1401-1/3

FORMATION OF THE TOP-MANAGEMENT

Tsunehiko Yui

Meiji University

The study of organizational structures from the historical perspective has fallen out of favor in the academic world. In Japan, historical studies of organizations seem to be neglected, except with regard to control of management. This is because historians so far have been inclined to describe industrialization or economic modernization exclusively in terms of capitalist development. However, in view of the importance of the organizational structure in any discussion of economic development, we should address our-selves here to the same problem and ask why Japanese businesses evolved the characteristic and elaborate organization for which they are well known.

In my opinion, Japanese top management has had unique organizational traits, summarized in the following three aspects: combination or fusion of managing and control positions, hierarchical rank order, and restriction of membership to those with middle-level managerial experience.

In this paper I will analyze in detail how this kind of organization had been devised and developed on a trial and error basis in the Meiji Era.

1401 -2/3

THE FORMATIVE PROCESS OF THE TOP MANAGEMENT ORGANIZATION OF MITSUBISHI DURING MEIJI ERA

Yasuaki Nagasawa

Fukuyarna University

Zaibatsu firms had several characteristic features; diversified business, close ownership by family (Ie) and so on. Corresponding to these features, their top management organization was, differently from other non-Zaibatsu firms in Japan, functionally similar to those of divisional type of organization in United States which had a general head office with automonous divisions.

It is, however, after 1910s that each Zaibatsu firms had formed such a common decentralized type of organization, and they differed from each other during Meiji era. This article traces on the formation process of the top management organization of Mitsubishi during Meiji era as a case study of the Zaibatsu firms.

1401-3/3

THE BRITISH BANKING DEBATE ON THE CLYDESDALE BANK’S ACTION IN THE LATE 19TH CENTURY

Masami Kita

Souka University

Banking in England and Scotland developed along quite different lines from 1694 and 1695 when the Banks of England and Scotland were established. The Union of the Parliaments in 1707 left Scotland bereft of its own Parliament and the removal of the law-giving body to London had important repercussions’ on many aspects of life including Scottish Banking. During the 18th century while banking in England was constrained by laws designed to protect and aggrandize the Bank of England, Scottish Banking was free to develop along lines best suited to an emerging industrializing society.

The Scots claimed that their banking system was far more stable than the English, when they had the government interferes under the English bankers pressure with their banking performance.

In the 1870’s the matter flared up again. With the improvement of communications during mid-19th century the regional money markets (Glasgow, Edinburgh, Liverpool, Manchester) gradually lost their standing to London as it became the money center of the World. It became increasingly frustrating to Scottish Banks to deal through agents in the premier money market over the boundary.

The Clydesdale Banking Company opened its three north of England branches at Carlisle, Whitehaven and Workington in Cumberland in January 1874. And then they had discussed over the bank’s invasion into England from both interests of Bankers in England and Scotland. They also had a series of disputes on this problem at the Parliament for some years.

I wish to consider and compare the Scottish bankings at that time with that of England along with the Clydesdale Banking Company’s behaviour.

1402-1/2

EMPLOYMENT OF ENGINEERS IN THE JAPANESE INDUSTRY 1900-1910

Hoshimi Uchida

Tokyo College of Economics

Increasing employment of engineers who had graduated universities or technical colleges founded since 1880’s meant for the private firms in the early phase of industrialization Organizational growth, from relying upon a single all-round engineer through diversification of jobs to the hierarchy of engineers. Examining the statistical data concerning the distribution of engineers among industries as well as companies for the year 1900 and 1910, those three Stages of organization are discernible in the firms which belonged to such industries as railroad, mining, cotton and electricity supply.

1402-2/2

‘GROUPS’ AND ‘PREDOMINANCE’ IN THE FRENCH RAILWAY COMPANIES UNDER THE MONARCHIE DE JUILLET

Toshihiro Tanaka

Fukuoka University

French railway industry had the first boom years in the Monarchie de juillet. But it is worthy to mention that in this period English capitalists also were interested in French railway construction and its exploitation. Their capital invested in French railway companies amounted to one-third of the total stock capital. Sometimes the French co-operated with the English and sometimes the French intended to exclude the English from the management of railway company.

The object of this paper is to analyze this English impact-French response relation.

Firstly, the author extracts five main ‘groups’ which existed among French interests and English interests; the Laffitte & Blount group, the London Merchant Bankers group, the Haute banquiers group, the Talabot group and the Paris-Orleans group.

Secondly, the author intends to clear the characteristics and behavior-pattern of each group.

Thirdly, the author analyzes which group acquired the predominant position in the board of directors. In the beginning, the board of directors ordinarily was composed of members of many different groups. But later, among directors, the comte de direction was formed, which include just a few members who belonged to the same group. And actually it took charge of management. Other director consequently were resigned to the feeble position. In this process, the English directors were often eliminated from the center of management.

1403-1/2

GENESIS OF THE CHAMBERS OF COMMERCE IN RHINELAND

Hisashi Watanabe

Kyoto University

Although the origin and development of the chambers of industry and commerce in Germany is regionally different and chronologically complicated, they could be grouped into several types. One of them, Rhine-type, is characterized by closely cooperative relations under the chambers which reflect an interregional interdependence in one of the most industrialized parts of Germany.

