HISTOR¥

Coinciding with Japan's opening up (kaikoku 開国) to nineteenth century world society, a historical constant emerged that contributed significantly to the whole of Japan’s modern financial evolution. I refer to Japan’s trauma with respect to foreign dependence; and the consequent scepticism of internationalist rhetoric and liberalist ideas. After all, it was its opening up to the West and the frustrating negotiations about foreign trade that had led directly to the financial and political impasse. Furthermore, the bakufu and Meiji government regarded with suspicion the Western banks which opened their businesses in the port of Yokohama, and which threatened to erode the government’s firm grip on financial matters (source:Tamaki, Japanese Banking, pp. 17-18; Tatewaki Kazuo 立脇和夫, 在日外国銀行史─幕末開港から条約改正まで (zainichi gaikoku ginkōshi –bakumatsu kaikō kara jōyaku kaisei made (A History of Foreign Banks in Japan –from the Opening of the Ports to the Revision of the Treaties) (Tôkyô, 1987)). Finally, experiences of some treacherous Western intermediaries had installed a deep distrust of internationalism. Especially the famous Lay Affair (1870), a case in which the Meiji government had been deceived by a former member of the British consulate (Horatio Nelson Lay) on the interest rate of a government loan on the London capital market (source: Suzuki Toshio, Japanese Government Loan Issues on the London Capital Market 1870-1913 (London and Atlantic Highlands, NJ, 1994)), reminded policy makers of the danger of foreign loans and foreign dependence.

It has been extensively documented that these and other events nurtured social Darwinist ideas. Recent research has demonstrated that anti-internationalist and mercantilist slogans of modernization were formative in shaping and legitimizing Japanese political and economic decision-making from the early Meiji-period up to the 2nd World War (source: Carol Gluck, Japan’s Modern Myths; Ideology in the Late Meiji Period (Princeton, NJ, 1985)). The central rationale was as follows: Japan had to be a wealthy nation, in order to be politically and militarily strong (富国強兵 fukoku kyōhei, ‘Rich Nation, Strong Army’). The slogan served the people, as their wealth was believed to be the cornerstone of national strength; and it served the modernizing elites, as it allowed them to dissolve the feudal system and to bring military force and industrial production under the protection of the state. The concrete policy for achieving national wealth and strength was shokusan kōgyō 殖産興業: literally translated ‘promoting production’, but better understood as ‘nurturing and stimulating domestic industry’. In Japanese Studies attention to these slogans of modernization has been mounting, especially since it has been shown that their ideas were a main determinant of socio-economic organization. In the social Darwinist view, technology and knowledge are fundamental assets of national security. For the Meiji reformers, this implied embarking on an assertive quest for learning. It translated into widely sponsored experimentation with foreign institutions, practices, and ideas, yet always in close reference to the Japanese cause. Japan had to adopt foreign knowledge, but imbue it with the Japanese soul (和魂洋才 wakon yōsai, 'Japanese spirit, Western technology'); only thus would it be able to 'catch up with' and eventually 'surpass' the West (追いつき追い越せ oitsuki oikose) (source: Richard J. Samuels, "Rich Nation, Strong Army"; National Security and the Technological Transformation of Japan (Ithaca & London, 1994)).

It is far less known that this social Darwinist worldview was also at work in the formation of Japan’s modern finance. It would be no exaggeration to say that finance was at the heart of the newly developing social Darwinist policy doctrines (source: 明治財政史編纂会 Meiji zaiseishi hensankai, 明治財政史 Meiji zaiseishi (A Financial History of the Meiji-period) (Tôkyô, 1927), vol. 12, p. 307). Just as in the case of technology policy, the capability of adopting and transforming foreign knowledge was seen as an invaluable asset. The Iwakura mission, for example, devoted considerable attention to, among other things, financial matters (source: Kume Kunitake, Iwakura Embassy, esp. Vol. III, pp. 115-124) In the course of reform, several Meiji statesmen hired foreigners to aid in the establishment of Japan’s financial and monetary institutions: Thomas Kinder headed the Ōsaka Mint (大阪造幣局); Allan Shand was to become the personal advisor to Ōkuma Shigenobu 大隈重信, Minister of Finance at the time.