given for the legitimate expansion of all branches of trade, since it is
in proportion to the prosperity of its industries and resultant wealth
that its political influence will in the main be appreciated. Baron
Shibusawa’s career has been essentially that of a business man, for
although he occupied at one time a prominent position as an official of
the Finance Department, and ranked next to Count Inouye, circumstances
ordained that his energies should be applied to tasks more or less
directly associated with commerce and the financial progress of his
country. If it may be said that the Bank of Japan (Nippon Ginko) owes
its existence to Count Matsukata, the First National Bank (Dai-ichi
Ginko) was established by the efforts of Baron Shibusawa. Eichi Shibusawa
was brought up in the metropolitan province of Musashi, having been
born in the village of Chi-arai-jima, in the county of Hanzawa, about
forty-five miles from the capital, in 1840. The village is one of many
in that region whereof the population is occupied partly in sericulture
and substantially in agriculture, millions of cocoons being annually
produced in the cottages of the husbandmen, and a great variety of
crops gathered from the fields, including some indigo. The Shibusawa
family was concerned with both these industries, and had been so for
generations. Saitama district, indeed, which comprises in great part what
was formerly the province of Musashi, was in the days of the Shogunate,
like the neighbouring districts to the west and north, devoted to the
rearing of the silkworm, and for the reason that good paddy land is
scarce thereabouts a large percentage of the inhabitants still regard
sericulture as their most profitable occupation. The industry dates in
Japan from the fourth year of the Emperor Chuai’s reign, corresponding to
A.D. 195, when a Chinese prince named Koman went over to Japan and was
naturalised there, at the same time introducing the Chinese species of
silkworm, which from that period was largely cultivated in the Japanese
empire. In 283 A.D., while the Emperor Ojin sat on the throne (he was
deified as Hachiman, the god of war) a number of Chinamen settled in
Japan and taught silk-weaving, the Court itself taking great pains to
encourage the industry, by causing mulberry-trees to be planted, and
rearing the worms. The taxes were then paid to some degree in silk
fabrics. At a later date silk raising and weaving had grown to be the
principal productive industry of the country, and was almost universal,
though some regions were especially famous for the quality of the output,
among them that which is to-day known as Saitama Ken. During the “age of
wars” which lasted from the middle of the tenth century to the beginning
of the seventeenth, the work could only be carried on in secluded and
out-of-the-way places comparatively free from the ravages of fire and
sword.
[Illustration: BARON SHIBUSAWA]
Under the Tokugawa regime the prosperity of sericulture revived, for
the feudal chiefs were anxious to see their people engaged in settled
occupations, and recognised the value of this industry in particular.
Throughout that region in which Baron Shibusawa spent his boyhood
the silkworm is an object of the keenest interest to the people, for
everything hinges upon its preservation in a good state of health, and
at certain stages of the worm’s existence it is regarded, even at the
inns where travellers have to put up for the night when on the road, as
a creature whose interests it is necessary to study far more carefully
than those of a guest. The “Kaiko-sama” must on no account be disturbed.
Shibusawa Eichi received the rudiments of education at his home, and
was a close student of history. He read the Chinese classics with a
scholar residing in an adjoining village, and helped his father in the
manufacture and sale of indigo. By the time he was nineteen years old the
cry of Jo-I (Out with the barbarians) which then was being raised in
Yedo, little more than a long day’s tramp away from him, had penetrated
to the remote village in which he dwelt, and by degrees the whole region
grew to be in an uproar. Shibusawa soon betook himself to the capital,
to see for himself what it all meant. There he continued his studies
under the famous Gyo-son Kai-ho, a classical scholar of repute, and he
was a pupil of the no less celebrated fencing master, Chiba Shusaku. From
Yedo he travelled to the then seat of learning, Kioto, where he made
many friends and finally was received into the Hitotsubashi clan, one of
the branches of the Tokugawa family, and from which the last dynasty of
Shoguns sprang. The Hitotsubashi branch was that into which the present
Prince Tokugawa Keiki, “the last of the Shoguns,” was adopted,—though
really a scion of the Mito house—and whose name he bore in the days
immediately antecedent to the Restoration of Imperial Rule. The head of
the Hitotsubashi house when Shibusawa owned allegiance to it was a very
distinguished nobleman, who was instrumental in founding a modernised
military system for the Tokugawas and did good service in connection with
its finances. Soon afterwards Prince Keiki was called upon to succeed
Iyemochi as Shogun at Yedo, and removed thither from Kioto, taking with
him Shibusawa Eichi, who became an officer of the Shogunate Government
or “Bakufu.” In 1867, the prince Mimbu-taiyu, a younger brother of the
Shogun, was sent to France to study Western sciences and institutions,
and in his suite was Shibusawa, at that time twenty-seven years of age.
