ECONOMICBUSINESS&
6th

ANNUAL REPORTQssSVTE'ltoeg`i ,IIEil :-'`e"
THE RESEARCH INSTITUTE FOR
AND BUSINESS ADMINISTRATIONECONOMICS
KOBE UNIVERSITY

I959

Copyright, 1959, by The ResearchInstitute for Economies

and Business Adrninistration, The

Kobe University

KOBE
ECONOMICBUSINESS&REVIEW
6th

REPORT
ANNUAL
4"Vli.lt%'9eqI8ii.:eS

THE

RESEARCH INSTITUTE FOR
AND BUSINESS ADMINISTRATIONECONOMICS
KOBE UNIVERSITY

1959

CONTENTS

Page

History of Yen Its Developmentsin the Japanese Economy (2)••••••••••••••••••••--•-••••••••••••••••••Hiroshi SmNJo-• 1

The Central Banking Policy in the Meiji Era••••••••••••••••••••• Masahiro FuJITA-• 19

Economic Growth, Balance of Payment
and Capital Movement•••••••--•-••••-•-•••--••-••---••••-•-----•••••• Hikoji KA'rANo••• 29World Trade and Japan's Export 1953-1957. •••••••••••• Fukuo KAwA'rA••• 41

AIguns Aspectos da Mobilidade de Japoneses no Brasil•••••••••••••••Hiroshi SAiTo••• 49Problems of Emigrant-Transportation in Japan••-••--•••••••• Hiromasa YAMAMoTo••• 61

Port Labor Conditions in Japan
Particularly in Kobe Port ••••••••-••••-•••••••••••••••• Ginjiro SHIBATA••• 75

The Development of the Concept "Operator" in Japan•••••••--••--•• Seiji SAsAI<I-•- 91

Single Industry Towns in Japan•••-••••••••••••••-•••-••••-••••--•--•-••••••Minoru BEii<A

•-•

103

On the Application of the Social Accounting
Principle to Business Accounting••-••-•••••••••••-••••••••••••••••••••• Nobuko NosE

Valuation of Work in Process••••••••-•-•••••••••••••••••••••••••••• Susumu WATANABE•-111•- 119Developmental Stag'es Relating to Theories
of Stock-Equity Accounting•-•••••-•••••••-•••-•••-•••••••••••••••••••-•Ryuji TAi<EDA

On the Rate of Interest in Business Administration•••-•••••••••••••••••--••••Jiro ONo

ny••

129

-• 137

Various Classes of Data Processing by Meansof Electronic Computer•••••••••••••-•-•••-•--••-•••••••••-••••••••••••--- Hideo KiTANI

---

149

•••

157

Company Histories in Japan Materials for Business History..•...•.•--•ny••••-•••••-•••••••••••••-•••••-• Tadakatsu INouE and Yoshiro Ii<usHiMA

DEVELOPMENTSHISTORY OF YEN ITS
IN THE JAPANESE ECONOMY (2)Hiroshi SHiNJo

6
The history ofmoney in every country might well be said to be the history ofits
depreciation. The yen is not an exception, rather it might be called a typical ex-

ample. Roughly observed, the index of prices starting from 1873 (Meiji 6) as 100
goes up to 240 in 1911 (Meiji 44) as the clDse of Meiji, to 514 in 1925 (Taisho 14)
at the close ofTaisho and to over 140,OOO, near the end ofthe 1950s. That is to say,the value of the yen has declined to about lf1500 of its original value in about 80
years. It is important to add that the major part ofthis depreciation was experienc-

ed during the inflation caused by wars-especially the last war. The price ofgold which was oMcially fixed in 1871 as 1 Yen per 1.5 grams (O.4 Momme) finegold, was doubled in 1897 and 1 Yen represented 750 miligram of fine gold. Aftermany revisions the oMcial price of 1 gram of fine gold was fixed at \405, themagnification of which exceeds 600.
Money is, as is well known, a standard measure ofvalue and prices for all commodities, but money itselfis changeable in value and it has really never been a simple

neutral measure ofvalue and prices. As a matter of fact, money has never beena sheer veil ofeconomy. In some cases, the value ofmoney was changed consciously and in other cases was obliged to be changed indifferent of the will of the govern-

ment. To know what the value of the money of one country should be, therefore,
is an intelligence of vital importance in modern life.

Now, when the units of an economy exist independently without having an
exchange system as in the past, there needs to be no common means of exchange,
and there may exist different kinds ofmoney made ofdifferent materials at the same1

HIROSHI SHINJO

2time. But as export and import begin to be carried on a world-wide scale andthe world itself is deemed to be one market including all countries, there should

exist only one kind money which all countries have in common. Gold has been
fixed as this "money of the world." As we have already seen, when Japan wanted
to trade with other countries at the beginning of Meiji, the international gold stand-ard had been almost completed and the adoptation of the same standard was aprerequisite. Of course, each governments is free to decide what price should be
fixed for a certain weight and fineness of gold, and as a matter of course the priceofgold has been fixed by governments proper to their own economy with denominations of their own. As a result the mint parity or oMcial rates of exchange are fixedin all countries, and so the depreciation of money is expressed primarily by theprice of gold and exchange rates for foreign currencies.
It is well known that so Iong as the convertible bank notes system is maintained

the rates of exchange among countries never change beyond so called "gold points."

The rates of exchange of the yen under the gold standard system form 1897 to 1917
was therefore very stable as shown below.
Table X. Foreign Exchanges 1897-l917.
Against London

Against New YorkHighestLowestHighestLowest1898

2s,O.42d2s.O.16d$49.45$48.82

1899
1900

2 O,8
2 O.4
2 O.5
2 O.8
2 O.7
2 O.4
2 O.6
2 O.5
2 O.5
2 O.5
2 O.6
2 O.4
2 O.5
2 O.6
2 O.9
2 O.4
2 1.3
2 1.6
2 1.8

2 9.4
2 O.3
2 O.3
2 O.3
2 O.4

50.00

49.47
49.25
49.25

1901

1902
1903
1904
1905
1906
1907
1908
1909
1910
1911
1912
1913

1914
1915
1916
1917

2 O.1

2 O.3
2 O.4
2 O.4
2 O.4
2 O.5
2 O.4
2 O.4
2 O.4
2 O.3
2 O.1

2 O.2
2 O.2

2 1.6

49.51

49.74
50.13
50.01

49.42

49.80
49.63

49.75
49.57
49.75
49.64
49.50
49.73
49.74
49.63
49.66
50.50
51.00

49.50
49.35
48.76
49.25
49.38

49.38
49.42
49.57
49.42
49.44
49.48
49.33
49.13
48.62
49.88
50.50

Wholesale Price Index(average)

100

96
97
103

108
116
120
129
125
119
120
125
132
132

126
128
155
195

HISTORYOF YEN
Though under the gold standard system the rates of exchange are stable, the pricesof commodities cannot be stabilized. They fluctuate and change according tobusiness cycles. But when prices rise because of increasing imports and when
they fall through increasing exports, a counterbalancing power automatically rises
and the gold standard system is the best stabilizer of prices in the long run, though

the price index numbers shown above might betray this expectation. But there
will be no doubt if we compare these numbers with those in later suspension years.
And the fact that international trade was impossible to be carried on freely during
the war because of the risks oftransportation by sea must also be taken into considertion.

During the lst World War, Japan next to the United States enjoyed the
profits of the war to the fu11, and was favored with an unprecedented balancc of

payment. However, looking back over the years from the Russo-Japanese War
to the outbreak of the World War I the scale of foreign trade has been enlarged,
imports having increased more sharply than exports, the balance of trade showing
a yearly deficit except for 1906 and 1909, and the total deficit during the above
period amounting to 582 million yen. Not only the balance of trade, but invisible
trade also had a deficit. The total of both deficits would have amounted to nearly

1 billion yen for this period, but for the fact that during this period sizableamounts of foreign capital to cover this deficit was borrowed from abroad. Above

all, government loans of 82 million pounds, (about 800 million yen) were raisedin London to finance war expenditures in 1904 and 1905. Thus, the specie reserveof the Bank ofJapan was dependent substantially on foreign loans and without
such a support even the maintenance of the gold standard system might have been

impossible. Just before the outbreak of the World War I, which changed mattercompletely, Japanese economy was on the verge of bankruptcy, as the politicalunrest in Europe made the prospect of new foreign loans very diMcult at the time
when past debts were falling due.

In 1914 and after, Japanese exports increased year after year because Japanwas furnishing goods to underdeveloped countries whose source ofsupply by former

connections became impossible, and invisible exports by shipping and insurance
also increased. The total excess of the balance of trade amounted to 1.333 billion
yen and that ofinvisible trade to 1.893 from 1914 to 1919, thus the total ofthe two

made 3.226 billion yen. About one-half of this holding was used to replenish ex-change holdings abroad and the specie reserve of the Bank ofJapan, about onetenth to pay back foreign loans and one-third to expend for foreign investments

3

HIROSHI SHINJO

4

by Japan. Thus Japan became a creditor country by the lst World War.

But when the War ended, the reaction carne quickly. After reaching thehighest peak of2.099 billion yen in l920 exports began to decline sharply to 1.253

billion yen in 1922. By 1919 imports already exceeded exports and the deficit
balance of trade for 1920 became 388 mi11ion yen, the largest amount since thebeginning of Meiji. In only three years after the War's end, the total deficits

amounted to 824 million, almost 60% or 408 million yen of the excess balances
gained during the war disappeared.

7
As already referred to,Japan stopped the gold standard on September 2, 1917,

just two days after the same measure was taken by the United States which
however returned back to the gold standard on July 13, 1919.

But the suspension of the gold standard system in Japan, continued for IS

years until January, 1930. Bank notes were inconvertible and an embargo was
put on gold export during this period.

The World War I resulted in the peace treaty concluded in 1919, and Japan
could have followed the example ofthe United States, if she had not been afraid oflosing more gold in the face of the unstable international situations. The
government continued the gold embargo with the intention of not decreasing its

gold holdings accumulated during the war, and thought it practical to use its
deposits in foreign markets for payment, if necessary. As its return to the gold

standard seemed probable sooner or later, the rate of exchange against New Yorkrose up sometimes to even more than $50 per\100. Unfortunately in September,
1922 there occurred a great earthquake which damaged Tokyo and its surroundings
heavily. Imports sharply increased and again the chance was lost. The return to
the gold standard had to be postponed until January, 1930 and even then it lasted

no longer than two years. In December 1931 it was again stopped three months
after England, and has never been restored again since then.

.

In those days after the lst World War it was the public opinion that theabandonment of the gold standard was a temporary, exceptional measure and whenthe emergency was over, it should be normalized as soon as possible. The International Economic Conference held in Geneva in 1922 passed a final resolution toestablish a monetary system enabling stable rates of exchange among nations assoon as possible. The conference was chiefly led by Governor Norman of the Bankof England and Governor Strong of the Federal Reserve Bank of New York but the

HISTORY OF YEN
necessity ofreturning to the pre-war gold standard was acknowledged unanimously
by participating countries. The resolution did not imply the necessity ofresuming

gold standard money of the same weight and fineness as in pre-war days. They
might be devalued when necessary and the notes might be convertible even in gold

bul!ion or exchange instead ofgold coins. And as is wellknown, Germany, Russia,
Austry, France, Netherland, Belgium, Italy and others adopted the gold standard

devalued and newly defined, while the United States and England resumed thestandard of pre-war days. It is self-evident that in the latter case, the deflationary

policy was indispensable in cancelling the depreciation bacause if the rates of ex-change should be resumed, the prices of commodities would have to be lowered in
the same degree. Premier Hamaguchi, head of the Minseito party which was traditionally anti-inflationalistic, enacted the resumption of payment in gold in January

1930 and began to take decisive steps for a deflationary policy. The financeminister was Junnosuke Inoue, ex-governor of the Bank of Japan, and a known
defiationalist. Inoue had been advocating in his book entitled "Japanese Economy
and Finance after the War" published in 1926 as follows; "Panic is inevitable in thebusiness world as a possible result ofsizable decreases of currency when bank notes

resume convertibility, though it is very diMcult to estimate the amount exactly.
Should panic arise, it would be impossible to increase imports. Some antagonists
against lifting the embargo calculated the possible increase of currency as large

as 7 or 8 hundred thousand yen. It could not be so large. To think of the total
loss ofJapanese gold holdings in the event of the redemption of gold payment wasan utterly groundless fear for a layman." The opposit party the Seiyukai werealways inclined toward an inflationary policy. But antagonists of the proposed

measure were rather few in number at this time. To mention some, there wereTanzan Ishibashi, then the Editor-in-Chief of the Oriental Economist, and Kamekichi Tak'ahashi representing the minor opinion which asserted energetic opposition

to the adoption of the gold stanclard without devaluation. Advocates urged thatJapanese economy be put on the rails following their predecessor's model by wayof suffering from declining prices and the rising foreign rate of exchange to thepre-war level. People wanted to be prepared for better days in the future andthe policy was supported by the public opinion of that time. "A Tract on Mone-tary Reform 1924" by J. M. Keynes was even translated into Japanese, but theguestion which was vital to Japan, deflation or devaluation was not fundamentally

discussed even among academic circles. Too much reliance was placed upon theclassical doctrines and the foregoing examples of England and the United States,

5

HIROSHI SHINJO

6

But as England and the United States found it impossible to maintain therestored value of the pound and the dollar after all, why could it be different forJapan? The re-imposition ofa gold embargo in England came into force in September, 1931, owing to the continued depressed business conditions inside the country
and motivated by the international credit crisis caused by a bank failure in Austria.

The Japanese Government failed to follow the English example at once and while
the re-imposition ofa gold embargo in Japan was deemed to be a problem of time,a huge reflux of gold promoted by powerfu1 speculators like the Mitsuis, necessitated

the government to stop gold payments. Premier Hamaguchi was shot and Minister Inoue was assasinated as sacrifices to the deflation policy. The governmentchanged from Hamaguchi to Inukai (Seiyukai Party) and the finance minister from

J. Inoue to Korekiyo Takahashi, a veteran financier, and Ex-minister, and theformer policy was abandoned. The devaluation of the United States dollar cameat last three years later in January 1934 by the newly elected President Roosevelt.

The panic in Wall Street in the stock exchange occurred in the Autumn of1929 and Hoover's moratorium was effected in 1931. International financebecame paralyzed thereafter. The great depression of the 1930s bagan. President Roosevelt who put a series of anti-deflation policies called the New Deal
into action started by devaluating the dollar by 40.94e/o (the dollar became equiva-

lent to O.88 gram. instead of 1.50 gram. gold. That is to say an ounce of pure gold

became equal to $35 instead of to S20.67).

Thus, even the pound and the dollar which were restored to their pre-war
value after the war by the enforcement of the deflationary policy had to be given
up in the face ofsevere economic instability. In order to promote economic activity,
the raising of the standard gold price would be effective in preventing a bottomlessdrop of prices and by giving room in furnishing circulating capital and increasingpurchasing power by a fiscal policy. Moreover, the fall offoreign exchanges would
encourage exports as well as check imports and even guard against countries which

had already devalued their money. The same measure was then unavoidable on
the side of the defensive countries-competitive devaluation. Such being the case,getting off the gold standard system in this stage was clearly different in naturefrom that exercised before 1930. Governments aimed at something positiveiy andintensively. It was notdesirable that the gold standard system in its original form

return again. The idea of "managed" currency has taken the place of the gold
standard system.

At any rate, the rate$ of exchange bacame remarkably unstable after 1917,

HISTORY OF YEN

7

as shown below, with the exception offrom l930-1931.
Table XI. Foreign Exchanges 1917-1945.
Against London

Against New YorkYear
HighestLowestHighestLowest50. 3/,

1917 (Taisho

6)

2s.

111/162s.

11!2

50. 71,

1918

(n
(n
1920 ( lt

7)

2

251,,

2

111/1652. i/s

50. 71,

1919

8)

2

6i/,

2

19!16

51. 7!,

49. 7!,

9)

2

1031,

2

3Y,

50. 5f,47. 3f4( lt
1922 ( tl
1923 ( t/1924 ( t/1925 ( lt

1O)

2

831,

2

3

48. i!,

47. 7!s

11)

2

351,,

2

o71,

48. il,47. i/,

12)

2

3

2

09!16

49. 0

48. i/,

13)

2

3il,,

1

7il,

48. i/,

38.i!2

14)

1

9i/,

1

7il,

43. i!,

38. il,1926 (Showa 1)

2

Ol/s

1

91!2

48. 31,43. i/,

1927 ( tl

2)

2

Oi/,

1

I071,,

49. 0

45. 51,

1928 ( tl

3)

1

251,

1

10il,

48. 0

44. 3!4

1929 ( tl

4)

2

oil,,

1

951s

49. 0

43. 31,1930 ( /t

5)

2

03/,

2

O'lg

49. 3/s

49. 01931 ( /t

6)

2

33/16

2

1if,

49. 31,48. il,1932 ( tl1933 ( 11

7)

2

1il,

1

23!4

37. 0

20. 0

8)

1

215/161

2

31.i/,

20. il,1934 ( /1

9)

1

2'ls

1

2

30. 31,

28. 51,

1935 ( lt

10)

1

2

1

2

29. ils

27. 3/,

11)

1

2

1

2

29. i!,

28. i/2

1937 ( tr

12)

1

2

1

2

29. i/4

28. i!21938 ( tt

13)

1

2

1

2

29. il,27. 01939 ( tl

14)

1

2

1

2

27. 3/,

23. 5!,,

1940 ( lt15)1

513/16

1

2

23. 7/,,

23. 7/,,

16)

1

2

1

2

23. 7/,,

23. 71i6

1921

1936

1941

(n

( 11

In this period concerning the stabilization of the rates of exchange there were
two alternatives, either calculated against London or against New York; from 1917-

1924 stabilization was aimed around $50-48 against New York, from 1925-1930(the period of England's return to gold) around 2 shillings against London, andfrom 1932 on the yen was linked to the dollar until 1932 and after 1933 linked to

1 shilling 2 pence against New York.

In the next table are given principal figures which will show the changesofJapanese economic conditions in the period from the outbreak of the lst World
War to the restoration of the gold standard.

HIROSHI SHINJO

8(million yen)

Table XII. Japanese Economy 1913-1929.
Notes
issued(year's

end)

WholesaleSpecieAll Banks'

All Banks'

reserve

Deposit

Loans

224
218
248

2, 2292, 749632

2, 3292, 827591

2, 811

2, 997708

411

3, 833

3, 841

1, 127

729
596
532
756

5, 7405, 133

1, 603

1, 036

195

8, 225

7, 464

1, 962

1, 668

255

Exports

Price Index

Imports(1900=1OO)
132

1917

426
386
430
601
831

l918

1, 145

1919

1, 555

650
7I3
952

9, 9189, 9632, 0992, 173312

1920

1, 4391, 247

9, 8699, 826

1, 9482, 336343

1921

1, 547

1, 24610 456

10 6691, 253l, 614265

1922

1, 5581, 06410, 297

11 1281, 637

1, 890

259

1923

1,704

1, 057

IO 616

1, 4481, 982263

1924

1, 662

1, 0591, 8072, 453273

1925

1, 632

1, 0572, 3062, 573267

1926

1, 5701, 0582, 0452, 377237

1927

1, 682

1, 063

1, 992

2,179

225

1928

1, 7391, 063

1, 972

2, 196226

1929

1, 642l, 0722, 1493, 216

220

1913
1914
1915
1916

'

'
'
11 485,10 845'
10 812'
11 287'll 444'11 066''
12 215'
12 489'12 985'
11 388'10 919,10 333,10 322
'

126
128
155

8
The year 1931 (Showa 6th year), when Japan suspended gold payments,
belongs to the earlier period of the world-wide great depression of the 1930s. It
goes without saying that in Japan the foregoing two years under the gold standard
were still worse. Credit crises occurred almost yearly from 1927 to 1931 and manybanks stopped payments while numerous firms were closed. After the country
went off the gold standard in 1931, the economic conditions began to improve, but
not so fast as expected. Some signs of improvement will be shown below.
After the suspension of the gold payment, the system of note issue by the Bank

ofJapan was naturally revised. The maximum amount of fiduciary issue had been
fixed at 120 million yen from the beginning since 1897 without modification, although in reality the fiduciary issue had been exceeding this limit in the shape ofexcess issues for which the Bank had to pay issue taxes. But in July, 1932 the above
limit was expanded to 1 billion yen, and in April, 1938 to 1.7 billion yen. In April,

1939 the limit was further raised to 2.2 billion yen, but in April, 1941 by making

the existing law temporarily ineffective, the government introduced the "Maximum

HISTORY OF
YENEconomy1926-1935.

Table XIII. Japanese

Average

Whole sale

Production
1931-1933=100

Price Index No.

(1900-1OO)

9MiningIndustry

CapitalForeign Trade

Unit \.

Planned
Unit \.

ExportImport1926

237

1, 6582,119

2, 563

1927

225

105. 674. 5

1. 5232, 0652, 3591928

226

107. 979. 2

1, 4572, 0382, 373

1929

220

110 9

83. 3

1, 042

2, 2182, 3891930

181

106. 089. 4

1, 5191, 680

1931

153

97. 2

89. 0

1, 1791, 319

1932

161

96. 1

97. 4

457
458
539

1, 457

1, 5241933

180

106. 8

113.6

1,136

1, 931

2, O17

1934

178

116. 4132.8

1, 3342, 2562, 4001935

186

125. 0148. 7

1, 4272, 6002, 617

Amount Limit System," which was enacted in February, l942, at the same time
when the Bank ofJapan Act was revised, and under which the discrimination of thespecie and fiduciary reserves was no more necessary and the fixing of the maximum
amount for the fiduciary issue became needless.
On the other hand, the oMcial price of gold continued to be raised successively
as the purchasing power ofthe yen declined, as shown in the following:

1897
1931 (Mar. 7)\l.33 (per 1 gram of fine gold)

1932 (Jan. 9)"2.4r91933 (April 7)"2.95

1934 (Jan. I1)"3.05

1935 (May 6)"3.56

1936( " l5)1937( " IO)"3.77

The suspension of the

"1.99

"3.85

not necessarily
goldstandard
bringdoes
disordertoforeign exchange markets.
By the operation of the Exchange Stabilization (EquaIization)

Fund in the hand of the government, or by regulating demands for foreignexchange, the rates
of exchange for foreign countires might be maintained at an

declining rate of exchange might, at first sight,
even constant or " Thepegged."look very favorable aforcountry, which must improve its balance of payment by

spurring exports suppressing
andimports. But a cheap rate of exchange means
only selling cheap andg buyindear for a country like Japan whose exports depends

much upon importsmaterials.
of raw Favorable effects would be short-lived,

10

HIROSHI SHINJO

unless repeated unlimitedly to bring on endless inflation. As a matter of fact,
under incessantly fluctuating exchange rates, foreign trade transactions would be

too risky to be concluded. Moreover, competitive cheap exchange rate policies
among countries will naturally cancel each other out and as a result every country
tends to wish to have rather stable exchange rates which equilibrate their economies.

That is the reason why exchange rates of the yen came to be stabilized again after

a period of competitive devaluations. But the way to realize a stabilized rate ofexchange was no longer through market operations but directly to adjust the demand
for foreign money to its supply.

The Foreign Exchange Control Act was put in force on May 1, 1933 (Showa 8)
and thereafter all demands and supplies for foreign exchange were concentrated

into government accounts in order to adjust demands to maintain the rates of
exchange. Prior to this, sinceJuly, 1932, the Capital Flight Prevention Act had beenenacted as a forerunner of the systematic exchange control which came out about
one year later under the exchange control, the rates of exchange were "pegged either

against London, 1 shilling two pence per 1 yen or against New York, 23 dollars
and 7116 cents per\100 or to both. In order to maintain these rates, the exchange
control had to be revised stepwise more strictly, until at last all trade and foreignexchange transactions became impossible, Japanese pound and dollar assets abroad
having frozen in 1941 anteceding the outbreak ofthe Great War. It might be worth
mentioning that in the 1930s all possible types of foreign exchange transactions wereexperienced in Japan from the extreme free style under the gold standard system tothe other extreme under a fu11-scale "Autarkie".
Now, let us turn to look at the moves of inner economy after the re-suspensionof the gold standard. In order to stand against this deepening depression, themonetary authorities started to Ioosen the money supply. Declining prices whichcharacterizes a depression are caused by excessive supplies and over-production
and these mean the shortness of effective demands for goods and services both inand out ofthe country.

The classical method of increasing the supply of money has been understood
to be the lowering of the oMcial rate of the central bank. Below are given tables

showing the movements of interest rates and principal accounts of the Bank ofJapan and all Japanese banks (Some long-term banks are included other thandeposit banks).

A cheap interest rate policy to provoke new investments is not so effective
as the adverse policy to curtail it, as the prospect of profits may be decreasing or

HISTORY OF
YENTable XIV.

11

OMcial Bank Rates.

Commercial(Sen for \100

Loans onGovernment's

fi11s

Bonds

re-discounted

per dium)

Other
Ioans

1931

Oct.

6

1. 6 sen

1. 7 sen

1. 8 sen

tt

Nov.

5

L8

1.9

2. 0

1932

12

1.6

L7

1.8

8

l.4

1.5

tt

Mar.
June
Aug.

18

1.2

1.3

1933

July

3

LO

Ll

L6
L4
L2

1936

Apr.

7

O. 9

1.0

1. 1

1937

July

15

O.9

O. 9

Ll

Xl

Sept.

21

O. 9

O. 9

1. 1

Ll
Ll

t/

1938

Mar.

12

0.9

O.9

1941

July

21

O.9

O. 9

1944

Apr.

4

O. 9

O.9

1945

Nov.

1

O.9

O.9

Table XV. Bank ofJapan: Principal
End ofNotes issued

1926 (Showa1)

1570

1927 ( n1928 ( tt

2)

1682

3)

1739

1929 (

t/

4)

1642

1930 (

tt

6)

1436

1931 (

tt

6)

1330

1932 (

tt

7)

1426

1933 (

tx

8)

1545

1934 (

tt

9)

1627

I935 (

tt

1O)

1767

Advances toLOLO

Accounts.

(million Yen)

Cash andGovernment

Loans

22
22
22
22
25
25
47
25
68
118
186
3

587

1, 117893

1, 112

1936 ( n1937 ( tt

11)

1866

12)

2305

1938 (

tl

13)

2755

1939 (

xl

14)

3679

1940 (

tt

15)

4777

1941 (

xt

16)

5979

1942 (

11

17)

7149

1943 (

xt

18)

10266

1944 (

tt

19)

17746

3
3
3
2
I
1
956

1945 (

11

20)

55441

11, 220

Bullion

849

1 ll3

680

1, 109

,

754

878

964

521

772

463
455
494
533
577
825
548
536
516
527
580

856
878
843
745
628
509
1 065
'

819
904
1, 8273, 6428, 94437, 838

627
519
523

HIROSHI SHINJO

12(million yen)

Table XVI. AJI Banks: Principal Accounts.

End ofDeposks

Borrowed

Money

Loans

Securities

Governments
Bonds only

1926

10 845926

11, 338

3, 234

1927

1O, 811

1, 291

10 9193, 902

1928

11 287

1, 336

10, 333

4, 7602, 286

1929

11,444

1, 40210 3224, 8852, 291l930

11 035762

1O, 184

4, 7852, 1681931

10, 595

1, 481

10 0524, 562

2, 056

1932

10 7771, 3199, 6164, 6552, 1691933

11 5091, 3659, 214

5, 1962, 7101934

12 203!, 2788, 8755, 9063, 2781935

12 911

1, 0449, 0816, 564

3, 5981936

13 9681, 2609, 50571 0393, 9001937

15 7471, 044

11, O127,135

3, 9869, 4395, 767

1938

1939

'

'
'
'
'
'
'

'
,
19 117
'

'

'
'

821

12 22325, 092

1,252

15 03812, 309

7, 57331 190'''14, 948

9, 62412 885972

18, 371

37, 801l, 15020 98519 447

1942

46, 569

1, 59i

24 85726, 530

18 184

1943

56 3284,174

33 41524 085

1944

77, 927

13, 768

51, 154

42 94532, 995

1945

119, 829

37 69097 62155 22844 921

1940
1941

'

'

'
'
32 354
'
'

'

'

'

'

'

'
'

'

even negative in times ofa great depression. Moreover, new investments might
increase supplies more than the ultimate effective demands brought about by theformer and might make the situations still worse than before. That was the reason
why in many countries fiscal policies appeared in the 1930s to play a greater partin increasing effective demands as supplementary to the central banking policy.
Fiscal policies may redistribute the national income, may directly increase national

income by giving public works, jobs to the unemployed, and by raising the propensity to consume of the country at large. And that will provoke new investments inturn. Thus effective demands may be increased within the country by a large-scale
fiscal policy or else may be expected to increase from outside by securing markets

exclusively for her products in foreign countries. Looking back at this period's
exports, it can possibly be said that the political leaders put too much weight upon

the latter. No, the party government had been losing confidence and the atmosphere of fascism was becoming influential. Several conspiracies for a coup d'etat

took place. In the 5-15 Accident (May 15, 1932) Tsuyoshi Inukai, Premier of thelast party cabinet was killed by a group of young navy oMcers and in the 2-26

HISTORY OF YEN

13Incident (Feb. 26, 1936) Finance Minister Korekiyo Takahashi, Ex-premier andthe head of the Seiyukai-party, Makoto Saito, Admiral and Ex-premier and someothers of fame were assassinated by a troop ofarmy terrorists. In 1940 all politicalparties were dissolved. In the course of these events, the Manchurian conflictoccurred on September 18, 1931, and Manchukuo became independent in March,

1932. In March of the next year Japan seceded from the League of Nations.
The China incident occurred near Peking onJuly 7, 1937 and soon battles expanded

to the whole of China. In 1940 the Germany-Italy-Japan Triple AIIiance wasconcluded, and finally the great war broke out on the Pacific on December 8, 1941.

Under such circumstances, the national budget expanded in scale year after

year and the Government had to issue bonds to make both ends meet as shown in
the following tables. But it is to beremarked that the largest partof the national
expenditure was for military goods and for the mobilization of troops.
Table XVII. Governrnents, Expenditure 1931-1945.
General Accounts

Special Account for

Extraordinary

Total

Administration

Expenditure

1933

2, 255

1934

2, 1631935

2, 206

1936

2, 2821937

2, 709

650
858
879
685
623
656
889

1938

3, 2881939

1931

1, 477

1932

1, 950

Military

War expenses

455
686
873

942
1, 033

1, 0782, 034

1, 2374, 795

1, 422

1, 167

4, 8444, 494

1, 947

1, 6295, 723

1940

5, 8602, 462

2, 226

9, 487

1941

8, 1343, 5633, O13

1942

8, 276

6, 1801943

12 5519, 9371944

19 87216 287

79
2
2

1945

21, 496

16 724''''18 753,'73 494'29 8186, 449{ 10
O17

9While in the beginning ofthe 1930s, inflationary policies backed by the manag-

ed currency system were not effective in stopping price declines and in stirring
up business activity, it went far at the end of the same decade in keeping the yen's'

HIROSHI SHINJO

14Table XVIII. National Budget and Index Nurnber of Prices

1926-1945.

(million Yen)

Average Index

National

National debt
outstanding

Settled Acet.

BudgetNumber of Wholesale
Prices (Tokyo)(1900-1OO)
1926

1, 6672, 056

5, 172237

1927

1, 7592, 0635, 398225

1928

1, 7212, O06

5, 831226

1929

1, 774

1, 8265, 959220

1930

1, 611

1, 5975, 956181

1931

1, 497

1, 531

6, 188153

1932

2, O182, 045

7, 054161

1933

2, 321

2, 3328, 139180

1934

2, 2242, 247

9, 090178

1035

2, 2152, 2599, 854186

1936

2, 3082, 372

10 5752, 9152, 914

,
'

198

1937

12 817238

1038

3, 522

3, 59517, 345

25I

1939

4, 8374, 9706, 117

6, 44522 886
'

278

1940
1941

8, 2118, 602i942

8, 9859, 19240 470'55 444
'

265

1943

14 373

1944

21, 2441945

29 157

14 OIO''29, 848''
23 487'21 0401311

330

77, 555376

107 633

419

140, 81I

595

,

1

value stable. Inflation crept in and when the 2nd World War, in which General
Tojo's cabinet entered in December 8, 1941, ended in defeat on Aug. 15, 1945, it
burst out in an inflation never experienced before in Japanese history.

In February, 1942 the New Bank ofJapan Act was enacted at the 60 years'
expiration ofthe former Act of 1882. In article 1 ofthe new Act it states that "theBank ofJapan's object is to regulate currency, and adjust credit as well as to main-

tain and foster credit systems in accordance with the government policy, in orderto give fu11 play to the best possible economic power of the nation," and in article 2,"the Bank ofJapan is to be managed solely to attain objects ofthe nation as its mis-sion." The Bank was ofa character that made it 100 per cent subordinate to thefinance minister and its dependence or neutrality from the government was explicitly

denled. Prior to this, by "the Extraordinary Fund Regulation Act" ofSept., 1937
for long-term lending and by "the Ordinance of management funds of banks, etc."
of Oct., I940 for short-term lending, credit control had been exercised not only

HISTORY OF
YENTable XIX.

15

Japanese Foreign Trade by Continents 1926-1945.
(million Yen)

Asia

EuropeAmerica

ExportImportExportImport1926

903

1, O18

129

1927

845

148

1928

8S5

1929

915

1930

704

1931

505

873
903
858
633
494

19S2
19S3

677
931

19S4

1,170

19S5

ExportImport

416

906

388

888

160

404

880

147

420

971

128

280

545

104

200

452

451

127

225

472

283

546

228

296

512

1, 304

659
812
870

182
263

352

653

767
750
706
739
496
385
555
681
848
913

1936

1, 371

1, 060

308

330

719

l937

1, 646

1, 295

356

504

1938

1, 665

1, 204261

19S92, 3201, 181238

1940

2, 494

1, 5141941

2, 1551942

1, 749

1943

1944
1945

Oceania

AfricaExport Import

ExportImport

43

41

62

132

51

36

61

r27

44

32

53

138

61

43

54

139

57

24

36

98

59

18

27

117

86

27

47

140

137

43

65

211

182

80

80

214

188

69

95

250

1, 055

198

108

98

2IO

824

1, 556

243

206

106

222

376

530

1, 605

137

61

97

98

310

769

1, 248

153

93

95

86

184

193

756

1, 533

129

91

93

122

1, 680

47

122

374

960

47

43

27

94

1, 66543

46

1, 607

1, 786133

117

1, 2981, 932

11

388

909

3

Table XX,

41
5
3
43

lndex Numbersof Production

GeneralIndex

MiningIron and
Steel

1

3
2
1

in War-time.

(1931-33=100)

ChemicalTextile1936

158. 4139. 7

197. 4

187, 8164, 3

1937

180. 8151.2

218. 1209. 1

197. 5

1938

179. 6

162. 8233. 0229. 1

181,6

1939

165. 1173. 3242. 6218. 4133. 7

1940

163. 7184. 7249. 6219. 1ll5. 6

1941

155. 8177. 9261.1

213. 7

91.8

1942

138. 8l77. 3259. 5181. 5

62. 1

1943

135.1

176. 9248. 1156. 2

62. 5

1944

99. 2

152. 5161. 1106. 4

22. 2

1945

40. 0

63. 9

27. 3

33. 7

4.8

HIROSHI SHINJO

16

Table XXI.

Rising Prices and Bank notes

Wholesale
General Price

Index inTokyo
(19oo= IOO)
1945 Jan.

444

Feb.

453

Mar.

476

Apr.

541

May

548

June

551

July

563

Aug.

577

Sept.

624
638

Index in Tokyo

Tokyo(191O= 1oo)

Producers'
Consumers'
goods
goods
Sept, 1945=1OOAug. 1946 =1oo

362
370
384
394
413

in circulation(End ofmonth)
17, 11417 841'20, 526

22 129'23, 207

431
445
475

26, 181

41 426

679

Dec.

1 053

1946 Jan.

1 211

1 057

Feb.

1 322

Mar.

2, 132

Apr.

May

'

Bank ofJapan notes

Index in

Nov.

'

1945-1947.

Black Market Price
Retail Price

478
434
489
495

Oct.

circulation

'
1 277
'

28, 456

42 300''43, 188

92
112

47 749128

55 441170

58 566200

54 342

'
'
'

1 852

196

'
23, 323

2, 5872 455

187

23 173

2 681

2 761

191

36 316

June

2 767

3, 155201

42 759July

3, 117

3 292

200

Aug.

3 298

3 230

186

1OO

Sept.

3, 612

172

105

'

'
'

'

Oct.

3 606

Nov.

4, O06

'

'

'

'

'
'
3 433
'
3 855
'
4 O17
'
4 352
,
4 516
'
4 566
'

'

'

'

49 731'57 572'64, 435

70 589

180

109

194

121

222

137

254

l64

'
100, 040'
74, 81793 398

Dec.

4 195

1947 Jan.

4 453

Feb.

4 586

275

185

105 490

Man4, 825

4 772

304

208

115 726

Apr.

5, 6185, 344

348

231

5 586

'

'

'

May

5 782

June

6 210

July

8 768

Aug.
Sept

11,706Oct.

l4, 099Nov.

15, 478

Dec.

16, 072'''

13 128
'

'

'
5 666
'
6 849
'
7 623
'
8 770
,
11 671,13 601'
14 553'''122, 400

129 685

370

271

419

292

456

330

143 746452

362

150 684478

383

156 417

518

401

519

408

178, 158

558

418

219 142'
136, 320'''
l67, 665'

HISTORY OF YEN

17quantitatively but also qualitatively. The number of banks decreased to about
80 by concentration, whether desired nor, into "one prefecture one bank principle."

So national savings and loanable funds were concentrated to maximize themilitary powers of the nation, However, as natural resources as well as humanpowers are limited, the more stringent the needs of the economic society are control-

led, the more diMcult and incompiete will be the result. The level of production

began to decline remarkably soon after the war against the Allied Powers began.

The old-fashioned quantity theory of money would be applicable in time of
war as an explanation of rising prices, though in general that theory cannot standa theoretical test. The theory asserts, if the quantity of currency is increased, thelevel of prices would rise proponionally, and vice versa. In ordinary times, this
proposition can not be true, because even the same increased quantity of currency
Table XXII. Prices and Note-circulation after 1948.

1948

1949

Wholesale Price

Wholesa!e Price

Index All
commodities

Index (Tokyo)

1934-36=1

Note circulation<\ million)Jan.

8, 506345. 4519 764Feb.

8, 6oo348. 9521, 137
515, 977'

Mar.

8, 668347. 9Apr.

8, 693344. 1

517, 710

May

8, 812344. 7501, 136

June

9, S82347. 2516, 352

July
Aug.

13 448512 806

15 754355. 6

Sept.

''348. 917, 038

359. 6

Oct.

17,344357. 4Nov.

18, 544358. 8Dec.

18, 722360. 2Jan.

18 994363. 0Feb.

19 615364. 0Mar.

''
19 700'360, 9',520 921'533 568'547 252'629 891'526 991

566, 168549 568''
543 972'534 624

Apr.

20, 602354. 2May

21 OIO

348. 2June

20 934342. 3534 21434Q 5524, oo1

July

Aug.

'
'
20 959'522, 604'

21,308341. 9521 724Sept.

21 691

343, O515 346

'

'
'

Oct.

21, 904

344. 2

529, 814

Nov.

21 912346. 1542, 137

Dec.

21 887343. 7622, 061''

18

HIROSHI SHINJO(bank notes and deposit money) would have different effects on our economy.
They may be expended for consumption i.e. to buy consumers' goods or services
without producing anything, or to buy goods in order to resale them or again to

employ laborers to produce goods and pay a sum of money as wages or salaries,
the Iatter get incomes or the income ofthe country increases. That is to say, income

causes national income increases, in other cases only money capital increases with-out influencing national income, or again in another case both income and capitalincreases. And in some cases goods are'produced without increasing consumption

and in other cases goods may be consumed without increasing production or atleast in the same degree. Therefore before we can analyse the quantity of money
increased or decreased as different flows of funds having different effects on thesize of production, income, savings, investment, or consumption, we can say nothing about the result.

What is different during a war? In a modern war, war-waging countries
try to maximize their military powers, and their resources and labor power are
utilized to the full for this purpose by sacrificing peace-time production. However,military goods and labor powers thus brought under government command aresimply and quickly consumed. Therefore, so far as the economy ofa country canbe observed as a reproduction ofproduction and consumption ofgoods or of national
income, the size of reproduction should necessarily become smaller as the war is
carried on. The result is that in spite of the fact that national income in money
increases, the goods purchased by it become scarce and the supply prices must be

raised to be in equilibrium with increased demands. That is the reason why inflation is inevitable in a war economy.

Inflation does not cease with the war's end but it bursts out after the war inearnest, and especially catastrophically in the defeated country. Red-ink budgets
continue, import of goods is almost impossible for the time being, production plants

are damaged, raw materials and motive powers are diMcult to command, both
employers and employees lose their incentive to work fairly under the incessantly
rising prices, black markets thrives and goods disappear from regular routes, andnobody saves under the prospect ofinfiation. And the vicious circle continues.

Japanese inflation after the 2nd World War could not settle down until
April, 1949 when the yen's rate of exchange against the United States dollar was

fixed as \360 equalized to $1, and Japan was permitted to enter the World Eco-nomy ofthe Post-war period. (To be continued)

THE CENTRAL BANKING POLICYIN THE MEIJI ERA

Masahiro FuJiTA(I)
Today, the limitation and effect of financial policy (and currency and banking policy) are one focus of the most important discussions in our financial circles.
It is understood, of course, that those in control of the financial policy are govern-

ment authorities (especially the finance minister), and the Bank ofJapan.

We shall try to stress here the importance of a central banking policy. Since
the establishment of the Bank ofJapan in 1882 (Meiji 15), various central banking

policies remain in operation. In the development of the capitalist mode of production in Japan (the industrial capitalism ofJapan is generally considered tohave been established in 1896-foundation of the Yahata Steel Foundry("), theperforming function ofour banking system is remarkable. Therefore, we want toanalyse our central banking policy from the standpoint of the history of Meiji
money and banking, and we shall try to include a recent central banking policy
analysis as much as possible.

(II)
In September 1881, Prince Matsukata put forward a proposal "Recommending the establishing of a Bank ofJapan" and "Memorial of Finance." These propositions were made in the form of a recommendation to Prime Minister Sanetomi

Sanjo. We summarize his memorial on the establishing of a Bank of Japan as acentral bank as follow;(a) Facilitation of finance (money and banking' operation)-the Central
Bank to be the apex focal point ofthe banking system ofall banks in the entire coun-

19

20

MASAHIRO FUJITA

try, the national banks to be regarded as branches of the central bank.

(b) Extension of capital power or ability of national banks and many enterprises-financial power ofordinary banks to be promoted by advance and discountoperations, so that the serious condition of lack of capital will disappear.

(c) Realization oflow interest-this is the only powerfu1 method ofincreasing
circulating funds.

(d) Transference of some parts of the superintendence of the ministry offinance-the central bank is not only the revenue and expenditure institution ofnational funds but also of private service institutions (giving facilitation to private

credit or advance and finance funds to purchase domestic or foreign currency andpurchase gold and silver bullion).

(e) Discount of foreign bills-by means of discounting foreign bills to absorb
species from over-sea areas,

Afterwards, Prince Matsukata was appointed Minister of Finance in March 1,
1882, so he powerfu11y pushed his financial policy(2'.

As is generally known, the Bank ofJapan (Nihon Ginko) was constituted in
October 1882 after the model of the Bank of Belgium, whose prototype was the old

Reichsbank.
The remarkable financial matters before the establishment of the Bank ofJapan
were severe inflation and rapidly increasing trends of inconvertible paper money.
Just at this time, Prince Matsukata was appointed Minister of Finance in October

1881. He began to engage in stabilizing* the economic crisis by means of with-drawing inconvertible notes and tax adjustments or reducing the international

payments. These measure were named the so-called "Matsukata deflationary
policy`3"' and the content of his policy was a rigorous deflationary policy whichcontained the readjustment of the amount of issuing notes (inconvertible nationalbank-notes), another measure was the establishment of the central bank.
Within the space of twenty years the financial system of this country became

deeply-rooted and grounded.
The table below clearly indicates the success of the Matsukata policy:* In 1893 a committee was organized to investigate the monetary system of Japan to inquire(i) the cause and the effect of recent fluctations of prices of gold and silver, (ii) the influenceof their fluctations upon the economy of this country and (iii) the necessity of revising themonetary system of this country due to these fluctations and if revision was necessary which

system and what measures should be taken.

BANKING POLICY IN THE
MEIJI ERATHECENTRAL
Table 1. Amount of Government convertible

21

note

issued, withdrawn from circulation.

(unit: thousand yen)

Withdrawn

In Circulation

Year

Issued1868

24 03724, 037

1869

26, 053

50, 090

1870

5, 40855, 500

1871

4, 77260, 272'

68 400'1872

8, 1281873

20 733852

1874

14 633

1, 1111875

2, 4435, 17399 071

1876

4, 545

1, 529105 147''

88 281'

1O, 802

'
'

1877

650

1

I05, 797

1878

34, 657

1, 035

139, 418

1879

1

9, 111130, 308

1880

410

5, 778124, 940

1881

6, 035ll8, 905l882

9, 536109, 369

1883

11 36997, 999

1884

4, 61993, 380

5, 03588 345

1885''

The central bank did not actually exercise the note-issuing right, owing to
the wide variation which existed between silver and paper money in circulation,in other words, the bank was fuIIy preoccupied with aiding the Government in
effectively adjusting the currency system, So, in May 1884, the Convertible Bank
jVote Regulation was promulgated and in May of the following year the bank began
to. lssue notes.

But, the Convertible Bank JVote Regulation merely provided that the specie reserve

for the convertible notes should be in silver coins, without stipulating either the

maximum issue or the minimum specie reserve.
The Government simply instructed the bank to maintain a fixed specie reserveof 2 million yeri and to issue notes to the extent of 5 million. Such a policy wasprobably due to the fact that the paper money in actual circulation, consistingof Government notes and national banks notes, already made up a large even quanti-

ty and so that the banks' notes should not be permitted to swell that quantity toa dangerous volume.
On the other hand, the authorities were afraid that the banks' notes, being

MASAHIRO FUJITA

22

based on specie reserve and convertible into silver, might be driven out by the inconvertible notes.

There was no limit prescribed on the amount of Bank ofJapan notes to beissued, but it was left to the discretion of the minister offinance.

In those days, our government started to redeem it notes with silver coinsin January 1886, and since then Government paper money and silver coins havebeen in circulation on parity. A steady increase was subsequently registered in thevolume of Bank ofJapan notes. In March l886, the Government ordered thebank to increase its 'notes to 20 million yen.

