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The Takashima Mine: British Capital and Japanese Industrialization

Published online by Cambridge University Press:  24 July 2012

John McMaster
John McMaster*
Affiliation:
Instructor in History, Boston University
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Abstract

As a notable instance of British investment in protectionist Meiji Japan, the history of the Takashima coal mine well illustrates the complications of foreign capital commitments in the Far East during the nineteenth century.

Type
Research Article
Information
Business History Review , Volume 37 , Issue 3 , Autumn 1963 , pp. 217 - 239
Copyright
Copyright © The President and Fellows of Harvard College 1963

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References

1 T. B. Glover to F. B. Johnson, June 30, 1870, Box Nagasaki, 1870, Jardine, Matheson & Company Archive (University Library, Cambridge). Hereinafter cited as J. M. & Co. The author is indebted to Mr. Andrew Fraser of London, who has generously allowed use of his notes from Ōe Tenchi Denki, by Hiyonori, Saiga and Ōmachi Keigetsu, Hakushaku Gotō Shōjirō (Tokyo, 1914)Google Scholar, to Mr. Ichiro Shirato of Columbia University for his help with translations, and, above all, to Miss Nora Bartlett and the staff of the Anderson Room for their help in using the Jardine papers.

2 Orchard, John E., Japan's Economic Position (New York, 1930), p. 104 Google Scholar.

3 Alcock, Rutherford, The Capital of the Tycoon (2 vols., London, 1863), vol. I, p. 285 Google Scholar notes Japanese officials citing this author in negotiations with the British Minister in 1859. See also p. 375.

4 Bosquet, G., Le Japon de nos Jours (2 vols., Paris, 1877), vol. II, pp. 245–46Google Scholar.

5 Loonen, C. H., Le Japon Moderne (Paris, 1894), p. 236 Google Scholar.

6 Bosquet, , Le Japon, vol. II, pp. 245–46Google Scholar.

7 A full history of the company's origins in China is given in Greenberg's, Michael British Trade and the Opening of China, 1800–42 (Cambridge, Eng., 1951)Google Scholar.

8 In addition to providing one-seventh of the revenue of British India, His Majesty's opium monopoly in Bengal also provided a commodity which could be exchanged for tea at Canton. It was not a direct exchange. As it was contraband under Chinese law, the Company did not deal in opium at Canton. Rather, it was smuggled by private English merchants who were protected with diplomatic papers naming them consuls of His Prussian, Danish, Swedish, or even Sandwich Island majesties. Of necessity, the opium was sold for cash and this specie was used to purchase Company bills of exchange upon London or, more rarely, India. The Company profited as banker and also saved the cost of shipping bullion from Britain to purchase the tea.

9 An Edinburgh University graduate, Matheson worked for two years in an export house in London before joining an uncle in Calcutta. From that port he was three times supercargo on voyages to Canton until finally, as happened with most supercargoes, he settled ashore — in Canton about 1811 and under Danish papers. Jardine came ashore at Canton in 1825 with profits of experience and capital from his seven tons of privilege cargo as surgeon on East India Company ships.

10 In 1872, Jardine's was prepared to invest up to $300,000 in the Osaka copper mines controled by Godai Saisuke. E. Whittall to J. Whittall, May 2, 1872, Box Yokohama, 1872. J. M. & Co.

11 Heco, Joseph, Narrative of a Japanese (2 vols., Yokohama, 1899), vol. II, pp. 86–88 Google Scholar; E. Whittall to W. Keswick, March 8, April 9, 1870, Box Yokohama, 1870, J. M. & Co.

12 E. Whittall to W. Keswick, Jan. 22, 1870, Box Yokohama, 1870, J. M. & Co.

13 E. Whittall to W. Keswick, March 8, April 9, 1870, ibid. Glover reports his cost of $2.00 a ton as including the Hizen royalty, but as later costs ran between $2.50 and $4.00, this figure may be attributed to his native optimism rather than to actual production costs.

14 T. B. Glover to F. B. Johnson, June 9, 1869, Box Osaka, 1869, J. M. & Co.

15 H. C. Maclean to J. M. & Co., May 14, 1870, Box Nagasaki, 1870, J. M. & Co.

16 E. Whittall to W. Keswick, March 12, 1870, ibid.

17 E. Whittall to W. Keswick, March 13, 1870, ibid. For pictures and descriptions of this slip see Kiichiro, Ueno, A One Hundred Years' History of Ships (Pt. I, Tokyo, 1957), pp. 13, 19 Google Scholar.

