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Yokohama Specie Bank

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Former head office building in Yokohama, designed by architect Tsumaki Yorinaka and completed in 1904;[1] since 1967 seat of the Kanagawa Prefectural Museum of Cultural History

The Yokohama Specie Bank (横浜正金銀行, Yokohama Shōkin Ginkō) was a Japanese bank founded in Yokohama in 1880, which dominated the Japanese market for trade finance in subsequent decades. During the 1920s, it accounted for nearly 50 per cent of foreign exchange transactions for Japanese exports and imports, and in 1929 was Japan's largest and most profitable bank aside from the Bank of Japan.[2] It also played a significant role in Japanese colonial ventures, not least in Manchuria and elsewhere in China.[3]

In 1946, following the loss of Japan's overseas possessions, the Yokohama Specie Bank was reorganized and rebranded as the Bank of Tokyo, one of the predecessor entities of MUFG Bank.

Background

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Following the signing of the Japan-U.S. Treaty of Amity and Commerce in 1859, Yokohama was opened as a port for foreign trade and quickly grew in importance. Through the New Currency Act of 1871, Japan implemented a policy of convertibility with 1 yen corresponding to 1.5g of pure gold. Silver coins were also issued for trade with Asian countries who favoured silver as a currency, thus establishing a de facto gold-silver standard.[4] Japan experienced high inflation in the late 1870s, however, caused by the 1877 Satsuma Rebellion and the outflow of a large amount of silver due to increased imports, generating a large discrepancy between government-issued banknotes and specie coin. This became a source of trouble for the merchants in Yokohama, as specie rather than banknotes came to be demanded for foreign trade.

Establishment and early history

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The creation of the YSB was initiated by statesman Ōkuma Shigenobu in alliance with Yokohama merchants, and submitted in November 1879 to the chief minister of the imperial government or Daijō-kan.[5] The bank was incorporated as the Japanese government approved the request on 28 February 1880.[6] It was created by a syndicate of 22 individuals with the support of Fukuzawa Yukichi and Inoue Kaoru on the basis of the National Bank Act, aiming to ensure the availability of specie for the trading community. The bank had an initial capitalization of three million Yen, of which one million was invested by the Ministry of Finance. The bank was modeled after the Hongkong and Shanghai Banking Corporation, which had a great influence on Japan's overseas trade and foreign exchange at the time. The new bank opened an agency in New York and a branch office in Kobe, both also in 1880. The next year, the bank opened a sub-branch in London, which was upgraded to a branch in December 1884 after the bank was appointed by the Ministry of Finance to manage Japan's foreign exchange.

During the 1880s, the YSB came under increasingly direct control of the ministry of finance. Ōkuma's successor Matsukata Masayoshi engineered the dismissal of its first president Nakamura Michita in June 1882 and his eventual replacement in March 1883 by an ally, Hara Rokuro.[7] In July 1887, the government promulgated the Yokohama Specie Bank Ordinance, which stipulated that branch offices be established everywhere that was regarded as important to Japanese foreign trade and authorized that an administrator from the Ministry of Finance would be assigned to monitor the bank's operations. This Ordinance was revised in 1889 to authorize the Japanese government to overrule any decision by its directors, and if deemed necessary, to replace the directors with others of its choosing.[8]: 3-4 

The YSB opened an office in Shanghai in 1893, the first of many offices which would be established throughout China. In 1894 it opened a branch in Bombay. In 1899 it upgraded its offices in Shanghai, Tianjin and Hong Kong to fully-fledged branches.[9]: 172  By 1900 it also had branches in Beijing and Lyon, and its foreign lending was four times that of all the Zaibatsu banks together.[10]

Early 20th century

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The YSB established a first toehold into Manchuria by opening a branch in Yingkou in 1902.[9]: 172  With the Russo-Japanese War of 1904-1905, it further established branches in the Kwantung Leased Territory and served as paymaster for the Imperial Japanese Army. From 1906, the bank was permitted to issue its own gold-convertible banknotes for use in the Kwantung Leased Territory and in China. In July of the same year, Japan's first leased line telephone opened between the Bank of Japan and the Yokohama Specie Bank head office. In 1911, the bank signed an underwriting agreement with the Imperial Chinese Chunghwa Post for the establishment of a postal banking system in China. New branches opened in 1909 in Dalian, 1910 in Honolulu, 1912 in Harbin, and 1915 in Sydney.[11] By 1911, the YSB was financing 45 percent of Japanese international trade, up from around 20 percent in 1887.[8]: 4 

In the late 1900s, the YSB had gained a monopoly on yen-denominated note issuance in Manchuria.[9]: 172  In December 1917, however, it lost that privilege which was transferred to the Bank of Chōsen. Simultaneously, the Bank of Chōsen took over the YSB branches in Lüshun, Liaoyang, Tieling, and Andong.[9]: 98  On 4 October 1918, London branch sub-manager S. Ujie, his wife and three sons, together with bank employee Takashi Aoki and wife Sueko, died when German U-boat UB-91 sank the Hirano Maru.[12][13]

Interwar period

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By 1919, the YSB had an expanded network of 30 overseas branches, of which 7 in Manchuria, 7 in the rest of Mainland China, 5 in Southeast Asia and Australia, 3 in India, 2 in South America, and 6 in Europe and the United States, including the most important by far in London.[14] More branches opened in Qingdao (1919), Hankou (1921), Vladivostok (1924), Mukden (later Changchun, 1925), and Tianjin (1926).[citation needed] In 1927, it inaugurated a new building for its branch in Tokyo, across the street from the Bank of Japan.[15]