After having acquired experience in this method our government revised theJN4ote Regulation in July 1888 using as model the system ofGermany ofthose days.
The Revised Note Regulation had the following main character.
(a) The specie reserve had hitherto consisted ofsilver coins alone, the new regula.
tion required the Bank ofJapan to hold gold and silver coins and bullion as reserveagainst its notes in circulation. The regulation authorized the bank to issue notes
to the amount of 70 million against securities such as national bonds, treasurybills,

Government promissionary notes, foreign exchange bills and other sound securities.

(b) The regulation fixed the minimum rate oftax on fiduciary issue over and above
the normal limit of 1 ,OOe million at 3 per cent per annum. (c) The Bank ofJapanwas required to loan to the Government 22 million yen as monetarycompensation
for the exclusive rights to the note-issuing primilege at an interest of 2 per centper

annum. Later this clause was amended, doing away with the interestaltogether.
(d) The bank was to pay the government halfof the remainder of the netprofits
after deducting the amount equivalent to 6 per cent on the paid-up capital andapportioning to the reserve fund one-twentieth of the balance of the abovededuction. In the case the balance ofthe net profit after this payment to theGovernment
exceeded 4 per cent per annum on the paid-up capital, three-quarters of the excess

amount was to be paid to the Government. (e) The bank was required to publish
in the OLfiicial Bulletin the weekly average amount of notes issued and the specie
reserve in order to maintain public confidence. And this limitation ofthe fiduciaryissue was raised to 85 million in May 1890 and to 120 million in March 1899. This

amount remained unchanged for thirty years in spite of frequent demands for expansion.

(III)
First ofall, the Bank ofJapan as a central bank was modelled on the experiences

THE CENTRAL BANKING POLICY IN THE meIJI ERA
of advanced countries. The central banks of England, France, and Belgium, notto speak of smaller institutions, have all been private institutions. For instance, aslate as l854 the Banks of Spain, Portugal, England, Sweden, Denmark, Russia andAustria became practically insolvent in consequence of the credit they granted orwere obliged to the StateC`). Under such financial circumstances, our government
authorities increased thier desire to establish a central bank as the focal point of

the banking system.
In those days, there were various opinions on the central bank and manydis-

cussions took place. All central banks have commonly some fundamental functions. We can list them as follows:(a) Purchase and sale of national bond loans can be granted on the security ofnational bonds provided that the period does not excess six months and the amount
does not exceed 80 per cent of the market value ofsecurities deposited. (b) Dis-

counting of bills endorsed by two or more approved persons and payable within
100 days, provided that merchandise attached to the bill are accbptable collateralreplacing one signature. (c) Accepting deposits in the form of Government balances, of the clearing of settlement funds of banks; and of the balances ofbanks

as reserve for payment of deposit (cash reserve). (d) Safe-keeping businesscollection of bills, purchase and sale of bullion, and advances made for bullion.

(e) Issuing Bank Notes.

Moreover, according to the Bank ofJapan Actg21. 0ctober 6, 1882; (a) todiscount or purchase bill or notes issued by the Government, bill of exchange, andother commercial bills as well as similar instruments, (b) to deal in gold and silverbullion, (c) to•make loans on gold and silver coin and bullion, (d) to collect bills

for banks, companies, and merchants who had previously entered into a business
relation with the Bank, (e) to receive sums of money in deposit accounts, and goldand silver coin, precious metals, and documents for safe-keeping, (f) to make advances on current account or Ioans for fixed terms upon the deposit of public loanbonds, bills or notes issued by the Government, and other securities guaranteed by

the Government.
Next, on restriction on business (a) the bank shall not advance money on
mortgage of real property or become an owner thereof, except for its business
requirements, mortgages may be taken over for the purpose of covering doubtfu1
debts, but must be disposed ofwithin one year, (b) the bank shall not own sharesof corporations, (c) the bank shall refrain from all operations which may be regarded
as contrary to national interest.

23

24

MASAHIRO FUJITA

These principles are based the Bank of Japan Act g 22. which is as follows;
the Bank ofJapan shall not engage in lines ofbusiness other than those set forth inarticle 21, and is expressly forbidden to undertake the following operations (a) tomake loans on the security ofreal estate or shares of banks or other companies, (b)to make loans on security ofshares of the Bank or to purchase same, (c) to become ashareholder in industrial companies or to take part, either directly or indirectly,
in industrial enterprises, (d) to become the owner ofreal estate except in so far as
it is necessary for establishing the head oMce and branches of the bank(5).

The Bank ofJapan, originally was formed as ajoint stock company with a capital of 10 million yen, of which 50 per cent was subscribed by the Government andthe rest by the public-Government holdings were transferred afterwards to theImperial Household.(6'And shareholders were limited by the provision of the Bank of Japan Actg7 -g 20: (a) 'Only Japanese are entitled to hold shares, (b) any Japanese desirousof becoming a shareholder must obtain permission of the minister of finance, (c)general meetings of shareholders may be attended only by those who own ten or
more shares for at least sixty days prior to the meeting, (d) each shareholder shallhave one vote for every ten shares, one additional vote for every fifty shares over

and above that number. No one can have more than ten votes as proxy for others.
This regulation differs in principle from that of the Commercial Code, which
stipulates that one share is entitled to one vote. The right of shareholders to the
distribution of dividends is equal to that of shareholds of any ordinary joint-stockcompany. The composition of the board provided for (i) one governor, (ii) one
vice-governor (both of whom were to be appointed by the Government for a termof five years), (iii) four directors selected and nominated by the Government fromtwice as many candidates elected at the general meeting ofshareholders. The term
ofoMce was to be four years, (iv) four to five auditors were to be elected at thegeneral meeting of shareholders for a term of three years. In those days, thisboard was only one institution of the highest administrative policy-making institu-

tions. But, nowadays, the highest policy-making institution is not the board ofgovernor but the policy board of the Bank ofJapan. The largest focus ofrecent
discussions on revisions in the Bank ofJapan is the function of the policy board.

Though we have neither space nor intention here, this problem requires further

examination. So, we shall take it up at a future opportunity.

At the end of 1883, Government inconvertible paper money in circulation
amounted to about only 98 million. But, this condition was equal to the level ofTHE CENTRAL BANKING POLICY IN THE MEIJI ERA
1875, showing a contraction of' approximately 30 per cent in comparison with thepeak of 1878. The Minister of Finance, Prince Matsukata, planned a readjustment of currency, especially, of government inconvertible paper money extraordi-

narily issued. This plan included the establishment of our banking system with
the Bank ofJapan as its peak.
Prince Matsukata's idea(') was that in a healthy society there should be avariety of banks whose functions should be distinct and exclusive; for instance,banks for short-term }oans to facilitate trade and commerce, banks for long-termloans to aid industries, and banks to collect savings from the poorer classes. Al!
the banks should be chartered by the state, and each type should have its peculiar

functions and its especial advantages. Some privileges should be available forbanks of one type and not for banks of another type, since some permit ofa lower
capitalization and some ofa higher. Our government should control the activitiesof all these banks. The execution of this idea determined the financial organization of this country. Prince Matsukata deemed it necessary to initiate a central
institution which was to be strictly and colsely controlled by the Government andwhose m:ssion was to issue convertible notes, to regulate the amount ofcurrency, andto manipulate the fore;gn exchanges in the interest ofthe nation. Prince Matsukata
strongly criticised the national banks system and emphasized the need of a central

organization which, once established, would coordinate all the banking activities
and bring to the same level the rates of interest throughout the country.

The hoarding of precious metals would automatically cease, and credit transactions would be greatly facilitated. The role ofthe ministry offinance in the bank-ing operations would be taken over by the central bank, and the tightness ofmoney,

consequent upon the reasonable collection of taxes, would be remedied. The
most important function would be the withdrawal of inconvertible paper, which
duty would be entrusted to the central bank.
The constitution ofthe Bank ofJapan was drawn up with these objects in view.

As above-mentioned, the circumstances foward the establishment of the Bank

ofJapan were promoted by Prince Matsukata and Marquis Ohkuma, but we may
briefly summarize these causes as; (a) the government needed a central institution

in order to handle the treasury accounts wh;ch could be utilized in accumulating
species, (b) it needed an organ, and a sole organ, to issue notes against specie re-serves, as plural reserves had proved a failure, (c) it required an organlzation totake charge of adjusting and controlling the undersiable currency situation createdby a defective system which had allowed more than a hundred banks of issue (na-25

MASAHIRO FUJITA

astional banks were over established in those days). It was seen to be futile to expect
the national banks to serve the public interests at their own expense, as experience

showed that these banks increased or reduced the amount of their notes according
to their own business requirement; and the volume of currency in circulation fluct-uated irrespective ot the market's actual demand for currency. Moreover, in view
ofthe fact that national banks could earn greater profits by expanding their paperissue, they theretore induced the industrialists to form companies and financed themalmost recklessly. And the national Bank Act made it possible for the banks tolend money on real estate security: as a consequence, a considerable amount ofbank funds was frozen. Such being the situation it was absolutely necessary towithdraw note-issuing privileges from the national banks and to concentrate thebusiness in a single central organization, so that the money market and the currency

situation might be effectively adjusted and controlled. Coincident with such asituation in this country, there was a pronounced tendency in European countries
towards a unification of note-issuing systems, (d) the national banks and ordinarybanks in those days operated their business quite independently without any corre-

lation. This caused an undue strain on the money market at one time and excessive

ease at another. Such a development reacted detrimentally on the general monetary situation as a whole. Therefore the need for a central bank was sorely felt inorder to providea special source for ways and means, and to supply funds liberally

and at low interest for the sound development of banking and other undertakings,(e) in time of financial panic, which Japan had already experienced, the existenceof a central bank to provide a liberal supply of funds to tide over the crisis was felt

to be imperative.

(IV)
Nowadays the lack of a central bank is rare and exceptional in any ad-vanced country. Moreover, even most underdeveloped countries have central
banks in some forms which are adapted to domestie economic and politicalsituations.

In civi!ized countries with a large volume of foreign trade the idea of a statebank has been discarded, but on the other hand if this idea is given up precaution

should be taken to prevent a private bank from degenerating into a purely private

concern for the interests of a particular groups. Government supervision mustbe given, but limited of course to general supervision, and must never tend to sub-ordinate the banking organization to any policy of promoting unsound finance.

THE CENTRAL BANKING POLICY IN THE MEIJI ERA

27

It was owing to this fear that the Bank ofJapan, although in structure a private

concern, was rendered an oMcial institution subject to rigorous government
control.

The right of issuing paper money is one of the most fundamental and important proper characteristics by which a central bank is especially distinguished fromordinary banks.
The second characteristic is that it should perform as a banker's bank; itfollows then that this bank should place as much capital as possible in the hands

ofordinary banks. Yet it does not mean that the bank should have nothing to
do with the public directly; for it can open deposit accounts to all and with certain

reservations, do usual banking business. The third characteristic of a central
bank is to provide an ethcient central control for the credit of the country.

Another characteristic of a central bank is to fu11y perform the main function
Table 2. The Development Process of the Business of the Bank ofJapan
Year

ment

rota]

depositgeneral govern-

total

deposit

loan

loan

1, 6183, 60734 624 22 OOO,'

paid-up reserve general govern-(adadvance vance)

ment

amountof bank
note(fund)

deposit
1, 9891894

10 OOO 6, 88'
10 OOO 7, 250

1895

22, 500

8, 350l, 981

1896

22, 500

8, 8502, 221

193, 709 195, 930

l898130, 378 18e 337
4, 715 66, 906 69 878 63 500'''
93 640 77, OOO 91 486 258, 084 198, 314''
22, 500 10 550 4, 809 74, 443 79 252 104, 973 28 831 63, 827 202, 195 226, 229'',
30, OOO 12,320 2, 088 27, O06 29 094 84, 376 20 OOO22, 967 133 874 197, 400

899

30 OOO 13, 320

5, 42370 892 76, 315 121 098 20 ooO 48, 350 195, 235 250 562

1893

1897

1900
1901

capital',
30 OOO 14 600''
so, ooo15, 700

deposit

1,722 3, 192 4, 914 36, 602''

2, 278 33, 400
3, 141''50, OOO 26, 023 132, 121 232 094

19 450 50, 722

43 600 27, 777 122 254 232, 921

87, 385

22 OOO33, 130 142, 516 385, 589'

30, OOO 17, 150

3, 917 l, 5533

1907

1908
1909

l910
1911

1912
1913
1914

'
'

66, OOO 27, O16 144, 943 214, 097

1903

1906

'

54 603'4, 287 16, 316 20, 603

19ou

'

21 839 24, 979 53, 677

30 Ooo 16, 600

1905

'
'

'

74, 102 149, 814

35 678 109, 052 34, OOO 36, 437 182 520 228 570

1902

'

37, 500

1ssue

56, 624 148 663

'

'

'
'
,
30 Ooo 17, 600 12 425 41 468 53 893 79, 317 116 586 27, 401 223, 305 286, 626
'
'
'
'
'
30, OOO 18 800 14, 025 459, 024 473 050 119, 233 70, OOO 58, 823 248 056 312, 791'''
30, OOO 20, 100
6, 288 416 443 422, 731 115, 575 22, OOO 29 Otll 166, 616 341 766'',
30, OOO 21, 500
8, O03 490, 714 498 718 135, 949 22, OOO 20, 580 178 528 369, 984''
30, OOO 23, 5oo
7, 993 223 236 231, 229 85 515 22, OOO 20 803 128, 318 352, 734','
30, OOO 25 500 5, 633 209, 982 215 615 49, 551 22, OOO 20 391 91 942 552 763
'
'
'
'
'
37, 5oo 26, 56
9, 333 268 817 278 149 l12, 118 30 800 27, 047 I69 965 401 625
'
'
'
'
'
37 500 27, 040 10 179 121 323 131 501 142 298 47, 660 23 601 213, 559 433, 399
,
'
'
'
'
'
37, 5oo 27, 660
6, 149 85 704 91 853 165, 340 26, 080 27, 430 218, 850 448, 922
'
'
28,
280
37, 5oo4, 959 113,276 118 235 124, 430 22 Ooo 32 Otl8 178, 478 426, 389'''
37, 500

29 205'15, 441 1OO, 214 115, 654

gg

MASAHIRO FUJITAof an international financial mechanism. Besides, an important characteristic
ofa central bank is that it should be the only issue bank and should lend only as alast resort. The latter, in other words, implies a banker's bank,

However, our national banks and ordinary banks were not able to develop
and extend their function as commercial banks because ofthe limitation of banks ofunderdeveloped countries.
From the early Meiji Era, our national banks and ordinary banks have grownas industrial banks rathcr than as commercial banks. Similarily, the Bank ofJapan, functioned not merely as a bankers' bank, but also had the character of anindustrial bank by giving long-term credit to national banks. Such a tendency
became very clear as the foundation for the return of the collateral system in thecase ofthe panic of 1890. We can consider the main features of the central bank(the Bank ofJapan) in those days to be an industrial financial insititution and over-seas financial institution. Neverthless, the fundamental function of the Bank ofJapan was that it would be an issuing bank, Now, our country is going to develop
from a so-called underdeveloped country to an advanced country in the true sense,

so our economic and financial system must wholly adapt to such trends.
Note.

(1) M. Yamada, Nihon Shihonshugi Bunseki ("Analysis of theJapanese Capitalism").
(2) K. Ono, Inflation in the early era of Melji, Kobe University Economic Review, 2. 1956. pp.

93-100.
(3) H. Shinjo, History of Yen-Its Developments in theJapanese Economy (1), Kobe Economic& Business Review 5, 1958, pp. 12-16.
(4) T. Akashi and N. Suzuki, History of Money and Banking in Japan, 1957. pp.82-100.
(5) T. Yoshino, Treatise on the Successive Governor of the Bank ofJapan, 1957.
(6) T. Yoshino, A study on Our Banking system. 1952.
(7) The Meiji Zaisei-shi (History ofFinance in the Meiji Era), ed. by the Dept. of Finance, Vol.
14. p. 38.

ECONOMIC GROWTH, BALANCE OF

PAYMENT AND CAPITAL MOVEMENT
Hikoji KATANo

O. I. In this article, I shall fu11y explain the necessary conditions for the equili-

brium growths in open economy. In section 1, I shall analyse situations in which

capitalists in each country act to make productivity correspond to effective
demands. And in section 2, I shall deal with ones in which they closely cooperate
to make productivity correspond to effective demands, and to equalize the balanceof trade.

O. 2. Assumptions and notations.
World consists of two countries (country 1 and country 2).

Each country produces a gross product Xi (i= 1,2) according to the normal
operation of constant capital Ki. There is the following relation between them,(O. 2. 1) aiKi==Xi, i=1, 2.
A gross demand for home product consists of compensation demand, Iaborer's

consumption demand, capitalist's consumption demand and new investment
demand for home product and export.
Di == Z,d + Mllid + c,dR, + I,d + E,

Import consists of demand for foreign products.
Mi = 2Ii. + Miri. + ci.Ri + Ii.

Therefore, compensation demand Zi, laborer's consumption Wi, capitalist's
consumption ciRi and new investment Ii are

icli=,z,d+c,., Mir,=M,T,d+w,.

ciRi=cidRi+ci.Ri, Ii=Iid+Ii.
Therefore, gross demand is

D,=Z,+Mil,+c,R,+I,+E,-M,.
Viewing gross demand from another angle, it consists of compensation Zi , wage

29

HIKOJI KATANO

30

Wi and profit Ri.

D,==:Z,+ld71,+R,
From the above-mentioned two relations, I have(O. 2. 2) Ii=,iRi+Mi-Ei, si=1-ci•
There are constant relations between normal product Xi and compensation Zi andbetween Xi and wage Wi,(O. 2. 3) ,Zi=piaiXi, V,Vi==zviTiXi,
where Pi stands for price of Xi, ai fbr quantity needed for production of a unitof Xi, wi for money wage per unit working hour, and Ti for working hour needed
for production of a unit of Xi.

There is a constant relation between gross demand Di and import Mi ,(O. 2. 4) M,=i,D,
Bi stands for balance of trade,(O. 2, 5) B,=E,-M,
Ui stands for difference between normal product and gross demand,(O. 2. 6) U,=p,X,-D,
New investment increases constant capital in the next period,(O. 2. 7) I,=liK,In the following argument, I use the model (O. 2. 1).v(O. 2. 7).

O. 3. For convenience in the following argument, I will clarify the needed rate of
growth for the situation in which productivity corresponds to effective demand andthe balance of trade is zero in each country respectively.

In model (O. 2. 1),--v(O. 2. 7), I analyse the time-path of constant capital Ki
subject to(O. 3. 1) Ui==O and Mi=Ei=O.
The time-path is(O. 3. 2) Ki"(t)=(1+siaiai)'Ki(O),or(O. 3. 3) Ii"(t)=siaiaiKi"(t),whereai=Pi-Piai-wiTi,
and si and aiai stand for capitalists' rate ofaccumulation and rate ofprofit per unit

ofconstant capital respectively. Therefore, new investments by normal accumulations in each country are needed and are suMcient for the maintenance of the situa-tion in which productivity corresponds to effective demand and the balance oftrade is zero.

ECONOMIC GROWTH, BALANCE OF PAYMENT AND CAPITAL MOVEMENT 31
Now, in this article, I will always assume(o. 3. 4) siaiai2s2a2a2•
Argument for the inverse case may be clarified in the same way as in (O. 3. 4).

1. In this section. I will assume that capitalists in both countries are uncooperative. In this case, what kind of situation do they expect to attain?

In any country, capitalists are anxious for equilibrium between productivity

and effective demand. For capitalists as such, it may not be matter whether thebalance of trade is zero or not, though equilibrium between productivity andeffective demand causes inequality in the balance of trade; they can not be directly
affected by this inequality.

Now, in this section, I shall investigate whether the equilibrium situation

between productivity and effective demand can be maintained or not so long as
the other conditions do not change.
In model (O. 2. 1)•-b. (O. 2. 7), I analyse a time-path ofconstant capital subject to(1. 1) U,=O, i=1, 2.
The time-path is(1. 2) Ki(t)-l {(ui-ai)aS+(ai-u-)uS}Ki(O),
u+-um

where
ai=1+siaiai, bi=iiai)
u+ ==: •-S-- { (ai+bi + a2 + b2)(1. 3. a)+'v'(a,+b,+a,+b,)2-4[(a,+b,)(a,+b,)-b,b2]}(1. 3. b)u-==-

2-1 {(ai+bi+a2+b2)-V(a,+b,+a,+b,)2-4[(a,+b,)(a,+b,)-b,b,]}And, when the initial balance of trade equals zero,(1. 4. a) B,(t)- Mi(O) (ut-ug)(a,-a,)k.O,
u+-u(1. 4. b) B, (t) - M2 (O) (ul-u`.) (a,- a,) r<. O•

u+-u- -This means that, in a situation in which productivity corresponds to effective
demand in each country, the balance of trade is positive for a country with a higher

rate of growth and negative for a country with a lower rate.

Then I shall investigate how much new investments must be projected at every
period in order to maintain the situation.

HIKOJI KATANO

32
From (1. 2) I haveut -"2 (u. . a,) (ai -u-) Ki (O),

(1. 5) Ii(t)=siaiaiKi(t)+u+-u.

where the second item on the right side is positive for country1 and negative forcountry 2, because(u+-ai)(ai-u-)21:O,(1. 6) for a2;il;ar(u+ - a2) (a2 - u- ) $.O,

This means that a new investment in country 1 cannot be supported by home savings
alone and in country 2 there is an over-supply of home savings.
These are assured by the following relations. From (O. 3. 2) and (1. 2) I haveK, (t) - K,*(t)210.

(1. 7)
K, (t) - K,*(t) =<-.O.

This means that country 1 grows at a higher rate than siaiai and it goes inversely

for country 2. Therefore, new investments in country 1 are needed more than at
the rate ofsiaiai, and the inverse is true for country 2.

As shown by (1. 5), lack of capital is constant in country 1 and in excess

for country 2, in order to grow maintaining a situation in which productivity
corresponds to effective demand in each country. It causes naturally capital
movement from country 2 to l.
Now, as shown by (1. 4), the balance of trade in country 1 is positive andnegative for country 2. Therefore, country 2 can compensate her debit on abalance oftrade by her capital transfer to country 1. However, to what extent is it
possible to compensate? To answer this question, I have, from (1. 4) and (1, 5),(l. 8) Ii(t)-siaiaiKli(t)=Bi(t).
This means that a debit on a balance of trade can be compensated completely bycapital transfer. Therefore, I can see a constant equality on a balance ofpayment.

As I have shown, in both countries, the equilibrium growth between productivity and effective demand is, ceteris papibus, always possible. However, in thiscase, the balance of trade is always positive for country 1 and negative for country

2. And this inequality can be compensated for by the capital transfer.

2. In this section, I assume a situation in which there is not on!y an equality
between productivity and effective demand but also an equality on balance oftradeowing to capitalist's international cooperation of economy.

33
OF PAYMENTBALANCE
ANDCAPrTALMOVEMENTECONOMIC GROWTH,
In model (O. 2. 1)•-v(O. 2. 7), I analyse a time-path ofconstant capital subject to(2. 1) U,=O, B,-O.
This condition means that productivity corresponding to effective demand andbalance of trade equals zero. The time-path is

Slalol+s2a2o21)tKi(O)(2. 2) K,(t) =-<1+
1+lor(2. 3) I,(t) .. Siaiail++Sl2a2a21 .K,(t)where. l= eiai,
K2(t)==IK,(t),t2a2l means an equilibrium ratio between constant capitals in both countries. Therefore, the above-mentioned equilibrium rate ofgrowth is a weighted mean of national

equilibrium rate of growth (siaioi); the weight is that equilibrium ratio ofconstant capital.

To grow maintaining a situation in which productivity corresponds to effective

demand and the balance of trade is equalized, new investments must be projectedby the amount of (2. 3). NowIcan rewrite (2. 3) as follows:

al-K,(t)Ii (t) = siaioiKi (t)1+l(2. 3*)I2 (t) == s2a2o2K2 (t) + 1 fl K2 (t) ,where(2. 4) a==siaiai-s2a2a22-O
This clarifies the following matter. In country 2, there must be invested not onlysavings from profits in country 1 but also by capital transfer from country 1 to 2.

These are assured by the following relations. I is always positive, andsiaiai+s2a2a21

slaio12}i: 1+l ---2s2a2a2•
Therefore, I haveK, (t) - K,* (t) SO,(2. 5)

K,(t)-K,*(t)LLO.
This means that country 1 grows at a lower rate than siaiai and it is inverse forcountry 2. Therefore, new investments in country1 are smaller than the rate ofsiaiai, and the inverse is true for country 2.

As shown in (2. 3*), to grow maintaining a situation in which productivity
corresponds to effective demand and the balance of trade equals zero, there areHIKOJI KATANO

34

always excess-capital for country1 and lack ofcapital for country 2. Therefore,
there may naturally be capital transfer from country l to 2. But, in this case, as

the balance of trade is always equalized, capital transfer in itself must be done

independently. This capital transfer takes the form of long loans or donations.
(In this article, I shall not touch on donations). In order to lend according to thecapitalist's rule, the rate of profit in country 1 must be lower than in country 2, andthe capital of country 1 goes to work in a foreign country at a higher rate of profit;(2. 6) aiai<a2a2
However, when the rate ofprofit in country 1 is higher than in country 2, how does

this happen?

(2. 7) aiai2i:a2a2•
In this case, it can not be possible to transfer capital from country1 to 2. In sucha case, for the achievement ofa common aim by capitalists in both countries so that
productivity corresponds to effective demand and the balance of trade equals zero,
capital in country 1 must be transferred to country 2 against the capitalist's rule.

So far, I have assumed that a constant capital in both countries fiIIs the equili-

brium ratio I needed for equilibrium growth. Now I shall investigate a situationin which constant capital in both countries does not fi11 the equilibrium ratio.

In order to correlate productivity to effective demand and to equalize balanceof trade, economy must grow at the equilibrium rate of (2. 2). To maintain theequilibrium rate of growth, constant capital in both countries must keep the equili-

brium ratio. Therefore, when constant capital in both countries does not fiII theequilibrium ratio, any adjustment for keeping the equilibrium ratio is needed.

Now, to clarify this problem, I investigated needed new investments by whichconstant capital in both countries can be kept for equilibrium ratio, though thepreceding constant capital in both countries does not keep equilibrium ratio. The
new investment can be seen by solving the following simultaneous equations,K, (t) + l, (t) =l(K, (t) + 1 , (t))(2. 8)I, (t) + I, (t) == s,R, (t) + s,R, (t) •This isI,(t)= Siaiail++Sl2a2a21 •K,(t)+(l,-l) 1 +IStal2a2 •K,(t)(2. 9)
I,(t)= SiaiOil++Sl2a2a21 •'K,(t)-(lt-l) 1(llf)ita,i •K,(t)where l' is a ratio of constant capital between both countries in an unequilibrium

OF PAYMENTBALANCEECONOMIC GROWTH,
ANDCAPITALMOVEMENT 35--

sltuatlon,

K, (t- 1) = l'K, (t. 1).
In this case, in addition to new investments at equilibrium rate of growths, there

may be added supplementary investments shown by the second item on the rightside. For capital transfer shown by (2. 3*), ifl'<l, capital transfer as a whole isweighted, and if l'>l, the inverse goes.

However, there may accrue a singular matter in this case. In.(2. 3*), demandfor (by country 2) and supply of (by country l) capital transfer always corresponds.

And if there is a possibility for capital transfer, equilibrium growth is always
possible. But, in the case of (1. 8), the absolute value of the second item on theright side is not always equal to each other. Therefore, in this case, if there is apossibility of capital transfer, demand for and supply of capital are not always

equal, and equilibrium growth becomes impossible.

As I have shown, to grow maintaining a situation in which productivity
corresponds to effective demand and balance of trade equals zero, there must be
constant equilibrium ratio between constant capitals in both countries. And thesemust always be available for monolateral loans, though equilibrium growth ispossible.

3. Last, I shall show a supplementary explanation comparing the abovementioned two situations.

In the situation in which equilibrium growth between productivity andeffective demand are kept, balance of payment is always equalized by cancellingthe balance of trade for balance of capital with each other. On the other hand,in the situation in which growth can be kept maintaining equalities between
productivity and effective demand and between export and import, monolateral!oan of capital is needed. Therefore, monolateral increase of credit on. capital

account in balance of payment results. Judging from the above subject, it may
be seen that the first case (laissez faire) is more reasonable than the second case(international cooperation ofeconomy). However, the rate ofgrowth in country 1
is larger than the rate of growth in country 2, and, as time goes by, the economic

activity level in country1 becomes larger thah that in cbuntry'2. And the diffe-

rence between the strong and the weak or between the rich and the poor becoMes
more and more conspicious. (I do not argue to judge whether it is right or not).

Comparing the second situation with the first one, I can see that in the second
situation the rate ofgrowth is equal in both countries. And in the second situation

HIKOJI KATANO

ss

there may not be an accumulated difference as in the first situation. This is justthe aim ofinternational cooperation of economy.

, I have shown the economic consequences of the first and second situations.
However, I can not treat the whole feature. I shall investigate the entire at somelater date.

4. Appendices.
4. 1. Proof of (1. 2).
From the model (O. 2. !.)•-v(O. 2. 7), if

ui == O,then

Ii=siRi+Mli-Ei.
From this,]Ki (t) =: siaiaiKi (t) + iiaiKi (t) - Ei (t)The above-mentioned equation is changed its form into the following
K, (t + l) - (a,+b,) K, (t) +b,K, (t) = O
K, (.t + 1) - (a, +b,) K, (t) +b,K, (t) =O

ai=l+siai6i, bi=iioi.
Therefore

Ki(t+2)-(a,+b,+a2+b,)Ki(t+1)+[(a,+b,)(a2+b,)-b,b,]Ki(t)==O•
From this equation, I can find the time-path of constant capital, namely, .

Ki (t) = u.!,- ((u+-ai)u!+ (ai-u-)u9)Ki(O),where u+ and u- are characteristic roots, (u+>ec-). And u are all real, therefore,time-path Ki(t) is steady and not cyclica!,

4. 2. Proof of (1. 6)(1. 1) sign (u+-a,)u+==-5-[(ai+bi+a2+b2)+1/(a,+b,+a,+b,)2-4[(a,+b,)(a,+b2)Therefore

2(u+-a,)=(A-2a,)+1/A2-4B
where

A= ai+bi+a2+b2
B= (a,+b,) (a2+b2)-bib2

A2-4B>Ob,b,] ]

37
ECONOMIC GROWTH, BALANaE OF PAYMENT AND CAPITAL MOVEMENT(a) case of A-2a,kO,
u+-a,>O•(b) case of A-2a,<O
2(u+-a,)=VA2.4B-(2ai-A)l}IO, for ail}ia2•
Therefore' u+-ai21:O(1. 2) sign (u.--a,)1
U-=-2-[(ai+bi+a2+b2)- 1/ (a,+b, +a, +b,)2-4[(a,+b,) (a, +b,) -b,b,] ]In the same way as for (1. I)

2(u--a,)=(A-2a,)-1/A2-4B(a) case of A-2a,>O
2(u.-a,)=(A-2a,)-VA2-4Bt.-...O for a,-2a2
Therefore
u--a,=<.O(b) case of A-2a,S.O

u--a,<O
From (1. 1) and (I. 2),Ihave(u+-a,)(a,-u-);lll;O for a,Z.a2(2. 1) sign (u.-a,)2(u+-a2) ::= (A-2a,) + 1/A2 -4BL
In this case, a relation

A-2a2 =(a,-a2)+b,+b2>O, for ai;}.IHa2
isalwayseffected. Therefore,

u+-a2>O
(2. 2) sign (a.-a,)2 (u- - a2) :- (A - 2a2) - 1/A2 - 4B
In this case, I have always

A-2a2>O, for a,)a2,
therefore2(u--a,)=(A-2a2)-1/A2-4B).O for a,l}lla2•
So that,u--a22:O, for aJ;lla2•
From (2. 1) and (2. 2),Ihave(u+-a2)((a2-u-).tx/...O, for al.>=,a2

38 HIKOJI KATANO
4. 3. Proofof(1. 7)

K,(t) - 1-[(u+-ai)u9+(ai-ut-)]Ki(O)u+-u-

Ki* (t) - at Ki (O)From these two relations, I haveki(t)-Ki(t)-Ki"(t)-[a2 - {I:t-" ai+u+u-• :I: )Ki(O)iO, for aiiaj, i, .7'=I. 2, i-=,V-v'.

According to mathematical induction, 'k,(1)-Oki(2)=(u+-ai)(ai-u-)iO, for a,iaj.

Now, whenki(n)iO, for aiE-ai,
I haveki(n+1)==a,k,(n)+ Ul-"n- (u.-ai)(ai-u-)l--o, for aiia,•.

u--ur
Therefore, for all positive t, I haveki(t)EO, for ai:-;{:!aj.
So that,

K, (t) - K,* (t)ZO,

K,(t)-K,*(t)=<.O.
4. 4. Proof of (1. 8).
Ii (t) - siaioiKi (t) - Bi (t):::: :,i: (u+-ai)(ai-u-)Ki(O)- :II:: •(ai-aj)Mi(O)ul-u!'Ki(O)[(u+-ai)(ai-u-)-bi(ai-a,•)]= u..u==u9-utu.-u- 'Ki(O)[-af +(u++um)ai-u+u--bi,(ai-aj)]+ ul-ut-- er.-uH • Ki (O) [- a? + (ai + ai + bi + bj)ai- (ai + bi) (ai + b,•) -F bi bi - bi(ai - ai)] =O

Therefore I have
Ii (t) - siai6iKi (t) = Bi (t) .

4. 5. Proof of (2. 2)
In model (O. 2. 1)--(O. 2. 7),(4r. 5. 1) Ui-O, i=1• 2,
is the same as

ECONOMIC GROWTH, BALANCE OF PAYMENT AND CAPITAL MOVEMENT 39

EU,=O

l:
and

Ui==:O, i=1 or 2.
From the former I have

(4. 5. 2) .E'Ii=2siRi,and from the latter(4. 5. 3) Di=piXi, i=lor 2.
However, I have
(4. 5. 4) B,-O, i,=:=1. 2.
For (4. 5. 3) and (4. 5. 4), since

Di=a-+Mili+.iR+Ii (for Bi=O)= Cdi + Wdi+ .d,R, + Idi+ M,= Zdi + Mld, + .d,R, + Idi + Ei =piX,,

these two conditions are equivalent. Therefore one of them can be eliminated,
And conditions (5. 4. 1) and (4. 5. 4) are equivalent for (4. 5. 2) and(4. 5. 4).

Now from (4. 5. 4),I have
(4. 5. 5) K,(t)-IK,(t), l.., eiai.

z2a2

And from (4. 5. 2) and (4. 5. 5),Ihave(4. 5. 6) dK,(t)= Siaiail++Sl2a2021.K,(t).
So that(4. 5. 7) K,(t)=(1+ Siaiail++Sl2a2a21 )`K,(o).

WORLD TRADE AND JAPAN'SEXPORT
1953-1957

Fukuo KAwATA(I)
The purpose of this article is to make an analysis of the recent world trade

structure and to examine the position ofJapan in the network of world trade. At
the beginning, we shall classify the world trading countries into four groups, that is,(1) western industrial countries, (2) non-industrial countries, (3) socialist countries,and (4) Japan. In the first group are included the United States, Canada, theUnited Kingdom, and Continental Western Europe. To the second group belong
Latin America, overseas sterling areas, territories of Continental Western Europe,

non-sterling countries of the Middle and Far East. In the third group arecounted Soviet Russia, eastern European countries and Mainland China.
In l953, export of the Western industrial countries took up 620/. of the total
world export, while that ofnon-industrial countries was 340/e . About three-fifths ofthe exports ofindustrial ceuntries of the West were carried out among themselves,and only less than two-fifths were directed to non-industrial countries.

While two-thirds of the exports from non-industrial countries were directed toindustrial countries of the West, only less than a quarter was absorbed by non-industrial countries themselves.

Socialist countries sold three-fifths of thier products to industrial countriesof the West and two-fifths to non-industrial countries.

Unlike other groups, Japan depended for her exports more on non-industrial
countries than on industrial countries. About 700/o ofJapan's exports were directed
to non-industrial countries, and 300/. to industrial countries.(see Table l-A)
As for imports a similar situation as that for exports prevailed with industrial

41

FUKUO KAWATA

42

Table 1-A. World Trade Structure in 1953
(in billion dollars)

Slii6ff>-(!9s-

III

IV

Total Export

16. 1(23. 0)

O. 7(1. 0)

1. 0(1. 4)

43. 2 (62. 0)

5.7 (8. 2)

O. 6(O. 8)

1. 0(1. 5)

23. 9 (34. 2)

o (o)L3 (2. 0)

I

II

I

25. 4(36. 4)

II

16. 6(24. 4)

III

O. 8 (1. 2)

O. 5 (O. 8)

IV

O.4 (O. 5)

O. 9 (1. 3)

o (o)Tota! Import

43. 2(62. 0)

23. 2(33. 3)

1. 3(1. 8)

L3 (L 8)2. 0(2. 9)

69. 7(1OO. O)

Source: United Nations, Yearbook of Interna.ional Trade Statistics, and Monthly Bulletinof Statistics.
Note: I indicates Western industrial countries
II indicates non-industrial countries
III indicates socialist countries

IV indicates JapanO indicates amount less than O.45 billion dollars.
Figures in parentheses show percentages oÅí the total export (or import)
Trade figures among socialist countries are not available.
One billion means one thousand million in this article.

countries ofthe West and with non-industrial countries as ,well; that is, both ofthem

depended mainly (600/. or 700/.) on industrial countries as sources of imports.
Socialist countries and Japan, however, imported almost equally from industrial
and non-industrial countries. [see Table l-A]

In 1957, the share ofindustrial countries of the West in world export rose to640/., while that of non-industrial countries declined to 300/..

The proportions of exports of Socialist countries and Japan to world exports
increased to 2.8e/, and 2.60/, respectively.

As to the distribution of exports, the pattern in 1957 was almost the same as
in 1953. Industrial countries of the West, non-industrial countries and socialist
countries sold major parts of their products to industrial countries of the West.
In contrast to those countries, Japan exportcd more to non-industrial countires thanto industrial ones. This is the same as in 1953, and it is one of the characteristics ofthe direction ofJapan's export. [see Table 2-B]
As for import, industrial countries of the West and non-industrial countries
depended for more than 600/o oftheir import on industrial countries of the West,while soeialist countries and Japan purchased about half of their imports fromindustrial countries. From Table 2-A and Table 2-B, it is made clear that theflow of commodities from Group I to Group I occupies about 400/. of world trade,while that from Group II to Group II constitutes less than 100/.. This meansTRADEAND JAPAN'S EXPORTWORLD
Table 2-B.

World Trade Structure in

ng

1957

(in bill;on dollars)Niii6ffS!2s-

Total

III

IV

Total Export

22.8(22.5)

1. 6(1. 6)

1. 7(!. 5)

63. 4(64. 0)8.0 (8. 1)

1. 2(1. 2)

1. 5(1. 7)30. 3(30. 6)

O. 1(O. 1)

2. 8(2. 8)

2. 6(2. 6)I

II

I

37. 8(38. 0)

II

19. 6(19. 8)

III

1.5 (1.5)

1. 2 (1. 2)IV

1.0 (1. 0)

1.5 (L6)

O. 1(O. 1)

Import59. 9(60. 4)

33. 0(33, 4)

2. 9(2. 9)

3. 3(3. 3)

99. 1(1oo. O)

Source: See Table 2-A.

that complementarity between industrial nations is larger than that between
non-industrial countries. In addition, geographical proximity between group
I countries is also conducive to the rapid development of their trade.

Trade from Group II to Group I, or from Group I to Group II comes next totrade from Group I to Group I, but when we add them together as trade between
industrial and non-industrial countries, the sum total is larger than trade fromGroup I to Group I. Th{s implies that complementarity between industrial andnon-industrial countries still plays an important role for the growth of their trade.

[see Table 1-A and Table 1-B]

World trade expanded by 29.3 billion dollars between 1953 and 1957. About
700/, of this increment is due to the growth of export of Western industrial nations,and it should be noted that 420/, of the increase of world export is attributed to the

expansion of export among industrial countries of the West themselves. Nonindustrial countries took up only about 22 o/o of the increaese of world export.

The increases ofexport from Group I to Group II and from Group II to GroupI are about 200/. and 100/. respectively, and even when we add them together, thesum total is less than the increase of export from Group I to Group I.
Socialist countries and Japan accounted for 4.60/. and 4.40/. respectively of
the increase of world export.

Therefore, expansion ofworld export between 1953 and l957 is chiefly ascribedto the increase of export by Western industrial nations, and especially the increaseof export among themselves plays a significant part in the growth of world export.
As for the increase of import, the contribution of industrial countries of theWest was 570/., which is fairly less than the percentage in the case ofexport; while
the contribution ol non-industrial countries was 330/o, which is considerably larger

than the ratio in the case of export. Shares of Socialist countries and ofJapan in
the growth of world import were 5.40/, an 4.10/. respectively, and this proportionFUKUO KAWATAeq

is almost the same as in the case ofexport. [see Table 1-C]
Table 1-C. Changes in World Trade Structure from(in billion dollars)

To-' SIFBIIIi)-"'sxr som

I1953 to 1957

IV

Total Export

O. 8(3. 0)

O. 7(2. 4)

20. 2 (69. 8)

O. 7(2. 3)

O. 5(1. 6)

6. 4 (21. 9)

III

II

Å~
I

12. 4(42. 5)

6. 3(21. 4)

II

3. 0(10. 6)

2.3 (7.8)III

O.7 (2. 2)

O.6 (2. 2)IV

O.6 (2. 1)

O.6 (2. 1)

O. 1(O. 2)

Total Import

16. 7(57. 0)

9. 8(33. 5)

1. 6(5. 4)

1.4 (4.6)

O. 1(O. 2)

1. 3 (4. 4)
1. 2(4. 1)

29. 3(100. 0)

Source: See Table 1-A.

(II)
In the preceding section, we find that the expansion of the value of world
export is mainly due to the development of export by industrial countries. Now,
we shall make a survey of the commodity pattern of exports by industrial countries.

The total value of manufactured goods exported by Western industrial countries increased from 26.5 billion to 40.0 billion dollars. Of this increase of 13.5

billion dollars, 44.70/. was held by machinery and transport equipment, 24.40/.
Table 2-A. Export of Manufactures by Western Industrial Countries(in bjllion do]lars)

Amount ofCommodity

1953

1957

Increse(1953-1957)

Share of
Increase(1953-1957)(o/o)

Rate of

Increase(1953-1957)(o/o)

Chemicals

2. 85

4. 66

+ 1. 81

13. 3

Textiles

2. 97

3. 20

+ O. 23

1.7

+63.5
+ 7.7

5. 02

8. 33

+ 3. 31

24. 4

+65.8

10. 65

16. 7e+ 6. 05

44. 7

+56.6

Other
Manufactures

5. 06

7. 21

+ 2. 15

15. 9

+43.0

Total
Manufactures

26. 55

40. 10+13. 55

100, O+58. 0Mgkal?.a.".,S,Xetai}t.,'tin/hsg.'o:,:,;and}Source: Borard of TradeJournal, 18 August 1956 and 8 August 1958.
Note : Western Industrial countries include United Kingdom, Western Germany, France,

Italy, Belgium Luxembourg, Netherlands, Sweden, Switzerland, U.S.A, andCanada,TRADEAND JAPAN'S EXPORT
WORLD

45

by metals and metal manufactures, 13.30/o by chemicals, 15.90/. by "other manufactures," and l.70/o by textiles. [see Table 2-A]

During 1953-1957, Japan's export of manufactured goods increased by 1,5billion dollars from 1.0 billion dollars to 2.5 billion dolars. Ofthis increase 29.50/,

was taken by machinery and transport equipment, 29.00/. by textiles, and 27.90/oby other manufactures, 8.80/o by metals and metal manufactures, and 4.30/o by che-micals. [seeTable2-B]
Table 2-B.

Export of Manufactures' by Japan(in billion dollars)Commodity

1953

1957

Arnount of
Increase(195S-1957)

Share of
Increase(1953-1957)

Rate of
Increase(1953-1957)

(o/o)

(O/e)

Chemicals

o. os

O. 13

+O. 07

4. 3

Textiles

O. 38

O. 81

+O. 43

29. 0

+103
+117

O. 19

O. 32

+O. 14

8. 8

+ 74

O. 19

O. 63

+O. 44

29. 5

+ 234

O. 23

O. 65

+O. 42

27. 9

+183

1. 04

2. 54

+1. 50

1OO. O+144

ltl:`.a.lsf.a.Eg,)T,etai}

IK,".C.h,i".e,llyandl

Equipment r
Other
Manufactures
Total

Manufactures

Source: See Table 2-A.

From Table 2-A and Table 2-B, we learn that in the case of Western industrial
countries, increase of export depends chiefly upon the expansion ot export of machi-

nery and transport equipment, and metals and metal manufactures, while in the caseofJapan, beside machinery and transport equipments, textiles and "other manufactures," (which are chieHy miscellaneous articles) play an important part in the

expansion of her trade.
As for the rate of increase, metals and metal manufactures and chemicals show

higher percentages in the Western industrial countries, while machinery andtransport equipment and "other manufactures`' register larger percentages in thecase ofJapan.

On the average the rate of increase of export during the l953-57 period
was 580/. in the case of the Western industrial countries and 1440/o in the caseof Japan. Japan's export advanced at the rate of more than twice that of WesternFUKUO KAWATA

46

industrial nations.

The commodity composition of the export of manufactures of Western industrial countries is also different from that ofJapan. In the former, machineryand transport equipment and metals and metal manufactures occupy a cons{derable
portion, while in the latter textiles and "other manufactures" have the largest
share, although machinery and transport equipment have become increasingly im-

portant. [see Table 2-C]
Table 2-C. Composition of Export of Manufactures by the WosternIndustrial Nations and Japan(in percentage)Japan

Western Industrial Countries

Commodity
1957

1950

1953

1957

1950

10. 9

10. 7

IL6

2. 3

5. 9

5. 0

15. 0

IL2

8. 0

47. 0

36. 1

32. 3

17. 2

19. 0

20. 8

22. 4

17. 9

12. 7

37. 2

40. 2

41.8

IL3

18. 1

24. 8

Other Manufactures

19.7

19. 1

18. 0

17. 0

22. 0

25. 2

Total Manufactures

100. 0100. 0100. 0100. 0100. 0

1OO. O

Chemicals
Texti1es}}

Metals and Metal
Manufactures

Mach;nery andTransport Equipment

1953

Source: See Table 2-A.

