Reluctant Capitalists: Japanese Railways and

Elite Investors in the Late Nineteenth Century

Thomas Schalow
University of Marketing and Distribution Sciences, Kobe, Japan
ijinkan@mac.com


I. Statement of Purpose

This paper examines the way in which unanticipated
changes in individual income affected the investment
motives and decisions of a special group of investors - the
former daimyo - and the development of private railways in
late 19th century Japan. It concludes that at least some of
these men were initially motivated by ideas of national
mission, but changes in the governments pension
system eventually caused considerations of prot and
potential investment losses to displace less selsh
motives.

II. Initial Daimyo Involvement with Railroads

A month after the government completed Japans rst rail
line between Tokyo and Yokohama in September 1872,
Hachisuka Mochiaki, the former daimyo of Tokushima han,
submitted a written appeal urging all former daimyo to
mobilize their family fortunes and annual pensions in order
to further railway development. Over two years later, on 27
March 1875, a group of eleven prominent (former) daimyo
and their representatives met at the Peers Club to
consider action on Hachisukas proposal.

The discussion at this rst meeting centered around a plan
to create a railway that was eventually to link the city of
Aomori in northernmost Honshu with the capital in Tokyo.
It was estimated that at least ten years would be required
to complete the project, but the daimyo expressed their
appreciation of the projects importance to the nation.
Although no rm decisions regarding the funding or
implementation of the groups yet rather vague objectives
were made at this rst meeting, the group did agree to
meet again in the near future in order to formalize a
course of action for what was now known as the Tokyo
Railway Association.

The second meeting of the group was held on 6 April at
the home of Ikeda Akimasa, the former daimyo of
Okayama. It was at this meeting that the important matter
of nances began to be considered and the daimyo
formally committed themselves and their incomes to the
project. Although this group of eleven prominent daimyo
believed they would personally be unable to fund more
than twenty-three percent of the estimated 7.5 million yen
in costs, it was agreed they would continue to meet, plan,
and hopefully attract other members of the former ruling
class to their venture. Hachisuka Mochiaki, whose petition
had originally prodded the group into action, remained the
most important investor, devoting seventy thousand yen
per year from his 19,317 koku income to the project.

The fourth meeting on 23 April brought the issue of the
purpose and direction, quite literally, of the group into
question. Takashima Kaemon, a businessman who had
been placed in charge of planning for construction,
strongly believed the railway ought to traverse the
northeastern (Tohoku) region of Japans main island of
Honshu. His convictions were based on practical
considerations as well as ideological concerns for the
nations development. He pointed out that railway
construction in the Tohoku region was attractive because it
presented few technological obstacles. The area the line
was to cover was fairly at, with no major rivers or
mountains to plicate the actual construction work.
Moreover, a railway spanning the Tohoku would serve to
advance commerce and protect the country from the
Russian threat to north.

Takashima further justied this northern route by asserting
it would serve to unify the embryonic Meiji state, which
was yet almost as much a confederation of feudal
territories as it was a modern, centralized state. At the
time, claimed Takashima, the people of Japan were so
different in their many customs and languages as to be
like foreigners within their own country. A railway through
the heart of the former Tokugawa stronghold to the north
would reduce the tensions caused by these differences.

Although no one doubted the validity of Takashimas
arguments there were doubts the daimyo were capable of
making the sacrices necessary to complete the railroad.
One person to raise such doubts was Inoue Kaoru, who
attended the fourth meeting at the invitation of the groups
nancial advisor, Shibusawa Eiichi. In a convincing speech
Inoue declared that the government, not the daimyo, ought
to bear the burden of railway construction. The risks were
too high for a private rm and the chances for immediately
prot on a line to Aomori were minimal. Moreover, the
group had greatly underestimated the costs necessary to
complete the project. Inoue asserted that even ten million
yen might be insufcient to meet unforeseen problems,
and the daimyo had yet to guarantee even the planned 7.5
million yen.

Takashima had also, claimed Inoue, minimized the
technological problems involved in a Tohoku line,
particularly in regard to the bridge that would need to be
constructed over the Tone River, in modern Ibaraki
prefecture. Under these circumstances he advised the
daimyo to abandon civic responsibility for prots and
negotiate with the government to acquire an existing
railway. He suggested the government might be willing to
sell the protable Tokyo-Yokohama railway if the daimyo
were interested.

