Michita Nakamura

2017/01/01

Image: Collection of Maruzen-Yushodo Co., Ltd.

Around Yukichi Fukuzawa, there were many successful businessmen who utilized their talents. Michita Nakamura, the subject of this article, was one of them. Building on the content already introduced by Masafumi Tomita and Tatsuro Sakai in "Mita-hyoron (official monthly journal published by Keio University Press)," this article will focus on the relationship between Fukuzawa and Nakamura and attempt to uncover the truth behind Nakamura's downfall, which has long been considered a mystery.

Michita Nakamura was born in 1836 in what is now Toyohashi City, Aichi Prefecture. His father was Teppei Nakamura, an accountant for the Yoshida Domain in Mikawa Province and a low-ranking samurai with a stipend for two people. The family specialized in the martial art of Ohen-ryu Jujutsu and the abacus, and Michita also trained students as an instructor at schools for both martial arts and the abacus. It is said that his abacus skills were at the level of a master. Nakamura, who had become interested in Fukuzawa after reading "Things Western (Seiyō Jijō)," visited Teppo-zu in 1866 on domain orders and was able to meet Fukuzawa without an introduction. Fukuzawa welcomed Nakamura, who was close in age, like an old friend. When Fukuzawa asked whether silk or hemp thread would be better for binding the books he was publishing, Nakamura replied that he should leave that to the craftsmen and concentrate on writing. Nakamura is evaluated as the person who best understood Fukuzawa's "Method of Bookkeeping" and applied it to business practice. Although he never formally studied at the Fukuzawa Juku, he was an ally to whom Fukuzawa could entrust practical business matters.

In October 1872, upon Fukuzawa's recommendation, Nakamura joined the Maruya Company (later Maruzen), managed by Yuteki Hayashi, and became a co-manager. Nakamura revamped Maruya's ledgers by introducing Western-style bookkeeping and began lecturing on the "Method of Bookkeeping" within the Maruya Company in 1873. In his hometown of Toyohashi, he also established the Asakuraya Savings Office, a banking organization, and worked hard to establish the Eighth National Bank, which opened in February 1877.

Later, he served as the head of Atsumi District in Aichi Prefecture, but resigned after being urged by Fukuzawa to move to Tokyo. This was because Fukuzawa and Shigenobu Okuma, who was then a Sangi (Councilor), agreed that trade finance should be handled by Japanese banks rather than foreign ones. Nakamura was recommended to Okuma by Fukuzawa as a reliable person and engaged in the establishment of the bank as the person in charge of practical operations. In February 1880, he became the first president of the Yokohama Specie Bank. However, amid the economic cooling caused by the Matsukata Deflation, Nakamura resigned as president in July 1882 to take responsibility for bad loans and was forced to take over 2,000 shares of Specie Bank stock, which had fallen from a par value of 100 yen to 90 yen. In May 1884, Maruya Bank reached a deadlock, and he also worked hard to resolve that situation.

Subsequently, he sold the Specie Bank shares, which had risen due to the economic recovery, to Mitsui for 300 yen. Using that capital, he worked on the redevelopment of the Komaki Silver Mine (Akita Prefecture) with Masanori Sugimoto and others from his hometown and succeeded. With the money he earned, he settled the affairs of Maruya Bank and donated 10,000 yen each to the construction of the Keio University Rengakodo (Auditorium) (construction started in 1886, completed in 1887, and used as a school building when the college was established in 1890) and the Tokyo Senmon Gakko (now Waseda University). By this time, he had gained Fukuzawa's trust to the point of being entrusted with the management of the Fukuzawa family's assets. For Fukuzawa, whose business involvements were increasing beyond school management to include the publication of the "Jiji Shinpo," Nakamura was an indispensable person in terms of funding to maintain his enterprises.

Furthermore, Fukuzawa frequently introduced people to Nakamura or consulted with him. He asked Nakamura to mediate with Shuzo Aoki to support Kim Ok-gyun and also introduced him to Buhei Ogawa of the Naganuma Incident. In 1887, in order to put his theory of North American immigration into practice, Fukuzawa jointly purchased land on the outskirts of San Francisco with Nakamura and recruited immigrants to engage in farming. However, Kakugoro Inoue, who was the local manager, was arrested in the secret letter incident addressed to the Korean government, and the plan fell through.

Nakamura used the large sum of money obtained from selling the Komaki Silver Mine to Mitsubishi to buy up shares of the Tokyo Rice Merchant Association, a rice exchange, and became its president in 1888. However, on June 17, 1891, the Ministry of Agriculture and Commerce suddenly conducted an extraordinary audit of the Tokyo Rice Merchant Association. Simultaneously, the Ministry of Finance entered and investigated the head and branch offices of the Sixth Bank, which was a business partner of the Rice Merchant Association. This was said to be because a tip-off was made to the government that President Nakamura had privately misappropriated 300,000 yen from the reserves, such as broker security deposits and transaction guarantees, that should have been kept within the association. This is the so-called Rice Merchant Association Incident. The Rice Merchant Association and the Sixth Bank were suspended from operations, and Nakamura was detained and prosecuted by the Ministry of Agriculture and Commerce (the sentence was one year and six months of rigorous imprisonment, a 15-yen fine, and six months of surveillance).

