Japan: Its History, Arts, and Literature/Volume 6/Chapter 5
Chapter V
THE HISTORY OF COMMERCE IN
JAPAN (Continued)
NOTHING is more noteworthy in the commercial history of this epoch than the improvement that took place in the social status of the merchant during the second half of the sixteenth century. Much of the change was due to the liberal views of the Taikō y whose patronage of everything that could contribute to national prosperity was quite impartial. He strongly encouraged commercial voyages by his countrymen to Macao, to the Philippines, to Cambodia, to Annan, and to other places. Nine ships engaged in this trade every year. They carried licences bearing the Taikō's vermilion stamp, and their ports of departure were Nagasaki, Ōsaka (for Kyōtō), and Sakai. Associated with these enterprises were the names of some ambitious adventurers, who sought to persuade Hideyoshi to undertake the conquest of Formosa and the Philippines. There is evidence to show that they would have succeeded had not his mind been already fixed upon a greater prospect, the conquest of China. At all events they had free access to his presence, and he showed himself equally willing to meet and converse with them, whether they had only an account of their travels to offer, or whether they brought him a gift of a musk-cat or presented some of the exceedingly homely jars of Luzon pottery to which Japanese tea-clubs attached extraordinary value. The town of Sakai was at that time one of the most flourishing commercial emporia of Japan. Its merchants possessed great wealth and influence, and so far from sharing the social stigma of their predecessors in the more exclusive days of Kyōtō rule, they were recipients of official patronage, obtained occasional admittance, condescending indeed but still courteous, to aristocratic circles, and became famous not only for their attachment to the tea cult, but even for their skill in composing a new kind of verselet which they were the means of bringing into fashion. A Portuguese missionary visiting Japan at that epoch records with astonishment that he saw a Sakai merchant pay fifteen hundred crowns for a tripod censer, and when the Taikō organised a gigantic tea-cult réunion at Kitano, three Sakai tradesmen won the distinction of having contributed the finest objects of virtu to the wonderful collection there displayed. It is, perhaps, to the exigencies of the Ashikaga Shōguns, as much as to the robust intelligence of the Taikō, that Japanese tradesmen owed their first emergence from a degraded position; for, unscrupulous as were the extortions and the heavy losses suffered by them at the hands of officialdom during Ashikaga days, their potentialities as contributors to the public exchequer won for them the title of "elders" at the Muromachi Court.
Japanese trade with Europe in mediæval times need not be noticed at any length here. The religious question alone prevented it from growing steadily and bringing in its train all the responsibilities and incentives of international relations. Under such circumstances Japan's ambition would certainly have led her far. It is on record that during the brief period—little more than half a century—which separated the opening of the trade from the first restrictions imposed on it, plans were formed, and in some cases partially carried out, for the conquest of Siam, the Philippines, Formosa, the Riu-Kiu Islands, Korea, China, and even southern Europe. In few countries, indeed, has the spirit of aggressive enterprise showed itself more potent than it was in Japan at the close of the sixteenth and the beginning of the seventeenth century. The map of the Far East would certainly have been altered had not the excesses of Christian propagandists, aggravated by the jealousies of her foreign visitors, shocked Japan into seclusion. The Dutch alone remained in her territories, but they purchased the privilege at a price which to men of modern times seems incredible. The island of Deshima where they were confined had an area of only three and one-fourth acres. It was surrounded by a high fence of boards with a double row of spikes, and never, from year's end to year's end, did the inmates enjoy the privilege of free egress, while the only Japanese allowed to enter constantly were prostitutes. Between the island and the mainland stretched a narrow bridge, having at one end a constantly closed gate, at the other a guard-house. A bamboo pipe brought a supply of fresh water from Nagasaki, and two tide-gates on the north gave access to ships arriving from Holland. A very potent commercial instinct was required to carry on trade under such conditions, and indeed the whole story shows that the mediæval Dutch possessed not only remarkable shrewdness but also extraordinary adaptability. They quickly appreciated that the good will of officialdom was essential to their successful sojourn in Japan, and they spared no efforts to ingratiate themselves. They went to Persia or India for rare and costly gifts such as might placate the Shōgun's councillors or the Nagasaki Governor. They obeyed every order addressed to them by the Japanese authorities, however unjust or repugnant they found it. Thus, when commanded to destroy various edifices just erected by them at Hirado, because the year of the Christian era was carved on the stones, they complied unhesitatingly. When required to lend armed assistance for the repression of the Christian insurgents at Shimabara, they made no objection. When ordered to enter what was virtually a prison at Deshima and to abandon all their religious exercises, they submitted unresistingly. It was certainly fortunate for Japan that the Dutch showed so much complaisance, since, insignificant as was the trade at Deshima from a national point of view, and slight the traders' contact with the Japanese people, there can be no doubt that had that door of ingress been closed to progressive ideas, Japan could scarcely have crossed the threshold of her new career in the nineteenth century without a catastrophe. To the Dutch themselves, also, the monopoly they thus secured brought considerable profits. For although they were not allowed to develop their business without limit, although the visits of their vessels were never permitted to exceed two annually and were ultimately reduced to one, yet in the disordered state of Japan's currency, in the arbitrarily fixed ratios between gold, silver, and copper, and in the people's ignorance of the value of foreign manufactures, they found an opportunity which they turned to such good account that between 1609 and 1858 they are said to have exported over forty million pounds sterling of gold and silver as well as two hundred thousand tons of copper. Deshima is now spoken of as a gate through which the wealth of the country flowed away incessantly during two centuries and a half, and some justice must be conceded to the definition.
