The Merchant's Tale

by Simon Partner

  I left Morioka on the 5th of this month and arrived in Edo on the 21st. Naotarō was there on business, so we met in Edo. Along the road I traveled in a kago [palanquin] with a hibachi [porcelain stove], so I didn’t feel cold at all. My body stayed healthy, and I am eating well, so no need to worry. At the sea near Morioka I bought 15,000 pieces of dried squid, at 450 pieces for 1 ryō … Even after all the expenses I think the total cost may be 45 ryō, and I believe I can sell it in Edo for 90 ryō. With this news, please put your hearts at rest and look forward to a prosperous new year.12

  Travel on horseback and by palanquin was a privilege reserved for the wealthy. Chūemon had clearly come into his own as a member of the new merchant elite. He added, “We were unharmed by the fire here in Yokohama. This is a matter for congratulation, and we can greet the coming year with our hearts at peace.”13 Chūemon’s optimism is understandable given his growing prosperity and the bright prospects for his new venture. And indeed, his business continued to grow through much of 1867. Nothing could have prepared him for the extraordinary turmoil with which the year would end.

  REVOLUTION

  In mid-1867, after a period of declining prices, Chūemon’s business dealing in silkworm egg cards began to boom again. In spite of financial constraints and market uncertainties, Chūemon was determined to profit from this market. On May 5, he wrote to his son, “No matter what happens, this year I plan to undertake trade in egg cards. If possible, please let me know how many egg cards we could expect each village to produce.”14 A month later, he reported, “Everyone is making profits at this time … Prices are on the rise, likely to go up to around three bu [$2] each. We need to put our effort into this.”15

  Once again, Chūemon planned for his own family, as well as other silk-making families in Higashi-Aburakawa and neighboring villages, to manufacture egg cards that he would sell in Yokohama. But “preparing the cards requires great care, and [the foreigners] want only those of top quality … If they are poorly made, they will be difficult to sell … They must be thickly spread but not too crowded. They must not have any holes in them. You must put all your effort into making them carefully. If you can make them well, then at present I can sell them for one ryō and one or two bu [$3.30–$4] … The foreigners are secretly asking me to supply them, so sales are likely to be extremely good … The money is in front of our eyes.”16

  Chūemon added, “Yesterday a group of five or six Italians arrived to buy egg cards. It is not yet known how many they want to buy, but some people are talking about a price of one ryō per card.”17 This is the only direct reference in Chūemon’s letters to the cause of the boom in egg cards—namely, strong demand from European silk-producing countries struck by the silkworm blight.

  By the end of June, Chūemon was riding the crest of a sudden boom in the egg card market. “At present the foreigners are visiting here wanting to enter into contracts. Even if we don’t make a contract, they are saying, ‘Please don’t sell to anyone else, I will buy as many as you can offer.’ They are coming daily to enter into these discussions.”18 A few days later, Naotarō wrote to his brother to “please make top quality if you want to ensure good sales. I understand that people are selling cards in the villages all around. If the cards are good quality, then you should contract to buy them at three bu [$2] or up to three bu two shu [$2.35], paying a deposit now and the rest on the last day of the seventh month. And send them to me. Please go around the villages and make sure no one else buys the top-quality cards.”19

  Once again, Chūemon was concerned that the cards should not be identified with Kōshū, which was still considered a second-class producing area. In response to requests from the foreigners for better identification and quality control, the regional government had been requiring producers to add the Kōshū seal to their packages, but “Kōshū eggs should not be identified officially this year. I have informed the officials of my opinion … It should be enough to have an inspection stamp. If we add the Kōshū name, the foreigners will look down on our egg cards. Please explain this to all concerned. Already last year when they attached the Kōshū name, our traders all lost money.” The following year, Chūemon actually instructed his son to cut off the inspection stamp so that the cards’ origin would not be visible.20

  By late July, Kōshū egg cards were selling for more than one ryō per card, while top-quality cards from name-brand regions like Ōshū were selling for as much as three ryō ($8) per card.21 “I believe the price will remain firm, so if Buzaemon keeps buying, I should be able to sell at one ryō one bu. Please also ask Gorōemon and Chūkichi to buy thick cards as soon as possible and send them here … I know I keep saying it, but unless they’re good and thick, they won’t sell. Even if you have to pay a little more, please buy good quality. If you are short of funds, you must buy on terms, paying by the last day of the seventh month. If you need money urgently, I can get it to you within five days of receiving the goods here.”22 In other words, in spite of his prosperity, Chūemon still did not have enough capital to finance large-scale purchases on his own account, without resorting to credit.

