47

Shibusawa Eiichi’s Thoughts on Banking from
Public and Private Perspectives*
KIMURA Masato**

1

Introduction

Shibusawa Eiichi 渋沢栄一, “the father of modern Japanese capitalism,”
introduced the modern Western banking system to Japan. His motivations
were based on his understanding that banks play the most important role increating a rich, prosperous, and peaceful society—a conclusion he arrived at
as a result of his experiences in Europe in 1867/68. This view led Shibusawa
to serve as president of Daiichi Kokuritsu Bank (First National Bank) from its
establishment in 1873 until his retirement of 1916, when he was 76 years old.
Shibusawa’s connection to First National Bank is one of the few examples of
his long-term association with a particular enterprise. As is well known,
Shibusawa was associated with establishing around five hundred enterprises
and a comparable number of nonprofit organizations through his long life.
Typically, once a company achieved a degree of success, he moved on to newopportunities, leaving to other talented managers, many of whom hementored, the task of leadership.
Shibusawa did not use the term capitalism to describe his entrepreneurial
economic and business activities. Instead, to describe his thinking about the
optimal system for running a business, he used such terms as “the gappon
method” 合本法, “a gappon organization” 合本組織, and “a gappon company”
合 本 会 社. The Japanese word gappon 合 本 refers to binding two or more
books together to form one. The roots of Shibusawa’s thinking about the	  * The following thoughts are based on a chapter that originally appeared in Gurōbaru
shihonshugi no naka no Shibusawa Eiichi: Gappon kyapitarizumu to moraru グロー
バル資本主義の中の渋沢栄一：合本キャピタリズムとモラル (Gappon Capitalism:
The Economic and Moral Ideology of Shibusawa Eiichi in Global Perspective),edited by Patrick Fridenson and Kikkawa Takeo 橘 川 武 郎 (Tokyo: Tōyō Keizai
Shinpōsha, 2014).
** 木 村 昌 人 Senior Director of Research Department, Shibusawa Eiichi Memorial
Foundation.

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Journal of Cultural Interaction in East Asia Vol. 6 2015

gappon method can be traced to his time in Europe and closely parallels thejoint-stock trading system. According to discussions and speeches by
Shibusawa, the gappon method can be defined as the process of advancing abusiness by gathering human and financial resources optimal for attaining its
mission and objectives, in concert with pursuit of the public good. It is
important to note that scholars have yet to clarify the exact origins of his useof the term gappon, and that despite the concept’s similarity to the joint-stock
trading system, Shibusawa did not use the two terms interchangeably.1
There have been a number of studies on the role of Shibusawa as thenational leader who introduced to Japan the Western banking system by
establishing First National Bank, the forerunner of a nationwide banking
network, established in the early Meiji era. Nonetheless, there remain several
incompletely understood dimensions of Shibusawa’s view of banking and his
more general philosophy of public-private partnerships in Japan’s modernization.2 They include the need to clarify (1) why Shibusawa left government
service to become an inspector general of First National Bank, (2) how hemanaged First National Bank for almost forty years until his retirement, aspresident, in 1916, and (3) Shibusawa’s view, as a business leader, of theproper balance between public and private organizations in Japan’s modern
development. In short, there is a need to better understand the characteristicsof Shibusawa’s thoughts and activities regarding these three questions by
digging more deeply into Shibusawa’s views on how organizations best
operate in modern society, particularly those related to banking.
The goal of this paper is to examine Shibusawa’s gappon method byfocusing on the relationship between public and private from his perspective
as a banker whose status as the president of the First National Bank and otherleadership positions, such as the Japan’s Bankers Association, enabled him tohave an outsized influence on Japan’s transition to the economic system thatcharacterizes the country today.

