Trading locomotives between the US and Japan:
A case of Okura & Co. aroundthe turn of the 19th and 20th centuries
July 2022
ISS Discussion Paper Series
F－198

Naofumi Nakamura ∗∗ Professor of Business History, Institute of Social Science, the University of Tokyonaofumin@iss.u-tokyo.ac.jp0Abstract
This paper examines international transactions related to steam locomotives aroundthe turn of the 19th and 20th century while focusing on Japanese trading companies. In
particular, this study considered how Japanese trading companies acquired theknowledge and know-how of locomotive trading to carry out their business transactions
in detail by using the example of Okura & Co.'s New York branch office. As a result,
this paper investigated the following three highlighted factors that supported Okura &Co.'s locomotive trade in New York:①Regarding Okura & Co.'s acquiring process of the trading know-how, they took
advantage of business opportunities by collecting information through networks ofJapanese in New York and local experts.
②The social infrastructures, such as international communication, transportation, andfinancial system were significant for the fundamentals of the overseas activities ofJapanese trading companies.
③The role of a formerly hired foreigner as a consulting engineer was critical. The
overseas activities of Japanese trading companies were also supported by former foreign
engineers who had technological knowledge and networks. It was also one of theessential routes of knowledge transfer in cross-regional commercial management.

Introduction
The aim of this paper is to investigate international transactions related to steam
locomotives around the turn of the century while focusing on Japanese trading
companies. In particular, this study considers how Japanese trading companies acquired
the knowledge and know-how of locomotive trading to carry out their business
transactions in detail. It would be an essential contribution to consider knowledgetransformation in cross-regional commercial management.
When thinking about the development of the railways, which represents
infrastructure, it is essential to ask how and to whom the necessary materials were
supplied for the industry. In particular, given that steam locomotives represented acollection of various cutting-edge technologies, Japan experienced difficulties
achieving self-sufficiency in terms of steam locomotives prior to World War I. In thosedays, therefore, the importation of locomotives was essential for the development ofJapanese railways. Accordingly, the above questions can be replaced by how steam
1

locomotives and their parts were able to be imported smoothly 1 . To answer thesequestions, we have to investigate the nature of business transactions related to
locomotives while focusing on the activities of trading companies mediating thesetransactions.
Machinery trades by trading companies played a significant role in developing
modern industries in East Asia, including Japan. The production of high-precision
machinery was technically difficult in Japan from the late 19th century to the early 20th
century. It was even difficult for the public to obtain information about such products.
Trading companies, therefore, contributed to industrialization by introducing
information about foreign products to Japan and procuring the machinery necessary for
their domestic customers from overseas. This role was played by foreign trading
companies that were well informed about the machine-producing countries in the late
19th century. However, by the turn of the century, Japanese trading companies had
cultivated capabilities for foreign trade and began to replace their foreign counterparts 2.
How did they accumulate knowledge and know-how related to the foreign trade ofmachinery? This is one of the core research questions in this paper.
The export of locomotives to Japan around the turn of the century can becharacterized by the emergence of American locomotive manufacturers and Japanesetrading companies. Until the early 1890s, the railway market of Japan was monopolized
by British makers and its trading companies. However, from the end of the 1890s, theAmerican makers and Japanese trading companies entered the market and expanded its
shear rapidly. Therefore, we have to explain the relationship between the two. Below,
we explore this question through the examples of Okura & Co., a mid-sized general
trading company in Japan renowned for its role in the machinery trade during the Meiji
era.
The most famous Japanese trading company was Mitsui Bussan (Mitsui & Co.), a
leading trading company before WWⅡ. It was the core company of Mitsui Zaibatsu,

the most influential financial group in Japan at that time. However, their market share
was not so high because the Japanese locomotive market was very competitive 3. Their
1

One of the reasons of this phenomenon was the increased machinery trade that accompanied the
deepening of the first global economy. On the development of the first global economy, see G.Jones,
Multinationals and Global Capitalism (Oxford University Press, 2005).
2
In contrast, Chinese traders cooperated with the foreign trading companies to procuremachinery and conduct the modern business. Therefore, foreign trading companies remained theleading players in the machinery trade in China. See Y.Lin, “Cross-national Trade and Cultural
Brokers”, Taiwan Historical Research, vol. 27 no.4 (2020), pp.56-58, 66.
3
N.Nakamura, Umi wo wataru kikansha (Locomotives from across the sea) (Yoshikawa kobunkan,2016), p.181.
2competitors were not only foreigners, but also many Japanese medium-size trading
companies. In the field of the machinery trade, the role of medium-sized trading
companies that specialize in this field has been significant, and even Mitsui & Co. has
struggled to expand its market share. One reason for this is that the machinery trade ishighly specialized, and the personnel of trading companies with experience in handlingmachinery were essential. Okura & Co. had such specialists. For instance, Kadono
Chokuro (director and general manager of the London branch), who had a backgroundas a railway engineer, was a typical example of such a person.
The historical study of the Japanese trading companies has traditionally focusedon large trading companies such as Mitsui & Co. 4 In contrast, studies of medium-size
trading companies such as Okura & Co. have been slight, and their actual substance androle have been neglected. Therefore, this paper investigates the factors enabling Japan's
medium-size trading companies to be active in foreign trade, using Okura & Co. as acase study.
Regarding this subject, Steven J. Ericson's works are essential references forunderstanding the process of locomotive importation in Japan and are direct
predecessors to this paper 5. In these papers, Ericson examined marketing activities by
American locomotive manufacturers in Japan and competition among British,
American, and German locomotive manufacturers in the Japanese market based on thenotebook (1901-02) of Willard C. Tyler, who was a sales representative of the American
Locomotive Company and the other railway equipment makers. Therefore, Ericson's
papers investigated the locomotive trade from the viewpoints of the U.S. makers andintermediaries. In contrast, this paper focuses on the activities of the Japanese trading
company. By cross-checking this with Ericson's studies, we can clarify the overall
picture of the development of trading locomotives between the United States and Japan.
1. Japan's railways and locomotive trade(1) The development of Japan's railways
In 1872, the first railway in Japan operated by the government opened from
Shinbashi to Yokohama with the introduction of British capital, technology, and4