(III)
We shall now proceed to examine the intensity ofJapan's export to various
regions or countries of the world according to the method adopted by Professor
A. J. Brown in his work, "Applied Economics" (pp. 214-215). IfJapan exports tocountry A in proportion to A's total external purchase of goods, then the index ofintensity becomes one, and this is a standard case. For example, ifJapan's export
to country A takes up 1OO/, ofJapan's total export, and country A's import from all
countries ofthe world takes up 1OO/. ofworld total imports (exceptJapan's import),
then the index of intensity of export becomes 1.0. If the former ratio is 150/. andthe latter ratio {s 50/., then the index becomes 3.0; and if the former ratio is 40/,,and the latter ratio is 80/., then the index becomes O.5.

Nowwe shall calculate the index ofJapan's export intensity to various regionsof the world. [see Table 3] From Table 3, we learn that the intensity ofJapan's
export is large with non-industrial countries, and small with Western industrial

AND JAPAN'SEXPORTWORLD TRADE

47

countries. The largest figure is registered with our export to "other areas," which
consists chiefly of South-east Asian countries. This is because of the complementa-

rity of economic structure of these countries with that of Japan and their geo-

graphical proximity to Japan.
It is also noticeable that the intensity of our export to the United States iscomparatively large, although the intensity to European industrial countries is verysmall. In this case, proximity plays an important role.

During the period from 1953 to 1957, the intensity ofJapan's export changed.
The intensity of her export to Western industrial countries, as a whole, increased,
mainly due to the increase ofintensity with the United States and Canada, although

the intensity of trade with European industrial nations remained very low. This
may foretell a promising future in our export to the United States and Canada, solong as trade res[rictions are not strengthened againstJapan.
On the other hand, the intensity ofher export to non-industrial countries declined, mainly because of the decrease of intensity with "other areas," (that is, Southeast Asian countries.)

The intensity ofJapan's export to socialist countries increased considerably

during the period, chiefly through the expansion of trade with mainland China.
[It is, however, regrettable that since May, l958, trade with mainland China has
virtually been suspended on account of political matters.]
Table 3. Index

of Intensity of Japan's

Exportl953

1957

Western Industrial Countries

O. 48

O, 62

United States

1.19

L77

Canada

O. 20

O. 45

OEEC Sterling Area

O. 22

O. 29

Continental OEEC Countries

O. 21

O. 27

Countries

Non-Industrial Countries

2. 10

1. 68

Latin America dollar area

O. 7S

O. 65

Latin America non-dollar area

O. 94

O. 62

Over-seas Sterling Areas

1. 74

2.10

O. 32

O. 22

Othei' Areas*

4. 59

3. 52

Socialist Countries

O. 16

O. 97

Territories of Continental OEECCountries

Source: See Table A-1.
Note: Other Areas include, among others, South-east Asian Countries, such as Indonesia,
Thailand, Philippines, Vietnam, Cambodia and Laos.

FUKUOKAWATAng(IV)
It is generally admitted that complementarity and proximity are main factors
determining the pattern ofinternational trade. In addition to these two factors,

we must mention a third factor, that is, the level of income. The higher thelevel of income, the larger the volume of trade, other things being equal. In
the proximity ofJapan, there are non-industrial countries of Asia whose economic
structure is complementary, and this is becauseJapan's intensity ofexport has beenquite Iarge with them. However most of these Asian countries are Iow-income
countries and their purchasing power is very limited. This retards Japan's further

advance to these markets. It is, therefore, necessary for Japan to cooperate withthese countries in their economic development aiming at raising their level ofmcome.
Moreover, with the progress of their economic, development, these Asian
counnies are changing their composition of imports in favour of capital goods
at the expense of consumer goods, and in the capital goods industries Japan is

not so strong in competition as compared with Western industrial nations, inspite of her proximity to Asian markets.

Japan, therefore, should make every effort to raise the productivity of her

capital goods industry, so that she may become competitive in the export ofcapital goods.

ASPECTOSDAMOBILIDADEALGUNSDEJAPONESESNOBRASIL

Hiroshi

SAITO

Passados cinquenta anos desde a entrada de sua primeira leva, a imigragao
japonesa no Brasil parece ter superado, hoje, as fases iniciais do processo de assimilag5o. Ha evidencias, de carater objetivo, que atestam os passos de sua integra-

gao no contexto social-economico brasileiro bem como de sua adaptagao ao meio-

ambiente do Novo Mundo. E, com o tempo, vio sendo incorporadas na mem6ria
obscura do povo as frases desconfiantes que outro'ra eram lancadas a esse grupo
etnico, o qua] era considerado de carater "misterioso," aparentemente "inassimila-vel" e, mesmo, "insoluvel cemo enx6fre" na expressio famosa do soci61ogo Oliveira

Viana.")
Uma dessas evidencias se refere a maneira como se tem processado a mobili-dade, tanto social como espacial, do grupo japones. Abordamos, neste artigo,
alguns aspectos dessa mobilidade, com maior enfase a sua distribuigao eco16gica
e levando em conta, no sentido temporal, os movimentos no espago.

Populaga"'o e sua distribuigao
Iniciando-se em 1908, a entrada de imigrantes japoneses no Brasil alcancou
ate o ano de 1941 a cifra de 188,615.(2) Depois de uma interrupgtto de dez anos,

a corrente foi retomada, no ap6s-guerra, a partir de 1953. Do total imigrado no
periodo anterior a II Guerra Mundial, que nos interessa mais de perto, pelo menos
por ora, verifica-se a seguinte distribuig5o, dividida em principais periodos:

(1)
(2)

Cf. Oliveira Viana, Raga eAssimilagao. Rio deJaneiro: 1932. p.205.
A cifra baseia-se em estatisticas oficiais doJap"a'o. Ha uma pequena margem de diferenga em
relagAa'o a dados estatisticos brasileiros, fato que, alias, pouco influi ao assunto aqui tratado.

De igual maneira, os dados sobre a entrada dejaponeses no Brasil baseiam-se na mesma fonte.

49

HIROSHISAITO

50

Periodos

No de imigrados

Percentagem

De 1908 a 1914 (7 anos)

15 ,543

8. 24

De 1915 a 1923 (9 anos)

16 ,723

8. 87

De 1942 a 1935 (12 anos)

141 ,732

76.14

De 1936 a 1941 (6 anos)

14 ,617

6. 75

188,615

1OO. OO

Total

As cifras quasi que insignificantes, referentes ao periodo de 1915-16, e resultanteda I Guerra Mundial. A partir de 1924, o governo japones toma medidas positivas com o fim de incrementar a imigragZo para o Brasil, mediante a concessio deauxilios as familias de imigrante e a criagao de orgios especializados; e o resultado

ai esta expresso no decenio 1925-35. 0s seis anos compreendidos entre 1929 e
34, constituem o auge de todo o periodo, pois registram 94,458 imigrantes entrados

nesse espago de tempo, o que corresponde a 50.10/. do total entrado at6 1941.
A diminuigao gradativa a partir de 1935, reflete o efeito do conhecido regime dequotas, adotado em 1933 pelo governo e parlamento brasileiros. Um simples exame
desses algarismos basta para verificar que o grosso da populag5o de origem japonesa
atualmente radicada no Brasil 6 constituido de elementos que imigraram nos Ultimos
tres decGnios e de filhos e netos que deles se originaram.

O movimento demografico do grupojapones constitui um assunto pouco esclarecido. A dificuldade reside, principalmente, na falta de meios seguros e adequadospara averiguar a populagao de fato da ascendenciajaponesa bem como respectivos
indices demograficos, muito embora alguns estudiosos tenham efetuado tentativasde estimativa,(3) Os recenseamentos nacionais do Brasil n5o fornecem dados senao
segundo as nacionalidades-de cuja classificag5o escapam os filhos e netos que sao
brasileiros-u, segundo a c6r da pele, pela qual os amarelos nio japoneses sio in-

cluidos no mesmo grupo. Nem tao pouco os levantamentos levados a efeito por
org5os consulares e entidades oficiosas conseguiram levantar dados de exatidio es-

perada.(`) A dispersao de elementos de origemjaponesa na vastid5o do territorio(3) Ver por exemplo, Kiyoshi Yamamoto, Brasil no jVlikkei'in-Jinko Suikei. Szao Paulo: 1957. Seiichi
Izumi e Hiroshi Saito, "Pesquisa sbbre a aculturagNao dos japoneses no Brasil," Sociologia,

XV, 3 (1953) (Sao Paulo).
(4) No periodo anterior h "ltima guerra, osjaponeses estavam concentrados no interior do Estado
de Sao Paulo e os org5os consulares exerciam influencias ou, mesmo, controle, s6bre as comunidadesjaponesas, tornando essa circunstancia viavel a realizag5o de censos. O mesmo nZo maisacontece no ap6s-guerra : as comunidades japonesas estao muito mais independentes e emancipadas

face as infiuencias dos orgaos governamentais do seu pais de' origem. Alem disso, a remigrag5o em rumo bs cjdades e a Estados vizinhos, torna dificil a tarefa de localizar os mesmos

elementos.

ASPECTOS
DE JAPONESESDAMOBILIDADEALGUNSNOBRASIL

51

brasileiro, fen6meno expressivo nos anos recentes, e a convivencia cada vez mais
intima desses elementos com as populag6es brasileiras tornam extremamente dificil
a semelhante ttarefa. E uma evidencia, aliis, da intensa mobilidade que esta em
curso, objeto de estudo desse artigo,
DistribuigNao, por areas, de japoneses e descendentes no Brasil, em 1932 e 1958.

1958 (**)

1932 (*)'

Areas
Familias

Pessoaso/oFamilias

Passoaso/o

Estado de S5o Pau]o:

1 S5o Paulo (Cidade)" (Sub"rbios)}

ll 57262 32715. 5

951

5, 1373. 9

6, 62440, 907

10. I

529

3, O06

2. 3

2, 96318 256

4. 4

3, 685

O. 9

17. 0

661
819

5 368

1.3

2, 86318 9924. 7'

2 E. F. Central do Brasil

3 E. F. Bragantina

4 C.Mogiana
5 C.Paulista (Tronco)

6 Araraquara-Douradense

3, 552

}

2
'

259

7 E.F. Noroeste do Brasil

8 081

8 Alto Paulista (prolongam.)

1

'

'

9 E.E Sorocabana

2

10 Santos-Juquia e Sul Paulista

1

'

'

Total para o Estado:

21'

Norte do Parana

Sul do Parana

22 681.
'

11 081'42 664
'

'

'

'

8. 8

1, 694,12, 13932. 0

6, 31945.316

IL2

3. 0

474

7, 3705. 57, 56351 955

12. 9

459

13. 7

5, 09032 686

8. 1

958

18 315'
10 031

7.5

3' 27822 038263

120, 285

90. 2

49, 447

313
,669

77. 7

513

3, 478

2. 6

8 740

62 172

15. 4

O.4

3, 735

O.9

2, 191

O. 5

'

'

'
'

'

'

5. 5

101

489

Minas Gerais

356

1, 997

1.5

Goias

121

874

O.7

552
381
287

1, 802

O.5

Mato Grosso531

2, 337L71, 1997, 046

1.8

D. Federal e Estado do Rio

85

389

O.3

951

5 376
'

L3

306

l, 641

1.2

1, 206

6, 411

1.6

147
242

1 868

L4

114

701
525

2 255

13 073

9.8

13 57789 95922. 3

23 518133 358

1oo. O

63 0244036281oo. OAmaz6nia (Amazonas, Para e Ter.
Federais)

Rio Grande do Sul
Outros Estados
Total exclusive o Estado de SSo Paulo'

Total geral

'

'

'

'

'

'

'
'

O. 2
O. 1

(*) Os dados de 1932 foram baseados em levantamentos realizados pelo Consulado
japones em S5o Paulo e por Brasil-Jiho. N6meros referentes a Mogiana incluem
parte da Araraquara e, os da Central, a parte da S. Paulo-Railway.
(**) Os dados sSo resultados do levantamento previo da Comiss5o de Recenseamento
da Co16niaJaponesa, realizado em junho de 1958. Faltam dados parciais referentesa Andradina e uma localidade do Parana, os quais sSo calculados em cerca de 570
familias.

Felizmente, como uma das realizag6es programadas em comemoragao ao cin-

HIROSHI SAITO

52

qUentenario da imigrag5ojaponEsa para o Brasil, foi realizado em 1958 um recensea-

mento geral da co16nia japonesa, do qual se incumbiu uma comiss5o competente

e contando, ainda, com a colaboragao tecnica do IBGE.{5) O quadro demonstra
a distribuigao por regi6es e areas da populagao de origem japonesa, tomando-se
como datas de referencia os anos de 1932e l958. 0s dados referentes a 1958 sao

resultantes do Ievantamento previo procedido pela Comissio de Recenseamento
da Co16niaJaponesa. No tocante a dados de 1932, os mesmos foram baseados nos
censos efetuados pelo Consuladojapones e pela imprensa, em comemoragio, ent5o,

ao vigesimo quinto aniverisario da imigragao. Um ligeiro exame do Quadro
capacita-nos a fazer seguintes comentarios:
1. Aumento exPressivo deJ'aPoneses na cidade de SaNo Paulo e em seus suburbios. Em

1932, residiam em Sao Paulo e arredores apenas 671 familias e 5,137 pessoas, correspondendo a 3.850/. do total presente na data'; em 1958, o mesmo nUmero passou
DistribuigSo, segundo zonas, da populag5o de origem japonesa, no Estado de

S5o Paulo e Paran6 em 1932 e 1958,

,

N

,
Nh

s. Å~1
N NIO

igs591 1engg,,---'Ssx 6 Nx ti %Xs-ev
7 NxN. on isx. OAragatubNa. x Rl/b.Pretos NNN;""XX
SN

Unidade:1,OOOpessoas

Xg. ]E[lls.... OLins Å~ .))Arar'aquarahl... 8 SN. 'h-.-NN oS..s tt 5 XaPnes•Prudente
N-. .. Marilia '" '"P Bauru X

AlN
9s-stNd
"'"s
1N
t--s
--- -F
NN

t'-

N

At'
"-tK
s

,
l

/
'

1

'

1. StioP aulo

(CidadesubUrbios)b,1
2.

E. F. Central do Brasil

3.

E. F. Bragantina

4.

C. Mogiana

5.

C. Paulista (Tronco)

tyt-t

t

t
'
'
t

.ML
e CURITIBA

tt-'/ 10

t

at
.NO
5i
-L
s --Nt!2hs

ks I

oLondrinas'

N..CampinitS ,oOurinhosvan)

1 - op;'SAe PAULO
N
N-.tl
Santos

"

nfZi

rs es

6.

Araraquara-Douradense

7.

E. F. Noroeste do Brasil
Alto Paulista (prolongam.)

8.

9.
10.

E. F. Sorocabana
Santos-Juquia e Sul Paulista(5) A Comiss5o de Recensearnento da Co16nia Japonesa foi instalada nos principios de 1958.
Como a chegada da primeira leva de imigrantes se verificara hi cinquenta anos, no dia 18
de junho de 1908, marcou dia 30 de junho de 1958 como data de referencia. Mobilizarido
milhares de monitores e recenseadores, estendeu suas atividades em todo o territorio nacional,
em estreita cooperagao corn os org5os governamentais brasileiros. Ate agora, sabe-se apenas
dados parciais do levanternento previo, esperando-se para breve a conclusio do trabalho.

53
ALGUNS ASPECTOS DA MOBILIDADE DE JAPONESES NO BRASIL

a 18,196 familias e 103,234 pessoas, o que vale diz.er que cerca de 300/, dejaponeses

e seus filhos residentes em todo o Estado de Sao Paulo ou, cerca de 250/, da mesma
populagao em todo o territorio brasileiro estao concentrados na area metropolitana

de SZo Paulo. Sem dUvida, a tendencia acompanha, at6 certo ponto, o fen6meno
mais amplo que se observa nos anos recentes em S5o Paulo e em outras grandes

cidades: migragao rural-urbana. Acontece que no caso de grupo japones, essa
migrag5o continuou marcante mesmo depois de 1947, quando a tendencia de outros

grupos, nacionais e estrangeiros, se mostrou diminuida.(6) Um ligeiro aumento
observado nas areas compreendidas no Vale do Paraiba atesta, tambem, a mesma
tend6ncia.
,
2. Areas
em eue se observaram mudangas. Durante os dois decenios e meio que

separam as duas datas de referencia, grande nUmero de imigradosjaponeses deslocou-se das zonas cafeeiras antigas, compreendendo as regi6es tributarias das fer-rovias da Mogiana, da Araraquara, da Douradense e da Paulista. A populag5ode origem japonesa presente em 1932 nas referidas areas que ascendia a 25.30/, do
total, decresceu em 1958 para, apenas, 9.00/o.
'
3. Areas
gue continuaram inalteradas. As areas que nao sofreram alterac6es
sensiveis sao as de Santos-Juquia-Sul Paulista, Noroeste e Sorocabana.
t
4. Areas
em gue se observaram aumentos. As regi6es da Alta Paulista-princi-

palmente os municipios localizados ao Oeste de Marilia-e do Norte do Parana
absorveram grande massa de imigrados em movimento. Para as regi6es da Alta
Paulista, a proporg5o de japoneses residentes passou de 5.50/. (i932) para 12.90/,(1958); igualmente a populagao japonGsa do Norte do Parana passou de 2.60/,
para 15.40/o, respectivamente.

5. 0utros Estados. Para outros Estados, a situagao continuou inalterada,
sem mudangas substanciais a nZo ser ligeiro aumento para os Estados do Rio deJaneiro e do Rio Grande do Sul.
' obvio que a mudanga verificada no quadro da distribuig5o regional deEjaponeses e seus descendentes durante o periodo de 1932-58 esta intimamente ligada

a fatores socio-economicos que, por sua vez, condicionaram a direg5o e a natureza

da mobilidade ora em foco.

Formas de estabelecimento
Q;uanto h maneira com que se processou o encaminhamento e a instalagfio inicial de japoneses no Brasil, pode-se estabelecer tres formas principais: a) trabal(6) Vicente Unzer de Almeida e Otavio Texeira Mendes Sob., MigraFno Rural- Urabana. S'a"o Paulo:

1951.

54

HIROSHI SAITO

hadores contratados para as fazendas de caf6 (colonos de cafe);b) imigrantes decolonizag5o agricola (proprietarios) ; e c) aqueles encaminhados as regi6es da Ama-

z6nia. Deixamos de lado, por ora, os imigrados na Amaz6nia, n5o por seu nUmero

relativamente pequeno- apenas 2% do total da populagao de origem japonesa em
1958-mas principalmente por sua evolug5o posterior peculiar que se processara,
quasi que independentemente, dos grupos encaminhados para o Sul do pais.
Desde o seu inicio em 1908, os irnigrantesjaponeses foram encaminhados quasi
que totalmente a lavoura cafeeira do Estado de Sio Paulo. A cafeeicultura paulista

estava, entio, em seu auge de expans5o, buscando, rumo a Oeste, matas virgens eareas ferteis da terra roxa. Os trilhos da Mogiana, da Paulista, da Araraquara,
e logo mais, da Noroeste do Brasil ligavam as fazendas de caf6 i cidade de Sio Paulo,

ent5o em seu espantoso crescimento e, passando por esta, ao porto de Santos; edai ao alem-mar. Em troca do caf5., o porto recebia e os trilhos transportavam em
sentido contrario as levas de imigrantes, vindas de varias nag6es, alem de mercadorias. Fazia anos que a escravidao era extinta; os italianos, tidos como bons colonos

e cuja presenga nas fazendas era estimada, nZo vinham desde 1902, quando o governo do seu pais proibira por certo espago de tempo, a saida de colonos e essa quasiinterrupgao durou ate 1920. Era a vez de os japoneses abastecerem o mercado
deficitario de bragos da lavoura cafeeira. Assim, a introdugio de colonosjaponeses
continuou intensa ate por volta de 1935, quando, por efeito do conhecido regime dequotas, foi restrita a sua entrada no pais. A cafeicultura paulista comegava mostrar

ent5o, primeiros sinais de decadencia, cedendo lentamente seu lugar as zonas pione-

iras quese extendiam ao Norte do Parana.
Mesmo que n5o tivesse sido imposta a restrig5o em l933, a corrente de trabalhadores japoneses n5o teria satisfeito a fome de bragos de grandes cafeicultores.
O que se verificava nas fazendas de caf6 com os colonos japoneses, era uma especie

de fonemeno de sucessaNo: eles nao permaneciam muitos anos e, mal terminado oprazo de contrato, saiam de fazenda em busca de melhores condig6es de vida e,sobretudo, a procura de meios de se tornarem lavradores independentes. Afim decompensar o desfalque, fazendeiros esperavam a chegada de novas levas e assim
o processo se repetia.(')

Ao lado desses contingentes de imigrantes-trabalhadores, entrou, tambem,(7) As queixas de fazendeiros eram frequentes quanto a curta permanencia de colonos japoneses nos
cafezais paulistas. Desde que o imigrante japones era introduzido como braco bustitutivo
da mio de obra escrava, a instabilidade deles ia contra o interesse dos fazendeiros. Neste sentido, o parecer apresentado em 1923 pelo ent'a-o parlamentar JoAaVo de Faria h Comissao de Agricultu;a da Camara e repre$entativo da opini5o da classe de fazendeirQs,

55
ALGUNS ASPECTOS DA MOBILIDADE DE JAPONESES NO BRASIL

consideravel nUmero de imigrantes-proprietarios, ou seja, de colonizag5o agricola.

A entrada desse tipo de imigrante foi particularmente ativa durante o decenio de

1926-36. Eles foram encaminhados em nUcleos previamente planejados e preparados e, onde, desde a chegada, possuiam lotcs de terra a seu disp6r. As empresas decolonizagao, as quais contavam com a participag5o de capital do gov6rnojapones,
adquiriam glebas de terra virgem, proviam-nas de instalag6es necessarias, inclusive

estradas hospitais, escolas, e cediam depois aos imigrantes. O primeiro desses

nUcleos foi instalado no Vale da Ribeira em 1913, desdobrado mais tarde com acriag5o da co16nia de Sete Barras. Outros nUcleos de maior dimens5o foram criados
a partir de 1926: s5o as co16nias de Alianga (Mirandopolis), Tiet6 (Pereira Barreto),

Bastos e Tres Barras (Assai), este no Norte do Parana. Veremos rapidamente,a situag5o desses nUcleos no ano de 1932.(8)Vale da Ribeira de IguaPe. Compreendiam tres nticleos: Katsura, Registro e
Sete Barras. Os dois primeiros criados em 1913 e o Ultimo em 1919. Totalizavam

75,853 hectares. Contavam, em 1932, com 692 familias e 4,378 japoneses e seus
filhos.

Alianga (Mirand6polis). A co16nia esta dividida em varias glebas, adquiridas

parceladamente. O estabelecimento de primeiros imigrantes data de 1926. A
populag5o dejaponeses e seus filhos era, em 1932, de 465 familias e 2,302 pessoas.

t
7riete' (Pereira Barreto),
Area de 47,500 alqueires, datando sua aquisig5o de1928. Em 1932, o nucleo contava com uma populagao de 284 familias instaladas
e 1,627 pessoas de origemjaponesa.
, Area de 13,OOO alqueires, adquirida em 1928. 0 estabelecimento de
Bastos.
colonos verificou-se a partir do ano seguinte. Contava, em 1932, com 804 familias
e 4,028japoneses e seus filhos.

Tres Barras (Assai). Gleba de 12,500 alqueires, de solo extremamente fertil.
Instalado o nucleo em 1932, tem acolhido nos anos seguintes grande numero de pequenos lavradores. Em 1955, Assai contava com 1,315 familias e 10,660 pessoas deorigem japonesa, das quais 403 famflias e 3,457 pessoas residentes no perimetro

urbano.
Destinados, originariamente, a acolher os imigrantes diretamente chegados do

Japio, esses nUcleos receberam tambem grande nUmero de colonos japoneses que
passaram primeiros anos nas fazendas de cafe. Dentre as 2,885 familias que seestabeleceram nos nUcleos de Alianga, Tiete, Bastos e Tres Barras durante o periodo(8) Cf. Brasil-JVenkan (Anuirio do Brasil.) Organizado por Brasil-Jiho (Noticias do Brasil),edig5o comemorativa do 25! aniversirio da imigrag'a'ojaponesa. SEo Paulo: 1933.

HIROSHI SAITO

56

de 1929 a 1940, contavam-se I,777 delas com as experiencias de colono de cafe.

Ascensao social vs. Mudanca de residencia

Os imigrados que foram encaminhados as fazendas de eafe do Estado de Sfio
Paulo, n5o permaneceram muitos anos nos mesmos locais, salvo casos excepcionais.

Regra geral, mal terminando o prazo estipulado no contrato de trabalho que erade dois anos, saiam h cata de outras fazendas onde ofereciam condig6es melhores

ou a procura de outras modalidades de trabalho, como sejam o arrendatario, omeeiro e outros similares. Para esses colonos, os estagios de ascens5o social eram,mais ou menos, os seguintes:a) Permanencia de dois atres anos nos cafezais em obediencia as clausulas de contra-

to firmado entre o fazendeiro eo agente de imigragao; b) ap6s o que procuravam
formas de trabalho mais favoraveis como contratistas para a formagSo de cafeeiros,
meeiros ou arrendatan'os nas culturas de algod5o, cereais e outros durante um periodo

que variava de tres a cinco anos; c) finalmente com os recursos acumulados durante
esse periodo, tornavam-se proprietarios de terras. O tempo dispendido nesse itine-

rario ascendente e variavel por numerosos fatores: doengas no seio de familia, ma

colheita ocasionada pela geada fora de 6poca ou por pragas ou simplesmente uma
baixa brusca de pregos bastavam para que o imigrante retroceda, em prejuizo dos
anos de labor, ao ponto de partida, i.e., ao colono de caf6, para novamente comegar

oitinerario. Paraalguns,essevai-e-vemserepetedurantedezenasdeanos. Obviamente, a mudanga de posig5o ou de modalidade de trablho era acompanhada a deresidencia. Ate que se consiga chegar h posig5o de sitiante e, consequentemente,a certa establidade econ6mica, os imigrados transferem frequentemente sua residencia.

Um levantamento realizado em 1939, junto as familias japonesas residentes nos
municipios tributarios das estradas de ferro Noroeste do Brasil e Alta Paulista, de-monstrou que o nUmero m6dio da mudanga de residencia era de 2.5 vezes durante

11 anos, prazo medio de permanencia no Brasil dessas familias.(9) Uma outra
pesquisa, realizada em 1952,junto a 255 familias-amostras nos Estados de SZo Pauloe Parana, mostrou que cada familia era portadora de experiencia, em media, de
4,8 mudangas.('e) Fato interessante e que a frequencia da mudanga de residencia
(9)

(10)

Shungoro Wako, Bauru-Kannai no Hojin. S'a"o Paulo: 1939.
Seiichi Izumi, "Brasil no Nikkei Colonia", in Imin, T6quio : 1957. p.40. A pesquisa em questaoda qual participou o autor, foi realizada nos anos de 1952 e 53 nas ]ocalidades de SEo Bernardo

de Campo, Mogi das Cruzes, Lins, Santa Cruz do Rio Pardo e Bastos no Estado de Sao Pauloe Assai no Paran6. Ver tambem S. Izumi e H. Saito, "Pesquisa sobre a aculturag'a'o dos japoneses no Brasil", Socielogia, XV, 3 (1953).

57
ALGUNS ASPECTOS DA MOBILIDADE DE JAPONESES NO BRASIL

n5o esta em fungZo do tempo de permanencia no pais, conforme demonstrou a pes-quisa. Isto prova que os imigrantes sZo extremamente moveis nos primeiros dez
anos ap6s chagada ao pais, prazo esse que pode ser considerado como necessariopara a aquisig5o de propriedade agricola ou essencial para atinjir as condig6es equi-valentes de estabilidade em outras formas de trabalho. Depois desse prazo, diminuiconsideravelmente a mobilidade espacial.

Como e facil de se discernir, a frequencia de mudanga de residencia esta
intimamente relacionada com o processo de ascens5o social. O imigrante transfere

sua residencia em busca de melhores status, melhores oportunidades de sucesso.

Cada mudanga no local de residencia corresponde, portanto, a mudanga no seu
status: de simples colono a arrendatario ou meeiro, deste a proprietario. Ou,
ainda, a mudanga de residencia era acompanhada, como muitas vezes acontecia,de uma mudanga de ocupag5o, de lavrador a comerciante, hoteleiro, industriario
ou art{fices,

Para tornar a realidade o seu plano, o imigrante nao mede a distancia fisica
a ser coberta para o novo local de estabelecimento. Longe de sua terra natal e ainda"estranho" na nova terra, esta ele livre de lagos emocionais e sociais que o pren-dessem a uma determinada localidade. Era s6 tratar um caminh5o e com ele transportar sua familia e parcos utensilios trazidos de sua terra. De fato, o imigrante e

impelido a locomover-se, ndo de um municipio a outro, mas muitas vezes, de uma
regiio i outra e mesmo, raramente de um Estado a outro. Nao porque ele 6 n6madeou semi-n6made por indole, como muitos pensam; mas o era por circunstancias.
Na epoca de maior fluxo dejaponeses no Estado de Sao Paulo, as fazendas decaf6 floresciam, ainda, nas zonas latifundiarias, n5o havendo ai terras retalhadas

que acolhessem pequenos agricultores. O imigrante que aspirasse um lavrador
independente mudava de zonas de grandes propriedades para as pioneiras onde seensaiava o regime de loteamento para pequenos lavradores ou para as zonas
chamadas "velhas" onde predominavam uma agricultura de subsistencia, a dos
sitios e sitiantes.

O planalto ocidental do Estado de SSo Paulo estava em plena fase de desbravamento na decada de 1920. As empresas de terras loteavam as enormes glebas
e acolheram, ao lado de urna corrente da populag5o nacional, o grosso desses grupos

imigrados. Ja na d6cada seguinte, de 1930, o Norte do Parana emerge como afrente pioneira, oferecendo grandes possiblidades por sua extensao de terra roxa.
O roteiro do caf6 era tambem, a partir do sec. XX, o itinerario seguido pelo imigrante.(i') E o inicio da cafeicultura por mttos do imigrante fez com que o cafe,

HIROSHISAITO

58

ate entio considerado um produto latifundiario, passasse a ser cultivado tambem empequenas propriedades.

Um outro roteiro, n5o menos importante para acompanhar os passos do imigrantejapones, nas regi6es pioneiras, era o de algodSo. Um novo e extraordinario
surto de "ouro branco" que data por volta de 1930, avassala as diversas regi6es do

Estado durante uns dois IUstros, para depois, esmorecer de seu impeto. A expansZo
rapida da cultura algodoeira foi desbravando, n5o s6 as zonas pioneiras, mas tambem, as areas ate ent5o consideradas pouco pr6prias para o cafe, de preferencia,

de solo arenoso. Das areas abordadas pelo trilho da Alta Paulista surgiram aschamadas "cidades-congumelos", das quais o caso mais conhecido a cidade de Mari-lia. As terras arenosas e de "massape" dos municipios tributarios da Sorocabana
ofereceram ao imigrante condig6es identicas para o cultivo do algod5o. Importantes lavouras de algodao sucederam ao cafe nas zonas colonizadas, ja com sinaisde cansago. Assim parte da Paulista e da Mogiana, zonas tradicionalmente cafeeiras, tornou-se palco da cultura de algodio. Ora, a expansSo da lavoura algodoeiracorrespondejustamente a 6poca em que o grosso de imigrantesjaponeses se achava
em pleno estagio de sua ascensao social, de colono de cafe a arrendatario e meeiro,
destes a proprietario.

Infelizmente nao ha dados numericos; mas sabemos que por volta de 1935
a 1940, numerosos grupos de japoneses se dedicavam a cultura algodoeira em diversas regi6es do Estado como arrendatarios ou contratistas.('2)

Uma outra corrente afluiu em direg5o a municipios proximos i capital do Esta-

do. Embora pr6ximos a centro consumidor, esses municipios estavam relegados
a segundo plano no cenario econ6mico do Estado por se tratar de zona "velha"
e "cansada" sem culturas notaveis, ou ent5o entregues a pratica de uma agriculturade subsistencia t5o tradicional a populag5o cabocla. Eram terras consideradas,

naexpressaoent5ocorrente,como"Terrap'rajapones",ruimeimprestavel. Comose sabe o estabelecimento do imigrante japones nessas areas pr6ximas a Sao
Paulo, marcou o comego de uma nova agricultura, intensiva e diversificada, a qual

(11)

A respeito da expansNao da cultura cafeeira e o movimento demogrifico, consultar: Sergio(12)Milliet, Roteiro do Cafe'e Outros Ensaios, Sao Paulo: 194l. Ver tambem: Pierr Monbeig, Pionnieret Planteurs de SaNo Paulo. Armand Colin, Paris: 1952.
Na epoca, verificaram-se a concentragio dejaponeses nos municipios tais como Avar6, Ivai,

Cerqueira Cesar, Ourinhos, Santa Cruz do Rio Pardo, S5o Pedro do Turvo, Salto Grande,Paraguagu Paulista, Rancharia, Bastos e outros municipios da chamada Alta Sorocabana;
Piratininga, Cabralia, Garga, FernZo Dias, Marilia, Pompeia, Tupan, na Alta Paulista.

59
ALGUNS ASPECTOS DA MOBILIDADE DE JAPONESES NO BRASIL

passou a abastecer as populag6es metropolitanas de Sio Paulo e do
Janeiro.

(13)

Rio de(13)

Os municipios de Mogi das Cruzes, Suzano, Santa Izabel, Juqueri (Mairiporan), Cotia e
Itapecerica sio a]guns desses municipios onde surgiram mais tarde importantes organizag6es
cooperativistas por iniciativa de japones. es. Ver a respeito: Hiroshi Saito, O Cooperativismo
na Regia`'o de Cotia: Estudo de 77ransPlanta.ca-o Culturat. Escola de Sociologia e Politica, S-ao Paulo:

1956.

PROBLEMS OF

EMIGRANT-TRANSPORTATION IN JAPAN

Hiromasa YAMAMoTo

1. UrgentpopulationprobleminJapanandoverseasemigration
As a consequence of World War II Japan lost forty-six per cent of its overseas
territory and had to absorb 5 million people who returned from old colonies, there-

after suffering from a more severe population pressure than before. Japan ranks
third in the world in density of population with 242 persons per square kilometer.

The population density of Japan per hectare of arable land is I7 persons, whichis the highest density rate in the world. Moreover, the census of October, 1955,
indicates that the population growth of Japan will produce 17 million workers in

the next ten years, of which 800,OOO will come into the labor market.(i' These
Tabie 1. Japanese emigirants after the war and immigration countries(at the date ofJuly, 17, 1958)

X YearDestinaEo)fiSxsxss

1952

1953

1954

1955

1956

1957

1958

Total

54

1,480

3, 5242, 6594, 3705, 172

1, 751

19, OIO

18

208
2

647
117

1, 074

1, 5873, 806

23
565
3

57
299
377

352
10
331

1,195

194

BrasilParaguay
Argentina

Dominica

7

Bolivia

87

209

4

15

27

7

668
118
53

3, 514

6, 1687, 4392, 45625 059

United States

118

OthersTotal

54

1, 4983, 741(Source) Department of Migration, Ministry of Foreign Affairs(1) Estimate of Population Research Institute, Ministry of Welfare

61

,

62

HIROMASA YAMAMOTO

are the most urgent problems that Japan must solve.

As a method of solving the population problem, the necessity of overseas
emigration has been keenly recognized. However, the volume ofoverseas emigration of Japan after the war amounted to only 25,059 persons up to July 17, 1958.(2'The total volume of emigration ofJapan during the last seven years was far less incomparison even with that ofthe annual volume ofthe main emigration countries ofEurope.(3) From this fact, it is vitally necessary to reconsider the existing migra-

tion policy and to line up a promotion policy for the purpose of developing theoversears emigration ofJapan. The transportation problem of emigrants, withwhich we are concerned here, is also one of the important matters to be reconsidered.

For it is a well-known fact that suitable transportation facilities for emigrants
with cheap rates are conductive to an enlarged volume of emigration.

2. 0bjects of a policy for emigrant-transportation
The policy of emigrant-transportation has two different purposes. One is toprotect and shelter emigrants during their journey from fraud and persecution sothat they can arrive at their destination with healthy bodies and minds. That
sphere of the policy was very important during the period from the beginning ofoverseas migration to the end of the nineteenth century, but since the beginning of
this century almost all problems ofthat sphere have been solved.(`) It is the same inJapan, too. With the enactment of the Emigrant Protection Act of 1893, ample
measures were provided to protect emigrants. Regarding emigrant transportation,
the law provides a section ofan emigrant-ship, in which emigrants are afforded suffi-

cent protection during their voyage with regard to food, sanitary condition, medicalcare and so on. Accordingly we shall omit that sphere of the policy from ourconsideration.(5)Another sphere of the policy, which is worth our attention at present, is thatof providing proper tansportation facilities for emigrants cheaply. In most cases
emigrants are not wealthy, ifnot poor, so high transportation costs and absence ofproper transportation facilities will disturb the flow of migration. Provisions of(2) DepartmentofMigration,MinistryofForeignAffairs(3) The averaged annual volumes of emigration during seven years from 1946 to 1952 were
158,OOO in Great Britain, 45,OOO in Netherland and 105,OOO in Italy. (Source, U.N. Population
Statistics)(4) CÅí I.L.O., The Migration ofWorkers 1936, p.112
With regard to contents ofpolicy of emigrant transportation, see. O.L.I.; MigratiQn Law andTreaties. Vol. I. 1928. ch.X Transport of Emigrants(5) However, we cannot say that no problem remains to be solved. For example special insurance system for emigrants is desirable to protect their lives and properties ag ainst accidents.

PROBLEMS OF EMIGRANT-TRANSPORTATION IN JAPAN63
transportation facilities with a cheap fare or fare-free are disirable in developing

overseas emigration. But emigrant transportation is handicapped in lts nature
because of the dificulty in finding return passengers or cargoes, and that leads tohigh transportation costs. In addition emigrant-fare has to be kept at a lower level

than that of usual third-class passengers. These conditions are likely to makeernigrant transportation unprofitable. Therefore the government should give someform of assistance to transportation businesses if it wishes to maintain emigranttransportation through private enterprises. Consequently, in relation to the lattcr

sphere ofthe policy, the government must take steps both to reduce the transportfare for emigrants and to assist transport business so as to maintain service.

Hereafter we shall consider the emigrant-transportation policy ofJapan withregard to the latter aspect. And because emigration from Japan in the postwar
period has been concentrated to South American countries, we shall pay attention
to ocean transportation ofemigrants fromJapan to South America.(6)3. Measures to reduce passenger-fare for enigrants
In the earlier stages ofJapanese emigration to South American countries, theGovernment ofJapan did not take any steps to reduce passenger-fares for emigrants,

except for approving the fares charged by transportatlon companies based on the
Emigrnat Protection Act, not to disturb the fiow of migration from fare raising.
During that period Japanese emigrants could travel fare-free through the assistanceof the State of Sao Paulo, Brasil, which provided transportation for agricultural

workers. But the assistance from the State ofSao Paulo ended in I920. Then thegovernment of Japan had to adopt some measures to reduce transportation costs
for emigrants so as to alleviate them of the burden of transportation costs. Mor-eover, as a consequence of the great earthquake ofJapan in 1923 there were many

sufferers who hoped to emigrate. The Government ofJapan decided to provide
earthquake sufferers with passenger fares from Japan to South Ameracan ports.
And afterwards the government enlarged the scope of assistance to all emigrants
for South American countries, and this assistance had been maintained until emig-

ration from Japan stopped because of the outbreak of World War II.
After the war emigration to South American countries reopened, late in 1952.
(6) Before World War II Japanese emigration was also mainly concentrated to South Americancountrie$ but there were manyJapanese scattered in the old colonies, China, South East
Asian countries and the United States. But most of those emigrants, except those to SouthAmerican countries, were short-term emigrants who desired to return home some years later.
In addition, according to the Emigrant Protection Act, only those who emigrated to SouthAmerican countries were regarded as emigrants in the senge that the act prescribed.

64

HIROMASA YAMAMOTO

The government proVided loans to emigrants for passenger-fares instead ofproviding
fare-free services as they did before the war. The object of this loan, however, isrestricted to the passenger fare fromJapan to the terminal port, so travel costs fromthe port to the destination ofsettlement must be borne by the emigrants themselves.

Emigrants had to repay annually same percent of the loan at an annual interest of
O.055 per cent over a period of eight years after a lapse during the first four year

when the loan is not redeemable. In addition there is a discount of \10,200 on
the \140,400 third-class passenger-fare for emigrants between Japan and Santos.
This system ofloans for passenger fares has room for improvement. As for theterms ofrepayment, emigrants in most cases find it dithcult to repay in accordancewith the terms, though the loan has a relatively long period ofrepayment and a low
rate of interest. Because almost all Japanese emigrants are settlers who engage in
agriculture as a family unit, they feel it diMcult to repay loans amounting to 400,OOO-500,OOO yen per family during the period when they are still endeavoring to getsettled and can hardly gain any profit from their harvest. In fact the rate of thecalling-in of loans is under one per centum of the amount to be repayed.(') Therefore it is desirable that the government make easier the terms of the loan, if it is
impossible to provide emigrants with transportation cost as was practiced in prewar
days. And further the cost ofland transportation from the Ianding port to the place

ofsettlement should be included in the object ofthe loan. Because postwar Japanese emigration has increased, the majority settle in inland places far from theports, such as Bolivia and Paraguay, and their Iuggages are bulky and need highfreight costs, whereas most of the prewar Japanese emigrants settled in Brasil andtheir inland transportation costs were borne by receiving firms.(8)4. Measures to assist emigrant transportation firms
Before the war Japanese shipping was developed through powerful governmental assistance, and the business of transporting emigrants was not an exception.

Prewar governmental assistance to emigrant transportation by sea was carried out

through a general shipping policy including route-and shipbuilding-subsidy, notthrough special policies designed to relieve firms from dithculties caused from thepeculiar situations of emigrant transportation, such as low passenger-fares and large

unused space on return voyages.
(7) Research group for International Migration,
Present situations of overseas emigration ofJapan and the trend of emigration policy ofJapan.
Nov. 1958. p.49.
C8) op.cit. pp. 48-50.

65

IN JAPAN
OF EMIGRANT-TRANSPORTATIONPROBLEMSThe JapanlWest coast of South America route via Africa, which became themain route to South America for Japanese emigrants, was opened in 1916 by the
Osaka Shosen Kaisha.`9' This route was designated by the Ministry of Communication in October 1920, consequently, the government afforded the O.S.K. Linea route subsidy based on the Assistance Act for Ocean Routes. With the provisionfrom this subsidy the O.S.K. Line could not only cover the loss caused from the operation ofemigrant vessels, but could also show some gain.
Table II. Effects of Route-Subsidy fov Emigrant-Transportation
before the Seconnd World War (1,OOO yen)Year

Earning

Expenditureloss and gain

net subsidy

1927

4, 8925, 1994, 714

5, 131

1929

5, 166

5, 463

1930

5, 2405, 924l931

4, 623

5, 278

1932

4, 7225, 090

1933

6, 9696, 446

1934

6, 364

6, 201

1935

6, 295

6, 441

1936

6, 6026, 457

- 805
- 417
- 297
- 684
- 656
- 368
523
163
- 146
145

l, 2281928(Source) O.S.K.

net loss and gain
after subsidy

1,229

423
812

1, 3261, 0291, 396712
884

1, 5401, 545

1, 177l,638

2, 161

1, 515

1, 6781,377

1, 231

1, 246

1, 391

Line.

With regard to emigrant vessel construction, the government applied a shipbuilding
subsidy and moreover after 1937 measures to assist in building superior vessels were

begun, therefore the O.S.K. Line could build emigrant vessels at Iow cost. Therefore, we may suppose that the prewar business oftransporting emigrants, being protected by subsidies, suffered little in operating emigrant vessels.

After the World War II circumstances surrounding emigrant-vessel operations
changed. All prewar subsidy policies for shipping were abolished and no emigrant-

vessels survived war damages. Consequently, at the reopening of the Japan/SouthAmerican line to transport emigrants, the government and the O.S.K. Line had toface many diMculties caused by the peculiar situation of emigrant-vessels operations.

(9) The East coast of South America route was opened in 1905 by the Toyo Kisen Kaisha. But
it had Iittle relation with emigrant transportation. Until the opening of the West coast routeby the O.S.K. Line,Japanese emigrants had been carried by foreign vessels or by vessels charte-

red by emigration companies.

HIROMASA YAMAMOTO

osa) Construction ofemigrant vessels
In l951 when overseas emigration attracted public attention in Japan, traderoutes between Japan and South Amcrican countries were maintained both by
Japanese vessels which set sail once every two months and by Dutch vessels which
set sail three times every four months. The carrying capacity of emigrants was
only about ten passengers in the former and 200-300 passengers in the latter. Thus

Japan had to enlarge the carrying capacity so as to develop emigration.

In 1952 the O.S.K. Line placed the Santos-maru, a cargo-passenger liner on
the route via the Panama Canal, and in the following years new vessels including
emigrant-vessels were put on the route. In 1958 aJapanese emigrant-vessels fleet
was organized with five vessels that had been placed on the route, one vessel a month,with the result that they were able to transport 8,700 emigrants annually. How-ever, in comparison with the prewar Japanese emigrant-vessel fieet which wasorganized with 10 vessels transporting 24,OOO passengers in 1934 and 1935`iO'
when Japanese emigration to South America was at its peak, the postwar Japanese
fleet is far smaller in carrying capacity, and consequently, postwar Japanese emigrants have to make use offoreign vessels too.
Table III. Emigrant transportation by different carriers'

O.S.K. Iine
R.I. Iine

1952

1953

1954

1955

1956

1957

54

1, 1733, 5492, 081

3, 8275, 722

o

325

192

1, 432

2, 266

1,709

18
44

8

6, 155

7, 439others
Aircraft

Total

54

1, 4983, 741

3, 513(Source) O.S.K. Line

According to the five-year emigration program formed by the government ofJapan, in 1959 as the first year of the program 1 1,OOO emigrants will settle in SouthAmerican countries, and in the following years they wi!1 be increased to 5,OOO annualy so that the total number ofemigrants in the next five years will amount to 1OO,OOO.

The government points out that for the purpose of carrying out this program successfu11y it is necessary to increase the transporting capactiy of emigrant-vessels and(10) In prewar emigrant transportation the O.S.K. Ljne made vessels on the African line extend
its route temporarily to South America, when the number Of emigrants increased so much that
ordinary emigrant-vessels coutd not carry all of them. The prewar carrying capacity, which
we mention here included those ofvessels which set sail on South American routes temporarily.