The opportunity was one of which he availed himself to the uttermost, and
he diligently acquired all the information possible on matters that it
had been his main ambition to know more about, passing no inconsiderable
portion of his time in England. His stay in Europe lasted until the close
of 1868, and he reached home only to find his former chief, the Shogun
Tokugawa Keiki, taking up his residence in retirement at Shidzuoka, in
Suruga province, 100 miles from the capital. The Restoration had been
effected a few months previously.
Shibusawa received the appointment of Chief treasurer of the Shidzuoka
household, under the prince Kamenosuké, who had been installed as chief
of the clan, and who is now the President of the House of Peers. In this
post Shibusawa found ample employment in rearranging the finances of
the Tokugawa family, but he presently relinquished it on being made tax
controller in the department of Finance under the newly formed Imperial
Government at Tokio. In the same service he was next promoted to be
Assistant Vice-minister of Finance, and also Chief Inspector of Trade,
and in the performance of his duties in these offices he supervised the
establishment of several joint-stock enterprises, the first of their
kind undertaken in Japan. The members of these companies were merchants
of Kioto and Osaka, and their enterprises extended to shipbuilding, land
reclamation, etc.; the joint-stock principle thus early in the history
of New Japan having begun to find favour. Soon afterwards Shibusawa was
appointed Junior Vice-Minister of Finance to Inouye Bunda, as he then
was—the present Count Inouye—and in 1873 both resigned in consequence
of their views relative to the apportionments to different departments
of the public service in the budget estimates not meeting with the
support of the Ministry headed by Prince Sanjo Sanetomi. Count Inouye
subsequently resumed his place as Vice-Minister of the department but
Shibusawa Eichi retired altogether from the Government service, and
applied himself to commercial pursuits.
Prior to the Restoration Japan possessed no institutions exactly
corresponding to the modern bank. There was what was termed a “rice
bank” which advanced rice to the retainers of the Shogun, and this, it
is declared, dated back at least as far as the days of Iyemitsu, in
1724. The plan of operations was for certain business houses in Yedo to
receive the grain as it came from the domains under the direct control
of the Shogunate, and to distribute it among the Shogun’s officers in
remuneration for their services. In this way the houses in question were
often called on to advance sums on account of the forthcoming crops,
the liabilities of the retainers to be met out of the proceeds of the
grain when received from the farmers and sold. Needless to say, the
normal condition of many of the samurai was one of indebtedness to the
“rice banks.” When, in 1870, the present Marquis Ito was authorised
to proceed to the United States to investigate financial affairs in
America, especially with respect to the public debt, banking, and the
monetary standard, he aroused extraordinary interest by his report on
the National Bank Act of the United States, a copy of which he sent to
Tokio for perusal. The need of some such system was much felt in the then
existing crisis in monetary matters, and though the proposal made at that
time could not be adopted in its entirety, the financiers were led to
consider the advisability of setting up a bank on those lines in the near
future. The reception of the idea was quickened by the cumbersome method
in vogue of paying taxes in rice, a plan which not only caused delay,
but resulted in loss owing to difficulties attendant on the transport of
large quantities of grain from places at a distance. The question arose,
should the tax be still paid in rice or in legal currency according to
the market price of the commodity? If it were allowable to pay in money,
then there ought to be some institution at which rice could be exchanged
for ready cash. The necessities of the hour pointed to a bank as the
medium which must forthwith be established.