K.Uyeyama, Hoku Bei niokeru sogo shosha no katsudo (The activities of general trading company
in the North America) (Nihon keizai hyoron sha, 2005); S.Asajimai, Senzen ki Mitsui bussan no
kikai torihiki (Mitsui bussan’s machinery trade in the per-war era) (Nihon keizai hyoron sha, 2001).
5
S.J.Ericson, ”Importing Locomotives in Meiji Japan”, Osiris, no.13 (1998) and S.J.Ericson,“Taming the Iron Horse”, in Public Spheres, Private Lives in Modern Japan, 1600-1950, (eds.)
G.Bernstein, A.Gordon, and K.Nakai (Harvard University Press, 2005).
3

materials. Japanese and Chinese railways shared a common starting point in that theconstruction of their railways was mainly financed by loans from Great Britain andother powers that be. However, in the 1880s, Japan's railways succeeded in breaking
away from its financial dependence on the British by raising funds widely from wealthy
domestic people such as merchants and landowners. In addition, at the same time, they
were also cultivating their technological ability. Therefore, Japan could procure railway
materials freely from all over the world since the late 1890s 6.
From the late 1880s to the 1890s, many private railways were establishednationwide in Japan. The railway booms played a central role in Japan's industrial
revolution. In 1900, there were five big railway companies and 36 middle- and smallsize railway companies in Japan. The number of locomotives under private operation
was more than twice that under government operation 7. The development of private
railways led to the diversification of nationalities of locomotives. This is because they
sought to procure the best locomotives from around the world as cheaply as possible
without being constrained by precedent. During the railway booms, a more significant
number of new railcars were imported from the U.S., and the American locomotives
dominated the Japanese market 8.
Moreover, the competitive world locomotive market and the intermediary role oftrading companies made their global procurement possible. For small and medium-sizedrailway companies with limited technological capabilities, the role of trading companies
in procuring materials was significant. And medium-size trading companies played
essential roles in those trades.
(2) Social infrastructure for locomotive trade
When examining the activities of mid-size trading companies, such as the Okura &Co., we must consider the underlying social infrastructure —communication,transportation, and financial infrastructure— supporting their activities. The Okura &Co. New York office was established in 1901, right around the time that thetransportation and information network connecting East Asia and North America wasstarting to rapidly develop. In 1896, Nippon Yusen negotiated and entered into an
6

Chinese railways depended on the foreign capital and technology at least until after World War 1.
See E.Köll, Railroads and the Transformation of China (Harvard University Press, 2019).
7
The number of locomotives under private operation was 892 cars and under government operation
was 387 cars. M.Sawai, Nihon testudo sharyo kogyo shi (A history of Japan’s railcars industry)(Nihon Keizai hyoronsha, 1998), p.16.
8
From 1888 to 1907, 906 locomotives were imported from the US to Japan. At same time, theimported number of British locomotives were 871 and German locomotives were 160. See Sawai,
Nihon testudo sharyo kogyo shi, p.27.
4

agreement with the Great Northern Railway to connect land and sea service andlaunched a Japan-Seattle route. In 1898, Toyo Kisen concluded a similar connection
agreement with the Southern Pacific Railroad and launched a sea route from Hong Kong
to San Francisco. The establishment of these transpacific shipping routes enabled
Japanese trading companies in New York to frequently exchange mail with their head
office in Japan.
With regard to freight transport, numerous new shipping companies connecting
New York and East Asia via the Suez Canal entered the market in rapid succession from1901 to 1902, leading to the creation of regular shipping routes using new, fastersteamships. As a result, the time required to ship freight between New York and
Yokohama shrank from four to three months. The shipping frequency increased toapproximately 1.7 ships per month.
Meanwhile, with regard to foreign bill of exchange, which were essential to the
trading business, the Yokohama Specie Bank took care of Japanese trading companies,
even providing bridge loans when necessary. Further, the promotion of the Japanese
consul in New York to a consulate-general in 1902 led to the complete protection ofJapanese expatriates and more information for Japanese companies doing business in
the U.S. By using this external infrastructure, Okura & Co. was able to open a branch
office with minimal human resources and funds.
2. Okura & Co. and trade in railway materials
Okura & Co. (President: Okura Kihachiro) was established in 1893, withinternational trade as its primary business, and sought to engage in the purveyor businessand the mining industry. They had only one overseas branch in London at its founding
but had agents in San Francisco, New York, Paris, Berlin, Melbourne, Sydney, Colombo,
Calcutta, Bombay, Shanghai, Tianjin, and Hong Kong. In Japan, in addition to its head
office in Tokyo, Okura & Co. had six domestic branches, a leather manufacturing plant,
and a gun shop. The director of the London branch office was Kadono Chokuro, a former
railway engineer who transferred to the merchant of industrial goods. Kadono was
responsible for supervising agents in Europe and the United States from his office inLondon.
Okura & Co. began brokering locomotives with its purchase of 48 British
locomotives (Dübs' 0-6-2 tank) in 1901-1902 for the IGR 9. At around the same time,
9

Dübs & Co., General Particulars of Engines, Tenders, Dübs records 3/1/1-2 (in Glasgow
5