As to the manner of regulating the Deshima trade, it varied, of course, from time to time, but the general principle was to exclude the Dutch from the benefits of Japanese competition. The imported goods were purchasable by a limited number of specially licensed merchants from Kyōtō, Sakai, Ōsaka, Nagasaki, and Yedo. When a cargo arrived, it was landed and examined by appraisers, who fixed the price to be paid to the importers. The Dutch were then required to set out samples in their stores, and thereafter a signal bell summoned the licensed merchants, who, having passed into the enclosure and examined the samples, subsequently put in tenders, whatever they offered above the appraised prices being appropriated by the officials, who also levied a tax from the licensed merchants as well as a heavy rent from the Dutch. More or less departure from this system is observable at various epochs, but the dominant principle remained tolerably permanent, namely, exclusion of the foreigner from the advantages of Japanese competition. Periodically the superintendent of the Dutch factory had to travel to Yedo for the purpose of tendering thanks and gifts to the Shōgun, who on these occasions always bestowed on him thirty suits of clothing. This journey, made under strict official supervision, was prefaced and followed by a similar visit to the Governor of Nagasaki. The articles imported by the Dutch were sugar, timber, stone-ware, metals, drugs, cloth, glass, porcelain, leather, toys, oils, mirrors, clocks, cutlery, surgical instruments, gold and silver wares, birds and animals. Those exported were copper, camphor, lacquered articles, porcelains, silk fabrics, soy, tea, cotton fabrics, saké, wax, screens, bamboos, toys, and bamboo-ware.
Originally, it was not considered necessary to subject Chinese tradesmen to similar restrictions. They lodged in the houses of the citizens of Nagasaki, who levied a brokerage on their sales and purchases, and were consequently eager to welcome them. But owing to the quarrelling and other abuses resulting from that system, a special settlement was ultimately assigned. It measured something over seven acres, was surrounded by a ditch and palisade, and might not be entered by any one unless he carried a passport. But the Chinese were not confined there after the manner of the Dutch in Deshima. They paid a duty of a little over two per cent of their total transactions during the year, and thereafter enjoyed a considerable measure of freedom. In their case also, the import trade, especially that in raw silk, was controlled by official assessors, whose method was to make three appraisements, pay the average of the three to the Chinese importers, sell the goods at the highest appraisement to the Japanese dealers, and appropriate the difference. The Chinese of that era were very active merchants. Their junks plied between Japan and twenty-two ports in China, Tonquin, Cambodia, Siam, Batavia, Malacca, and elsewhere, and their list of exports was large,—sugar, rare woods, lead, quicksilver, porcelain, musk, drugs, cotton and silk fabrics, writing brushes and ink, pictures and other works of art, tin, copper and brass, gems, glass, dyed leather, furs, and various edibles. It should be added that in the case of the Chinese the trade was not confined to purchases with coin. A system of barter also was practised in an exchange building, and received encouragement from the authorities, who saw in it a device for preventing the outflow of specie. The chief article of barter on Japan's side was marine products, for which there was always a great market in China,—beche de mer, dried cuttle-fish, various kinds of shell-fish, and sundry sea-weeds. At first the Government entrusted to an association of merchants the duty of collecting these products, and bringing them together in the exchange building at Nagasaki, financial assistance being given by the Treasury.[1]
But it was ultimately found necessary to take the whole business into official hands, and by skilful organisation thoroughly successful operations were conducted. The chief interest of this page of commercial history is that it shows the Japanese samurai acting in a tradal capacity, and acting with much ability. Purchasing offices were established in Osaka, Hakodate, Akamagaseki, and Yedo, that in Yedo having twelve stores attached with an extensive drying-ground. The goods were divided into ten grades, and the official examiners became so skilled that they could detect at a glance the provenance of any article, though fifty-nine districts contributed to the production. The chronicles of the eighteenth century gravely record that as the prices of all these goods were officially fixed, no special "business policy" was required in selling them, the whole question being limited to an endeavour on the part of the Chinese to get as much as possible of the best grades, and on the part of the Japanese to dispose of as much as possible of the inferior.