2

Why Banking Attracted Shibusawa

Why, then, did Shibusawa see banking as important? There were two

1 On Shibusawa’s thoughts about the gappon method from various points of view, see
Gurōbaru shihonshugi no naka no Shibusawa Eiichi, edited by Fridenson andKikkawa, pp. 11–13 and pp. 159–162.
2 See Shimada Masakazu 島田昌和, “Kin’yū seido no sōsetsu: Shibusawa Eiichi toDaiichi Kokuritsu Ginkō” 金融制度の創設：渋沢栄一と第一国立銀行 (The Establishmentof the Monetary System: Shibusawa Eiichi and Daiichi Kokuritsu Bank), in Kigyōka
katsudō de tadoru Nihon no kin’yū jigyōshi 企業家活動でたどる日本の金融事業史(The History of Japanese Finance as Seen through Entrepreneurs’ Activities), editedby Hasegawa Naoya 長谷川直哉 and Udagawa Masaru 宇田川勝 (Tokyo: Hakutō
Shobō, 2013), pp. 13–41.

﻿Shibusawa Eiichi’s Thoughts on Banking from Public and Private Perspectives 49

reasons. The first reason was that he thought that the Western banking system
was the foundation for making Japanese society capable of becoming a
wealthy and advanced country like Britain and France. Shibusawa was singularly impressed how the gappon method of business organization could
accomplish such large-scale undertakings as the Suez Canal, allowing bothpublic and private interests to contribute to making a country wealthy. The
second and more important reason was that Shibusawa thought that the
gappon method was essential to achieving his lifelong target of overcoming
the tendency in Japan to respect bureaucrats and look down on the citizenry
官 尊 民 卑. Shibusawa stated that when he toured Europe in 1867, he wassurprised to see how well businesses had developed and how well government and the private sector worked together.3 He thought that if commerce
and industry developed in Japan via the gappon method, the relative positionof merchants and manufacturers would naturally rise, narrowing the distance
between government and the private sector.
In his youth, Shibusawa had dealt with officials of the Okaya Domain on
his father’s behalf and was angered by their arrogant attitude and mindset. He
then set his lifelong goal of eradicating the tendency in Japan to respectbureaucrats and look down upon the citizenry. He found the authoritarian
attitude of incapable officials unforgiveable and was tremendously dissatisfied
with merchants who accommodated the unreasonable requests of such officials and who conducted business only for their own profit.4 Strongly affectedby the Mito school of historical and Shinto studies, along with the theories of
Odaka Junchū 尾高惇忠 on social reform,5 Shibusawa felt that it was essential
to make ordinary citizens feel responsible for reforming the nation andsociety in order to transform Japan into a modern country centered on manufacturing, as in Europe. For that purpose, Shibusawa believed that it wasnecessary to introduce a system that draws on people’s talents and knowledge
to the fullest degree, and he found the gappon method and organization mostsuitable.

3 On Shibusawa’s observations of Paris in 1867/68, see Kōsai nikki 航西日記 (A Diaryduring the visit to Europe), in Shibusawa Eiichi denki shiryō 渋沢栄一伝記資料(Biographic Materials on Shibusawa Eiichi), vol. 1 (1955).
4 Shibusawa wrote about and related this episode many times. See Shibusawa Eiichi,
Amayogatari 雨夜譚：渋沢栄一自伝 (Autobiography of Shibusawa Eiichi) (Tokyo:
Iwanami Shoten, 1984), pp. 25–28. In English, see The Autobiography of Shibusawa
Eiichi: From Peasant to Entrepreneur, translated by Teruko Craig (Tokyo:
University of Tokyo Press, 1994), pp. 12–14. This is a translation of Amayogatari.
5 Odaka Junchū (1831–1901) was a private teacher of the Chinese classics, including
The Analects. Shibusawa often visited Odaka’s house and studied the Chinese classics in his childhood. Odaka’s younger sister, Chiyo, married Shibusawa.