IN JAPAN
PROBLEMS OF
EMIGRANT-TRANSPORTATION
to construct six ships, including four special emigrant vessels, during the five years

beginning in l959.(")

While the necessity of emigrant-vessel construction has been recognized,
special measures to facilitate shipbuilding have not been adopted yet. Because
shipping companies in Japan lost their capital accumulation and ships during thewar, the fund needed for shipbuilding has been furnished by loans from financial

funds and from private banks and the burden of the loans and interests has put

pressure upon shipping companies which have been suffering from the declining
trend of freight rates in shipping markets.(i2)However common this phenomenon may be to all shipping companies inJapan,
the burden of loans and interest is more severe on businesses operating emigrantvessels than on others, because in the operation of emigrants-vessels it is more
diMcult to earn profits and in addition, emigrant-vessels are strictly restricted intheir usage. Accordingly the emigrant-vessels building program accompaniedby the five year program of emigration, will place a greater burden on shipping

business that have built and are operating emigrant-vessels. Under present
conditions the diMculties of emigrant transport have no prospect of easing in thenear future, unless the government affords some form of assistance to emigrantvessel construction.

b) DiMculties of emigrant-vessel operation
The transportation ofemigrants has in its nature the tendency to be a one-way

transport of passengers on an outward voyage, and on the return voyage vessels

are compelled to operate with much unused passenger space. In the emigranttransportation of Japan to South American countries the tendency is clearer.(i3)The coeMcient of utilization of third class passenger space by emigrants in the
(11)
(12)

(13)

Department of Migration, Ministry of Foreign Affairs, Five-Year Program for Overseas
Emigration (Data for the fifth Overseas Emigration Council. No. 7.Jan. 1959)
The total shipbuilding cost of five emigrant ships was 7,465.6 million yen, of which 3,869.7
million were financial loans and 3,098 million loans from private banks. The shipping company's capital fund was only 497.8 million yen. (Department of Shipping, Ministry of Transportation, Data relating to Emigrant Ship. p.15) With regard to financial loans for shipbuilding and its effect, see H. Yamamoto, The Recovery Method oftheJapanese Shipping Industry
in Post-War Period (The Kobe Economic & Business Review, No. 2, 1954. pp,89-106)

In the Royal Interocean Line, which also'carries Japanese emigrants to South Americancountries via Africa, the conditions are different from those ofJapanese vessels. For example,
the former lays stress on general travellers via Africa rather than emigrant transportation.
Consequently Dutch vessels have seating capacities for 104 fitst class passengers, 66 for 2ndclass, 84 for tourist class and 179 for third class. In contrastJapanese vessels have room for
902 third class passengers and only 80 for other classes.

67

os HIROMASA YAMAMOTO
post-war period is shown in Table IV. We can easily see that on the return voyage

only ten per cent of the capacity has been utilized. This situation is quite
different from that of Italy which can transport considerable numbers of passengers
on the return voyage also.

Table IV. CoeMcient of Utilization of third class passenger
space in Japanese emigrant vessels (O/.)

outward voyageYearemlgrants agalns[

3rd class passengers

available 3rd classsaeg
aa snSttiavailableseats

inward voyage
all 3rd classall 3rd classpassengers agalnst
available seatspassengerS againsc
available seats

1955

48. 7

21. 5

70. 2

9. 6

1956

76. 9

17. 0

93. 9

9.8

1957

81.8

10. 7

92. 5

7. 9

(Source) O.S.K. LineTaking into consideration the condition mentioned above, postwar Japaneseemigrant-vessels have to be designed not as pure emigrant-passenger boats but as
special passenger boats that have considerable capacity for third class passengers,

and that on the return voyage a large part of the third-class passenger space canbe transformed into cargo space. By such a device of increasing cargoes to beloaded the shipping business intends to cover the loss of operation, caused by theunused capacity on the return voyage. This method should be regarded as
deceitful reflecting the nature of the Japan/South America route. This method
also premises a considerable amount in the fiow of cargoes from South Americancountries to the Far East, including Japan. But this premise seems to beunhealthy. Trade between Japan and South American countries during thepostwar years increased to a greater extent after the opening of trade than during
the prewar period and reached its peak in 1955, but there-after the volume of trade

has been declining.{i`) The decline of trade has been due to inflation, the badbalance ofpayment$ in Brasil and Argentina that are main traders with Japan, andthere is little prospect of the condition becoming better in the near future.

Tariff rates for main cargoes on the route kept pace with the decline involume( 14) Development of trade betweenJapan and Latin American countries was surveyed in "Develop-

ment ofTrade ofJapan" 1956. (Department, Ministry ofTrade and Industry) pp. 452-479.
See also, Ministry of Trade and Industry, White Paper of Trade, 1958, pp,343-377.

PROBLEMS OF EMIGRANT-TRANSPORTATION IN JAPAN69
of trade.('5) Therefore the method designed to get more cargoes for the purposeof covering the Ioss on return voyages has not produced satisfactory results, at least,

at present. According to the calculation of the O.S.K. Line, the operation of emigrant-vessels produced a 400 million yen loss in 1958, so the Line expressed its desire

to be given some form ofassistance or coverage ofloss by the government to alleviate
diMculties in emigrant transportation.(i6)5. Measures to irnprove emigrant transportation
What methods are most effective to overcome the diMculties of emigrants
transportation? We shall examine available measures to improve the situation.
At first we shall call attention to measures improving the earnings of emigrantvessel operation. Lack ofpassenger demand on return voyages is the largest cause
oflosses in the operation of emigrant-vessels. The O.S.K. Line has been endeavoring to collect group-travellers and to catch passengers at intermediate ports, andhas tried to increase the volume ofcargo on return voyages. Because in emigranttransportation it is inevitable in its nature that passenger demands are concentrated

on outward voyages, adequate measures other than those adopted by the O.S.K.
Line can not be found to increase the earnings on return voyages.

However, though it can hardly be expected that trade betweenJapan and SouthAmerican countries will increase in the near future, the government ofJapan should

endeavor to develop trade with them through a conclusion ofa trade agreement and,if possible, make provisions for loans. These will lead not only to an increase of

trade, but also to prosperous conditions on theJapan/South America route where weare concerned. In addition we may suggest an alternative method that emigrant-

vessels change their return courses and come back via Europe. Indeed there isa relatively large flow of passengers from South America to Europe, but from
Europe to the Far East we cannot expect any considerable demand of passengers.
In addistion, considering the increase of additional cost resulting from the changeof route and competition to catch passengers, the alternative method does not necessarily seem hopefu1.

Turning our attention to the space used by passengers on the outward voyage,
the coeMcient ofutilization ofthe third class by emigrants was 81.8 per cent at thehighest, though the coethcient ofutilization by third class passengers including emi(15) Traiff rates in Far East River Plate Brazil Conference shows a declining trend. On inward
voyages the rate of iron-ore was $20 in August 1956, after reaching $23 in June 1957, declining

continuously to $9 in February 1958. 0n outward voyages cargoes in lot are given special
rates, 400/. Iess than the tariff rates.

(16) CÅí H. Emura, Problems of South America Emigrant Route (Kaiji Kenkyu No. 35)

70

HIROMASAYAMAMOTO

grants was over ninety per cent in 1956 and 1957 while in 1955 it was 70.2 per cent.
It is possible and necessary to improve the space to be used by emigrants for available third calss seats and to increase the coeMcient of utilization to nearly 100 per
cent by emigrants and other third class passengers. For that purpose it is necessarythat the government endeavor to send out emigrants as planned, but that has notbeen carried out successfully. There are points to be remedied. For example
4,902 emigrants were sent out by the end ofNovember 1958, while the emigration
program of 1958 expected to send out 10,OOO."') The causes that have prevented
the plans from proceeding smoothly may be sought in circumstances arising in immigration countries, but Japan also has to share in the resposnsiblity of its failure.

In Japan much time has been spent in the procedure of collecting emigrants, so theperiod of advertisement for emigrants has to be restricted to only a month so as toallow emigrants to arrive at their destinations at the proper time for settlement. In

addition previous notices before the collection of emigrants were inadequate. Under such conditions it is diMcult for possible emigrants to make up their minds toemigrate and take necessarymeasures for doing so. In relation to this we should refer also to the fact that postwar Japanese emigrants included those invited by acqua-intances in South American countries other than emigrants sent out in accordancewith the governmental program. There was one year when the emigrants invited
amounted to over a half of the total annual number of emigrants.('8) In sucha case it is possible to conjecture that spontaneous emigration could cover the

failure of the emigration program. However, emigration based on invitation
can be expected neither to increase the volume of imigration further nor to fix theaccurate number of annual emigration. Therefore it is desirable that the sendingout emigrants should go along the plan smoothly so as to decrease the unused

capacity of emigrant-vessels on outward voyages. And for that purpose it isessential that emigration organizations make up detailed annual programs to sendout emigrants and carry them out eMciently.
In the process of seeking measures to improve the earning of emigrant-vessel
operations, it becomes clear that an increase of passengers and volume of cargo on
return voyages can be expected to occur in the near future, that it is possible todecrease the unused capacity of third class passenger space on outward voyages, in

Department of Migration. Ministry of Foreigri Affairs. States of Emigration and Problems
to attain the Airns of Emigration Program (Data for the Fifth Overseas Emigration Council,
No. 1,Jan. 1959)(18) Research Group for International Migration, op. cit. p.42,(17)

PROBLEMS OF EMIGRANT-TRANSPORTATION IN JAPAN71
some measure, by controlled emigration, and that it is diMcult to maintain emigrantvessel operation without loss ifwe keep emigrant-fare at the present low level throughconsideration of the fact that fare-raising would disturb the flow of emigration.
Therefore, so far as the present conditions remain unchanged, the government must
aid emigrant-vessel operations.

The Government may choose any of many kinds of assistances, for example, toprovide a fix amount as an operating subsidy for emigrant vessels, or to compensate
for losses which result from the emigrant-vessel operation, or to give permission for

emigrant-fare raising under terms so that the amount of the price-raising will beborne by the government. But now the most desirable measure is to cover theselosses within the limits that result after private operators have made their greatest
effort for emigrant-vessel operation.

In the next step we should consider the building up of emigrant-vessels andof a fleet as a comparatively long term problem. The Government asserts, as we
mentioned above, that an increase of emigrant-vessels is necessary to accompany
the development ofthe emigration plan. With regard to this, we must take up thefollowing two points. One is that the emigration plan can hardly be expected toattain the necessary volume of emigrants if the government continues negotiations
for emigration with immigration countries individually as done now. Accordingly,
estimates for necessary increases ofemigrant-vessels are apt to produce errors. The

other is the problem of funds used for building emigrant-vessels. As mentioned
above emigrant-vessel operations have been suffering from the pressure ofloans andinterest, so it is desirable to adopt special measures to assist emigrant-vessel building

other than the ordinary shipbuilding program by which the Japanese merchant
fleet has been rebuilt.

Thus we may reach the conclusion that for the present the government should
give such assistance to emigrant-vessel operation and its shipbuilding as has been

enforced in Italy or as in prewar Japan. Of course the government should avoid
undue increase of financial funds, and for that purpose it is necessary to make andcarry out emigration programs, both with regard to short- and long-terms, so as toreduce the unused capacity ofemigrant-vessels and to determine the volume of fleet

to be constructed without error. Then we must return to the fundamental problem
of emigration policy and consider our questions from wider viewpoints if we would
solve the question of emigrant transportation policy decisively.

Overseas emigration of Japan has been restricted to far lower levels withregard to its volume, number ofimmigration countries and profession ofemigrants in

HIROMASA YAMAMOTO

72

comparison with European countries. The situation has remained unchanged eventhough Japan has made considerable effort to develop its emigration since its re-

opening after the war. So far as Japan has been compelled to negotiate with themain immigration countries individualll, it is quite diMcult to improve the present

situation and moreover, to make adequate plans for emigration. A fundamental
solution of this problem in Japan is possible only with international cooperation

for migration. We have good examples in international cooperation gained from
activities of IRO and ICEM. Though these organizations confine their activities
to special spheres of migration, we can get important suggestions from a survey of
how they were able to destroy the bottle-neck of international migration.C'9)

6. International co-operation for the development of migration
In the face of the existence ofa huge volume of war refugees and the over-polutation problem in Europe after the war, the United Nations and European
countries recognized the facts that international migration had been disturbed by

the severe immigration rules in main immigration countries, by price-raising ofocean passenger-fares which had continued since the thirties of this century,(20) andby lack of proper transport facilities for emigrants. To solve these problem inter-national cooperation was urgently desired by the concerned countries, because
the efforts of individual countries were not suMcent to overcome these diMculties.

Thus the International Refugee Organization and the Intergovernmental Committee for European Migration were established, based on the intention ofdeveloping international cooperation.(2i)

While IRO endeavored to relieve the restrictive rules ofimmigration countires
and took measures to facilitate the activities oforganizing immigration countries inselecting workers, the IRO provided the necessary training for emigrants, and prepared emigrant-vessels. For the training and sending out refugees IRO establishedthree centers (Resettlement-, Staging-and Embarkation-Centers), and the movement ofrefugees between centers and procedures for emigration were carried out
Regarding the facts that emigration problems in Europe could be overcome through international cooperation, H. A. Citroen given a handy description in his work.
CÅí European Emigration Overseas PasT and Future. 1951(20) Regarding governmental assistance of countries for transport costs and fare-raising before thewar, Cfi I.L.O., Technical and Financial Co-operation with regard to Migration forSettlement, 1938. pp.42-45.
(21) Regarding the process to organize I.R.O. and I.C.E.M., see following writings, J. Vernant,the Refugee in the Post-war World, l953, pp. 33-39 and pp. 46-50 P. Jacobson, The Intergo(19)vemmental Committee for European Migration (in Economics of International Migration,edited by B. Thomas, 1958) pp.108-111.

PROBLEMS OF EMIGRANT-TRANSPORTATION IN JAPAN73
in comformity to the plan. In consequence emigrant-vessels could be operated onschedule without any disturbances and the carrying capacity of each vessel wasable to be used in fu11. In addition refugees felt no inconvenience during theirtravel. For the purpose of permitting emigrants to enjoy their trip under goodsanitary conditions at minimum cost, IRO secured passenger space on vessels setting
sail to different destinations, and further, the organization chartered and placed on
the routes thirty-nine vessels with a carrying capacity of 37,500 passengers.{22'ICEM was organized by European countires and main immigration countires,
so the organization could keep close relations with countries concerned. Therefore

ICEM has been able to prepare proper transport-facilities and also to transport
emigrants of different countr'ies according to the special emigration program.
ICEM has made use of private vessels only when their carrying capacity and accomodations were satisfactory and available at remarkable cost. ICEM concluded
special agreements with shipping conferences regarding emigrant-fare in all possible,

cases. When adequate private tonnage could not be made use of, ICEM preparedvessels with a guarantee of high utilization of space or secured vessels by time charteror by round trip charter. In the latter case if shipowners gained profits earning on
their return voyage, ICEM adjusted the charterage.(23)International cooperation through IRO and ICEM has been usefu1 to improve
the situations of emigrants transportation. Because these organizations made it

possible to enforce eimgrant transportation based on short-term and long-term
programs. Consequently, unused capacity on emigrant-vessels has decreased andthe cost of emigrant transportation has been reduced. With regard to the Iongterm program, necessary tonnage for emigrants has been secured.

Problems which we have been facing can also be solved fundamentally by
joining such organizations as IRO and ICEM. With international cooperation we
can send out under fixed plans more emigrants to more immigration countries than
before, and a Japanese emigrant-fieet could be made use of by Japan and others,
thus reducing the unused capacity ofvessels.
However, at present ICEM confines its activities to European migration only,
as shown by its name, and has no contact with migration problems of other regions.
We should build up the organization for international cooperation on a world-wide

scale to solve migration problems of the world, including Japan and other Asian
countrles.
(22) H. A. Citroen, op.cit. pp.42-3.
(23) P.Jacobson, op.cit. pp.113-114.

IN JAPAN
CONDITIONSPORT LABOR-PARTICULARLY IN KOBE
PORT-

Ginjiro SH!BATA

Historical
The port labor situation in Japan has been bound by tradition since the biginning of the Meiji Era. Though some rationalization took place during and after the

recent war, old traditional conditions have been revived since then, and diMcultand perplexing problems connected with both the port administration and labor
management exist now. The present report aims to point out the diMculties andto offer some suggestions foward the settlement of these questions. But to treat the

problems of those ofJapan in general, the description would not only become quite
complex but abstract as well, so for the present we shall take up the problems connec-

ted with the port of Kobe in particular. •As soon as the port of Kobe was opened to foreign vessels in 1867, many foreign

merchants began to reside in a settlement, while domestic merchants also began

gatheringinthecityandtheportrapidlybecameactive. Theunemployedworkers,
most of whom were vagabonds and the poor who had been discharged by theirmasters or had left their work as a consequence ofthe Meiji Restoration, flowed into

the city in great numbers and various troubles occurred daily. Hyogo Prefecture
was at a loss as how to regulate these people who had no fixed abode and built a port

laborers' home called "Hyakunin-beya" (hundred men's house). At that time thelaborers (alias "Gonzo") already could be divided into two kinds-regular employees and day-workers-but the labor was not specialized according to its nature,for example, loading and unloading or shore work. The labor conditions weremuch more extreme than the present; a gang then, consisted ofabout fifteen workers
while at present it is about twenty-five; and their average wage was \O.25 per day

75

76

GINJIRO SHIBATA(all-night additional wage was 1.6 times thereof), from which \O.17 was deducted

for bed and meals.
Most of the port laborers were under the personal supervision of a contractor

called "Kobe-gumi" at the beginning, but later in 1873 were separated into twogroups-Kami-gumi and Naka-gumi, and worked in different sections of the port.
Labor contractors or labor brokers gradually increased with the passage of time,and especially, the Civil War of 1877, the Sino-Japanese War of 1894-1895 and the

Russo-Japanese War of 1904-1905 swelled the number of such contractors andbrokers. After the Russo-Japanese War the Governor of Hyogo Prefecture instructed that they form a union so as to prevent frequent troubles which arose fromthe rivalry between them. This was the first case of a union of this kind in thiscountry. Among the port laborers the relation of boss and followers came into
existence by necessity and bloody struggles over these posts occurred very often in
the port. Followers were supposed to give absolute obedience to their boss and theboss in turn gave allegiance to his master (contractor) sometimes at the risk of hislife. This was the fact during the Meiji and Taisho Era.

On the occasion of Sino-Japanese hostilities in 1938 the national economic
policy was put on a war footing and all transportation was controlled by the Government. Consequently, the business of terminal services was limited to a single com-pany for each different business in the port and the Kobe Port Carrying Company,

Ltd. (the Kobe Koun Kaisha, Ltd.) became the carrying service in the port of

Kobe; the Kobe Port Work Company, Ltd. (the Kobe Kowan Sagyo Kaisha.)
was the primal contractor for shore laborers, and the Kobe Ship Loading Company,

Ltd. (the Kobe Sempaku Niyaku Kaisha.) was established for stevedore. Andeven subcontractors of port laborers were forced to join and formed the Labor Sup-

pliers' Union whose name was changed to the Patriotic Labor Service Association

when the National Mobilization Law was proclaimed in 1941. Thus, each terminal business was amalgamated into one to carry out the war program and all laborers were changed into machines under the patriotic password, "unselfish devotion

to country". This situation continued until the end of the war.

After the war all such situations were removed, the Kobe Port Work Company

closing in Dec. 1947 and the Kobe Ship Loading Company being prohibited fromcarrying on business in April, 1948 and finally being dissolved by the Conference

Memorandum issued from General Head Quarters of Allied Forces in June, 1949.
An outline of the memorandum is as follows.

"In consequence of the dissolution of the Kobe Ship Loading Company, thePORT LABOR CONDITIONS IN JAPAN
workers are to be the regular employees of contractors whom they chose, and eachcontractor can employ laborers other than the regular employees, if necessary, only

through the Public Employment Security Offices (PESO). Ifthe contractors wish
to employ any skilled worker who belongs to another contractor through mutual
understanding, it must be done without any compensation under the inspection of
PESO. PESO is to prohibit any unothcial labor supply business, that is, such busi-

ness is to be carried out exclusively by PESO. And GHQ advise that collective
bargaining should be done to conclude an agreement concerning the port carrying
business between the newly formed contractors' association and the labor union."

By this memorandum the situation of port labor changed again completely.
The contractors and subcontractors ofport labor were thrown into free competition,

but all the skilled workers who had belonged to the dissolved companies could be
the direct exclusive employees ofthe contractor whom they chose, and according to
the prohibition of illegal labor supply exploitation by the middleman was excluded

and casual laborers could only be employed exclusively through PESO.
On the side ofport Iaborers themselves, marked and complicated changes werealso present after the war. Since the end of the war, GHQendeavored to form andnurture a port labor union until 1951 when GHQwas dissolved. They advised
several times to organize a single port labor union and played a prominent role inthe successfu1 struggle for increasing wages. At one time unified labor agreement
was successfully concluded, but after the dissolution of GHQ. the labor union dissolved into several groups until the function of the union ceased completely in thefall of 1952. InJune, 1955 many groups oflaborersin the port ofKobe, in company
with the port-laborers in other ports, again organized a union, the AII Japan Port

Labor Union (the Zenkowan) ; some of the others combined as the Kobe Branchofthe Japan Port Labor Unions' Association (Nikkoren) in April, 1956 and therest remained as members of single independent partnerships.

In 1950, with the opening ofthe Korean Hostility, the port ofKobe became acommissary base for the Allied Forces. For the urgent loading and unloading of
war supplies, absolute order necessary in cargo loading compelled the trades to meetthe demands of the port laborers completely. The trades (labor contractors andsubcontractors) made strenuous efforts to gather the number of Iaborers required

and the so-called "underground arranger" (Yami-Tehaishi) who gathered port
laborers illegally, generally unskilled, and supplied them to trades secretly, appeared

again. Moreover, with the Korean Hostility, Japanese imports and exports increased so rapidly that all ports were under the pressure ofbusiness, until the ill-treatment

77

78

GINJIRO SHIBATA

case committed by an underground arranger was exposed in Kobe by the police
and the Bureau of Labor Standard (Rodo-Kijun Kyoku) in June, l956.
The occurrence ofcriminal case affected the labor unions seriously. The Branchofthe AllJapan Port Labor Union soon requested governmental agencies concerned
for fundamental improvement in labor conditions and port facilities, and asked thatthe agencies form an organization to settle composite and fundamental port labor

policies, and expected them to all that the Port Transport Industry Act and Em-

ployment Security Act be observed and practiced completely. The Hyogo Prefecture Branch of the General Conference ofJapan Labor Union (Nihon Rodo-kumiai
So-Hyogikai or Sohyo) also issued a statement including the six items presented asfollows, and handed it to all governmental agencies.

1. Enactment ofa Port Labor Act.
2. Amendment of the Port Transport Industry Act and its prudential application.

3. Complete practice ofthe Labor Standard Act.
4. Reform of public employment business.
5. Increase of welfare facilities for port laborers.

6. Removal of the wavy fluctuations in the volume of cargo-loading during themonth.
On the other hand, governmental oMcials were seriously concerned about thisproblem. In September, 1957 the Department of Labor and Industries of Hyogo
Prefecture, the Kobe Shipping Bureau ofthe Ministry ofTransportation, the Hyogo

Bureau of Labor Standard of the Ministry of Labor and the Kobe Public Employment Security OMce organized an athliating conference. They deliberatedjointly
on the problem and came to the conclusion that (1) conditions of employment for

day-laborers should be presented openly: (2) payment of wages should be doneclearly: (3) identification of the liaison man, who applies for the day laborers to

PESO and secures them in the name of his employer, should be shown clearly:(4) The Labor Standard Act should be put into practical force: and (5) suflicient
procurement of port laborers should be achieved.
Most of these resolutions were promptly put into practice and an appreciable

contribution was made to the port labor policy. The conference had been timely
opened to examine the problems occurring and to unify the opinions of the various
groups.
Before this, the All Japan Port Labor Union presented a petition to the Diet
in January, 1956, asking for the enactment ofa port labor act so as to meet the l949

PORT LABOR CONDITIONS rN JAPAN
resolutions ofthe ILO. In this petition they asked for (1) stabilization of employ-ment and a register system for port Iaborers, (2) preference of employment to re-gistered laborers, (3) a minimum wage and allowance for unemployed day workers
and (4) setting up committees consisting of representatives of employers and employees in Tokyo and prefectures where principal ports are located in order to de-liberate on the problems mentioned above.

This petition was adopted and the Ministry of Labor formed the CounterMeasure Conference for Port Labor Problems in Tokyo, consisting ofthe representa-

tives of public interests, laborers, employers and governmental agencies. This
Conference started in November, 1956, and after meeting seven times and inspecting
five principal ports, it submitted a report dated July 19, 1957 to the Ministry ofLabor.
This report stated the need of composite policies adapted to the special character of port labor and the diMculties of a too rapid preparation for an ideal structure,and the following recommendations were made to the Government and its agencies,
employers, and labor unions.
a.

Control ofdemand and supply of labor.
1. Expansian of the facilities and functions of the public employment security
oMces; especially, regarding the functions ofthe othces, (1) discipline ofthe staff

to be made rigid so that they would comprehend the nature of port work andbe able to undertake an adequate employment business for the laborers, (2)classification of port labor by the kind of work to be done by consultation with

employers, employees and oMcials concerned, (3) a register system of port laborers to be thoroughly executed; day laborers who are registered and classified

to be given preference in employment, but their position as day workers not
to vary in any way, (4) supervision over the illegal supply of laborer to bestrengthened, and (5) when Iaborers are out of day work, other employment tobe found for them, for example, any private work or official work for unemply-

ment reliefj or an unemployment insurance system to be applied to them.
2. Settlement of an organ for strengthening cooperation between employers andemployees.
(i) Since the day laborers are exposed to unemployment daily, it is desirous
to promote positively their employment as regular workers at certain firms.

(ii) Raise ofday laborers outside ofPESO should be prohibited.
b.

Administration of supervision over port labor management.
1. Guidance and supervision should be done thoroughly concerning the condi-

79

80

GINJIRO SHIBATA

tions of labor, direct payment of wages, allowance wage system and hours oflabor.
2. A system ofport laborers' hand book should be created so as to establish andmaintain order of port labor and to protect the welfare of port laborers.

3. According to the object ofthe International Labor Treaty, a standard for prevention of disaster should be settled, education for safety should be practiced

completely and notices regarding dangerous and injurious matters should beclearly posted.

c. Port carrying business.
1. To prevent excessive competition, the standard ofscale for port carriers shouldbe raised to the limit whole cargo of a ship being able to be handled by asingle-hand; and this measure should be carried out within two years after
which the carriers under this standard would be abolished.

2. Rate and component ofwages announced in public should be re-examined
and made reasonable.
3. A re-subcontract of port labor should be prohibited by taking proper legal

measures.
4. Governmental agencies concerned should not only promote and guide theport carriers' business but control them properly.
d. Welfare facilities.
Since facilities for port laborers in existence are very insuMcient, it is urgently

essential to newly establish or increase them.

e. Port Labor Conferences.
Port labor conferences should be established in Tokyo and districts where prin-cipal ports are located. The conferences should be formed by the officials concerned, the representatives ofpublic interests, and the representatives ofemployers

and employees.

According to the recomendation presented in the report above-mentioned,
prefectures where main ports are located have established conferences as the report
indicated.

In January 1958 Hyogo Prefecture formed the Kobe Port Labor Conferencewith the representatives of the employers, the labor unions, the public interestsand oMcials concerned. This conference aims to adjust the employment and working conditions of the port labor and to give suggestions concerning the control ofport labor and the welfare of the laborers; that is, this conference has been formed inorder to realize the purport of the report of the Counter-Measure Conference for

PORT LABOR CONDrTIONS IN JAPAN81

Port Labor Problems in Tokyo, based on the special situation ofthe port of Kobe.

Recent Conditions and Problems
Employers of port laborers in the port of Kobe are divided into four classes
according to their work: general transport industry (or freight forwarder), stevedore

work, lighter industry, and quay work. Of these trades the largest employ morethan two hundred workers while the smallest use less than twenty five. Those of
the smaller scale comprise the majority.
Labor contractors can be further divided into two classes, primal contractors
and subcontractors. Before February l959, the divisions were three, that is, subcontractors were divided into first subcontractors and second subcontractors, but
the latter was abolished in February 1959. Primal contractors are those who receive
requests for cargo handling or carrying from shipping companies or traders or ware-house companies, ofwhich they handle part ofthe work themselves, but other parts
are given out as contracts to subcontractors, Each subcontractor is subject exclu-

sively to a definite primal contractor. This subordinate relationship has been
kept distinct for a long time, especially in stevedore work. Their number and scalein the port of Kobe as of the end of February l959, are as follows :1. Number of Registered Contractors andSubcontractors in Kobe Port
GeneralClass

SLevedoretransport
industry

Number

92

Lighterindustry

Quaymen

82

13I

41

contractor

Total

Round

Eliminate
duplication

346

295

2. Number (Ditto) classified by Capital Size in Kobe Port
IndiviClass (in\1,OOO,OOO) dual

Number

under
O. 5

19

under
1.0

under

under

under

under

2. 0

5. 0

10. 0

50. 0

50. 0

over

Total

35

59

19

31

24

261

26

48

3. Number (Ditto) classified by the Number of Workers
regularly employed in Kobe PortMay 1958
Class by No. of Workers

Number of Employers

under

under

25

50

150

61

under
1OO

under
200

under
300

over
soo

21

13

3

1

Source: The Employment Security Seccion, Hyogo Prefecture.

GINJIRO SHIBATA

82

Primal contractors and subcontractors are gradually increasing in number,especially for general port transport industry as follows.

4. Change in Number of Trades in Kobe PortEnd of March in every Year
Year
1951

1952

1953

1954

1955

1956

1957

1958

1959

General Port
Transport

46

48

49

49

54

49

58

80

92
41

TradesStevedore

25

33

45

43

41

41

42

41

Lighter

86

84

88

87

85

81

78

81

82

Quay

98

109

116

120

117

119

125

130

131

Total

255

274

298

299

297

290

303

332

346

(Eliminate
duplication)

174

184

206

208

212

214

224

249

259

Source: Ditto.

Regularly employed laborers of primal contractors and subcontractors haveorganized unions. Many ofthem are direct members ofthe AllJapan Port Labor
Union (the Kobe Branch has about 1,300 members) and some of the others, whose
employers operate only in the port of Kobe, have formed independent unions ineach firm, these unions joining together as the Kobe Port Labor Unions Association(the members are about 600 in total). The forrner has appealed to free day-laborers

who are named by employers as time-limit employees (so-called "named dayworker") to apply for membership in the Union, but they have not yet succeededsufficiently in this. The rest (about 1000 laborers) have organized iridependent
unions in each of their workshops but are not reratecl to other unions. The latteris counted by groups of ten unions.

Trouble generally occurred hitherto on the side of the All Japan Port Labor

Union. As the latest example, in September 1957 they demanded a retirement
allowance of \1,923,400 for those who served in the same company for 35 years
continuously, as well as the settling of a regular wage increase system, the fixing ofoff-days at the year-end, the new year, and port festival days, etc. In reply to thesedemands the companies agreed to a retirement allowance of \8,OOO for one year's
service, \48,OOO for 5 years' service and Y121,OOO for IO years' service. After agroup negotiation of two months a revision was made by the companies to increase
the allowance for 1O years ofservice to \135,OOO, and the Union complied with this.

After that, in February 1958, in concert with the spring struggle of the General

Conference ofAll Japan Labor Unions, the All Japan Port Labor Union demandedIN JAPAN
PORTLABOR CONDITIONS

83

again a base-up ofwages by \2,OOO and an increase of allowance for night work, etc.

and they went on a 24-hour strike on March 26, in which about 350 stevedores and100 quaymen took part. Three days after, they again refused cargo-handling fortwo hours. Negotiations were carried on many times between the Union and thecompanies until May 11, during which the Union carried out two-hour and 24hour strikes twice, and against which the companies announced a lock-out. On
May 11, both groups, being exhausted in the end, reached a compromise that thelock-out would be called off and they would peacefuIIy discuss the questions witheach other. The negotiations were successful and the eMciency allowance was in-creased to \420-495 for a 200-hour average per month. Nevertheless, workers
who were employed by some companies seceded from the Union, in disagreementwith the action of the Union, and formed several different independent unions.
This is the situation of regular port laborers employed by fixed (?ompanies.

5. 0rdinary Wages of Free Day Port-Laborers

December 31, 1957 (Unit: Yen)---

Work Time--. xM...... Grade of Wage

Classification of Workers ""'-----x..

H
:
ca
tr
-vp.

8-17 o'clock

17-6 o'clock

6-8'o'clockHigh-

Low- Ave- High- Low- Ave- High- Low- Ave-

est

est

rage

est

est

rage

est

est

x•
Winchman

650

580

620

800

700

730 1, 450

1

Stevedore

700

450

550

950

550

700 1, 700

1

CIeaner

550

500

530

800

650

700 1,450

1

900

700

76

850

650

700

" (cotton)

900

750

850

650

550

600

Heavy shoulder
Hook (ice, wheat, crude
sugar)

'

'

'

rage

250 1 300'

050 1 250'

1OO 1 520

2ir"

?Og

.p

: K
8 g'
g

&
rp

Laying in warehouse

900

700

800

Lighter (crude sugar, sulfur)

730

650

680

tt (others)
Hand-cart

650

500

550

550

480

500

Pole carrying (coal)

850

700

750

" " (salt)

950

700

900

Needle work (male)

600

500

55

" " (female)

600

300

35

Note: Miscellaneoug works and various kinds of allowances are omitted. Above figures
are the net receipts, that is, after health insurance (\8), unemployment insurance(\5) and a meal (\12) have been deducted. Time includes a one-hour recess per
every 8 hours.
Source: The Bentenharna Branch OMce, the Employment Security Section, Hyogo Prefec-

ture.

'

M

GINJIRO SHIBATA

Most of the diMcult social problem questions are rather presented by the group of
free day-laborers.
Free day-laborers are classified, by their functions as registered with the public

employment security oMces, into seventeen classes. Stevedores are classified into
four groups; deck, winch, general cargo, and cargo in bulk. <2tuaymen are divided
into heavy-shoulder, shoulder, hand-cart, pole carrying, cotton-hook, cargo-laying

in warehouse, and repacking. Miscellaneous works are grouped as watch, tally,needle work, Iabelling and odd-job. Their wages are set according to the above

classifications by thejudgment of the contractor who employs them. An example
in the port of Kobe is shown above.

Free day-laborers were generally employed in two ways befbre March 31,
1959; first were those employed through the public employment security oMce,
while the others were employed on the outside by PESO. The former is classified

into two types, the "applied over the counter" and the "named by an employer"
which further includes the "long-time hired" and "short-time hired". After April
1, 1959, employment on the outside by PESO was to be abolished in general and allfree port-laborers were to be employed exclusively through PESO. But because of
the shortage of the staff of PESO and of long usage, this new measure has not yet
been sufficiently carried out. Part of the free laborers are hired as yet throughthe hands ofarrangers at the request ofsubcontractors.
Properly speaking, port work should be carried on by the hands ofregular portlaborers and only when a port is extraordinarily active should free day-laborers be
employed to assist the regular laborers. But in practice, a great part ofthe work inevery port has been usually done by free day-Iaborers. The following table shows
the yearly cumulative number of port laborers who actually worked in the port of
Kobe in the last three years.

6. The yearly Cumulative Number of Port-Laborers
who Actually Worked in the Port of Kobe
Kind ofWork
Kind

of Employee

1956

Quay Workers

Stevedore

Regular

Free

RegularFree

OthersRegular% 550,600 % 663,252 53.5
% 575, 254 46.%5 1, 618, 353 81.%1

379, 903 40. 9

Total

Free

59. 1

427, 592 39. 0670, 026 6L O 727, 109 51.4 687, 801 48.6

1, 788, 504

82.2

1858

401, 888 46.4

464. 484 53. 6

510, 591 39.4

1, 894, 625

84.6 343, 318I15. 4

1

Free

'
% 1, 502, 020 136%1

2, 661, 508

63. 92, 943, 205

62. 8

1, 745, 457

3,0830,75 70. 0

1,318,393

387, 630I17. 8

1957786, 562 60. 6

Regular376, 166!18.%9

Note: Others include lighterrnen, tugboatmen, overseers, etc.

Resource: The Kobe Shipping Bureau, the Ministry of Transportation.

Of the free port-laborers, the so-called "named day-laborers" are employedggl:bCONDITIONSIN JAPAN
PORTLABOR

85

always in greater numbers than "the applied-over-the-counter" of PESO. The
former are employed on the average at the rate ofabout 700/o ofall free laborers em-

plyed. Details are shown in the following table.

7. The Monthly Cumulative Number of Free
Day-Laborers who Actually Worked in the Port of Kobe
Kind of

Works at Quay

Works in ShipWork
Kind of

Named

Employment

Over theCounter

1957

o/o

Jan.
Feb.

28 342 69. 4

12, 451

33 693 69. 1

15 075 30. 9

Mar.
Apr.

May
June
July

Aug.
Sept.

Oct.

Nov.
Dec.
1958

'
'
36 393 69. 1'
33 537 69. 3'
39 853 69. 1'

o/o4, 061

28. 4

'

'

116

Ll

5, 179

29. 6

'

l.

3, 32720. 6

6, 17134. 7

4, 77031.6

5, 11732. 0

3, 22824. 1

3, 92524. 5

3, 90224. 2

3, 256

21.4

3, 797

26. 2

18. 8

'

'

'

'

'

,

'

19 092 66. 0
21, 149

Mar.

22 471 66. 0

Apr.

23 487 65. 9

May

23, 113June

19 920 66. 0

July21, O05 67. 0

Aug.

22 912 67. 0

Nov.
Dec.

o/o
10 217 71.6

Over theCounter

'

Feb.

Oct.

o/o

2L7 36 810 78. 3o/o

10 217

Named''
30, 599 68.1 14 328 3L9 10 519 98. 7''
16 275 30. 9 29 542 68. 3 13 710 31.7 12 33I 70. 4'''
14, 834 30. 7 25 794 65. 9 13 323 34. 1 I2 831 79. 4''
17, 788 30. 9 34 431 65, 6 18 052 34. 4 11 610 65. 3''
37, O12 69. 2 16 483 30. 8 28 080 67. 2 13 689 32. 8 10 323 68. 4
J''40, 442 69. 2 18 O09 30. 8 30 776 6L9 18 949 38. 1 10 873 68. 0'''
33 704 63. 2 19 604 36. 8 33 047 67. 4 16 O09 32. 6 10 146 75. 9''''32 039 61.2 20 302 38. 8 31 611 62. 7 18 790 37. 3 12 125 75. 5''''
27 396 61.2 17 360 38. 8 29 235 66. 3 14 868 33. 7 12 232 75. 8''',
25 235 66. 5 12 739 33. 5 22 707 7L7 9, 244 28. 3 11 949 78. 6'''
29 352 66. 0 15 151 34. 0 25 325 69. 4 11,174 30. 6 10 706 73. 8
'
'
'

Jan.

Sept.

Over theCounter

Named

o/o
30. 6

Miscellaneous

'
'
'

66. 0

66. 0

'

9, 836

34. 0

'
77. 0
'
37 173 72. 6'

13 906 32. 86, 98381. 2

1, 622

1O, 690 23. 06, 770

90. 3

727

9. 7

9, 20587. 9

1, 26812. 1

6, 79978. 3

902 21. 7

6, 93378. 6

1, 885

6, 87481. 3

1, 58318. 7

7, 45074. 8

2, 50525. 2

6, 73174. 9

2, 25225. 1

6, 61676. 4

2, 04923. 6

7, 18085. 2

1, 24814. 8

7, 24284. 7

1, 307

15. 3

6, 63773. 5

2, 39926. 5''
14, O07 27. 4'
12 157 34. 1 34, 665 69. 3 15 382 30. 7''
11 907 34. 0 34, 622 69. 9 14 907 30. 1''
10 263 34. 0 32 274 74. 0 11 357 26. 0'''
10, 365 33. 0 37, O12 7L2 14 966 28. 8'
11 285 33. 0 34, 086 68. 5 16, 113 31.5'
11 437 33. 0 34 219 72. 8 12 754 27. 2'''
12, 905 33. 0 23 703 69. 7 10 302 30. 3''
11 576 34. 0''
26 201 67. 0'
18 547 51.4 17, 536 48. 8'
28 470 67. 0 13 998 33. 0''
23 284 67. 0

28 537 67. 2

10 919 34. 0 35 769

27, 430

61.2 17, 384 38. 3

37, 029 82. 4

7, 921

17. 6

Source: The Employment Security Section, Hyogo Profecture.

From this fact, both PESO and the Kobe Port Labor Conference have repeatedly said to the employers that most of the "named-day-laborers" should be employed

as regular employees by those who usually name them. The named day-laborers
ofa long-time-limit are employed generally every one month, while those for a short-

21.4

eo

GINJIRO SHIBATA

time-limit are hired every day or every few days. Therefore, at least the free labor-

ers usually named for a Iong-time-limit would like to be employed as regulars altogether.

The employers, however, are not generally pleased with this advice; because
as long as free laborers are left as "the named", they can employ them at any timeand as many as they want without the obligation or trouble which would be neces-sary by appointing them as regulars. Since there is no legal measure to compel
them to engage any laborer as a regular, the only measure that can be adopted atpresent is to develop their consciousness ofthe importance of consistent managementin the port work and to stabilize the relation of an employer and his employees.
When the port is very active, registered free port-laborers are employed in fu11,
and a shortage oflaborer occurs. At such a time, the question on the side oflaborers

will be concentrated upon welfare problems, that is, an increase ofwages and allow-

ances, procurement ofresidence, guarantee ofsuMcient rest and avoidance ofbeing

driven too hard. On the side of the employers, they have inevitably to employ
many free laborers who have little experience about port work and sometimes theymust scramble for laborers.

On the contrary, during a slack period the port labor problem enters upon aquite different phase. Unemployment becomes the dominant question above allothers. First, free laborers, so-called "the applied over the counter" are sacrificed;"the named" will be excluded by and by from being called; and at last even among

the regulars unemployment increases. This would be an ordinary phenomenon
occurring in a process ofa general business cycle too. As a port labor problem,
however, the question is more urgent than in the case ofgeneral business conditions.

Because, a cycle in the case of port labor employment comes every month andmost of the laborers are daily wage earners as stated above.

Employment of free port-laborers has a tendency to be concentrate extremelyin the period from the end to the beginning ofthe month in general. This tendency
is due to the fact that shipping companies are inclined to place their ships forexports at terminal ports at such times, and consequently, exporters inevitably
make every arrangement for cargo forwarding in accord with the shipping program.

The public employment security oMces, the labor unions and the labor contractors all desired that the wavelike fluctuations of employment be averaged
throughout the month.
The battery-leading-to-death case of August 1956, to which we just referred
before, was certainly caused originally from this concentrating of severe work in

PORT LABOR CONDITIONS IN JAPANa limited period within a month. Taking a warning from this case, the Kobe Port

Stevedore Control Committee was formed in October 16, 1956, by the members of
the representatives of the Kobe Shipping Bureau (an Agent of the Ministry ofTransportation), the Kobe Customs House, the Hyogo Bureau of Labor Standard,

the Kobe Municipal Bureau of Port and Harbor, the Kobe Public Employment
Security Oflice, the Kobe Foreign Trade Association, the Kansai Foreign Shipowners' Association, the Kobe Liners' Association and the labor contractors' and sub-contractors' associations. They agreed to the following resolutions and began
to practlce them from October 24, 1956.

(1) Loading of cargo which is done by the hands of one gang (20-25 workers)
either during the daytime or at night should be limited to 200 tons as a lot.

(2) When the total loading foravessel is under 1000 tons, the work should ceaseat half-a-night. Half-a-night means until 9 o'clock P.M. When it is under 3000

tons, all-night work is permissible only once. When it is over 3000 tons, thenumber of times for all-night work may be added by one for every 3000 tons as anunit.

(3) Every contractor and subcontractor should report to the QMce the number oflots which they demand, classifying the work as daytime, half-a-night, all-night or

2 days running, and also report whether they need or not an arrangement of la-borers for the number of lots in which they must engage. The Committee may
control the proper quantities between them.

(4) Measures above-mentioned should be practiced at the end of every month(28th).

Besides, the Committee asked all shipping companies and foreign traders foran arrangement of their programs of placing ships and cargo forwardings so as not
to concentrate everything at the end and beginning of every month.

The above measures were successfu1 to a certain extent since then. That is,the concentration ofhandling cargoes has been moderated to some extent and consequently the employment of port laborers has been somewhat averaged during themonth. The daily fluctuations of the employment of free port-laborers throughPESO are shown in the charts at the end. All fluctuations in the charts are express-

ed as index numbers which are based on the averages (that is, average==!OO.O)
ofdaily figures in each month and are averaged again quarterly for every year.
Moreover, in addition to the exeicise of the above measures, the business conditions inJapan's foreign trades have gradually declined, because of the strengthened

control of foreign exchange which began from the spring of 1958. Port laborer em-

87

GINJIRO SHIBATA

88

ployment has naturally decreased, and even on the busiest days, unemployed laborers are large in number. These unemployed, if they are qualified, are generalJy

used at various works given for unemployment relief by the government, otherwise
they are employed for private work through the service ofPESO.

Many questions still remain on port Iabor. The recomendations stated in thereport (mentioned above) which was submitted in November, 1956 to the Ministryof Labor from the Counter-Measure Conference for Port Labor Problems have
not yet been completely carried out. Besides, other measures decided at the governmental agencies, for example, a port Iaborers' hand book system, the prohibition ofraising laborers on the outside by PESO, etc, have not yet been fu1filed, on accountof the hesitation on the part of the employers. Illegitimate employment by anarranger or a boss has not yet disappeared and for such illegitimate employment

and outside employment, higher wages are usually paid than those announced
publicly or the payment for Iaborers employed through PESO. This is certainly
a valid reason why the orders and rules in port labor markets cannot be readily
observed.

QuARTERLy INDExEs FoR DAIty
EMpLoyMENT oF REGIsTERED FREE LABoRERs :N KOBE PORT
Monthiy Average=100
180

--

a

T"Tr"'

L

170

Chartl:1956

160-July-Sept.---Oct.-Dec.

150

III

140
130
120
1]O

.- ,,

.sNts

NSs

100

'sttNstt-

/tSs"

NsN.

-l

Nt.

80
70

'

..

s

sN"?

st

9.0

"s.ts
s-tl

ss,

III

60
1

5

10

15

20

25

so

PORT LABQR CONDITIONS IN JAPAN

89

170

Chart2:1957

160

July-Sept

Jan"Mar.