By the end of the fourth meeting Inoues ideas had won
the support of the daimyo investor group. Therefore, at the
next meeting Shibusawa submitted his proposal to Dajo
daijin Sanjo Sanetomi on 8 May 1875. He suggested the
railway be sold for no more than three million yen, and
payments be allowed over a seven year period.
Negotiations with the government were carried out over
the next year, during which time various points pertaining
to the method of payment were debated. A contract was
nally achieved on 5 August 1876. The contract between
the government and the daimyo investment group
established a sinking fund into which the group members
were required to pay 428,000 yen per year for the next six
and one-half years. Payments were to be made biannually
until June of 1882, and the government was to pay the
group six percent annual interest on this money until the
daimyo assumed control over the railway. The government
was also to be responsible for running and maintaining the
railroad until the nal payment had been made. After that
time the daimyo would gain title to the railroad and would
be responsible for its operations. No guarantees of
protability were provided by the government but the
members of the Tokyo Railway Association had no reason
to assume they would be unable to achieve anything but a
handsome return on their investment.

As we have already seen, the project initially proposed by
Takashima fell far short of the nancial support needed to
bring it to a successful conclusion. Inoues promises of
prot on the Tokyo-Yokohama line, on the other hand,
managed to raise the level of interest in railway investment
and elicited promises of monetary contributions from eight
more daimyo. After Inoues speech in the Peers Club the
men involved with the Tokyo Railway Association had
rmly committed themselves to total annual contributions
of 353,000 yen over a ten year period. The terms nally
agreed to by the government for the sale of the Tokyo-
Yokohama railway, however, required them to meet
428,000 yen in annual payments over a six and one-half
year period. The difference between the two payment
periods, and thus the annual nancial responsibility, was
not small, but after some difcult negotiations a few
prominent investors agreed to raise the level of their
contributions to meet the governments terms.

Even the almost certain prospect of prots, however, could
not guarantee the project would never lack for cash.
Hachisuka Mochiaki remained the largest investor and his
777,000 yen contribution was critical for the success of the
venture. Unfortunately, his support, as well as that of his
partners in the railway venture, waned when the terms of
the governments pension commutation became public
knowledge and incomes were revised downward. In the
next section we shall focus on the way in which
Hachisukas income was adversely affected by changes in
the governments pension scheme.

III. The Kinroku Kosai & Daimyo Funds

The funds the daimyo had committed to their railway
project were not drawn from savings or accumulated
wealth. Although the daimyo had formerly controlled vast
territories and claimed rights to the tax revenues of these
areas, following the Meiji Restoration their rights to this
feudal income and the wealth of their domains were
gradually invalidated. By the time they began to consider
investment in the railway venture their assets were
reduced to the income collected from an annual pension
payment from the government. During the short lifetime of
the Tokyo Railway Association a number of changes to the
governments ensign system caused drastic reductions in
annual incomes and forced the group to reconsider
investment motives and commitments. The changes to
that pension system are generally referred to as the
chitsuroku shobun, and occurred in three general stages.

The rst stage, precipitated by the return of feudal
domains under hanseki hokan regulations, converted
feudal tax privileges to annual salaries. In regulations
issued on 2 August 1869 the daimyo were ordered to
allocate no more than ten percent of domain revenue for
their personal use. This amount became the karoku of the
daimyo. The income the daimyo received as a result of
this legislation ranged from Shichinoe daimyo Nanbu
Nobutakas one hundred and seventy koku to the 636,880
koku received by Maeda Yoshiyasu of Kaga. Hachisuka
Mochiaki, as daimyo of Tokushima, received a sum of
19,317 koku on an annual basis. He also received an
additional award (shotenroku) for service in the Boshin
Civil War of 1868-69 of two thousand ryo.

The second stage in the process of converting feudal
privileges to annual income substituted cash payments for
allotments of rice. The cash payments were known as
kinroku amounts, and were dispensed according to
legislation of 7 September 1875. The governments cash
payment system was based on a simple formula that
multiplied the original stipend of the recipient by the
average local rice price, computed over the preceding
three years. Rice prices varied greatly, from less than 3
yen per koku in certain Tohoku domains, to over six yen
per koku in various parts of the Kanto. This meant that two
daimyo whose tax incomes in the Tokugawa period,
expressed in koku of rice, were rather similar might now
have found their cash incomes quite different due to
regional rice price variations.