  In the second half of 1867, Chūemon’s business was flourishing as he traded in a variety of products. Top-quality egg cards were selling for more than two ryō, and Chūemon was able to sell as many as he could get his hands on. “Right now eggs are what the foreigners want the most … At present there are many buyers, so even inferior product is selling.”23 But Chūemon was also dealing in tea, silk thread, cocoon shells, seafood, and charcoal. He had recently purchased a new building lot in the Ōtachō district, and he had spent two hundred ryō ($530) developing the property. He planned to sell the lease and invest the profit in his business.24 In August 1867, he wrote to his son, “Right now market conditions [in Kōshū] are difficult. It’s hard to tell if you will profit or lose … If you have extra money, you should not keep it uselessly at home. You should give it to me, as I am using it profitably.”25

  At this time, Chūemon’s wife was staying in Kōshū with their children. Shōjirō was running the affairs of the family in Kōshū, and at about this time, Chūemon made him official head of the Shinohara family (in 1868, Shōjirō was to change his name to Chūemon). Seitarō was working on the family farm, taking responsibility for the agricultural side of the business. Naotarō, his wife, daughter, and their newborn baby were living with Chūemon in Yokohama. And Chūemon’s youngest son, Katsusuke (age fourteen), was being schooled for a fee of two ryō per month in Edo, where (Chūemon comments rather proudly) “he is said to be the leader of evil pleasures.”26 In March 1867, Chūemon was delighted to hear that his wife had negotiated the betrothal of their daughter Fuki. She was to marry Okamura Kanemon, making her the third member of Chūemon’s immediate family to marry into the Okamura family (both Chūemon’s and Shōjirō’s wives were Okamuras).27

  Throughout 1867, Chūemon’s irrepressible optimism seemed to be justified. His decision to invest heavily in silkworm egg cards was paying off handsomely; he was trading successfully in a variety of other products; the threat of attack by hostile rōnin had receded; the shogunate was no longer interfering with trade; and Chūemon’s family were all doing well. There was nothing in the air to warn him of the turmoil and near disaster that were about to overwhelm Chūemon personally, nor of the revolution that was to bring the world he knew to a sudden and irrevocable end.

  The first hint came on November 9, 1867. Chūemon wrote, in a brief message, “I have to go to the city commissioner’s office [machibugyōsho] in Edo, but you shouldn’t worry. However, it will take a good deal of time.” Chūemon clarified the situation in a letter to three of his creditors on November 19:

  The Mitsui branch in Yokohama has lost one hundred thirty thousand ryō [$350,000] of the government funds deposited there. The manager, Kōmura Senjirō, as well as one other has been jailed. Thirteen people of Yokohama who had borrowed that money [these included Chūemon] were summoned by a letter of the ninth of this month from the Edo
city commissioner’s office to appear there on the twelfth. We were questioned about the amount of the loans. The officials suspect that the loans were made improperly, which is why those two individuals were jailed for misconduct. Those summoned were ordered to return the borrowed money immediately … Already one person called Nakaya Tōsuke has been thrown in jail. The rest of us were required to submit a full accounting of the affair. Upon presentation of these accounts, the officials inspected our statements, and now they have demanded that any merchants with whom we did business should provide an accounting of transactions involving these official funds … The money I was supposed to receive from these transactions is now frozen. While the books are being inspected, I must request a delay and ask for your patience. At present I have no money on hand. Depending on the decision of the officials, I may be treated the same as Tōsuke. Now I am just at a loss. I know that you need your money returned. But if you insist too much, that would negate all your kindness to this point. If you insist on repayment, please allow me to extend the date, and I will be able to settle all these matters. I am out of funds, and I am the object of a severe investigation.28