18 Ōe Tenchi Denki, p. 359, records Glover as having lost heavily in silk in 1869 which is possible, although Glover's letters do not mention it and he was an experienced silk man.

19 Ibid., also records that Glover offered his interest in the mine to the government in 1869–1870 for $380,000.

20 E. Whittall to W. Keswick, April 9, 1870, Box Yokohama, 1870, J. M. & Co.

21 T. B. Glover to F. B. Johnson, June 9, 1869, Box Osaka, 1869, H. Maclean to Johnson, Sept. 1, 1870, Box Nagasaki, 1870, J. M. & Co.

22 Memorandum on Salary to Sir Harry Parkes from a Subordinate, Yedo, January 27, 1870, Box “Correspondence,” Sir Harry Parkes Papers (University Library, Cambridge).

23 Eto Tsuneharu, “Takashima tanko ni okeru kyuhan makki no nichiei kyodo kigyo” (“The Joint Anglo-Japanese Coal-Mining Enterprise at Takashima in the Late Tokugawa Period”), Keizai Shi Kenykyu, vol. XII (Feb., 1935), p. 19 Google Scholar. Summarized in Smith, Thomas C., Political Change and Industrial Development in Japan: Government Enterprise, 1868–1880 (Stanford, 1955), pp. 11–12 Google Scholar.

24 F. B. Johnson to J. Keswick, May 30, June 30, 1877, Box Shanghai, 1877, J. M. & Co.

25 J. J. Van der Pot, “trustee of Glover & Co. in liquidation,” to J. M. & Co., Sept. 10, 1872, Sept. 7, 1875, Boxes Nagasaki 1872, 1875, J. M. & Co.

26 Borton, Hugh, Japan's Modern Century (New York, 1955), p. 80 Google Scholar; Smith, Political Change, pp. 88–89. In August, 1872, the Japanese government did send an official to arrange terms for taking over the mine. The Netherlands Trading Company reported that an acceptable offer had been made but had been replaced by an unacceptable one and the matter dropped. E. Whittall to J. Whittall, August 27, 1872, Box Yokohama, 1872, J. J. Van der Pot to creditors, Sept. 10, 1872, Box Nagasaki, 1872, J. M. & Co.

27 Smith, Political Change, pp. 11–12, citing Eto Tsuneharu, “Takashima tanko.”

28 Printed handbill dated Nagasaki, September 1, 1874, Box Printed Miscellaneous, J. M. & Co.

29 Smith, Political Change, pp. 88-89, quoting Takenouchi Tsuna, Takenouchi jijoden (The Autobiography of Takenouchi), Meiji bunka zenshu, vol. XXII, pp. 430, 436, 444–46, 448–90Google Scholar. See also Ōe Tenchi Denki, p. 360.

30 Borton, Japan's Modern Century, p. 80.

31 F. B. Johnson to J. Keswick, December 11, 1877, Box Shanghai, 1877, J. M. & Co. As acting President of the Senate from April, 1875, until March, 1876, Gotō was in a position to arrange an exception to the law in his favor.

32 Ōe Tenchi Denki, p. 361, says that this $200,000 was raised by Gotō's selling 20,000 tons of government coal to Jardine's. The coal had been stockpiled for the Formosa expedition of 1874 being turned over to Gotō on his promise of later payment. Jardine's does not mention this transaction and treats the $200,000 as an outstanding loan.

33 Smith, Political Change, p. 90, citing Meiji Zaisei Keizai Shiryo Shusei (Materials on Economics and Finance in the Meiji Period), vol. XVII, p. 119 Google Scholar. Ōe Tenchi Denki gives the total figure as $500,000, p. 360.

34 Smith, Political Change, pp. 88–89.

35 F. B. Johnson to J. Keswick, December 11, 1877, Box Shanghai, 1877, J. M. & Co.

36 Ibid., June 5, 1877.

37 Ibid., May 30, 1877.

38 Ibid., October 31, December 11, 1877.

39 F. B. Johnson to J. Bell-Irving, June 29, 1877, Box Shanghai, 1877, J. M. & Co.

40 Bribery was usually involved in any large transaction between foreigners and Japanese officials; e.g., of the $128,000 paid for the steamer England, $8,000 went to the officials involved. K. Mackenzie to J. M. & Co., January 23, 1861, Box Nagasaki, 1861, J. M. & Co. The Meiji Government does not seem to have differed from its Tokugawa predecessors in this respect.