150
xrv

140

"--'

Apr"June'-'-Oct•Dec.

x

130

tAxtt

IIIi,

120

'"s
Nt

110

tt

100

11-A

tt--t

.

t.Atu.Ut

l

ILttl

,

t

NlNI

!-../

I

80

tAs
1.,

.A

ts N--.

JNt
Xs
tstv'

s

NS

90

'v,

III

l,
t

xXx

II'

'

i-

N

v

III

70

60
1

oo

i'

Chart3:1958

90
II

80

Jan.-Mar..July•Sept.

:;

70

t-

60

:

Oct.-Dec.'

{

1ti

40

v•
lt

30

I
L

III

1:

ttirlt

4

210
o

;1tt

1

iLt

fv,

o987065

Apr.-June ----

--''

:,

,

50

30

25

20

l5

10

5

g

tAL If

.

it4tA

vt

:

:s

'"g"tt

tti

t-J
ttv
lt

tt

ti,

o
,

lt

,

'

,ll,1
:N:hiltts`"
tsl1-s,1J,

N.

,

tstlL
'

ttXl1-

i

itx

s

s

tt
Il IN
JL

ttt

,

i--tl-it-

IIL,-

tl
v

o

I

m

o
1

5

10

15

2'o

25

30

GINJIRO SHIBATA

so

160
150

140

Chart4:tsso

130

January-March

120
110
100

90

80
70
60
50

1

5

10

15

NOTE:Calculated from the data given by the
Section, Hyogo Prefecture.

20

25

30

EmploymentSecurity

THE DEVELOPMENTTHEOF CONCEPT"OPERATOR" IN
JAPAN
Seiji SAsAKi

Foreword
After World War II Japanese shipping circles have popularized a strange pairof maritime terms, "Owner" and "Operator" due to their enthusiasm for English.
These words, however, have very special Japanese meanings in their real use or in

their scientific concepts. In Japanese, C`Owner" sometimes corresponds to "Jun-

Shenshu" and "Operator" is frequently equivalent to "Unkogyo-sha." And as theterm " Jun-Shenshu" means a simple or pure shipowner, it would refer to only a partofJapanese shipowners, who own but don't operate their ships. On the other hand,
the term "Unkogyo-sha" is more curious, for all ofthem are, in fact, not only operat-

ing much tonnage but owning so much their ships too, even if less than operated
vessels. Therefore they are not pure operators in rigid meaning of the word in
English. It is thus very questionable whether either of these Japanese maritime

terms "Owner" and "Operator" can be called English.
Sometimes the phenomenon or its theory on the separation of the operating
business from owning business of the vessel may be raised as a basis for these
distinctive terms, but this opinion also includes other questions, for such separation

has created the most popular concepts of "Charterer"and "Shipowner " as inter-nationalmaritimeterms. Inaddition,wemustalsoexaminewhetherbothconceptsof "Owner" and "Jun-senshu" are equal, or whether "Operator" and "Unkogyosha" are same. These two ofcurrent maritime terms are very interesting, and in-volve in themselves many important specialisties, which were brought about byboth historical process and today's conditions ofJapanese shipping industry. Fuller
details on the above-said problems, however, shall be given at an other opportunity,

91

SErJI SASAKI92

if possible, and this article will treat mainly the term "Operator" along with its

historical appearance and developmental process. Here we previously notice thatthe italic "Operator" means "Unkogyo-sha" or the Japanese terminology, and weshall regard "Operator" and "Unkogyo-sha" as being similar in this article for thesake of brevity of description.

(1)"Operator" or "Unkogyo-sha" as a special maritime term developed as a namefor one of the distinctive groups inside all Japanese shipping interests. It is almost

certain that this distinction resulted from the so-called separation between theownershipfunctionandtheoperatingfunctionofthevessel. Butwemustrecognize,
as has been described, the historical and substantial disparities in such a simple andrough expression. This separation is and must be divided into two parts. The
first and most popular one is known by the terms, "Shipowner" and "Charterer,"

and the secondary special one brings the distinction between "Jun-shenshu" or"Owner" and "Unkogyo-sha" or "OPerator" inside pure shipping agents. The ship-owner and Charterer are international terms which have been recognized sinceancient times, and have been used most commonly in Europe and America. On theother hand, the secondary separation appeared just after the development of ourmodern shipping industry, and it seems that such distinctive words, especially OPera-tor, are not yet used as common technical terms in modern world shipping circles,
even though such separation of function is itself fairly regarded in real businessor in theoretical study.

The concept "Unkogyo-sha" or "Operator" does not mean a simple "Charterer," but is clearly a pure shipping agent who takes charge of the operating function
ofvessels as his chiefoccupation. The charterer is a common or all-inclusive being,whether it is a shipping agent or not. It includes all the enterprises which is chart-

ering a vessel from her shipowner. Over against this the Unkogyo-sha (OPerator)
was a pure shipping company and as such it was enough actually to operate ships
for the purpose of transporting people or shipper's cargo. Whether a charterer or
not and whether a shipowner or not, have by origin no relation to being a Unkogyo-sha. But actually the Unkogyo-sha or "Operator" has a very close connection withthe terms "charterer" and "shipowner." Among others the relation between charterer and OPerator is nearest and most important.

Though it was a general rule that the shipping agent was shipowner as well as
carrier, and that all shipowners were most certainly shipping agents, the chartererIN JAPAN
OF CONCEPT"OPERATOR"THEDEVELOPMENTTHE93

was not necessarily a pure shipping agent, for even trading firms or other Iarge

shippers were able to charter and operate vessels, Under such circumstances themain reason why Unkogyo-sha was recognized as a new independent group amongshipping agents had to be found in the point that it did adopt special or exceptional,

but fairly similar business method to that of the charterer. Charterer andUnkogyosha, apparently, engaged together in the same marine transportation

business depending on chartered ships. On the points that both employedsteamer from her owner, and that both took charge of operating functions
instead of the shipowner, the Unkogyo-sha was much closer to the charterer. Now,
we can start our study on the beginning of the concept Unkogyo-sha or OPerator byasking the time and reason ofits appearance as another group outside the charterer.

Generally speaking, modern Japanese shipping industry started in the right
direction by the hands of both monopolistic enterprieses, the Nippon Yusen Kaisha

and the Osaka Shosen Kaisha. These largest companies were clear shipowners
as well as strong carriers which operated their own vessels as a rule. They had beencalled by a specialJapanese term "Shasen" which meant a privileged power. They
were such a special group in Japanese shipping circles that till World War II noother name was necessary for them. Therefore they had no relation with the ap-

pearance of the intentional term "Unkogyo-sha" or the foreign-born expression"OPerator."

OPerator was indeed formed and recognized as a name for the general unprivileg-

ed shipping agents' group, so-called "Shagaisen." Apart from the Shasen group,

modern general shipping companies had been mainly established by the hands ofindividual shipowners, about after the 20th of the Meiji Era, who had bought one or
two steamers and at first operated them on intercoastal or neighboring routes. Almost all of those earliest Shagaisen group, therefore, were carriers as well as ship-owners. There was also no active necessity for such a special distinctive name as

Unkogyo-sha in the early days of the Shagaisen. The Zaibatsu shipping group,
like the Mitsui Bussan and the Mitsubishi Shoji, - they had been sometimes calledby another word, "Jogaisen" (excluded ships) and later been included into the
Shagaisen group - were merchant carriers which had to be distingusihed from pure

shipping agents. And as they were so much nearer to the charterer-concept, theyalso gave no-impetus to the creation of the new term.

The Sino-Japanese War (1893-4) and the Russo-Japanese War (1903-4) gave
the greatest and most important opportunities for modern Japanese shipping industry, especially the Shagaisen, to develop on a general and rapid scale. Many

94

SEIJI SASAKI

new steamship companies had taken part in doing modern shipping business withlarger steamers and over many ocean routes. An approach to larger-sized steamers and longer navigation routes was a natural tendency of those days. This
movement was attended by a noticable change in the general Shagaisen business
management, which had been regarding a conversion from their business type ofsmall-scale owning and operating steamers to large-scale hiring, then the above-

said secondary function separation, after the development of modern shipping,spread out at last on a large scale. It was clear that such change or separation had

been brought about by the original stagnation ofJapanese shipping agents (shipowners), and that the shipowners who had bought or built larger steamers had hardly suMcient ability to operate their vessels profitably by their own hands. On thispoint, we may state that a similar or original shipping enterprise to today's Junshenshu (Owner) had appeared at a relative early stage.

Those function separation, however, still remained in a condition which were
only noted as the distinction between shipowner and charterer, so that Unkogyo-sha,

which should be distinguished from charterer, was not approved publicly. Until
World War I it was common knowledge that the majority of large or middle-sizedsteamers which were navigating on all ocean routes beyond the neighboring waters
were operated by only Mitsui Bussan, and that the Shagaisen was almost controlled

by the Mitsui.* Consequently the general Shagaisen-shipowners which became
to play only the part of ownership had recognized the Mitsui Bussan as almost
the only charterer of their large steamers, and they had entrusted all the real
operating business of their vessels to this trading firm.

The famous Mitsui Bussan Shenpakubu which had been established as a normal
department of this trading company on April 29, 1903 might be recognized as one
ofthe shipping agents, but so far as it was the sub-organization ofthi$ company andperformed both the business ofowning and operating for the purpose of carrying theirmerchant goods, at least, so far as it was a clear merchant carrier, we can notdescribe it as a pure shipping agent. Their chartering or operating business wasnearer to that ofa charterer than that of Operator.

During this period, the N.Y.K. and the O.S.K., sometimes, had also charteredand operated a few Shagaisen. But they, as it has described, had formed a privileged group which had been given exclusive government protection and carriedon main regular Iine-services and did not need any other name like OPerator.

* cf. The Kaiun Kokokushi, 1927, p. 754.

95
THE DEVELOPMENT OF THE CONCEPT "OPERATOR" IN JAPAN(2)
The modern (secondary) separation phenomenon between the owning function
and the operating function of a vessel had hardly an opportunity to be recognizedin Japanese shipping circles before World War I. The extraordinary shortage of
tonnage in this war was a decisive factor in such a.transfer. Many shipping million-

aires were born of this boom, and every shipowner selected a Iarge-sized steamshipas a simple and prompt method ofspeculative wealth accumulation. But they did
not operate their steamers by their own hands due to inexperience. The function
separation has consequently come forward, and such simple shipowner-groups naturally differed from the ship-operator groups. The former aimed at charterage,
and the latter purposed to obtain a greater surplus of freight over charterage, or togain profits to protect their trading business.

About June 1917, 252 Shagaisen (steamers) were chartered while only 64
steamers were operated by their owners, that is, 80 per cent were in fact operated

by non-shipowners. But we must lay much more stress on the following fact, thatnew operating enterprises have been formed inside the so-called "Charterer" or"Operator." This is more important than such phenomenal materials as a change
in the Shagaisen shipowners' business or the ratio of chartered steamers, for those

new comers were given first and direct opportunity to be recognized Unkogyosha
or OPerator as a special group in our country. The fact that many shipowners hadbuilt or bought large steamers for the purpose of hiring them out, and the N.Y.K.,

the O. S. K., the Mitsui Bussan and a few other trading firms had chartered thosesteamers, were not yet enoguh to create the concept, "Unkogyo-sha" or "Operator,"
because the conditions were the same as usual, and the later would rather be calledby the term "Charterer." The Unkogyo-sha must be a group distinct from the usual

charterer. Now, any group could charter and operate newly those Shagaisen?

The data that the Kaiun-kokoku-shi had recorded on the basis of the main
number of cases chartered during the four months from May to August, 1917, give
us a valuable suggestion to approach this problem.

Co. Suzuki Shoten

51

Mistui Bussan

36

Yamashita Kisen Kaisha

30

Shoshou Yoko

15

Foreign Trading Firms

15

Co. Masudaya

8

SEIJI SASAKIos

Co. Yuasa Shoten 7
Co. Okura Shoji 5
Taiyo-kaiun Kaisha 4

Co. Murai Boeki 4(The Kaiun-kokoku-shi p. 757)
Eight members among the above ten charterers were clear trading enterprises.

Two members, the Yamashita Kisen Kaisha and the Taiyo-kaiun Kaisha, ,werefamous and true steamship companies, which of course meant they were also pure
shipping agents. Both of them are still main members of today's shipping circles.
From these figures, we can clearly see that the former had chartered 36 steamers
while the latter had chartered 4 vessels during this period.

The beginning ofthe Yamashita Shipping aompany goes way back to the open-

ing years of the 20th Century. Mr. Kamesaburo Yamashita, a coal merchant,
had bought the Kisagata-mara in 1903 and organized the Yamashita Gomei-Kaisha(an unlimited partnership) in 1911. In 1916 this enterprise was reorganized intoa joint-stock company, the Yamashita Kisen Kabushiki-Kaisha. On the other
hand, the Taiyo Kaiun Kaisha (ajoint-stock company) was a new steamship company, which was established by Chojiro Ito, Chozo Ito, T. Iguchi, T. Ishida, N.
Hatsui, G. Katsuta, Y. Ugawa and T. Hirota in 1917, just in the midst of the war.

Mr. Yamashita had been only an insignificant "single ship owner" and mainly
rented his steamers to the Mitsui Bussan or the Katsuta Shokai, a shipping broker,
because of his inexperience or ignorance of the ship-operating business until WorldWar I. This war, however, led him to enter this field, for he owned just then not

only many steamers, but operated many more vessels which were chartered fromother shipowners. The Taiyo Kaiun was a special shipping firm without theirown ships, at least till the next year, in which their first steamer, "Ume-maru" wasbought into. Therefore this company began their shipping business by operating
the chartered vessels for freight,

Compared with the ordinary business of the N.Y.K., the O.S.K. or Qf the trading firms these two shipping enterprises carried on, at least were thought to carryon, a strange shipping business, for they aimed mainly to charter and operate manysteamers with almost the sole purpose of gaining a surplus of freight over their chart-erage costs. It was certainly an entirely new business from those of the usual
chaterer and Shasen, so that it led to the creation of the concept "Unkogyo-sha" or

OPerator. Thus we can recognize those two steamship companies as the originatorof this Japanese special name.

97
THE DEVELOPMENT OF THE CONaEPT "OPERATORS' IN JAPAN(3)
A large-scale function separation had not only created the concepts "Ship-owner" and "Charterer" but just now formed a new pair of concepts "Shipowner"and "Ship-operator." The latter led to a more widespread appreciation ofsuch
distinction between many general enterprise types which were satisfied with theownership business ofvessels and a few special types which aimed mainly at operat-

ing as pure shipping agents themselves. As a general rule, the former, the Junshenshu in Japanese, was a kind of shipping agent which owned the vessel but did
not operate it. They lent their steamers to other shipping agents or trading firms

to gain the charterage. And the greater part ofthe Shagaisen, so-called "a single

ship owner," "individual shipowner" or "minor shipowner," belonged to thisgroup. On the other hand, the latter, the Unkogyo-sha, owned a few steamers ornone at all and aimed mainly at operating the chartered steamers in line with theirown business plan. The vessels thus carried only such cargoes as they gathered frommany shippers, and earned greater freight than the chaterage costs which he had

to pay the shipowners. Though the word operator in English origin.ally meant
such a simple agent who operated ships regardless of their ownership relation, theUnkogyo-sha, or Operator in Japanese was a more specially limited concept.

Apart from the Taiyo Kaiun which owned no steamers, at least during the one
year after its foundation, the Yamashita Kisen owned, in fact, some steamers andoperated them together with chartered vessels, The N.Y.K. and the O.S.K. also

chartered steamers from the Shagaisen group and operated them together with
their own vessels. On this point, the Yamashita and the N.Y.K. or the O.S.K.
were in the same condition, even though the latter, the Shasen, was a privileged
group and carried on mainly line business. So far as it was a true shipping agent,

there was hardly any distinction between the Yamashita and the others. But,
as has often been described, the difference between the Shasen and the Shagaisen
was too absolute and rigid, so that, the Yamashita had to be called by another name,

This was the main reason that the name or its concept, like Unkogyo-sha or OPerator
was created in our shipping circles. Therefore, OPerator was, in its rigid meaning,

the operator outside the Shasen group, and limited to within the Shagaisen group.

There are some questions on the problem as to whether the term, "Operator"
had been used popularly in those days. This word had been first recognized in thedescription ofthe Kaiun-Kokokushi which had been published in 1927. This tells
us the fact that the term was used from about the end of the Taisho era or from the

SEIJI SASAKI

98

early years of the Showa era, though the meaning of "Operator" in Japanese, as
above-said, was perfectly distinctive from that of its ordinary English connotation.

Since the concept, Unkogyo-sha or OPerator, had been acknowledged in Japanas a special kind of shipping agent, its meaning or its concept has changed in real

usage today. It may be said that this term has a historical development. Now weshall start to seek for an early estimation of this special shipping agent. On thissubject matter, the above-said history-book, the Kaiun-Kokokushi, gives us valuablesuggestions. It describes in summary as follows; though a senior in shipping circles

had pointed out and deplored the fact that there had not been any development of
the Operator in our country, this was rather a speciality inJapanese shipping circles,......this was a kind of abnormal business in the transition period, and if large-

scale shipping companies which could carry on a worldwide transportation or the
socalled great international shipping brokers which would treat all shipping businesswould develop in the future, such an exceptional business, like Operator, would

begin to decline,......the supremacy of Operator, therefore, meant rather the
infant development of our shipping industry,......it would be very questionable,

whether such a growth as Operator could be regarded with pride, and whether
it would develop in the future,......

We can to-day regard the Unkogyo-sha as true shipping agents, for they carryon complete transportation functions of ships. And also it can be said that thedevelopment of many OPerator, like the Yamashita and the Taiyo, as well as the
N.Y.K. and the O.S.K. ought to have meant the prosperity ofJapanese shipping as
a whole. Furthermore, as this book describes, some men of foresight had,stressed

the need of the appearance of such shipping agents. Nevertheless, the author of

the above-said book, a famous shipping newspaperman, dared to assue that such
Operators would be abnormal and there was no hope for their growth. Though it
may have been the man's arbitary opinion, his thought was never random or senseless, so far as he was a well-known journalist and the author of voluminous, fairly

authorized shipping history book. We must naturally understand that there werealso strong anti-OPerator opinions or contemptuous attitudes toward the Unkogyosha in those days.

(4)
So far as the term had been used with such limited special meaning or methodthat only a few operating Shagaisen group, namely the Yamashita Kisen and the
Taiyo Kaiun, or the Daido Kaiun Kaisha which was established in 1930 were called

99
THE DEVELOPMENT OF THE CONCEPT "OPERATOR" IN JAPANby this word, the concept of OPerator or Unkogyo-sha had a special characteristic.
Frankly speaking, the early OPerators were estimated as fairly a contemptuous group,and therefore the word had an insulting tone. This can be also clearly understoodby the words of another expert in relation to the term. Mr. Okazaki, the general
director of the Nippon Shipping Exchange, defined this special group as speculative

shipping agents in his book, the Kaiun*. Many experienced shipping men aMrmed
also that the Yamashita, the Taiyo and the Daido had speculator's tendencies inthose days, and that the early business type ofthose two or three Operators were treat-ed as abnormal or heretical. Perhaps, there wasjealousy over their active development in the general Shagaisen group, while Operator was distinguished as an ignoble

tramp steamship company different from the Shasen group. It can be easily
supposed that suchjealousy would lead to an unreasonable undersetimation of them.

The Yamashita kept on operating 500,OOO-800,OOO dead-weight tonnage inthose days and the Taiyo continuously chartered over 300,OOO too. During thelong depression period after World War I both companies gave, indeed, an opportunity for the voluminous Shagaisen to continue their real activities. They stimulat-

ed not only the growth of many other OPerator businesses, but accelerated thedevelopment of modern Japanese shipping industry as a whole. Thus the earliest
OPerator rendered remarkable services to Japanese shipping history. Neverthelessthe frequent tendency oflooking askance at the pioneer was apt to regard the OPerator

as a speculator and to underestimate it. So far, the concept, Unkogyo-sha or Operator was yet indistinct and undeveloped.

Accordingly it is easy to understand that the developmental change of theconcept "Operator" should have begun by weeping away such an unreasonable
impression as that of its being a speculative shipping agent and by improving thecondition that was apt to be despised. Indeed the real course of this development
was opened by the direct involvement ofmany stronger historic shipping companies,

though the above-said two or three companies also developed within themselves
and through their success gave great impetus to the business ofother shipping agents.

Soon after the establishment of the Daido Kaiun Kaisha, at least before the10th of the Showa era (1935), the Kawasaki Kisen Kaisha, the Kokusai Kisen
Kaisha and the Mitsui Bussan Senpaku-bu (the shipping department of the Mitsui

Bussan Kaisha) had come to be called by the word "OPerator." The Kawasaki and
the Kokusai were established together in 1919. 0n this point they were rather* cf. The Kaiun, p. 147.

100

SEIJI SASAKI

newcomers after World War I, but both had very close connections with the famous

Kawasaki Shipbuilding Company, now the Kawasaki Ju-Kogyo (heavy industry)
Kaisha, and constituted the so-called "K-Line." Such a back ground and theirpowerfu1 activities readily led them to command the confidence ofmany merchants
and general shipping agents. The Mitsui Bussan was, as a matter of course, themost famous historic merchant carrier and even then had begun to develop as acommon carrier. Its historical back ground and its control-power for Shagaisen
were even greater and stronger than those of the Shasen group.

Since so many stronger shipping agents have been involved in the concept"OPerator," this term has lost its contemptuous connotation. The word, Unkogyosha or OPeratorinJapanese still retains some such special meaning as all ofthem were

special steamship companies which mainly chartered ships belonging to other firms.
There was accordingly something ofa speculative nature in those OPerator's business.

But nowit is not worthy ofspecial mention. Even ifthey had some speculative business, it no longer had any effect oflowering their positions as shipping agents. Onthe contrary, the term became a respectfu1 word for first-class shipping agents, whichwere mostly large-scaled companies carrying on an ocean-going transportation
business with larger and better steamers than those ofother popular shipping firms,
some ofwhich operated their own vessels in coastal or inshore routes, like the Shima-tani Kisen Kaisha, the Kuribayashi Shosen Kaisha, etc., while the majority owned
only their vessels without operating them. For a few ofthe greatest selective Shaga-isen enterprises which were doing ocean or international transportation businesssuch an English or international word was suitable. Any middle-class operating
steamship company was, as a rule, placed outside the ordinary meaning ofthis term.

Such a reversing development of the usage has not only made the position of
those OPerators higher than ever, but resulted in a significant change in the concept,

for the term has now become a honorific title for the leading group among Japanese
shipping circles, though the meaning, "first class" or "leadership," was still limited

within the Shagaisen group. And this was the greatest and most importantcharacteristic in the term till WorldWar II. The prewar term, OPerator neverincluded the Shasen group, that is, the N.Y.K. and the O.S.K., in its concept.
The same word, OPerator, had and has a very clear difference in its prewar andpostwar' meamngs.
World War II has brought about many revolutionary changes in both the quality and quantity ofJapanese shipping industry. The industry itself, is changing as awhole, while each member, himself, has passed or is passing through varied experi-

101
THE DEVELOPMENT OF THE CONCEPT "OPERATOR" IN JAPAN

ences. Above all, there is a discontinuance of the distinctive relation between the

Shasen and Shagaisen groups. Those terms have been not used today. We cansurmise the following fact from this discontinuance; that the prewar relat;.on ofboth group powers, or the former's superiority in our shipping circles has changed

very clearly and essentially. Though both companies are still the largest andmost representative steamship enterprises in Japanese shipping circles, the N.Y.K.

and the O.S.K. have almost completely lost their priviledged status. The reappearance of their special treatment as Shasen can not perhaps be expected.
By involvement of the above-said two largest shipping agents, the OPrator hascome to represent the Japanese modern shipping industry as a whole after this war,and to hold a larger-scale leadership. It is even a new term, for its concept haschanged so thoroughly. Ofcourse, we must not neglect the fact that there weresuch historical conditions as the "Unko-jitsumu-sha system" in war shipping control

policy which gave a large direct impetus to the diffusion of this word. However,the fact that the scope of Operator which had been limited to the Shagaisen group has

been enlarged to cover almost all shipping agents and is leading the Japanese ship-ping industry is most important from the historical developmental viewpoint.
Another importance can be found on such points as the real business-performances

ofprewar OPerators who hadbeen composed ofonly a few of the stronger Shagaisenshu but has approached closer to that of the Shasen group. To-day's Operators,
either the N.Y.K. and the O.S.K. or the others, are carrying on almost the same services, especially regular transportation services.

In brief, the group, named, "Unkogyo-sha" or "OPerator," is now governing
the entireJapanese shipping industry as well as what the Shasen had been controlled.

And in today's concept, the N.Y.K. and the O.S.K. are placed on the same levelwith other steamship companies, namely Operaters. There are no longer any clear
distinctions. This is an important change in this concept and it may be said thatthrough this development the Japanese special term "OPerator" is approaching theEnglish concept of "Operator."

SINGLE INDUSTRY TOWNS IN JAPAN

Minoru BEIKpL(1)
In Japan, a considerable part ofher industrial activities has been concentrated

in a few central disticts including our representative trade ports, Keihin (Tokyoand Yokohama), Hansin (Osaka and Kobe), and Chukyo (Nagoya), especiallywhere many classes of industries have accumulated. This is because our country
must depend on raw materials from abroad and foriegn markets for products to ahigh degree, as she has less industrial resources and smaller home markets, and moreover it is due to the fact that the surplus population in agricultural districts has con-centrated in those few industrial districts. Accordingly, our local districts haverelatively fewer industrial plants, excluding certain traditional localized ones, andother small-sized industrial firms. However, some modernized chemical industries(synthetic fibre, oil or natural gas chemical industries, etc.) have recently been constructed in the country districts.

As the result, a considerable number of the large plants in the country, which

belong to representative industrial companies in Japan, have naturally formed
quite a few "single-industry-towns" in agricultural districts. These plants chiefiybelong to the iron and steel, shipbuilding, and chemical industries. These kindsof industries are formed not only in the central industrial districts, but also in the

agricultural districts. Such a single-industry-town has characteristic features re-lating to the company and community relations, being considerable different fromthe features in the central districts. This article is to deal with the management

problems for a core plant in relation to such a single-industry-town in Japan.
We can find one more type of a single-industry-town which has a certain localized
industry through a number of small-sized firms. But this article omits the latter

103

BEIKA
MINORU

104

type, since it has different problems.

(2)
In general, the economic activity of an industrial plant has an important
effect upon the economic, social, and cultural lives of the local community where

the plant is located. Economically, employment and income in the community are
the principal effects. They are not only in relation to the number of workers andthe amount of income which have directly originated from the wages and salaries,
and the various other payments by the plant, but also to the indirect effects which
the direct activities of the plant have circulated by giving employment and income

to various other activities in the local community. Several studies for these
problems have been found before. Moreover, the more the relative weight occupiedby the plant in the community grows, the more its effects are many sided andlarger; they are not only economic phases, but also social and cultural phases.
Furthermore, the characteristics of the various activities in such a community also
have no small effect on the activities of the plant. It is possible to find a mostremarkable model of such relation between the company and community in the"single-industry-town." These phenomena are also not unusua! in Japan. A
single-industry-town in Japan seems to have the common general characteristics
as in other industrial countries, and it also has peculiar charactieristics found onlyin Japan. The purpose of this article is to point out these characteristics.

Representative single-industry-towns in Japan are as follows'.
Manufacturing Industry
Singleindustry

Prefecture

Population

town
Sunagawa
Tomakomai
Muroran

Hokkaido
Hokkaido
Hokkaido

31 437

Kamaishi

Iwate(1957)

Core plant

Employee'
57 190'

artificial fertilizer

2 454

pulp and paper

3 114

'
84 706'iron and steel

881{7,3,128

iron and steel

7, 381

134 508'{'

metallic mining
electric machine

12 OOO

motorcar and track

5, 8263, OOO

Hitachi

IbarakiToyotaKariya

Aichi
Aichi

54, 640

machine6, 5ooNoi
TamanoHyogo

35, 905

ship building

5, OOO

Okayama

65, 202

ship building

6, 173Innosh:ma

Hiroshima42, 759

ship building

4, 156

Ube

Yamaguchi

145 816'43 079'169, 626

coal mining, artificial fertilizer

and cement'

18 OOO'SINGLEINDUSTRY
IN JAPAN
TOWNS
metal mining, chemical products

105

NiihamaEhime

112 570'and machine

Omuta

Fukuoka

205, 880

coal mining and chemical products

26, OOO

NTobeoka

Miyazaki120, 202

chemical products

12 OOO

8, OOO'

Mining Industry{12i,' 152428
5, 999{ 1,762{ 5,3, 500
824
073{ 5,3, 711

Yubari

Hokkaido

131 666

coal mining

MikasaHokkaido

61 576

coal mining

Bibai

Hokkaido

91, 231

coal mining

Ashibetsu

Hokkaido

74, 957

coal mining

MatsuoIwate

2! 645

metal mining

4, 46jr

Osarizawa

Akita

metal mining

2, 598

Ashio

Tochigi

18, 510

metal mining

2, 400KamiokaGifu

26 871

metal mining

3, 800

Yanahara
Takashima

Okayama

i6, 082

metal mining

2, 6ooNagasaki

18, 253

coal mining

4, 551

SakitoNagasaki

25 548,coal mining

3, 940'''11 142''

Looking over the above table, we can see that singl-industry-towns in Japan
usually have a population ofabout 20,OOO to 60,OOO in general, and in the few cities

their populations are between 100,OOO to 200,OOO that a core industrial plant
has developed to integrate the independent or dependent associated industrial
plants horizontally and vertically, and that these cities have multi-core plants
mutually related.

(3)
Mutual relations between the core plant and the local communtiy where theplant is located, are found in various activities as follows :(1) Mutual relations between the core plant and other residential industrial
firms (chiefiy middle-and small-sized firms due to the single industry town),(2) Mutual relations between the core plant and many local wholesale andretail merchants,(3) Mutal relations between the core plant and local agricultural activities,(4) Mutual relations between economic and social activities of the core plant
and the various phases of life of the townsmen.
(1) The core plant and other residential industrial firms.
Since there are primarily few industrial firms required by the core plant in asingle industry town, the core plant should either have some of their own subsidiary

106

MINORU BEIKA

establishments necessary to the principal manufacturing activities, or foster someindependent associated industrial firms in the local community. Even if the core
plant could utilize these independent associated firms, the plant should hold itself

responsible for supporting these associated firms, since independent associatedfirms can find few customers except the core plant in the local community.
Such relations will bring characteristic management policies and behaviors to both.
It is desirable that the core plant adopt business policies to foster the residential

associated firms, not to utilize them as neutral zones for economic fluctuations.
Such policies should be favourable to the core plant too, in the long run. But caremust be taken as some problems are apt to accompany them. It tends, not only, forthe associated firms to be gripped by inertia as they grow accustomed to the fostering
policies ofthe core plant, but also for the management ofthe latter itselfto fall intoa habit ofidle ease from its dominating position in the community, It is one ofthe
serious problems ofindustrial development in the present technical innovation age.

(2) The core plant and local merchants.
In Japan, the local community where the core plant is located, is relatively
insignificant as a market for these products (even if consumer goods) of the plant,
in most cases. Therefore in this case, the matter is chiefly concentrated in the pro-blem of distributing the necessaries of life to the townsmen and the employees ofthe plant. One problem is related to the effect on the commercial activities in thelocal community by the business conditions ofthe core plant. The other problems
are concerned with the coordination or competition between the institutions con-trolled by the plant to supply commodities to the employees and the independent
local wholesalers and retailers. The former problems include not only the economic
effects from the amount of the various payments of the plant, but also the direct
and indirect effects on the commercial activities of the community by the methodof those payments and the b.uying habits and modes of the lives of the employees.
An example can be taken from the fact that commodities prices in some single in-dustry towns tend to rise 100/. to 200/. on pay-day every month. Moreover pricelevels in most single industry towns seem to be higher than in other ordinary industrial districts. Local retailers in such town are inclined to neglect the improvement of

their marketing management, due to the same hot house growth as the sub-manufacturers above-stated. For that reason, the core plant might necessarily have to
get their own shops to sell (or supply) the commodities of life to their employees
at lower prices and with more service . As a result, it often brings about conflict

between the two-the local retailers (and wholesalers) and the plant shops. More-IN JAPAN
SINGLE INDUSTRY TOWNS
over, retired workers from the plant have opened quite a few retail shops in the same

town. It should be one ofthe inevitable responsibilities of the core plant to adjust
the interests ofthe concerned groups; employees, retailers and townsmen.
(3) The core plant and local agricultural activities.

These relations are necessarily more important in single industry towns thanin other industrial districts. Problems are found on two-fold. One is related tothe physical effects, and the other to the human and structural effects. The physicaleffects are such problems as Iand use competitions between industrial and agricultu-

ral activities, and the disposition ofharmfu1 plant water and smoke. These should
be settled not only as one ofthe plant policies in Iocal community relations, but also

for technological efllciency in the manufacturing process. The human and structural effects on agricultural activities are no less important than the physical effects.

In a single industry town, the core plant inevitably has to employ for workers, aconsiderable number of the farmers or their family in the neighbouring rural communities. As a result, pure farmers decrease and side farmers increase, so gradually

the type of so-called "plant-worker-farmers" has come into existence. Thus theadministration of such farm villages and the management of their agricultural industry come to have characteristic problems, such as the increase ofvery small-sized
farmers, the idea toward agriculture ofthe farmers in such districts changes and theirmode ofIife too is affected not a Iittle by those changes. The core plant must investigate the quality ofsuch workers, forindustrial activities. These workers in farm
villages have fairly different natures from those of workers in industrial districts.
Moreover, the core plant should inevitably share the responsibility of developing such

agricultural communities, more or less, because Japan has originally less arable
land for provisions (only about less than 200/, ofthe whole land). The agriculture
and industry relations are one of the most important problems in our country.

(4) The core plant and the lives ofthe townsmen.
The industrial development ofthe core plant means an increase in the employment of the local people, but the degree of the employment increase is generally
lower than the degree ofpopulation increase in the local community, due to techni-

cal developments in industry. Since there are few other industries for employment

in the town, employment problems are very serious in a single industry town.
Moreover, the quality of the operations ofa core plant may characteristically limit
the quality ofthe employees, for instance, sex, or age restriction, kind ofskill, andso on. Accordingly, the structure of the occupied population in a single industry

town tends to incline to a conspicuous unbalance that it is in danger of being107

MINORU BEIKA

108

detrimentally affected by economic fluctuations.

In short, the four types of mutual relations between a core plant and its local

community above-stated, emphasizes the importance of Iocal community relations,for the core plant or its company in a single industry town.

(4)
What are the real states of the community relations policy of industrial com-panies in Japan? Generally speaking, most of our industrial companies do notseem to have definte community relations policies. Actually, the general affairs

department of our companies which is a relatively characteristic department ofour companies, deal with such problems, without having definite policies.
Especially, real activities in the community relations have been undertaken insingle industry towns. It is now a question as to what constitute problems in
actual community relations in the single industry town.

In a sense the community relations in single industry towns in Japan seemto go beyond a moderate state. As stated at the beginning of this article, the industrial activities have been concentrated in few central districts, so a number ofsingle industry towns has come into existence in local districts. Therefore, the core

plants in these towns must necessarily undertake much work which are n6t directly
related to the original business of the plants and which are unnecessary in thesecentral districts, for the purpose of preparing good working conditions for theiremployees. Such positive favouring policies to the local community have been
traditionally institutionalized, so that the various facilities given by the core plant

have unconsiously been deserving to not only the employees and the townsmen,
but also to the local government. Thus the employees and townsmen tend to lack

positive will for improvement. These phenomena can be seen as being caused by
the insensible excess ofcommunity relations policies ofthe core plant.

Generally, the characteristics ofa modern town (or city) life are so many sided
and so dynamic that the business activities, cultural lives, amusement, religious anddaily lives ofthe townsmen are separated from each other in the community. However, in a single industry town, the many-sided lives ofpeople are blocked up in thesame circle to a considerable extent and have features similar to the rural community

life ofJapan. We can go so far as to say, that in some cases the single industry

town seems to have a feudalistic atmosphere. Accordingly, the management ofthecore plant has been directly or indirectly affected by such an atmosphere. This isalso one of the important management problems for buisness enterprises in Japan.

SINGLE INDUSTRY TOWNS IN JAPAN
Community relations in general are very essential for business enterprises, as it has

recently been emphasized, especially in the U.S.A. But naturally the actual policies

must be peculiar to each real industrial business. It is natural that community
relations have been emphasized in American industrial enterprieses recently, since
they have established many new branch-plants at great strides in various new loca-

tions for the expanding markets oftheir country. InJapan, the enterprises shouldreflect on their existing community relations policies which have naturally accumu-

lated through unavoidable necessitiy, at least in the single industry towns. In
such cases, the simple intensification of community relations might have resulted
in human inertia against the improving activities of the townsmen and the management of the core plant. Moreover, the municipality, the local self-governing bodyand the state, also tend to depend on the community relations policies of the core

plant. These mutual relations might have brought about the actual features ofthelabour and management relations as more characteristic or more undesirable incertain cases. Community relations in single industry towns must be an essential
matter of concern for the interest groups, but actual policies and behavior must be

decided under actual circumstances.
In the industrial districts, however, the necessity ofso-called community relations should be emphasized, since the local industrialists and the national industrial-

ists or the local firms and the large plants ofnation-wide companies might not always

have good relations with each other in the local communities.

(5)
The management problems in business activities due to spatiality which may
be found in the internal relation ofthe company, consist oftwo sides which concep-

tionally are actually combined. One side of the problem may be found in thespatial diversification (branch plants, sales oMces, etc.) ofthe company. The othermay be the management problems that each of the diversified establishments ofthe company has been affected by the peculiar conditions of the environing local

community. The latter problems seem to be more weighty than the former inJapan.
Many reasons could be enumerated. But in the final analysis, the dual (un-balanced) structure of ecomonic conditions in Japan should have been realized
in the spatial phases ofindustrial management. The real features could be foundin the unbalance between urban (or metropolitan) and rural communities in theireconomic, social and cultural phases, the accumulated industrial concentration in

109

110

MINORU BEIKA

the few central districts and the formation of single industry towns and of dotted
small-sized industrial districts, and of the excessive concentration in Tokyo of thehead oMces ofmany representative companies As aresult, the regional differencesby the unbalance between forwardness and backwardness in regional development,

have caused diMcult management problems in multi-establishment companies.
Typical cases are to be found in single industry towns, as stated before.

Accordingly, for the purpose ofsolving such problems even to a small degree
the cornmunity-relations policies in a single industry town should be examined by
the concerned companies on the one hand, and regional development policies should
aim to remove the regional unbalance on the other hand. Especially, in the latter,

the regional industrial development policies by the government have important
relation to the problem. Generally, industrial development has been seen to havea direct effect on employment and income in the local community, but attention
must be paid so that a balanced regional development in industrial actlvities cangradually settle one of the spatial problems in the management of the companies,and contribute indirectly to the industrial development ofJapan as the whole. The
latter viewpoint must be emphasized to prevent a shortsighted application of thelocation theory. The single industry town has typically shown us one ofthe characteristic features of the regional problems of industrial activities in Japan.

ONTHE APPLICATION OF THE SOCIALACCOUNTING PRINCIPLE TO
BUSINESS ACCOUNTING

Nobuko NosE

I. Introduction
Recently, Dr. Bray has made a proposal saying that it is necessary to apply
the principle of social accounting to business accounting. In other words, themain points ofhis writing can be understood as follows, that is-he tried to establish

1) a measuring principle for business income and 2) an accounting system for business accounting to fit that of social accounting and to develop this method for that(1)
purpose.
We would like to take up the first problem in his remarks in this article. The
reason we do this is that, first of all, this problem is the most important before

and is set to the line of "relation between accounting and economics" as thetheoretical background for this argument. Secondly, there still remain many pros

and cons concerning this problem as it was formed during the period when the

inflation was going on in England. The study of this problem is also very
interesting from the view point ofits relationship with the economic background in

England.
Analysis of this problem will be made in the following order :I. An outline of Dr. Bray's proposal.
II. His thoughts in his proposal and opposite opinions.
III. Social backgorund of Dr. Bray's proposal.

IV. Conclusion.
(1) See his works `Measurement of Profit,' `Accounting Mission,' `Four Essays in Acounting
Theory' and `The Interpretation of Accounting.'

111

NOBUKO NOSE

112

(II)
The postulate ofmeasurcment on social accounting, which he used as a standard
for studying business accounting, is the method of recording transactions for thebusiness sector in the category of the social accounting concerned. There is nothing peculiar in this itself, because considerable isomorphism lies between the account-ing system in the business sector and business accounting. The question arises
as to the reason of applying this method to business accounting, which has alreadyestablished its postulate, convention and assumption, unless this application comesfrom the practical reasons.
Dr. Bray's explanation on this point is not so very clear and not intersecting asthat ofthe social accounting view. Ifforced to find a reason from the social accounting view, we sould conclude that the current business accounting system, in the cour-

se of expected fluctuations in price level and increasing productivity, is now in astage where its convention needs to be reexamined and reformed, and also to be

adjusted by way of adding the logic of economics to the conventional tendencywith influenced by law. Here, he compares the two accounting situations on theconcept ofbusiness income. According to his words, these two forms of accountings

are different on the following two points regarding fundamental measurement.
1) Whereas social accounting measures the produced value added, business accounting evaluates the profit from revenue-from realized sales.

2) Social accounting estimates and sums up the imput according to the current
market price basis, while business accounting does so according to the historicalcost basis which has been realiy paid by the business.
It is interesting to note that Dr. Bray places great importance on the second
point when he examines the concept of business income, that is, what he says is that

there are many defects in which present accounting adopts the monetary postulate
when inflation is going on. About that, he says "there is little that we should needto say about this ifwe still lived in times ofrelatively stable money values. As things

have turned out, particularly in the face ofrising prices, it is very doutfu1 whether

this approach can be supported."(')
Thus, he insists that the depreciation system of traditional accounting, which

can be traced back to the past historical cost which was ruled by the Recommendations on Accounting Principles by the Institute of Chartered Accountants of Englandand Wales, is a backward-looking method, and the depreciation system of social
accounting, according to the current market price or replacement cost, is a forward-

113
ON THE APPLICATION OF THE SOCrAL A(moUNTING PRrNCrPLETO BUSINESS AocOUNTING
looking one, and the latter surpasses the former when counting economic income.
This argument on treating fixed assets applies also to inventory assets. Regarding

the above-mentioned Recommendations which are concerned only with `the lower
ofcost or market value' and `the consistency in method', he says. "The questionsof replacement does not arise in arriving at the accounting measurement of
profit."(2)This traditional method regards only for expending money capital oninventories, and contrasts with the method of social accounting in which theinventory cost is counted according to thelast cost or end period prices. Thus, thebusiness income, counted by the traditional method, cannot help amounting toalarge sum of money which contains capital gain-the difference between
historical costs and current prices. In this way, Dr. Bray opposes the concept of
the real capital maintenance behind the income count in social accounting to that of
the maintenance of contributed monel caPital ofProPrietors behind the business income
count in business accounting, and in conclusion, he insists that it is necessary for us

to depend upon the former method which is significant in national economics.
(1) F. S. Bray, `Measurement of Profit,' p.67.

(2) Bray,`Measurement,' ibid.

III
In Dr. Bray's proposal, the social accounting postulate should be taken intobusiness accounting as a part ofhis demand in which he insists that the consistency

should always be held between social accounting and business accounting. But,
we wonder whether this consistency can be formed between two accounting systems
ofsuch different spheres and whether there can be any question beyond the balance
ofthe two systems. Let us examine this matter a little further.
First ofall, we would like to see the situation ofthose who study social account-ing. When they count the accounting aggregates in a business sector, they estimate
the expense of the inventoiy and fixed assets according to the current market prices.

So, their way of doing comes from the motive of social accounting itself in which
they wish to count the real value of one year's productive activity in one country
according to the current market prices. This testing oftheirs is naturally needed formeasuring the real national products. But it does not mean for other accounting

systems to imitate this, nor does it mean that it is generally used for micro
accounting entity-for instance, for business. Of course, in social accounting,some statisticians, who are really collecting and examining data, are dissatisfied

NOBUKO NOSE

114

with the amount of depreciation expenses and inventory cost, which is given bybusiness accounting,(i) and also support the argument on the consistency of the twosystems in appraisal method as they wish to enforce the direct count of the sampling method.(2) It goes without saying that this opinion itselfcomes from practicalreasons-a quite practical motive in which they can carry out accurately, cheaply,
and immediately the counts in social accounting, not from any theoretical reason.
Then, we must inspect his proposal from a theoretical viewpoint.

First, we can recognize that the problem in the business income concept is
not only a matter of the relation between social accounting and business accounting

but it also has a more profound background. This is understood as the line ofsub-

ject which arose concerning the relation between accounting and economics.
Therefore, next, let us see how the position of this problem is fixed in the history of

the relation between accounting and economics. First, social accounting is a kind
ofnational accounting in which we count the social income according to the definition ofeconomics, and it is well known that the principle ofreal capital maintenance,
the principle ofincome count for social accounting, was originally stated by Pigou(3)and followed by other economists to estimate the national income, the objective
counterpart ofeconomic welfare. Added to this, in the relation between the twostudies which is prosecuted through an examination of accounting income andeconomic income, that this principle of economic income count is quoted as thefundamental basis is well recognized by those who know the related process
between these two studies.(`)

We can, after all, understand that Dr. Bray's proposal is to study the relation
between social accounting and business accounting instead of that between account-ingandeconomics. Ontheotherhand,examiningthisrelationfromtheaccounting
viewpoint, we can know that this is evidently one expression of the argument of
whether it should depend upon the historical cost basis or the replacement cost(current market price) basis as the principle of measuring business profit.
Those who insist on the replacement cost or current market price always quote moreor less this economist's income and capital conception as the core oftheir arguments.

So, from these two above-mentioned points, we can understand what it means inaccounting when the income conception ofsocial accounting is applied to the business accounting which finally goes to the argument of the principle of the replace-ment cost or current market-periodical matching ofrevenue and cost in same pricelevels.

