty-sixhigh officials,among whomwereOkubo,Ito, andKido.Accompanying themweremorethanfiftystudentsofbothsexeswhointendedtostudy abroad.Among the studentswereDanTakuma,a futureobantoof

Mitsui,andhisfriendKanekoKentaro,wholaterhelpedItotowrite theMeijiconstitution, promulgated in1889.

Mostof thosestudentswereoffspringof noblesor prominent samuraifamilies;thechildrenofhelpfulmerchants seemto havebeen

ovetlooked.Inoue,whohadmorethana

casualinterestin the futureof

theMitsuis,realizedthatiftheyweretokeeppacewiththetimesthey wouldhavetobroadentheexperiences oftheirsons.Untilthenno Mitsuihad evertraveledabroad,so

nonehadmorethan

a secondhand

knowledgeofmodernmethodsofbusinessandfinance.Inconsultation withMinomura,InoueprevaileduponOmotokatato sendfiveof the Mitsuiyouths,rangingin agefromseventeento twenty-twoyears,to

BY APPOINTMENT

TO THE

EMPEROR

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theUnitedStatesforstudyandtraining.TheysailedfromJapanin February1872.Atfirsttheyattendeda preparatoryschoolin New Jersey,butthen,insteadofgoingontocollege,theytooktheirhigher

educationin the textilemillsof Lowell,Massachusetts. Onediedin the

UnitedStates,buttheothersspenttwoyearsabroadandlaterserved theirfamily’sHousewithdistinction.

Thiswisemoveindicated Inoue’sconcernoverthefactthatfewof the old-linemerchants,includingthe Mitsuis,hadshownenough imaginationor flexibilityto becomeleadersinthechangingeconomy. WhileMitsui-gumi,asusual,hadaligneditselfwiththemeninpower andsecuredthelion’sshareofofficialbusiness,ithadmadenoadjust-

menttothetremendoussocialchanges thatwereoccurring. Theeconomicupheaval hadbroughtruintomanymerchants, whoaccordingly wereunabletorepaytheirdebtstoMitsui.Theclothingandtextile

business,uponwhichtheprosperityof thehousehadlongrested,had goneto pieces.And.especiallysincetherecentshiftof thecenterof

politicalactionfromKyototoTokyo,theoldstructure ofOmotokata hadbecomeobsolete.ButtheMitsuis,asthoughmesmerized bytheit venerable traditions,wereunable tocopewiththesenewdevelopments

andtheproblemstheycreated.Instead,theydependeduponthegenius ofMinomuraforeverything.Inthesixyearssincehe hadattainedhis newnameandposition“themanfromnowhere”had madehisinfluencesopervasivethat heseemedto havebecomethe Mitsui’smaster

ratherthantheirservant.

Intheearly1870s,attheinsistenceofMinomura,theMitsuis’textile brancheswereseparatedfromtheirmoneyexchanges,andtheauthority oftheTokyooffice,inwhichhewasthepower,tookprecedence over

Omotokata. Controloverholdings ofspecie,government funds,loans, andsecurities wastransferred totheexchangeoffices,andOmotokata

(inotherwords,thefamilyheads)no longerwasentrustedwithdirect managementofthebusiness.Insteadofcontinuingtoenjoytheirfixed sharesof Mitsui-gumi’sprofits,the severalbranchesof the concern wereput on a self-supportingbasis and maderesponsiblefor their

respective losses.Thethree-year accounting periodwasreduced tosix months,andeachbranchofficewasentitledtokeeptwentypercentof

theprofitsitproduced duringthatperiod.Bonuses weretobepaidto

thecompany’sofficersaccordingto thequalityof theirperformance;

andmembers ofthefamilywereenjoined to“devotethemselves tothe promotionofbusinesswithoutobjection.” Clerksweregivenhigher salaries, butalsotheyweretobeheldstrictly responsible forshortages in theiraccounts.

Thisdowngrading ofthefamilieswasresented,naturally,buteven

moreoutrageouswasMinomura’sdecisionto uprootthemfromtheir

98 .- MITSUI

luxurioushomesinKyotoandtransplantthemtoTokyo,Osaka,Kobe,

andYokohama. Notonlyweretheirsocial habitstobedisrupted: they weregivenbluntorderstogettowork.Thearticleofreorganization concerning theirexilefromKyotostated:“Theheadsofthefamilies willgoto theofficesofwhichtherespective familyisin charge.The eldestsonofeachwillbefreeto selectlive-outorlive-instatus,[but]

thesecondsonandyoungersonswillliveinandworkthesameas

clerks.Omotokatawillincreasepaymentforboard,butwillnolonger payforincidental expenditures.’”” BehindMinomutra’sstrategywashis cherishedhopeto convert Mitsui-gumifroma generalmerchanthouseandmoney-changerintoa greatbankingconcern.Anopportunitytodosoappearedin1871,when Inouegavehimto understandthatthefinanceministrywouldfavor Mitsui’sestablishinga full-fledgedbankaftertheAmerican or Europeanpattern,withbranchesinJapan’smajorcitiesandtheprivilegeof

issuingitsownnotesaslegaltender.Apetition tothateffectwassubmittedbyMitsui-gumi andapprovedbythecabinetwithinamonth. Confidentof success,Minomurahireda mastercarpenternamed ShimizuKisuke,whodrewup plansandstartedto constructanimposingfive-storybuilding.Shimizu,whosedescendants nowbuild skyscrapersandatomicenergyplants,hadneverseena bank,buthis

imagination wasuninhibited, andsoonTokyoites watchedwithwonder andadmiration asJapan’slargestforeign-style buildingtookshape.As onenon-Japaneseobservercommented,it wascalled“foreign-style” becauseit wasforeignto anystyleofarchitectureonearth.Butbefore thesplendidedificewasfinishedthegovernmentcanceleditsapproval ofaMitsuibankinfavorofaplantoestablish nationalbankslikethose

in theUnitedStates.Thisreversalseemstohavebeentheworkof

Inoue’sassistant,ShibusawaEiichi,whoconvincedhissuperiorsthata bankcapableofsupportingthenation’scurrencysystemandfostering itsindustrieswouldhaveto bemorebroadlybasedthana familybank couldbe.Inoueagreedthatthebestcourseforthecountrywastoform

a coalitionofbigfinanciersforthejointestablishmentofa national bank,withsharesopentopublicsubscription. Thebiggestexchangehouseswerethoseof MitsuiandOno,then competingfiercelytoexpandtheirsharesofgovernmentbusiness.The firstproblemwastopersuadethemtoworktogether.Asapreliminary

step,InoueandShibusawa summoned representatives ofthetwohouses openeditwiththisadmonitoameetingatInoue’smansion.Shibusawa tion:“ThereisarumorthattheMitsuiandOnocompanies arenoton good terms.If the rumorbe true,it is regrettableindeed,asboth com-

paniesaredoingthesamebusinessforthegovernment. Theyshould

notbepreytothespiritofrivalryandjealousy.”

