0201-1/1

Business System and Economic Development

This is the special issue on System Economic Development, the central subject of the second annual meeting of the Business History Society in Japan that was held at the University of Kobe on November 4^th and 5^th, 1966.

In the opening address, Shozaburo Sakai (University of Nanzan) explained why the meeting had taken up the subject, “Business System and Economic Development”, elucidating the concept of “Business System. “ He claimed that this concept would be very much helpful for understanding particular topics in business history.

Following the Sakai’s address, five papars were read. The first paper by Moriaki Tsuchiya (Universiy of Tokyo) explored the relations between the American economic development and the development of shop management system. The second speaker, Yasuo Okamoto (Tokyo University of Foreign Language) stated in detail on the organizational structures of American big business, mostly depending on Alfred D. Chandler’s work.

Hiroshi Shimpo (University of Kobe) dealt with the introduction of joint-stock company system in Japan. He footlighted the 30 years after Meiji Restoration, and emphasized that the quick settlement of joint-stock company system in Meiji period had very much contributed to the development of modern management in Japan.

Hidemasa Morikawa (Hosei University), taking up the Japanese cases, inquired into the interactions between the pattern of economic development and the structures of inter-firm competition and combination. He pointed out that the diversity of Meiji entrepreneurship had given rise to the business combines and the inter-combine relations was far more dominant than inter-company relations.

Lastly, Yasuzo Horie (University of Kyoto) stated that the “ie(family)” was one of the most important factors in Japanese business history. He explained the characteristics of “ie” system and those of family business, pointing out that some of the basic features of modern joint-stock enterprise had their origins in the structure of family business of Tokugawa merchants.

Following the six reports, the panel discussion on the above subject was held and Professor Sakai presided the meeting. The stenographi record of the symposium is included in the issue.

0202-1/4

Zur Geschichte des Leuna-Werks des IG-Konzerns

Teijiro Kanbayashi

Osaka Municipal University

Die Geschichte des Leuna-Werks in Deutschland besteht aus zwei verschi-edenen Abschnitte. Der erste Abschnitt von 1916 bis 1945 ist die Oeschichte des Leuna-Werkss als ein grosses Werk des I G-Monopolkapitals, und der zweit von 1945 bis heute ist die Geschichte als ein volkseigener Betrieb der DDR. Dieses Referas spricht hauptsachlich uber den ersten Abschnitt.

Die Geschichte des Leuna-Werks als ein kapitalistisches Werk des I G-

Konzrns ist in zwei Bestandteile zuteilen, also, erstens die Geschichte der

Grundung und Entwicklung des I G-Monopolkapitals, zweitens die der

und Entwicklung des Leuna -Works selbst. Die Entstehunw des I

G-Trusts in 1925 war ein Erfolg des langen Entwicklungsprozesses der acht

grosen Chemiegesellschaften, die in 1904 zwei Interessengemeinschaften

und dann in 1916 ein grose Interessengemeinschaft bildeten. In 1925 wurden

diese acht Gesellschaften in einern Trust, “l G Farbenindustrie AG” fusioniert. Das Leuna-Werk selbst wurde in 1916 als ein Work von „Die Badische Anilin-und Sodafabik“ begrundet, dann in 1920 als ihre Tochtergesellschaft, ammo-niakwerke Merseburg GmbH, “ reorganisiert, und nach 1925 als das grosste Werk des I G-Monopolkapitals entwickelt. Aber die Niederlage des deutschen Imperiolismus in dem zweiten Weltkrieg war zugleich die Ende des Leuna-Werks als Werk des Monopolkapitals. Heute ist es ,,VEB LeunaWerke Walter Ulbricht” in der DDR.

0202-2/4

The Controversy over Forms of Balance Sheet

in Meiji Japan

Sadao Takatera

University of Kyoto

The system of publicizing business balance sheets was introduced to Japan early in the Meiji period on two separate occasions. When the government transplanted the National Bank system from the United States to Japan, in the years 1873-75, it attempted to institutionalize financial statements as a means of controlling the activities of the new National Banks in Japan. Again, in 1883, in the course of introducing continental commercial law to Japan, the French and German system of financial statements was adopted as the core of the accounting system required by the new law.