Okura & Co. purchased six British locomotives (Nasymth's 2-4-2 tank) for theGovernment-General of Taiwan 10. From this, it is evident that Okura & Co.'s trade in
railway goods began in earnest with British goods. In 1901, the group established a branch
in New York with the goal of brokering the sale of American-made machinery andrailway goods.
The New York office was opened on Broadway and, working with the London
branch office, engaged mainly in the trade of machinery. The first branch director,
Yamada Majiro, joined Okura & Co. after graduating from Tokyo Higher Commercial
School in 1894 11 and, after engaging in the machinery trade in the London office 12, madehis way alone to New York with the mission of opening up a branch office. Yamada left
a "letter book" from his time in London and, when he first moved to New York, left
numerous copies of business correspondences with the Tokyo head office overseas
department and others in a tracing paper booklet that was titled Domestic Letters 19001901 13. He subsequently left eight volumes of tracing paper booklets containing copies
of correspondences with the Tokyo head office (No. 1 (1901-2) to No. 8 (1904-5)) titled
Tokio Letters 14 . Analysis of these correspondences provides insight into the detailed
activities of Okura & Co.'s U.S. branch during the Meiji era that were not revealed by inprevious studies 15.
3. Okura & Co.'s activities in New York: A case of the Hokkaido Government
Railways tender
Yamada Majiro, a staff of Okura & Co.'s London branch office, arrived in New Yorkon April 12, 1901, and was tasked with opening up a branch office 16. Yamada began
University Archives).
10

Nasmyth Papers, Loco Specifications 1867-1922. This trade was in 1901-1902, too.
Yamada Majiro was born in Wakayama Prefecture, Japan in 1870. He became the Okura gumi
vice president for business affairs (as of December 1917), president of Okura & Co., and memberof Okura gumi board of directors. See Kojunsha, Nihon shinshiroku Showa 16 nen han (Who’s
Who 1941) (Kojun sha, 1941), “ya” column p.111.
12
No.1 Domestic Letters 1900-1901, p.17, RG131/A1/Entry-123/Box-838 Okura, (in11

NARA at College Park).
RG131/A1/Entry-123/Box-838 Okura.
14
RG131/A1/Entry-124/Box-856 and 857 Okura.
15
The major study of Okura gumi is Okura zaibatsu kenkyukai, ed., Okura zaibatsu no kenkyu
13(A study of the Okura zaibatsu) (Kondo Shuppan, 1982).
16“A letter from Yamada to Yorikichi Uchiyama, April 20, 1901,” No.1 Domestic Letters,
6enthusiastically collecting information immediately after arriving in New York andconducting full-fledged business activities after opening an office on Broadway on June
9 17. At the time of launch, Okura & Co. the New York branch office consisted of one
branch director, one typist, and one messenger boy. For the next 10 months, Yamada
carried out all aspects of work by himself 18. He vigorously visited journalists of Americanindustrial magazines, such as The Iron Age, to get technical and industry information
related to the machinery trade 19. The first major job for the New York office was thepurchase of six locomotives for the Hokkaido Government Railways. Here, let us take adetailed look at the steps leading to this purchase.
On June 10, 1901, the Hokkaido Government Railways issued the call for tenders
regarding the procurement of 6 locomotives and other railway equipment in relation tofacilities enhancement accompanying route expansion 20. The request for a quote for thistender arrived at the New York branch office sometime between July 13 and 15, over amonth after the initial announcement. Upon receiving the notice, Yamada issued
requests for quotes to major American locomotive manufacturers and railcar component
manufactures from July 15 and 17.
Right around the time, the American locomotive manufacturing industry was
undergoing large-scale consolidation, resulting in the merger of eight locomotive
manufacturers centered around Schenectady Locomotive Works in July 1901 and theestablishment of the American Locomotive Company (ALCO). This merger narrowed thefield of major American locomotives to just three companies: ALCO, Baldwin
Locomotive Works (Baldwin), and Rogers Locomotive Works (Rogers). Yamada sent
the information regarding this change to London branch office and to the Tokyo head
office on July 20 and 23, respectively 21. In this letter, he mentioned that the ALCO vicepresident and head of the sales department were from Schenectady Locomotive Works
p.32.
17

“A letter from Yamada to Tokyo head office, oversea department” (June 10, 1901), No.1

Domestic Letters, pp.193-194.
18“A letter from Yamada to Tokyo head office, overseas department” (February 5, 1902), Tokio

Letter No.2 (1902), pp.103-104, RG131/A1/Entry-124/Box-856 Okura.
19
N.Nakamura, “Okura-gumi New York shiten no shido to testudo-yohin torihiki” (Theestablishment of Okura & Co.’s New York branch and the trade of railway materials), in Senzen
ki Hoku Bei no Nihon shosha (Japanese trading companies in the North America during the prewar period) (eds.) K. Uyeyama and Y. Kikkawa (Nihon keizai hyoron sha, 2013).
20
Kanpo, no.5379, (June 10, 1901), p.183.
21“A letter from Yamada to Tokyo head office, overseas department” (July 23, 1901), No.1

Domestic Letters, pp.421-425.

7and the information that Mitsui & Co. 22, which had previously had many transactions
and had strong connections with Schenectady Locomotive Works, was likely going to
be treated as an agent for the East Asian region by the new company. It is for this reason
that Yamada speculated that, even if ALCO provided a quote for the six locomotives inthis tender to a company other than Mitsui & Co., the quoted price would not be an"honest price." Indeed, although Yamada visited ALCO repeatedly to conduct
negotiations, in the end, he did not succeed in obtaining a price quote 23.
Just as Schenectady and Mitsui & Co. had formed a close partnership, Baldwin had
built a strong business relationship with Frazar & Co., a mid-size American trading
company, which had offices in Yokohama and New York 24. With regard to this tender,
given that it was after Frazar & Co. had already requested a price quote, Yamada wasalso unable to obtain a price from Baldwin 25.
With regard to the third major locomotive manufacturer, Rogers had temporarilysuspended business due to the passing of the company's former president. However,Yamada requested a quote from Rogers, explaining, "I have recently heard that a
proprietor has been decided and that the factory will resume operations." However,Yamada also noted, "given the company's situation as I described, I do not expect thatthey will present us a quote" 26.
With the consolidation of the American locomotive manufacturing industry, theadvantage of trading companies (Mitsui & Co. and Frazar & Co.) that had entered themarket early and had developed long-term business relationships with the few remaining
manufacturers only increased, leaving little room for late comers such as Okura & Co.
For this reason, Yamada's initial attitude was pessimistic, as evidenced by his comment,"Unfortunately, I do not think we will be able to participate in this tender for six
locomotives" 27.
However, on July 25, 1901, the Okura & Co. New York branch received anotification from Rogers stating, "We would very much like to provide a quote for thetender by the Hokkaido Government Railways for six locomotives." In response, Yamada