BYAPPOINTMENTTO THE EMPEROR«

99

Thecompetingfinanciersmanagedto suppresstheirhostility,and theMitsui-OnoGinkowassetupimmediatelyasexclusiveagentforthe

government’s exchange business, inanticipation oftheNationalBank Actthenbeingdrafted byIto.Theactwaspromulgated in1872,anda yearafterward theMitsui-Ono partnership becametheDai-IchiKoku-

titsuGinko,orFirstNationalBank.Thirtythousandshares,eachwith afacevalueofoneyen,wereissued.Twentythousandweretakenupby MitsuiandOno,andtheothertenthousandwereofferedtothepublic. The equaldivisionof sharesbetweenMitsuiandOnoraisedthe

problemofwhowouldbebossofthebank.Theneatbutimpracticable

solutionwasto havetwopresidents,MitsuiHachiroemon andOno Zensuke,servingtermsinalternatemonths.Therewerealternatevicepresidentsandalternatemanagingdirectorsaswell.Toaverttheconfusionsuretoarisefromthisdichotomy, ShibusawapromisedMinomura

secretly thathewouldserveintheposition ofgeneralsuperintendent. However,Minomuraalsoenteredthegrouppictureasdeputypresident,inplaceofHachiroemon, whoexcusedhimselffromtakingan activerolebecause ofageandinfirmity. TheMitsuis’chagrinat havingbeendeniedan exclusivefranchise wasaggravatedby the government’sinsistencethat theysurrender

theirnewbuildingtoDai-IchiKokuritsuGinko.Mitsui-gumi House, asitwascalled,hadbecome theshowplace ofTokyoandnolesspopularasa subjectforpaintersandprintmakersthanEchigoyahadbeenin anearliertime.Minomurashruggedoffthisdisappointmentandcalled

inShimizutodesigna newbankbuilding,havingnodoubtthathis petitionwouldbeaccepted eventually, astheorganicweaknesses in Dai-IchiKokuritsuGinkoshowedtheireffects. Grippedby the feverto modernize,the Meijireformersraidedthe treasurywithoutrestraint,incurringbiggerandbiggerdeficits.Roads,

railways, andtelegraph lineswerespreading acrossthecountry.Harbor wotks,lighthouses, warehouses, andpublicbuildings wereprovided to assistforeigntradeandshipping,whichwereburgeoning. Prefectural governments,compulsoryuniversaleducation,a postalsystem,and mandatorymilitaryserviceforallablemaleswereinauguratedinquick succession.OkumaShigenobureturnedfromEuropeexcitedwiththe

ideaofindustrialization; butthemeninchargeoffinances,knowing thatrevenues stillbroughtinlittlemorethanhalftheamount ofmoney beingspent,foresawonlydisasterratherthanOkuma’s vision.

Partlytoavoidbeingblamedforthenation’sfinancial difficulties,

InoueandShibusawa(alreadyundersharpattackfortheirfavoritism

towardcertainbusinessmen) resignedtogether,but not without releasing ajointstatementinwhichtheycriticized themanagement of

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privatebusiness aswellasofpublic finance. Thereupon Shibusawa took

thesupervisoryjobatDai-IchiKokuritsuGinko.AndInouehadtime at lastto takestockoftheungainlyMitsuienterprises andto analyze theiroperations. WhatInouefoundwasdeplorable. The Houseof Mitsui,oncea modelof progressivebusinessorganization, had become,likethe

shogunate uponwhichitwasmodeled, alooseagglomeration ofsemiindependent operations, eachencrusted withthebarnacles oftradition. TheTokyoofficeandOmotokata inKyotoworkedat cross-purposes,

asresentfulfamilyheadsandjealous bantoeitherignored orsabotaged

theinnovationsof the upstartMinomura.He knewhowto winthe

affectionandcooperationof hisunderlings,buthisbluntplebeian mannerrepelledsomeMitsuis,andhisappearance mayhave embarrassedthem.Althoughinhisownluxurioushome(agiftfrom Hachiroemon)hewotethefinestof silks,onthejobheworecheap cotton kimonoanddirtystrawsandals.Healsohadahabitoflaughing loudly, therebyexposingthegapsleftbyseveralmissingfrontteeth.

ThefamilyheadslivinginKyotohadresisted hisordertomoveto

new posts, so upon Inoue’s advicea second general headquatters,

TokyoOmotokata, wassetup.Minomura wasputinchargeofliaison andplanning,undernominalsupervision ofMitsuiSaburosuke and MitsuiJiroemon, whoappearedattheofficeonalternatedays.Very

soonit becameclearthatwithno moreauthoritythanthatconferred uponhimby Hachiroemon(whohadlittleof it himself)Minomura couldnot enforcehisreforms.In 1875,whenanothergreatnational

ctisisloomed,Inoueintervened directlyto shaketheclanoutofits

complacency.Summoningeighteenfamilyheadsandseniorbantotohis palatialresidencein Tokyo,he told them how mattersstood.His un-

sparingassessmentmusthavefrightenedthem,for afterwardMinomurawaspresentedwitha powerofattorneybearingthesealsofthe

headsoffivemainfamilies. Thisamazing document gavehimavirtual dictatorshipovertheaffairsoftheclananditsbusinessorgan,Mitsuigumi. Thefamilies’? membersweregiventhreedaystoexpresstheir“frank opinions”concerningthisdispensation. However,it wasmadeper-

fectlycleartothemthattheonlyalternative toapprovalwastopart

companywiththeclan.Therewasnoaudibleobjection,andMinomura becamesuperintendentof Omotokataas the proxyof Hachiroemon Kofuku,who now wasftee to devotehimselfto his silkcollages,the

teaceremony, andwhatremainedof a cultivatedsociallifein those materialisticMeijitimes.