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Journal of Cultural Interaction in East Asia Vol. 6 2015

The Gappon Method Described

A gappon company is typically understood as similar to a joint-stockcompany. According to the Kōjien dictionary, joint-stock companies conductbusiness activities using stock finance, where the funds necessary for startinga business or establishing or expanding a company are supplied by having
stock issued and accepted or purchased. Such companies are organized byshareholders, who own the company’s stock and have limited liability.
However, the gappon method advocated by Shibusawa is quite different inmany ways from how joint-stock companies and shareholders operate intoday’s capitalist societies. For example, companies that Shibusawa took partin establishing also included unidentified companies and limited partnerships,
in addition to joint-stock companies. This is because the gappon method
consists of three elements: purpose and mission, human resources andnetworks, and capital, which I elaborate on below.
3.1

Purpose and Mission
For Shibusawa, the mission of a gappon organization aims to attainbenefits for the entire nation and society. Therefore, it is essential that shareholders and administrators fully understood the company’s intents andmission when they invest in or manage such a business. There is a difference
between Adam Smith’s invisible hand and Shibusawa’s notion of the gappon
method. As Tanaka Kazuhiro points out,
[In gappon capitalism] the characteristic unique to the gappon philosophy
is the … aspect of [passive] morality, which advocates that self-interest
should not be put first. People generally understand, as Smith also
believed, that in a market economy, pursuit of self-interest can be given
priority as long as one conducts business without deceiving others and ina way consistent with justice. However, Shibusawa was not satisfied onlywith justice, which prohibits dishonest conduct. He placed importancealso on beneficence, that is, behavior that tries to bring benefits toothers. For Shibusawa, not putting self-interest first was also among thenorms not to be deviated from. When he presented the “rule of rightprinciple in the business world,” he noted “acting without indulging in
self-centeredness” was the appropriate concept shaping the gappon
philosophy. It is fine to pursue self-interest, but it should be done byplacing benefits for others first, not self-interest. … Conducting businessbased on such reasons and norms is how the gappon philosophy operates.6
6 Tanaka Kazuhiro 田中一弘, “Dōtoku keizai gōichi setsu” 道徳経済合一説 (Harmoniza­﻿Shibusawa Eiichi’s Thoughts on Banking from Public and Private Perspectives 51

In other words, Shibusawa, as his first priority, believed that the purpose ofbusiness included a public-oriented value system, as advocated by the
Analects.
As such, a corporation need not be organized as a joint-stock company,
but could be any type of organization suited to the purposes of a gapponorganization. Shibusawa established not only joint-stock companies, but also
limited partnerships, as well as a mutual-aid society.7 He also invested significant amounts of money in tokumei kumiai 匿 名 組 合 (anonymous companies
and silent partnerships).8 We should note that these latter investments
surpassed funds that Shibusawa directed to joint companies.9
3.2

Human Resources and Networks
Shibusawa also regarded as important the human resources engaged incompany management and business activities. The administrator, in particular,
must be a person who understands the company’s purpose and mission andpursues public benefit. As is clear from Shibusawa’s famous argument with
Iwasaki Yataro 岩崎弥太郎, Shibusawa regarded securing profits from businessactivities as important, but more important was to ensure that the benefits
were distributed among all investors.10 He was firmly against business andprofit monopolization and the formation of conglomerates.
In this regard, Shibusawa expected business administrators to possess not
only the ability to suitably conduct business, but also a broad perspective andcooperative disposition that made them willing to seek partners among a wide
human network of collaborators. Shibusawa himself was deeply engaged in
the establishment and operation of educational institutes such as the Tokyo
Higher School of Commerce (now Hitotsubashi University), for example,
with the hope of eventually hiring graduates with the skills he found desirable in organizing human-resource networks.
3.3

7
8
9
10

CapitalSufficient capital is needed for starting and developing a business. Totion of Morality and the Economy), in Gurōbaru shihonshugi no naka no Shibusawa
Eiichi, edited by Fridenson and Kikkawa, chap. 2, pp. 56–57.
See Shimada Masakazu 島田昌和, Shibusawa Eiichi no kigyōka katsudō no kenkyū
渋沢栄一の企業者活動の研究 (Research on Shibusawa Eiichi’s Activities as an
Entrepreneur) (Tokyo: Nihon Keizai Hyōronsha, 2007), pp. 233–242.
According to the Japanese Commercial Code, article 535, “In a tokumei kumiai
arrangement, anonymous or silent partners make up the tokumei kumiai,
which,Tokumei invests in a venture operated by a manager.
Shimada, Shibusawa Eiichi no kigyōka katsudō no kenkyū, pp. 375–378.
Shibusawa Hideo 渋沢秀雄, Shibusawa Eiichi 渋沢栄一 (Tokyo: Ryūmonsha, 1951),
pp. 83–86.

