2401-1/1

EAST ASIA BRANCHES OF MITSUBISHI GOSHI IN THE 1910s

Yasuaki Nagasawa

Fukuyama University

After 1902, Mitsubishi Goshi opened branches in Hankou, Shanghai, Hong Kong, Peking, Vladivostok, and Singapore in order to export coal extracted from the company’s mines. As these branches began in the 1910s to deal in commodities made by other companies, the character of the trading department of Mitsubishi Goshi changed from that of a sales department to that of a Sogo-shosha (general trading company). In this paper, I will try to outline reasons for the change by analyzing the business activities of the branches.

In the 1910s, coal exports to China were unstable because of the severe fluctuations of the foreign exchange rate. As a result, the branches were unable to show stable profits. On the other hand, they had adopted an independent profit system. Thus, in order to obtain a profit, the manager and salesmen of each branch attempted to deal in goods produced by other companies.

They sold the goods made by Mitsubishi-related companies, including beer, carbonated water, paper, and glassware, and traded commodities of unrelated companies, including raw cotton, cotton thread and fabrics, cement, paulownia oil, sesame, and so on. They succeeded only in dealing in paulownia oil and sesame export goods of Chinese origin to Europe and America. This indicates that only those goods which do not suffer the instability of major goods (coal) are suitable for trade.

From the above analysis, we can form a hypothesis that the Sogo-shosha is a mechanism for stabilizing foreign trade and that a sales department must transform its character to that of a Sogo-shosha in order to stay in operation when its main business becomes unstable.

2402-1/2

FRANCE'S ORGANIC CHEMICAL INDUSTRY FROM THE SECOND HALF OF THE 19TH CENTURY TO THE FIRST WORLD WAR

--THE CASES OF TWO MAJOR COMPANIES--

Jun Sakudo

Kobe-gakuin University

This article aims to examine two principal aspects of France's organic chemical industry from the second half of the l9th century to World War I: the first is the declining process of France's tar dye industry, and the second is the formation of French pharmaceutical industry during this period.

As for the first point, two cases will be investigated. Firstly, the Saint-Denis Company had to abandon the fabrication of synthetic alizarins in the 1880s, mainly because of stiff competition with German companies. Secondly, the Usines du Rhone Company discovered a new synthetic process of indigos at the turn of the century, and succeeded in licencing its patents to Hechst Co. But the adventure of the Usines du Rhone was doomed to fail, mainly because of the poor performance of this company’s top management.

The case of the Usines du Rhone will also be useful for clarifying the second point. In spite of the failure in the field of tar dye industry, this company had successfully commercialized the synthetic pharmaceutical products such as salicylates, antipyrine and synthetic anesthic, as well as the synthetic perfume and the cellulose acetate just before World War I. In talking about the factors contributed to this development, emphasis will be p1aced on two points; the renovation of the managerial system by the Societe Generale Bank and this Company's traditional eagerness to establish and maintain R & D laboratories, which were commonly held to has been little developed in France before World War I.

2402-2/2

STANDARD OIL CO. (NEW JERSEY) IN THE UNITED KINGDOM AFTER WORLD WAR II

Takashi Itoh

Saitama University

The purpose of this paper is to clarify the characteristics of business activities of Standard Oil Co. (New Jersey)--the present name is Exxon Corp.--in the United Kingdom from right after World War II through the late 1950’s.

The main characteristics were as follows:

(1) The Company was able to make most products with its new refinery in the U. K. At the first the Company hesitated to build and operate the refinery because of some problems, especially uncertainty as to use of foreign exchange for remitting profits to the U.S.A. and other payments. But it had no choice but to do that in order to keep its position in the British market.

(2) The Company strengthened control over the retail market of gasoline, a main item among petroleum products, chiefly by extending network of exclusive outlets. But the primary motive to bring the network into its marketing channel did not directly come from marketing itself, but from refining. The Company needed enough and reliable outlets which helped to make operation of the refinery high level.

(3) The Company’s local refining depended on its operations (producing and purchasing crude petroleum) in the Middle East. But on the other hand the operation in the U.K. influenced them in the Middle East. Under the dollar shortage in the U. K., the Company could hardly use crude petroleum produced by Aramco for the refining because of its so-called dollar oil. The Aramco crude development program had already been reduced in the late 1940’s.

2403-1/2

PIONEERING ATTEMPT AT TECHNOLOGY TRANSFER BY JAPANESE FIRMS TO GERMANY

Akira Kudo

University of Tokyo

Generally, the international transfer of technology occurs from a country possessing a high level of technology to one of a lower level. Prior to the Second World War many German technologies were introduced into Japan. There was, however, at least one case where they tried to transfer Japanese technology to Germany. It was the case of Ostasiatische Lurgi-Gesellschaft mit beschrankter Haftung located in Berlin.