In order to conclude the subject of Japan's foreign trade in feudal times, it may be noted that one of the earliest acts of the Tokugawa Shōgun Iyeyasu, after he assumed administrative power, was to replace his country's relations with Korea on a friendly footing. In this matter he showed great patience, but his emissaries did not succeed in altogether overcoming the anti-Japanese sentiment that prevailed in Korea as a natural result of former settlers' lawless procedure and of the Taiko's armed aggressions. Korea agreed, however, that forty Japanese junks might annually visit Fusan, where a settlement was laid out for the use of Japanese merchants. It is highly probable that the system adopted by Korea with regard to this settlement suggested the arrangements made at a later date by the Japanese themselves for the control of the Dutch at Deshima. The Koreans insisted that the Japanese settlers should confine themselves strictly to the limits of the concession, never passing out of the four gates and never holding free intercourse with the people of the country. Subsequently, the settlement having been removed to a more convenient site in the neighbourhood, the Japanese sought permission to visit their cemetery in the old settlement, but the Korean authorities decided that this should be allowed only twice annually, that all Koreans dwelling along the route taken by the Japanese should close their doors for the day, and that the settlers should be escorted to and fro by constables and soldiers. These irksome restrictions did not find the Japanese as patient as the Dutch always showed themselves at Deshima: Fusan became the scene of several disturbances. Towards the close of the seventeenth century the Tokugawa policy of international isolation reached the trade with Korea, limiting the total value of the transactions to seven hundred thousand pounds sterling, and imposing specific import duties of ten per cent, approximately. Nevertheless Japan's diplomatic attitude toward Korea remained conspicuously cordial. A custom had been established that the Korean Government should send a special envoy to Japan on the occasion of a Shōgun's accession. To this envoy a profusely hospitable reception was accorded. The third Tokugawa Shōgun, Iyemitsu, ordered that the fifteen provinces and forty-two post towns through which the ambassador passed en route for Yedo should organise independent demonstrations in his honour, although the official reception given to a Japanese envoy visiting Korea was limited to the port of arrival, and organised on lines of simplicity rather than ostentation. The scholar and statesman Arai Hakuseki protested against the excessive costliness and courtesy of Japan's hospitality, but although his protest obtained approval, a hundred years elapsed before (1811) practical effect was given to it. Thenceforth officials despatched from Yedo received the Korean envoy at his landing-place in the island of Tsushima, and the further prosecution of his journey was dispensed with.
Naturally commerce so burdened by restrictions and monopolies as was that with the Dutch and the Koreans, offered a tempting field for clandestine operations. These were frequent. Invariably the Dutch ships were escorted into and out of harbours, and were watched while at anchor by guard-boats. The smuggler's only resource, therefore, was to meet a foreign vessel at some rendez-vous beyond the range of official observation, receive her goods there, and furnish return cargo. In Korea's case transactions of this kind were comparatively easy, since the smugglers from each side could be sure of reaching the place of assignation at the appointed time. But the length of the voyage from Europe and its incidental vicissitudes, made smuggling a troublesome and dangerous matter where the Dutch were concerned. In spite of the risks, however, and in spite of the fact that detection invariably meant death, such large profits accrued that constant evasions of the law took place down to comparatively modern times. There are recorded in connection with these infractions five cases of capital punishment, and one instance of expiatory suicide on the part of several officials.