41 Norman, E. Herbert, Japan's Emergence As a Modern State: Political and Economic Problems of the Meiji Period (New York, 1940), p. 89 Google Scholar.

42 Ibid., pp. 174–75.

43 It also came at an opportune time, for the trading and banking firm (Horaisha) which Gotō had founded in 1870 at Tokyo was in serious financial difficulties. Ōe Tenchi Denki, p. 358.

44 A sharing of profits and expenses had been Glover's arrangement with the Hizen clan. Also, at a period when mine profits were estimated at some $400,000 annually, Jardine's wrote of having $200,000 for its share. F. B. Johnson to J. Bell-Irving, June 29, 1877, Box Shanghai, 1877, J. M. & Co. At a later date, when Gotō was in financial difficulties, Jardine's suggested taking one-third of the profits for a few years and then 60 per cent thereafter to retire its loans. J. Bell-Irving to J. Keswick, April 30, 1879, Box Shanghai, 1879. Gotō was also paid a half-share of return insurance commissions in 1879. R. Holme to J. M. & Co., May 18, 1879, Box Nagasaki, 1879. See also Ōe Tenchi Denki, p. 364.

45 Ten per cent was the usual rate of interest on the China Coast, see Heco, , Narrative, vol. II, p. 197 Google Scholar. It was also the rate at which Jardine's made a loan to the Chinese government in 1877.

46 Production cost per ton varied widely depending upon such unusual expenses as explosions, roof falls, or an unexpected rock fault, as well as permanent improvements, such as roads, buildings, etc. The most economical volume of coal production from an engineering standpoint was usually more than could actually be sold. R. Holme to J. M. & Co., June 1, 6, July 31, 1876, Box Nagasaki, 1876, J. M. & Co.

47 Jardine's trust in Gotō arose from his holding high government office from 1869 to the end of 1873 and his appointment as acting head of the Senate in April, 1875. H. S. Parkes to Terashima Munemori, Sept. 30, 1878, Box Yedo, 1878, J. M. & Co.

48 H. Gribble to J. M. & Co., Jan. 25, 1875, Box Nagasaki, 1875, J. M. & Co.

49 F. B. Johnson to J. Keswick, April 12, 1877, Box Shanghai, 1877, J. M. & Co.

50 R. Holme to J. M. & Co., March 1, 1876, Box Nagasaki, 1876, J. M. & Co.

51 Ibid., Aug. 26, Oct. 1, 1875.

52 150 to 200 tons a day could be raised by hand.

53 Bureau, of Mines, , Mining in Japan (Tokyo, 1909), p. 54 Google Scholar.

54 R. Holme to J. M. & Co., July 31, 1876, Box Nagasaki, 1876, J. M. & Co.

55 Ibid., August 28, 1877.

56 Ibid., Nov. 13, 1876.

57 Ōe Tenchi Denki, p. 373.

58 In the margin of an article titled, “The Martyrdom of an Empire,” by E. H. House, Atlantic Monthly (May, 1881), Sir Harry Parkes penciled the comment, “Whenever foreigners have lent capital to Japanese they have been cheated and robbed of it and can get no redress in Japanese courts.” Box II, Parkes Papers. R. Holme to J. M. & Co., Nov. 7, 1881, advises in regard to an insurance claim against a Japanese firm that obtaining a favorable judgment from a Japanese court “would be hopeless.” Box Nagasaki, 1881, J. M. & Co. See also Chamberlain, Basil H., Things Japanese (4th ed., London, 1902), pp. 479–83Google Scholar.

