Season 13, Episode 7: Clans, Corporations, and Capital
While the English-speaking world tends to refer to the 1877 uprising of Saigo Takamori as the “Satsuma Rebellion,” this is not a direct translation of the Japanese name for this conflict. In Japan it is referred to as “Seinan Senso,” which literally means “Southwestern War.” After studying the conflict in greater detail during the research phase for this season, I’m inclined to agree with the cadre of Japanese scholars who assert that the term “rebellion” does not accurately capture the scope of this event.
Saigo Takamori’s war began on January 29, 1877 and ended on September 24 of that same year. For most of 1877, Japanese people would have been following the war as it was reported in newspapers. For the better part of a year, the conflict would have consumed the attention and amplified the anxieties of an already-anxious populace. Many modern historians of Japanese history consider Seinan Senso to be more accurately classified as a civil war.
The imperial army’s response was, all things considered, more than adequate. Yes, it would have been nice if they could have captured or killed Takamori sooner, but they were probably expecting him to try to die in battle. His elusive tactics toward the end of the war only served to extend what had been, since the battle of Tabaruzaka, a losing proposition. Had he been captured, had the entire affair been wrapped up by late March, then it would have been just another in the long line of shizoku rebellions of the 1870s. However, the length of the campaign meant massive expenditure for the state. Mobilizing the massive force which they used to squash Takamori’s loyalists nearly bankrupted the Meiji government.
In the immediate aftermath of the Seinan Senso, urgent measures were needed to shore up the Japanese state’s flagging resources. Among the early steps was abandoning the gold standard in favor of a more flexible monetary policy. The gold standard is one of those things that some people get very weird about but it’s worth mentioning here that its historical origins were essentially an accident of British history and many nations around the world adopted it primarily to imitate the United Kingdom, which operated a large, impressive empire and a robust economy.
Essentially a nation’s currency is valued according to a fixed amount of gold. While this sounds simple and even, theoretically, stable, such a system has several shortfalls, including alternating waves of high inflation and massive unemployment, and wildly fluctuating prices for goods and services. By abandoning the boom-and-bust cycles of the gold standard, the Meiji government put itself onto a more active economic footing and was able to respond to inflation and unemployment in order to more adequately exert control over both.
Still, in the short term inflation rose as the banknotes were devalued, and for a while this led to some prosperity among Japan’s farmers. Taxation was based on a fixed value of real estate, so as prices rose these revenues became more affordable for farmers during the late 1870s and early 1880s. This caused a drop in real revenue for the government, who implemented some austerity which stymied economic growth for the moment in favor of bringing the value of the yen back up.
In the midst of the Seinan Senso, the first of the Three Outstanding Heroes of the Meiji Revolution passed away. Kido Takayoshi had been suffering from a myriad of health problems brought on by years of stress from the responsibilities of nation-building and exacerbated by excessive alcohol consumption. He may have suffered from Beriberi, a disease brought on by a deficiency of Vitamin B1, though there is some debate whether the relevant symptoms actually emerged due to tuberculosis. Ultimately he died of Colorectal Cancer on May 26, 1877, a few months after the beginning of Seinan Senso.
With Saigo Takamori and Kido Takayoshi both dead by the end of 1877, Okubo Toshimichi was the last Outstanding Hero still standing. In fact, even before the deaths of his two co-conspirators and colleagues, Toshimichi had essentially outdone both of them in terms of personal power and prestige.
When he returned to Japan following the Iwakura Mission, Okubo Toshimichi was determined to create a centralized state and, more importantly, a bureaucratic office to administrate said centralized state. In early November of 1873, a little over a month after the resignations of Saigo Takamori and his partisans, Toshimichi succeeded in establishing the “Naimu-sho,” or “Home Ministry.” He was named as the first Naimu-kyo, or Lord of Home affairs, which vested him with a new level of centralized authority.
Initially this new bureau was primarily concerned with preserving internal security of the fledgling government. As many samurai nationwide were growing increasingly dissatisfied with the rapidly-changing status quo throughout the mid 1870s, the creation of an agency to ensure security was easy to justify. The departure of Saigo Takamori and Eto Shinpei in particular made more than a few of the remaining Meiji elite very nervous about potential future uprisings, a concern which we now know was well-grounded.