The great chiefs of feudal days had an effective method of treating tradesmen: they regarded them in a certain sense as chattels to be moved from place to place according to the convenience of the Administration. The Taikō, when he built his Castle in Ōsaka, ordered a number of the Sakai merchants to transfer their stores to new streets laid out by him there. Subsequently, when Ōsaka's prosperity began to decline, owing to the growth of Yedo, Matsushita Tadaaki, governor of the former city, caused all the Fushimi merchants to migrate from the two hundred streets occupied by them and to take up their abode in Ōsaka. Similarly, when Iyeyasu wanted a commercial population for Yedo in 1603, he summoned thither the leading tradesmen of Kyōtō and Ōsaka. But these arbitrary acts entailed little hardship. Merchants found their account in obeying such orders, especially in the case of Yedo; for since the Tokugawa system compelled the feudal chiefs to have residences there, each of the provincial magnates provided himself with at least two mansions and sets of barracks, where a host of retainers sojourned, supporting their lord's reputation by the fashion of their lives, so that the city rapidly became a centre of unparalleled prosperity.
It was, indeed, under the shadow of feudalism that the Japanese merchant flourished, and his greatest representative may be said to have been a direct outcome of that system. The feudal chiefs received the bulk of their income in rice, and it became necessary to make arrangements for getting the grain to market, disposing of it and transporting the proceeds to the fiefs, or to cities, whence the latter drew their supplies. These objects were originally achieved by establishing in Ōsaka "store mansions" (kura-yashiki), under the charge of samurai, who received the rice and sold it to merchants in the city, remitting the money by official carriers. But from the middle of the seventeenth century the business of these store-mansions was placed in the hands of trustworthy merchants, who took the name "kake-ya," or "agent" The kake-ya had large responsibility and was the repository of much confidence. For not only did he dispose of the rice and other commodities forwarded from a fief, but also he held the proceeds, sending them by monthly instalments either to Yedo or to the fief, rendering accounts at the end of each year, and deducting from two to four per cent as commission. He had no special licence, as was the case with tradesmen in other branches of business, but he invariably belonged to the highest class of his profession, and sometimes he was honoured with an official title or rewarded with an hereditary pension after the manner of a samurai. In fact, a kake-ya of such standing as the Kōnoike and the Mitsui families, was, in effect, a banker charged with the care of a large section of the finances of several fiefs.
The method of transacting rice sales in Ōsaka on behalf of the fiefs was uniform. On the arrival of the grain, a notice was posted inviting tenders by a certain day. These tenders having been opened in the presence of all the "store-mansion" officials and the kake-ya, the names of the successful tenderers were advertised, wherupon they were required to deposit bargain money and to affix their seals to a statement of the transactions. Generally the bargain money had not to be paid until the day following the opening of the tenders, but if the credit of the tenderer was doubtful, he had to send in the bargain money at once. As for the remaining sum, ten days' grace was allowed, but failure to pay within that time involved confiscation of the bargain money and permanent exclusion from all subsequent transactions. On receipt of the full amount, the kake-ya gave the buyer a ticket, which entitled him to take delivery of the rice, in whole or by instalments, at any time prior to the third month of the second year after the sale, no fee for storage being charged during that time.
Corresponding with the kake-ya of Ōsaka, was the fuda-sasbi of Yedo, a curious term, literally signifying "ticket-holder," and derived from the fact that rice-vouchers were usually thrust into split bamboos, which could be conveniently planted in a pile of rice-bags to indicate their buyer. The fuda-sashi received the grain constituting the revenues of the Shōgun's immediate feudatories—the Hatamoto, or bannerets—as well as of administrative officials, and accounted for it in cash. In Ōsaka no limit was at any time set to the number of the kake-ya, nor were they obliged to have licences. But in Yedo, from the beginning of the eighteenth century, the fuda-sasbi were duly licensed, the number of licences being fixed at one hundred and eight. Their fees amounted to a little more than two per cent of the transactions managed by them (three bu per thirty-five koku of grain), but they also derived large profits by lending money to the feudal chiefs, though they were forbidden to charge a higher rate of interest than fifteen per cent. Divided into three confederations, each subdivided into six classes with six houses in a class, they appointed a general manager for each confederation every month by vote, organised their business so ably that it brought them great gains, and lived in luxury which became proverbial. A licence might be transmitted in the holder's family, and might also be sold, but in the latter case the consent of the confederation had to be obtained. The usual market value was £1,600. On the other hand, they had always to take into account the risk of official interference, as when (in 1789) the Shōgun's chief minister drew his pen through all debts owed by feudatories to fuda-sashi; or when, in 1841, the celebrated Mizuno Echizen-no-Kami, desiring to succour the bannerets and restrain the extravagance of the fuda-sashi, decreed that all moneys owing to the latter should be paid by instalments spread over twenty years without interest.