In the interval the British form of balance sheet prevailed, under the influence of the Meiji government, and terms snch skarikata (“debtor”) or fusai’gimu (“liabilities and obligations’), and kashikata (“creditor”) orshisan” kenri (“assets and claims”) were prevalent. When the Continental system was applied, the term actif Pssiva, which properly meant “asset, “ and the term passif Pssiva, which meant “liability”, were translated respectively as kashikata (Cr) and karikata (Dr). These translations were authorized and established by the first commercial law, issued in 1890. Consequently, in spite of the application of the Continental form of balance sheet which listed the assets on the left hand and the liabilities and obligations on the right, the British form which listed the liabilities and capital on the left hand and the assets on the right had to be followed according to the com-mercial law.

The two forms of balance sheet. Continental and British, continued to be valid side by side until the system was unified following the Continental pattern in the middle of the Taisho period, and the commercial law revised in 1922. In the meantime, however, debates on the appropriate form of balance sheet were frequent between the two schools, British and Continental. The controversy was similar to the dispute which arose among British accountants at the beginning of the 20^th centurv concerning Table B of the Company Act of 1862.

0202-3/4

The Cotton Textile Industry in Northern New

England: A Case Study of Amoskeag

Manufacturing Company

Kesaji Kobayashi

Ryukoku Univercity

This paper deals with a cotton manufacturing company in Manchester, New Hampshire, promoted by a group of entrepreneurs known as the "Boston Associates. "

Started as a small establishment in the 183(Xs, this company had grown the space of a century to one of the largest-scale and highest quality compnies in the industry. But though the mills in Manchester were firmly established, the management of the company in Boston was totally unsuited meeting the changing situation in the early 20th century. One of the cans of the company's bankruptcy in the 1930's was attributed to mismanagement by the executives.

With an emphasis on the functions, respectively, of the company treasurer and of the local mill agent, this paper analyzes the relationship between decision-making and execution, and discusses some of the characteristics of business enterprises controlled by the so-called general entrepreneurs of 19th century America.

0202-4/4

Government and Business in the Age of Emergence

of the Japanese Ship-Building Industry. —The

Influence of the Ship-Building Promotion Law on

the Ishikawajima Ship-Building Yard.

Takeaki Teratani

Yokohama Municipal University

Japan’s protective policy towards its shipbuilding industry originated in the enactment of the Ship-Building Promotion Law in 1896. It was intended not to protect particular companies, but to increase the total building capacity of the country by offering premiums for the building of new steel ships larger than 700 tons gross. However, the response to this protective policy and its effects on individual businesses varied markedly depending on the particular circumstances of each shipyard. This paper attempts to examine the characteristics of the response made by the Ishikawajima Ship-Building Yard to the new law, and the nature of the decisions made by Eiichi Shibusawa, chairman of the company, in the face both of opportunity and crisis.

The Ishikawajima company built a large new yard at Uraga in response to the Promotion Law, but it was unable to utilize the yard to its full capacity because of the absence of intimate contacts with major shipping companies, and thus could not take advantage of the premiums offered by the new law. Shibusawa, quick to recognize his mistake, had the foresight to curtail the business, sell the new yard to a competitor, the Uraga Dock Company, established in 1896, and to expand his company’s construction of machinery.

As a result the company managed to escape total failure, and in a few years

had entirely recovered financially. The Uraga Dock Co., meanwhile, was

equally unable to take advantage of the huge yard it had bought from Ishikawajima, and its business, too, began to decline gradually.

By contrast, both the Mitsubishi and Kawasaki Ship-Building Yards kept intimate contact with the leading shipping companies, such as Nippon Yusen and Osaka Shosen, and were thus able to secure huge premiums and solidify their positions in the industry.