The rather high rice prices common to Tokushima worked
in Hachisukas favor when calculating the cash payment
he was to receive by the terms of the September 1875
legislation. The established Tokushima pice of 5.27 yen
per koku was on the upper end of the price scale, and
Hachisukas income was thereby set at slightly over one
hundred thousand yen per year. Even based on this
favorable gure, however, it was clear the 770,000 yen
Hachisuka had promised to contribute to the railway
project over a six and one-half year period exceeded his
total income for the same period by approximately one
hundred thousand yen.

The nal stage in the process of adjusting pensions to
accommodate the governments scal difculties
converted cash payments into bond obligations, and
caused further deterioration in Hachisukas own nancial
position. The new legislation went into effect on 5 August
1876, once again using a simple formula that multiplied
the cash stiped by a stipulated, xed number of years. By
the new legislation Hachisukas cash payment was
converted to ve hundred thousand yen, face value, in
bonds, known as kinroku kosai, paying ve percent
interest per annum. Interest payments on the bonds would
amount to only 250,000 yen per year, and an attempt to
sell the bonds at the discounted prices that prevailed on
the nancial markets at the time might have cut
Hachisukas one-time gain from the government pension
scheme to less than 350,000 yen. Given these facts, one
can begin to understand the difculty Hachisuka and the
other daimyo believed they would experience in meeting
planned investment commitments.

Of course, the sum Hachisuka obtained from the Meiji
government in return for his feudal rights as daimyo of
Tokushima was not insubstantial. In the mid 1870s even
the Dajo daijin commanded a salary no higher than 800
yen per year. Moreover, it is important to remember that
the bonds could truly be called a git from the Meiji
government, as it was not compelled to honor the
obligations inherited from the Tokugawa regime. Once
feudal rights to tax collection had been converted into
salaries paid to daimyo in their new capacity as domain
governors. One can perhaps better understand the sense
of mission perceived by the daimyo after these
considerations.

Nonetheless, when the extent of the burden to which
Hachisuka and the other daimyo had committed
themselves to became apparent it also became obvious to
most members of the Tokyo Railway Association that they
would need to reduce nancial commitments to the railway
venture. There may have been a place for a sense of
mission when that mission could be funded by money
provided by someone else as a gift. It was more difcult to
commit ones self to a mission that might need to be
nanced by borrowed money.

IV. Faltering Daimyo Support for Railways

The issue of nances dominated the tenth meeting of the
daimyo investment group the month after the September
1875 pension reform was announced. It was clear the
daimyo had been overly optimistic in their assessment of
the groups nancial power, and unless other persons
could be brought into the group it was clearly
overextended. An impending crisis was momentarily
averted, however, when Shibusawa offered the group
nancial assistance from his own 1st National Bank in
order to meet the governments required payment
schedule. To the extent that the daimyo adversely affected
by the pension reform were unable to make payments, he
would advance the necessary capital with a mere ten
percent interest charge. (The daimyo, it will be
remembered, received only six percent interest from the
government on these payments, resulting in a net loss for
them but a tidy business for Shibusawa.)

Most daimyo were momentarily reassured by Shibusawas
commitment to the project and his willingness to loan
necessary funds to the group. The 1st National bank was
thereupon placed in charge of collecting all payments and
holding the interest paid by the government for the sinking
fund. It assumed the role of lead bank for the Tokyo
Railway Association and seemed prepared to guarantee
the success of the groups venture.

Unfortunately, the last phase of the pension reforms made
an already bad situation even worse. The daimyo slowly
began to realize they were not only in danger of losing the
nancial gift the Meiji government had originally offered to
them, they were also in danger of becoming personally
responsible for the repayment of the ever-larger loans
needed to keep the Tokyo Railway Association in
operation. The business meetings of the group began to
be dominated by expressions of concern, if not actual fear,
for the nancial difculties of individual members. When
Yamanouchi toyonori indicated he might be able to make
his rst semi-annual payment for 1876, but would have
difculty meeting the second payment, he was certainly
expressing a sentiment that was already troubling most
other members of the group.