Rice, of course, always constituted the chief staple of commerce in Japan, but since the fief products, which formed the bulk of the crop, were disposed of by tender at the places of storage, neither Ōsaka nor Yedo possessed a regular rice exchange until the second half of the sixteenth century. From the use of tickets, the grain being held in store until it suited the purchaser to take delivery, sales of rice to arrive soon came into vogue, and further, instead of paying cash for tickets, the custom was established of merely registering a transaction, and deferring any transfer of money until the rice came to hand. A so-called "exchange," but really a bank, was established to deal with these tickets, making advances against them, and in that way purely speculative transactions were conducted on an extensive scale. It need scarcely be said that when the market price of rice rose to an abnormally high figure, public opinion rebelled against these speculative operations. Several of the brokers were arrested (1721) and placed on trial, and though the authorities acquitted them, dealing in margins was thenceforth forbidden, and the licence system, as described above, went into force in Yedo. There were three exchanges. One closed at noon; the other two remained open until nightfall, and consequently received the name of "fire-rope exchange," because the burning out of a fire-rope constituted the signal for closing. Orders to be filled as well as lots of "real rice" and of rice to arrive were put up at auction, and the current price of the day was communicated from Ōsaka to the provinces by signals with flags, or with flambeaus if at night. Twice in every year, namely, on April the 17th and October 17th, the standard rice was determined by vote, and since this rice commanded the highest price in the market, it became a matter of great moment to a fief that its grain should be chosen. There was consequently keen competition, and the chief of the successful fief contributed £800 towards the expenses of the market. It must not be inferred, however, that merchants were free to fix the price of rice at will. In every age this commodity enjoyed the distinction of being considered the standard of value, and stringent measures were officially adopted to prevent regrating or hoarding of grain in times of bad harvests. Similar scrutiny extended to the productions of saké, which is brewed from rice, and occupies in Japan much the same place as that held by beer in England or Germany. Official restrictions were consequently imposed on its manufacture whenever a scarcity of rice threatened.
It has been shown that the system of organised companies had its origin in the Kamakura epoch, when the number of merchants admitted within the confines of the city being restricted, it became necessary for those not obtaining that privilege to establish some method of coöperation. The Ashikaga Shōguns developed the idea by selling to the highest bidder the exclusive right of engaging in a particular trade, and the Tokugawa Administration perpetuated the practice. But whereas the monopolies instituted by the Ashikaga had for sole object enrichment of the exchequer, the Tokugawa, though their manner of applying the system was not free from the taint of favouritism, regarded it chiefly as a means of securing worthy representatives in each branch of trade. Thus the first trade licences were issued in Yedo to keepers of bath-houses, in the middle of the seventeenth century. The Japanese bath-house was often a haunt of immorality. In the upper storeys of these buildings vices were practised which the authorities found themselves unable to control without enlisting the assistance of the bath-keepers themselves by means of the licence system. As the city grew in dimensions, these licences increased in value, so that pawn-brokers willingly accepted them in pledge for loans. Subsequently, almanack-sellers were also required to take out licences, their numbers being limited to eighty-one; and the system was afterwards extended to money-changers, of whom six hundred were placed on the official roll.