Undertheinfluence ofInoueandMinomura,TokyoOmotokata’s charterwasrevised inamannerforeshadowing themodernconceptof

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corporatemanagement asdistinctfromsimpleownership ofassets: “Omotokata isthesolidbaseoftheMitsuiclan,whosedutyistopro-

tectthepropertyandotherassetsbequeathed byitsancestors. . . . The familyassetsof Mitsui-gumibelongto Mitsui-gumiandnot to the Messrs.Mitsui.Allthoseconcerned shouldrecognizethedistinction, andnoneshouldregardthoseassetsas his privateproperty.”®The charteralsostatedthatanyfamilymemberwhomightbe foundunworthyof hispositionbecauseof extravagance,disobedience,or unauthorizedindebtednesswastobepunishedwithconfinementathome,

or,ifheprovedtobeincorrigible, withexpulsion fromtheclan. Minomura musthaveexercised hispowerjudiciously, forhewonthe respectofhisemployersandcolleagues andtheaffectionofhissub-

otdinates.Indeed,theMitsuishada tendencyto dependuponhimtoo much.Once,whenhesoughttheirhelpinimprovingthebusiness, he pleaded:“I cannotovercomethisdifficulty alone....I amnot confidentofsuccessunlessallMitsuifamilymemberscooperateandwork as oneperson.... AsI havetoldyourepeatedly, I amjustan employee,andifyourelyonmeyoucannotexpecttheclantosurvivevery long.’”®

Perhapsworriedaboutwhatwouldhappen tothehouseintheevent ofhisdeath,hetriedtorecruitShibusawa Eiichi,anextremely talented financier whohadentered thebusinessworldunderhisauspices. Inhis

oldageShibusawarecalledMinomura’seffortsin thisdirection:“Mr. MinomuraoftheMitsui,wishingto makemehissuccessor, oneday

calledonmeandgavemeasuitofclotheswiththefamilycrestofthe Mitsui.ButItoldhimthatIwouldbepleased toservetheMitsuiasan adviser,butnotasitsemployee. I feltthatI couldbeofsomehelpto thefirm.Thisincidentwasthe originof thefriendshipbetweenthe Mitsuiandmyself.’’!°

ByalternateentreatiesandbrowbeatingMinomuramanagedto reinvigorate theenterprise, givingtheviable unitssomecoherence and loppingoffmuchdeadwood. TheTokyoEchigoya, theninperilous

condition,wassetup as a separatecompanycalledMitsuiClothing

Store,underthemanagement ofa relatedfamilybearingthename Mitsukoshi. (“Koshi’” isanalternatereadingofthe charactermeaning “echi”inEchigoya. It willberemembered thattheformerhereditary titleoftheMitsuifamilyheadwasLordofEchigo, andthatthename

hadbeenassociated withthe claneversince.)Withthe retaillines permanentlydivorcedfromthe money-exchange business,Minomura consolidatedthefinancialofficestoforma neworganizationcalledExchangeBankMitsui-Gumi.In 1874thenewedificewascompletedand toppedwitha hugedolphincastin bronze.Accordingto folklore, thegreendolphinwouldprotectit fromfire;but thebankneededa

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motepotenttalismanagainsttheholocaustthat,asInouehadprtedicted,wouldsoonthreaten thefinancial structureofJapan. AftertheestablishmentofDai-IchiKokuritsuGinko,theprivateex-

changehouses,likeMitsui’s,nolongerissuedpapermoney for the

government,althoughtheystillperformed exchequerservicesforprefectutesandcollectedtaxesfor the centralgovernment. Mitsuialso retaineditsappointmentasagentforthemint.Ono-gumi, lackingthis perquisite,concentratedits effortson taxcollecting,faroutstripping Mitsui.However,Mitsuiwasalsoholdingfundsfor the army,five ministries,andothergovernment agencies.Depositsof officialmoney,

withoutinterest,providedthethreehouseswithamplefunds.Onogumi,tryingto overtakeMitsui,was investingadventurously in mining,speculating in rice,and otherwiseexpandingits business. MitsuiandShimadaalsowereoperatingquitefreelywithtaxfunds,

becausethegovernment requirednocollateral. In1874,whenagainthefinance ministrywasintroublewithitspaper money,it demanded thatprivateholdersofofficial fundspostsound collateralamountingto asmuchasone-thirdofthevalueof such deposits.Despitethiswarningsignalthethreehousescontinuedtheir profitablegamesuntillatein 1875,whenthe ministrysuddenlyannouncedthattheywouldhaveto postcollateralequalin valueto the amountsofthedeposits.AtthattimeOno-gumi,whichhadextended itstax-collectingnetworkto fortyprefectures,haddebtsof morethan sevenmillionyenandassetsofonly170,000 yen.Unableeitherto put

upenoughcollateral ortorepaytheofficial deposits,thefirmcollapsed. AtthesametimeShimada-gumi alsowentbankrupt. Mitsuiwasinpoorconditiontoo,withgovernment depositsofsome fourmillionyen,andonlytwomillionyenworthof acceptablesecurities.The House,includingthe bank,held generaldepositsand silveramountingto abouteightmillionyen,butwitha financialpanic

infullcrytheMitsuiscouldnotriskusingthatmoney topaythegovernment. How,then,didtheyescapebankruptcy?Theanswertothatquestion mayhavebeenlost foreverwhenthe Minomurastorehousewas destroyedbytheearthquake in 1923.Butbymaneuversthatappeared

tobemiraculous,Minomutapresented thefinanceministrywithgovernmentbonds,landcertificates, andothergilt-edgedsecurities sufhcientto savetheHouseof Mitsui. It isknownthathewasnottakenbysurprise.Sometimebeforethe

ministry’s ultimatumInoue,byhisownaccount,hadwarnedMinomurathatOno-gumiwasonthevergeof bankruptcy,andadvised Mitsuitodisentangle itsfinancesfromthoseofOno.SinceInouewas

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inclosecontactwiththeMinisterofFinance,OkumaShigenobu, it seemslikelythatheknewoftheminister’s intentiontodemandhigher

collateral.Infact,thereisreasontobelievethattheministry’s movewas partof a planto eliminatethetworivalhousesof OnoandShimada (whohadbeentardyintheirsupportoftheRestoration’s regime)and to makeMitsuisupreme.Thishypothesisis supportedbyRizaemon’s gteat-grandson,MinomuraSeiichiro,whowroterecently:“It is true thatthecollateral-increasedecreebroughtona crisisforMitsui[aswell

asforOnoandShimada].Butit wassoarrangedthatMitsuialone wouldsurvive,takingadvantage ofofficialprotection.” Anotherpossiblemotiveforthisplot,ifsuchexisted,wastheneed

to shakeOno-gumiout of the managementof Dai-IchiKokuritsu Ginko,whoseaffairshadfallenintodisorderunderits schizophrenic

management. AfterOno-gumi’s collapse,Shibusawa hadthebank’s booksexamined byAllanShand,ayoungEnglishbankeremployed