Japan’s biggest general trading company before World War Second. Mitsui & Co. later
became an agent for the American Locomotive Company.
23“A letter from Yamada to Tokyo head office, overseas department,” (July 23, 1901). No.1
Domestic Letters, pp.421-425.
24
Nakamura, Umi wo wataru kikansha, pp.108-110.
25“A letter from Yamada to Tokyo head office, overseas department” (July 23, 1901).
26
Ibid.
22

27

Ibid.
8

requested Rogers to provide a price quote by the following Monday and, at the same time,
requested the Tokyo head office to, "please consider the possibility of submitting a bid
for the six locomotives based on the price from Rogers" 28.
Thereafter, on August 4, Yamada visited Rogers in Paterson, NJ, where he learned
from the company president that "our plan is to produce an average of 200 locomotives
per year," and saw that the factory had resumed operations 29. On August 6, a price quotefrom Rogers for six mogul-type (2-6-0) tender locomotives arrived. This quote and pricequotes for other railway goods were promptly telegraphed to the Tokyo head office 30.
Given that the per-locomotive price in this quote was USD 9,833 compared to the perlocomotive price offered by Rogers of USD 9,250 31, it is believed that the difference,
USD 583(6% of the per-locomotive price), would have been Okura & Co.'s commission(brokerage fee). Given that the average brokerage fee for railway goods around that time
was 5%, this quote was in the reasonable range 32.
When the tender was held by the Hokkaido Government Railways on August 10,
1901, Okura & Co. was awarded a contract for locomotives, wheels, axles, and springs.
This news was sent the same day by telegraph to the New York branch office, and orders
for the items were promptly sent out 33. Upon receiving news of the successful bid fromthe Tokyo head office, Yamada immediately sent a telegraph to Kadono in London andasked him to come to New York as soon as possible 34. In summoning Kadono, who had
approval authority and know-how of machinery trade, to New York, Yamada, who
suddenly found himself responsible for the New York branch's first major order valued
at USD 70,000, was hoping to eliminate the time and effort needed to exchange
information between New York and London and to facilitate the ordering process.
Kadono did, in fact, arrive in New York on August 24, where he remained until28“A copy of telegraph to Rogers” (July 25, 1901), No.1 Domestic Letters, 436, and “A

letter from Yamada to Tokyo head office, overseas department” (July 28, 1901), No.1 Domestic

Letters, pp.442-445.

29“A letter from Yamada to Kadono Chokuro” (August 4, 1901), No.1 Domestic Letters,

pp.458-460.
30
31

Tokio Letter No.1, p.16.

“A letter from Yamada to Tokyo head office, overseas department” (October 1, 1901), Tokio

Letter No.1, pp.170-174.
32

As of 1898, Frazar & Co.’s brokerage fee for Baldwin locomotives was 5%. (Baldwin
Locomotive Works, Engine Orders, 1898-1900, (in Smithsonian Institution Archives)).
33
Tokio Letter No.1, pp.17-18.
34“A telegraph to Kadono” (August 10, 1901), Tokio Letter No.1, p.13.
9September 17 when the order for railway goods had finally settled down 35. At a time
when transportation and communication systems were still undeveloped, it was more
efficient to have officers with approval authority travel to a location and make decisions
on the spot rather than having to wait for each item to be approved by the head office.
4. State of the locomotive trade in New York
(1) Price negotiations
What were the procedures involved in ordering, delivering, and paying
locomotives? We clarify the specifics of the locomotive trade through an examinationof Okura & Co., New York branch office's activities.
In competitive tenders for railway materials, trading companies obtained pricequotes from manufacturers and, after adding brokerage fees, submitted a bid based on
the delivery date and specifications stipulated by the party issuing the tender. If a
company successfully won a bid, it placed official orders with the manufacturers that
had provided the price quotes. Strictly speaking, however, the manufacturers were not
fixed at the time that a contract was awarded, and there was no rule that the
manufacturers that had submitted the price quotes had to be used. It is for this reason
that the Okura & Co. New York branch, after being awarded the contract for
locomotives, etc. from the Hokkaido Government Railways, sent out new requests forprice quotes from each manufacturer 36. In addition, Yamada, the manager of the New
York branch, visited two major manufacturers, Baldwin and ALCO to solicit pricequotes and to seek long-term business partnerships. However, the two companies
expressed their intent to emphasize their long-standing trade relationships with Frazar& Co. and Mitsui & Co., extinguishing Yamada's hopes to obtain quotes. It is throughthis process that Yamada realized anew the importance of forming an exclusive traderelationship with Rogers, which had prepared the original price quotes. Since then, he
had been a strong promoter of getting an agency agreement with Rogers 37.
Meanwhile, since the price of the winning bid (USD 9,833 per locomotive) was
already fixed, any lowering of the product price would mean higher handling fees for
35“A letter from Yamada to Tokyo head office, overseas department” (August 30, 1901), Tokio

Letter No.1, pp.62-66, and “A letter from Yamada to Tokyo head office, overseas department”(September 20, 1901), Tokio Letter No.1, pp.151-154.
36“A letter from Yamada to Tokyo head office, overseas department”, (August 13, 1901) in