It was to the fishmongers, however, that the advantages of commercial organisation first presented themselves vividly. The greatest fish-market in Japan is at Nihon-bashi in Tōkyō. It had its origin in the needs of the Tokugawa Court. When Iyeyasu entered Yedo in 1590, his train was followed by some fishermen of Settsu. To them he granted the privilege of plying their trade in the adjacent seas, on condition that they furnished a supply of their best fish for the use of the garrison. The remainder they offered for sale at Nihon-bashi. Early in the seventeenth century, one Sukegoro[2] of Yamato province went to Yedo, and organised the fish-mongers into a great guild. Nothing is recorded about this man's antecedents, though his mercantile genius entitles him to historical notice. He contracted for the sale of all the fish obtained in the neighbouring seas, advanced money to the fishermen on the security of their catch, constructed preserves for keeping the fish alive until they were exposed in the market, and enrolled all the dealers in a confederation which ultimately consisted of three hundred and ninety-one whole-sale merchants and two hundred and forty-six brokers. There were three markets in the city, but none could compare with that of Nihon-bashi in magnitude and importance. The main purpose of Sukegoro's system was to prevent the consumer from dealing direct with the producer. Thus in return for the pecuniary accommodation granted to fishermen to buy boats and nets, they were required to give every fish they caught to the wholesale merchant from whom they had received the advance; and the latter, on his side, had to sell in the open market at prices fixed by the confederation. A somewhat similar system applied to vegetables, though in this case the monopoly was never so close. All products of the garden had to be carried to the market and sold there by auction, none being disposed of privately. But as the vegetable-grower's circumstances rendered him more independent than the fisherman, he was never brought completely within the meshes of the organisation.
It will be observed that this confederation of fishmongers approximated closely to a "trust," as the term is now understood; that is to say, an association of merchants engaged in the same branch of trade and pledged to observe certain rules in the conduct of their business and to adhere to fixed rates. The idea obtained wide vogue from the first half of the eighteenth century. It was extended to nearly every domain of trade, ten monster confederations being organised in Yedo and twenty-four in Ōsaka. These received official recognition, and contributed a sum to the exchequer under the euphonious name of "benefit money."[3] They attained a high state of prosperity, the whole of the city's supplies passing through their hands.[4] No member of the confederation was permitted to dispose of his licence except to a near relative, and if any one not borne on the roll of a confederation engaged in the same business, he became liable to punishment at the hands of the officials. In spite of the limits thus imposed on the transfer of licences, one of these documents commanded from £80 to £6,400, and in the beginning of the nineteenth century the confederations, or guilds, had increased to sixty-eight in Yedo, comprising nineteen hundred and ninety-five merchants.
The guild system extended to maritime enterprise also. In the beginning of the seventeenth century a merchant of Sakai established a junk service between Ōsaka and Yedo, but the business did not receive any considerable development until the close of that century, when ten guilds of Yedo and twenty-four of Ōsaka combined to organise a marine-transport company for the purpose of conveying the merchandise of the guilds. Here also the principle of monopoly was strictly observed, no goods belonging to unaffiliated merchants being shipped. This carrying-trade rapidly assumed large dimensions. The number of junks entering Yedo yearly rose to over fifteen hundred. They raced from port to port, just as tea-clippers from China used to do in recent times, and troubles incidental to their rivalry became so serious that it was found necessary to enact stringent rules. Each junk-master had to subscribe a written oath that he would comply strictly with the regulations, and observe the sequence of sailings as determined by lot. The junks had to call en route at Uraga, for the purpose of undergoing official examination. The order of their arrival there was duly registered, and the master making the best record throughout the year received a present in money as well as a complimentary garment, and became the shippers' favourite next season.[5]