A natural extension of the Home Ministry’s power was oversight over police nationwide. However, it soon expanded into census registration, land surveys, censorship, civil engineering, and was even granted authority over the nation’s agricultural programs. The power of Okubo Toshimichi himself grew along with that of the Home Ministry and he enjoyed an equivalent authority to a prime minister. The Meiji government from 1873 to 1878 is sometimes referred to as “The Okubo Government” and some historians compare the power that he enjoyed to being nearly equivalent with that of a dictator.
Throughout this period, Toshimichi himself took charge of many different events which we’ve already discussed this season. He pressed for the 1874 invasion of Taiwan and, you may recall, traveled to Beijing to sign the ensuing peace treaty with China. He led the suppression of Eto Shinpei’s rebellion in 1874 as well, serving as a kind of commander-in-chief of the imperial armed forces. Before Seinan Senso began, he had wanted to travel to Kagoshima to meet directly with Saigo Takamori and see if some compromise couldn’t be worked out.
It does seem like he regretted not taking that trip after the war in Kyushu ended and Takamori was dead. Contemporary accounts claim that he wept bitterly when he was informed of the death of his longtime ally, co-conspirator, and friend. The fact that Okubo Toshimichi and Saigo Takamori both hailed from the former Satsuma Domain was not lost on samurai throughout the nation who, although they had not participated in Seinan Senso, were deeply moved by what they saw as the idealistic self-sacrifice of Saigo Takamori.
You may have noticed that the closing year of the so-called Okubo government was 1878. Disgruntled samurai nationwide decried Okubo Toshimichi as a traitor for his role in opposing Saigo Takamori - sending an army of commoner conscripts to massacre honorable, idealistic samurai. On May 14, 1878, Okubo Toshimichi was traveling by carriage to the imperial palace in Tokyo, which had formerly been known as Edo Castle. As his vehicle approached the Sakurada Gate, it was stopped by a band of six disgruntled samurai who dragged him from the carriage’s interior and cut his throat, killing him. They left a note at the scene explaining their actions and then promptly surrendered themselves at the nearby palace. The six assassins were executed in July of that year.
It is notable that Toshimichi was killed very near the same spot where Ii Naosuke had been assassinated. Want to feel old? The assassination of Okubo Toshimichi happened eighteen years after the assassination of Ii Naosuke. According to some accounts, a letter from Saigo Takamori was found in Okubo Toshimichi’s pocket, though this may be apocryphal.
The posthumous reputations of both Takamori and Toshimichi are fascinating. Saigo Takamori is frequently painted as a romantic idealist who was fighting on behalf of his deeply-held beliefs while Okubo Toshimichi, in the immediate wake of his assassination, was decried as a sneering dictator whose only personal value was the acquisition of power. Both men were later honored nevertheless alongside Kido Takayoshi as the Three Outstanding Heroes of the Meiji Revolution.
Thus by the spring of 1878, a little less than ten years after the Emperor came to Edo and the Meiji Period began, the three men considered the primary leaders of the revolution were dead. We will discuss more of the government’s actions, policies, and developments in future episodes, but for the remainder of our time today, we will instead turn our eyes to the samurai.
You’re probably thinking, “with all of these rebellions and uprisings, are there even any samurai left?” As it turns out, those samurai like Otaguro Tomoo who obstinately opposed modernization or like Saigo Takamori who wanted to secure samurai privilege in the new order were, broadly speaking, in the minority. The samurai, it turns out, contain multitudes.
While the more traditionally-minded samurai like those who would later follow Eto Shinpei or Otaguro Tomoo typically eschewed business pursuits, many jumped into the new economy with both feet. Often using their stipends as seed money, they purchased shares in emerging businesses, and while some of those businesses failed miserably, others did quite well and became zaibatsu.
The term “zaibatsu” combines two kanji: the first, “zai,” means “wealth,” and the latter, “batsu,” means “group” or “cohort.” The common English translation is conglomerate, and comparable western businesses would include Standard Oil, Lloyd’s of London, Western Union, AT&T, and Carnegie Steel, among several others. Many of the early Japanese conglomerates were funded by former daimyo who had generous government payouts at their disposal, but many samurai also set aside any supposed prejudices against mercantile activity and got in on the ground floor of companies which would produce fortunes for themselves and their descendants for generations to come.