But there was another thing that made the notion additionally attractive,
and this was the position of the country’s finances in respect of the
inconvertible paper currency termed “Da-Jo-Kwan Satsu”—notes issued by
the Government, which were depreciated, though not to any great extent so
far, and it was deemed unwise to keep them floating so long as thirteen
years, the period assigned for their redemption. It had been ascertained
that the United States had established a National Bank to facilitate the
management of the inconvertible notes issued at the time of the Civil
War, known as “Greenbacks,” and the similarity of the situation at the
moment in Japan to that of America in 1860 struck everyone.
Messrs Inouye and Shibusawa, then together in the Finance Department at
Tokio, cordially agreed with the proposals of Ito Hirobumi, as conveyed
in his reports from America, and began to take the needful steps for
establishing a National Bank of Japan on a small scale. Mr Shibusawa was
made Chairman of a Committee of Investigation into the system of national
banks, and after careful study the Committee framed regulations which
were put into force by the Government under the National Bank Act in
November 1872.
The Dai-Ichi Ginko, _lit._: No. 1 Bank, prospectus appeared in December
1872, the proposers—two of them members of the renowned house of
Mitsui, two of the firm of Ono, and Minomura Rizayemon, five well-known
men, subscribed 2,000,000 yen, and offered 1,000,000 yen for public
subscription. It illustrates the change which has come over Japan in
more recent years that, notwithstanding every effort, in 1873, when
the list closed, only 4408 shares had been taken in the new venture,
and the capital of the bank was reduced to 2,440,800 yen, equal at
present rates to about £250,000 sterling. The public had not sufficient
understanding of the corporation system to be able to appreciate the new
enterprise. A few years later the joint-stock concerns were numbered by
the hundred. The Dai-ichi Gin-ko began business on the 20th July 1873,
in the picturesque block at Nihonbashi, in Tokio, which had belonged to
the Mitsui Company, and had been bought from them for 128,500 yen, and
it continued thenceforward to transact a general banking business, and
to act as accountant of the Finance Department, for at that time every
department of the Government had its own accountant and kept its own
independent set of accounts.
Mr Shibusawa,—as he was then,—on resigning his post of Junior
Vice-Minister of Finance, was elected General Superintendent of the
Dai-ichi Gin-ko, and discharged the duties of president.
Speaking some time ago of those early days of banking in Japan, the Baron
explained that “It was the 1st day of August 1873 when the First National
Bank received the certificate of authorisation. From that time we issued
the new bank-notes for circulation, little by little, but there were
none who came to make demands for the redemption thereof. It was our
idea to have them circulated in the country districts rather than in the
cities and open ports. The people of the country districts, although
they were very unfavourably impressed by the old Government paper,
were now better disposed to circulate the notes issued by a bank under
strict Government inspection, and the general public began to put more
confidence in these notes than in those which had been issued before.
But we were very careful not to put too many of them into circulation,
because we were well aware of the possibility of fluctuation in the price
of gold and silver that would seriously affect the value. So, at first we
kept back a large quantity of the paper in our vaults....” And thus by
prudent management the First National Bank passed its first year with a
record of 112,000 yen net profit, out of which 11,000 yen were carried at
once to a reserve fund.
At the end of 1874 the bank received a severe blow by the failure of
the Ono firm, which had been one of the largest shareholders, and owed
the bank a considerable sum. At a general meeting it was resolved that
the Ono house’s obligation would be met by the shares of 1,000,000
yen which it owned, and consequently the capital was reduced by that
amount. Mr Shibusawa was elected first president of the bank, and as
the Government had been a little alarmed by the Ono affair, and was
determined thenceforward to establish an accountant bureau in each
department of State under its own charge, the First National Bank had to
hand over all Government moneys left in its control, and seek to extend
its business solely among the people. It was believed that no fears need
be entertained of the result, and it has, as a matter of fact, done well.