Operations relating to the currency also were brought under the control of guilds. The business of money-changing seems to have been taken up as a profession from the beginning of the fifteenth century; but it was then in the hands of pedlars who carried strings of cash which they offered in exchange for gold or silver coins, then in rare circulation, or for parcels of gold dust. From the early part of the seventeenth century exchanges were opened in Yedo, and in 1718 the men engaged in this business formed a guild after the fashion which obtained such vogue at that time. Six hundred of them received licences, and no unlicensed person was permitted to pursue the avocation. Four representatives of the chief exchanges met daily and fixed the ratio between silver and gold, the figure being then communicated to the various exchanges and to the Shōgun's officials. As for the prices of gold or silver in terms of copper, or of bank notes, twenty representatives of the exchanges met every evening, and in conjunction with four representatives of the gold and silver exchanges, an official censor also being present, settled the figures[6] for the following day and recorded the amount of transactions during the past twenty-four hours, full information on these points being at once sent to the City Governors and Street Elders. The exchanges in their ultimate form approximated very closely to the Occidental idea of banks. They not only bought gold, silver and copper coins, but they also received money on deposit, made loans, and issued vouchers which played a very important part in commercial transactions. The voucher seems to have come into existence in Japan in the fourteenth century. It originated in the Yoshino market of Yamato province, where the hilly nature of the district rendered the carriage of copper money so arduous that rich merchants began to substitute written receipts and engagements, which quickly became current. Among these documents there was a "joint voucher" (kumiai-fuda), signed by several persons any one of whom might be held responsible for its redemption. This had large vogue, but did not obtain official recognition until 1636, when the third Tokugawa Shōgun selected thirty substantial merchants and divided them into three guilds, each authorised to issue vouchers, provided that a certain sum was deposited by way of security. Such vouchers were obviously a form of bank note. Their circulation by the exchanges came about in a similar manner. During many years the treasure of the Shōgun and of the feudal chiefs was carried to Yedo by pack-horses and coolies of the regular postal service. But the costliness of such a method led to the selection (in 1691) of ten exchange agents who were appointed bankers to the Tokugawa Government, and were required to furnish money within ninety days from the date of receiving an order in that sense. The agents went by the name of the "ten-men guild." Subsequently the firm of Mitsui was added, but it enjoyed the special privilege of being allowed one hundred and fifty days to collect the specified amounts. The guild received moneys on account of the Tokugawa or the feudal chiefs at provincial centres, and then made its own arrangements for cashing the cheques drawn upon it by the Shōgun or the Daimyō in Yedo. If coin happened to be easily available, it was employed to cash the cheques; otherwise the vouchers of the guild served instead. It was in Ōsaka, however, that the functions of the exchanges acquired fullest development. That city has in all eras exhibited a remarkable aptitude for trade. Its merchants, as already shown, were not only entrusted with the duty of selling the rice and other products of the surrounding fiefs, but also became depositories of the proceeds, which they paid out on account of their owners in whatever sums the latter desired. Such an evidence of official confidence greatly strengthened their credit, and they received further encouragement from the second Tokugawa Shōgun (1605—1623) and from Ishimaru Sadatsugu, who held the post of Governor of the city in 1661. Ishimaru fostered wholesale transactions; sought to introduce a large element of credit into commerce by instituting a system of credit sales; took measures to promote the circulation of cheques; inaugurated market sales of gold and silver, and appointed ten chiefs of exchange who were empowered to oversee the business of money-changing in general. These ten received exemption from municipal taxation and were permitted to wear swords. Under them were twenty-two exchanges forming a guild, whose members agreed to honour one another's vouchers and mutually to facilitate business. Gradually they elaborated a regular system of banking, so that, in the middle of the eighteenth century, they issued various descriptions of paper,—orders for fixed sums payable at certain places within fixed periods; deposit notes, redeemable on demand of an indicated person or his order; bills of exchange drawn by A upon B in favour of C (a common form for use in monthly or annual settlement); promissory notes to be paid at a future time, or cheques payable at once, for goods purchased; and storage orders engaging to deliver goods on account of which bargain money had been paid. These last, much employed in transactions relating to rice and sugar, were generally valid for a period of three years and three months, were signed by a confederation of exchanges or merchants on joint responsibility, and guaranteed the delivery of the indicated staples independently of all accidents. They passed current as readily as coin, and advances could always be obtained against them from pawnbrokers. All these documents, indicating a well-developed system of credit, were duly protected by law, severe penalties being inflicted for any failure to implement the pledges they embodied. A peculiar form of voucher may be mentioned here. Cut out of cardboard, a foot long and about three inches wide, it had a hole for stringing it on a cord after the manner of copper cash. Merchants frequenting the provincial markets for silk fabrics often carried a number of these vouchers suspended from their girdles.