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utilize unused capital in Japan effectively, Shibusawa established the First
National Bank and many other private banks throughout the country. At a
deep personal and professional level, Shibusawa understood that the banking
system enabled capital to be gathered from a wide range of people, beyond
the class system of samurai, farmers, manufacturers, and merchants.
Shibusawa precisely described his intent, as found in an advertisement forbanks:To begin with, banks are like a great river. There are infinite ways banks
prove themselves useful. However, money not yet collected at a bank is
no different than water pooled in a ditch or water drops that keep
falling. Sometimes money is hiding in a warehouse of a rich merchant ora farmer, or being kept in a day worker’s or grandmother’s shirt pocket.
In such cases, money cannot serve the people or help make the nation
affluent. Water cannot flow forward even if it has the force to do so if itis blocked by an embankment or a mound. But if we make a bank, andskillfully open a channel for letting the water flow, money that was kept
in warehouses or shirt pockets can come together in great amounts. This
will help trades to prosper, products to increase, industries to develop,
studies to advance, roads to improve, and the entire situation of ourcountry to be renewed.11
As Shibusawa presciently observed, the supply of funds through banks led to
public benefit, that is, the creation of something new. Financial aid should be
supplied for generating tangible wealth out of intangible resources andallowing for its effective utilization. This is the role performed by banks andgappon organizations.

4

Concrete Studies of Shibusawa’s Management of First NationalBank

Why did Shibusawa leave government service to become an inspector
general of First National Bank? As related in his autobiography Amayogatari,
Shibusawa resigned the Finance Ministry in 1873 due to his conflict withŌkubo Toshimichi 大 久 保 利 通, the most influential leader in the early Meiji
government. The disagreement stemmed from differences of thought on the
management of national finances. Ōkubo tended to support a positive fiscal
policy, and he insisted on increased support for military expenditures evenbeyond maintenance of a balanced budget in order to promote the policy of arich country with a strong military 富 国 強 兵. On the other hand, Shibusawa
and Inoue Kaoru 井上馨, head of the Finance Ministry, where Shibusawa was
11 Shibusawa Hideo, Shibusawa Eiichi, pp. 79–80.

﻿Shibusawa Eiichi’s Thoughts on Banking from Public and Private Perspectives 53

employed, strongly opposed Ōkubo’s policy because of a desire to balance
the budget. They held the view that an overly large military would cause
huge budgetary deficits and contribute to a financial crisis that the Meiji
government could not manage. Ōkubo, one of the three most importantleaders of the Meiji restoration, with a strong political power base in theSatsuma and Chōshū factions, prevailed. Inoue and Shibusawa resigned fromthe government, but not before publicizing their opinion in the press.
Parenthetically, Shibusawa’s resignation also represented, it is reasonable toassume, his pessimism regarding his future as a political leader and bureaucrat so long as the anti-Tokugawa Satsuma and Chōshū factions were incontrol of the government.
A second reason for Shibusawa’s resignation from the government was
his commitment to leading the private sector in mitigating the tendency inJapan to respect bureaucrats and look down upon the citizenry. From the
gappon viewpoint, this second reason was more important. This importancecan be further explained by examining several challenges facing the establishment of First National Bank in 1873.
4.1

