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IT WOULD BE Unthinkable to Leave Outthe Name of Eiichi Shibu

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IT WOULD BE Unthinkable to Leave Outthe Name of Eiichi Shibu Japanese Yearbook on Business History•\2002/19 How Eiichi Shibusawa Offered Models of Investment and Management to Introduce Modern Business Practices into Japan Masakazu SHIMADA Bunkyo Gakuin University sawa in any discussion of business managers who had a hand in ITstartingWOULD upBE modernunthinkable businessto leave in Japan.Thisoutthe name is ofbecauseEiichi he Shibu was there in the thick of the action,whether it was connected with the establishment of a modern banking industry,the transplantation into Japan of modern industries making use of the joint-stock com pany system,the laying in place of a solid foundation for business ethics,or the formation of a financial world.And yet,despite such a position at the heart of the business world,he has been acclaimed less for his activities in the private sector and more for his activities as a public person,as a quasi member of the government.As can be seen from the descriptive labels that have been attached to him (such as•gthe mastermind of Japanese capitalism,•h•gthe organizer of the financial world,•hand•gthe bourgeois ideologue•h),it is his role as the guiding light of the financial world as a whole in the absence of anybody else who could do the job,rather than for his actual contri butions to business as a manager,that has been acclaimed.1 For the standard Japanese treatments of Shibusawa's achievements,see1 Kiyoshi 10JAPANESE YEARBOOKON BUSINESSHISTORY-2002/19 Nevertheless,the overwhelmingly major part of Shibusawa's ordinary daily schedule was occupied by the monitoring of the numerous companies that he was involved in as an executive official,and by planning for the establishment of even other compa nies.2Despite the astounding fact that he invested staggering sums of money in large numbers of companies,hardly any research on Shibusawa has dealt with the aspect of his investments and manage ment.For this reason,I propose in this paper to look at the kinds of business frameworks Shibusawa selected,adapted,and tried to apply to Japanese conditions in order to have modern business take root in Japan,and how he himself used those frameworks,with my main attention focused upon the aspect of his investments . A PROFILE OF EIICHI SHIBUSAWA He was born in1840in a small village about80kilometers outside Tokyo,in what is now Fukaya City in Saitama Prefecture.His father was a progressive,wealthy farmer who carried on a big business in farming and the processing and selling of indigo dyestuffs,and who consequently took on the status of a leader in the community.3In his youth he learned the rudiments of the Chinese classics from an older male cousin who was a Sinologist,and in this way he acquired a better-than-average cultural training.Still,he sensed the contra Oshima,Toshihiko Kato,and Tsutomu Ouchi,Meiji shoki no kigyoka[Early Meiji- entre preneurs](University of Tokyo Press,1976);Mariko Tatsuki,•gShibusawa Eiichi to Godai Tomoatsu•h[Eiichi Shibusawa and Tomoatsu Godai] ,in Kindai Nihon keieishi no kiso chishiki[A basic knowledge of modern Japan's business history],ed.Keiichiro Nak agawa,Hidemasa Morikawa,and Tsunehiko Yui(Tokyo:Yuhikaku ,1974);and Takao Tsuchiya,Shibusawa Eiichi(Tokyo:Yoshikawa Kobunkan,1989).The works available in English include Johannes Hirschmeier,•gShibusawa Eiichi:Industrial Pioneer,•hin The State and Economic Enterprise in Japan,ed.W.Lockwood(Princeton University Press , 1965);and Etsuo Abe,•gShibusawa Eiichi,•hin The International Encyclopedia of Business and Management,ed.M.Warner(London and New York:Routledge ,1996). 2See my contribution•gKindai kigyo oruganaiza no joho kodo:Shibusawa Eiichi [The information activities of modern enterprise organizers:The case of Eiichi •hShibu sawa],in Joho to keiei kakushin[Information and business reform],ed.Satoshi Sasaki and Nobuyuki Fujii(Tokyo:Dobunkan,1997),pp.114-22. 3There is an English version of the life of Shibusawa that can be useful:The Autobi ography of Shibusawa Eiichi:From Peasant to Entrepreneur,trans.T.Craig(University of Tokyo Press,1994). SHIMADA:Shibusawa and Modern Business Practices11 dictions in the class society that existed in the Edo period,when everyone had to submit without objection to the outrageous demands of the warrior class,and took part in the political move ments that bubbled over after Perry's visit to Japan.He would go so far as to plan such direct action against the foreigners as taking over castles controlled by the shogunate and torching the open port in Yokohama,but just before the plan was initiated he realized how reckless it was and abruptly called it off.He went into hiding in Kyoto to escape the shogunate's search for the plotters.He entered the services of Yoshinobu Hitotsubashi,a man of whom people had high expectations as being