Tokio Letter No.1, pp.21-24.
37

Ibid.
10

Okura & Co. However, because Yamada's negotiations with Baldwin Locomotive Worksand ALCO did not go well, it was not possible to know what the "market price" of adiscount might be. As such, Yamada obtained information regarding the case of
Schenectady locomotives purchased by Kyushu Railway from J.U. Crawford, who had
previously been a hired foreigner for the Hokkaido Development Commission and had
substantial experience working as an inspector of railway materials exported from the
U.S. to Japan. This prompted Yamada to request a 5% discount from Rogers (discussed
later in detail). However, negotiations regarding the discount did not end in success and,in the end, the order was placed with Rogers at the price that was originally quoted at theend of August 38.
(2) Delivery
That said, regarding the official ordering of locomotives for the Hokkaido
Government Railways, the thorny issue of the delivery date remained. To begin with,according to the original tender, delivery to the Asahikawa port was to occur in February
1902 (4 locomotives) and April 1902 (2 locomotives) 39. Considering the time required
for shipping, delivery to the New York port would have to be made in October andDecember 1901, leaving only two and four months from the time of ordering (August).
This was a short lead time for locomotive production, for which the general rule was
made-to-order production. With regard to lead time, American manufactures enjoyed asubstantial advantage over British manufacturers, with the shortest and average lead times

38“A letter from Yamada to Tokyo head office, overseas department”, (August 30, 1901), Tokio
Letter No. 1, pp.62-66.
39
No.1 Domestic Letters, p.374.
11

for the latter being three months (Neilson & Co.) and generally close to a year, compared
to one month to three months (Baldwin). (Table 1).
Table 1 Comparison of delivery time between British and American locomotives
Units: day
Baldwin Locomotive Works(American)
No. ofNo. ofShortest Longest Average
Shortest Longest Average
shipments
shipments
25
129
64
174
12
122
214
183
1893
30
105
12
38
158
66
118
1894
90
13
62
53
38
6
109
109
109
1895
31
55
30
70
240
18
302
180
1896
115
1897
36
102
58
7
68
83
1898
61
9
340
32
105
105
105
1899
290
390
8
302
234
1900
185

Year

Neilson & Co. (British)

Source: Baldwin Locomotive Works, Engine Orders (in Smithsonian Institution Archives) and
Neilson Co. Engine Orders, NBL/2/1/1 (in National Railway Museum)Notes: Delivery time is the number of days from order to shipping, not including transportation days.

As such, given that British manufacturers would have had difficulty accommodating
the short lead time of two to four months, it is suspected that this tender targeted American
manufacturers from the beginning. That said, lead times of American manufacturers had
also been increasing starting in 1899, owing to increased domestic demand. In 1900,
Baldwin's average lead time was 234 days. Furthermore, exports of locomotives to Japan
had started to decline as a result of the railway boom in the U.S., leading to Yamada's
observation, "at any rate, during periods when orders for products bound for the domestic
market are flourishing, as has been the case recently, small-volume low-margin exports
bound for Japan are not preferred" 40. In fact, Baldwin Locomotive Works' exports toJapan fell dramatically from 115 locomotives in 1897 to less than ten in 1898 41.
Given these circumstances, Okura & Co.'s Tokyo head office predicted from the startthat the delivery date could not be met and instructed the manufacturer to submit a "letter
explaining the reason for late delivery" to the Hokkaido Government Railways 42 . In
40

“A letter from Yamada to Tokyo head office, overseas department, December 6, 1901”, Tokio

Letter No.1, pp.385-391.
41

Nakamura, Umi wo wataru kikansha, p.157. Japan experienced what is often referred to as the“second railway boom” between 1896 and 1899. The number of locomotives imported during thistime increased from 1,621 in 1896 to 4,236 in 1897 before peaking at 4,266 in 1898 andsubsequently falling back to 1,968 in 1899. For more information, see Sawai, Nihon tetsudo
sharyo kogyo shi, p.26, Table 1-7.
42
“A letter from Tokyo head office to New York branch, August 10, 1901”.
12

response, Yamada, assuming shipment from New York in January 1902 (delivery to
Asahikawa in May 1902) 43 , met with Rogers to come up with a reason for the latedelivery. The "reason" that Yamada came up with was the strike by U.S. steel workers
that had occurred in August 1901 44. Thanks to a letter from the Japanese consul in New
York (with whom Yamada was friendly) certifying that the strike was a "general strike",
the strike served as an acceptable "reason" for the delay even though in reality it was
small scale 45. After discussing the propriety of this reason with Tokyo head office andUchiyama Yoriyoshi (Okura-gumi Gun Shop) who had stopped by New York as part ofa tour of Europe and the United States, in December of the same year, Yamada sent a"letter explaining the reason for late delivery" signed by Rogers to the Hokkaido
Government Railways via the Tokyo head office. The reason was accepted, enabling the
postponement of delivery of the first four locomotives by four months and delivery of thelast two locomotives by two months 46 . Following the same procedure, Yamada also
requested that the delivery of other railway goods that were part of the awarded contract
be delayed by one month.
Despite the postponement of the delivery date, difficulties procuring locomotive
components caused the delivery to be further delayed. In some cases, penalties would
be levied when the delivery of railway goods was delayed 47. In the case of railway goods,
for which the associated handling fee rates were low to begin with, the application of apenalty could mean a substantial loss 48. For this reason, both the Tokyo head office andthe director of the London branch, Kadono, paid close attention to locomotive delivery
dates 49 . To this end, Yamada visited the Rogers manufacturing plant, after which he
43“A letter from Yamada to Tokyo head office, overseas department”, (August 13, 1901), Tokio
Letter No. 1, pp.21-24.
44“A letter from Yamada to Tokyo head office, overseas department”, (September 7, 1901), Tokio