by the financeministryto teachWesternbookkeeping to Japan’s buddingbureaucrats. His competenceand thoroughnessimpressed Shibusawa,who relieduponhim heavilyduringhis incumbency andformanyyearsafterward.Themare’s-nest thatShanduncovered is clearlydescribedby a modernhistorian:“This,the firstgovern-

mentalinspectionofa bankinJapan,revealedcompletelackofuniformityandconfusion inbookkeeping practices ofthefirstyearsofthe nationalbanks.Violationsof

the BankLawhad occurred,suchas:the

grantingoflargeloans(¥1,300,000) toOnogumiandlesseramountsto someindividuals withoutsecurity.Thecurrencyreservewasnotsufficienttomeetasuddendemandbydepositors fortheirmoney.TheinfluenceofOnogumiwastoogreat,theevaluation ofthebank’shold-

ingsoflandswastoohigh,andthemainbuildingitselfwasnotsuitable for Westernbankingprocedures.”!* Whenthese“extraordinaryevents”hadended,theMitsuisboreno |

illwilltowardtheirerstwhile rivalandmagnanimously interceded with ministerOkumatogivethevanquishedhouseenoughtimeforliquidatingits indebtedness. TheOnosdidso punctiliously, andtheir obantoturnedoverevenhispersonal fortunetocreditors,endingup withonlythekimonoonhisback.TheOnosandShimadas remainedin

business,but on so diminisheda scalethat Mitsuistood aloneas the

greatfinancialhouseinJapanandthemajorshareholder inthenational bank.

TheMitsuisgavefullcreditfortheirsalvationto Minomuta,ex-

tollinghimina letterofcommendation:“Youhaveforgottento sleep or eatin yourintenseeffortsto supportandpromotetheinterestsof theMitsuihouse.Whentheextraordinaryeventsconcerningthemott-

104 - MITSUI gagesoccurred,youtookunutterable painsandexperienced agonies

thatwouldhavewrungthebowels ofanordinaryman.Butthanksto youreffort,peacehasbeenrestored toMitsui.’ For this achievementMinomurareceived,alongwithmoresubstantialemoluments,a treasuredkakemonohandeddownthroughthe generationsfromtheMitsuis’ancestors. And,perhapsbecauseofhis

unendingworries,heacquiredatthattimea stomachdisorderfrom whichhe neverrecovered.

10 - Foundationsin

BankingandCommerce THROUGHOUT THEREMAINDER oftheMeijieratheimperial party’soligarchswentto extraordinary lengthstonurtureandprotecta few

favoredcommercialhouses.It is easyto imaginethattheir solicitude forthosemerchants, whomtheyrescuedfrombankruptcy againand again,wasinspiredbyacquisitiveness. Butalthoughmostofthestatesmeneventuallywereenrichedbytheirrelationshipwiththe entrepre-

neursandlivedaslavishlyashadmanya daimyobeforethem,they werenomerehenchmen ofbigbusiness. InWesternsocieties capitalists habitually subornedcomplaisant politicians intoservingtheirpurposes; butinMeijiJapanthepoliticians hadto createthecapitalistsfirst. Beinginchargeofthenation’sfinancesatatimewhentheaccounting

systemwasinchaos,thestatesmen needednopersonalassistance from themerchants inthemakingoffortunes.Politicians wereinaposition todisposeofpublicassets andtodispenseconcessions astheypleased.

Rewardsforloyalservicewereunstinting,andthemeninpowerusuallylookedtheotherwaywhentheircolleaguespassedoutthoserewards todeservingfriendsoreventothemselves.(Itiswrittenthatoneminis-

teroffinance,havingprepared theissueofsomenewpapermoney, arrangedto havea cartloadof “samples”deliveredprivatelyto his home.!)Butin generalthe newstatesmenusedthe country’sscant

wealthjudiciously, andtheirpamperingofcertainmerchants, which borea superficial resemblance toTammanyHallgraft,actually wasa partoftheirpeculiarstrategyforbuildinga strong,richcountry. Inthepoliticalrealmthenewoligarchs heldcontrolovertheimperial family,theunassailable bulwarkoftraditionandsymbolofthenational faith.Inmilitarymattersthequalificationsoftheirassociateswererecognized:Choshu’smentook chargeof the army,whileSatsuma’s dominatedthenavy.Butin questionsoffinance,whichcouldalsode-

terminethesuccessorfailureoftheimperialgovernment, theymost frontwas certainlyneededoutsidehelp.Theircitadelontheeconomic Mitsui,whosegoodnametheyusedasamarkofrespectability forunoftheMitsuis Theskillandexperience triedandoftenriskyprojects. themselves werevaluable, ofcourse.Butinthekaleidoscopic shiftsand 105

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changesoftheearlyrestoration periodtheMitsuis’ alreadyoutmoded knowledge waslessrelevant thanwastheirusefulness asanimpressive

facadebehindwhichto hidea makeshiftfinancialstructure. Thepaternalisticroleofthegovernment wasa decisivefactorinthe tiseofMitsuiasamodernbank.TherecentlyorganizedExchangeBank Mitsui-Gumi,a joint-stockcompany,wasalreadyoperatingunderits ownregulations,butMinomurawasanxiousto obtainfinancialsanc-

tionaswellaspermission tousethetitle“ginko,”asa nationalbank did,andtoadoptalimited-liability systemthatwouldprotect thehouse frommeetingthesamefateashadbefallen Ono-gumi. In 1875theMitsuissubmitteda petitionto thiseffect,pointingout thattherewerenoofficiallyrecognizedrulesconcerninggeneralbanks, andpleaded:“Thoughweareignorantanduninformed andnotconfidentthatweourselvescanformulateperfectrules,yetwedaretopresentforyouresteemedconsideration. . . ourdraftsofbankrulesand

otherdocuments inthehopethatyouwillinstructandenlightenus.”

Theformof organizationchosenandthereasonsforits choicewere statedintheprospectus:“Companiesareofvariouskinds,butthebest istheSociétéAnonyme,inwhichthenamesofmembersdonotappear. Itspolicyandsystemaredecidedbymajorityvotesandarecarriedout openly,thusinsuringjusticeandfairness.Moreover,thearticlesofas-

sociation andregulations areallsubjecttotheapprovaloftheGovernmentandmustbestrictlyobserved.Theneworganization terminates

therelationshipofmasterandservant.Weallbecome,equally,friends as membersofthenewsocietyandhopeto sharethebenefitsit may bringbymakingourheartsasoneandworkingtogether.”