The company, Ost Lurgi, was established in March 1926 as a joint venture of Mitsubishi Goshi, Metallgesellschaft and Degussa. The initiator of the establishing Ost Lurgi was Fritz Haber, inventor of the Haber Bosch process, who visited Japan in 1924, thought highly of the standard of Japanese technology and originated a number of proposals for technico-industrial cooperation between Germany and Japan. One of his idealistic proposals gave rise to the establishment contract of Ost Lurgi. The purpose of Ost Lurgi was to transfer Japanese technology to Germany. The Shimazdu process for manufacturing battery cells and ship hull paint owned by Shimazdu Works was the only actual proposal as to Japanese technology. Degussa showed an initial interest, but reached a negative conclusion on this. Metallgesellschaft’s dissatisfaction with the contract also deepened. As a result, Ost Lurgi was liquidated in December 1931, when the contract was invalidated. Ironically, in June 1932, the patent right for the Shimazdu process was established in the United States, followed by its transfer in France and Great Britain as well as in the United States, but not in Germany. In the light of the present context of booming Japanese direct investment in West Germany, this failed attempt, however, can be seen as a pioneering technico-industrial endevour, from which there is much still to learn.

2403-2/2

THE ESTABLISHMENT OF THE “KYOCHOKAI” AND BUSINESS LEADERS’ VIEWS AS TO LABOR MANAGEMENT

Masakazu Shimada

There have been few studies concerning the fact that the Industrial Club of Japan (ICJ) played a prominent role in the process of establishing the “Kyochokai.” A report by the ICJ formed the basic foundation of the “Kyochokai.” The business leaders in the ICJ assumed a vital role in collecting funds and making up its policies, and were elected as the main members in the “Kyochokai.” It is very important to analyze the role that the ICJ played in the establishment of the “Kyochokai” and to examine the business leaders’ views of labor management relations which were founded upon the ethics of “Kyocho-shugi (the principle of harmony and conciliation).”

In 1919, the Hara government consulted the ICJ about the “Shin-ai-Kyokai” plan which the government itself had drafted. This plan reflected the paternalistic relationship between labor and management. Business leaders in the ICJ felt that they should deal with the increasing labor disputes after World War I in a way different from the paternalistic one. So, they adopted a strategy based on the “kyocho-shugi” including arbitration of labor disputes and various social policy programs.

However, the social policy programs of the neutral foundation “The Kyochokai”, were not governmental programs. Actually they were industry-based voluntary programs which did facilitate labor management relations.

Seijiro Miyajima is one of the persons who most heatedly argued the necessity of “Kyocho-shugi”. He recognized the gap between the classes of labor and management and the opposing nature of their interests, and he contributed to moving the views of the ICJ members closer to the spirit of “Kyocho-shugi.”

2404-1/2

THE STANDARD-VACUUM OIL COMPANY IN PREWAR JAPAN

Takeo Kikkawa

Aoyama Gakuin University

The purpose of this essay is to make clear the activities of the Japan Branch of Standard-Vacuum Oil Company (SVOC) and its predecessors, Standard Oil Company of New York (SOCONY), Vacuum Oil Company, and Socony-Vacuum Corporation, before World War II. In this essay I examine the following seven points at issue.

1. Why did SOCONY and Vacuum establish the Japan Branch in the early 1890s?

2. Why did SOCONY and Vacuum succeed in Penetrating into the Japan’s petroleum market?.

3. Why did SOCONY start producing and refining Japan’s domestic crude oil in 1900 and stop them in 1911 ?

4. Why did SOCONY’s sales share in the Japan’s petroleum market decrease during the 1910s and 1920s?

5. How did the establishment of Socony-Vacuum in 1931 influence the Japan Branch?

6. How did the establishment of SVOC in 1933 influence the Japan Branch?

7. How did SVOC move against the Japan’s Petroleum Industry Law of 1934, which persecuted foreign petroleum companies?

These examinations show one general conclusion: in case of analyzing activities of foreign companies in Japan, we must take notice of their world-wide (at least Asia-wide) strategy as well as the peculiarity of the Japan’s market.

2404-2/2

HOW ZAIBATSU CONTROLLED BANK

--A CASE OF MITSUI--

Makoto Kasuya

University of Tokyo

It has been commonly accepted that the Zaibatsu holding companies held control over its subsidiary companies by giving permission to appoint managers, to make a huge long-term investment, to establish branches, and so on. But we have few studies about Zaibatsu control over banking companies. The purpose of this paper is to make clear how Zaibatsu holding company (Mitsui Gomei) controlled its subsidiary bank (Mitsui Bank) in the 1910s.

Without agreement of the directors board of Mitsui Bank, Managing Directors could not (a) make or revise rules or regulations of the bank, (b) establish branches and appoint managers of branches, (c) change the tacit cartel treatment on deposit interest rate among main banks, (d) change maximum amount of loans of each branch, (e) underwrote public and corporate bonds, (f) closed contracts with foreign banks, while they could change the preferred interest rate of deposits for special customers and make loans (except asked politically). The board of the bank needed the permission of Mitsui Gomei when it (a) made or revised important rules, (b) established branches and appointed managers of branches, (c) underwrote bonds.

In 1917, the board meetings were held 57 times, of which 25 meetings could not make decisions because the number of those present didn’t reach a quorum. The quorum is five of six members of the Board, into which Mitsui families sent two members. From this fact we can infer that the board meetings didn’t play an important role in decision-making.

In 1919, Mitsui Bank issued new stock partly by public subscription, the Board added two members in it. The two were the new stockowners, and they had not been working for the companies controlled exclusively by Mitsui Gomei. It was the first time for the Board to accept the outsiders. After 1919 the Board could make any decisions without agreement of Mitsui Gomei formally. At this time the Board made some codes which empowered Managing Directors to make decisions in particular matters without agreement of the Board, but the codes consisted mainly of the customs which had prevailed in the Board.