It can therefore be said that changes in the governments
pension scheme were a key factor in dimming whatever
enthusiasm the daimyo investment group may have once
had for the railway project. Date Munenari spoke for the
group when he expressed the opinion that the pension
changes had made it virtually impossible to continue
planning, and it was thus imperative the government be
asked to revoke the contract and return money already
paid into the sinking fund. The members of the Tokyo
Railway Association continued to meet until 18 March
1878, but there was little discussion of national mission
and the railway project at the latter meetings. By the time
of the groups demise after the fortieth business meeting
considerations of potential investment losses can truly be
said to have displaced concerns for national welfare.

V. A Final Attempt & Failure

The daimyo were to make one more attempt, as an elite
group, to promote railway construction before they
decided to devote themselves wholeheartedly to the
democratic enterprise known as the Japan Railway
Company. In August 1881 another group of daimyo
submitted a petition to the Tokyo municipal authorities
seeking permission to form the Tohoku Railway Company.
This group planned to lay railway lines from Yanagase (in
Shiga prefecture) to Toyama and from Nagahama (also in
Shiga) to Ise. All those involved with the project had
personal interests in the area under development, usually
due to the fact that they had previously served as daimyo
or chili (governor) for a portion of the area. The company
was to be initially capitalized at 4.5 million yen, with
contributions from the Maeda, Doi, Ogasawara, Arima,
Manabe, and Matsudaira (of Echizen han) families.

This venture, however, like the Tokyo Railway Association,
was ale undercapitalized and subject to adverse
government interference. The noble plans of the Tohoku
Railway Company came to naught when the government
forced it to change one of its lines, eliminating the Fukui
portion of the track. The affected daimyo indicated they
would not fund a railway that did not traverse the territory
of their former domains, and withdrew their monetary
support. In July 1884 the group chose to disband after
having failed to either attract new capital or agree on a
method to reallocate previous commitments.

VI. The Daimyo as Investors

Although the Meiji government certainly did not make it
easy for the daimyo to plan their investments, or
implement those plans, I believe the failure of groups such
as the Tokyo Railway Association and Tohoku Railway
Company was as much a result of the character of the
daimyo as investors as it was of government interference.
if we were to attempt to classify our group of daimyo
investors we might place them in Marilyn MacGruder
Barnewells passive investor group. According to the
Barnewell Two-Way Model, passive investors are dened
as those investors who have become wealthy passively -
for example, by inheritance.

Although the daimyo had received their wealth from the
Meiji government, rather than from their forefathers, they
were in many ways similar to inheritors. Ronald Kaiser
noter that those who have inherited money, or received it
as a gift, often exhibit a tendency toward low self esteem,
which can exhibit itself in a fear of failure and lack of
motivation. Fear of failure can cause the inheritor to be
indecisive, feeling that no decision or action is better than
making a mistake. Moreover, Inheritors can be very risk
adverse because, not having earned the wealth
themselves, they may be very fearful about what they
would do without it.

The fear felt by the daimyo resulted from the fact that
changes in the government pension system had made it
difcult to anticipate future income ow. We have already
seen the way in which the September 1875 reform
degraded income expectations, and how the August 1876
reform further reduced those incomes. The daimyo were
certainly wise to re-evaluate their ability to undertake
substantial investment projects in the face of such
uncertainty.

Yet, in the nal analysis, we must ascribe the failure of the
investment groups to a lack of will, an extreme adversity to
risk. After all, no investor enjoys the luxury of planning in
an environment in which there are no risks or uncertainty
concerning the future. No individual is able to project
future income ow, or probable expenses, with any degree
of certainty. The daimyo at leas enjoyed the advantage of
knowing their government bonds were likely to continue
yielding a 5% interest payment, and thus a rather stable
income. Moreover, the difcult problems of capital
inadequacy experienced by both the Tokyo Railway
Association and Tohoku Railway Company could have
been met by asking other daimyo to join the investment
groups. The amount of government bonds (over thirty
million yen) given to members to the former ruling class as
a result of the pension reforms was not small, and even at
the deep discounts that prevailed on the nancial markets
of the time the total of those bonds was more than
sufcient to capitalize both the projects we have looked at.