,Now we would Iike to examine more about whether this opinion in accounting

115
ON THE APPLICATION OF THE SOCIAL ACCOUNTING PRINCIPLETO BUSINESS ACCOUNTING
has any other points for argument aside from Dr. Bray's explanation. People who
prefer the replacement cost principle are convinced that they can restore the valueof explanation about the statement of profit and loss and resolve the problem ofpresent financial deficiencies at the same time, and believe themselves right, having

theirjust economic income conception as their chiefreasonable support, and having

the responsibility for manager to reserve replacement fund, the demand forsound finance and holding the comparability of business eMciency, the elimination
ofthe influences toward business fluctuation, and finally the claim ofaccordance tothe national income accounting as complementary support.(5) Here, we can see
the fact that the basis of Dr. Bray's argument is equivalent to only the above men-tioned last point as complementary support. By the way, we know that this replacement cost principle can be passed if it can completely conquer the opposite
cost principle-the last card of traditional scholars in accounting. This last cardis theoretically stated as follows. According to Mr. Norris, 1) We do not think thatmonetary value fluctuation will happen as a count term in accounting. 2) We
have to apprehend capital and interest concepts in their primarymeanings. 3) Weshould satisfy the necessity of objectivity on reports of past transactions. 4) We

must think of the measurement of profit and financial policy to be in different
dimensions. And adding to these, Norris insists that he cannot easily get index anddatum proper in practical collection.(6)Moreover, the above-mentioned argument ofcost basis can satisfy the following

as being more practical arguments. 1) Want ofa replacement fund depends on
the re-investment condition of funds in business and the degree oftechnical advance-

ment. 2) There is an institutional objection, for instance, disagreement of tax
authorities. 3) managers of business do not like to use the replacement cost basis

during a depression . 4) The purpose offund increases and tax reductions can beachieved by increasing the retained profit and introducing some device as the initial

allowance into the tax law. And, in England, there is one objection, given by the
Tucker Report, from the impartial point ofview-an objection for the preferential
treatment to the owners of business as against other classes of tax-payers, especiallyto the owners ofspecial businesses.(')

Dr. Bray has to dispute every one of these objections and conquer them so that
his insistence of the replacement cost principle may have a persuasive effect in accounting. It is not so persuasive, ifhe only insists that the income count principle
ofsocial accounting should be the same as that of business accounting without disput-

ing above points.

NOBUKO NOSE•

116(1) S. Kuznets, `Changing Inventory Valuations and Their Effect on Business Savings and on
National Income Produced,' gee also, S. Fabricant, `On the Treatments of Corporate Savingsin the Measurement of National Income.'(2) R. Stone, J.E. Utting and I. Darbin, `The Use of Sampling Methods in National In come,'
Accounting Research, Vol. 1, No. 4. July, 1950.
(3) A.C. Pigou, `Economics ofWelfare,' Ch. 4.
(4) J.T, Wheeler, `Economics andAccounting,' pp.42-76, Ch. 2 of`Handbook ofModern Accounting,' edited by M. Backer. Study Group on Business Income, `Changing Concept of Business

Income,' Ch. 3.
(5) A. R. Prest, `Replacement Cos: Depreciation,' Accounting Research, Vol. 1, No. 4,July, 1950.

(6) H. Norris, `Profit, Accounting Theory and Economics,' Economica, Aug., 1945.
(7) Tucker Report, Article 100, 104, 105 and 109 of Ch. 3.

IV
The objection to Dr. Bray's argument is not only prominent as an accounting
argument, but it also depends upon present business conditions which are the realbase of accounting, that is, upon the fact that there are really some Iines of business

which are against taking the uniform social accounting principle. Now, let us
study the social meaning of Dr. Bray's argument and the opinions against it behindthe social framework of England. First, in the general background, the degree of
prices lncrease in England after World War II, is shown in a general price index

as:-52(1945), 58(l947), 67(1948), 70(1949), 80(1950), 97(1951), 1OO(1952) [IOO=(1953)],(i) and then it is shown in an average index of replacement cost as this-159(1945), 195(1947), 209(1948), 218(1949), 232(1950) [100-(1938)].(2) Thisis the backgound for inflation accounting, which is insisted upon by scholars on
current market price basis.

This background, however, is onlyageneral base. So it does not mean theurgency degree of the physical capital maintenance or of interest taking a new
accounting system in each business. As for my opinion, this is the veicy backgroundto which each business objects to take the new unifying count system as Dr. Braysays.

So, when we consider his proposal of the replacement cost basis, we must at
first understand that each business is different in the timing ofits capital expenditureand enjoys different effects from it.

The above-mentioned Tucker Report looks askance at the fact that some business had prepared all their equipment before the war, as this proposal was allowedby tax laws, and they have not yet paid for replacement and new capital after thewar, but still have obsolete machinery without treating as scrap. These businesses generally do not expend capital to modernise their plants, and have fixedON THE APPLICATION OF THE SoeIAL ACCOUNTING PRINCIPLE 117
TO BUSINESS ACCK)UNTING
assets lately, saying that they had expended their capital before the War, and havereceived much more tax benefits than re-expended businesses.(3) Thus, as the
Tucker Report suggests, it is natural that there are many objections on the side ofa new business or any expansion in existing ones.

But questions do not disappear here, for there are some businesses that object

because they can not practise it at all. Probably, there will be some businesses

which are not willing to agree to change the present accounting system even if
they have the above-mentioned conditions, because it is diMcult in them to treat
the inflation accounting.
So, secondly, we must recongize that a business, which cannot get mnch revenue
in proportion to its cost increase, will be against this proposal. This includes two

kinds ofbusiness, one is the public company under the control by the government,
and the other is a business which can not make profits even in the time ofinflation-under conditions ofgeneral small products. In these two, the former can request
a revision of fee to the government, saying that they will increase their replacement

expense unless they are able to increase the price and will be able to get an allo-

wance from the government before long, while the latter's objection comes fromthe fact that the increasing degree ofprice and the rate ofprofit have their weakness

and incongruity at the time of inflation especially at the end, and these kinds ofbusiness cannot always help clinging to count according to the historical cost unlessthey have the ability of obtaining enough profit. So, the argument, which existed
only one side, should be considered wider.
Thirdly, the technical level in making a price index is not the same in eachbusiness. The objection of traditional accounting scholars, saying that the index
puts selfishness into right technique, is suspended with the fact that producing

an accumulated price index is too diMcult for minor private companies without

any count equlpment.
Moreover, in accounting for inflation in England, we see the fact that theFederation of British Industries is its direct advocate, and some big business recom-

mends and practises it. And more remarkable thing, we should know that thisbusiness is the famous monopolistic enterprise, i.e. Imperial Chemical Industry,Ltd. and Unileverse. From this, we can understand that Dr. Bray's proposa! of
taking the social accounting postulate into business accounting is not an urgent

matter for many average businesses or those below average, but is recognized byonly a few big businesses as an interesting idea.
(1) Source, `World Statistics,' Vol. 8. p. 460.

NOBUKO NOSE

118(2) Taxation and Research Committee, `Accounting for Inflation.'(3) Tucker Report, ibid. Article 109. Now, we must add that the initial allowance system,
recommended by the Tucker Report, which admks to count 40-200/, of the jnitial allowanceof fixed asset js relief for inflation accounting in England.

v1) Dr. Bray's opinion of taking the social accounting postulate into businessaccounting is summarized in the argument ofthe replacement cost basis in businessmcome count.
.

2) Dr. Bray's insistence is one of the expressions at present in the relation

between `accounting and economics.'
3) Dr. Bray's argument has not yet been proved enough as a criticism forpresent business accounting, while, in its inclination ofsurpassing the theory of social

accounting, it is deficient in persuasive ability-lack of theoretical accuracy.

4) As I mentioned before, the adaptation of the social accounting principle
into business accounting is not always useful for every business, but is usefu1 for
only a few special businesses-partiality.

5) The application of the social accounting principle to business accounting
is only supported by practical props, i. e. easy, cheap estimation in social accounting and desire of rising provisions in big business.

VALUATION OF WORK IN PROCESS
Susumu WATANABE

I
Here we understand by `valuation of work in process' the determination of
costs to be assigned to work in process, not yet finished at the end ofthe cost account-ing period. In process cost accounting on the basis ofactual costs, the sum ofmanufacturing costs ofthe period and costs ofwork-in-process inventory at the beginning
ofthe period (hereinafter referred to as `total manufacturing costs') is to be divided
between finished goods of the period and work in process at its end, with the logicalconsequence that the determination of costs to be assigned to work in process at theend of the period is at the same time the determination of costs to be assigned tofinished goods ofthe period. The relation, therefore, between total manufacturingcosts and valuation offinished goods and work in process may be stated by the follow--

ing formula:

Ci+C2=C3+C4
C, +C,-C,=C, ......(1)C,==costs of work in process at the beginning of the period, C2=manufacturingcosts ofthe period, C3=:costs ofwork in process at the end ofthe period, C4=costs offinished goods of the period.
By formula (1), we first determine costs ofwork in process, and then find costsof finished goods by deducting costs of work in process from total manufacturing costs. But this is not the only possible way of allocating total manufacturingcosts. Such allocation may also be attained by the following formula:

C,+C,-C,=C, ......(2)Formula (2) is no less theoretical and no less practicable than formula (1) in allocat-

ing total manufacturing costs between finished goods and work in process. In

119

120

SUSUMU WATANABE

addition to formulas (1) and (2) by which C, or C, is first determined and then deducted from Ci +C2 to find C4 or C3, it is possible to compute C3 and C4 independent-

ly ofeach other (in accordance with the principle ofcost allocation to be mentioned
below). But formula (1) is in general use, solely because it is the simplest procedure.

The following are important factors to be taken into consideration in allocating

total manufacturing costs between finished goods of the period and ending workin-process inventory.

(1) Process cost accounting is the method applied to those industries in whicha continuous and repetitive production of the same kinds of goods is carried on.
Costs ofa given department or process are assigned uniformly among units producedin the department or process. In other words, the unit cost of the products is cal-culated in terms of average cost. That is because there is no reason why one unit

should be distinguished from another in assigning manufacturing costs. (Hereprocess cost accounting is to be differentiated from job order cost accounting inwhich production costs are accumulated for each production order, each production
order having its own costs to be assigned to it.) The performance of that particulardepartment or process necessary for obtaining average unit cost is represented interms offinished units. For instance, work in process, 200 units 60 per cent. complete,is added to finished units as equivalent to 120 finished units. The quantity thus
represented in terms of finished units is called `equivalent production' or `effective

production'. Thus a common denominator necessary to compute average unit
cost is obtained by computing equivalent production.
Equivalent production is generally computed with regard to materials on the

one hand and labor and manufacturing overhead on the other. The proportion ofmaterials contained in unfinished units at the end of the period to materials contained in finished units is not necessarily equal to the proportion of labor and over-head assignable to unifinished units to labor and overhead assignable to finishedunits. As to materials, we first estimate the ratio ofmaterials contained in unfinished units to materials contained in finished units, and then obtain equivalent produc-tion of unfinished units at the end of the period by multiplying the quantity of un-

finished units by that ratio. As to labor and manufacturing overhead, we firstestimate the ratio of unfinished units at the end of the period to finsished units interms of stages of completion, and then obtain equivalent production of unfinishedunits at the end of the period by multiplying the quantity of unfinished units bythat ratio.

The correctness of the estimation of materials contained or of stages of comple-

VALUATION OF
WORK INPROCESS
tion, through influencing the estimation of the performance of that department orprocess,exerts a gi'eat influence upon cost assignment between finished and unfinish-

ed units. It is in this aspect that the alleged importance of the valuation of un-

finished units in process cost accounting is to be considered. For if equivalent
production is properly estimated, assignment of costs will automatically be correctly

made between finished units and unfinished units at the end of the period on the

N to be mentioned in the following paragraph.
assumption as to the `flow ofcost factors'(2) As to the flow ofcost factors there are three assumptions generally accepted: (a) first-in first-out, (b) average, and (c) last-in first-out. On the basis of theseassumptions there arise Fifo, average and Lifo methods respectively. These threemethods have a uniform application to all kinds ofinventories. Cost assignment inprocess cost accounting is no exception to the rule. In other words, costs of unfinished units at the end of the period may be regarded as consisting exclusively of
manufacturing costs of the period-provided the quantity of unfinished units at theend ofthe period is not greater than the quantity ofmanufactured units corresponding to the manufacturing costs of the period-(Fifo), as consisting of both the costs

ofunfinished units brought forward from the preceding period and the manufacturing costs of the period (average method), or as consisting of the costs of unfinishedunits brought forward from the preceding period-provided the ending quantityof unfinished units is not greater than the beginning quantity of unfinished units(Lifo).

In the case of the Fifo method, the costs of unfinished units at the end of theperiod are valued as consisting solely of manufacturing costs of the period. The
unit cost necessary to value unfinished units at the end ofthe period is obtained byapplying the following formula:

Uf = g,+(p,Å~QgS-(P,Å~Q,)
Uf=unit cost to be used in valuing unfinished units by Fifo, e4=quantity of finishedunits of the period, P3=stage of completion of unfinished units at the end of theperiod, Q3==quantity of unfinished units at the end of the period, P, =stage of completion ofunfinished units brought forward from the preceding period, Q.,=quantity

ofunfinished units brought forward from the preceding period.
Hereinafter we refer to the denominator in this formulaq4 + (P3 Å~ Q3) - (Pi Å~ Qi)as performance corresponding to the manufacturing costs of the period. Thisis a quantity obtained by subtracting the equivalent production of unfinished units
brought forward from the preceding period from the total of the quantity of finished

121

SUSUMU WATANABE

122units ofthe period and ofthe equivalent production ofunfinished units at the end of

the period. The manufacturing costs ofthe period have been expended for the pro-duction ofthis quantity. (P, Å~ Q,) is subtracted because itrefersto theperformance

during the preceding period. But as already pointed out, the cost assigned to unfinished units at the end of the period is to be determined separately with regard tomaterials and labor and overhead, so that C2 in the above formula denotes material
cost of the period for the purpose of material cost assignment and that it denotes

labor cost and overhead of the period for the purpose of assigning them. Corres-

pondingly g, P and <2.in the denominator denote e, P and Q.corresponding to material cost or labor cost and overhead, and so forth.

Thus the cost ofunfinished units at the end of the period (CJf) and the cost offinished units (C4f) are to be calculated by the following formulas:

C,f= Uf Å~ (P, Å~ Q,)

C4f=Ci+C2-C3f or Ci+Ufx(g4-PiXQi)
These formulas mean that the cost offinished units is determined on the assumptionthat the manufacturing costs of the preceding period are contained exclusively inthe cost offinished units. As stated above, however, where the quantity ofunfinished units at the end ofthe period exceeds the perfbrmance corresponding to the manufacturing costs of the period, part of C, is contained in the cost of unfinished units
at the end ofthe period. In this case, thcrefore, all the costs ofthe preceding period
cannot be said to be contained in the cost offinished units. But such rare cases willbe left out of consideration in this article.

In the case of the Lifo method, the valuation of unfinished units at the end of

the period is somewhat complicated. The reason is that the valuation of unfinishedunits at the end ofthe period varies with the relative quantity of the equivalent production ofunfinished units at the end ofthe period (P, Å~ Q,) and ofthat ofunfinishedunits at the beginning ofthe period (P, Å~ Q,)•

Where P3 Å~Q3==Pi Å~Qi, unfinished units at the end of the period are valued
at the amount C,. In this case, therefore, C2 is itselfthe cost offinished units ofthe

period. Where P3 Å~ Q3 is greater than P, Å~ Q,,we divide the quantity P3 Å~Q3into
two parts, (a) that part ofP3 Å~ Q3which is equal to P, Å~ Q, to be valued at C, and (b)the excess (hereinafter to be represented by dg) ofP3 Å~ Q3 over P, Å~ Q, to be valued

at the unit cost Uf used in the case of the Fifo method. That is because in the caseof the Lifo method costs are assigned on the assumption that that part ofP3 Å~ Q.3

which is equal to Pi Å~Q, continues to be P, Å~Q, and that only dg, the increment

during the period, consists of the performance corresponding to the manufactu-

VALUATION OF WORK IN PRoeESS
ring costs of the period.

Thus the cost of unfinished units at the end of the period (C3i) and the cost offinished units (C4i) are to be calculated by the following formulas :Csi=:C,+UfÅ~dg
C4i=Ci +C2 -(C, + Uf x dg) or C2 - Uf x lig
Where P3 Å~ Q.3 is smaller than Pi Å~ Q,, unfinished units at the end ofthe period

are valued at C, less the cost corresponding to the decrement during the period(hereinafter to be represented by -dg). In Lifo valuation, C, does not generally
consist of uniform unit cost, but of `layers of costs', different layers having different

unit costs. Assuming for simplicity's sake that Ci consists of uniform unit cost,
C3i and C4i are as follows :Cji== Ci- p,giQ, Xdg or p,CxiQ., Å~(P3XQ.3)
C,i=C, +C,- p, giQ, Å~ (P3Å~ Q3) Or C2+ p, l] Q., Å~ lie
In the case ofthe average method, the total ofC, and C2 is distributed between
finished units ofthe period and unfinished units at the end ofthe period by the ratio

between their quantities. The unit cost (U.) needed for this purpose is caulclated
as follows :Ua= g,+C`(>:xC2Q,)
And the cost ofunfinished units at the end ofthe period (C3.) and the cost offinishedunits (C4.) are to be calculated by the following formulas:
C.ia= Ua Å~ (P3 Å~ Q3)

C4aww-Ci+C2-UaX(P3XQ3) Or UaXe4
As cleaily shown by these formulas, it is characteristic of the average methodthat the unit cost given to a finished unit is equal to the unit cost given to the unit of

the equivalent production of unfinished units. (This is not the case with the Fifo

or Lifo method.) But this is the result of the selection of the average method asa cost assignment method. When we say that in process cost accounting the unit
cost of the product is an average cost, we do not mean the average cost describedabove. In other words, process cost accounting lends itself to the application ofeither the average or Fifo or Lifo method. Selection among these three methods
is a matter to be considered from an entirely different point of view.

123

SUSUMU WATANABE

124

IIWhat do we mean by saying that in process cost accounting the unit cost of
the product is an average cost (because there is no necessity, as in the case ofjob ordercost accounting, of distinguishing different products in assigning manufacturingcosts.) ? Does it mean that the unit cost of finished units produced during a costaccounting period is uniform? As a matter ofcourse, uniform costs for finished units
can be obtained by dividing, by the quantity of finished units, the costs assigned tofinished units by one of those methods. (In the same way, uniform costs for unfinished units can be obtained by dividing, by the quantity of unfinished units, thecosts assigned to unfinished units.) But the `average cost' primarily meant in process cost accounting is not the averaged cost in this sense. For example, the average
cost of finished units can be obtained by dividing, by the quantity of finished units,

the cost of finished units calculated by the Fifo method. In this case, the average
cost is as follows:

Ci+UfÅ~(g4-PiÅ~Qi)
q4
But this formula is not the only way ofobtaining the unit cost of finished units by the

Fifo method. The Fifo method, in distributing manufacturing costs, assumes thatthe manufacturing costs of the period are first expended for the completion of unfinished units brought forward from the preceding period, and then for the production ofunits started during the period. Strictly speaking, therefore, finished unitsof the period should be divided into (a) units brought forward from the preceding
period and finished during the current period and (b) units started and finishedduring the current period, the two parts having costs corresponding to them respectively. Thus the cost of finished units (C,f) is to be divided into the following
parts :

Ci + Uf x Pi' Å~ Qi • . . . the part of finished units which co nsists of units

brought forward from the preceding period .. (a)Ufx(g4-Q]) •••.the part of finished units which consists of units
started and finished during the current period . . (b)Here P,'==1 -Pi
In this case, it is of course possible to obtain average costs of (a) and (b) res-pectively. The unit cost of (a) is one thing, and that of (b) is another, assumingthat cost factors are subject to price fluctuations. That is to say, the unit cost of (a)is CJ+Uf il i'Å~Q) , may be different from the unit cost (Uf) of (b)•

VALUATION OF WORK IN PROCESSTo divide finished units of the period and to calculate and record the respective
costs as above mentioned is not repugnant to the purport of process cost accounting,but is a procedure more compatible with the purpose ofthe Fifo method, where thismethod is adopted. It is then obvious that to obtain a uniform unit cost for finishedunits of the period is not the primary object of process cost accounting. Still lessis it the proper purpose of process cost accounting to equalize the unit cost of un-

finished units at the end ofthe period (the stage ofcompletion being ofcourse taken
into account) and the unit cost offinished units.
By saying that in process cost accounting the unit cost ofthe product is an aver-age cost, we really mean that the manufacturing costs ofthe period (C2) are equallydistributed over the performance corresponding to the manufacturing costs of theperiod, that is to say, C2 is equally distributed over the quantity represented by

g4+(P3Å~ Q.3) -(P, Å~ (2,i). For there is no reason why works ofthesamekind per-formed during the same cost accounting period should be distinguished to havedifferent unit costs charged on them. And the unit cost equally distributed overthe performance corresponding to the manufacturing costs of the period is Uf.

This incidence of Uf is clearly shown in the Fifo cost allocation. As above
mentioned, C, and C2 are distributed in the following relation;
Ci +C2 = [Ci + Uf Å~Pi' Å~ Q]] +[Uf Å~ (g4-Q])] +[ Uf Å~ (P3 Å~ Q3)]

In the case of the Lifo method, where P3Å~Q.3=P, Å~<2.i, finished units arevalued at the unit cost of Uf and, where P3Å~Q3 is greater than P, Å~ Q.,, the total
ofCJ and C2 is to be distributed as follows:

Ci +C2 =[C2 - Uf Å~ dg] +[C, + Uf Å~ de]In the case of the average method, Uf does not become apparent, because
the total ofC, and C, is distributed between finished units ofthe period and unfinishedunits at the end of the period without distinguishing Ci and C2, and there is no parti-

cular need to obtain Uf for C2. But the effect of Uf on the valuation of unfinishedunits at the end of the period by the average method can be found by the following
formulas. But, for simplication, e, shall stand for Pi Å~Q.i, g3 for P3Å~<2.3, and g2

for g4+(P3XQ3)-(PixQ]). In this case, the cost of unfinished units at theend of the period calculated by Fifo may be represented as follows:

C3f:= C2 xg3 or Ufxg3
92
The cost ofunfinished units calculated by the average method is as follows,
and we can see how far C2 exists in it:

92

125

SUSUMU WATANABE

rz6

C3a= S,++Cg22 Xg3== g,C+'g2 ' 93+ g,C+'g2 'g3= e,C+'e, 'q3+ g,C+'g, 'g3' *-= g,C+'e, '93+ q,l'g, ( f:m' Zs)
2Cis notparticularly calculated, but we
In the case of the averagemethod,g2
should realize that this calculation is hidden in the average method. If we representby x the quantity consisting of C, out of g3 and by! the quantity consisting of C2,

C3. may be expressed as follows:

C, C,

x+ 2=C3agi g2

x +1=g3
The values x andJ can easily be obtained by solving the above simultaneous equa.
tlons.

It has thus become clear that the average cost meant by process cost accounting
is not the average cost meant by the average method as a method of cost allocation.
And process cost accounting lends itselfto the application ofeither the Fifo, average,

or Lifo method. The question which method should be selected is to be consideredfrom an entirely different point ofview.

The Fifo method is supported on the ground that it is a method of identifying
the flow ofcost factors with the fiow ofgoods. In fact, unfinished units at the end
ofthe period in a given department or process will consist of materials received mostrecently. Thus Fifo is a method ofmaking the flow of cost factors correspond withthe flow ofgoods. But Fifo leaves something to be desired from the point ofview
of matching costs against revenues on the same price level, because the cost of products calculated by Fifo may include costs of the previous period (perhaps on a different price level) and gross profit or loss from sales may involve `inventory profit

or loss'. The significance and effect of the average method are similar to thoseof the Fifo method.
The Lifo assumption as to the flow ofcost factors does not generally agree withthe actual flow ofgoods. The reason why this method is none the less supported isthat the cost ofproducts calculated by this method does not include costs of the pre-vious period (except where the quantity of unfinished units at the end of the period

is below the quantity brought forward from the preceding period), and makes it
possible to match costs against revenues on the same price level. It should be
noted, however, that such matching is possible only where Lifo is applied consistent-

ly through all stages ofmaterials, work in process and finished goods. In this case

VALUATION OF WORK IN PROCESS
the manufacturing costs of the period become the cost of goods sold during theperiod. No such matching is attained where Lifo is applied only at the stage ofmaterials or of finished goods, because part ofthe manufacturing costs of the period
will sink at the stage where Lifo is not applied, and will not be charged on the current

revenue. Argument in favor ofLifo at the stage ofmaterials and against it at thestage ofwork in process or finished goods is lacking in consistency from the theoretical

viewpoint (except where the actual flow ofgoods is last-in first-out only withregard

to materials). It is because the proper purpose of Lifo cannot be attained unlessthe method is consistently applied through all stages of materials, work in process

and finished goods, in so far as we recognize the necessity of matching costs
against revenues on the same price level, and of excluding `inventory profit or loss'
from the periodic profit or loss.

127

DEVELOPMENTAL STAGES RELATING TO
THEORIES OF STOCK-EQUITY ACCOUNTING
Ryuji TAKEDA(1)
It is well known that there are "Issue Equity Theory" and "Entity Equity
Theory", which mainly support a partial theoretical structure of the Stock-Equity

Accounting Theory.
"Issue Equity Theory" means that out ofa separate capital fund entrusted toa corporation by a particular class of its stockholders, when a part of corporation

own stock is purchased by a corporation, the corporation has paid back to someor all of that class the money which they paid-in and, if there is a premium
involved, has at the same time distributed to them some of its accumulated earnings.

And "Entity Equity Theory" implies that the corporation has paid back to certainof its stockholders part of the capital fund which was entrusted to it by all of its
stockholders, and has reduced its capital fund correspondingly.`i'

As it was about five or six years ago that these two equity theories came into

question in Japan, there are not suMcient studies relating to these developmental

and historical circumstances. Under such particular circumstances in Japan,
based upon literatures which I could obtain, I have tried to consider that how
Issue Equity Theory and Entity Equity Theory have came into existence in relationship with the history of Iiterature concerning stock-equity accounting in America.

(2)
The processes of systematizing theories relating to Stock-Equity Accounting'(1) Cf. SamuelJ. Broad, The Capital Principle, Accounting Review,January 1942, p.28.

129

RYUJI TAKEDA

130

constitute the essential features inAmerican Accounting, but its formation andevolution belong to the twentieth century. And Issue Equity Theory and Entity
Equity Theory are the theories relating to "paid-in capital", which were the focusof active discussion in the 1930's and 1940's.

I intend to follow chronologically the processes of such theories as they appearin writings. In summary, the processes are follows:O1917 William A. Paton and Stevenson, Principles of Accounting.
O1922 Wi]liam A. Paton, Accounting Theory.
O1922 Roy B. Kester, Accounting-Theory and Practice.

O1924 WilliamA.Paton,Accounting.
A1932 AdolfA. Berle,Jr., and Gardinder C. Means, The Modern Corporation
And Private Property.

O1932 William A. Paton, ed., Accountants' Handbook, Second Edition.
O1936 American Accounting Association, A Tentative Statement of Accounting Principles Underlying Corporate Financial Statements.

O1937 Leo A. Schmidt, Theory And Mechanics of Accounting.

O1940 H.T. Scovill, Premium On Redemption of Preferred-Stock Issues.
Accounting Review, June 1940.

O1940

William A. Paton, and A. C. Littleton, An Introduction to Corporate

Accounting Standards.

O1941

George Hillis Newlove, Leo Cecil Haynes, and John Arch White, Elementary Accounting, Revised Edition.

O1941

Frank P. Smith, Preferred Stock Redemption Premiums, Journal of
Accountancy, August 1941.

A1941

George O. May, Premiums on Redemptions of Preferred Stock, Journal
ofAccountancy, August l94l.

O1941

American Accounting Association, Accounting Principles Underlying
Corporate Financial Statements.

O1941 William A. Paton, Advanced Accounting.
A1942 Samuel J. Broad, The Capital Principle, Accounting Review, January
1942.

O1942 William W. Werntz, Comments on the Capital Principle, Accounting
Review, January 1942.

A1943

George O. May, Financial Accounting.

DEVELOPMENTAL STAGES RELATING TO THEORIES 131
OF STOCK-EQUITY AC)COUNTINGO1943 S.E.C., Accounting Series Release, No, 45. (cf. Newlove-Garner, Advanced Accounting, Vol. I, p.p. 101-2, Lonis H. Rappaport, SEC Accounting Practice And Procedure, 1956, p. 291).

A1944 William T. Sunley, and William J. Carter, Corporation Accounting,
Revised Edition.

O1947 Charles H. Langer, Accounting Principles and Procedure-Advanced
Accounting.
O 1 948 American Accounting Association, Accounting Concepts And Standards
Underlying Corporate Financial Statements.

O1949 William A. Paton, Essentials of Accounting.

O1951 George Hillis Newlove, and S. Paul Garner, Advanced Accounting,Vol. 1.

O1951 H. A. Finney, and Herbert E. Miller, Principles ofAccounting-Intermediate.

OI952 Maurice Moonitz, and Charles C. Staehling, Accounting-An Analysis
of its Problems, Vol. II.

O1955 William A. Paton, and William A. Paton, Jr., Corporation Accounts
And Statements.
O1958 H. A. Finney, and Herbert E. Miller, Principles of Accounting-Introductory.

O1958 William A. Paton, and Robert L. Dixon, Essentials ofAccounting.
(Note) O mark means Issue Equity Theory.
A mark means Entity Equity Theory,
It seems to be reasonable to rne that these developments are classified with following four steps.

The First Period-The embryo period ofIssue Equity Theory. (1910's- 20's).

The Second Period-The period of intsitutionalizing Issue Equity Theory,and the embryo period of Entity Equity Theory. (1930's).
The Third Period-The period ofopposition and conflict between Issue Equity
Theory and Entity Equity Theory. (1940's).,

The Fourth Period-The period of generalization. (1950's).

(3)
The embryo period of Issue Equity Theory contains principally the equity
theories of the 1910's and 1920's. As equity theories which belong to this period,

RYUJI TAKEDA

132

we shall pick up early Paton's accounting theory and Kester's accounting.
Though the thought ofdistinguishing paid-in capital by classes of stock appears
in Paton's stock-equity accounting theory, where capital deductions in the substant-

ial meaning are performed, it is doubtfu1-because concrete examples are not illu-

strated-whether he has the intention to follow up the charge against paid-in
capital by classes of stock.

Kester says approximately as follows in his "Accounting-Theory and Practice, vol. I" on that aspect. Where more than one kind ofstock is issued, such ascommon, and one or more kinds ofpreferred, separate capital stock accounts should
be kept for each class, and the record ofthe transactions affecting common and preferred stock should always be kept distinct and separate.
He apparently insists that credit and debit ofcapital accounts should be treatedby each class of capital stock, but he does not illustrate whether he deals with charges
to paid-in surplus accounts identically.

Therefore, Paton's and Kester's equity theories have meaning as being embryo
types from the view-point of Issue Equity Theory at present.

(4)
The thought of entity equity comes into existence in studies in the 1930's.

Men who embossed the Entity Equity Theory with well defined patterns, were

Adolf A. Berle and Gardiner C. Means (The Modern Corporation And Private
Property, 1932), as far as I know. This book does not belong to accounting
fields, but is juridical in nature. We shall not be able to overlook it in the historyof equity accounting, because it is the first study on entity equity theory.

An outline oftheir insistence is mostly as follows. Many corporation statutes
permit payments made for preferred shares to be deducted, at least in part, from
capital account, thereby preserving unimpaired the surplus account, leaving it avil-

able for dividends. Ifredemption premiums of preferred shares can be paid onlyout of earned surplus, the operation might reduce the earned surplus so far thatpayment of dividends upon thejunior shares might be prevented. Accordingly,
corporations set up paid-in surplus, thereby protecting their earned surplus accountfrom drains occasioned by retirements.
The legal ideas of Berle-Means were later endorsed from the accounting view-

point by Samuel J. Broad. Accordingly, their article gives Entity Equity Theory
the features of an embryo.

In opposition to Entity Equity Theory, Issue Equity Theory gained an institu-

DEVELOPMENTAL STAGES RELATING TO THEORIES 133
OF STOCK-EQIUITY ACICOUNTING

tional foundation about the middle of 1930. It means that the idea ofIssue Equity
Theory was adopted as a capital principle in "A Tentative Statement ofAccounting,
Principles Underlying
Corporate Financial Statements" by the Executive Committeeof the American Accounting Association (1936).

(5)
As problems relating to accounting practice, controversies concerning either
entity equity basis or issue equity basis were raised many times in the 1940's.

New special tendencies occurred in aspects of corporate financing from about

1935. 0ne important tendency was the predominance of securities floated forrefunding purposes. For instance, during the five year period ofJuly 1, 1935 toJune 30, 1940 securities registered with the S.E.C. for the purpose of redeeming(out ofproceeds) outstanding preferred stocks totaled approximately $616,OOO,OOO,
or approximately five per cent ofall securities effectively registered in this period."(2)Referring to the practical necessity above mentioned, the recording ofpreferredstock redemption premiums may prove to be a problem of practical importance.

The logic of A. A. A. Accounting Principles in 1936 remains unchanged in
William A. Paton and A. C. Littleton, "An Introduction to Corporate AccountingStandards" in 1940. 'At the same time of Paton and Littleton, H. T. Scovill developed the Issue

Equity Theory about preferred stock redemption premiums. His study is basedon the reasoning developed from the economic concept of profit and loss in businsss

and from a single entry method of calculating profits. His conclusions is that"the premium paid upon the redemption of an entire issue ofpreferred stock is properly chargeable to earned surplus to the extent that the total premium paid exceeds

the amount of premium paid into the issuing corporation on the same issue of preferred stock at the time it was issued,"(3) There is the completed transaction theory

as a premise of his conclusion.
A similar conclusion to that ofScovill was expressed by Frank P. Smith in 1941.
But the conclusion reached in Smith's article is presented entirely from the stand-point of the corporation.

The insistence of Smith was taken over in Wernz's comments (Accounting Re-(2)

Frank P. Smith, Preferred Stock Redemption Premiums, Journal of Accountancy, August(3)

H . Scovill, Premium on Redemption of Preferred-Stock Issues, Accounting Review, June

1941, p.133.
1940, p.205.

RYUJI TAKEDA

134

view, 1942), and later Wernz's opinion was formally presented in S.E.C. Accounting
Series Release, No, 45 in 1943.

Samuel J. Broad backed up the thought of Berle-Means from both legal standpoint and corporate entity standpoint (The Capital Principle, Accounting Review,
January 1942). But his article is aimed at the critiques aganist "Accounting Princi-

ples Underlying Corporate Financial Statements," A.A.A., 1941.
His conclusions are as follows. "From a legal standpoint, as well as from a
corporate entity standpoint, it would seem that a corporation has one capital fundand one capital fund only." "Accordingly, I (S. J. Broad) see no occasion for theaccountant to depart from the legal interpretation of the transaction, namely, thatthe corporation has a single capital fund entrusted to it by stockholders as a whole
to be used for their benefit and that any increase or decrease in this fund is an in-crease or decrease ofcapital, and not a distribution ofincome."
Capital concepts according to his thinking, are not concepts of economic capitaland ofcapital from the standpoint of the stockholders, but concepts of the equityof the corporationas a separate entity, that is the business capital concepts. Accordingly, it seems to me that he conceives accountabilities of corporation for its
stockholders, which are discharged by fulfi11ing the rights that are established by.

Iaw and by the contract contained in the charter of the corporation.
Since the main factors of accounting purposes is to hold the historical records
oftransactions on the one hand and clearly present its records as well as fairly reportthem on the other, I can not express approval for Broad's logic that paid-in surplus
may indiscriminately be utilized for all kinds of adjustments in all classes of capitalstocks.

George O. May rejects not only dealing with paid-in capital by classes ofshares,

but also treating redemption premium as a charge for earned surplus. As logicalgrounds for his argument, based on his peculiar opinions that accounting is not ascience but a utilitarian art, he has reached the conclusion that accountants should
hold no more authority than the rules prescribed by the corporation statute.

We can find the same propositions in Sunley-Carter's Corporation Accounting.

Accordingly, we may conclude that the Entity Equity Theory is an expression
ofjuridical accounting thoughts,(6)
Why do we have to keep the separation of paid-in capital by classes of stock

in Issue Equity Theory? Stating my conclusion first, we should understand it asDEVELOPMENTAL STAGES RELATING TO THEORIES135
OF STOCK-EQUITY AOCOUNTING
a form ofrevelation of the cost principles in equity accounting. Accordingly, anamount recognized as the cost in equity is not such a nominal dollar amount as
a par or stated value, but an amount actually paid-in to a corporation as a bargained

price, namel'r' the paid-in capital or the contributed capital, which may appear
as a resu!t of financial exchange between the corporate entity and its stockholders.
Issue Equity Theory is supported by the thought that intends to support continnually

the apparent line to present clearly costs by each class of stock, as well as not todisturb such a cost where the equity adjustments have occurred.
As different classes of stockholders may have different grades of interests incorporations, where corporation issues more than one kind ofstock, we shall be able

to understand that the corporate entity is bound by the lump-accountabilities
differentiated by classes ofstockholders.

What we must pay attention to here is that Issue Equity Theory does not intend
to deal with the paid-in capital which are usually attached to physical securities.

Issue Equity Theory in the modern sense may come into being with acknowledging that the flow of physical securities and the cost fiow have to be systematizedseparately. Therefore, Issue Equity Theory based upon cost principles is not theaccounting thought that intends to calculate paid-in capital by each stockholders
and has also already overridden thoughts of steward ship. We shall be able to appreciate that not only does it make clear the situation of accountabilities to the different classes ofstockholders, but it also performs the principles ofsocial responsibilities

under circumstances which those stockholders spread widely over society.

ON THE RATE OF INTERESTIN BUSINESS ADMINISTRATION

Jiro ONo(I)
It is a matter of common knowledge that interest is an essential factor in theimportant problems of financial management, i.e. the valuation of enterprise, thecontrol of working capital by coordinating buying-and selling terms, price policy(e.g. decision of transfer price), dividend policy and a comparison of production
processes etc., and that for many years various opinions on interest in business havebeen published, especially from the view-point of cost accounting.
However, it seems to me that there have been few opinion in which the interestin business was considered as one of the most important categories of economics.

But a consideration from this fundamental side must not be disregarded because
a business is also an economy.
So, here, referring to several sources, I will try to consider the theory of Eugen

Schmalenbach on interest in business from this fundamental point of view.

(II)
On interest in business, there are two opinions, i.e., one that understands'it as a general category essential in economy and another that understands it asa historical category which appears in only a given step of economic development.
According to the theory of E. Schmalenbach, who insists on the first opinion
in accord with K. Mellerowicz and K. Schwantag et al., the purpose of economy is
to give human beings as many as possible the usefu1 goods at the least cost, and forthat purpose business is responsible and must compare cost with cost, cost with utility,

and utility with utility ofgoods and services that are used or produced in business.("

137

138

JIRO ONO

His "cost" means the value of goods that are consumed in the production
process whether it is disbursed or not, and "the value of goods" is decided again by
its utility and scarcity. So, cost is the loss of utility and has its origin in the factthat by applying the goods to a given production-process the possibility of its application to another is Iimited or excluded.(2)And capital, i.e. the stock of goods, also has particular utility in that througha so-called round-about-production-process it increases the building powers anddurability in the economy of all development-steps. This utility has its own value,
which appears as price in credit-circulation and is independent ofthe value ofgoods

embodying the capital.
Schmalenbach defines this price or value ofcapital utility as interest. Therefore, the interest in business means the loss of utility i. e. the occurrence of costbecause an amount of capital is used and bound in a business and cannot beapplied to other purposes.(3)This definition of the interest concept indicates that Schmalenbach views
interest as an essential category in every step of economic development, which ismade clearer in his opinion of cost appraisal as follows.

Cost is a concept which makes it possible to realize a difinite purpose in ac-

cordance with the purpose of economy that produces goods (i.e. value) in as large
quantities as possible with the least cost, so that it must be appraised at such an
amount as might make it possible for a business to reach an exact decision out ofthemany possibilities and get the most economic result, that is, it must be appraised

as "Die optimale Geltungszahl," which means such a figure that a production notcapable of being done will be done if the cost is appraised at a lower value than it,

and a production to be done will be neglected if appraised at a higer value.
Establishing such figure is essential in business and the economy ofall develop-

ment-steps,notonlyofcapitalismbutofthecentral-controlledRussiantype. Theremay be some didiculty ofcalculation in an economic structure, but it does not deny"Die optimale Geltungszahl." Neglecting it is neglecting the subject of economyJand in such an economy, on the one hand, the cultural and economical due demandsof the people are not taken care of, and on the other hand, useful goods are left.

This principle must be applied to capital interest. Interest appears(1) as the transaction-price or the control-price built among economic parties

in a credit-economy.
(2) as the transaction-price decided between two economic parties (e.g. houserent) even where there is no general credit-circulation.

139
ON THE RATE OF INTEREST IN BUSINESS ADMINISTRATION(3) as the calculation-price i.e. the yard-stick measure for the use of capita!
in business.
(4) as the calculation-price also in a controlled economy where the government
has capital and a free credit-circulation is not found.

So, interest can exist not only as market price but as calculation-price"Die optimale Geltungszahl" that is essential to carry out the economic purpose in
Business and also in national economy, i.e. to transfer capital to a place where it
can get the highest utility. The rate ofinterest-the most general form representing
interest-as calculation-price also must be appraised at such a figure that, whatever

the historical step of the economic development is, if the rate is appraised lower
than it the capital will be invested where it need not be used, and ifit is appraised

higher the usefu1 investment objects will be neglected without due reason.(`'On the contrary, in the second theory, interest is understood as a historicalcategory that appears only in a given step of the economic development. According to the opinion of A. Schnettler who tried to consider interest in business as anindependent object apart from any money- and capital market, one of the mostimportant characters of the present- day economic institution is that when thevarious production-means are bound into an organization i.e. a business, a higher

value than the value of the consumed goods is produced. So because of thisstructure ofsocial economy, business cannot exist ifit does not produce this surplus

in addition to the value consumed from alongview-point. As a compensation theamount of surplus, which is generally produced on an average with the capital inan economy, must be given to the capital used in each business whatever the form
offinance.

In other words, this amount of surplus is an equivalent necessary to control
the use of capital, to keep the stream of capital orderly, and to assure the existenceof business. And Schnettler defined this equivalent as "the interest essential inbusiness (Der betriebswirtschaftliche Zins)."

Therefore, he understood interest as the factor that appears only in the production-process characteristic in present-day economy, not as the cost essential
in the production-processes of all steps of economic development. He stated thatinterest exists in a private-capitalism-economy where individuals haN e money-capitaland business-means-capital, and they are bound into a business for an equivalenti.e. interest, and in a national-capitalism-economy where money-capital is in thehands of the government but business-means-capital is in the hands of individuals
and production is still done privately, however, interest does not exist in a commun-

140

JIRO ONO

ism-economy where the government has all the capital.
And further, he said "The interest in business is seized as a part of the profit

and only as an amount for calculation from one poinr of view, and as cost fromthe other. In my opinion it does not matter whether the interest is a part of the
profit or not." That is, in his theory, it was not made clear that interest is a cost.(5)M. R. Lehmann also, in his early work,(6) insisted that interest is not a costfactor, but that it is necessary to calculate the interest of the whole capital used inbusiness.

We have known that there are two different standpoints in the theories which
recognize interest as an essential factor in the calculation for business administration.

In the latter point ofview, interest is regarded not as a general category in economy

but as a category peculiar to a particular step ofthe economic development, startingat rather a given present-day business than the whole of social economy. On thecontrary, in the opinion of Schmalenbach or Schwantag(7) interest is understoodas the value of capital-utility general in every step of the economic development,

as cost in business and as "Die optimale Geltungszahl" which makes an exact
comparison, essential to an orderly capital-control, possible.

Here, we can find one of the characteristics of the theory of Schmalenbach,which is related to his basic view-point that it is one of the most serious tasks ofbusiness finance to make the limited amount of capital bind more productively,
and that we have already recognized in his theory on enterprise-valuation or on
capital-concept.

Then, one of the most important problems is how to decide the rate of interestin business as "Die optimale Geltungszahl." In the following, we try to consider
this point by examining his opinion on interest-building.
Note(1) Eugen Schmalenbach; Pretiale Wirtschaftslenkung, Band 1, Die optimale Geltungszahl, 1948,
p.14-p.16.
(2) E. Schmalenbach; Kostenrechnung und Preispolitik, 1956, p.5, and see F. F. Wieser; Theorie
der gesellschaftlicher Wirtschafts, 1924, p.74.

K Mellerowicz; Kosten und Kostenrechnung I, 1957, p.4 and p.78.
(3) E. Schmalenbach; Kapital, Kredit und Zins, 1951, p.18 and p.40.

(4) E.Schmalenbach;ibid.,p.47-p.48.
E. Schmalenbach; Die optimale Geltungszahl, p.45-p.49, p.67, and p.85-86.
(5) A. Schnettler; Der Betriebswirtschaftliche Zins, 1931, p.5-p.6, p.8-p.9, p.16 and p.20-p.21.

(6) M. R. Lehmann; Allgemeine Betriebswirtschaftlehre, l930, p.148-p.149.
(7) K. Schwantag; Zins undKapitalinder Kostenrechnung, 1948. He also starts from the same
stand-point as Schrnalenbaches'.

ON THE RA'IE OF INTEREST IN BUSINESS ADMINISTRATION141(III)
In Schmalenbach's theory of business finance, there is the thought that thevalue, which is conjectured as being built when every body in the social economy
is supposed to act only economically, must be adopted as the calculation-value toregulate the activities of all economy, including businesses, i.e. the thought thatthe price, which is found in the mechanism of a perfectly free competition, is themost usefu1 value of cost and utility. And this thought is found also in his theory
on the rate of interest.

Here Schmalenbach adopts the method of deducting an abstraction, in which
conditions that have no actuality are imagined and are gradually changed in thought

to conform to actual problems. Because the rate ofinterest, which is very complex
and influenced by various forces, can be exactly observed only by isolating it inthought from them.
And he divides the process ofbuilding the rate ofinterest as follows.

(1) The rate of interest in an economy where no creidt i.e. no capital-circulation, can be found.
In this step, we suppose that no credit-i.e. offering the utility of capital toothers-can be found. Therefore, in such an economy, a capitalist has his capital
only in the forms ofhouses, factories, land and goods, etc.,and so the utility ofcapitalis never traded. But there is the rate ofinterest as cost and as "Die optimale Gelt-

ungszahl." Capital must be bound in order to bring about its highest utility i.e.
the highest profit also here, and for this purpose the investment must be done withthe standpoint of going from the object of the highest profit to that of lesser profits

one after another. And the largest of the profits, anticipated in the investmentobjects left after all the capital has been bound, is the rate ofinterest as cost and as"Die optimale Geltungszahl." Because this amount of capital-utility is lost bybinding the capital into the investment-objects, and so is the yard-stick for the use ofcapital in the meaning that the free capital which will be given to the owner there-

after must not be bound in an object of less profit than this rate. So, it must berecognized that the utility of capital has no price but has value.