The First Challenge
Challenge number one concerned which banking system should be introduced to Japanese society, that of the Bank of England or of the National
Bank of the United States.12 In the 1870s Britain was militarily and economically the most powerful country in the world, owing to its world trade andfinancial strength. The Bank of England, its central bank, played a key role in
the formulation of monetary policy, in collaboration with the British government. In particular, the Bank of England contributed to social and economic
progress by issuing paper currency based on the gold standard. Yoshida
Kiyonari 吉 田 清 成, who studied the British banking system in London, initiated efforts to introduce “the gold bank plan,” based on the British banking
system, as a model for Japan.13 Initially, Shibusawa supported this plan, alongwith Ōkuma Shigenobu 大隈重信 and Inoue.14
Itō Hirobumi 伊藤博文, later inaugurated as the first prime minister withenactment of the Meiji Constitution in 1889, insisted that Japan should intro12 See 日本銀行著 ・ 発行『 日本銀行百年史 』 上（Nihon Ginko hyakunen shi（Hundredyears of the Bank of Japan）written and published by the Bank of Japan）, vol.I,
1982. pp. 16–22.
13 Yoshida Kiyonari (1845–1891) was born in Satsuma and become a talented financebureaucrat in the Meiji government.
14 On Shibusawa’s attitude toward to the introduction of the Western banking system,
Shibusawa’s attitude toward the Western banking system is discussed at length in the
Shibusawa Eiichi denki shiryō, vol. 4 (1956).

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Journal of Cultural Interaction in East Asia Vol. 6 2015

duce a national bank system modeled after that found in the United States,
based on the National Currency Act of 1863. As portrayed in the act, theNational Bank was chartered by the federal government as a commercial bankfor the purpose of issuing new paper money and liquidating war loans associated with the Civil War (1861–1865). The main difference between the
British and American banking systems was whether new paper money issued
by the bank should be bank notes convertible into gold. The issue of convertibility meant that in the United States, private banks could issue their own
paper money by themselves; in Britain, only the Bank of England had such
authority. The two perspectives represented different views of monetary
policy. Yoshida attached importance to currency stability. Itō, on the other
hand, was partial to money supply designed to meet Japan’s goal of
becoming a rich country with a strong military.
After intensive and contentious discussions, the Meiji government established the National Bank Law 国立銀行条例 in 1872, based mainly on the U.S.
National Currency Act of 1863 but also including several aspects of the
British banking system. The law had the merit of abolishing older paper
money issued by the Tokugawa government and local feudal domains during
the 1860s, which allowed new paper money to be issued by the National
Bank in each of Japan’s major cities. The National Bank Law sought toencourage entrepreneurs to start new businesses, as well as to disseminate
new paper money by making it exchangeable for gold at 60 percent of its
value.
The main reason the Meiji government decided to introduce the U.S.
National Bank system was that major government leaders and officials
thought that it was too early to establish a central bank like the Bank ofEngland because the government did not have enough political and economic
power to support the central bank and to introduce the gold standard.
In the late nineteenth century, when banks were established on the basisof laws enabling a national banking system, the United States and Japan
shared a number of common circumstances. First, both countries had large
amounts of diversified paper money after civil wars that occurred in eachcountry in the 1860s. Second, the United States and Japan had several
commonalities in their progress in industrialization, despite major differences
between their natural and cultural endowments. In the late nineteenth century,
textile companies and food suppliers played major roles at the local level,reflecting small-scale, entrepreneurial business activity. These businesses
needed stable operating funds previously supplied by local financiers. A
national bank system in which local banks had the power and authority toissue bank notes played a crucial new role in supporting business development.

﻿Shibusawa Eiichi’s Thoughts on Banking from Public and Private Perspectives 55

At this point I would like to clarify Shibusawa’s evolving thinking on the
gappon concept and the role it played in his decision to endorse the U.S.
National Bank system. Shibusawa’s change of thinking occurred during thespring of 1871, in the midst of discussion between the major Meiji government leaders, including Itō and others. Shibusawa concluded that Britain’s
monetary model was too advanced to introduce to Japan, even though it
closely resembled the ideal model for Japan as a future maritime country
whose economy could prosper through worldwide trade.
Shibusawa concluded that for Japan’s early-modern development, the U.S.
National Bank system would more easily meet its need to issue bank notes
and supply money for local entrepreneurs. He based his thinking on thecircumstances of the Meiji government, which, in contrast to Britain, did nothave sufficient power to establish a solid central bank based on the gold
standard. He also observed that political and business leaders in rural areas
possessed significant assets, including such former ruling clans as theTokugawa 徳川, Maeda 前田, and Date 伊達 families; wealthy farmers such as
the Honma 本 間 family in Sakata; and entrepreneurial merchants. Since the
Meiji government budget was still quite small, access to those assets andfunds through government issued national bonds was particularly attractive.
Ultimately, common interest was identified between government leaders andthose who emerged as presidents of the early local branches of the nationalbanks, the so-called chihō meibōka 地方名望家, political and economic leaders
in rural areas.
4.2