FinanceministerOkumaignoredthepetitionatfirst,buta national crisiswasdeveloping overanexpectedrebellion,andDai-IchiNa-

tionalBankwasstillweakfromthecollapseofOno-gumi.Mitsui’srequestwasgrantedfinally,withtheexceptionthatthestockholderswere requiredtoassumeunlimited liability.Thatis,intheeventofthebank’s

failureeachstockholder wasresponsible notonlyforhisownshareof thedebtsbutalsoforthatofothersunabletorepaytheirs.Otherwise thenewlycharteredbankwasallowedto followitspreviouslyestablishedrulesandwasgiventheprivilegeofhandlingthegovernment accountsthathadbeenentrustedto itspredecessor.Thesetermswere

accepted. MitsuiBank,withoffices inJapan’sfourbiggestcitiesandtwenty-

fourmajortowns,wasinauguratedonJuly1,1876. Attheceremony Minomura’smessagerevealedhisconcernoverthe weaknessof the clanandtheexasperationhemusthavefeltathaving topushitsmembersupthehillofsuccess: “It mustnotbeforgotten thatinundertak-

inga deedonetendstopaygreatattention toit inthebeginningbut

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getstiredastheworkproceeds.... Thisisthegeneralhabitofhu-

manity.Soevenif thepurposeis beautifulandthereisagoodsystem, lazinessmakesone’seffortsuseless.ThatiswhyI hopethatyou,dear partners,willresistthistendency... continuingto do yourbestso thatthisbankwilldevelopgloriouslyandmakeprofitstobesharedby allofyou.’’8

Unfortunately, Minomura couldnotdeliver hisadmonition inperson becausehewasseriously ill.Buthewasstillworriedaboutthebank’s excessivedependenceuponofficialbusinessanditsvulnerabilitytothe

whimsofpoliticians.Therefore,hedictatedanotherpetitiontothe

financeministry:“Ifthegovernmentshouldchangeitscurrentpractice

andwithdrawthemoneydeposited withus,weshallfinditverydif-

ficulttokeepgoing.. . . Ifsuchasituationshouldarise,ourcompany’s distressaside,theflowofprivatecapitalwouldbeobstructed andfinancialoperationsparalyzed.Consideringthis,weurgeyouto continueto allowus,forthecomingfewyearsatleast,to handleofficialmoneyof governmentministriesandagenciesandnot to changethatpolicy.’’

TothispleaOkuma replied:“Yourrequest willbegrantedandyouwill beentrustedwithofficial moneywithoutfail.”>Sodespitetheexistence of thestate-sponsored Dai-IchiNationalBank,Mitsuicontinued to handlea majorshareof thegovernment’sfinancesuntiltheBankof

Japanwasfoundedin 1882. MitsuiBank(known asMitsuiGinkoinJapan),withheadquarters inTokyo’sSurugacho, startedwithacapitaloftwomillionyendivided intotwentythousandshares,ofwhichtenthousandweresubscribed by Omotokata,fivethousandbynineMitsuifamilies,andtheremainderby employees.Therewere383shareholders,mostofwhomheldonlyone

ortwoshares.Thisformalparticipation ofthestaffintheprofitsofthe enterprise wasoneofthefruitsofMinomura’s democratic policy,under whichtheprincipal managers, includingvice-directors, wereelected by theshareholders, andalltheemployees downtothejuniorclerkswere called“officers.” Theeconomicthinkersin government—especially Inoue,Shibusawa, andOkuma—wereunderconstantharassmentin theireffortsto stabilizefinance.ButmeanwhiletheyneverlostsightofthefactthatJapan’s survivalasanindependentcountrylayinforeigntrade.Evenafterthe openingof thetreatyports,virtuallyalloverseascommerce hadremainedinthehandsofforeignmerchants.Andsincetreatyprovisions hadsetcustomsdutiesat thelowrateoffivepercent,thegovernment

earnedverylittlerevenue fromthissource.Althoughoverseastrade wasincreasing rapidly,importsgreatlyexceeded exports;andtopay forimportsthegovernmenthadtoexpendabroadapproximatelyseven-

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tymilliondollarsingoldandsilverduringthe1870s—a ruinoussum considering thenation’spoverty.Indeed,withsuchanadversetrade

balanceJapancouldillaffordtheimportedmachinery,transportation equipment,steel,andothermaterials necessaryfor startingitsindustrialrevolution. Soonaftercomingto power,thegovernmentorganizedtheTokyo CommerceandTradeCompany, a jointenterpriseof whichMitsui Hachiroemonwaspresident.At the sametimethe Houseof Mitsui soughttoexpanddomesticandforeigntradethroughitsretailshopsin

Tokyo,Yokohama, Osaka,andtheoldbranchinNagasaki. Thoseeffortsmetwithlittlesuccess; andin1875Minomura, atInoue’surging, decidedtousetheprefectural branches ofMitsui’s reorganized bankfor handlingmerchandiseaswellasmoney.Aspartofthisprogramvarious tradingactivitieswereconsolidatedto forma newcompany,Mitsui-

gumiKokusan-kata (NationalProductsCompany). Onesectionofit consistedofanold,ratherhumdrumventureconducting tradewith theIzuIslands,southofTokyo.A secondsectionsupplied silkand grainto foreigntradersandimportedblanketsforthearmyministry. Athirdtransported cargobetweenNiigataandYokohama.Therewas alsoa sectionsupplyingMitsui-brandteaforexport. Kokusan-kata’s firstbigbusinesscamewhenthegovernmentbegan

toemphasize theexportation ofriceinordertosustainpricesandearn foreigncurrency.Withaloanofhalfa millionyenfromthetreasury, thecompanyboughtupricefromtheprovincesandshippedit to Europe.Havingno branchesabroad,Mitsui-gumiworkedthrough

Japanesegovernmentofficialsstationedin London,whoactedas Kokusan-kata’s agents.In thiswayKokusan-katabecamethefirst Japanesecompanytoconductforeigntradeabroad. Whilehelping theMitsuistoorganizeKokusan-kata, Inoueusedhis governmentconnectionsto starthisowntradingenterprise.Knownas SenshuKaisha,orFirstProfitCompany,thefirmhandledriceexports throughforeignmerchants,marketedthe outputof lead,silver,and

coalminesownedbythegovernment, andobtained amonopolyforthe importingofsteel.Themanager Inouerecruited wasMasudaTakashi, onceacavalryofficerforthebakufu,whohadshowntalentasoneof

hissubordinatesinthemint.AsaladMasudahadbeenanofficeboyat

theUnitedStatesLegationinEdo,wherehelearned Englishandstood readytodefendMinister TownsendHarrisagainstthreatenedattacks byantiforeignronin.Because hisfatherwasabakufuofficial, Masuda

hadbeeneducatedintheChineseclassics;andhehadseensomethingof theworldasa memberofa governmentmissionto theUnitedStates andFrance.AftertheMeijiupheaval hisfatherwasemployedbyphilos-

