The Concept of Fixed Capital and Industrial Revolution in England
Akio Okochi
Rikkyo University
Fixed Capital in most of the manufacturing industries increased remarkably as aresult of the industrial revolution. Research in the history of accounting indicates,
however, that modern .accounting methods, including depreciation and cost accounting
to deal with the increased fixed capital, were gradually developed in the latenineteenth century. During the more than fifty year time lag, how was fixed capitaltreated in the accounting of the manufacturing business; what delayed the appearance
of industrial book-keeping?
One important premise to remember is that during the eighteenth and nineteenth
centuries lease of the workshop, including machines and other equipment was quite
common in England. Industrialists could, by leasing, be relived of the burden ofheavy investment for fixed capital. Accordingly, their only interest in regard to
fixed capital was the amount of rent, and they did not recognize the depreciationof the shops and equipment leased. This fact seems to be one of the main reasons
why modern industrial accounting was delayed until the latter half of the nineteenthcentury.
Before the end of the eighteenth century, however, some of the larger and leading
enterprises had their own workshops and equipment. In such cases, they had to be awareof the annual depreciation of their own invested capital and the accounting of costs,
which included transference of the depreciated capital value.
For example, Samuel Oldknow, a famous muslin manufacture, recognized thetransference of the fixed capital value to the value of his products; but he did notlist the depreciation. The annual decrease in value, or depreciation of the fixedcapital, was clearly recognized in the trading account of the Soho Engine Manufactory,
managed by Boulton and Watt, but they were hardly concerned about the transference.
Thus, during the industrial revolution, the basic ideas about fixed capital had
already begun to appear; but so long as the lease of workshops was widespread, theconcept of the fixed capital could not be generally recognized.
The Management Structure of the Nambu House of Ono Gonemon
Mataji Miyamoto
Osaka University
This paper is concerned with the management organization of the Ono Gonemon family,
descendants of the house of Ono Zensuke. The Ono Gonemon house was known by the nameKagiya in Kyoto and lzustuya in Nambu Koriyama. In Kyoto the family engaged in the
trade of products from northern Japan, and acted as pawn brokers and second-handdealers. They possessed a kabu license for waste paper and were active in second-handtrade as well as other businesses. In Nambu the family was involved in sake brewing,
pawn brokerage, and money exchange, and served the han government in each of theseoccupations. In the present paper, house lineage, house precepts, and store rules
are introduced, the management structure of the Nambu store and its relations with

Kyoto are examined in detail, and business conditions and the organization of bekke
branch families are also discussed. The management of commodities, organization ofaccount books, accumulation of property, and sake brewing will be discussed in a
subsequent article.
Leaders of the Sumitomo Zaibatsu
Yoshitaro Wakimura
Tokyo University
The Sumitomo Zaibatsu, one of the biggest business groups in Japan, has grownuninterruptedly since the Meiji Restoration. The key factor of its growth may befound in its unique leaders-recruitment policy.
This paper introduces many of its leaders and analyzes the recruitment and personnel
policy of the Zaibatsu.
The Development of the Advertising Industry in Japan
Toshikazu Nakase
Osaka Industrial University
No previous analysis has been made of Japanese advertising (advertising industryand capital) from a social scientific point of view. The study of the history ofadvertising has also been limited to discussions of custom and fashion.
This paper outlines the history of Japanese advertising in relation to the growth,development and crises of Japanese capitalism, by considering the functions ofadvertising in several periods of history. It also shows how and when the advertising
agency came about and has continued to develop in Japan.
The Tasks of Business History
KEIICHIRO NAKAGAWA
University of Tokyo
All of the six articles in this issue (Vol. 1, No. 1) of the Japan Business History
Review are papers read at the first annual meeting of the Business History Society
in Japan, held at the University of Tokyo on November 6 and 7, 1965.
In the opening address, Nakagawa emphasized the need for an interdisciplinary
approach; he asked business, entrepreneurial and economic historians, who have beenstressing the organizational, cultural and economic factors, to cooperate moreclosely to achieve a unified history of business. Nakagawa tried to explain theinteractions of the above three factors in a tentative comparison of English, Americanand Japanese development.
A sociologist, Professor Hazama of the Tokyo University of Education, introduced
to the economic historians the usefulness of the Parsons-Smelser model in analyzing
the objectives and motivations of business and the personalities of business men.
Using the same model, he explained the reason for the different social sanctions
awarded to the two eminent Meiji entrepreneurs, Shibusawa Eiichi and Yasuda Zenjiro.

The third speaker, Professor Takada of Osaka University, presented to the audience
many topics of research, in which this scholar in business administration asked thehistorians to promote extensive research work as soon as possible. Among thesubjects were many topics concerned with the objectives and ideology of management,
the organization of production and distribution, and the entrepreneurs or businessmen
themselves.
An economic historian, Professor Otsuka of the University of Tokyo, used Max Weber's
term “Betriebskapitalismus” and emphasized the purposeful and organizational
aspects of modern business. Insisting that capitalism developed in Western Europe
only through such organizational activities, he urged the close cooperation of theeconomic and business historians in both economic and business history studies.
Professor Katsura of Kobe University took up the four words “ executive, ”“administrator,” “entrepreneur,” and “manager” and explained their meaning
primarily according to the works of Dr.Fritz Redlich.
Professor Inoue of Kobe University tried to answer the question, “How should thecompany history be written? ” by making a distinction between five types of businesshistory studies: A) administrative history developed by the late N.S.B. Gras andProfessor H.M. Larson and their group in Harvard Business School, B) in sharp
contrast with A, the business history in East Germany, C) innovation historyorganized from Schumpeter's concept, D) Redlich's school which emphasizes the roleof coping and routine for economic growth as well as the innovations for development,E) entrepreneurial history developed by Professor A. H. Cole. Professor Inoue himself
is trying to find in the individuality of each way of business management reflectionsof general circumstances of economic development.
For Japanese business historians are now available all the ways of approachdeveloped in the United States and other leader countries in this science. Sometimes
this variety is confusing. But we believe we are not so incompetent in choosing theproper means of study, just as the industrial leaders of the Meiji era did not failin their final choice from among various types of industrial technology to achieve
the rapid growth of the Japanese economy.
The Historical Background of the Birth of the Science of Management in the UnitedStatesMoriaki Tsuchiya
Tokyo University.
Conscious efforts to form a science of management were initiated in the UnitedStates in the late nineteenth century. This paper will inquire into the generalconditions in which a scientific approach to management problems and the efforts toform a science of management were developed. The conditions might prescribe theessential character of the science of management in its early stages.
The possibility of a science of management was primarily perceived by H. Metcalfeand H.R. Towne in the 1880ʻs. Thereafter many authors, mainly mechanical engineers,
discussed management problems, but their interest was limited to the workshop.
Therefore, the basic conditions for the birth of the new science of management might
be thought to be in the workshop on which the top business managers focused theirattention.
However, the top-managers of the emerging big businesses in the Middle West were
not directly interested in the workshop, but in the creation of national marketing
networks or the horizontal combination. The original unit in the formation of ascience of management was the eastern metal-working industries which supplied partsor machine tools to big businesses in the Middle West.
Cost reduction by the improvement of efficiency was the most important problem in
the workshops of the eastern metal-working industries; owners had abolished thesub-contracting system and directly controlled the workmen.
At the same time, metal-working factories had become increasingly specialized in
the product they were manufacturing. Such specialization made it possible to achieve
fairly complex division of labor and, as result, the work of a laborer could bemeasured objectively.
These were the particular conditions in the eastern machine shops from which thescience of management emerged.