The merchants of Yedo and Ōsaka, working on the system of trusts here described, gradually acquired great wealth, and fell into habits of marked luxury. It is recorded that they did not hesitate to pay five pounds for the first bonito of the season and eleven pounds for the first egg-fruit. Naturally the spectacle of such extravagance excited popular discontent. Men began to grumble against the so-called "official merchants" who, under government auspices, monopolised every branch of trade; and this feeling of umbrage grew almost uncontrollable in 1836, when rice rose to an unprecedented price owing to crop failures. Men loudly ascribed that state of affairs to regrating on the part of the wholesale companies, and murmurs similar to those raised at the close of the nineteenth century in America against the trust system began to reach the ears of the authorities perpetually. The celebrated Fujita Tōko of Mito took up the question. He argued that the monopoly system, since it included Ōsaka, exposed the Yedo market to all the vicissitudes of the former city, which had then lost much of its old prosperity. Finally, in 1841, the Shōgun's chief minister, Mizuno Echizen-no-Kami, withdrew all trading licences, dissolved the guilds, and proclaimed that every person should thenceforth be free to engage in any commerce without let or hindrance. This recklessly drastic measure, vividly illustrative of the arbitrariness of feudal officialdom, not only included the commercial guilds, the fishmongers' guilds, the shipping guilds, the exchange guilds, and the land-transport guilds, but was also carried to the length of forbidding any company to confine itself to wholesale dealings. The authorities further decreed that, in times of scarcity, wholesale transactions must be abandoned altogether and retail business alone carried on, their purpose being to bring retail and wholesale prices to the same level. The custom of advancing money to fishermen or producers in the provincial districts was interdicted; even the fuda-sashi might no longer ply their calling, and neither bath-house-keepers nor hair-dressers were allowed to combine for the purpose of adopting uniform rates of charges. But this ill-judged interference produced greater evils than it was intended to remedy. The guilds had not really been exacting; their organisation had reduced the cost of distribution, and they had provided facilities of transport which brought produce within cheap and quick reach of the central markets. Ten years' experience showed that a modified form of the old system would conduce to public interests. The guilds were re-established, licence fees being, however, abolished, and no limit being set to the number of firms in a guild. Things remained thus until the beginning of the Meiji era (1867), when the guilds shared the cataclysm that overtook all the country's old institutions. It is probable that a reaction similar to that of 1851 will by and by be witnessed, and that the guilds of former days will be revived on
the lines of modern American trusts. However 
Wayside Resting Place.
show how little thought has been given to the lessons of history by those that deny Japanese capacity for organisation, since it appears that during nearly a century and a half prior to the Restoration every branch of business was organised in a manner effectually contradicting such a theory.
Japanese commercial and industrial life presents another feature which seems to suggest special aptitude for combination. In mercantile or manufacturing families, while the eldest son always succeeded to his father's business, not only the younger sons, but also the apprentices and employés after they had served faithfully for a number of years, expected to be set up as heads of branch houses under the auspices of the principal family, receiving a place of business, a certain amount of capital, and the privilege of using the original house-name. Many old-established firms thus came to have a plexus of branches all serving to extend its business and strengthen its credit, so that the group held a commanding position in the commercial world.
- ↑ See Appendix, note 52.
- ↑ See Appendix, note 53.
- ↑ See Appendix, note 54.
- ↑ See Appendix, note 55.
- ↑ See Appendix, note 56.
- ↑ See Appendix, note 57.
Note 52.—It is recorded that when this trade flourished, the total yearly sales made to Chinese dealers at Nagasaki were a million pounds, approximately. An idea of the development of Japan's foreign commerce in modern times may be gathered by comparing that figure with her present annual sales of marine products, namely, one hundred and eleven million pounds.
Note 53.—He was consequently known in commercial circles as Yamato-ya.
Note 54.—At the beginning of the nineteenth century, the Yedo confederation paid nearly £20,000 to the Government.
Note 55.—In 1725, when the population of Yedo was about three-quarters of a million, the merchandise that entered the city was 861,893 bags of rice; 795,856 casks of saké; 132,829 casks of fish-sauce; 18,209,987 bundles of firewood; 809,790 bags of charcoal; 90,811 tubs of oil; 1,670,880 bags of salt, and 3,613,500 pieces of cotton cloth.
Note 56.—This shipping guild was called Higaki-kaisen (water caltrops company), a name derived from the form of the bulwark railings. In 1730 the business of carrying saké was entrusted to another company, the Taru-kaisen (barrel company), and the two subsequently engaged in a competition which is still well remembered in Yedo and Ōsaka.
Note 57.—The figures were chiefly influenced by the quality of the coins issuing from the mint. From 1608 to 1643 the current price of a riyo was 4,000 copper cash (4 kwan) but in 1842 it was 6,500 cash and in 1859, 8,688 cash. As to gold and silver, a riyo of gold was the equivalent of 65 momme of silver; in 1733, the riyo was 61.2 momme; in 1789, 55.4 momme; in 1825, 64.3 momme, and in 1864, 85.5 momme.