WISDOM OF SHIBUSAWA EIICHI (III) A Companies Man Inoue Jun, director of the Shibusawa Memorial Museum, continues his series highlighting the life and achievements of Shibusawa Eiichi with a review of the great entrepreneur’s work establishing and cultivating joint stock companies. hibusawa Eiichi’s first efforts in the private sec- tor involved establishment S of the First National Bank (Daiichi Kokuritsu Ginko, Later First Bank)—Japan’s first modern bank. Though the bank bore the name National, it was a private joint stock company. Shibusawa worked hard with a belief that the foundation for economy and finance needs to be established first, and then all types of companies should have a joint stock structure. However, establishing a new joint stock company and getting its busi- ness going was never easy. The First National Bank, for instance, under- went hardship because the major in- vestor Ono-gumi Corporation went bankrupt only a year after the bank’s COURTESY OF SHIBUSAWA MEMORIALCOURTESY MUSEUM establishment. Oji Paper Company, Japan’s first full-scale manufacturer, was unable to overcome technological issues that prevented the company from making sellable products, and several years were needed before it began to earn profits. In these diffi- cult years, Shibusawa ran around seeking investors’ understanding, often on his knees. Shareholders, however, had faith in Shibusawa’s sin- cerity and determination, did not complain even when no dividends were paid out, and agreed on capital Shibusawa Eiichi holds blue-eyed dolls received in the goodwill exchange of dolls between Japan and the United States in the 1920s (top). Farewell reception for the COURTESY OF SHIBUSAWA MEMORIALCOURTESY MUSEUM Japanese dolls (bottom). 20 The Japan Journal JANUARY/FEBRUARY 2021 The Japan Journal JANUARY/FEBRUARY 2021 21 COURTESY OF SHIBUSAWA MEMORIALCOURTESY MUSEUM Sugoroku board game depicting images of westernization in Japanese industry and progress in daily life increases to make up deficits. olies and avoiding the forming of fying the opinions of people in com- Shibusawa also supported those zaibatsu. When a company was es- merce and industry in order to spur who attempted to establish new com- tablished and its businesses began revision of unfair treaties the Edo panies by instructing them on how to going well, in many cases Shibusawa Shogunate had concluded with sever- get loans from banks and prepare sold his shares and used the funds to al countries in its final years, in addi- balance sheets, as well as lending his support a new company. tion to serving the need to encourage name as a founder and investing Instead of accumulating wealth new industries. When the Japanese funds for business startup. These sin- for himself, he evidently was dedicat- government negotiated with cere and patient efforts won public ed to promoting Japan’s moderniza- Ambassador Harry Smith Parkes of trust in joint stock companies, caus- tion and industrialization. the United Kingdom for revising ing them in one burst to prosper dur- While striving to develop busi- the treaty, saying that public opin- ing the Meiji twenties and thirties nesses in Japan by establishing and ion was against the situation continu- (1880s and 1890s). cultivating companies, Shibusawa also ing, Parkes countered with, “There is Shibusawa was involved with tried to organize economic associa- no system in Japan for a large number companies in all areas including tions. An example of this is the Tokyo of people to gather and debate. manufacturing, land transport, ma- Chamber of Commerce, forerunner to Opinions indicated by different indi- rine transport and services, and re- the Tokyo Chamber of Commerce and viduals are not public opinions.” tired from most of them in 1909 Industry. It was established in 1878 Thus, it was decided to establish when he turned seventy. In his life- (Meiji 11), with a subsidy of 1,000 yen chambers of commerce, because pub- time, he was reportedly involved in from the Meiji government. lic opinion needed to be unified for about 500 companies. Among Shibusawa’s reasons for revising the treaties, and a forum was One policy Shibusawa main- promoting the Tokyo Chamber of needed for forming such opinion. tained while active in the business Commerce was that he saw the need The national government report- world was staying away from monop- to establish an organization for uni- edly gathered influential people in 20 The Japan Journal JANUARY/FEBRUARY 2021 The Japan Journal JANUARY/FEBRUARY 2021 21 WISDOM OF SHIBUSAWA EIICHI (III) commerce and industry and estab- What Shibusawa had in mind with in his lifetime; yet the number of so- lished these chambers of commerce private sector diplomacy was, in addi- cial and welfare works projects, in- because of its awareness that indus- tion to trying to improve relations, to cluding efforts for popular diplomacy, trial development was impossible firmly position the country of Japan in surpasses it, totaling around 600. without the cooperation of these international society. Shibusawa passed away at the age of people in the private sector, and that In welfare, Shibusawa was in- ninety-one on November 11, 1931 an organization that represents them volved with the Tokyo Yoikuin (Tokyo (Showa 6), to the regret of many, needed establishing. Yet the people Poorhouse), regarded as the starting leaving behind distinguished accom- themselves were also keenly aware point of modern of the need to establish an organiza- medical treatment tion that represents them in order to and welfare in have their opinions reflected for re- Japan. As the facil- alizing sound development of com- ity’s first president, merce and industry while competing Shibusawa expand- and collaborating with the govern- ed the scope of ac- ment and other countries. Thus the tivities and estab- wishes of those in commerce and in- lished, in addition dustry were also clearly a factor be- to a nursing home hind the establishment of chambers for the elderly, an of commerce. orphanage, a juve- nile reform school, Promoting Social and Public a health resort for Works Projects physically weak children, and other After retiring from the business facilities. These fa- world, Shibusawa kept even busier by cilities were also working in many areas, including so- equipped to train cial and public works projects, as his nurses and nursery last endeavors. staff. Shibusawa One of these areas was private supported and co- sector diplomacy, especially that in- operated with nu- volving a boycott of Japanese immi- merous facilities grants that arose in the United States and institutions, and aggravated Japan-US relations. mainly the Tokyo Shibusawa tried to improve the situa- Yoikuin. tion from a private-sector perspective. In the area In 1909 (Meiji 42), Shibusawa vis- of education, ited the United States as the head of a Shibusawa saw COURTESY OF SHIBUSAWA MEMORIALCOURTESY MUSEUM delegation of businesspeople, with fif- importance in ed- Shibusawa Eiichi’s funeral procession passes along ty-one members including the heads ucation on com- Hongo Avenue in Tokyo. Citizens come together to say of the Tokyo, Yokohama, Kyoto, merce and wom- goodbye to Eiichi. Nagoya, Osaka and Kobe Chambers en’s education, of Commerce. The delegation visited which at the time sixty-three cities in three months, were regarded as having no place in plishments in diverse areas that meeting with local businesspeople and higher education. He strove for the should allow readers to see why he is trying to improve relations. development of private sector educa- referred to not only as an entrepre- Shibusawa also served as the head tional institutions offering education neur but also as an organizer of mod- of the Japanese side in the 1920s on practical commerce and for ernization in Japan. goodwill exchange of dolls between women. This spirit has been suc- Japan and the United States. ceeded by some of Japan’s most rep- Note: This article updates that which He was also engaged in active ex- utable schools, such as Hitotsubashi first appeared in the January 2012 changes with people in Europe and University, Tokyo Jogakukan Middle issue of the Japan Journal. Asian countries, and made his resi- School and High School, and Japan dence available for functions for pri- Women’s University. INOUE Jun is an executive director with the vate-sector diplomacy with many Shibusawa is said to have been Shibusawa Eiichi Memorial Foundation and guests invited. involved with about 500 companies director of the Shibusawa Memorial Museum 22 The Japan Journal JANUARY/FEBRUARY 2021 The Japan Journal JANUARY/FEBRUARY 2021 PB.