The Second Challenge
The second challenge for establishing a new banking system in Japan was
how to communicate the concepts and practices of a Western-style banking
system to the Japanese public. During the Edo period (1600–1863), moneychangers 両替商 played a role as financiers in Japan, supplying money to bothfeudal clans and samurai not directly involved in the production of goods,
trade, or commercial activities. Money changers conducted financial businessamong merchants, engineers, and farmers as well. In the nineteenth century
Mitsui 三 井, Kōnoike 鴻 池, and other old money-changer families exerted
tremendous influence on the Tokugawa government and feudal clans
concerning their financial and monetary policies. In terms of principles andtheories of monetary policy, their activities were well understood. However,in the functioning of a Western-style banking system, the key difference was
the public nature of assets held. The way of thinking fostered by the traditional Japanese system worked against the importation and adoption of theWestern banking system, because in this system the movement funds was
based on closed, private relationships between lenders and customers, a56

Journal of Cultural Interaction in East Asia Vol. 6 2015

feature also true of the mutual-finance associations 講.
Shibusawa thought that the transparency associated with the Westernbanking system was crucial for the public to take the initiative to build amodern economy and society, and for changing the traditional mindset ofrespecting bureaucrats and looking down on the citizenry. He aggressively
promoted the idea, concepts, and practice of banking and persuaded politicians and wealthy people to accept its openness by articulating the value of
gappon-style business organizations. As paper money became more widely
available, the new banking law served to support his efforts.
Shibusawa was one of the few leaders who could understand at a deeplevel the essence of the Western banking system in the early Meiji period.
This can be explained in part by his own past business experiences. By
helping in his father’s indigo trade and other farming activity, Shibusawa
learned business management and the role of money. During his stay in Parisand on his trip to several cities in Europe in 1867, he was impressed by new
forms of technology and the political and economic systems found there. On
the advice of the French banker Flury Herard, he bought railroad bonds inFrance, benefitting from their subsequent appreciation. In combination, theseexperiences contributed to Shibusawa’s ability to lead and manage the financeand banking system emerging in Japan as the country modernized after the
Meiji Restoration.15
After returning from Europe to Japan, Shibusawa established Shōhō
Kaisho 商 法 会 所 (Commercial Company), a combined bank and trading
company, in Shizuoka. This company was one of the early gappon organizations in Japan and represented a first step in linking banking and the trade ofrice and other agricultural products. The company got off to a good start but
ceased operations after Shibusawa was recruited to serve as a bureaucrat in
the Finance Ministry of the Meiji Government. Nonetheless, Shibusawa’s
early experience in the private sector, although interrupted, set the foundation
for the tremendous leadership that he later provided as inspector of the First
National Bank. As the wealthy of Japan came to invest their money in newly
established national banks, his leadership in the banking sphere resulted innumerous benefits for the country.
4.3

The Third Challenge
The third challenge for the establishment of the First National Bank was
how to manage the relationship between the Finance Ministry and the
15 On Flury Herard (1836–1913), see Kashima Shigeru 鹿島茂, Shibusawa Eiichi 渋沢
栄一, vol. 1, Sorobanhen 算盤篇 (Business) (Tokyo: Bungei Shunjū, 2011), pp.
180–182.