  According to the Mitsui company history, the loss was the result of mismanagement rather than fraud. During the course of the previous decade, Mitsui’s Edo and Yokohama branches had been given a large new portfolio of responsibilities by the shogunal government, including management of the shogunate’s foreign exchange accounts and financial management of the Yokosuka Shipyard, which was under construction with French technical support. Most of the managers in the Edo branch had experience only in textile retailing, and they were unable to develop an effective system of bookkeeping, especially since the money entrusted to Mitsui moved frequently between the Edo and Yokohama branches, which were managed independently of each other. Moreover, there was little oversight of the branch managers, who seem to have thought they had permission to invest government funds in speculative loans and investments. The top management of Mitsui in Kyoto became aware of the shortfall as early as mid-1866, and they immediately recognized the threat that it represented. If the government were to call in the funds that it had on deposit with Mitsui, the entire enterprise was in danger of going bankrupt. Mitsui sent a senior executive to Edo to try to sort out the muddle, but all he could do was confirm the shortfall. Out of two hundred thousand ryō and forty thousand dollars of government funds under Mitsui management, only ninety thousand ryō and twenty-five thousand dollars could be physically accounted for. The rest had been lent to Yokohama merchants by the branch’s managers. While the merchants might have been able to repay the loans in time, none of them had the funds for immediate repayment. A portion of the government funds had also been lost in foreign-exchange speculation.29

  Now that the scandal had been exposed, Chūemon, a prosperous Yokohama merchant who wanted nothing more than to be wealthy, respected and admired, was suddenly facing the terrifying prospect of being thrown into jail.

  Then, just four days later, Chūemon sent word of more ominous events. The political world was descending into chaos. A year earlier, Chūemon had reported in passing on the death of the shogun, Iemochi, the appointment of Tokugawa Yoshinobu as the fifteenth shogun, and the withdrawal of the shogunal army from its campaign against Chōshū in western Japan. He did not mention that the campaign had been an unmitigated disaster, costing the shogunate millions of ryō and resulting in its humiliating defeat at the hands of Chōshū’s samurai-commoner army. Nor in the following months did his letters touch on Japan’s deteriorating political situation. Indeed, up to this point Chūemon had only really shown any interest in national or international politics when Yokohama was directly threatened. To some extent, this reflects the attitude of many commoners—that the affairs of “those on high” did not concern them. Chūemon was concerned mostly with making money within his own sphere.

  But Chūemon could not ignore the reports of civil war in the Kyoto area, nor the rumors that a showdown was imminent between the new shogun and the hostile forces surrounding the imperial court. The shogun, Tokugawa Yoshinobu, was an energetic reformer who was determined to unify the country around its most pressing need: to develop a national government capable of resisting foreign aggression. With time, he might have succeeded in persuading the domains to accept his leadership. But in the aftermath of the failed shogunal campaign against Chōshū, the two western domains of Satsuma and Chōshū had already formed a secret alliance, dedicated to the overthrow of the Tokugawa. On November 9, 1867, the young Emperor Meiji, who had recently ascended to the throne, was persuaded by courtiers sympathetic to Satsuma and Chōshū to call for the shogun’s arrest.

  News of the events in Kyoto reached Chūemon two weeks later:

  There are rumors here that Nijō Castle [in Kyoto] has been burned to the ground and that rōnin have flooded into Osaka Castle. Also that Lord Itakura [Itakura Katsukiyo, daimyo of Matsuyama and chief minister at the time] and the shogun are nowhere to be found. There are many such rumors, but it seems that in fact the shogun has offered up his authority [to the emperor]. It is also said that ships of Tosa and Satsuma are heading to the Kantō, and that hundreds of warships have been seen in the western sea. Also that no goods are being shipped by sea from Edo to Osaka.30