0103-1/3

The Business of Shipping

Professor Francis E. Hyde

University of Liverpool

Shipping industry is a fruitful field for business history studies. Earnings of shipping firms depend on the various factor such as the level of demand for the products carried, the effectiveness of competition on the structure of freight rates, the technical efficiency of the ship and the amount of shipping space on offer at a berth at any particular time in relation to the amount of cargo to be lifted.

Over the past sixty years, the fluctuation of net earning from British ship-ping service has been very wide and the British ship owners maintained a competitive structure by building up reserves in good years from which to sustain building programmes during the poor years. By offering regular service, the Conference lines increased the commercial tempo of the countries which they served and safeguarded their capital by maintaining earning capacity, sustaining the efficiency of the shipping industry as a whole.

Before 1939, the British fleets of cargo-liners were rebuilt twice. The first rebuilding, from 1885 to 1897, incorporated the change from compound to triple-expansion engines, the replacement of iron with steel, new system of ventilation and so on. The second reconstruction occurred between 1924 and 1929, switching from steam to diesel propulsion. The second changeover was less comprehensive because Britain was still a coal-based economy.

For the shipping company which had a reasonably well diversified trade, it was still profitable to put capital into ships. If, however, a shipping line con-fined its activities to a limited number of routes, the investment of the com-pany’s resources in alternative enterprise would have been a prudent course to have taken.

0203-2/3

Organized Entrepreneurship in the Course of

Industrialization of Pre-War Japan

Kenchiro Nakagawa

University of Tokyo

The gate into modern industrial society is generally narrower for the follower than for the leader countries. Moreover, to catch up with the leader countries, the latecomers must pass this narrow gate more rapidly than did leader countries. Various segments and sectors in a backward economy are inevitably juxtaposed and the narrow gate forces all elements and sectors in the national economy. Therefore, the Meiji entrepreneurs in the course of industrialization tended to think and act rather with a broad and national horizon, considering the problems of various levels, sectors and units of the national economy. In short, the Meiji entrepreneurs were unable to secure their private profit unless those aspects of social interactions—social gains-were deliberated simultaneously.

Such an organized aspect of Meiji entrepreneurship was particularly evident in foreign trade. Japan possessed no organization of foreign trade on the eve of industrialization. Therefore, the formation of powerful commercial enterprises had to precede the emergence of modern industrial production, and one of the results of such an evolution of commercial organization was the famous “general merchants” (sogoshosha), a unique feature in the modern industrial society of Japan. They had to perform the functions of bankers, exchange brokers, insurance brokers and sometimes even the function of shipping firms, and as such these multi-functional organizations gradually grew into big business. Through their world-wide network of branch offices, they explored the newest industrial techniques and surveyed market opportunities abroad. They proceeded at times to promote subsidiaries for the purpose of industrializing the technology they imported and sometimes they purchased independent factories to assure the quantity of goods they were to export. Thus they truly became industrial organizers on a large scale. The Zaibatsu” organization was the result of such an organized entrepreneurship executed by general merchants.

0203-3/3

Miyamada Silk Reeling Works of the Ono Company

—Case of introducing foreign machines—_

Hideko Nakamura

Tokyo Institute of technology

Raw silk was one of the major items of Japanese export at the beginning of Meiji period and the Italian and French machines were introduced into Japan for the purpose of modernizing the silk reeling industry. The Ono Company started to operate a large scale reeling machines of Italian type at its Miyamada Works in 1872. But on account of the lack of skill needed for handling the sophisticated machine, the output was small and the cost of productior was inevitably quite high. Unstable supply of cocoon was another source oj trouble for the Miyamada Works which eventually fell into financial difficulties in 1874.

Almost all the silk reeling works of Western model had to suffer the same kind of difficulties. But the cotton industry, another textile industry that had introduced foreign machines aggressively almost from England, had achieved a brilliant success in establishing modern mills which were sufficiently competitive in international market. What was the reason for this difference between the two textile industries ?