The chambers came here into existence at the beginning of the 19th century as auxiliary institutions of the Napoleonic central government in Aachen/Burtscheid, Crefeld, Stolberg, Trier, Eupen and Malmedy. Only Cologne made an exception because there had been in this city an organization of merchants already in the 18th century which was reorganized later as chamber of commerce.

After Rhineland was annexed to Prussia as a result of the Vienna Congress the government in Berlin did not allow at first the foundation of new chambers. But in the 1820’s it approved another form of merchant organization, “Kaufmainnische Korporation”, in the eastern part of Prussia i.e. in Berlin, Stettin, Danzig, Memel, Konigsberg, Tilsit, Elbing and Magdeburg. The chambers which were founded at length in the 1830’s in Rhineland i.e. in Elbefield, Diisseldorf, Duisburg, Koblenz, M.-Gladbach, Wesel, Lennep, Mul-heim a.d. Ruhr, Essen and Solingen, had to be now organized after the principle of the eastern institution, compulsory membership related to the minimum of the business tax.

The new principle was ‘applied also to the older Napoleonic chambers, which caused a serious confusion especially in the chamber of Cologne. Big merchants were opposed to a reorganization.  Moreover this affair fell on the beginning of the steamship navigation on the Rhine since 1827 by Preussisch-Rheinische Dampfschiff-fahrts-Gesellschaft and the conclusion of the Rhine Navigation Act in 1831 which gave a fatal blow to the class of small sailboat owners. The both antagonistic parties struggled now for the membership and leadership of the chamber. Therefore the chamber could hardly function through the 1830’s as an institution for local interests of different classes and sectors.

In this process, however, the transition from the Napoleonic to the Rhine type of the chambers was performed and the leadership of the liberal big merchant class was in Cologne established which enabled the Chamber now to represent the interest not only of the city but also of Rhineland as a whole because the merchants were most clearly aware of consequence of interregional relations with Holland and Belgium which were indispensable to build up the industrial structure of Rhineland in the era of traffic revolution.  The both companies of PreuBisch-Rheinische Dampfschiffahrtsge-sellschaft and Rheinische Eisenbahn Gesellschaft were creations of the chamber of Cologne as entrepreneur on the initiative of leading merchants by this time as Merkens, Boisseree and Camphausen.

1403-2/2

SCOTTISH BANKING AND THE FAILURE ‘OF THE WESTERN BANK’ OF SCOTLAND IN 1857

Toshio Suzuki

This paper presents a business history of the Western Bank of Scotland (hereafter, cited as the WBS) during the period 1832 to 1857. The paper also attempts to compare the management of the WBS with that of other Scottish banks.

A. W. Kerr attributed the cause of the failure to the WBS’s manager’s mismanagement leaving the bank with a shortage of reserves, in his “History of Banking in Scotland.” On the contrary, R. H. Campbell favoured the directors and manager and ascribed the failure to the hostile behaviour of the Edinburgh banks.  Five Edinburgh Chartered banks (The Bank of Scotland, The Royal Bank of Scotland, The British Linen Co., The. National Bank of Scotland, The Commercial Bank of Scotland) played a great Part in Scotland. These banks still had a large amount of Government Securities (Consol or Exchequer Bill) which accounted for 1/4 to 1/3 of the total assets of the bank. In consequence, the Edinburgh banks had a very stable constitution making them apt to hesitate to advance money into the industry field.

However in Glasgow, one of the centre of Anglo-American trade, many merchants and manufactures desired to establish a bank, financed trades. Under such a circumstances, the WBS was set up in 1832.

It is obvious that the comparatively high demand for money in Glasgow accelerated the promotion of the WBS. However the WBS made the mistake of adopting a lending policy which was too ambitious for the bank with such limited reserves (CF. the Edinburgh banks) and such low cash/total assets, reserve/liability ratios. Due to this policy, from the very beginning, the WBS suffered from so called bad debt (rediscount, open book credit, advances without securities).

This shortage of cash and reserves was not the WBS only problem. Trying to reap out competitors, by their absorption and by increasing its own number of branches (use of an agency system), the WBS created for itself a further problem’ a problem of high management and running costs. It was because of these problems that the WBS gained the reputation of being a very unstable institution amongst Scottish banks. In 1834, the WBS was in grave trouble. The Jones, Loyd and Co., one of the leading London Bankers, refused to honour a draft made upon it by the WBS. Also, the WBS was told that if it did not change its banking policy, the Edinburgh banks would refuse its notes.

In the autumn of 1857, general commercial tension rose and the money market entered what might be called a panic phase. There had been heavy American failures and bank suspensions. The WBS faced ever increasing difficulties. The City Article of the “Times”, October 30th included a paragraph stating that the Edinburgh banks had resolved to carry the WBS through its difficulties, on the condition that it should wind up its business completely. As soon as this news spread, a heavy withdrawal of deposit commenced. On 9th November, the WBS closed the doors of its Head office in Glasgow, never to open them again. Immediately, “Bankers’ Magazine” said that ‘the Bank’s misfortunes were attributed to gross negligence on the part of the directors, and wild reckless in Taylor, the late manager’. Taylor’s immediate predecessor, D. Smith had shown some caution about the trade credit. But Taylor showed none. He had given the undue facilities to 4 commercial houses in Glasgow which later were to fail to reap up their payment. The debt of 4 houses amounted to £1,603,726. Moreover the WBS had financed a considerable amount of the railway investment in U.S.A. by means of letters of credit through an agency in New York, James Lee & Co.