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opher-educator FukuzawaYukichiand,ashisassistant,tookpartin theWesternization ofmanyJapanese intellectuals. Masuda’s background, especially inforeignlanguages andWestern

thinking,wastoproveveryusefulinsurmountingthecommunications barrier,whichhadlongobstructed trade.SinceJapaneseandforeign merchantswereequallyignorantof oneanother’slanguage,theyem-

ployedChinese clerks,knownbythePortuguese nameofcompradors, toconducttheactualbusiness. Thecompradors couldreadJapanese

(itbeingwrittenmainlyin Chineseideographs)andspokea littleof thelanguage,aswellasthepidginEnglishcurrentinAsia’sseaports. Manyforeignersconsideredthecompradorsto be morehonestthan theirJapaneseemployers,butthelatterdespisedanddistrustedthem. Masuda’saversiontothecompradorswasstronganddidnotmellow withtheyears.In 1910hewrote:“Theyaimedonlyatobtainingcom-

missions... nevertroublingthemselves abouttherealinterestsof trade.Therelations betweenJapanese andforeignmerchants werethus greatlyestranged, andtheintimacyandconfidence sonecessary tothe smoothworkingofbusinessrelations. . . wereentirely lacking.Great inconvenience wasexperienced byJapanesemerchants, whocouldneitherobtaingoodswithoutcashpayments,norreceivetheirowndues

withoutactualdelivery ofthegoods.Thecompradors invariably took

theprofits,andit wasnotanuncommon occurrenceto seea foreign

merchant, whohadfailedinbusiness, workingintheemployment of

hisoldcomprador.”’6

Masudahadbeentrained inpracticalmathematics byhisfather,who wasfamousforhisrapidcalculations byancientChineseformulasand for hisabilityto usethreesorobansimultaneously. ThusSenshu Kaisha’syoungmanager wasmorethanamatchforanycomprador. Histalent,however,wasoutweighedbythedefectsof Inoue’sother

partners,whoeitherwithdrew theircapital abruptlyorembarrassed the firmby speculation,bribery,or counterfeiting.Inouehimselfwasin

troublebecauseofhis(andShibusawa’s) conspicuous liberality insellingthegovernment-owned AshiocopperminestoFurukawa Ichibei, son-in-lawofOno-gumi’sobanto,at a suspiciouslylowprice.In consequence,whileSenshuKaishawasstillonlya

fewweeksold,the Min-

istryof JusticebroughtInoueto trialandhe wasfoundguiltyon

chargesthatcouldhaveincurred aprisontermoftwoyears.Suchwas

hisprestige,however,thathegotoffwithafineofthirtyyenandsoon

wasappointed tothenewlyformednationalsenate.Immediately thereafterhewassenttoKoreaasJapan’sambassadorplenipotentiary. Even

beforehereturnedfromthismissionin 1877hewastoodeeplyengrossedinpoliticalproblemsto keephismindonanythingsomun-

110 - mrTsul daneastrading.AlthoughtheveryableMasudahadearneda profitof

150,000 yenforthefirm,Inouedecided togooutofbusiness.

TheneedfordevelopingJapanesetradeindependentofforeigncontrolwasasurgentasever,butMitsui’s Kokusan-kata,withitshaphaz-

_ardstructure,wasobviouslyinadequate forthepurpose.Ministerof FinanceOkuma, concernedover Inoue’sintendedwithdrawalfrom

trade,calledinMinomuraRizaemon andproposedthatMitsuiabsorb SenshuKaishaandbuilda strongerfirm.Minomura, knowingthat OkumawascloselyconnectedwithTosaandSatsumamerchants in

competition withMitsui,wasincredulous. Butuponconsulting Inoue anddeputyfinanceministerMatsukata Masayoshi, he wasassured thatOkumameantwhathesaid.Withthisencouragement, Mitsuiin 1876—after theestablishmentofMitsuiBank—mergedSenshuKaisha

with Kokusan-katato formMitsuiBussanKaisha,knownabroadever

sinceasMitsuiandCompany. Masudadescribedthecreationofthecompanyinhisautobiography:

“Minomura proposedtoInouethatatradingfirmbeorganized aspart oftheMitsuibusiness andthatpeoplefromSenshuKaishabeinvited totakechargeofit.Inoueagreedandaskedmetobepresident ofthe

newcompany.Minomuraalsocameto meto makethesamerequest. AtlastI agreed.Asalarywastobepaidmeundercontract,butI hadto assumefullresponsibility forthecompany.Evenifitshouldfail,Mitsui

wouldbeabsolvedofallresponsibility. Myassetsweresmall,butI

pouredthemallintothe newcompany. “TtoldMinomurathat businessmustbecommission-based. I meant thatthecompany shouldnotundertakebusinessthatwouldcompelit to assumealltherisk.I alsosaidthatspeculationshouldbeavoided.

Minomura agreed,andInoueofcourse wasofthesameopinion. Once weagreedonthispointIsaidthateverything shouldbelefttome,with nointerference. Theysaid“allright,’andentrusted mewitheverything. Buttheysaidtheywouldnotprovide anycapital.AllI couldgetwas permission tooverdrawmyaccountatMitsuiBankbyfiftythousand

yen.””?

Thenewcompany’s ratherfloweryprospectusexpressed thepromoters’intention“toexportoverseas surplusproductsoftheImperial Land,to import...

productsneededat home,andtherebyto engagein

intercoursewiththetenthousandcountriesof theUniverse.”8Upon thisgranddesignandslendercapitalMasudadevelopedtheprototype ofthesogoshosha, orgeneraltradingcompany,thatplayedsuchasignificantrolein modernizingtheJapaneseeconomy.

InfoundingthecompanytheMitsuistooknoinitiativewhatever, andevenMinomura’s approachwasextremely hesitant.Insteadofassigningfamilyheadsortheirfirst-born sonstoitsmanagement, heap-

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pointedTakenosuke,seventhsonofHachiroemonKofuku,andYonosuke,thirdsonofanotherofKofuku’ssons,bothofwhomhadgoneto theUnitedStatesforstudyfiveyearspreviously. Otherwise,theclan tooka strictlyhands-offattitudeforreasonsapparentin thecontract signedbytheheadsofthemainandthebranchfamilies(whichbynow

hadincreased toeleven).Thecontractbeganoptimistically: ““We have carriedoutextraordinary reformsinMitsui,abolished Mitsui-gumi and established MitsuiExchange Bankonthegreatfortress ofOmotokata. Weourselvesarestockholdersof thebank,sothatourbusinesswill prosperforeverandbeenjoyedbyusequally.”