There were four major zaibatsu companies which emerged during the early Meiji Period, but two of those had roots in the previous Edo Period. The oldest was called “Sumitomo,” originally a bookshop which was founded around 1615 by a Buddhist monk named Sumitomo Masatomo, but eventually became known for its exclusive and secretive smelting technique which extracted silver from copper ore. The business expanded into general exports and prospered throughout the Edo Period. The other business was called Mitsui, named for the family of its founder, Mitsui Takatoshi, who expanded the Kansai-area Miso restaurant-slash-pawn shop he inherited from his father and opened a second location in Edo. Eventually Mitsui moved into the arena of money-changing, charging a small fee to transform samurai koku stipends into paper receipts which could be used like cash.
Both Sumitomo and Mitsui had huge advantages as the Meiji Period began: large cash reserves and a pre-existing infrastructure that allowed them to get a jump on most of their would-be competition. The other two major zaibatsu who launched during the Meiji Period were Yasuda and a little company you may have heard of called Mitsubishi. Yasuda was named for its founder, Yasuda Zenjiro, who established a currency exchange and worked on contract as a tax farmer for the shogunate in 1863. As all signs pointed to the shogunate’s collapse, he arranged to purchase large amounts of Edo Period cash for pennies on the dollar, so to speak, from panicking currency-holders certain that their hard-earned money was about to be worthless. When the Meiji government paid face value for the currency after the shogunate’s demise, his investment paid for itself many times over. Flush with cash, Yasuda Zenjiro established the Third National Bank in 1876. Later they expanded into insurance. The Mitsubishi Zaibatsu was initially established by Yataro Iwasaki as a shipping company and later expanded into coal and shipbuilding.
As you might surmise from these extremely simplified corporate histories, most zaibatsu companies began with rather limited scopes and expanded when profits allowed. While many were largely funded by well-to-do merchants, their upper management included significant numbers of samurai. Mitsubishi, in particular, was not only largely founded by a samurai, but used a clan-style crest, called a mon, as their logo.
While the emerging corporate class of Meiji Japan largely adopted the samurai aesthetics in their logos and branding, the emerging business titans were, of course, not all descended from samurai stock. Few Japanese citizens embody this emerging capitalist class more thoroughly than Shibusawa Eiichi.
Born in 1840, Eiichi’s young adult life spanned the Bakumatsu Period and for a time he was even associated with the Sonno-joi movement which advocated for the violent expulsion of all foreigners. Although he was not born a samurai, his commoner family was very wealthy and involved in several productive pursuits, including farming, creating and selling indigo, and producing silk. In spite of his earlier radicalization, he ended up serving the shogunate and attended the 1867 World’s Fair in Paris as part of a Japanese delegation. He appears to have been counter-radicalized through his experiences in France and when he returned to Japan, he abandoned the now-abolished shogunate and sought opportunities to assist in the modernization efforts of the Meiji government.
He established Shoho Kaisho, one of the first joint-stock companies in Japan, and was later recruited by the Meiji leaders to serve in the “Okura-sho,” the “Ministry of Finance.” In 1873, he resigned from the ministry in order to become president of the Daiichi Kokuritsu bank, Japan’s first national bank. He had expended considerable energy while working in the Ministry of Finance on establishing this bank, and under his leadership it spurred new businesses of all kinds, providing seed capital, financial expertise, and market research to entrepreneurs.
To list all the projects in which Shibusawa Eiichi either founded or supported, both through his leadership at the Daiichi Kokuritsu Bank and as a private citizen, would probably span several episodes of this podcast, so we’ll just stick to the highlights. He helped found the Imperial Hotel, the Tokyo Stock Exchange, the Mizuho Financial Group, Sapporo Breweries, the Oji Paper Company, Tokyo Gas, and Toyobo, a textile manufacturer. He also helped establish business schools, including Hitotsubashi University and Tokyo Keizai University. Throughout his lifetime, he is credited with founding or supporting the founding of over five hundred businesses and with involvement in over six hundred social welfare organizations including women’s schools.
While he may sound like an exceptionally busy private citizen, the truth is that Shibusawa Eiichi’s activities were all perfectly in keeping with the desires of the Meiji Government. In fact, even after his time in the Ministry of Finance had ended, he was still in close contact with government officials and was part of the Kazoku Peerage system.