As passive investors the daimyo were also, to use the
terminology of the Bailard, Biehl & Kaiser Five-Way Model,
guardians. The daimyo were simply people who were
cautiously trying to preserve their wealth, rather than
increase it. They were basically satised with what they
had, and believed investments were potentially more
dangerous than protable. Again, it was better to do
nothing than to accept the uncertain opportunity to gain (or
lose) more.

There was probably little that could be done to change the
basic character of the daimyo as investors. They were
extremely cautious and not comfortable with the risk that
would be undertaken if it were necessary to actually
borrow money top nance the railway projects we have
spoken of. This does not mean, however, that they were
incapable of making contributions to the economic
development of the nation. In fact, as the wealthiest group
of potential capitalists it was impossible to merely accept
their risk-adverse nature and plan investment projects
without them. The solution to the problem of how to satisfy
the need for security felt by the daimyo, while at the same
time promoting the development of an important
transportation infrastructure, was simply to enlarge the
investment groups.

The amount of individual nancial risk on a given project
declines in proportion to the number of people committed
to that project. A ten million yen project, as originally
conceived by the daimyo when planning the Tokyo-Aomori
railway, might present unacceptable risk and nancial
responsibility for a group of eleven men. A group of ve
hundred persons, however, might nd the level of risk and
nancial responsibility for that same ten million yen project
to be quite reasonable, even if these persons were all,
basically, extremely cautious investors. The chances for
the projects success would, moreover, be enhanced
considerably by accepting investments from a diverse
group of individuals, rather than from a uniform group os
guardians or passive investors.

The objectives of preserving the wealth of the daimyo and
advancing the development of railways were, quite
fortunately, goals which many important members of the
government were committed to. The most outspoken and
energetic advocate for these two causes was perhaps
Iwakura Tomomi, who assisted in the planning for the next
railway venture we will consider.

VII. Success & Its Conditions: The Lessons of Failure

By 1880 new plans were under consideration that would
allow the daimyo to achieve their professed desire to
contribute to railway development. When a group of forty-
six men led by Ikeda Akimasa submitted a petition in May
of 1881 to forma company with capital subscribed to by
both daimyo and the provincial elite they found the
government extremely receptive to the planned project.

One reason for renewed government interest in railway
development was that Japan had once again experienced
a surge in imports in the late 1870s, leading to a dramatic
decline in foreign currency reserves. A railway to link
producers in the Tohoku region with Yokihama merchants,
thus encouraging exports, was seen as a necessary rst
step toward the solution of this problem. The railway,
which was also expected to improve the living standards
of the farmers close to the line, might additionally help the
blunt the political opposition, expressed through the jiyu-
minken movement, that had become such a problem.

The Kobusho, which was to oversee construction on the
new railway, granted its approval for the project in
November and blessed the group with a number of special
privileges, about which we will be speaking momentarily.
Out of gratitude, and to guarantee the government would
continue tits support for the project, the group elected
Yoshii Tomozane of the Kobusho as its rst president at
the stockholders meeting held the following month.

The new venture known as the Japan Railway Company,
unlike the Tokyo Railway Association, was authorized to
sell stock to anyone who wished to purchase that stock,
regardless of social standing. It was expected that the
former daimyo would make a major contribution, and
Iwakura devoted much time to meeting with these men to
assure this, but it was realized that the company would be
successful only if it were able to mobilize the funds of
daimyo, samurai, farmer, craftsmen, and merchant - rich
and poor alike.

The twenty million yen of stock offered to the public was to
be the largest public offering since two million yen of
Yokohama Specie Bank stock was sold in 1879, and the
venture was therefore undertaken with more than a little
trepidation. Finance Minister Matsukata Masayoshi
suggested the initial stock issue might meet with more
success if the government offered prot subsidies for the
company, and he arranged for money from postal
revenues to be diverted for this purpose.

Prot subsidies guaranteed an eight percent operating
prot for each section of track for a xed number of years
after it was completed. The entire Tokyo-Aomori line was
not completed until September 1891 but individual set ions
were opened for business earlier. Although there were ve
distinct set ions of track (section one was from Tokyo to
Maebashi, section two from Omiya to Shirakawa, section
three from Shirakawa to Sendai, section four from Sendai
to Morioka, and section ve form Morioka to Aomori) the
government agreed to a general ten year guarantee on
prots for the Tokyo-Sendai line and a fteen year
quarantee of the Sendai-Aomori line. prot subsidies were
thus due to expire on the nal portion of the track in 1906.