However, here, because there is no circulation of capital, the rate ot- interest
as value of capital-utility varies in each business, e.g. the rate is 90/. in the one and40/. in the other. This difference can be lessened to a degree through imitation
ofbusinesses with each other but this equalization is inadequate. In an individual
business and also in the whole ofeconomy, under this presupposition, capital can not

JIRO ONO

142

be used to bring out its largest utility.

(2) The rate of interest in an economy where only the untransferable accounts-receivable are found.
In this step, we suppose that a seller can give 'his customers credit in the formof untransferable accounts-receivable butother forms ofcredit such as money-loans

have not yet been found. Here the seller at least requires the above-mentioned
rate ofinterest in his own business and also the customer will not receive this credit

if his rate of interest is lower. After all, the difference between these rates will

disappear and the rate as "Die optimale Geltungszahl" will be built at the point
where the demand and the supply of credit equalize each other and the profit of theseller and customer will become as large as possible. And when the capital is circulated among businesses one after another the capital will be bound to become more
profitable. But the equalization of the rate ofinterest is still inadequate because it

is limited to a narrow range in which sellers and customers of given goods are
related to each other.

(3) The rate of interest in an economy where also transferable accountsreceivable (note-receivable) are found.
It is obvious that the rate of interest is equalized in a wider range. Becausethrough using note-receivables the relation of sellers and customers become morepolygonal, the note-receivables are transferred from a business in one region to one

in another, and capital is bound more productively by keeping the more profitablenote-receivables instead of money or goods. But here the capital-market is not
built yet.

(4) The rate of interest in an economy where further loan-credit appears,
In this step, we suppose loan-credit and a bank. But this bank does not havethe function oftransforming the capital offered on short terms into a capital oflongterms, and can only apply the deposit of given terms to loans of the same terms.

For example, we suppose that the demand and the supply of capital ofa given
term in a bank are as follows.

Rate

DemandSupplyII%
1O%

110 OOO M'
130 OOO M

600 OOO M'

110, OOO M

520, OOO M

130, ooO M

9.e.1

370, OOO M

470, OOO M

370, OOO M

270, OOO M

490, OOO M

120, OOO M

370 OOO M'
270 OOO M'
120 OOO M
'

8%
7%

'

Amount of credit given

143
ON THE RATE OF INTEREST IN BUSINESS ADMrNISTRATION

If the bank tries to apply the supply to the demand as much as possible andto make the capital work as productively as possible, the rate of interest will bedecided between 80/. and 90/., and the amount ofthe capital traded will be S70,OOO
M.. So, this rate is the cost as "Die optimale Geltungszahl" to regulate the activityof the business because binding the capital in the business is losing the utility of thisrate anticipated to be received by supplying the capital to market, i.e. the capitalin business must at Ieast bring out the utility of that rate.

(5) The rate ofinterest in the economy where further organizations for trans-

formation and mobilization appear.
In this step the banks and the mobilization of securities transform the credit
supplied on short terms to a credit of long terms generally demanded by businesses,
and the rates of interest which were built on short-term-credit supplied will rise on

the one hand, the high rate of a long-term-credit demanded will fall on the other
hand and the difl7erence between both credits will tend to disappear. And throughthe circulating of capital between banks and the security-market and among thecredit-forms above-mentioned, this tendency will be further strengthened. Therefore, if complete equalization is thus accomplished, the whole credit-market will
be controlled by the sole rate of interest, and theoretically the rate thus built will

be regarded as the most important interest-cost that is the yard•-stick to bring on
the largest utility in the whole of economy and also in businesses.(8)Note(8) E. Schmalenbach; Kapital, Kredit und Zins, p.154-p.188.

<IV)
In Schmalenbache's theory mentioned above on building the rate of interest,
the logic of marginal value is carried through. In his abstract credit economy
which premises the complete transferability of capital and the mechanism of freecompetition, the rate ofinterest is dependent on the disposable amount offree-capitaland the demand for it, and the rate as "Dic optimale Geltungszahl" is decided by
the profit or the utility of the last unit of free-capital invested i.e. the utiltiy lost by

supplying the last unit of free-capital traded. In other words it is insisted thatthe rate which is decided at the intersecting point of supply and demand is "Dieoptimale Geltungszahl."
Then Schmalenbach insists that the rate ofinterest as cost in business must be
decided by the marginal rate, i.e. the rate ofcapltal which is financed last and de-mands the highest price, or by the marginal utility i.e. the profit which the last

JIRO ONO

144

unit of capital in business brings out, whatever the rate of interest actually paid
is, when the supply ofcapital from outside is prevented.(9) Because the demand andthe finance in individual businesses appear as the process to the complete equili-

brium-point.
That is, when the highest rate ofinterest is adopted as the cost, ifit is decided

above (or under) the equilibrium-point of the business the demand for capital will
decrease (or increase) bacause the cost (i.e. the rate of interest actually paid or the

profit anticipated to be received outside) of that amount of capital is higher (orlower) than the profit gotten in the business, and the demand and the finance will

equalize to the point in which the profit becomes as large as possible. In thismeaning the marginal rate of interest is an important cost-factor for the control ofcapital. Then, the equilibrium-points that varies in each business will be equalized

to the point of equilibrium of the whole economy through transfering of capitalfrom the business of a Iower equilibrium-point to a business of a higher point, sothat the profit might become the largest in the whole of economy, in the businesses
and also in all individual capitalists. And when the marginal utility i.e. the margi-

nal profit is adopted, it is intended to invest the limited amount of capital mostprofitably under the condition that the supply is prevented, but even here the outflow ofcapital, ifpossible, will made the rate ofinterest in the business approach therate in the equilibrium-point of the whole economy though it is incomplete.
Thus, Schmalenbach insists that the rate ofinterest in business must be dedcided
by the marginal rate or the marginal utility, in relation to the thought that the rateof interest built under the marginal-value-principle in the mechanism of free competition is "Die optima!e Geltungszahl."
However it seems to me that there are some further problems to consider in his
theory.

Note(9) E. SÅëhmalenbach; Kostenrechnung und Preispolitik, p.221 and p.225-p.226.

(v)
In another theory, such as introduced in the first place, on the rate of interestin business, various opinions are stated.

According to the opinion of Schncttler which we quoted above as one thatregards interest as the historical category peculiar to a particular step of economic

development, the rate of interest in business must be one of the average rates in
the national economy as follows,ON THE RATE OF INnREST IN BUSINESS ADMINISTRATION145a) the average rate of interest paid on debts.

b) the normal market-rate ofinterest, or the discount rate ofthe central bank, or
the definite rate under or above the discount rate.

c) the rate which matches the risk adherent to the investment of capital.
d) the effective rate ofinterest on long-term national debts.('O)

He understood interest not as cost essential in the production-process of all
steps of economic development but as a calculation-amount, as a factor of finance,or as the historical and conventional compensation for the contribution of capitalowned by individuals in a capitalistic economy.

So he insists that the rate of interest generally required as compensationon the average must be adopted as calculation-price in business administration.

And both Mellerowicz and Schwantag, who are fundamentally dependent on
the same cognition as Schmalenbaches', insist on the rates of interest as being
different from the above-mentioned.
Mellerowicz, who understands interest as the loss of capital-utility and as costin business, states that calculating the interest-cost of
the whole capital used in b
usi-

is necessary for an exact business-analysis. However, according to his opinion,
nesstherate of interest in cost-accounting must be appraised by "an effective rate ofinterest of a long-term secure investment-the prevalent rate in the national econo-my." Because the marginal cost is dependable on short-term problems in businessbut on long-term problems the average cost makes a more exact decision possible,
and in the problems such as the control of capital-rentability or finance the longterm point of view is more required.Cii)

Schwantag, who also starts from the same cognition that interest is the lossof the marginal utility of capital i.e. cost in business, states "It is only when various
credits offer the utility of the same quality that the rate ofinterest of the credit which

covers the last demand for capital can be adopted. But actually the utility ofdeben-

ture-credit is not the same as that of note-credit or of bank-loan. Each capital,
offered by the credits ofvarious terms and risks, has its own utility of a particularvalue and so ofa particular price."
And he calculates the rate ofinterest as cost in business by dividing the amountofinterest paid or profit desired in finance by the whole capital used.(i2'In comparison with the opinions above-mentioned, it must be pointed outthat Schmalenbach's opinion is related to his theory on capital and interestbuilding. According to his theory, capital is the stock of goods and, also on thecalculation ofinterest in business, it is insisted that whether the capital in business is

146

JIRO ONO

borrowed from an outsider or contributed by the owner is not important but rather
it must be considered whether the capital is bound into the production-process ornot.(13)And he considered how the rates of interest, i:e. the utility-value of capital(the stock of goods) of the same abstract quality, are equalized to only one rate

under the premises ofthe mechanism of free competition and the complete transferability of capital.

That is, it seems to me that he thinks that the utility of capital wil! become
the same quality whatever the form of finance if all factors act only economically,
and that the sole rate built beyond the differences due to forms of credit or financemust be regarded as "Die optimale Geltungszahl" in the whole ofeconomy and also
in businesses, and that also the rate in the actual business must be understood as theappearance in the process to the complete equilibrium-point.
This is one of the most characteristic points of Schmalenbach's theory in that
it is related to the framework ofhis business-finance-theory and starts from his basic

view-point of national economics and so shows the nature of his so-called technique-theory (Kunstlehre).
But as Schwantag pointed out, the equalization of the rate of interest is not
so complete in actual business. It seems rather justifiable to me that each utility
ofcapital, offered by various credits, has its own quality and the differences ofcredit-

conditions, including terms or risks, must be raken into consideration.

And as Mellerowicz insisted on the long-term point of view, the large fixed
assets in present-day business bind capital much Ionger and make it more inflexible,that is, the complete transferability of capital, which is a premise of the marginal
principle, tends to become very little. This means that it is possible that his general

economic law has already lost its practical meaning and can not be applied to actual
business, and that therefore his theory on interest might already lose the nature of

his technique-theory. It must be (at least) recognized that there are someproblems to consider in Schmalenbach's opinion that the highest rate in theactual business can be substituted for the marginal rate of interets in his abstract
theory.
Further, there is the difficulty of the calculation of capital-utility as a problem

to regard. It will be an important cause to segregate the utility-the profit inbusiness from one in the whole of economy i.e, the utility of capital can not always
be dicided only by the profit of business.

147
ON THE RATE OF INT[EREST IN BUSINESS ADMINISTRATION

Note
(10)

A. Schnettler; ibid., p.62.

K. Mellerowicz; Kosten und Kostenrechnung IIi, p. 16-17 and K. Mellerowicz; Wert und
Wertung, 1952, p.61.
(12) K. Schwantag; ibid., p.38-p.40 and p.44.
(13) E. Schmalenbach; ibid., p.320.

(11)

VARIOUS CLASSES OF DATA PROCESSINGBY MEANS OF ELECTRONIC COMPUTERS

Hideo KiTANr

For the past two or three years, electronic computers ofmedium or large sizes

have become remarkably popular in various countries in Europe and America asdata processing machines in business routine. From our country also, orders forsome twenty electronic computers of such brands as IBM type 705, 7070, 650,
Univac File, and UCT have already been placed with their overseas suppliers,and part of these computers have already been put into operation in Japan.

As compared with the electronic calculating punch, which is one of the constituent elements of the punched card system, the electronic computer has a muchlarger capacity for inner storage, and as compared to the program instruction system,

which is a plug-board type in the case of the electronic calculating punch, it works

on a stored 6rogram system whereby the business program is given previously tothe storage unit. Moreover, it is a machine of great capacity and rich in adapta-

bility which admits of a combination ofvarieties ofinput and output devices andstorage devices.

Therefore, it is generally thought that the use of this kind of electronic com-puter in business routine will enable all business operations to be performed onan electronic system, or, in other words would make possible the so-called "Auto-mation of data processing." In fact, such an idea is feasible when the computerhas quite a large storage capacity. To take inventory control as an example, theup-to-date stock quantity, the up-to-date total amount of stock and the moving aver-age unit cost ofall the items are checked, moment by moment, through the transactions ofreceiving and delivering goods; moreover, when an item ofa certain number
gets short of its standard holding quantity, the order quantity previously decided for

149

150

HIDEO KITANI

that item is registered, and, furthermore, when a decrease has been noticed in theholding quantity, a warning is automatically given to urge a fresh supply and placing of additional orders.

When a machine factory receives an order for a machine, the computer makes
an operation schedule after comparing the respective processes and the numbers ofsuch processes for all the spare parts that make up the ordered machine with the condition of the load ofvarious kinds ofmachine tools used to process such spare parts,
then determines, on which items or parts to place an order for, and thus automatical-

ly decides the delivery time ofthe machine ordered. Thus, the computer serves toselect at a high speed, and to give instruction for those matters which have hitherto

been managed through complicated procedures on the part of the superintendents
in charge.

Besides, this kind of computer has such an essential function as to display exceedingly great power in facilitating a series of complicated mathematical calcula-tions, such as questions concerning operation research which has hitherto been
diMcult of solution, with the help of the electric calculator, and Iinear programming which is a part ofoperation research, and other technical problems.

Thus an electronic computer of medium size or of large size is expected to
produce remarkably satisfactory results quantitatively and qualitatively both inprocessing business data and in making scientific and technical calculations.

However, to use the electronic computer and perform on a perfectly automatized basis a series of business procedures, namely, sorting, collation, calculationand printing, would prove highly effective in point of the speed of processing,but is not always advantageous, viewed from the angle of processing cost.

The following points may be mentioned as chiefcauses;(1) While it is rapid in the calculation ofaddition, subtraction, multiplicationand division, the electronic computer requires much time to perform the operation
ofsorting and collation, because a number ofoperation steps have to be taken evenfor a single one item.

(2) Moreover, sorting and collation are fundamental operations in businessroutine, and when their data are compared with the volume of addition, subtraction, multiplication and division, it is found that exceedingly voluminous operations
are required to perform the business ofsorting and collation.

(3) The electronic computer cannot perform the function ofsorting and collation simultaneously with the calculation of the four rules of arithmetic, because its

basic unit is an organization composed ofthe three units of arithmetic, storage, andVARIOUS CLASSES OF DATA PROCESSING

control. In other words, it cannot perform parallel operations as in the case of thepunched card system.
For the above-mentioned reasons, the speediness and automation of data processing may be accornplished by the computer through its sorting and collating
functions, but results in keeping the expensive computer in operation for a longtime; therefore in most cases it proves disadvantageous from the point of processing

cost. Consequently, as a method of using the computer for data processing, thefollowing two points should be determined in consideration of the type of businessroutine, processing cost, processing speed desired, etc;

(1) Whether sorting operations shall be performed by the computer or not.
(2) In connection with the foregoing item (I), which of the three factors-

card, tape, and voluminous external storage-shall be used as media for data?
Or, whether two or three of the above-mentioned factors shall be used together?
Next, in connection with the foregoing decisions (1) and (2), the types of input andoutput devices and the number ofsuch devices must be determined, and as a result,
there will develop processing forms ofvarious classes.

Thus, in the mechanization of business routine by means of the electronic
computer we must determine, first of all, various elements which need not be taken

into consideration in the case of the punched card system. Accordingly in themechanization of business routine, the mere determination of the type of the computer to be used does not enable us tojudge the general effect which the computer

will display. Observations will be made on the punched card system. The punched card machine is, as is generally known, a machine system which possesses constituent function in the form of a sorter, a collator, and a calculating punch withcards used as media, and which is composed ofa group of automatic machines withindependent capacity, each provided with card input and output devices. Ifthe
tyPe and volume of business routine and the kind of documents to be drawn up
are determined, the method ofprocessing such business routine, the kind ofdevices
and the number ofdevices are determined as factors of first importance, and at thesame time, the direct effort, such as speediness and saving of processing cost, can bestudied with relative easiness.

In analyzing advantages and disadvantages ofvarious forms of electronic dataprocessing, distinction will be made, in view of the foregoing reason, between thetwo cases (1) where sorting and collating operations which presuppose such processing are performed, and (2) where they are not performed, and with each ofthesecases explanations will be given on the characteristic points peculiar to each

151

152

HIDEO KITANI

medium, such as punched card, magnetic tape, etc.

1. Processing in the case where sorting and collation are not performed.
Sorting and collation are not performed. In other words, electronic dataprocessing in the case sorting and collation are performed by means of other machines than the computer.

(1) Data processing where only punched cards are used as media.
The use of punched cards naturally causes punched card sorters and punchedcard collators to be used as auxiliary devices. In this case, however, unlike the dataprocessing by means of the punched card system, the operation of calculation performed by the tabulator is absorbed into the computer, and the tabulator has only
to act as a high-speed printer. By providing two or three receivers of the cards forthe computer, it is possible to re-separate the cards which have merged previously

upon completion of the calculation. Moreover, not only summary pucnhes canbe dispensed with but also it is possible to store the intermediate result of calculationand frequently used constants without punching them on cards. Therefore thecourse of data processing is remarkably automatized. The more complicatedthe calculations, as in the case ofcalculation of wages, tax assessement and additional

allowances for a large number of oMce personnel, the higher eMciency it displays.

As explained above, the electronic data processing where punched cards areused as media is a method which enlarges as much as possible the domain ofprocessing the computer in the case of the punched card system, and automatizes its

working procedure. It may be regarded as a processing method a step ahead of
the punched card system. However, as the speed of the operation of card input
and output is much slower than the calculation speed of the computer, it has a drawback in that the speed ofdata processing is checked more or less.

(2) Data processing where magnetic tapes are used as medial.
Compared with the punched card, the magnetic tape is a medium which is not
only capable of reading and writing information much more speedily but also has
capacity ofcloser storage. For example, the speed ofreading or writing is 20,OOO-

60,OOO digit/inch. Therefore, the magnetic tape may safely be regarded as a me-dium which best matches the calculating speed of the computer. Consequently,
even in the case where punched cards are used as media as described above, themethod is considered most eMcient whereby sorted data are transfered to tape bymeans of the card-tQ-tape converter, and then passed on to the computer for subse-

quent processing. In this case, the method has the merit of having collation per-

VARIOUS CLASSES OF DATA PROCESSING
form automatically by the computer because the data have already been sorted bymeans of cards.
But, in order to transfer the data from cards to tapes, the converter is needed,

and this transfer entails more expense and trouble. Therefore, a magnetic sorteris provided by which the data registered at random on the magnetic tapes is sorted
directly. That is to say, even in the case where sorting is not done by means of thecomputer, the use of a magnetic sorter makes possible the processing of such data
for which only magnetic tapes have been used. At present, it seems impossible todecide indiscriminately which ofthe two methods is more eMcient; (1) where cards
and tape are used together, and (2) where tapes alone are used by means ofa magne-

tic tape sorter. However, inasmuch as cards are of legal importance as recordsof transaction, as sorting by the magnetic sorter which is done by the collation

method is less speedy than by the punched card sorter when voluminous data arehandled, and as this machine is rather expensive at present, what is adopted ingeneral is the processing method wherein magnetic tapes and punched cards areused together.

In order to use magnetic tapes, a tape mechanism used for reading and writingis necessary, of course; and in order to obtain the desired result, a magnetic corebuffer is needed which is for reading or writing data block by block. These two
devices being rather expensive, processing by means of magnetic tapes will not pay
unless it is utilized to process a considerable amount ofbusiness data.

(3) Processing by large volume random access storage.
In the case ofbusiness processing by means ofthe electronic computer, magnetic

tapes are media of machine language possessed of excellent properties; however,their only defect is that a very long space ofaccess time is required. Then the data

must be sorted beforehand in order to avoid such delay. Therefore it is ideal inpoint of data processing if it is possible to use voluminous random access storage

which requires a short access time. And when the volume of this storage is large
enough for the number of items of data to be processed, it is possible to store itemby item for each address ofstorage in a sequence order. Therefore a preparatory
operation of sorting can be entirely dispensed with. In other words, if the data
are read into the electronic system, the sorting of the data is completed simultaneously.

In this case, the input operation on the'electronic system is done not only bymeans ofpunched card or magnetic tapes in the batch, but also directly through key
stroke, and it has the merit of obtaining the calculation result of the data at once.

153

HIDEO KITANI154

Therefore, when voluminous external random access storage is used, "real time"processing of business routine, such as inventory control, is made possible, whichmeans that business processing is done on a perfectly automatized basis. And in
the case ofthe computer for business routine, data processing by means ofvolumin-

ous random access storage is considered to be the proper method. However, ingeneral this method is not used, presumably for the following reasons;-(1) At present, voluminous magnetic drum storage costs are very high.
(2) With this type ofstorage, the greater the storage volume, the longer becomes the access time and consequently the speed of the basic computer, which isessentially ofa high rate, becomes weakened. And the larger and the speedier it is,
the less edicient the computer becomes.
(3) As a matter of fact, there is rarely a business routine as absolutely needs

real time processing. In the greater part ofenterprises the degree ofdelay in processing due to the off-line operations by means of magnetic tape does not ,geem tocause any hindrance to business management.

2. Processing where sorting is done by means ofthe computer
The fact that the sorting of the data of magnetic tapes is also performed by thecomputer, serves to realize the speediness and automatization ofits operations on
one hand, but is, on the other hand, evidently disadvantageous on the point ofits

processing cost. Therefore, this is probably a method to be practiced only when
speediness is demanded even at the cost of expensiveness. As it is not a generally
accepted method of processing a detailed explanation will not given here.

3. Conclusion
In the electronic data processing it is feasible to perform automatic priority
processing, of which the function is as follows;-

Evcn when various business data have been put into the computer indiscriminately, and later when it receives such data as are of still greater importancethan those now being processed by the computer, the machine is capable of automatically suspending the operation now going on and preferentially switching overto the processing ofsuch newly put in data, provided that the machine is, in advance

given programs on the respective business data and indications of the degree ofurgency of data processing.
Such a processing method is made possible only by computers with an electronic
circuit, and also in the case of real time processing the machine can be operated

CLASSES OF
VARIOUSDATAPROCESSING

intensively and efllciently without being idle, if off-Iine processing is performed

simultaneously. From such a point of view also, it is desired to develop in the
future large volume storage of the random access type which is not expensive andyet requires a quick access time.

155

COMPANY HISTORIES IN JAPAN-MATERIALS FOR BUSINESS HISTORY-

Tadakatsu INouE and Yoshiro IKusHiMA(I)
Growing Interest in Business History in Japan
It was about twenty years ago that the name business history appeared inJapanese writings for the first time. In Betriebswissenschaft und Betriebswirtschaftslehre(Keiei Gijutsu Gaku to Keiei Keigai Gaku. Tokyo. 1931), Professor Shosaburo Sakai of

Nagoya University referred to the rise and development ofresearch and study inbusiness history at the Graduate School of Business Administration of Harvard
University and stressed the need ofestablishing that field ofstudy inJapan. One

year later Hisao Otsuka, Professor of Economic History in Tokyo University,
contributed his essay under the title of Gras' Business Histor2 to the Keizai Gaku

Ronshu, a periodical of Tokyo University. At that time, however, little attention
was paid to the new field ofresearch and study.

In the meantime business history has developed greatly in the United States.
Professor Gras' 'Business and CaPitalism (1939) has drawn a broad outline of businesshistory by tracing the evolution of business in its successive stages. In Casebook in

American Business Histor" (1939), Gras and H. M. Larson give an outline ofa coursein American business history. With the publication of G. S. Gibb's The SacoLowell Shops (1950), Harvard Studies in Business History, the first series of mono-graphs in business history, have reached sixteen volumes. Of the series, Larson's
Guide to Business Histor2 (1948) is a usefu1 guide to the materials from which businesshistory is written. It will be no exaggeration to say that today's business history
stands as a specialized field of historical research and study.

Influenced by the rapid development of study in business history in America,

157

158

TADAKATSU INOUE AND YOSHIRO IKUSHIMA

our students of both business administration and economic history newly recognized
the necessity ofcreating that field ofstudy inJapan. In addition they were recently
informed, not only ofthe rise and development ofresearch in entrepreneurial history
at the Research Center in Entrepreneurial History, established in I948, but also of
the issue of Tradition : Zeitschrift fUr Firrnengeschichte und Unternehmerbiographie(1956 - ) in Germany. Thus, interest in the history ofbusiness among our students
has widened greatly in recent years.

What our students began with, however, was the introduction of the researchand study in business history in foreign countries in order to get an explanationof what business history is, that is, its subject, objective, content, and materials.

Among the students of business administration, Professor Sinzo Kurita of the Kobe
University of Commerce summarized J. L6ffelholz's Geschichte der Betriebswirtschaft
und Betriebswirtschaftslehre (1935) in his Business Histor) (Keiei Keigai Shi. Tokyo.

1949). Tadakatsu Inoue, Assistant Professor of Kobe University, contributed
On Business Histor! to the Kobe Economic & Business Review (1953), and The
DeveloPment of the Underl"ing Concepts ofBusiness Hlistor2 in America to the Kokumin

Keizai Zasshi (Jan., 1955), a periodical of Kobe University. He also introduced
G. S. Gibb's The Saco-Lowell ShoPs, E. H. Knowlton's PePPerell's Progress, and N. S. B.
Gras' Business and CaPitalism.

Growing interest in the history of business among the students of businessadministration was refiected in the 29th annual convention oftheJapan Society for
the Study ofBusiness Administration held at Kobe University in 1956. In the meeting business history was to be taken up as a subject for discussion and Professor
Sakai, an advocate ofbusiness history inJapan, was invited to lecture on the pro-blem. He spoke on the System of Business History and gave his answers to thequestions on various problems, but chiefiy on the types of business history. (Oneyear Iater, Professor Sakai contributed his essay titled The Obj'ective and Method ofBusiness Historl to the Keiei Seminar, June, 1957.)

Economic historians, as students of business administration, have played an
important part in introducing researches and studies in the history of businessin other countries. Professor Uemura of Toyama University did not spare pains
in translating Gras' Business and Capitalism into Japanese under the title of Gras'

Keiei Shi (Kyoto. 1957). Yasuo Mishima introduced Larson's Guide to BusinessHistor) in the Keizai Ronso (Apr., 1956), a periodical of Kyoto University. Kei-

ichiro Nakagawa, Assistant Professor of Tokyo University, contributed his essay
titled A Direction of the DeveloPment ofResearch in the Histor2 ofBusiness to the Keizai

COMPANY HISTORIES IN JAPANGaku Ronshu (Sept. 1958). Recently he also translated T. C. Cochran's American
Business S)stem intoJapanese under the title of Gendai no Business S2stem (Tokyo. 1959).

Jiro Toyohara, Assistant Professor of Oita University, reviewed A, Chabert's De
auetgues tendances recentes de i' histoire economieue ame'n'caine : Les "Business and Entre-

preneurship Histories" (Revue d'histoire economique et sociale) in the Keizai
Ronshu of Oita University (Mar. 1959). And in the Keigai Seminar (1956) a discussion between Takao Tsuchiya and H. Rosovski on the "Todays' Business History

in America" was printed.
Thus, through the active introduction ofresearches and studies in the history
ofbusiness in other countries, the underlying concepts ofthat field ofstudy have been

examined and developed. In other words, tracing the history ofbusiness history,
we have received some understanding ofwhat business history is, that is, its meaning,its contributions, its objectives, its types, its contents, its techniques, its materials,

and its relations to other fields ofstudy and research. Now we have to put theminto practice in writing of business history.

As the late Professor Gras pointed out, busines$ history may be divided into
four categories: the history of individual business units; the history of an industry
from the point of view of administration; the history of functional divisions of busi-

ness; and general business history. Ofthese, however, the history ofa firm or company holds a preeminent position in research in business history. Certainly, otherkinds of business history can be forthcoming only after we have had many histories
of individual business units. We must, therefore, start with the history of a firmor company in Japan.
In entering upon our research and writing on the history of business units weshould be conscious of the difference between the ordinary company history andthe history ofbusiness units as conceived by Professor Gras. As shown in the latter

halfof this paper, innumerable company histories have been written in Japan. But
this does not mean that there are many histories of individual business units thatbelong to the shcool oftruth. With some exceptions, they are either the company
histories written on the inside and on behalf of the given company or journalisticcompany histories written to obtain a living or a reputation for the authur. Of
course, the history of these types can not fi11 the requirement of business history.

The history of business units must be constructed according to the canons of goodscholarship. It must be a rounded and balanced treatment of the policy, control,and management of the company in the past. And it must present the company
against its broad and dynamic setting.

159

TADAKATSU INOUE AND YOSHIRO IKUSHIMA

160

We do not say, however, that the traditional company histories written
in our country are all worthless of consideration; on the contrary, most of them

are an important source ofinformation concerning our firms or companies. Whenonce they are looked upon as materials for business history, many of them containmuch that is important about the subject. Ofcourse, we must not depend on themalone. We must supplement and check them by other sources, especially by origi-

nal business records. Then, if they are used by informed and discriminating
students, they have undoubtedly much to contribute to the research and writing ofbusiness history.

(II)
A List of Company Histories in Japan

Prefatory
1) The books and pamphlets listed below are classified by functions and industries. Many companies represented are, however, highly integrated, and books
dealing with such companies have been arbitrarily classified under only one industry.

2) With a few exceptions, the books and pamphlets that are included in thelist have been not only compiled but also issued by the companics represented.

Indeed innumerable comapny histories have been written to commemorate anniversaries of companies. In such cases neither compiler nor publisher are noted
down in the list. Sometimes books and pamphlets were prepared by the successors
ofthe companies represented. In such cases the names ofthe successors are noted.

3) While most of the company histories below have been compiled by men
working in the companies, some books were compiled or written with the support

of well-known historians or economists. In such cases their names are noted
down in the list.

4) Publications dealing with companies established in old colonies ofJapanare not included in this list.

5) Books and pamphlets dealing with trade associations and chambers ofcommerce and industry are all left to some other opportunity.
6) Though little attempt has been made in this paper to evaluate the materials
listed from the point of view of business history, the paper is presented with the hopethat it may be somewhat helpfu1 to foreigners who are interested inJapanese businesshistory at this stage of its development.

7) This paper lays no claim to completeness in the inclusion ofthe all company
histories written in Japan.

IN JAPAN
MSTORIESCOMPANY

161

8) In making the list, we have referred to 7rhe Ldst ofCorPoration-histories in

7apan (Honpo Shashi A4okuroku) printed in the Hikone Ronso (Sept., 1956 and Jan.,l957), the periodical of Shiga University.

9) This list was made up as ofJune 30, 1959.

Contents
1. Banks and Trust Companies
A) The Bank of JapanB) CommercialBanksC) MutualFinancingCompaniesandSavingBanks.
D) Special Banks
E) TrustCompanies
2. ConstructionCompanies
3. DistributionConcernsA) Department Stores
B) Foreign Trade & Wholesale DistributionC) Auxiliary Services
4. InsuranceCompaniesA) Fire&MarinelnsuranceB) Life lnsurance
5. ManufacturingCompanies

A)
B)
c)
D)
E)
F)
G)

Food, Beverage, and Agricultural Products

H)

Pottery and Cement

I)

Automobiles
ChemicalsElectric Appliances and Machines
Iron & Steel
Machines and Metals

Paper and Pulp
Textiles (Cotton, Hemp, Silk, Rayon, Wool
Cloth)

6.
7.

8.
9.

.
Mimng
Companies
Picture Companies
Motion.
Petroleum Com
pames
Printing

and Publishing Concerns

A)
B)

Books and Periodicals

Newspaper& Worsted Products,

INOUEANDYOSHIROTADAKATSU
IKUSHIMA

162

10. PublicUtilityCompanies
A) Electricity

B) Gas
11. ShipbuildingCompanies
12. Securities Companies

13. StockExchanges
14. TransportationCompaniesA) RailroadsB) ShippingCompanies
C) ExpressCompanies
15. Miscellaneous

Appendix. TheZaibatsu

1. Banks and Trust Companies
A) The Bank of Japan
History of the Bank ofJapan. 10 vols and index. 1913.
History of the baiik's operations as the central bank in Japan from its establishment in 1882 under the Act of the Bank ofJapan to the end of the Meiji era.

The development and present status ofthe Bank ofJapan. 1948. pp.239.
Shows the bank at work, 1882-i948.

To do research or write on the history of the bank, the reader is also

referred to Tsuneyuki Okinaka's 7rhe Bank of7apan (Tokio, 1952), Seiki

Miyake's The Bank of5aPan (Tokio, 1953), Toshihiko Yoshino's Successive Governors of the Bank of5aPan (Tokio, 1957), and Naoshige Honda's
Function and Policpt ofthe Bank of3aPan (Kyoto, 1959). These works shouldbe helpful to students who needs a general introduction to the subject
although they do not deal in any large way with administration and opera-tion.

B) CommercialBanks
The!e is a wealth of company histories including those of the six
biggest banks in Japan, that is, ofthe First (Dai-ichi), the Fuji, the Mitsu-t

bishi, the Mitsui, the Sanwa, and the Sumitomo. Some of them haveconsiderable value to business history, for example, the books dealing with
the Dai-ichi, the Mitsui, and the Fuji.

Short history of fifty years of the First (Dai-ichi) Bank. 1926. pp.160.

History of the First (Dai-ichi) Bank. 2 vols. 1957•-58. pp.970, 823.

COMPANY HISTORIES IN JAPANA detailed history of the oldest banking company in Japan. Contents: parti, introduction; part ii, the Meiji era (establishment of the First National Bankin 1873 under the Act of National Bank of 1872; reforms of the Act in 1876 and1883 ; start under the name of the First Bank-from a national bank to a commercial bank; and operations as a central banking company in Korea) ; part iii, theTaisho era (absorbtions of the commercial banks; development during War time;and postwar crisis and the bank) ; part iv, the Showa era (financial crisis of 1927
and the bank; the Iifting of the go!d embargo in 1930 and the bank; the bank's

operations during World War II; formation of the Teikoku Bank in 1943consolidation with the Mitsui Bank; and separation from the Teikoku Bank in
1948-postwar planning and management under the name of the First Bank);

and apps.
Written by Takao Tsuchiya, Emeritus Professor of Tokio University, Shizuo
Halji, Lecturer of Hirosaki University, and Masao Tashiro, Assistant Professorof Hosei Universlty.

Chronology of the Fourth (Dai-shi) Bank 1953.pp.105.
History of the 12th (Juni) Bank.
The bank was amalgamated in 1943 with three banks in Toyama Prefecture
to form the Hokuriku Bank.
Brief story of fifty years of the 1 2th Bank.

Sixty years of the 17th (Junana) Bank. I941.
One of the four parent banks which came together to organize the Bankof

Fukuoka in 1945.

Fifty years of the 38th (Sanjuhachi) Bank. 1928. pp.54.
The bank, established in 1878 as an old national bank under the Actof National Bank of 1876, was consolidated in 1936 with six banks in Hyogo Prefecture

to organize the Bank of Kobe.

History ofthe 48th (Dai-yonjnhachi) Bank. 1944.
The bank, established in 1879, was amalgamated with two other principal
banks in Akita Prefecture to form the Akita Bank.

Seventy-seven years of the 77th (Nanajunana) Bank. 1954. pp.724.
History ofthe 85th (Dai-hachijugo) Bank. 1944.
The bank, established in 1878, was amalgamated with three banks in Saitama Prefecture, including the Sinobu Commercial and the Hanno Banks, toform the Saitama Bank.

Sixty years of the 98th' (Dai-kyqjuhachi) Bank. 1943.
0ne of the old national banks established under theAct of 1876. In 1943
the bank was consolidated with two banks in Chiba Prefecture to organize the

Chiba Bank.

History of the 107th (Dai-hyakunana) Bank. 1924.
Eighty years of the 114th (Hyakujushi) Bank. 1959. pp.953.
Short history of the banks in Akita Prefecture. Pub. by the Akita Bank,
1950. pp.16.

163

IM

INOUE AND YOSHIRO IKUSHIMATADAKATSU
Outline of the development of the banks in Akita Prefecture, but chiefly of
three predecessors of the Akita Bank.

Forty years of the Ashilsaga Bank. I935. pp.66.

Short history ofthe Bank ofKobe. 1956. pp.103.
Twenty years of the Bocho Bank. 1918.

Ten years of the Chiba Bank. (Presented to Shiro Koso in honour of
his 70th blrthday). Pub. by the Chiba Shinbun-sha, I954. pp.267.

Ten years of the Chugoku Bank. 1941. pp.204.

History of the Commercial and Industrial Bank of Kyoto. 1917,
The bank was absorbed by the First (Dai-ich) Bank.

Seventy years ofthe Fuji Bank. 1952. pp.723.
History of the successor to the Yasuda Bank, a rnost important constituent
company of the Yasuda Combine. Enlarged from Sixty rears ot the rasada Bank,
published in 1942. Valuable.

Twenty years ofthe Gunma Daido Bank. 1952. pp.77.

History of banking in Gunma Prefecture. Pub. by the Gunma Daido
Bank, 1952. pp.238.

Twenty years ofthe Hanno Bank. 1921. pp.250.
One of the predecessors of the Saitama Bank.

Ten years of the Hokuriku Bank. 1954.
Compliled with the support of Professor M. Uemura of Toyama University.

The Irnari Bank. 1939. pp.252.
Ten years ofthe Iyo Consolidated (Iyo Godo) Bank. 1951. pp.288.
The bank changed its name to the Iyo Bank in 1951.

Tobayama, Hiroshi., author. History of the Izu Bank. Pub. by the
Nitta-Chikuso-kan. I941. pp.212.
The bank was absorbed by the Shizuoka Bank in 1943.

Twenty years ofthe Jyoyo Bank. 1955. pp.920.
History of the Mitsubishi Bank. I954. pp.836.
Fifty years of the matsui Bank. 1926. pp.78.

The Mitsui Bank: A briefhistory. 1926. (In English)
Eighty years of the Mitsui Bank. 1957. pp.804.
There is an authorized history of the bank's operations as a basic unit of the

MitsuiCombine. Contents;parti,originanddevelopment(theMitsui ExchangeHouse in the Edo era; the founding of the Mitsui Bank in 1876; the reform of
Hikojiro Nakagamigawa, 1891-1901; development in the period from the late
Meiji Era to the Taisho Era; management under Seihin Ikeda and his successors;
and the forrnation of the Teikoku Bank in 1943-amalgamation with the First
Bank; the new Mitsui Bank and its development) ; part ii, business, past and present (deposit; loan; foreign exchange; and security); part iii, changos in organi-

COMPANY HISTORIES IN JAPANzation (articles of association; oMcers; branches; business organization; and employees); part iv, short history of the Dai-jugo Bank which was absorbed in 1944

by the Teikoku Bank; and apps.

Forty years of the Nada Commercial Bank. I935. pp.140.
One of the predecessors of the Bank of Kobe.

Forty years ofthe Nagoya Bank. 1922.
The bank was amalgamated in 1941 with two banks in Aichi Prefecture toorganize the Tokai Bank.

Twenty years of the Nomura Bank. 1938. pp.354. •Thirty years of the Nomura Bank. Pub. by the Daiwa Bank (Successor
to the Nomura Bank), 1948, pp.333.
Forty years of the Daiwa Bank. 1958. pp.836.

Twenty years ofthe Naniwa Bank. 1918.
Fifty years of the Oita Cosolidated (Oita Godo) Bank. 1943. pp.241.
The bank changed its name to the Oita Bank in 1952.

History of the Sanwa Bank. 1954. pp.385.
History of the leading Japanese commercial bank organized in 1933 asa consolidation of the Konoike, the Sanju-shi, and the Yamaguchi Banks..

Fifteen years since the foundation. (the Shiga Bank). 1948. pp.1OO.

Twenty years of the Shiga Bank. 1954. pp. 595.

Ten years of the Shikoku Bank after the war. 1956. pp. 470.
Forty years of the Shinobu Commercial Bank. 1936.
One of the predecessors of the Saitama Bank.

Ten years of the Sizuoka Bank. 1953. pp.40.

Thirty years ofthe Sunitomo Bank. I926. pp.242.
History ofthe Sumitomo Bank. 1955. pp.627.

Hashimoto, Motomu., author. Kitaro Okano: A history ofthe Suruga
Bank. 1954. pp.432.
Forty--six years ofthe banks in Aichi Prefecture. Pub. by the Tokai Bank.

1944. pp.376.

c)Mutual Financing Companies and Savings Banks
Twenty years ofthe Hold(aido Savings Bank. 1942. pp.133.
Twenty years of the Kyosei Mutual Financing Company. 1 932. pp. I42.
History of the Nippon Savings Bank. I912. pp.172.

Ten years of the Nishi Nihon Mutual Finandng Company. 1954.
pp.407.
Compiled by T. Okahashi, C. Takagi, Y. Mabsui, and S,Tateoka, Professors of Finance in Kyushu University.

165

IKUSHIMAINOUEANDYOSHIROTADAKATSU

166

D) SpecialBanksHistory of the Agricultural and Industrial Bank of Aomori Prefecture. 1918.
The Agricultural and Industrial (No-ko) Banks, established in every prefecture under the Act of the Agricultural and Industrial Bank of 1896, carried ona real-estate mortgage-loan business chiefly for•the farmers.

History of the Agricultural and Industrial Bank of Ehime Prefec.
ture. 1937.

Twenty years of the Agricultural and Industrial Bank of Hyogo
Prefecture. I918.
Thirty years of the Agricultural and Industrial Bank of Hyogo Prefecture.

1929. pp.92.
History of the Agricultural and Industrial Bank of Kyoto Prefecture.

1922.

History of the Central Cooperative Bank for Agriculture & Forestory (Norin Chuo Kinko). 5 vols. 1956. pp.346, 357, 329, 328,
282.

Ten years of the Hokkaido Takushoku Bank from the founding. 1910.
pp.55.
History of a Hokkaido banking company which helped finance the development of the area. Established in 1900 under the Act of Hokkaido Takushoku

Bank.
Twenty years of the Hokkaido Takushoku Bank. 1920. pp.107.
Fifty years of the Hokkaido Takushoku Bank. 1950. pp.90.

Ten years of the Industrial Bank of Japan (Nippon Kogyo Ginko).
1912. pp.176.
Established in 1902 under the Act of the Industrial Bank ofJapan to help
furnish long term credit to the industrial entrepreneurs.

Recent ten years of the Industrial Bank ofJapan. 1934. pp.163.
Short history ofthe Industrial Bank ofJapan. 1946.
Fifty years of the Industrial Bank ofJapan. I957. pp.1061.

Chronology of the Industrial Bank ofJapan. 1957. pp.546.

The Japan Development (Nihon Kaihatsu) Bank and its development. 1958. pp.199.
Established in 1951 under the Act of the Nihon Kaihatsu Bank to furnish
long term credit to industries.

The first twenty years of the Nippon Kangyo Bank. 1917. pp.218.
Established in 1897 under the Act of the Nippon Kangyo Bank to loan money

COMPANY HISTORIES IN JAPANon real estate, also issue and sell its securities against real estates mortgages as

securlty.

Thirty years of the Nippon Kangyo Bank. 1927. pp.402.

Forty years of the Nippon Kangyo Bank. 1938. pp.435.
History of the Nippon Kangyo Bank: The era of the bank's operation asa special bank. 1953. pp.884.
By the abolishment of the Act of the Nippon Kangyo Bank in 1950, theBank newly started as a commercial banking company.

Materials for the history of the Nippon Kangyo Bank. 4 vols. 1951-53.

pp.427,506.
Sixty years ofthe Nippon Kangyo Bank. 1957. pp.401.

Forty years of the Yokohama Specie Bank 6 vols. 1920.
E)

Trust Companies
History ofthe Kyodo Trust & Banking Company. 1943. pp.424.
Short history of thirty years of the Mitsubishi Trust & Banlding Com-pany. I957. pp.86.

Thirty years of the Mitsui Trust & Banking Company. 1955. pp.506.

Thirty years of the Sumitomo Trust & Banlding Company. 1955.
pp.508.

2. Construction Companies
See Section 1 1 for books dealing with the shipbuilding companies.

Ten years ofthe lkeda-gumi. 1940.
Brief history of the Kajima Construction Company. 1950.

One hundred and fifty years of the Shimizu Construction Company.
1953. pp.316.
Fifty years of the Tomijima-gumi. 1938. pp.648.

3. Distribution ConcernsA) DepartmentStores
History of the Maruzen Company. 1951. pp.429.
Brief history of the store. (The Matsuzakaya). 1937. pp.278.

The growth of the Mitsnkoshi. 1954. pp.70.
Three hundred years ofthe Shirokiya. 1957. pp.689.
History of a department store in Tokyo. Begins with the founder's activities
as a dry-goods retailer in Edo.

One hundred years of the Takashimaya Company. 1941. pp.71 1.

167

TADAKATSU INOUE AND YOSHIRO IKUSHIMA

168B) Foreign Trade and Wholesale Distribution
Forty years of the Harada Shoji Kaisha. 1944.
Historical memoir' of the Inanishi Gomei Kaisha. 1927.
Fifty years of the Itornan& Co. 1933. pp.168.

Fifty years ofthe Nihon Menka Company. Pub. by the Japan Cotton& General Trading (Nichimen Jitsugyo) Company (the successor company to the Nihon Menka), 1943. pp.245.

Historical memoir ofsixty years ofthe F.Kanematsu & Company. 1950.

pp.199.
Fifty years in blanket business. Pub. by the Kobayashi Sangyo Kaisha,

1944. pp.472.
Seventy-three years of the Meiji-ya. 1958. pp.213.
Fifteen years of the Meiji Shoten. 1936. pp.58.
Thirty-five years of the Meiji Shoji Kaisha (the successor to the Meiji

shoten). 1957. pp.470.

Short history of the Mitsui Bussan Kaisha. Pub. by the Dai-ichi
Bussan Kaisha, 1951.
After World War II, the old Mitsui Bussan Kaisha, a principal constituent

company of the Mitsui Combine, was dissolved. The Dai-ichi Bussan Kaisha
was organized in 1947 to succeed to some part of the former's business.

Fifty years of the Nanyo Trading Company. 1942.
Sixty years of the Nozaki & Company. I953. pp.63.
The First fifty years. (the Tsukamoto Shoji Kaisha). I939. pp.272.
C) Auxiliary Services
Sixty years of advertising. Pub. by the Haknhodo, 1955. pp.254.

Short history of the Shibusawa Warehouse Company. 1931.

4. Insurance CompnaiesA) Fire & Marine Insurance

Tenyearsofservice. (theDowaFire&MarineInsuranceCompany).
1954. pp.148.
Fifty years of the Meiji Fire Insurance Company. 1940. pp.598.
The company was amalgamated in 194tl with the Tokio Marine Insurance
Company, the oldest insurance company in Japan, and the Mitsubishi Marine
Insurance Company to organize the Tokio Marine & Fire Insurance Comapny.