We first mentioned the Kazoku system in episode 2 of this season, though only in very broad strokes. The Kazoku, meaning “Magnificent Lineage,” was essentially meant to be the Meiji government’s version of the British House of Lords. In 1884, the Meiji government, guided by Ito Hirobumi, decided to more fully refine that system to allow for a more granular hierarchy for future Kazoku assemblies which would help advise the state on its proper course. Any ex-daimyo who formerly governed a domain with over 150,000 koku annual income were dubbed “koshaku,” which is translated as marquis, those whose domains were less than 150,000 but more than 50,000 were dubbed “hakushaku,” which is translated as count, and anyone below 50,000 was labeled a “shishaku,” which is translated as viscount. Those who had not been daimyo but whose contributions to the revolution were considered especially significant were also granted shishaku rank. The pre-existing hereditary nobility were given the rank of koshaku, translated as “duke.” You may be thinking, wait, I thought koshaku means marquis? Although Japanese names for the two titles sound identical, they utilize different kanji. Koshaku meaning duke was considered a higher rank than koshaku meaning marquis. The office of Danshaku, corresponding to baron, was also created for commoners who had made significant contributions to civil service. The founders of the zaibatsu companies were made into barons, though Shibusawa Eiichi himself was honored with the title of viscount.
Although expenses incurred by the Seinan Senso had set the government back, the necessary infrastructure for recovery was already in place by the late 1870s, though its ability to spur economic growth was significantly hampered. Capitalists like Shibusawa Eiichi continued funding new ventures and the zaibatsu groups continued likewise creating new branches of their growing companies to satisfy emerging demands both internal and external.
The Meiji government took steps, in 1882, to more thoroughly establish the loyalty of their conscript army. They issued a document called “Gunjin Chokuyu,” which is translated as “The Imperial Rescript to Soldiers and Sailors.” This was essentially a new oath of service which the members of Meiji Japan’s armed forces were expected to follow. It included an oath of absolute loyalty to the emperor and a promise to obey orders given by superior officers as though they were the direct commands of the emperor himself. While this was meant to ensure loyalty to the Tenno and, more importantly, to the Meiji government who acted in his best interests, it also established the military as a source of political power in the new status quo. HIgh-ranking military leaders were granted direct audiences with the emperor and they would sometimes relay his compliments or concerns to their officers who would inform the rank-and-file. Proximity to the emperor, regardless of the fact that Meiji-Tenno exerted no direct governance himself, granted political clout to the leaders of the conscript army and many of them had no hesitations about using that influence when it suited them.
In the previous episode, we discussed how Eto Shinpei and Itagaki Taisuke established the Aikoku Koto, which was Japan’s first political party. After Shinpei’s failed uprising, the Aikoku Koto was disbanded for fear of government reprisals but Itagaki Taisuke considered this to be a strategic political withdrawal. In 1875, leaders of the Meiji government opted to meet with concerned activists at what came to be called the Osaka conference. They discussed forming representative assemblies, and came away having promised to establish a Senate along with an assembly of the prefectural governors. While the creation of these assemblies made for good press in 1875, the fact remained that all of the members would be appointees, not elected by the populace. Later that year, the government moved to suppress the liberal movements which were gaining popularity throughout Japan, partially through the censorship laws we discussed in episode 3.
In 1878, Itagaki Taisuke formed a new political movement called “Jiyu Minken Undo,” the “Freedom and People’s Rights Movement,” though it was often called “Jiyuto” for short, which simply means “The Freedom Party.” They pressed for the government to establish a constitution which would support elections and officially recognize civil rights. They were very active throughout the 1880s and ultimately are credited with successfully pressuring the government into drafting a constitution. Japan in the 1880s and beyond would be defined in part by the decisions made by the framers of that constitution as well as the continued formations of parties across the political spectrum.
The 1870s was, all things considered, an incredible decade for Japan. The new government implemented new policies based on their objectives of shoving the Japanese citizenry into the modern age, whether they liked it or not. Some of those policies - like the end of the social caste system - were broadly popular but as we’ve seen, many others - like conscription and compulsory education - were likewise the cause of riots and even spawned armed unrest among disaffected samurai. In the midst of this somewhat chaotic yet enthusiastic modernizing, debates raged amid the Meiji leadership itself over the fundamental issue of establishing a constitution.
In 1881, those in the government who opposed drafting a constitution finally either relented or were overpowered by those who saw the document as an essential step in modernization. Ito Hirobumi, whom you may remember from episode 3, was appointed to lead the effort. Next time, we will explore the process that unfolded which led to the establishment of Japan’s first modern constitution.