In recent years it has been the chief financial organ of the Japan-Korea
trade, and has floated loans for the Imperial Household and Government
of Korea with complete satisfaction. The Dai-ichi Ginko notes are the
recognised medium of circulation in Korea still and are facilitating the
commerce of that country.
It was in May 1900 that a peerage was conferred on Baron Shibusawa,
and it was the first instance in which such a mark of imperial favour
had ever been extended to a business man in Japan, the rank being in
his case accorded in recognition of his past services to the State. It
was on his initiative, supported by Marquis Ito and Count Okuma, that
the Tokio Chamber of Commerce was founded in 1878, with himself as its
president, an honour which he still enjoys. He has played a distinguished
part in connection with the municipal affairs of Tokio, and was mainly
instrumental in establishing an Asylum for the Poor. When at a later
date the Tokio municipality abolished this useful institution, he took
upon himself the work of raising a fund for an asylum to exist purely
as a private establishment, and to be maintained wholly independently
of official aid. In the end it was taken over by the municipality, with
Baron Shibusawa as its president, and he continues to be the head of the
institution, which is the largest and best equipped of its kind in the
land.
Before he quitted the Government service in 1873 he had taken the first
steps to establish a mail steamship service to China and Korea, and
around the Japanese coasts. The Company formed to undertake this work was
afterwards amalgamated with the Mitsu-Bishi (Three diamonds) Shipping
Company, and subsequently, when another concern was started and a fierce
competition arose for the coastwise trade, Baron Shibusawa induced the
opponents to make terms with each other and unite in one Company which
is now among the great Shipping Organisations of the world, and known as
the Nippon Yusen Kaisha, or Japan Mailboat Company. He is still one of
its directors, and has helped, moreover, very materially to establish a
trans-Pacific line,—the Toyo Kisen Kaisha,—which runs mail steamers from
Yokohama to Hong Kong and San Francisco.
In the cotton-spinning industry he is prominent, having founded the Osaka
and Miye Spinning Mills, and he has either promoted or started numerous
undertakings for the supply of gas or electric light, for silk or cotton
weaving, hemp and rope manufacturing, brickworks, cement factories,
sugar refining, and many other enterprises for the utilisation of the
knowledge which modern science has conferred on his fellow-countrymen.
He is deeply concerned with railway extension, not only in Japan but
in Korea, he is interested in harbour construction, and reclamation
works, in farming, the breeding of horses and cattle, the manufacture of
artificial manures, hat-making, and a variety of other ventures that need
not be particularised. Altogether, including several banks other than the
Bank of Japan of which he is president—_e.g._ the Yokohama Specie Bank,
the Industrial Bank, and the Japan Credit Mobilier—the Baron is connected
with upwards of thirty companies in the capacity of either president or
director. He founded the Tokio Clearing-House, the Commercial Agency,
and other business institutions, and in Korea he has from the outset
taken a leading part, the construction of the railway from Fusan to the
Capital, and between Seoul and Chemulpo, having been due principally
to his efforts. When the railway development of Southern Manchuria is
seriously undertaken this line from Fusan to Seoul, and thence to Wiju,
is destined to form a link in the long chain of railway communication
which will stretch from London to Tokio, with short breaks at the Straits
of Dover and the Straits of Korea which divide Fusan from Shimonoseki in
South-west Japan. There are incomplete links, notably between the Yalu
river and Liao-Yang, but a military line exists, which needs only to
be strengthened, so the permanent establishment of that section should
present correspondingly fewer difficulties. Ultimately it is to be
expected that England will be brought within a fortnight by rail of Japan.
Baron Shibusawa was nominated by the Emperor as a member of the newly
formed House of Peers in 1890, when the Imperial Diet was first opened,
but he resigned that post a year later, and afterwards occupied the
chair of the Higher Council of Agriculture, Commerce, and Industry, and
he has served on many commissions appointed by the Sovereign to make
investigations on various subjects of importance to the nation.