The line from Tokyo to Maebashi proved to be highly
protable as soon as the track was completed and it
needed and received no government subsidies. Section
two managed to show a prot within a few years after
completion of the line and received no subsidies after
1887. Section three required a longer period of time to
begin to show a prot, but it was also able to end
government subsidies by 1894. Section four, however,
was not able to sustain prots at the eight percent level
until the time of the Russo-Japanese War, and section ve
was never weaned from prot subsidies.

Even with tax breaks and prot subsidies the success of
the companys rst public stock offering in March 1881
could not be assured. As feared, the response from the
public was less than enthusiastic. it had initially been
hoped the company would be able to raise twenty million
yen (the proposed capitalization) in the initial subscription
and that the entire amount could be paid in within two
years. However, the amount of stock actually subscribed
to in the initial offering was less than one-third of the
twenty million yen total.

A total of ve hundred and sixteen persons pledged to
purchase at least ve thousand yen of stock when the
company applied for permission to incorporate in 1881.
Only seventy-one of these persons were members of the
former feudal ruling class, but they contributed forty-ve
percent of the 5.72 million yen total achieved by the initial
public offering. The fact that almost half of the companys
initial capital was derived from the former daimyo and
court aristocracy shows that this group was prepared to
assume a major role in railway development if risks could
be minimized. The daimyo were passive and extremely
risk-adverse, but with proper direction and supervision
provided by the government they could be mobilized to
action.

Fortunately, by January 1884 the company was able to
offer its rst dividend, thanks in part to the subsidies
provided by the government, and this pushed up prices
and demand for the stock on the Tokyo stock exchange.
This development made another stock offering possible in
1885, which nearly doubled the capital available to the
company. Stock was tendered to the public again every
other year from 1888 to 1896 and a nal, eighth offering
was made in 1897. By 1905 the capital of the company
exceeded fty million yen. Daimyo investments continued
to provide a major source of capital during this time.

With the government guarantee of prots investment in
railway construction proved to be a safe and sound
investment for the daimyo for almost two decades
following the establishment of the Japan Railway
Company. By the end of the nineteenth century, however,
new developments in the railway industry made investing
less attractive than it had once been. The reason for the
declining daimyo interest in railways may be found in the
prot statements of the Japan Railway Company. By the
end of the nineteenth century the railways had quite
simply ceased to be a good investment, even with the
prot subsidies provided by the government. In 1898 the
dividend ratio on Japan Railway stock fell from a fairly
constant ten percent rate to a mere 5.5 percent. The fall in
the dividend rate precipitated a sharp decline in the price
of the stock from a high of 125.5 yen per share in 1896 to
a low of 59.5 in 1898. Many people began to fear that the
Japanese railroads were destined to follow the path of the
English railway system into declining prots and stock
prices. The daimyo were once again faced with the choice
of continuing to invest in railways, perhaps at the risk of
loss of investment capital, or reverting to character and
accepting their role as guardian of wealth. it should
surprise no one that they chose the latter course of action.

VIII. Conclusions

Although the daimyo may not have lacked a certain sense
of mission, the history surrounding their investment in
railways indicates they were primarily concerned with loss
of capital, and only secondarily with either personal or
national prot. It was much more important for these
people to preserve what they had been given than to
enhance their wealth or prestige. They were, to return to
the distinction provided by Shibusawa Eiichi and
mentioned in the rst footnote of this paper, shonin rather
than jitsugyoka. Their concern, as merchants, for more
trivial matters of prot and loss made it difcult for them to
act as entrepreneurs, concerned for the economic and
technological advancement of society. As such, they
proved ineffective in small groups, though the aggregate of
their wealth was an extremely important factor in the
development of Japans railway infrastructure.

1) See Hi r schmei er, Johannes. The Or i gi ns of
Entrepreneurship in Meiji Japan. Cambridge: Harvard
University Press, 1964, page 209 for discussion of the
concept of national mission versus prots, and the
distinction between what Shibusawa Eiichi referred to as
the shonin and jitsugyoka types of investors.