Forty years ofthe Nichido Fire & Marine Insurance Company. 1954.

pp.416.

COMPANY HISTORIES IN JAPANFifty years of the Tokyo Fire Insurance Company. 1938. pp.491
One of the three parent companies which came together to form theYasuda
Fire & Marine Insurance Company in 1944.

Sixty years of the Tokyo Marine & Fire Insurance Company. 1940.
pp.679.
B)

Life Insurance

Fifty years of the Chiyoda Mutual Life Insurance Company. 1955.
pp.615.

Twenty-five years of the Dai-ichi Mutual Life Insurance Company.
1929. pp.321.
Thirty-five years of the Dai-ichi Mutual Life Insurance Company. 1940.

pp.373.
Fifty-five years of the Dai-ichi Mutual Life Insurance Company. 1958.

pp.936.

History of the Fukuju Life Insurance Company. 1941. pp.312.
Absorbed by the Meiji Life Insurance Company in 1942.

Fifty years of the Fukutoku Iife Insurance Company. 1926. pp.63.
Absorbed by the Dai-hyaku Mutual Life Insurance Company in 1941.

History of the Kokko Mutual Life Insurance Company. 1926.
The company was amalgamated in 1941 with four companies to form theShowa Life Insurance Company. The latter company was absorbed by theDai-ichi Mutual Life Insurance Company in 1941.

Fifty years of the Meiji Life Insurance Company. I933. pp.673,
Sixty years of the Meiji Life Insurance Company. 1942. pp.492.

Seventy years ofthe Meiji Mutual Life Insurance Company. 1955. pp.733.
History of the oldost life insurance company in Japan. Contents: part i,
origin and development (sixty years from the founding, 1881 - 1941; war times,
1942-45; immediate postwar days, 1945-46; inflation period, 1946-48; andthe
years of stabilization, 1948-52) ; part ii, changes in organization (articles ofassocia-

tion; business formula; representatives; oMcers; main oMce, branches, andagents); part iii, business (marketing; finance and accounting; and personel
management); part iv, statistics; and apps.

History of the Nippon Kyoritsu Life Insurance Company. 1933.
pp.52.

Fifty years ofthe Nippon Life Insurance Company. 1942. pp.761.
History of the Nippon Life Insurance Company : A sequel to Filfty 2ears of
the .7ViPPon LiLfe Insurance ComPan2. 1957. pp.419.

Fifty years of the Teikoku Life Insurance Company. 1939. pp.637.
The predecessor company of the Asahi Mutual Life Insurance Company.

169

TADAKA'ISU INOUE AND YOSHIRO IKUSHIMA

170

Fifty years of the Toho Mutual Life Insurance Company. 1953.

pp•

1269.
Sixty years of the Yasuda Life Insurance Company. 1942. pp.604.

5. Manufacturing Companies
A) Automobiles
History ofthe fifty years. (the Daihatsu Kogyo Company) . 1957. pp.306.

History ofthe Isuzu Motor Company. 1957. pp.282.
Thirty years of the Toyo Kogyo Company. 1950. pp.369.

Twenty years ofthe Toyota Motor Company. 1958. pp.863.
History of the leading manufacturer of cars, trucks, buses, and automotive
parts. Incorporated in 1937 in Koromo, Aichi Prefecture.

Twenty years of the Yanase Automobile Company. 1935.
B)

Chemicals

Thirty years of the Dai-ichi Chemicals (Kogyo Seiyaku) Company.
1938. pp.230.
History of a manufacturer of marseilles soaps, textile chemicals, miscellaneous cellogen, intermediate materials, and fatty acid.

History ofthe Dai Nippon Celluloid Company. 1952. pp.229.
Compiled by N.Nakamura, Professor of Kyoto University, and S. Murayama.

Thirty years of the Dai Nippon Jinzo Hiryo Company. 1917. pp.326.
Fifty years ofthe Dai NipponJinzo Hiryo Company. 1936. pp.327.
A principal predecessor company of the Nissan Chemical Industry Company,a manufacturer of chemical fertilizers, industrial medicines, agricultural medicines,

etc.

Fifty years of the Hirao Sampei Shoten. 1929. pp.984.
A history of a manufacturer of cosmetics.

Fifty years of the Kao Soap Company. 1940. pp.787.
Contents: part i, development of the soap industry in Europe and America;
part ii, development of the soap,industry in Japan (soaps in Tokugawa era; thesoap industry in the firsthalf ofthe Meiji era; the soap industry in the latter halfofthe Meiji era-development of the Kao Soap Co. during the period; the soap
industry in the Taisho erardevelopment of the Kao Soap Co. during the period ;the Showa era-development of the Kao Soap Co. during the period); part iii,
stages in the development ofJapan's soap industry and their problems; and apps.
Written by the famous marxians, Korefusa Hattori and Yoshimasa Kobayashi.

The founder, Tomiro Nagase. Pub. by the Kao Soap Company, 1940.
pp,396.
Written by K. Hattori.

Thirty years ofthe Denki Kagaku Kogyo Company. 1952.

COMPANY HISTORIES IN JAPAN171

Story of a manufacturer ofcarbide, calcium cynamide, cement andfertilizer.

Short history of the eighty years of the Nlkka Rubber Company. 1953.

TwentyyearsoftheNissen(NipponDystuffCompany). 1936.pp.98.
The development and present status of the Nippon Chisso Hiryo Company. 1937. pp.618.
Reorganized as the Shin Nippon Chisso Hiryo Company in 1950. A manufacturer of ammonium sulphate, ammonium phsphate, etc.

Forty years ofthe Nippon Paint Company. 1941. pp.122.
Fifty years ofthe Nippon Paint Company. 1949. pp.126.

Ten years from the founding. (The Nippon Shinbun Ink Company).
I954. pp.173.
Thirty years of the Nippon Synthetic Chemical Industry Company.
1958. pp.700.
History of a manufacturer of calcium carbide, glacial acetic acid, ethyl
acetate, etc. Written by N.Nakamura, a well-known historian.

Eighty-five years of the Shiseido and the Ginza Street. 1959.
History of the leading Japanese manufacturer of cosmetics on the Ginza
Street, Tokyo.

Fifteen years of the Tohoku Hiryo Company. 1954. pp.82.
Ten years of the Toyo Rubber Industry Company. 1955. pp.207.
Forty years of the Yokoharna Rubber Company. 1959. pp.731.
History of one of the leading rubber-manufacturing companies in Japan:
origin, cooperation with the B.F.Goodrich Co., techniques, plants, products,sales,

competition, and regulation of the government.

c)Electric Appliances and Machines
History of the Fuji Denki Seizo Company. 1957. pp.330.
Anniversary book of a company established in 1923 to manufacture generators, motors, railway and ship equipments, etc.

History of the Hitachi Seisakusho. 1949. pp.334. (contains resume in
English)Chronology of the Hitachi Seisakusho. 2 vols. 1953-54. pp.133, 138.
History of an important manufacturer of power generating machinery, electric machinery, roiling stock, industrial machinery, household electric appliances, etc.

Thirty-five years of the Matsushita Electric Industrial Company.
1953. pp.137.
History of the leading Japanese manufacturer of radio and television sets,
electric lamps and fittings, dry cells and batteries, etc.

A historical memoir. (The Mitsubishi Electric Manufacturing
Company). 1951. pp.432.

TADAKATSU INOUE AND YOSHIRO IKUSHIMA

172

Contains the history of the company's operations as an important subsidiaryof the Mitsubishi Combine.

Twenty years of the Nippon Battery Company. 1937. pp.289.
Thirty years of the Nicchiku (Nippon Gramophone). 1940. pp.209.
Story of a manufacturer of records, phonographs, radios, etc. The namewas changed to Nippon Columbia Company in 1946.

Forty-six years from the founding. (The Sawafuji Electric Company).
1953. pp.58.
A manuieacturer of magneto, starter, and generator.

History of the Sumitomo Electric Industries. 9 vols. 1947-52. pp.743.
History of the rankingJapanese manufacturer of electrical wires and cables.

Sixty-fiveyearsoftheShibauraSeisakusho. Pub.bytheTokyoShibaura Electric Company (Consolidation of the Shibaura Seisakusho
and the Tokio Electric Company), 1940. pp.494.
History of an important manufacturer of generators, prime movers, moters,
electric cars and locomotives, telephones, electric household appliances, e:c.

Our last twenty years. (The Tokyo Electric Company). 1934. pp.275.
Fifty years of the Tokyo Electric Company. Pub. by the Tokyo Shibaura

Electric Company, 1940. pp.698.
Thirty-five years ofthe Yasuda Battery Company. 1953. pp.308.

D) Food, Beverage, and Agricultural Products

History of the Ajinomoto Company. 1951. pp.946.
History of the company beginning with the inven;ion of Aji-No-Moto(monosodium glutamate).

Thirty years of the Dai Nippon Breweries. 1956. pp.254.
After World War II, the properties of the company was divided by two
newly established companies, the Nippon Breweries and the Asahi Breweries.

The recent twenty-five years of the Nitto (Dai-Nippon Sugar Manufacturing Company). 1939. pp.330.
Enlarged from The recent tenJears o; the Nitto, Pub. in 1919. 'Brief history of the Nitto. 1944.

Twenty years of the Honen Oil Company. 1944. pp.284.
Thirty years of tobacco manufacturing. (The Japan Monopoly Bureau).
1935. pp.52.

History ofJapan salt industry. (The Japan Monopoly Corporation).
I958. pp.990.
Japan salt industry after the War. (Japan Monopoly Corporation). 1958.

pp.425.

COMPANY HISTORIES IN JAPANTen years oftheJapan Monopoly Corporation. 1959. pp.481.

Fifty years of the Kirin Brewery Company. 1957. pp.249.
Twenty years of the Melji Confectionery Company. 1936. pp.81.
Short history of the forty years of the Meiji Confectionery Company.
1958. pp.397.

Thirty years of the Meiji Sugar Manufacturing Company. 1936.
pp.140.
Advance of the Meiji. 1940, pp.40.

,

Fifty-five years of the Morinaga Confectionery Company. 1954.
pp.520.
History of the Nisshin Flour Milling Company. 1955. pp.508.

Twenty years of the Noda Shoyu Company. 1940. pp.724.
Thirty-five years of the Noda Shoyu company. 1955. pp.844.

Ten years of the Showa Sugar Manufacturing Company. 1939.
The company was absorbed by the Dai Nippon Sugar Manufactur:ng

Company.

History of the Taiwan Sugar Manufacturing Company. 1939. pp.458.
By the retrocession of Formosa, the company had lost the greater part ofits property. But started newly under the name of the Taito Comapny.

Twenty years from the founding. (The Takasaki Ham Company).
1958. pp.650.
E)

Iron and Steel
Ofthe six biggest iron and steel manufacturers, the Fuji Iron & Steel,theJapan Steel & Tube, the Kobe Steel, the Sumitomo Metal Industries,
the Yawata Iron & Steel Companies are all represented in the books below.

Course of forty years of the Daido Iron & Steel Company and its
present status. 1958. pp.209.

Forty years of the Kobe Iron Foundry (Kobe Chutetsu-sho). 1956.
pp.380.

Rise of the modern iron industry: Pre-history of the Kamaishi Iron

Works. pub. by the Works of the Fuji Iron and Steel Company,
1957. pp.183.
Written by K.Mori and G.Itahashi, Professors of Iwate University,

Seventy years of the Kamaishi Iron Works. Pub. by the Works of the Fuji

Iron and Steel Company, 1955. pp.533.
History of the oldest iron foundry in Japan. Contents: part i, general
history (birth of blast furnances at Kamaishi in 1857; years of government mana-

173

174

TADAKATSU INOUE AND YOSHIROIKUSHIMA
gement, 1874-1887; transfer ro the Tanaka Seitetsu-sho in 1887; management
under the control of the Mitsui Mining Company, 1924-1934; formation of the
Nippon Iron & Steel Co. in l934 under the Act of the Nippon Icon & Steel Co.
-amalgamation with the five largest iron manufacturers in Japan; and separation from the Nippon Iron & Steel Company in 1950-birth of the Fuji Iron&
Steel Company) : part ii, history of functions of business (organization, producing,marketing, and personel management) ; and apps.

Fifty years of the Muroran Iron Works. Pub. the Works of the Fuji
Iron & Steel Company, l958. pp.780.
Compiled under the supervision of T.Tsuchiya, Emeritus Professor of Tokyo

University.

Historical memoir of twenty years of thde Japan Steel & Tube Company.

1933. pp.291.
Thirty years of the Japan SteeI & Tube Company. 1942. pp.486.
Compiled by S. Kojima, a well-known economist.

Forty years oftheJapan Steel & Tube Company. 1952. pp.937.
Revised by T. Tsuchiya and F. Yamamoto, Professor of Economics inRikkyo University.

Thirty years crf the Kobe Steel Works. I938. pp.126.
Fifty years ofthe Kobe Steel Works. 1954. pp.405.

Twenty-five years of the Nichia Steel Works. 1943. pp.218.

History ofthe Nippon Iron & Steel Company. 1959. pp.1034.
History ofthe Nippon Sheet Steel Company. 1956. pp.422.
Short history of sixty years of the Sumitomo Metal Industries.
I957. pp.315.

Fifty years of the Yawata Iron Works. Pub. by the Yawata Iron &Steel Company. 1950. pp.473.
Hiroto Saegusa and Keiichi Iida, compilers. Development in iron andsteel production in Japan: Establishment of the Yawata Iron Works.

Pub. by the Oriental Economist, 1952. pp.752.
One of the few company histories which has real merit from a scholastic
point ofview. The origin and development of the Works is seen against the story
ofJapan's iron and steel industry.

F) Machines and Metals (Aluminium)
Twenty-five years of the Fujikoshi Steel Industry (Fujikoshi Kozai
Kogyo) Company. 1953. pp.344.
History of a manufacturer of machine tool.

Fifty years of the lkegai Iron Works. 1941.
Story of a manufacturing company of engines, machine tools and others.

HISTORIESrN JAPANCOMPANY

Thirty-five years of the Ishii Iron Works. 1956. pp.282.

Forty years of the Nilgata Engineering Company (Nti'gata Tekkosho). 1934.
A manufacturer of engines, railroad equipments and others.

The Nippon Locomotive (Nippon Sharyo) Company. 1926.
History of the Nippon Aluminiurn Manufacturing Company: Fiftyfive years with aluminium. 1957. pp.310.

Thirty years ofthe Nippon Air-Brake Company. 1955. Pp.157.
The 20th anniversary of the incorporation of the Shimazu Seisaku-sho.

1937. pp.100.
The 35th anniversary of the incorporation of the Shimazu Seisaku-sho.

1952. pp.43.
History of the ranking Japanese manufacturer of physical and chemical apparatus, X-ray apparatus, precision measuring instruments, etc.

Seventy years of the Tokyo Wire Rope Manufacturing Company.
1957. pp.655.

History of the Toyota Textile Machinery Company. Pub. by the
Nisshin Trading Company, 1953. pp.276.

G) Paper and Pulp
Twenty-five years of the Hokuetsu Paper Mills Company. 1932.

The origin and development of the Nakanoshima Paper Company.
1928. pp.135.

Fifteen years of the Nippon Paper (Nippon Seishi) Cempany. 1933.
pp.170.
Handbook of theJapan paper industry. Pub, by the old Oji Paper Com-pany, 1937. pp.1097.
History of the Oji Paper Company, 3 vols .1956-58. pp.335, 327, 427.
A detailed history of the largest paper company in Japan, 1872-1937. Contents: part i, years of the founding, 1872-1886 (incorporation of the Shosi Kaishain 1873; construction of Oji Factory in 1875; operations; contribution of Heisaburo Okawa to the process of manufacturing; formation of trade associations) ; partii, 1887-1897 (the first stage of its development; construction of the Keta Factory,
Shizuoka Profectur{}-the first sulphite pulp factory); part iii, 1897-1911 Ccon

struction of the Nakabe Factory, Shizuoka Prefecture; labor unrest in 1898;
construction of the Tomakomai Factory, Hokkaido); part iv, strengthening thefoundation, l912-1926 (World War and the company's progress; advance inManchuria); part v, 1926-1937 (consolidation with the Fuji Seishi and the
Karafuto Kogyo Companies in 1933; the combination and its effects on the indust-

ry; management under Ginjiro Fujiwara)

175

TADAKArlSU INOUE AND YOSHIRO IKUSHIMA

176

Thirty years of the Okayarna Paper Company. 1936.
History of the Tohoku Pulp Company. 1952. pp.475.

H) PotteryandCement
History of the Asano Cement Company. 1940. pp.611.
The company changed its name to the Nihon Cement Company in 1947.

Seventy years of the Nthon Cement Company. 2 vols. 1955. pp.541,
1103.
An accurate and comprehensive study of the leading Japanese cement
manufacturer. Contents: part i, the development of cement industry (thecement industry in Europe and America; and the cement industry in Japan) ; partii, history of the Nihon Cement Company (the years of founding, 1883-1897; themodernization of the factory, 1898-1911; the development in the Taisho Era; thenew products and expansion, 1925-1937; World War II and the company, 19371945; postwar reorganization-the dissolution of the Asano Combine and thecompany; and the development in recent years); part iii, business organization(factories and oMces; capital, oMcers, and employees; and business analysis);and apps. (chronology, statistios, and index).

History of the development of the Chuo Cernent Company. 1931.
The company was absorbed by the Onoda Cement Company in 1929.

Thirty years of the Ina Seito Company. 1956. pp.318.
History of a pottery manufacturer.

History of the Mikawa Cement Company. 1937.
Twenty years of the Nippon Carbon Company. 1940.
Thirty years of the Nippon Gaishi Company. 1949. pp.195.
The ranking Japanese manufacturer of porcelain insulator.

Fifty years from the founding. (The Onoda Cement Company). 1931.
pp.798.
Historical memoir of the seventy years. (The Onoda Cement Company).
1952. pp.1102.

Fifty years of the Osaka Yogyo Company. 1935. pp.305.
A manufacturer of fire brick.

I) Textile '(Cotton)Outline ofthe fifty years ofthe Dai Nippon Spinning Company. 1941.
pp.192.
Chronology of the last ten years of the Daiwa Spinning Company. 1951.

pp.47.
Fifty years of the Fuji Spinning Cornpany. 1947. pp.387.

Fifty years of the Fukushima Spinning Company. 1942. pp.250.

COMPANY HISTORIES rN JAPANFifty years ofthe Kishiwada Spinning Company. 1942. pp.127.
Historical memoir of sixty-five years. (The Kurashi1ri Spiming Company). 1953. pp.722.

Fifty years of the Naigai-men (Naigai Cotton Spinning) Company.
1937. pp.218.
Historical memoir ofthirty years. (The Nitto Spinning Company). 1953.

pp.226.

Brief history of twenty years from the founding of Osaka Spinning

Company. 1908.
The company, established in 1882, was arnalgamated with the Mie Spinning Company, founded in 1883, to organize the Toyo Spinning Company in 1914.

History of the development of the Osaka Spinning Company. 1914.
The 20th anniversary: An outline of the growth of the Toyo Spinning

Company. 1934. pp.66.
Seventy years of the Toyo Spinning Company. 1953. pp.755.
A detailed history of the leading spinning compnay in Japan. Contents:
part i, history (the Osaka Spinning Co. ; the Mie Spinning Co.; the rise ofJapan's
cotton spinning industry; the establishment ofJapan's cotton spinning industry;
the formation of the Toyo Spinning Co. in 1914 by the combination of the Osaka

Spinning and the Mie Spinning Companies; World War I and the company;
postwar rationa]ization; laborer and labor management; the merger of the Osaka
Godo Spinning Co. in 1931; diversification and expansion; advance into China;

World War II and the company; postwar planning; postwar labor relations);
part ii, present status; part iii, materials.

(Hemp)
Fifteen years of the Nissen (Japan Textile Manufacturing Company) ,1950. pp.3I2.

Thirty years of the Tbikoku Seima Company. 1937. pp.222.
(Silk)

Short history of the Gunze Silk Manufacturing Company. 1936. pp,
170.
Twenty years of the Katakura Silk Spinning Company. 1941. pp.575.
Thirty years of the Katakura Industry Company. 1951. pp.178.
Successor to the Katakura Silk Spinning Company.

The Tomioka Seishi-sho. Pub. by the Katakura Silk Spinning Company,
1943. pp.79.
In 1939 the cornpany ceased as an independent company and became adivision of the Katakura Spinning Company.

177

TADAKATSU INOUE AND YOSHIRO IKUSHIMA

178(Wool and Worsted Products)
Ten years of the Itami Seijyu-sho. 1933. pp. 40.

Thirty years ofthe Japan Wool Textile Company. 1931. pp.400.
Sixty years of the Japan Wool Textile Company. 1957. pp.729.
History of the foundation and developmenL of the largest wool textile company

in Japan.

Fifteen years of the Nippon Keito Boseki Company. 1936. pp.139.
(Rayon)Course of the Asahi Chemical Industry Company. 1955. pp.21.
Rayon industry and the development of the Teikoku Rayon Company.
1938. pp.144.

The 30th anniversary: the development of the Teikoku Rayon Company
and an outline of the chemical fiber industry. 1949. pp.428.
The development and the present status of rayon and staple fiber and thefifteen years of the Toyo Rayon Company. 1940. pp.126.
History of the Toyo Rayon Company. 1954. pp.451.
Origin and development of a leading manufacturer of rayon and nylon.
Established in 1925. Contents: part i, history; part ii, administration (labor,
finance, selling, purchasing, research) ; part iii, rayon and nylon; and apps.

(Cloth)Sixty years of the Fukusuke Tabi Company. 1942. pp.600.
Fifty years ofthe Kyoto Orimono Kaisha. 1937. pp.345.

Twenty years ofthe Nippon Cloth Industry Company. 1941. pp.73.
Fifteen years ofthe Toyo Cloth Company. 1935. pp.98,

Ten years ofthe Teyo Deying Company. 1947. pp.354.
Since after l949, the company became a division of the Toyo Spinning

Company.

6. Mim' g Companies
Historical memoir ofthe Seventy years. (The Dowa Mining Cornpany) . 1955.

pp.290. •Fifty years ofthc Hokkaido Colliery & Steamship Company. 1939. pp.284.
Seventy years of the Hokkaido Colliery & Steamship Company. 1958. pp.835.

History of the Hitachi Mine. Pub. by the Nippon Mining Company, 1952.
pp.461.
Fifty years of the Nippon Mining Company. 1957. pp.741.

Twenty years since the founding (History of the Ishihara Sangyo KaiunCOMPANY HISTORIES IN JAPAN
Kaisha). 1941.
History of the Meiji Mining Company. 1957. pp.532.
History of the Sumitomo : The growth and development of the family businessoriginating in copper mining. Pub. by the Sumitomo Metal Mining
Company, 1952. pp.154.
Story of the two hundred and fifty years of the Besshi Mine. Pub. by the

Sumitomo Honsha, 1941.

7. Motion Picture Companies
Ten years ofthe Daiei Motion Picture Company. 1951. pp.300.
The history and present status of the Nilckatsu. 1942.

Forty years ofthe Nikkatsu Corporation. 1952. pp.212.

Five years of the Toei Motion Picture Company. 1956. pp.97.
Ten years ofthe Toho. Ed. and Pub. by the Tokyo TakarazukaTheater, 1943.
Extracts from the ten years of the Toho Company. I942.

8. Petroleum Companies
Twenty-five years of the Hoden Oil Company. 1920. pp.259.
One of the predecessors of the Nippon Oil Company.

Story ofan oil refiner : fifty years ofMatsumura Oil Company. 1958. pp.328.
Written by professor M. Tamura of Kobe University of Commerce.

Historical memoir of twenty years. (The Maruzen Oil Company). 1958.

History of the Nippon Oil Company. 1914.
Fifty years of the Nippon Oil Company. 1937. pp.IOI.

History of the Nippon Oil Company. 1958. pp.630.
Shows the company at work, l888-1958, within its dynamic setting. Contents :part i, origin and development (a venture in oil at Amase, Niigata Prefecture,
1888-1898; Hisahiro Naito, the founder of the company; advance to Nishiyama
Oil Field, Niigata Prefecture, 1898-1914; purchase of the International Oil

Company in 1907, a subsidiary of the Standard Oil Company of New Jersey;
World War and the company's progress; consolidation with the Hoden Oil Co.
in 1921; the first import of crude oil in 1924 and its refining; the period from 1925
to 1945; and postwar adjustment) ; part ii, development of the petroleum industry

in Japan and the company (discovery of crude oil; early petroleum industry inJapan; the founding of the Nippon Oil ()o. and the industry; the petroleurnindustry in the middle of the Meiji era; new producing methods and the Akita

Oil Field; World War and the industry; the government and the industry;World War II and the industry; and postwar status); and apps. (statistics,

chronology, and index).

Fifteen years of the Toa oil Company. 1956. pp.l302.

179

TADAKATSU INOUE AND YOSHIRO IKUSHIMA

180

9. Printing and Publishing ConcernsA) Newspaper
A sketch of the Asahi Shinbun Publishing Company. 1927. pp.322.
Historical memoir ofthe fifty years. (The Asahi Shinbun Publishing Com-pany). 1929.
Short history of the seventy years of the Asahi Shinbun Publishing Com-pany. 1949. pp.484.
Ten years of the Chubu Nippen Shinbun-sha. 1951. pp.280.
Short history of the Hochi Shinbun-sha. 1932.

Ten years of the Hokkaido Shinbun. 1952. pp.27.
Short history of the Japan Times. 1941. pp.155.

Fifty-five years of the Kobe Shinbun. 1953. pp.424.
History of the Nishi Nippon Shinbun-sha. 1951. pp.467.
Eighty years of the Nippon Keizai Shinbun-sha. 1956. pp.771.

History ofthe Osaka Mainichi Shinbun-sha. 1925. pp.194.
Fifty years of the Osaka Mainichi Shinbun-sha. 1932. pp.513.

Seventy years of the Mainichi Shinbun-sha. 1952. pp.639.
Seventy-five years of the Sanyo Shinbun-sha. 1954. pp.466.
The ten years. (The Teito Nichinichi Shinbun-sha). 1943.

Seventy years ofthe Tonichi. (Tokyo Nichinichi Shinbun-sha). 1941.

pp.407.
Eighty years of the Yomiuri Shinbun-sha. 1955. pp.744.

B) BooksandPeriodicals.
Ten years of the Chukyo Publishing Company. 1953. pp.147.
Historical memoir of the fifty years. (The Chuo Koron-sha). 1935.

Seventy years of the Chuo Koronsha. 1955. pp.648.
Course of seventy-five years : History of the Dai-Nippon Printing Com-pany. 1952. pp.242.
Twenty-five years of the Diamond-sha. 1938. pp.296.
Fifty years of the Fuzanbo. 1936. pp.726.
Fifty years ofthe Hakubun-kan. 1937. pp.542.
Story of the fifty years of the Hokuryu-kan. 1940. pp.830.

Sixty years ofthe Oriental Economist. 1953. pp.573.

COMPANY HISTORIES IN JAPAN10. PublicUtility Companies
A)

Electricity

Twenty years of the Dai Nippon Electric Power Company. I940. pp.
157.
History ofthe Daido Electric Power Company. I941. pp.471.
History of the Fukushima EleÅëtric Light Company. 1927.
History of the Hiroshima Electricity Company. 2 vols. 1934. pp.349,

196.
History of the Kansai Kyodo Coal Power Electricity Company. 1 941 .

History ofthe Keihin Electric Power Company. 1926.

History of the Kiso Electric Power Company. 1944.
Fifty years ofthe Kyoto Electric Light Company. 1939. pp.362.

Twenty years of the Kyushu Hydro-electricity Company. 1933.
pp.405.

History of the Nagoya Electric light Company. Pub. by the Toho
EIectric Power Company. I928.
Thirty years of the Nti'gata Electric Power Company. 1937. pp.255.

Ten years of the Nippon Electric Pewer Company. I933. pp.598.
History of the Osaka Electric Light Company. 1925. pp.692.
Thirty years ofthe Shikoku Hydro-electricity Company. 1928. pp.350.
The first fifty years of the Tokyo Electric Company. I936. pp.289.

Historical memoir of the Ujigawa Electricity Company. 1942. pp.300.

Ten years of the Yahagi Hydro-electricity Company. 1929.
History of the Yamagata Electricity Company. I940.
History of the Yokohama Electricity Company. 1922.

History of the Japan Electric Generation & Transnission (Nippon
Hassoden) Company. 2 vols. 1954. pp.503, 446.
History of a semi-government corporation from its founding in 1939 to its
liquidation in 1951. Vol.I: Japan's electric light and power industry before thecompany-competition among the big five; formation of the company under +he
Act ofJapan Electric Generation and Transmission Company-transfer of theproperties of the big five and others to the company and the nine newly organizedelectric distribution (Haiden) companies; World War II and the company; postwar liquidation of the company-transfer of the properties of the company and the
Haiden companies to the nine private electric power (Denryoku) companies established in 1951. Vol.II: organization; finance; operations; planning and re-search; employees and employee relations; Iiquidation; and apps. (financial
statements and others).

Ten years of the Kanto Branch ofthe Nippon Electric Generation & Trans-

181

TADAKA'ISUINOUE AND
YOSHIROIKUSHIMA

182

mission Company. 1949. pp.568.

History of the Chubu Electric Distribution (Chubu Haiden) Corn.
pany. 1954. pp.500.

Ten years of the Chugoku Electric Distribution (Chugoku Haiden)

Company. 1953.
History of the Hokuriku Electric Distribution (Hokuriku Haiden)

Company. 1956.
History of the Kansai Electric Distribution (Kansai Haiden) Company. 1953. pp.314.

Ten years of the Kyushu Electric Distribution (Kyushu Haiden)
Company. 1952. pp.408.

B) Gas
Forty years of the Kobe Gas Company. 1940. pp. 298.
Fifty years of the Osaka Gas Company. 1955. pp. 465.

History of the Toho Gas Company. 1957. pp.531.

The Tokyo Gas Company: Its development and present status. 1927.

pp.40.
Historical memoir of the forty years of the Tokyo Gas Company. 1929.
Fifty years ofthe Tokyo Gas Company. 1935. pp.264.

Seventy years of the Tokyo Gas Company. 1956. pp.531.
Contents: part i, the prosent status; part ii, history (rise of the gas industry

in Japan; the Meiji era-formation of the Tokyo Gas Co. in 1885; the Taisho
era; and the Showa era); part iii, materials. Contains the develoPments oT the .gas
indusby in 7apan, contributed by Tatsuo Takenaka, Professor of Public Utilities

in Kobe University.

Il. Shipbuilding
Forty years of the Hakodate Dock Company. 1937. pp. 309.

Seventy years of the Hitachi Shipbuilding & Engineering Company.
1956. pp.569.
Written by H. Kurowa, doctor in economics, and E. Yamamoto under thesupervision of E. Honjo, well-known historian.

Forty years of the Kawasaki Dockyard Company. 1936. pp.320.
Course of sixty years ofthe Kawasaki Dockyard Company. 1956. pp. 37.

History of the Mitsubishi Heavy Industries. 1956. pp.816.
In 1917 the old Mitsubishi Shipbuilding & Enginc Company was incorporated to succeed the shipbuilding business of the Mitsubishi Goshi Kaisha, the operat-

ing holding company of the Mitsubi$hi CQrnbine, In 1934 the company changed

HISTORIES IN JAPANCOMPANY

1gg

its name to the Mksubishi Heavy Industries. After World War II, the company
was forced to be divided into three independent companies, that is, the Naka Nip-pon Heavy Industry (later becoming Mitsubishi Heavy Industries, Reorganized),
the Nishi Nippon Heavy Industry (later changing to Mitsubishi Shipbiulding& Engine Company), and the Higashi Nippon Heavy Industry (later becoming
Mitsubishi Nippon Heavy Industries)
Contents: part i, historical survey; part ii, changes in organization; part iii, development of personel management; part iv, laborer and labor policy; part v, works,
past and present; part vi, research; part vii, shipbuilding; part viii, engineering;part ix, aircraft; part x, financial operations and rewards; part xi, postwar dis-solution; and apps.

Fifty years of the Kobe Shipyard & Engine Works. Pub. by the Mitsubishi
Heavy Industries, Reorganized, Ltd., 1957. pp.543.

History of the Mitsubishi Nagasaki Shipyard & Engine Works. Vol.I.
Pub. by the old Mitsubishi Shipbuilding & Engineering Company, 1928.
pp.468. Vol.II. Pub. by the Nishi Nippon Heavey Industries Co, 1951.

pp.621.
The Nishi Nippon Heavy Indmstry Company, a successor of the old Mitsubishi, changed its name to the Mitsubishi Shipbuilding & Engineering Company in

1952.

Thirty-five years of the Mitsui Shipbuilding & Engineering Company.
I953. pp. 322.
Twenty years ofthe Shipbuilding & Engineering Division ofthe Mitsui Bussan

Kaisha. Pub. by the Tama Shipbuilding & Engineering Company, 1938.
The Division was separated from the company and incorporated under thename Tama in 1937. The company changed its name to the Mitsui Shipbuilding& Engineering Company in 1942.

Fifty years ofthe Tokyo Ishikawajima Shipbuilding & Engineering Company. 1930. pp.282.
Sixty years of the Uraga Dock Company. 1957. pp.628.

12. SecuritiesCompanies
Thirty years of the Fujimoto Bil1-Broker & Securities Company.
pp.248.
Ten years ofthe Nikko Securities Cornpany. I954. pp,813.

Ten years of the Nomura Securities Company. 1936.
Twenty-five years of the Nomura Securities Company. 1951. pp.371.

History of the Yamaichi Securities Company. 1958. pp.1346.

1936.

IKUSHIMATADAKATSU INOUE AND YOSHIRO

184

13. StockExchange
History of the Dojima Rice Exchange. 1911. pp.139.
Forty years of the Hiroshima Stock Exchange. 1934.
Fifty years of the Kyoto Stock Exchange. 1935. pp.420.

History of the Nagoya Rice Exchange. 1941.

History of the Nagoya Stock Exchange. I943.
Fifty years of the Daikabu. (Osaka Stock Exchange). 1928. pp.1625.
Short history of fifty years ofthe Daikabu. 1928. pp.99.
A pocket edition of Fi#ty years or the Daikabu.

History of the Tokyo Stock Exchange . 1916. pp.385.
Fifty years of the Tokyo Stock Exchange. 1928. pp.859.
History of the Tokyo Stock Exchange. 2 vols. 1933, 1938. pp.626, 1020.
Sequel of the Fift" 7ears o# the 7rok2o Stock Exchan.ge.

14. TransportationComapnyA) Railroads
Fifty years of the Chichibu Railroad. 1950. pp.74.

Course of fifteen years of the Enshu Railroad Company. 1958. pp.68.
Fifty years of transportation service, (The Hanshin Electric Railway).

I955. pp. 211.
Thirty years of our business. (The Iyo Railroad). 1919.
Fifty years ofthe Iyo Railroad & Electric Company, 1936. pp.832.
Thirty years of the Jyoso Railroad. 1942.

History of the Keihan Electric Railway Company. 1949. pp. 600.
Fifty years of the Kei-Han-Shin Kyuko Railway. 1959. pp. 389.
The history of the development of the Keihin Electric Railway Com-pany. 1949.
The recent ten years of the Keihin Electric Express Railway Company.

1958. pp.84.
Historical memoir of the twenty years of the Keio Electric Railway

Company. 1930.
Thirty years of the Keio Electric Railway Company. 1941.

Ten years of the Nagasaki Electric Railway Company. 1924. pp.47.
Fifty years of the operation. (The Nankai Railroad Company). 1936.
The development of the Nankai Railroad Company. 1938. pp.455.
Course of seventy years of the Nankai Railroad Company. 1957.

COMPANY HISTORIES IN JAPAN
Twenty-five years of the Odakyu Electric Railway Company, 1952.
pp.654,
Twenty-five years of the Oji Electric Railway Company. 1935. pp.105.
Thirty years ofthe Oji Electirc Railway Company. I904. pp. 198.

Thirty years of the Osaka Electric Railway (Daiki) Company. 1940.
pp.628.

History of the Osaka Railway (Daitetsu) Company. Pub. by the
Kinki Nippon Electric Railway Company. I952. pp.518.
The Daiki, established in 1910, absorbed the Daitetsu in 1943. 0ne year
later the company joined with the Nankai to form the Kinki Nippon Electric

Railway Company.

Thirty years of the Shimabara Railroad. I923.

History of the Tokyo Underground Railway Company. 2 vols. 1934.
pp.434, 390.

The history of the development of the Tokyo & Yokohama Electric
Railway Company. Pub. by the Tokyo Electric Express Rail.

way 1943.

History of the Ube Railroad. 1942. •B)

Shipping Companies
History of the Baba Steamship Cempany and its operation. 1958. pp.
400.
Twenty years from the founding. (The Kita Nippon Steamship Company). 1934. pp.34.
Twenty-five years of the Kita Nippon Steamship Company. 1939. pp.522.

Eighty years since the founding. (The Mitsui Steamship Company).

1958. pp.862.
Contents: part i, history (rise and development of the shipping business of
the Mitsuis; operations under the shipping division of the Mitsui Bussan Kaisha;and the formation of the Mitsui Steamship Co. in 1942 and its after) ; part ii. Iines :.

part iii, ships; part iv, earnings; part v, organization; and apps.

Fifty years of the Nippon Yusen Kaisha. 1935. pp.952.
Seventy years of the Nippon Yusen Kaisha. 1956. pp.741.
The dominating combines in Japanese business before and during the war
were popularly known as the Zaibatsu. Of these, the Mitsubishi Combine developed from a shipping business founded by Yataro Iwasaki in 1870. This volume
is packed with facts about the beginnings of the Yubinkisen Mitsubishi Kaisha,its competition with the Kyodo Unyu Kaisha which led to the formation of the
Nippon Yusen Kaisha in 1885, opening of various lines, their operations, Russo-

Japanese War and the company, development during World War I, postwar
depression and the company, regulation during war time, loss of their ships, and185

TADAKA'ISU INOUE AND YOSHIRO IKUSHIMA

186

postwar reorganization.

Thirty years ofth Nisshin Steamship Company. 1941. pp.425.
Fifty years of the Osaka Shosen Kaisha. 1934. pp.952,
Compiled by W. Kanno, doctor in economics.

Fifteen years of the Shimomura Steamship Company. 1942.
Fifty years of the Taiko Steamship Company. 1937. pp.81.
Twenty years of the Toyo Kaiun Company. 1956. pp.386.
Ten years of the operation of the Tozai Steamship Company. 1956.
pp.164.

C) Express Companies
Ten years of the Hakata Transport Company. 1935.
Ten years of the Kokusai Transport (Kokusai Unyu) Cornpany.
1934.
Higtory of the Kokusai Express (Kokusai Tsuun) Company. 1938.
pp.399.
Successor to the Naikoku Express Company.

History of the development of the Naikoku Express Company. 19I8.

pp.154.
Ten years of the Nippon Air Transportation (Nippon Koku Yuso)
Company. 1938.
Fifteen years of the Nippon Yubin Teiso Company. 1957. pp.350.

15. Miscellaneous
Fifty years ofthe Hakuyosha. 1955. pp.269.
History of a laundry company established in Tokyo in 1896.

Stories of the Marunouchi; Ancient and modern. Ed. and pub. by the Mitsu-

bishi Real Estate (Jisho) Company, 1952. pp.70.

Appendix. The Zaibatsu
There are relatively many number of books dealing with rise andgrowth of the Zaibatsu, the dominating combines in Japanese businessbefore and during the war. With a few exceptions, however, they are
either journalistic pieces or books written to point out the evils of the

Zaibatsu.

A) General
Kamekichi Takahashi. An analysis of the Zaibatsu (Nippon Zaibatsu no

COMPANY HISTORIES IN JAPAN 187
Kaibo). Pub. by Chuokoron-sha, 1930. pp.362.
Study on the Zaibatsu (Zaibatsu Kenkyu). 2 vols. Ed. & pub. by the

Teikoku Koshinsho-Nippobu, 1929. pp.442.
Story of the Zaibatsu (Zaibatsu Seisuiki). 2vols. Ed. by the Economist,

Osaka Mainichi Shinbun-sha, Pub. by the Meisei Shobo. 1930.
pp.251, 337.
Mosaburo Suzuki. On the Zaibatsu (Nippon Zaibatsuron). Pub. by the
Kaizo-sha, 1934. pp.453.

Kamekichi Takahashi and Jiro Aoyama. On the Zaibatsu (Nippon
Zaibatsuron). Pub. by the Shunju-sha, 1938. pp.305.

Hiroshi Higuchi. On the Zaibatsu (Nippon Zaibatsuron). 2 vols. Pub.
by the Mitoh, 1940. pp.306, 303.

Hiroshi Higuchi. Planned economy and the Zaibatsu (Keikaku Keizai
to Nippon Zaibatsu). Pub. by the Mitoh, 1941. pp.311.
Hiroshi Higuchi. Study on the Zaibatsu (Nippon Zaibatsu no Kenkyu).
Pub. by the Mitoh, 1948. pp.271.
Toshio Togai.'The Zaibatsu and Capitalist (Zaibatsu to Shihonkatachi).

Pub. by the Gakufu-Shobo. 1956. pp.206.
Takao Tsuchiya. Founders of the Zaibatsu (Zaibatsu Q Kizuita Hitobito).

Pub. by the Kobundo, 1956. pp.245.
B) The Four Biggest Combines: the Mitsui, the Mitsubishi, the Sumitomo,

and the Yasuda
Kurama Otaki. The Mitsui plutocracy (Mitsui Okoku). 1926.
Takero Yamada. Story of the Mitsui (Mitsui Monogatari). 1934.
Denkichi Matsushita. Study of the Mitsui Combine (Zaibatsu Mitsui
no Shinkenkyu). Pub. by Chugai-Sangyo-chosakai, 1936. pp.390.

Hidekichi Wada. Reading in the Mitsui Combine (Mitsui Konzern
Tokuhon). Pub. by the Shunju-sha, 1937. pp.363.

Nobuyuki Masuo. Reading in the Mitsui (Mitsui Tokuhon). Pub. by
the Ajia-shobo, 1943. pp.555.

Toyoji Otsuka, compiler. The Mitsui and the Mitsubishi (Mitsui to
Mitsubishi). Pub. by the Jitsugyo no Nippon-sha, 1913. pp.512.
Ryotaro Iwai. Story of the Mitsui and the Mitsubishi (Mitsui Mitsubishi

Monogatari). 1934.
Seiki Miyake & Yoshio Togai. The Mitsui, the Mitsubishi and theSumitomo (Mitsui Mitsubishi Sumitomo). Pub. by the Kaname-

188

TADAKATSU INOUE AND YOSHIRO IKUSHIMA
shobo, 1953. pp.217.

Taro Todoroki. Sketch of the Mitsui (Mitsui Zaibatsu no Tenbou).

1932.
Ryotaro Iwai. Reading in the Mitsubishi Combine (Mitsubishi Konzern
Tokuhon). Pub. by the Shunju-sha, 1937. pp.336.

Shuko Shirayanagi. Story of the Sumitomo (Sumitomo Monogatari).
Pub. by the Chikura-Shobo. 1931.

Kiyosaku Nishino. Reading in the Sumitomo Combine (Sumitomo
Konzern Tokuhon). Pub. by the Shunju-sha, 1937. pp.310.

Toshie Kohama. Reading in the Yasuda Combine (Yasuda Konzern
Tokuhon). Pub. by the Shunju-sha., 1937. pp.334.
C) Zaibatsu Dissolution

The Zaibatsu and its dissolution (Nippon Zaibatsu to sono Hokai).

Ed. & Pub. by the Holding Company Liquidation Commission(HCLC), 1951. 2 vols. pp.570, 594.
Kenichiro Osumi. Structure of Zaibatsu and its dissolution (Zaibatsu
no kiko to sono Kaitai). 1946.

THE RESEARCH INSTITUTE FOR ECONOMICS AND
BUSINESS ADMINISTRATION, KOBE UNIVERSITY.
,gev.t.tay.t x•.i.,.-'"tf.vts•y te"';.",•p. :•, •''!' ' The lnstitut2 was founded in 1919

' and attached to Kobe University (theGt i? ll le ;' Kobe Higher comrnerciai schooi at that
Ulfu , time) with an endowment fund fromlls IL tfif ,s•,
" F, Kanematsu & Co,, Ltd., the pioneer

i ,,, Sg"-' "',. :.m,':.Jl:.x"-e,2sz`Easgz,t.r:.ss•.,T.:is' ding and the means to carry on researchoMcial organization attached to Kobe
University, maintained by the national treasury.
The aim of the Institute is to carry on scientific and synthetic study of industrial

economy in its two teams of research work, namely, the Research Team of Interna-

tional Economy and the Research Team of Business Administration. The former
comprises five sections, each taking charge of research work on International Trade,

Marine Economy, International Finance, International Rules and Agreements on
Commerce and Regional Study on Latin-Arnerica; the latter comprises four sections,each of which undertakes to do research work on Business Administration, Accounting,International Management and Industrial Relations.
Besides these regular research sections, we have horizontal study groups closely

related to the regular reasearch sections to carry on special research work by aCommittee of Specialists. In the field of international economy, two committees for

special study, the Committee on Asian Economy and the Committee on Latin American Econemy, have been organized; and in the field of business administration theCommittee on Company Accounting has been formed. The said special research workis carried on by the faculty of the Institute and by extra-Institute and extraUniversity research workers.

The results of the research work are published in the Kobe Economic & Business Review, the Kobe University International Economic Review and the Kobe
University Business Review (each published annually) and in the monthly journal"Kokumin Keizai Zasshi" (Journal of Economics and Business Administration), andsometimes in book from on specific themes.
The Institute has a research staff of 24 members and a secretariate of 10 clerks.

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THE RESEARCHi INSTITUTE FOR :iIl

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KOBE UNIVERSITY
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Professor of rnternatiotiall
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SuSUrnUWATANABE' of Accounting'i
Tradc and Marineii

Ginjiro SHIBATA

Fukuo KAwATAl

I•Iiroshi SHINJO
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BusinesB History l

Tei-ichi YAMASAKI

ABsistant Professor of l Nobuko Nosk

Seiji sAsAKIRegional Study 4
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Assistant Professor::of Soclal AccountinglMarine Eeonomics l Hideo KITANIlEngineer of Businegs
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Masahiro FUJ:TA

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Hikoji KATANe
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Americail Ryuji TAKEDA
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professor of private liiJito YAoI

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Assistant Professer of :llprofessor of i

International Law I Tadakatsu lNouE

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Taro KAwAKAMIii

Profe$sor of Plant i

TradelProfessor of :Torasaburo NOMuRA

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Professor of rnternational:

THE KOBE UNIVERSITyROKKO, KOBE, JAPANiÅÄ

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