The Business Role of Japanese Wealth Holders in the early 20th Century: an analysis of networks and activities during the process of industrialisation Shunsuke Nakaoka Economic History Department London School of Economics and Political Science 1 UMI Number: U163017 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Dissertation Publishing UMI U163017 Published by ProQuest LLC 2014. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 T h t'S £ S F 7<m Abstract This thesis sets out specifically to investigate business wealth holders in modem Japan. It includes the study of businessmen, landlords or even peers who were engaged in business and commerce as founders, owners or investors. It attempts to locate their social, historical and business characteristics in the context of the early 20th century, when Japan emerged as one of the economic powers of Asia, having passed through the transitional period of the late 19th century. The research focuses primarily on characteristics related to the development of Japanese business, and incorporates some comparisons with contemporary members of the European bourgeoisie, especially in Britain and Germany. The second major concern is to analyse Japanese business through an investigation of those wealth holders who succeeded in the modem business world by managing to survive the transition from the pre-modem to the modem economic system. The third and final focus is on the relationship between the state and wealth holders. Chapter 1 of the thesis explains the methodology adopted for the research, along with a detailed explanation of the data and sources utilised. Chapter 2 seeks to establish a profile of Japanese wealth holders in the prewar period. Data on estimated wealth, class and social structure is presented, with some comparisons with Britain and Germany. Chapter 3 deals with the role of wealth holders in the development of modem Japanese business, in relation to the role of the business family and business organisation. Chapter 4 focuses on the relationship between wealth holders and the state. This chapter consists mainly of an analysis of the formation of informal networks through marriage, and the operation of various state honours. A major finding of the research is that the Japanese household (ie) system strongly influenced wealth holders’ attitudes towards business, and their business activities. 2 Acknowledgement Although many people have helped and supported me in completing this thesis, I would like to mention some individuals who have been particularly helpful in my work. First, I would like to express my deepest gratitude to my supervisor, Dr. Janet Hunter. Without her intellectual guidance and support, and of course her corrections and revisions of my English, I could not have researched and written this thesis. I would also like to thank a number of academic researchers who have given generous help in my research. Among them, I owe a great debt to Professor Abe Takeshi of Osaka University, and Professor Wada Kazuo of Tokyo University, who not only generously offered their time and shared with me their expertise in the business history of modem Japan, but also gave some helpful suggestions and comments when they read parts of this thesis. I also received suggestions and encouragement from Professors Yui Tsunehiko and Yasuoka Shigeaki, both of whom are experts on zaibatsu and business development. As head of the library of the Department of Economics at Tokyo University, Professor Takeda Haruhito kindly gave me permission to conduct my research there. I am also grateful to Yamamoto Kazuo, the deputy-director of the Sumitomo Archives in Kyoto, for providing me with some significant information. Warm thanks go to my friends and scholars in the London of School of Economics and Political Science. I am particularly grateful to those who made suggestions and comments on my work at the time of my upgrading to PhD status, and at my presentation at the workshop in the Economic History Department. They include Professor Paul Johnson, Dr. Max Schulze, Professor Patrick O’Brien, Mar Rubio, Peter von Staden and Itoh Keiko. I also received much helpful comment and information from Dr. Tom Nicholas, which helped me focus my analysis. I would also like to express many thanks to friends at the LSE who provided me with mental support, especially Okada Sanae, Nakayama Yoshiko and Osada Susumu. Finally, a special word of gratitude