The Dawn of Commercial Trade - The birth of the Shosha / Narration

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Chapter 1: Have you ever heard of a Shosha ?

Have you ever heard of a Shosha?

“Commercial trading” is the activity of importing things that are needed into Japan, and exporting things that other countries need from Japan. A Shosha is a kind of company that conducts commercial trading as one of their main business activities.

The Shosha become partners with other companies in many different countries, and trade lots of different products all over the world.

They also operate other businesses, like making investments to ensure the supply of important natural resources that are needed in Japan, such as oil, natural gas, coal and iron ore, as well as operating convenience stores and supermarkets, and providing support for medical treatment and nursing care.

Shosha also help other countries develop by building things like power plants, water plants, airports, shipping ports and railroads.

This means that the Shosha are helping not only Japan, but also many other countries to build a more comfortable society.

This kind of Shosha was first started about 150 years ago, during a period in Japan at the end of the reign of the Tokugawa shoguns. There was an organization called Kameyama Shachu started by a famous man named Ryoma Sakamoto that is considered to be the roots of the Shosha.

What was it like at the time that Kameyama Shachu was started? What was Ryoma thinking when he created Kameyama Shachu? What kind of business did they do?

Let’s look closer at the roots of the Shosha, together with Shoma and his little sister Osho.

Chapter 2: The coming of the Black Ships, the opening of a country – the dawn of commercial trade

Shoma
“Today there is trading between lots of different countries, but when did Japan first start commercial trade with foreign nations?”
Osho
“There was a lot of trading in the really old times, up until the Heian period which ended in 1185. But, while the Tokugawa shoguns were in power during the Edo period, except for a few places in Japan, contact with foreign countries was prohibited, so Japan was isolated for more than 200 years.”
Shoma
“That’s right. The closed-door policy of Japan was broken when that famous American Commodore Perry brought the black ships to Uraga.”

The year was 1853. Huge, black warships appeared off the coast of Uraga in Kanagawa prefecture. This was the first time that such large steamships had ever been seen in Japan.

The American Commodore Perry was leading a fleet of 4 warships that were the largest and most advanced in the world at that time. His mission was to open Japan to the outside world.

At that time, the shogunate was limiting the contact with the West. The only concession was for the Dutch on the island of Dejima in Nagasaki prefecture. The Japanese people were prohibited from travelling abroad, and were not even allowed to build large ships.

However, the shogunate knew about the Opium Wars between the United Kingdom and the neighboring country of China that had occurred about 10 years earlier. They realized that refusing the demands of the Western powers with such military strength could lead to the occupation of Japan if there was a war. Therefore, in 1854 the Convention of Kanagawa was concluded, and in 1858 the Treaty of Amity and Commerce was signed with the United States, ending more than 200 years of isolation of Japan.

Shoma
“These treaties opened the five ports of Hakodate, Niigata, Yokohama, Kobe and Nagasaki, allowing anyone to engage freely in trade with foreign countries. This was called the “Ansei no Kaikoku (Ansei Treaties to open Japan).”
Osho
“Under these treaties, however, Japan was not able to set their own tariffs on the goods imported from other countries, so Japan’s position was rather weak.”

In the year that the black ships landed in Japan, as a samurai from the Tosa Domain (now Kochi prefecture), Ryoma Sakamoto had the responsibility for the coastal defense of Edo Bay.

Ryoma was stunned when he saw the intimidating black ships, and asked “How are we supposed to fight a foreign power that has warships like that?”

Chapter 3: Protecting the nation

Shoma
“Ryoma was trained as a swordsman and worked hard for Tosa Domain, where he was born and raised; but, he thought “If things stay like this, the entire country of Japan is in trouble! I want to help protect Japan!” So, in 1862, at the age of 28, he left his hometown area of Tosa Domain without official approval.”
Osho
“At that time, it was a serious crime to leave your home area without permission; but, he strongly felt that he should help protect Japan.”

Ryoma Sakamoto headed to Edo (now called Tokyo). There, he met Kaishu Katsu, an official of the Shogunate who had studied at the Nagasaki Naval Academy, visited the U.S. and was very knowledgeable about naval matters and foreign affairs.