the most enlightened person in the shogunate(and the man who later would become the fifteenth shogun),and for his services Shibusawa acquired the status of a war rior.After Yoshinobu became the shogun,the government sent a group to represent it at the Paris Exposition,and Shibusawa was chosen to accompany the group.This enabled Shibusawa to see with his own eyes the advanced world of Western Europe. During his absence the shogunate fell.Upon his return to Japan, Shibusawa had an opportunity,albeit a very short one,to experi ment with a modern business in Shizuoka Prefecture,where Yoshi nobu was living in seclusion.Later he was promoted to a position in the government,and,in the Ministry of finance,he was engaged in enlightening businessmen and in other activities aimed at smooth ing the way for the introduction into Japan of banks and companies. Caught up in political maneuverings,he resigned his government post and became the president of Dai-Ichi National Bank,for whose establishment he had been lobbying Mitsui and other wealthy mer chants while working for the government. With a foothold in Dai-Ichi National Bank,Shibusawa then went on to become involved in a whole host of companies.He acted as the chairman of the board of Tokyo Gas,Nihon Renga Seizo K.K. (Nihon Bricks Corporation),Tokyo Rope Mfg.Co.Ltd.,Kyoto Ori mono,Tokyo Jinzo Hiryo(Tokyo Artificial Fertilizer),Tokyo Ishikawajima Shipbuilding Co.,The Imperial Hotel,Oji Paper Co., Ltd.,Iwaki Tanko K.K.(Iwaki Coal Mining),Hiroshima Suiryoku Denki K.K.(Hiroshima Hydro-Electricity),and Sapporo Beer Com pany,among others.He also provided financial assistance toward the establishment of several of Japan's largest companies,such as 12JAPANESE YEARBOOKON BUSINESSHISTORY-2002/19 Osaka Boseki Kaisha(Osaka Mill),Nihon Railway,the Tokio Marine and Fire Insurance Co.,Ltd.,and Nihon Yusen Kaisha(NYK) ,and he served as an executive at each of these companies . In1909,on the occasion of his seventieth birthday ,he resigned from almost all of these positions,remaining only as the president of Dai-Ichi Bank.Then in1916,at the age of77 ,he also gave up his position as president of Dai-Ichi Bank,the base of all his business activities,and retired entirely from the front line of the business world.He still continued to be active,however ,promoting private sector diplomacy,spreading dedication to business virtues ,and encouraging new ways to handle labor problems .In1931,his long life came to an end with his passing away at the age of92 . SHIBUSAWA THE INVESTOR The Shibusawa Memorial Museum has in its possession two source materials that have been completely overlooked in the past:the Shibazaki-ke monjo[Shibazaki family records]and the Shibusawa dozoku-kai kaigiroku[Records of meetings of the Shibusawa family] .4 The former consists of fragments of disconnected memos that are thought to have been jotted down by Kakujiro Shibazaki ,a secretary in charge of keeping the accounts of the Shibusawa family ,when he was preparing the ledgers.The latter is a record of the meetings held monthly from1891on,at which a report was presented to Eiichi Shibusawa and the families of his sons and daughters in regard to all the fluctuations in the assets owned by them.From the former it is possible to get an idea of the funds available to the Shibusawa family and how their assets moved in the one year1891 .From the latter it is possible to see long-term trends in the movement of funds and assets held by the Shibusawa family from1891on . To help analyze these documents and form an accurate picture of Eiichi Shibusawa as an investor,I have compiled two tables based on what is found in Shibazaki Family Records.The first(Table1) 4Both the Shibazaki Family Records and the Records of meetings of the Shibusa wa Family are kept in the Shibusawa Archives established by Ryumonsha ,The Shibusawa Eiichi Memorial Foundation.For a treatment of the former ,see Takashi Igarashi,•gShibazaki ke bunsho ni tsuite•h[On the Shibazaki Family Records],in Shibusawa kenkyu[Shibusawa studies],ed.Shibusawa Studies Association(Tokyo:Shibusawa Archives ,1990,no.2). SHIMADA:Shibusawa and Modern Business Practices13 shows an account of the Shibusawa family finances for the year 1891.The second(Table2)shows the gains and losses in family assets in that same year.5 An analysisof incomeand expenditure From Table1we can see the family income and expenditures for 1891.Budget control was exercised in regard to both.The actual amounts of expenditure found in the books were in almost all cases within the amounts allotted within the budget,and the overall expenditure fell within the budgeted amount. Dividends from shares owned provided more than60%of the family's income.The Shibusawa family was receiving dividends from thirty companies whose shares they owned,as well as interest from government bonds;the largest amount of money came from divi dends declared by Dai'Ichi National Bank.
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