Silk, Nationalism, Commercial Policy, and the Direct Trade Movement in Meiji Japan, 1868-1890
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“RESTORING OUR COMMERCIAL RIGHTS”: SILK, NATIONALISM, COMMERCIAL POLICY, AND THE DIRECT TRADE MOVEMENT IN MEIJI JAPAN, 1868-1890 Michael Brady Smith A dissertation submitted to the faculty of the University of North Carolina at Chapel Hill in partial fulfillment of the requirements for the degree of Doctor of Philosophy in the Department of History Chapel Hill 2012 Approved by: W. Miles Fletcher Daniel Botsman Peter Coclanis Simon Partner Benjamin Waterhouse ©2012 Michael Brady Smith ALL RIGHTS RESERVED ii ABSTRACT MICHAEL BRADY SMITH: “Restoring our Commercial Rights”: silk, nationalism, commercial policy, and the direct trade movement in Meiji Japan, 1868-1890. (Under the direction of W. Miles Fletcher) In 1858 Japan responded to demands from Western governments to remove restrictions on trading with foreigners by signing a series of trade treaties which opened up a number of Japanese ports to unrestricted foreign trade. After these ports were opened, Western mercantile firms armed with intimate knowledge of world markets and ready access to capital quickly became the dominant force in Japan’s overseas trade. When the new Meiji government assumed power in 1868, government officials, businessmen, and intellectuals who feared foreign domination of Japan’s overseas trade, began a concerted campaign to challenge the dominance of foreign merchants in Japan’s treaty ports and reclaim Japanese “commercial rights” (shōken) through the promotion “direct trade” (jiki yushutsu). Despite vigorous efforts to promote direct trade which culminated in a battle with foreign merchants over the control of Japan’s lucrative raw silk trade, the movement failed to break the foreign merchants’ stranglehold. This dissertation examines the failed direct trade movement as a way to reassess the popular assumptions about the Meiji government’s role in Japan’s economic development and “modernization.” While some scholars have argued the economic successes of the Meiji era were due to careful government planning and guidance “from above,” this dissertation argues that the story of the direct trade movement shows the government’s economic policies in the period were a series of confused and ill-considered iii extemporaneous measures designed only to meet the immediate needs of the moment. This study also argues that although the Meiji state was an authoritarian regime, it was not invulnerable to influences “from below.” Businessmen and intellectuals advocating the adoption of direct trade policies were able to influence the direction of the government’s commercial policies thanks to a lack of stable institutions and processes for determining economic policy in the early Meiji period. Although the direct trade movement ended in failure, this lack of institutional structures and norms along with close collaboration between the state and the private sector gave commercial policy the flexibility needed to make the later economic successes of the Meiji period possible. iv TABLE OF CONTENTS LIST OF TABLES………………………………………………...ix Introduction………………………………………………………...1 Chapter1: Silk, Tea, and Foreign Devils: foreign trade in the early Meiji period…………………………………..28 Foreign Trade by the numbers: an overview of Japan’s foreign trade…………………………………...31 The Challenges of Primary Commodity Exports………....40 Foreign Imports and Economic Change: a case of deindustrialization?.............................................45 Foreign Merchant Dominance and Japan’s Trade………..48 The Unequal Treaties…………………………………….49 Market Barriers…………………………………………...55 Conclusion………………………………………………..61 Chapter 2: Feeding Baby Leviathan: the Meiji state and the Origins of Commercial Policy………………………..63 Tokugawa Precedents: domain monopolies……………...65 The Pioneers of Commercial Policy: Yokoi Shōnan and Yuri Kimimasa…………………….....71 Ōkubo Toshimichi and the Origins of Direct Trade……...83 Conclusion………………………………………………..90 Chapter 3: National Champions and Model Entrepreneurs……... 92 v The Mitsui Family and the Mitsui Trading Company………………………………………………….98 The Meiji Restoration and Mitsui’s Struggle for Survival…………………………………………………102 Creating National Champions: Ōkubo Toshimichi and Mitsui……………………………………………….113 Commercial Agent of the Japanese Government: Mitsui and the Meiji Regime…………………………………...119 Mitsui: merchant capital and foreign trade……………...127 Rural Producers and the Silk Trade: Hoshino Chōtarō and Arai Ryōichirō……………………………………...129 Rural Elites in Crisis: the Hoshino family and the end of the Tokugawa bakufu………………………...131 Hoshino Chōtarō and the Early Meiji Silk Industry…….134 Government Loans and the Model Entrepreneur……….137 Selling Silk: the market structure of the early Meiji silk industry………………………………....139 