Katsu strongly believed that Japan should establish itself as a unified nation and build a central navy, and that it was necessary to make money through trade with other countries. He was very persuasive, and Ryoma became a protégé of Katsu.

Under Katsu’s direction, Ryoma began collecting money to build the Kobe Naval Training Center and Katsu’s private naval academy in order to create a Japanese navy that could stand up to foreign powers.

He approached people in the highest levels of society, like Shungaku Matsudaira, one of the previous Fukui lords, and was remarkably successful in arranging the funding to establish the facilities.

Shoma
“Normally, it shouldn’t even be possible for Ryoma to meet such high-ranking people and get money from them. I can see that Ryoma must have been a great negotiator. That kind of negotiation skill is very important in business too!”
Osho
“In addition to Ryoma’s abilities, I think his success was also due to his sincere concern for Japan, and that he was able to convey that passion to people. Passion is also important in business.”

In September 1863, the Kobe Naval Academy was established, and in February the following year, the Kobe Naval Training Center was built. Ryoma and his colleagues studied naval technology, like navigation, as well as foreign languages and Katsu’s naval concepts.

Chapter 4: The birth of the trading company – the start of the Shosha

Osho
“Just at that time, there was a movement beginning to spread throughout Japan, to overthrow the Shogunate that was passive to foreign countries.”
Shoma
“In July 1864, the Choshu Domain sent troops to Kyoto.”
Osho
“This was called the “Kinmon Incident,” and it was the start of some big changes in Japan.”

In the Kinmon Incident, the Choshu Domain wanted to drive out the foreigners, so they fought against the Shogunate. At this, Ryoma thought that if the Japanese fought among themselves and shed blood at a time when Japan was being forced to accept unequal trading conditions with foreign countries, they could never gain an equal relationship with the foreign powers, and decided that “Japan should be cleaned up.”

Shoma
“After the Kinmon Incident, there were suspicions that the students at Katsu’s private naval academy had participated in the attacks by the Choshu Domain armies. In October 1864, Katsu was ordered to return to Edo. Later, the Naval Training Center and the naval academy were both shut down.”
Osho
“Oh no! What did Ryoma and the others do?”

Ryoma and his associates were disillusioned by the Shogunate, and started something new. They formed the “Kameyama Shachu,” a trading company in the Kameyama area of Nagasaki. It is considered to be the start of the Shosha.

Shoma
“Nagasaki was a place that Ryoma had previously visited with Katsu. He had vowed that he would someday set up a company there, and make money trading with partners from all over the world.”
Osho
“Kameyama Shachu was the first commercial trading company established by private Japanese citizens.”
Shoma
“That’s right. And that is why it is considered to be the roots of the Shosha.”
Osho
“They imported the latest western weapons and steamships, and exported specialty Japanese products like green tea and ceramics. They also tried to earn profits by training and dispatching staff to run the ships.”

There was a good group at Kameyama Shachu; trusted companions since their days at the naval academy, including Chojiro Kondo, who spoke English and was good at negotiating with foreign traders, and Yonosuke Mutsu who excelled at accounting and trade administration (and later became the Minister of Foreign Affairs, Munemitsu Mutsu.)

Even during Japan’s long period of isolation, Nagasaki had a neighborhood called Dejima that was open to Dutch traders, as well as a good harbor. Many foreign traders gathered there, so it was an ideal location to set up a trading company.

Osho
“Wasn’t trading pretty difficult in those days?”
Shoma
“It sure looks that way. There were differences between the trading customs of the foreign countries, language problems, and when ships got caught in storms and sunk, they had to take all the responsibility for the loss of cargo, and there was no insurance to cover the costs if an accident occurred.”
Osho
“Even one transaction was a big risk.”

In Nagaskai, Ryoma met an English trader named Thomas Blake Glover.

Glover had moved to Nagasaki as soon as the port was opened, and was a big power in the trade with foreign countries.