goes out to my father, Nakaoka Tetsuro, who awakened my interest in history and has also given intellectual guidance and devoted attention as an expert in the history of technological development in modem Japan. My mother, Yuri, has given long-term emotional support for my project. I owe them the deepest gratitude for their large dose of patience in my completing this thesis. My brother Ryusuke and his wife Kiyoko offered me a place to stay during my research work at Tokyo, for which I am truly grateful. Without all their help, I could not have completed my research. This thesis is, therefore, dedicated to them. 3 Table of contents Abstract 2 Acknowledgements 3 Table of Contents 4 List of Tables 6 Note on Conventions 7 Chapter 1. Introduction 1.1. Introduction 8 1.2. Themes and Debates 12 1.2.1. Japan 13 1.2.2. Britain 22 1.2.3. Germany 26 1.3. The Importance of Comparative Research 30 1.4. Methods and Sources 33 1.4.1. Quantitative Sources 35 1.4.2. Other Sources 46 1.5. The Structure of the Thesis 50 Chapter 2. Perspectives on Japanese Wealth Holders 2.1. Introduction 52 2.1.1. Brief Explanation of the Data Set 53 2.2. General View 56 2.3. Regional Distribution 61 2.3.1. Highly Concentrated Areas 66 a) Tokyo 66 b) Osaka and the Kansai area 70 2.3.2. Other Areas 75 a) Aichi 75 b) Niigata 78 c) Fukuoka 82 d) Colonial areas 84 e) Other regions 87 2.4. Occupational Distribution 88 2.4.1. Merchants 93 2.4.2. Businessmen 98 2.4.3. Landlords 99 2.4.4. The Aristocracy 103 2.5. Survival of Wealth Holders 106 2.5.1. General View of Survival 106 2.5.2. Survival of Wealth Holders in Regional Perspective 114 2.5.3. Comparison of Newcomers and Surviving Wealth Holders 117 2.6. Conclusion 121 Chapter 3. Family and Business of Japanese Wealth Holders 3.1. Introduction 124 3.1.1. Categorisation of Business Wealth Holders 126 3.1.2. Method of Analysis 128 3.1.3. Brief Content of the Chapter 130 4 3.2. Social Origins 131 3.2.1. General Perspectives 131 3.2.2. Education of Wealth Holders 137 3.2.3. Comparative Perspective 139 3.2.4. The Role of Yoshi (Adopted Son) 145 3.3. The Function of the Japanese Ie System as a Business Organization 151 3.3.1. Merchant Houses in the Tokugawa Era 153 3.3.2. The External Impact on Merchant Houses 158 3.3.3. The Attempt at Business Reorganization 163 a) From Merchants to Zaibatsu : Mitsui 164 b) Sumitomo 167 c) Involvement in other Business Sectors 169 The Department Store Business 171 The Pharmaceutical Industry 173 3.3.4. The Role of the Ie System in Modem Japanese Business 176 3.4. Profits and Profitability of Wealth Holders’ Business 178 3.4.1. Profit Distribution within Zaibatsu Families 180 a) The Mitsui Families 180 b) The Sumitomo Family 183 c) The Iwasaki Families 185 3.4.2. Other Holding Companies and the Pattern of the Investment of the Business Wealth Holders 188 a) The Role of Holding Companies 189 b) The Pattern of Investment Activities 191 3.5. Conclusion 196 Chapter 4. Social Networking of Business Wealth Holders 4.1. Introduction 200 4.2. Marriage Alliance as a Method of Informal Networking 207 4.2.1. Characteristics of Spouse Selection 208 4.2.2. Marriage as a means of Elevation of Social Status 213 4.2.3. Patterns of Marriage Alliance 218 a) Big-Four Zaibatsu Families 219 Mitsui 219 Other Families of the Big-Four 225 b) Other Wealthy Business Families 227 4.2.4. Analysis of the Data Set 231 a) General View 231 b) Comparative Analysis 239 4.3. Honorary Titles and Decorations 244 4.3.1. Titles of Nobility 244 4.3.2. Non-Hereditary Governmental Titles and Honours 252 4.4. Conclusion 263 Conclusion 267 Appendix 275 Bibliography 294 5 List of Tables Table 2.1. Distribution of wealth holders by estimated wealth 58 Table 2.2. Regional distribution of wealth holders 62 Table 2.3. Occupational distribution in each areas 63 Table 2.4. Occupational distribution of wealth holders 89 Table 2.5. Occupational distribution within business wealthy elite 91 Table 2.6. The survival of wealth holders in 1933 107 Table 2.7. The regional distribution of the surviving wealth holders in 1933 107 Table 2.8. Scale of wealth of surviving 1915 wealth holders in 1933 108 Table 2.9. The occupational distribution of the surviving 1915 wealth holders in 1933 112 Table 2.10. Wealth holders whose estimated wealth was over 3 million yen in 1933 114 Table 2.11. Occupational distribution of wealth holders whose estimated wealth over 3 million yen in 1933 115 Table 3.1.