Butafterthatpreamblethepromoters’anxietyasserteditself:“As statedalready, thepurposeoffoundingthenewcompany istoensure ourlivelihoodin caseMitsuiBankiscloseddown.Thatiswhywe

pickedTakenosukeandYonosukeasinitiatorsof thenewcompany. Havingentrustedthesetwopersonswiththemanagementofthenew companyasdistinctfromMitsuiBank,therestofuswillbeabsolvedof responsibilityevenifthenewcompany shouldsufferfatallossesorbe forcedoutofbusinessbynaturaldisaster.Thentherestofuswould

havenodutytorepaydebtsrunupbythenewcompany.”® Thisodd disavowal seemstohavebeenintended toconvincetheMitsuisthatthe newfirm,whichtheycalled simply“Bussan”’ (literally, “productcompany’’),wouldprotecttheirfuture.Butitisevidentthatthewritershad

littleconfidence intheundertaking andactually wereprotecting themselvesagainstcriticismandindebtednessin theeventofitsfailure. ThemanagerofBussan’sforeigntradesectionwasMagoshiKyohei, whoseonlypreviousbusinessexperiencehadbeenthemanagingofan inn.A riddlemakingtheroundsinMitsui’sparentfirmrevealedtheir opinionofBussan:“WhatisthecheapestthinginTokyonowadays?”

Theanswer:“‘Magoshi’s salary.”Thebrightyoungman,wholaterput Bussanintothebrewingbusinessandbecame abeertycooninhisown right,wasearningthirteenyena month. Otherpromising talentswhojoinedBussan’s smallstaffintheearly yearswereFujiseSeijiro,whoseheirmarriedintoMasuda’s family;

Yamamoto Jotaro,lateragreatpolitical bossandpresident oftheSouth

ManchurianRailway;andFukuiKikusaburo,whodidmuchtobroaden

andinternationalize Mitsui’sbusiness.Thesethreeinturnservedas obantoofBussanundertheguidance ofMasuda, whowatched overthe

firmformorethanseventyyears. Atthetimeofitsfoundingin 1876Bussan’smainexportswerecoal fromthestate-ownedcollieryatMiikeinKyushuandsurplusrice.‘The

firmalsoimported blanketsandwoolensforthearmy.Mostvaluable wastheagencyforcoal,whichMasuda tookonattherequestofIto Hirobumi,thenMinisterofIndustry.Later,in relatingthecircum-

112 « MITsuUl stances,MasudaquotedItoassaying:“Masuda,sinceyouareestablish-

ingMitsuiBussantoengageinforeigntrade,itwouldbegoodifyou

handledthecoalfromMiikecolliery.If youarewillingto undertake this,wewillnotbetight.Youcanacquirethecoalatcostpriceandget startedonit directly.”’1° Masudadidn’tknowmuchaboutcoal,but

he hadbeenfamiliarwith

miningadministrationsincechildhood.Hisfatherhadservedasmagistrateinchargeofconvictlaborat thegoldmineson SadoIslandand

laterwasassigned todevelopingmininginHokkaido. Masudaknew thatBussancouldnot competein copper,dominatedasthatwasby

Sumitomo, underthepatronage ofPrinceIwakura, andbyFurukawa

Ichibei,whohadboughttheAshiomines.Wantingtoestablisha footholdin mining,MasudaacceptedIto’sofferwithalacrity,andBussan becamesolepurchasingagentfor the government’sminingbureau. Thisgaveit a monopolyoverexportsof coal.In duecourseBussan cameintopossessionofthenation’srichestcoal,lead,andzincmines,

aswellasimportantdepositsofgold,silver,andsulfur.

Througha branchin Shanghai,Bussanbeganexportingcoaljustas theEuropeanswereestablishingmodernfactoriesandmillsthere;and eventuallyit securedalion’sshareoftheChinamarket,aswellasa ship bunkeringbusinessin HongKong,Singapore, and otherOriental

ports.At thebeginningof its historyBussan’s annualcoal-export volumewasamere27,000 tons.DuringthenextnineyearsMasuda and Magoshiboostedit to 1,837,000tons,an increaseof 6,800percent. Theyhaddiscoveredthe magicformulafor makingprofitswithout takingrisks.

Whetherbydesignorotherwise, BankandBussan formedamostfelicitouscombination,theadvantagesof whichsoonbecameapparent. Thefirstsuccessfulinnovationmadepossibleby Bank-Bussanteamworkwastheissuanceofexchangebillsforcommodities.Aftertheinternalrevenuesystemhadbeenmodernized, thefarmerswererequired

topaytheirlandtaxesincashinstead ofgrain.Butitseemed thatwhenevertherewasabumpercroppricessagged andproducerswerehard pressedto meettheirobligations to thegovernment.Seeingopportunityinthissituation,Minomuraobtainedpermissionfromthefinance

ministrytoundertakethepurchaseofricewithbillsthatcouldbeused topaytaxes.Untilthenmerchants handlingofficialmoneywereprohibitedfromoffering loans,butunderthenewplanBussan’s branches

werethusable,in effect,to lendmoney.Theinauguration of Mitsui BankandBussanin 1876happenedtocoincidewithanotherbumper cropof rice,but withBussanconductinga widespreadpurchasing

BANKINGANDCOMMERCE-

113

operationwithBank’s money,theHouseofMitsuisupported theprice ofriceandsavedmanyfarmers fromruinwhilesubstantially increasing thegovernment’s revenue,aswellasitsownprofits.