59 F. B. Johnson to J. Keswick, June 5, 1877, Box Shanghai, 1877, J. M. & Co.

60 Ibid., May 30, 1877.

61 Ibid., May 15, 1877.

62 Ibid., June 5, 1877.

63 R. Holme to J. M. & Co., Sept. 10, 1877, Box Nagasaki, 1877, J. M. & Co.

64 Ibid., Oct. 1, 1877.

65 Smith, Political Change, pp. 11–12; Mining in Japan, p. 305.

66 F. B. Johnson to J. Keswick, Oct. 16, 1877, Box Shanghai, 1877, J. M. & Co.

67 Ibid., Nov. 8, 1877.

68 Ibid., Dec. 11, 1877.

69 J. Bell-Irving to J. Keswick, Feb. 7, 1878, Box Shanghai, 1878, J. M. & Co.

70 F. B. Johnson to J. Keswick, June 5, 1877, Box Shanghai, 1877, J. M. & Co.

71 For Gotōs swordfight in defense of Sir Harry Parkes, see Lane-Poole, Stanley and Dickens, F. V., The Life of Sir Harry Parkes (2 vols., London, 1894), vol. IIGoogle Scholar.

72 J. Bell-Irving to J. Keswick, Feb. 14, 1878, Box Shanghai, 1878, J. M. & Co.

73 Gotō Shōjirō to R. Holme, April 25, 1878, Box Nagasaki, 1878, J. M. & Co.

74 R. Holme to J. M. & Co., April 11, 1876, Box Nagasaki, 1876, J. M. & Co.

75 F. B. Johnson to J. Keswick, June 5, 1877, Box Shanghai, 1877, J. M. & Co.

76 J. Bell-Irving to R. Holme, April 30, 1878, Box Shanghai, 1878, J. M. & Co.

77 T. Robertson to J. M. & Co., July 29, 1878, Box Nagasaki, 1878, J. M. & Co.

78 J. Bell-Irving to J. Keswick, July 30, 1878, Box Shanghai, 1878, J. M. & Co.

79 H. S. Parkes to Terashima Munemori, Sept. 30, 1878, Box Yedo, 1878, news clipping from The Rising Sun and Nagasaki Express, November 15, 1878, Box Printed Miscellaneous, J. M. & Co.

80 H. S. Parkes to Terashima Munemori, Nov. 19, 1878, Box Yedo, 1878, J. Bell-Irving to J. Keswick, April 7, 1879, Box Shanghai, 1879, J. M. & Co.

81 J. Keswick to W. Keswick, Sept. 25, 1880, Box Shanghai, 1880, J. M. & Co.

82 J. Keswick to W. Walter, May 8, 1881, Private Letter Book, Shanghai, vol. V, 18811883, M. Kirkwood to F. B. Johnson, June 10, 1881, Box Yokohama, 1881, J. M. & Co.

83 F. B. Johnson to J. Keswick, June 16, 1879, Box Nagasaki, 1879, Gotō Shōjirō to J. Keswick, Sept. 24, 1880, Box Nagasaki, 1880, J. M. & Co.

84 C. Hooper to J. M. & Co., Oct. 18, 1880, Box Nagasaki, 1880, J. M. & Co.

85 Gotō Shōjirō to J. Keswick, Sept. 24, 1880, Box Nagasaki, 1880, J. M. & Co.

86 Ibid. Mining in Japan, p. 45, refers to these same miners as having inherited the ancient samurai spirit and morality.

87 News clipping from The Rising Sun and Nagasaki Express, Nov. 6, 1880, Box Printed Miscellaneous, C. Hooper to J. M. & Co., Nov. 8, 1880, Box Nagasaki, 1880, J. M. & Co. In 1909, Mining in Japan, p. 44, noted that “strikes of miners are almost unheard of. The absence of strikes may generally be ascribed to the kind treatment accorded to miners.”

88 F. B. Johnson to J. Keswick, Nov. 8, 1877, Box Shanghai, 1877, H. Smith to W. Keswick, Jan. 11, 1881, Box Shanghai, 1881, J. M. & Co.

89 J. Keswick to W. Walter, April 11, 1881, Box Shanghai, 1881, J. M. & Co.

90 Ōmaichi Keigetsu, Hakushaku Gotō Shōjirō, pp. 503–521.

91 Mining in Japan, p. 304; R. Holme to J. M. & Co., June 30, 1876, Box Nagasaki, 1876, J. M. & Co.

92 Hearn, Lafcadio, Out of the East (London, 1906), pp. 221–22Google Scholar.

93 A news clipping from the Japan Daily Herald, Sept. 20, 1879, stated “the government have hitherto strictly excluded the introduction of foreign capital, and the result of this … is shown in … the slow development of its mines.”