In the domain of philanthropy Baron Shibusawa’s exertions have tended
materially to the establishment and support of schools, orphanages,
reformatories, hospitals, and kindred benevolent institutions designed
to confer public benefit, on the directorates of which his name is
frequently to be found, for he has ever been an active worker in the
cause of charity.
In 1902 he again visited England, and was entertained by the London
Chamber of Commerce, his speech on that occasion containing the happiest
allusions to the growth of commercial relations between Japan and Great
Britain. He was able to point with satisfaction to the existence in his
own country of no fewer than 2534 banks possessing an aggregate paid-up
capital of £35,000,000 sterling. After the Chino-Japan war the number of
joint-stock companies rose, as he explained, with phenomenal rapidity,
for in 1900 the total number was not less than 6176, and their paid-up
Capital amounted to 440,476,000 yen, or over £44,000,000 sterling. The
volume of the export and import trade, as he was able to assure his
audience, had risen from 50,000,000 yen in 1877 to 138,330,000 in 1890,
and 506,160,000 in 1901. Though Japan has since been at war with Russia
the volume of her trade for the year 1905 will in all probability show a
very appreciable increase over any intervening year, and with the immense
commercial activity which she has developed subsequent to the conclusion
of peace the figures for the fiscal year ending with March 1907 must
inevitably exhibit a degree of progress and an expansion of international
trade in which her people may justifiably take the utmost pride.
Speaking as a business man to men of business, Baron Shibusawa proceeded
to refer in his speech to the then recently concluded Anglo-Japanese
Agreement of 30th January 1902. His remarks may be said to apply with
equal force to the extended form of that Agreement entered into on the
12th of August 1905.
“It is true,” he said, “our manners and customs are so
different from yours that it would be impossible to make them
common to both nations; but, as judging from past experience we
are getting ever nearer to and assimilating with each other,
and especially as there is no racial or national distinction in
economic affairs, I firmly believe that the future development
of commerce and industry in our country must be cosmopolitan
in its character, that is to say, we should freely invite the
co-operation of knowledge, experience, and capital from the
most advanced nations of the West, not only for the further
development of industry and commerce in Japan, but also for the
opening up of the great natural resources of China and Korea.
Our country is geographically so near to these countries and
has so much of literature and art in common with them that we
can understand the manners and desires of their people much
better than you do, and your country has the advantage of being
rich in capital as well as in the knowledge and experience of
modern scientific appliances. There is no reason, it seems
to me, why we should not co-operate in the Far East to our
mutual advantage, since we have so many interests in common,
and especially now that we are so closely knit together by the
Anglo-Japanese Agreement of Alliance.
“Just as I was planning to leave Japan on my present tour, the
United Chambers of Commerce were holding their General Meeting
in Tokio, and they passed a resolution requesting me to convey
their unanimous desire to bring the business world of Japan
into closer relation with that of Europe and America, and to
reach a better understanding of the real business conditions of
each other’s countries. Vague as such a resolution must sound,
its ultimate aim can be no other than what I have stated,—the
co-operation of Japanese and foreign capitalists for the
industrial and commercial development of the Far East,—and I
trust that if there be anything in our business methods and
customs which will obstruct the realisation of this happy
union, our people will not spare their utmost efforts to
remove it. I sincerely hope that not only will your Chamber
take note of this desire on the part of the Japanese business
world, but that it will kindly help to convey this desire to
all other Chambers of Commerce in your country as well as to
the business world at large. It is more than thirty years since
I first visited your land, as a petty government official,
but I now am here as a business man, and I cannot but admire
the wonderful development of industry and commerce which is
here exhibited. May the Anglo-Japanese Alliance be the means
of realising the richest results in the pacific expansion of
commerce and industry in the Far East, and may it thus be a
source of inestimable blessing to the nations of the world!”
The wish to which Baron Shibusawa gave utterance in 1902 is one that
finds its echo in the hearts of the people of both nations to-day, and
one with which this humble effort to spread a knowledge of Japan and her
affairs may fittingly conclude.
INDEX
Abdication of Shogun, 82
Academies of Bakufu, 96
Accumulation of specie, 291
Ama-no-terasu, goddess, 11