Letter No.1, pp.117-121.
45“A letter from Yamada to Tokyo head office, overseas department”, (November 26, 1901),
Tokio Letter No. 1, pp.348-352.
46“A letter from Yamada to Tokyo head office, overseas department”, (November 2, 1901),
Tokio Letter No. 1, pp.278-283.
47
The Draft Contract for the Supply of Foreign Goods (September 1902) from the Hokkaido
Government Railways stipulates the following: “Article 12. Compensation for late delivery shallbe calculated as a proportion of the price of the good in question (n/1000) per day times thenumber of days from the next day of the end of the contract period to the eventual deliverydate”, Hokkaido tetsudobu ed., Tetsudo bupo (Report of the Railway Department), no.151,(September 30,1902), pp.1163-1164.
48
Mitsui & Co., Mitsui bussan shitencho kaigiroku 2 Meiji 36 nen (Minutes of branch managers
meetings in 1903, vol.2), p.20.
49“A letter from Yamada to the London branch of Okura & Co.” (January 4, 1902), Tokio13

urgently pressed the manufacturer to stay on schedule 50. Namely, both the manufacturer
and the trading company worked frenetically to meet the delivery date of January 15,
1902.
Four locomotives were shipped from Rogers on January 27, 1902 and loaded onto
the steamship Satsuma belonging to the New York and Oriental Steam Ship Co. (NY&O)
on February 1 51 . However, the two remaining locomotives that were supposed to beloaded onto the same ship did not arrive on time and, in the end, were loaded onto thenext steamship, the Shimosa 52 . According to a memo from Yamada, the Satsuma,
carrying the four Rogers locomotives, left New York on February 2 and was scheduled
to arrive in Yokohama via the Suez Canal sometime in April. The Shimosa, which was tocarry the two remaining locomotives, was scheduled to set sail on February 15 and arrivein Yokohama via the same route in mid-May 53 . Yamada, thus, believed that both
shipments would meet the delivery date in Asahikawa of June 15. However, arrival of thesecond ship, the Shimosa, which was coming from England, was delayed substantially
due to bad weather and actually set sail from the Port of New York on March 6, some 20
days after the scheduled departure date 54. As a result, Yamada found himself having towrite a second letter explaining the reason for the delayed delivery to the Hokkaido
Department Railways. The Shimosa, which was a new, powerful steamship, was able to
make the New York-Yokohama trip in three months rather than the conventional fourmonths 55 and reportedly arrived in Yokohama on June 6 56. It goes without saying that
this substantial increase in shipping speed was beneficial to trading company activities
Letter No.1, pp.462-463.
50“A letter from Yamada to Tokyo head office, overseas department” (January 8, 1902), Tokio

Letter No.1, p.476.
51

The Satsuma was an iron and steel ship with a gross tonnage of 4,204 tons built by the British
shipbuilding company, Sunderland Shipbuilding, in 1901. It ran between New York and
Yokohama via the Suez Canal.
52
The Shimosa had a gross tonnage of 4,221 tons and was built by the British shipbuilding
company, Sunderland Shipbuilding, in 1902. Similar to the Satsuma, it was operated by the New
York & Oriental Steam Ship Co. See “Barber Steamship Lines have unique Flagship”, Port of
Houston Magazine (November 1968), pp.18-19.
53“A letter from Yamada to Tokyo head office, overseas department” (February 1, 1902), Tokio

Letter No.2, pp.78-79, RG131/A1/Entry-124/ Box-856 Okura.
54“A letter from Yamada to Tokyo head office, overseas department” (March 8, 1902), Tokio

Letter No.2, pp.212-213.

55

The steamship Indrasamha carrying axles and wheels bound for the Hokkaido Government
Railways sailed from New York on November 6, 1901 and arrived in Yokohama five months
later on April 14, 1902 (Japan Weekly Mail, December 14, 1901 and April 19, 1902).
56
Japan Weekly Mail (June 14, 1902), p.663.
14

that were, in many ways, a race against time. In the one-year period from July 1902 toJune 1903, 18 steamships departed New York bound for Japan (48,975 tons) and 23
steamships arrived in New York from Japan (62,121 tons) 57 . Although there is adiscrepancy in number of ships departing and arriving, which can be explained by thelong travel times, an average of 1.7 ships per month moved between the two ports.
Unlike Mitsui & Co. 58 , which was a general trading company and thus able totransport freight using a combination of its own ships and chartered ships 59, Okura & Co.,
which was much smaller in size and did not possess shipping know-how, had no choice
but to rely on freight liners, despite the risk of delays. At the same time, it should not beignored that the activities of the Okura & Co. New York branch centering around theshipment of machinery, i.e., heavy freight, were made possible by the existence offreightliners connecting New York to East Asia via the Suez Canal. Before the openingof the Panama Canal in 1914, the route used for shipping heavy freight not requiring rush
delivery from the East Coast of America to East Asia, an expensive endeavor to begin
with, was not the transcontinental-transpacific route but, rather, the transatlantic-Suez
Canal route 60. Regarding the latter route, new shipping companies such as the NY&O 61
and the American Asiatic Steamship Co. 62 were established in 1901 and 1902
57

Zai nyuyoku soryoji hokoku, “Nyuyoku ko to nishin ryokoku sonota toyo shoko tono kounjoko” (Report from the consul general of Japan in New York, Shipping situation between New
York and East Asian ports including Japan and China) (November 29, 1907), in Tsusho isan Meiji
41 nen (Trade reports in 1908 ), no.4, p.103.
58