Ryoma seems to have been strongly influenced by Glover, and learned about the attitude toward business from him,

Chapter 5: Changing Japan – Ryoma’s Senchu Hassaku

Shoma
“One day, Ryoma had a big idea. The Choshu Domain was adversaries with the Satsuma Domain, who had been on side of the Shogunate during the Conspiracy of Kinmon. If these two Domains joined forces, however, there might be a chance of overthrowing the Shogunate.”
Osho
“Really?”
Shoma
“The Choshu Domain wanted to buy weapons to prepare for further conflict with the Shogunate, but the Shogunate prohibited the foreign merchants in Nagasaki from selling weapons to Choshu.”
Osho
“That sounds like a problem. What did the Choshu Domain do?”
Shoma
“Ryoma was also interested in seeing the Shogunate defeated. He made it possible for Choshu to purchase weapons by doing it in the name of their rivals, the Satsuma Domain.”

The Choshu Domain had suffered devastating damage from a powerful fleet made up of British, French, Dutch and American ships during a battle of the Shimonoseki Straits that occurred in 1864 during the same month as the Conspiracy of Kinmon.

The Satsuma Domain, on the other hand, was having trouble getting enough rice to feed their soldiers.

Ryoma had the idea of acting as an intermediary between the two sides to arrange for both of them to obtain the things they needed.

Through his friend Glover in Nagasaki, 7,500 of the latest European rifles and a steamship that the Choshu Domain needed were purchased in the name of the Satsuma Domain. The Choshu Domain prepared 500 bales (about 30,000 kg) of rice for the Satsuma Domain, with Ryoma acting as the intermediary.

In this way, Ryoma got these rival Domains to cooperate with each other, smoothing the way for the establishment of an alliance between Satsuma and Choshu (Satcho Alliance) to defeat the Shogunate.

Shoma
“The imagination to come up with new ideas, and the ability to carry them out. Connecting people with the things they want and need. This is exactly the business of a Shosha.”
Osho
“As a result of the Satcho Alliance that Ryoma helped to establish, the Satsuma Domain did not participate in an 1866 attack by the Shogunate on Choshu.”
Shoma
“That’s right. And thanks to Ryoma, Choshu was prepared with the latest weapons and was able to repel the shogun army.”
Osho
“This defeat was a turning point for the Shogunate, and their power began to weaken.”

After this fight between the Shogunate and Choshu, Ryoma thought there should be no more bloodshed by Japanese people fighting each other.

He continued to look for ways to resolve the conflicts without military force.

In 1867, while traveling to Kyoto on a Tosa Domain ship, Ryoma devised the “Senchu Hassaku,” a proposal for an eight point program of reform in which the Shogunate would return power to the Imperial court, without the use of any force.

Shoma
“Ryoma believed that if the Shogunate could agree to his Senchu Hassaku, it would be possible to change Japan without any more fighting.”
Osho
“Later, the Senchu Hassaku was rewritten as the Taisei Hokan proposal and presented to the Shogunate by the Tosa Domain. In October 1867, the regime was changed without any fighting, and the Taisei Hokan (restoration of imperial rule) was achieved.”
Shoma
“Ryoma’s creativity and his commitment to unifying Japan were really amazing.”

Chapter 6: Shosha working to achieve a society of abundance

One month after the restoration of political authority to the Emperor, Ryoma was attacked by assassins in Kyoto and was killed.

With the death of Ryoma, his Kameyama Shachu also disappeared; but later, various trading companies were born, and have continued to expand their trade with countries all over the world.

Ryoma’s big dreams were adopted by many young people, and their will and determination led to the Meiji Restoration, which transformed Japan. It was a time of great change.

The spirit of Kameyama Shachu is still a part of the modern Shosha, and continues to live in the mission statements and corporate mottos of the Shosha.

Osho
“Ryoma’s dreams have shaped our modern world.”
Shoma
“That’s true. And today the Shosha continue to take on the challenges to realize the dreams of people and a more abundant society, not only in Japan, but all over the world.”
Osho
“Thanks for watching!”
Shoma
“I hope you found the Shosha interesting.”
Shoma & Osho
“See you again! Bye!”