BysuchintegrationoffinanceandcommerceMitsuiinfactlaidthe groundworkforarationallyorganizedcapitalistsystemtosupplantthe economyoffeudalism.Becauseofhisforesightandpersistencein assistingthatchange,MinomuraRizaemonhasbeencalled,withsome justice,the“fatherof Japanesecapitalism.”Theroleof Mitsuiin Japan’seconomicdevelopment—asa publicinstitutionratherthana privateenterprise—wasconfirmedsixmonthsafterBank’sfounding, whentheheadsofsevenMitsuifamiliesweresummonedtotheMinis-

tryofFinance. ThereministerOkumainformed themverybluntlythattheprivilegestheyhadbeengrantedbythegovernmentwerepredicated not

upontheirpersonalworthinessbutuponexpectationsof theirfuture servicesto thestate:“Thetimesarechanging,” thefinanceminister’s lecturebegan.“Thedaimyohavereturnedtheirfiefsto theemperor,

andthesystemofhereditarystipendsforthenobilityandsamuraihas

beenrevised.RichfamilieslikeShimadaandOnohavegonebankrupt, andhavebeendispersed;onlytheMitsuismaintaintheirtraditional prestige.... Thegovernment,onitspart,hasbeendeeplyconcerned withprotectingtheMitsuiclan.Asto thefoundationofMitsuiBank,

itmustberemembered thatMinomura Rizaemon, foreseeing thetrend ofthetimes,petitioned thegovernment tothateffect.Believing thatthe preservation ofa traditionalwealthyhousewouldcontribute to the generalinterestsofthenation,thegovernment decided. . . topermit theestablishment ofMitsuiBanksolely toperpetuatetheprosperityof thefamily. “Therefore, theMitsuishavenocauseforcomplaint. Ifanyshould

bedissatisfiedwiththenewsystemandclingto traditionalways,the government’sintentionoffavoringMitsuiwithspecialprivilegeswill notbebinding.Thesemattersconcernnotonlytheprivateaffairsof yourfamilybut alsothe developmentof the statetreasury,since Mitsui’sfinancialconditioninvolvesthatofthestate.Allwhosharethe

familytitleofMitsuiassumeaninescapable responsibility.” Possiblythiswarningwasinspiredbythefactthattheguidinghand ofMinomurahadslippedfromthehelm,andbythediscovery thatthe

familyheadshadbeenlaggard inobeyinghisearlierinstructions. While MinomuraRizaemonlayuponhis deathbed,Ministerof Finance

OkumaorderedOmotokatato makeHachiroemonKofukumovepetmanentlyfromKyototoTokyo.Othermembersofthefamilywhohad beenassignedto localbranchesofthebankwereinstructedto report

114 - mitTsur

immediately to theirrespectiveofficesandto settletheirhouseholds nearby.Furthermore,allmembersoftheMitsuifamilywereto“refrain

frommisconduct.”

ThetimingofOkuma’sadmonitionissignificant,fortheMeijigovernmenthadjustsurvivedits worstpoliticaltestandanticipated an

economiccrisisinconsequence. Theproblemcentereduponthedisplacedsamurai. Ingeneraltheyhadadjusted quitewelltotheneworder bytakingupcareers inthemilitaryservices, policeforce,assorted businesses,or theprofessions.Butamongthelessadaptableindividuals discontentsmoldered.Thiswasincreasedin1876when,initsperennial attemptstobalancethebudget,thegovernmentcommutedthepensions ithadbeenpayingsamuraisince1872todisappointingly smallterminal paymentsinbonds.Aggravatingtheinjury,a lawwaspasseddepriving theproudwarriorsoftheprivilegeofwearingtheirtwoswords.The indignationofdisaffectedsamuraiwasexploitedbypatriotsandpoliti-

cianswhochosetobecritical oftheoligarchy’s arbitraryrule,corruption,anddisregardfortradition. ThemosteloquentcriticoftheoligarchywasMarshalSaigoTakamori,whohadwonthepeople’s affectionbyhisopenheartednessand incandescentpatriotism.Aself-righteousdefenderofthenationalpurity andanadvocateofa vaguekindofpopulism,Saigowasoutragedby OkuboToshimichi’s opportunismandimperiouspoliticalstyle.Hewas

disgustedbybacksliders, suchasOkubo,Ito,andInoue,whohaving seizedpowerinthenameoftheemperor,nowconsorted withmoneylendersandlivedin suspectopulence,attendedbyscoresof servants. Uncomfortableinhiscommandofthenation’snewpeasantarmyand

thwartedinhishopesforanexpedition tosubdueKorea,Saigostalked outofthegovernmentandwithdrewtohisnativeKagoshima. There, surrounded bymenofsimilarsentiments, heincitedopposition against Okubo’sdictatorial management ofthegovernment. Hedidnotadvocatearmedrevolt,butby1877hisfollowershadmobilizedanarmyof aboutfortythousandmen,mostlyimplacable samurai;andtheirofficers

persuaded himtoleadtheminarebellion thatagainplunged thenation intocivilwar. MinisterofHomeAffairsOkubo,backedbytheimperialcourtand mostof theMeijioligarchs,wasequalto thechallenge.Witha considerablylargerconscriptarmy—organized by GeneralYamagata

Aritomo,transported byMitsubishi’s ships,supplied byMitsuiBussan, andpaidbyMitsui Bank—the centralgovernment executed asuccessful counteroffensive in Kyushu,the centerof disaffection,and demonstratedonceandforallitsabilityto rulethenation. TheSatsumaRevoltof1877wasfarmorecostlythantherestoration

skirmishes hadbeen,takingatollofsomethirtythousand lives,includ-

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toJapan'sprogress. showstheYawataIronandSteelWorkscontributing 42, Fortune’sphotograph government formedintheearly1930sbyconsolidating state-runmonopoly TheYawataWorkswasa facilitieswiththoseofsixzaibatsuconcerns, including Mitsui’s. Kyodo

43.Carryingout ordersfrom Washington to dissolve themajor\\

zaibatsuholdingcompanies—foremostofwhichwereMitsui,Mitsubishi, Sumitomo, and Yasuda—

SCAP beganthe processbyim-

pounding thefirms’securities. On October8, 1945,aconvoy oftrucks,

complete withMPguards,hauled

awayMitsui’ssecurities,valuedat morethantwohundredmilliondol-

lars.StoredintheHypothec Bank bytheHolding Company Liquidation Commission, theimpounded securities eventually weresoldtothepublic. The holdingcompaniesthemselves ‘ didnotrevivewhentheoccupation

ofwy egroups the companies have erespectiv merged stronger than ed,but end ever.

AsahiShimbun

44,OnAugust6,1945thefirstatomic bomb everusedinwarfare demolished Hiroshima. At MitsuiBank’sHiroshimabranch,therewerenosurvivors.

es

45.Aspartofthepostwar democratization program, theemperor wasencouraged tomeethispeople. In 1949,whenhevisitedtheMiikemines at Omuta,Yamakawa Ryoichi, presidentofMitsuiMining

Company, ledtheinspection tour.

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47. IshizakaTaizo,formerpresident ofTo- 48. HirashimaToshiro,first chairmanof reorkyoShibaura ElectricCompany andofKeidan- ganizedMitsuiBussan.(1959) fen.(1F52)