﻿Shibusawa Eiichi’s Thoughts on Banking from Public and Private Perspectives 57

National Bank. This brings us to the issue of the public-private relationships
and the emergence of a national banking system in Japan. In the nineteenth
century, every advanced Western nation, as defined by the military andeconomic achievements of such countries as Britain, France and Belgium, had
its own central bank and the power to issue paper money. These central
banks were not directly managed by the government, because a central role ofbanking was activation of the market economy, and so responsibility for
management rested with the private sector in order to maintain politicalneutrality. Issuing paper money is a central right of the state. In the Japanesecase, every national bank had such currency privileges, as regulated by the
Meiji Government’s National Bank Law.
Shibusawa was not in favor of establishing banks managed by the government. His position was that governmental management would be overly influenced by finance in the Tokugawa era, resulting in inefficiencies and improprieties. Shibusawa’s economic philosophy was that there were public obligations inherent in the monetary policy of a country that should inform not only
the money collected through taxes but also the goals and commitments of
those participating voluntarily in gappon- or joint-stock-type companies.
Competition was the preferred approach; at the same time, basic fairness
required that the national government play a legal role. Thus, Shibusawa’s
position was that First National Bank should be independent from thegovernment but should maintain a good working relationship with the
Finance Ministry. He nurtured relations with reliable and trustworthy leaders
such as Ōkuma Shigenobu, Matsukata Masayoshi 松 方 正 義, and Takahashi
Korekiyo 高 橋 是 清, all of whom were deeply involved in the development
and execution of Japan’s financial and monetary policies.
Shibusawa’s conceptualization of the relationship between public andprivate was broad and profound. He came to realize that his own role was asa private rather than public leader. Although he affirmed that a suitabledistance between private and public was absolutely necessary for the newbanking system to function for the sake of country and society, the respectthat he garnered from his work in government allowed him to collaborate (asa business leader) with officials in the Finance Ministry and other politicalleaders. Shibusawa was also uniquely placed to collaborate with former lordsin such families as the Maeda, Shimazu 島津, and Date, and with large privatemoney changers such as the Mitsui and Kōnoike, who had substantial assets
and who become important early supporters of the banking system as it tookhold throughout the country. In particular, Date Munenari 伊 達 宗 城 (1818–
1892), who was a lord of the Date clan in Uwajima, Shikoku district, and his
main family in Sendai, which was the largest clan in the Tōhoku region since
the early seventeenth century, highly appreciated Shibusawa’s talent and58

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spirit. Date Munenari supported the establishment of the national bank in
Uwajima and also asked Shibusawa to manage Date family assets.

5

Conclusion

As is well known, Shibusawa managed First National Bank as an inspector
general from 1873. He became president of this bank in 1875. After it
became a private bank and changed its name to Daiichi Bank, Shibusawa
continued as president until his retirement in 1916. Even after his retirement,
he remained a consultant until this death in 1931.
Shibusawa was adept at addressing several serious crises that might have
led to First National Bank’s becoming bankrupt, which would undermine thepotential of Japan’s early effort to establish a national banking system.
Fundamentally, he understood that First National Bank and Daiichi Bank wereweak compared with Mitsui and other private banks that supported Japan’s
emerging industrial conglomerates (zaibatsu 財閥). In fact, the actual numberof national banks fell below initial expectations: just four, because earlyholders of bank notes decided immediately to convert them into gold.
Shibusawa was one of the few financial specialists who had the practicalexperience in money matters in both Europe and Japan that allowed him toweather these challenges. He also had the skills for resolving the bankruptcies of the Onogumi 小野組 and Shimadagumi 島田組 companies in 1874, bothof which had been working as money changers connected to the National
Treasury since the early Meiji period.16
Shibusawa also recognized the value of an extended period of leadershipas president of Daiichi Bank, which allowed him to encourage and develop
new enterprises for Japan’s industrialization and many organizations
promoting the quality of peoples’ lives in such areas as education and social
welfare, among others. He well understood the role that a bank and thebanking system could play in promoting such developments by directly gathering money from the private sector. His actions affirmed his view that theWestern approach to banking was the best way for ordinary people tosupport, through personal investment, the development of Japanese society.

16 See Nihon Ginko hyakunen shi, op. cit, pp. 22–31.