Conclusion……………………………………………....149 Chapter 4: Taming the Paper Tiger: the inflation crisis of the 1870s, direct trade and the debate over commerce……...153 Trade Deficits and Inflation……………………………..157 Inflation and Industrial Reform: Ōkuma Shigenobu and Godai Tomoatsu…………………………………….162 Commercial Nationalism: Maeda Masana’s theory of inflation and direct trade…………………………......169 The Monetary Solution: Taguchi Ukichi’s liberal answer to inflation …………………………………......192 Conclusion……………………………………………....210 vi Chapter 5: Profits and Patriotism: the direct trade movement and the improvisation of economic policy……………....214 Fukuzawa Yukichi, Ōkuma Shigenobu and Currency Stabilization……………………………..........218 From Silver to Trade: the Yokohama Specie Bank and the exchange loan fund……………………………...223 The Salad Days of Direct Trade………………………...234 A Typical Urban “Outsider” Firm: the Trade Company……………………………………...236 Direct Trade and the Cooperative Movement in the Silk Industry………………………………………....244 The Creation of the Mutual Extension Company….........250 From a Cooperative to a Company: the Jōmō Silk Improvement Company…………………………………255 Conclusion……………………………………………....260 Chapter 6: The Skeins of Power: silk, national sovereignty and the United Silk Storing Company Incident………....264 The Yokohama Export Merchants and the Silk Trade……………………………………….269 A Silk Guild?....................................................................276 The Gentlemen Object: foreign merchant reaction to the United Silk Storing Company…………………….....284 A War of Words: the Silk Dispute in Print……………...290 Mobilizing for Commercial War………………………...301 Crisis……………………………………………….........311 Compromise or Capitulation?..........................................322 The Aftermath of the Incident…………………………...331 vii Conclusion………………………………………............333 Epilogue and Conclusion………………………………..............337 Matsukata and the End of the Cargo Loan Program……339 The Yokohama Specie Bank’s New Mission…………...345 The Battle over the Jōmō Silk Improvement Company....................................................349 Silk Industry Associations and Intra-industry Conflict…………………………………..355 Conclusion………………………………………………379 BIBLIOGRAPY…………………………………………………387 viii LIST OF TABLES Table 1. Japan’s Primary Exports, 1879-1882……………………..33-34 2. Japan’s Primary Imports, 1879-1882……………………..35-36 3. Primary Destination of Japanese Exports…….........................37 4. Primary Origins of Japanese Imports………………………...38 5. Percentage of Total Exports Handled by Japanese and Foreign Merchants……………………………..49 ix INTRODUCTION On July 2nd, 1853 four American warships commanded by Commodore Matthew C. Perry appeared at the entrance of Edo Bay, off the coast of Japan. Perry had come to deliver a letter from American president Millard Fillmore addressed to the emperor of Japan. Fillmore’s letter expressed the hope that “…the United States and Japan should live in friendship and have commercial intercourse with one another.”1 Emphasizing a strong desire for commerce with Japan among the American people, Fillmore suggested that if “your Imperial Majesty were…to change the ancient laws as to allow free trade between the two countries, it would be extremely beneficial for both.”2 After delivering Fillmore’s letter to officials of the Tokugawa shogun, Perry used both moral suasion and the not so subtle threat of military force to convince his Japanese hosts of the benefits of opening Japanese ports to foreign shipping. Tokugawa officials were not won over by Fillmore’s letter. To them, the idea of opening the country to commercial relations with a group of barbarians who threatened them with violence was hardly appealing. Luckily for Perry, however, his warships were sufficiently intimidating to convince his Japanese hosts that it was better not to reject his request. When Perry’s fleet returned to Japan in February, 1854, the Tokugawa government reluctantly agreed to open two supply ports to American ships. 1 “Letter of the President of the United States to the Emperor of Japan,” in Commodore Matthew Calbraith Perry, The Japan Expedition, 1852-1854: the personal journal of Commodore Matthew C. Perry, ed. Roger Pomeau, with an introduction by Samuel Eliot Morison (Washington: Smithsonian Institute Press, 1968), 220. 2 Ibid. The historic agreement marked the beginning of Japan’s forced integration into an emerging world economic system dominated by the Western powers. By 1858 Japan had signed a series of trade treaties, commonly referred to as the Ansei treaties, with America, the Netherlands, Russia, Britain, and France which opened up the nation to nearly unrestricted foreign trade.3 While these treaties marked the beginning of Japan’s full participation in the capitalist world market, the treaties also relegated Japan to the status of an inferior nation