H.Oshima, “Mitsui bussan niokeru yuso gyomu to yosen shijo” (Mitsui & Co.'s transportation

business and the chartered vessel market in Japan), in Shohin ryutsu no kindaishi (A modern
history of goods distribution), (eds) S. Nakanishi and N. Nakamura (Nihon keizai hyoron sha,2003), pp.213-219.
59
Mitsui & Co. expanded its fleet of ships in the latter 1890s after the end of the Sino-Japanese
War and, in 1903, established a shipping department.
60
Zai nyuyoku soryoji hokoku, “Nyuyoku ko to nishin ryokoku sonota toyo shoko tono kounjoko”, p.103.
The New York & Oriental Steam Ship Co. (NY&O) was a steamship line operating between
New York and East Asia that was established by Edward J. Barber in 1901. Its fleet included the
newly-built 4000-ton class Satsuma, Shimosa, and Suruga (“Barber Steamship Lines have unique‘Flagship’”, p.17).
62“Launch of a New Japan-US Shipping Line” Tsusho isan, Issue 237, 1902, p.51. The American
Asiatic Steamship Co. was established in New York with a capital stock of 500,000 USD. Its fleet
included the newly built 8600-ton class (registered tonnage of 3,803 tons) Gibraltar. It wasannounced that it would later add newly-built steamships to its fleet and operate at a pace of one
passage per month.
61

15

respectively, resulting in the addition of new ships and a dramatic reduction in shipping
times. These freight services were part of the social infrastructure that enabled the
Okura & Co. New York branch to harmoniously conduct business.
(3) Payment
At the time, payment for railway materials in the U.S. was delivered to the
manufacturer when the goods were loaded onto the ships. For the newly-established
Okura & Co. New York branch, the money needed for payment was obtained from the
Yokohama Specie Bank using bills of exchange combined with letters of credit for eachordered item 63 . Incidentally, with regard to payment for the six locomotives for the
Hokkaido Government Railways (USD 60,089), a letter of credit at four months aftersight was established in advance 64. From March 1902 onward, "it became possible toissues letters of credit in any amount up to USD 10,000 in exchange for documentary bills
for shipment from the source country (USA) and loading documents with no restriction
on the number of letters issued" 65. Based on this system, the New York branch was able
to conduct bill of exchange transactions without the hassle of obtaining a letter of credit
from Tokyo Head office each time, so long as the value of the transaction was less than
USD 10,000.
In cases where the arrival of the official bill of exchange was delayed for somereason, the branch was able to receive a bridge loan from the Specie Bank for any amountless than the credit limit that had been set. For example, with regard to the delivery ofRogers locomotives to the Hokkaido Government Railways, delivery of the official billof exchange was delayed due to a discrepancy in the quote for the cost of transportationfrom the factory to New York and an ongoing dispute between the manufacturer and thesteamship company as to which party was responsible for paying the difference.
However, because the agreement between the Okura & Co. New York branch and the
manufacturer was "to make payment in exchange for ship receipt," so long as it hadreceived the goods, the trading company was obligated to pay promptly or tarnish its

63“A letter from Yamada to Tokyo head office, overseas department” (November 11, 1901),
Tokio Letter No. 1, pp.295-298.
64“A letter from Yamada to Tokyo head office, overseas department” (February 28, 1902), Tokio

Letter No.2, pp.167-168.
65“A letter from Yamada to Tokyo head office, overseas department” ([March] 17, 1902), Tokio

Letter No.2, pp.220-221.

16

reputation. Accordingly, Yamada borrowed money to pay for the four locomotives fromthe Specie Bank for 12 days at an interest rate of 6%, which he used to pay Rogers 66.
With regard to transactions with the Yokohama Specie Bank such as that describedabove, Yamada kept in close contact with the bank's New York branch manager andcollected information regarding the conditions and interest rates of loans and reported
these to the Tokyo head office and the London branch hoping to gain even the slightest
advantage 67. However, the relationship between the Okura & Co. New York branch andthe Yokohama Specie Bank was essentially limited to those related to the exchange ofbills. With the exception of bridge loans, there is no evidence that the bank provided
any direct financing for the branch's activities. As explained earlier, during this period,
the funds needed by the New York branch were not secured in New York but, rather,were sent from London.
5. Role of the formerly hired foreigner in Japan
In the previous section, we examined the steps leading to the delivery of railway
goods by Okura & Co. to the Hokkaido Government Railways with a focus on thelocomotives. Yamada Majiro who single-handedly established the Okura & Co. New
York branch office in April 1901, won a massive contract for railway goods worth over
USD 70,000 in July of the same year and, after progressing through each step, ultimately
succeeded in getting goods loaded on a ship bound for Japan by February 1902. How
was Yamada, who had only arrived a few months earlier, able to successfully manage
such a large job with such a short lead time? If we consider this question from thestandpoint of human resources, in addition to Yamada's own exceptional ability andinternal factors, including appropriate support from top-level Okura & Co. managers
such as Kadono, what comes to the fore is the importance of the external factor of theformerly hired foreigner in Japan as a consulting engineer, Joseph U. Crawford．
In 1878, J. U. Crawford was invited to Japan as a civil engineering consultant by
the Hokkaido Development Commission and immersed himself in railway constructionin Hokkaido until 1881. From 1880 to 1881, Crawford traveled with Matsumoto
Soichiro, who was the officer of the Hokkaido Development Commission at the time(and later became the director of the Railway Works Bureau), to inspect potential routes“A letter from Yamada to Tokyo head office, overseas department” (February 15, 1902), Tokio

66

Letter No.2, pp.135-136.
67“A letter from Yamada to Tokyo head office, overseas department”( [March] 17, 1902).
17

for railway lines from Tokyo to Aomori and to Takasaki and to estimate construction
costs, creating the foundation for the establishment of Nippon Railway Company 68.
Crawford was discharged from the Hokkaido Development Commission during a trip
home to the United States in 1881, but continued to contribute to the development of
the Japanese railway industry as an on-site preliminary inspector of railway goods being
shipped from the U.S. to Japan.
The relationship between the Okura & Co. New York branch and Crawford began
when Yamada visited Crawford at his home on August 12, 1901 to get advice on
specifications for the Hokkaido Government Railways' locomotives 69 . At the time,
Yamada was concerned about discrepancies between the Hokkaido Government
Railways' specification document and the detailed quote prepared by Rogers (regarding(1) the size of the firebox and (2) the material properties of the track wheel center) 70.
Crawford's advice was that (1) was not a major issue and that it could be resolved simply
by recalculating the size using the specified area and (2) that the cast steel advocated byRogers was fine and that similar material had been used in locomotives manufactured by
Schenectady Locomotive Works for Kyushu Railway. Taking this advice into
consideration, Yamada submitted an official order to Rogers at the end of August 1901.
To Yamada, who had just arrived in New York, Crawford, an engineer who had
intimate knowledge of Japanese railways, technological expertise, and abundant
experience inspecting American-made locomotives and railway goods bound for Japan,

68

N.Nakamura, Chiho karano sangyo kakumei (Reconsidering the Japan's industrial revolution

from a local perspective), (Nagoya University Press, 2010), pp.72-73.
69“A letter from Yamada to Tokyo head office, overseas department” (August 13, 1901), Tokio

Letter No.1, pp.21-24.