During the 1920s, the YSB came under increasing competitive pressure from Mitsui Bank, Bank of Taiwan and others.[8]: 4  Even so, by 1929 the YSB had a total 37 offices outside of Japan and its colonies, by far the largest international network of any Japanese bank.[8]: 3  It regained market share in the 1930s in the environment of tightened exchange controls.[8]: 4 

Wartime development and establishment of the Bank of Tokyo

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The bank continued in its role as the paymaster for the Imperial Japanese Army during the Second Sino-Japanese War and Pacific War, assisted by its widespread branch office network. Its assets in New York and Honolulu were seized by the United States government in 1941. In 1946, following the surrender of Japan, the bank was officially merged with The Bank of Tokyo as part of anti-zaibatsu ordinances issued by the American occupation authorities. The bank was finally liquidated in 1963.[16]

Presidents

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  • December 1879 – July 1882: Nakamura Michita [ja]
  • July 1882 – January 1883: Ōno Mitsukage
  • January – March 1883: Shirasu Taizō
  • March 1883 – March 1890: Hara Rokurō [ja]
  • March 1890 – April 1897: Sonoda Kokichi
  • March 1897 – March 1906: Sōma Nagatane [ja]
  • March 1906 – June 1911: Takahashi Korekiyo
  • March 1911 – February 1913: Mishima Yatarō
  • February - September 1913: Mizumachi Kesaroku [ja]
  • September 1913 – March 1919: Junnosuke Inoue[17]
  • March 1919 – March 1922: Kajihara Nakaji
  • March 1922 – September 1936: Kodama Kenji
  • September 1936 – March 1943: Toshikata Ōkubo
  • March 1943 – June 1945: Hideshige Kashiwagi
  • June 1945 – July 1946: Shōji Arakawa
  • June – December 1946: Itsuki Takada

Former branches

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See also

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References

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Notes

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  1. ^ "Yokohama Specie Bank, Yokohama, c. 1920". Old Tokyo. 25 January 2018.
  2. ^ Hiroaki Yamazaki (2010). "The Yokohama Specie Bank during the period of the restored gold standard in Japan (January 1930–December 1931)". In Youssef Cassis (ed.). Finance and Financiers in European History 1880–1960. Cambridge University Press.
  3. ^ The Yokohama Specie Bank Building – built in 1924 (No. 24, The Bund) Archived 12 September 2011 at the Wayback Machine
  4. ^ Japan Currency Museum (日本貨幣博物館) permanent exhibit
  5. ^ Norio Tamaki (1995), "Chapter 8 - The search for stability: the last bank controversy, 1879–1881", Japanese Banking A History, 1859–1959, Cambridge University Press, pp. 46–54, doi:10.1017/CBO9780511586415.013, ISBN 978-0-521-49676-6
  6. ^ Kato Yuzo (1990), Yokohama Past and Present, Yokohama City University
  7. ^ Norio Tamaki (1995), "Chapter 10 - The Yokohama Specie Bank, or Shokin, 1882–1897", Japanese Banking A History, 1859–1959, Cambridge University Press, pp. 69–73, doi:10.1017/CBO9780511586415.016, ISBN 978-0-521-49676-6
  8. ^ a b c d e Makoto Kasuya (January 2009), The Activities of a Japanese Bank in the Interwar Financial Centers: A Case of the Yokohama Specie Bank (PDF), Center for Advanced Research in Finance
  9. ^ a b c d Howard Kahm (2012), Colonial Finance: Daiichi Bank and the Bank of Chosen in Late Nineteenth and Early Twentieth Century Korea, Japan, and Manchuria, University of California Los Angeles
  10. ^ Dallas Finn (1995), Meiji Revisted: The Sites of Victorian Japan, Weatherhill
  11. ^ "Japan-led project finance brings Australia's infra".
  12. ^ "The Torpedoed "Hirano Maru"". The Singapore Free Press and Mercantile Advertiser. 13 December 1918. Retrieved 4 January 2012.
  13. ^ "独政府を相手に損害賠償の訴え". Osaka Asahi Shinbun. 10 July 1919. Retrieved 4 January 2012.
  14. ^ Norio Tamaki (1995), "Chapter 18 - The expansion of special banking, 1911–1919", Japanese Banking A History, 1859–1959, Cambridge University Press, pp. 118–125, doi:10.1017/CBO9780511586415.026, ISBN 978-0-521-49676-6
  15. ^ "Commemoration of the Completion of the New Tokyo Branch of the Yokohama Specie Bank". Edo-Tokyo Museum Digital Archives. 1927.
  16. ^ Michael Schiltz (30 July 2020), "Trade in Gold and Silver: The Yokohama Specie Bank", Asian History, doi:10.1093/acrefore/9780190277727.013.569, ISBN 978-0-19-027772-7
  17. ^ Tamaki, Norio. (1995). Japanese banking: a History, 1859-1959, p. 120, p. 120, at Google Books
  18. ^ "Yokohama Specie Bank Building". hiChinatown. 2020.
  19. ^ "The Yokohama Specie Bank, Ltd.", The Economist, 7 October 1933
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