2) Iwakura ko kyuseki hozonkai. Iwakura ko jikki. Tokyo,
1927, volume 3, page 480-482. (Hereafter this source,
volume 3, will be referred to as Iwakura.)

3) Shi busawa Shoen ki nen zai dan tatsumonsha.
Shibusawa Eiichi denki shiryo. Tokyo: Shibusawa iichi
denki shiryo kankokai, 1956, volume 8, page 359.
(Hereafter this source, volume 8, will be referred to as
Shibusawa.)

4) Hachi suka s 19, 317 koku of r i ce was wor t h
approximately 140,000 yen at the prevailing price of
7.28 yen/koku of rice. See Kajinishi Mitsuhaya, ed.
Nihon ni okeru shihonshugi no hattatsu-nenpyo. Tokyo:
Tokyo daigaku shuppankai, 1953, page 14.

5) Shibusawa, page 371.

6) Okubo Toshiaki, ed. Kazoku kaikanshi. Tokyo:
Yoshikawa kobunkan, 1986, volume 1, pahge 58, 16
July 1874.

7) Shibusawa, page 373.

8) Shibusawa, pages 378-384.

9) Naikaku kanpokyoku. Horei zensho. Tokyo: Hara shobo,
1975, volume 2, pages 237-238. (Hereafter this source
will be referred to as Horei zensho.)

10)Ouchi Hyoe, ed. Meiji zenki zaisei keizai shiryo shusei.
Tokyo: Kaizosha, 1933, volume 8, pages 449-461.
(Herefter this source, volume 8, will be referred to as
Meiji zenki zaisei.)

11)Meiji zenki zaisei, page 450.

12)Okubo Toshiaki, ed. Kazoku seido shiryoshu. Tokyo:
Yoshikawa kobunkan, 1985, page 42.

13)Horei zensho, volume 8, page 171.

14)Meiji zenki zaisei, pages 480-489.

15)Horei zensho, volume 9, pages 147-151.

16)Meiji zenki zaisei, page 405. In Hachisukas case this
was ve years, thus yielding slightly over ve hundred
thousand yen in bonds.
17)Jones, hazel L. Live Machines: Hired Foreigners and
Meiji Japan. Vancouver: University of british Columbia
Press, 1980, page 11.

18)Shibusawa, pages 403 and 452.

19)Shibusawa, page 476.

20)Shibusawa, page 534.

21)Noda Masaho. Meijiki ni okeru shiyu tetsudo no
hattatsu to kabushiki hakko shijo no tenkai, Keizai
shirin 32 (January 1964), pages 127-128.

22)Kaiser, Ronald W. Individual Investors, in Managing
Investment Portfolios: A Dynamic Process. 2nd edition.
John L. Maginn and Donald L. Tuttle, eds. Boston:
Warren, Gorham & Lamont, 1990, section 3-6.
(Hereafter this source will be referred to as Managing
Investment.)

23)Managing Investment, section 3-15.

24)Managing Investment, section 3-10.

25)Iwakura, page 782.

26)Iwakura, page 797.

27)Noda, Keizai shirin, page 124. Government subsidies
were common on railway projects throughout the world.
See Macpherson, W.J. Investment in Indian Railways,
1845-1875, Economic History Review 8 (1955),
177-186 for a succinct discussion of the need for
subsidies.

28)Hoshino Takao. Nihon tetsudo kaisha to dai jugo
kokuritsu ginko, Musashi daigaku ronshu 19 (March
1972), pages 124-125. The Tokyo-Maebashi section of
track was through Omiya, and branched off to
Shirawaka from Omiya for the second section.

29)The total amount of stock sold as a result of this initial
offering was 119,314 shares, which provided 5,965,700
yen of capital at fty yen per share. See Nihon tetsudo
kabushiki kaisha. Meiji 38 nen-nenpyo. Tokyo, 1906,
pages 3-4. (Hereafter this source will be known as Meiji
38 nen.)

30)The stock of the Japan Railway Company was,
incidentally, rst traded on the Tokyo stock exchange on
24 April 1884. The primary focus of Nodas article in
Keizai shirin is to show how the stock market gradually
changed from a market for government bonds to one
dealing in stocks - primarily railway stocks.

31)Meiji 38 nen, pages 3-4.
32) Hoshino. Musashi daigaku ronshu 19 (August 1971),
page 19.


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