The size of the firebox determines the output of the locomotive, and track wheel center,
which is under heavy load, requires a material with high strength and durability.
70

18

was someone that could be a reliable resource. It is for this reason that Yamada asked
Crawford to serve as a consulting engineer 71.
The role of Crawford as Okura & Co.'s consulting engineer can be broken down
into the following four functions:(1) Inspecting and certifying goods that were purchased.
(2) Providing price and technical knowledge and know-how about railway goods basedon wide ranging inspection experience.
(3) Evaluating discrepancies between specification documents and quotes from atechnical standpoint.
(4) Providing product information obtained through personal connections withJapanese individuals involved in the railway industry
Of these, function (1) was that of inspector, for which Crawford received a handlingfee equal to 1% of the product price. Function (2) was that of a source for knowledge on
railway goods and know-how of its trade, which Yamada was lacking. For example, as
described earlier, regarding negotiations with Rogers Locomotives Works for a
discounted price, Crawford informed Yamada of the actual cost price of the Schenectady
locomotives bound for Kyushu Railway that he, himself, had inspected 72. To Yamada,this information was very important for knowing the "market price" of railway goods.
With regard to (3), if the specification document for given railway goods needed to bechanged in the manufacturing stage, the consulting engineer Crawford would directly
contact and negotiate with the source of an order, to make them acknowledge that thechange was needed 73. This would have been impossible for Yamada, who was not anengineer. Furthermore, with regard to (4), the relationship between Crawford and hisformer colleague, Matsumoto Soichiro, is particularly noteworthy 74 . In 1900,
Matsumoto, who was then the top official of the Imperial Government Railways (i.e.
Director-General of the Railway Works Bureau) at that time, visited Crawford in
Philadelphia and discussed his bureau's evaluation of Rogers locomotives. Yamada

71

J.U. Crawford became a consulting engineer for the Okura & Co. by September 5, 1901, at thelatest. ”A letter from Yamada to Tokyo head office, overseas department” (September 5,1901,

Tokio Letter No.1, pp.115-116.
72“A letter from Yamada to Tokyo head office, overseas department” (August 22, 1901).

73“A letter from Yamada to London branch office” (September 5, 1901).

“A letter from Yamada to Tokyo head office, overseas department” (November 5, 1901), Tokio74

Letter No.1, pp.284-286.

19

learned of this from Crawford himself, enabling him to confirm the positive assessmentof Rogers products within the IGR.
In October 1901, Crawford was hired as a consulting engineer by the Hokkaido
Government Railways, which had purchased the railway goods 75. This was extremely
favorable to the Okura & Co. New York branch, in terms of its activities, information
gathering. It was his effective use of a consulting engineer that enabled Yamada topurchase railway materials despite just having arrived in New York.
Conclusion: Acquiring knowledge and know-how of the locomotive trade
In this paper, we investigated the process of acquiring knowledge and know-how in
American branch office of Japanese trading companies through the example of Yamada
Majiro, the first manager of the Okura & Co. New York branch office.
This detailed examination of Yamada's thoughts and actions reveals that he was able
to acquire the trading know-how and take advantage of business opportunities bycollecting relevant and accurate information through networks of Japanese companies andconsul in New York, local experts including journalists of industrial magazines andconsulting engineers, as well as Japanese businessmen and engineers visiting New York
temporarily. The purchase of locomotives for the Hokkaido Government Railways
discussed in this paper was also helped by the timely resumption of manufacturing by
Rogers Locomotive Works, which had suspended operations up to that point. That said,
there is no denying that Okura & Co. was able to capitalize on this opportunity despite
just having opened its New York branch because of the existence of a multilayered
network centered around Yamada.
In addition, I would like to point out the critical role played by a formerly hired
foreigner in Japan (the Oyatoi) as a consulting engineer. One reason that Okura & Co.'s
New York office was able to successfully carry out procurement of such a large accountdespite just having been established was the fact that Yamada was able to hire Crawford,
who had served as a civil engineer consultant for the Hokkaido Development
Commission, as a consulting engineer and carry out various steps of the transaction
while receiving advice from Crawford. Crawford was able to not only conduct partsinspections but, also, to provide technical knowledge, information on American railway
goods manufacturers, and also information on Japan railway companies, making up for
75“A letter from Yamada to Tokyo head office, overseas department” (October 17, 1901), Tokio

Letter No.1, pp.228-231.

20

Yamada's lack of know-how. Without Crawford, the successful delivery of railway
goods to the Hokkaido Government Railways would not have been possible. Examplesof former foreign engineers becoming consulting engineers or inspectors for Japanesetrading companies after returning to their home countries could also be seen in the
U.K 76.
The overseas activities of Japanese trading companies were supported by these andother former hired foreigners. It was also one of the essential routes of knowledgetransfer in cross-regional commercial management.

I had illustrated it by the case of Thomas R. Shervinton, who had served as a chief engineer
for the Railway Bureau from 1877 to 1881. See, Nakamura, Umi wo wataru kikansha, chapter
3.
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