  This sudden, terrifying announcement reflects the imperfect nature of communications in Japan of the 1860s. The shogun had indeed resigned his office, formally returning his authority to the emperor and bringing the 264-year-old Tokugawa shogunate to an end. Although the shogun’s Kyoto palace at Nijō Castle was the setting for this dramatic event, the castle was not burned. Nor—yet—was a Satsuma navy on its way to the Kantō. However, in the weeks that followed, the western alliance of the Satsuma and Chōshū domains moved a large army into Kyoto, effectively claiming the city for themselves. On January 3, 1868, they took control of the Imperial Palace and issued in the emperor’s name a rescript stripping the ex-shogun of all his lands and estates. Tokugawa Yoshinobu had not intended to fight: he had resigned his office in the interest of unifying Japan so that it could withstand the pressures of Western imperialism. But now, faced with a coup d’état and the loss of his wealth and influence, he mobilized his forces in the Kyoto area to challenge the western domains’ control over the emperor. Ostensibly, Yoshinobu merely wanted to present a petition to the emperor asking him to reverse his harsh edict. But Yoshinobu accompanied the petition with a large military force, and on January 27, 1868, the forces of the ex-shogun clashed with those of the western alliance in a five-day battle at Toba-Fushimi, outside Kyoto. The battle ended in a decisive defeat for the Tokugawa shogunate.

  As the crisis gathered toward its climax in Kyoto, the shogunal authorities in the Kantō area mobilized to respond to the emergency. The city commissioners imposed enormous special taxes on the Edo merchant houses, and before long the Kanagawa commissioners extended these demands to the merchants of Yokohama. The crisis playing out in Kyoto suddenly came home to Chūemon in the most painful way possible: with a ruinous special levy imposed on his landholdings. “Since the government has been incurring great expenses, it is said that land renters must pay a tax of two ryō [$5.40] for each tsubo. If that is the case, based on the one hundred fifty tsubo that I hold, my share will be three hundred ryō [$800].”31 Although this was an enormous sum, it could have been even worse. In addition to his one-hundred-fifty-tsubo property in Honchō Nichōme (which he had leased since the port opened in 1859), Chūemon had just finished developing another one-hundred-fifty-tsubo parcel of land in the reclaimed Ōtachō district. Luckily, this land was exempted from the tax.

  Nevertheless, given that his money was all frozen because of the Mitsui affair, that Chūemon himself was stuck in Edo until the affair was resolved, and that—again owing to the Mitsui affair—trade in Yokohama had come to a virtual halt, he had no idea where he would come up with this money. In spite of his recent business success, Chūemon remained cash poor. He continued to rely heavily on short-term deb
t to finance his business operations, and any surplus cash he had, he had put either into payment of debt or into new business investments. As he considered his options, he mulled the possibility that he would have to give up the premises he had occupied for the past decade: “At present because of the Mitsui affair I have nothing on hand. I may have no alternative but to return my land. If it comes to that, I would at least like to keep the fifty tsubo that I have been using as my living quarters … But even that would be [a tax of] a hundred ryō.”32

  Meanwhile, Chūemon remained stuck in Edo, required by the city commissioners to stay there until their investigation was concluded. And Edo itself was descending into chaos. In the final months of 1867, there was an unprecedented breakdown in law and order in the shogunal capital. “In Edo,” wrote Chūemon,

  thieves are flooding the city and robbing the houses of the wealthy. The bands consist of a hundred or more followers, and they are forcing their way into people’s homes. They tell the men in the guardhouses not to raise their voices, and if they suspect them [of trying to raise the alarm], they will cut them down. My neighbors are strengthening their security, but in places [the robbers] have been seen breaking down locked doors with axes and running riot inside. There are many instances where they have taken five hundred or a thousand ryō. At present, Mitsui and the other designated government money changers are each being guarded by twenty or thirty warriors day and night. Nabeya Jinbei of Odenmachō Sanchōme has hired fifty soldiers … Many of [these robbers] are said to be Satsuma rōnin who are staying on ships and coming ashore at night.33