Regarding this incident, there are theories that the Matsukata Cabinet attempted to destroy Nakamura, a source of funding, as part of an attack on their political rival Okuma, or that Nakamura was reported to the government in retaliation for refusing a request for political funds from members of the Liberal Party. However, the truth of the incident has been said to be "shrouded in darkness" (Tatsuro Sakai, "Yuteki Hayashi and Michita Nakamura," Mita-hyoron (official monthly journal published by Keio University Press) 1086, p. 29). I would like to approach the truth of the incident using newly discovered materials. It is a letter dated June 29 from Minister of Agriculture and Commerce Munemitsu Mutsu to Minister of Home Affairs Yajiro Shinagawa.

"The matter of the Rice Merchant Company is also mostly settled thanks to the efforts of Saito and others. Today, the Ministry of Agriculture and Commerce filed a complaint against Michita Nakamura with the court. Nakamura will likely be detained by tomorrow. If things go well, we may be able to wipe out the nest of thieves" ("Yajiro Shinagawa Related Documents" 7, Yamakawa Shuppansha, 2009, p. 161).

This letter reveals that Mutsu, at the very least, intended to attack Okuma and the Kaishinto (Constitutional Progressive Party) by targeting Nakamura as their funding source. However, the "efforts" of Shuichiro Saito, the Officer of the Bureau of Commerce and Industry at the Ministry of Agriculture and Commerce, likely refer to his long-standing work on the organizational reform of the Rice Merchant Association. The Ministry had enacted the Exchange Ordinance in 1887 to strengthen control over the Rice Merchant Association, but its implementation had been postponed partly because Fukuzawa criticized the ordinance as a reform that did not fit the actual situation. Furthermore, the Rice Merchant Association had earned a bad reputation in public opinion due to the soaring rice prices caused by speculation during the crisis of the previous year (1890). Fukuzawa had also conveyed to Nakamura public rumors pointing out the lack of transparency in the handling of margin money and was worried that the association could not settle accounts immediately. For the Ministry, the rumors of misconduct by President Nakamura, Fukuzawa's ally, became a perfect opportunity to win over public opinion and proceed with reforms.

To incite a split between the Liberal Party and the Kaishinto, Mutsu requested Home Minister Shinagawa to take care not to cancel or dissolve the public speaking events planned by Kentaro Oi and others of the Liberal Party regarding the Rice Merchant Association Incident as follows: "This public speaking will attack Nakamura, and its aftereffects may reach as far as Waseda," "This opportunity may show signs of a split between the two parties," "I would like the public speaking to finish its attack without being stopped or dissolved if it is generally acceptable (legally permissible). While these matters are difficult to state clearly to subordinates, please give orders to the Metropolitan Police Department in some way through your discretion" (Ibid., pp. 161-162).

To the clan bureaucrats who were struggling with the offensive of political party forces in the House of Representatives, this incident must have appeared as a once-in-a-lifetime opportunity to cut off Okuma's funding source, strike at Fukuzawa who stood in the way of exchange reform, and create a rift in the relationship between the Liberal Party and the Kaishinto. After the Political Crisis of 1881, politicians and bureaucrats of the Okuma and Keio factions who lost the power struggle retired from public office. Ten years later, in order to oust the Okuma faction again, Nakamura was singled out by political power and forced to fall from the business world. Fukuzawa lamented, "Michita Nakamura has finally been ruined. The shortfall of money is said to be about 400,000. Now, apart from Nakamura, the existence of the Rice Merchant Company has become almost a national issue, and it is as if Nakamura has already committed harakiri" ("Collected Letters of Yukichi Fukuzawa" 7, p. 90), suggesting a connection with the Rice Merchant Association reform.

Nakamura, who fell from power due to the Rice Merchant Association Incident and was sentenced to one year and six months of rigorous imprisonment (one year and two months excluding four months of detention pending trial), took responsibility by giving up his private fortune. For a time, he hoped for a loan from Mitsui and had Fukuzawa speak to Hikojiro Nakamigawa, but when that failed, he decided to live in seclusion and did not appear on the public stage. Regarding his life after retirement, stories have been passed down that he succeeded as the head of the Uraku-ryu school of tea ceremony and lived an elegant life in Aoyama with his second wife, and that he was seen in Toyohashi and Nagoya. The Fukuzawa family's cash book contains a record of lending 5,000 yen to Nakamura in 1899 and a record of 700 yen being returned at the end of the year, suggesting that he struggled to manage money. Then, on January 3, 1921, Nakamura passed away in Tokyo (aged 84). His grave is at Myoen-ji Temple in Toyohashi. The Yokohama Specie Bank presented Nakamura with 10,000 yen in merit pay the year before he died.

Regarding Nakamura's character, Fukuzawa described him as "a hermit in the economic world" ("Collected Letters of Yukichi Fukuzawa" 9, p. 107) and as having a "nature of being a poor correspondent" (Ibid. 3, p. 141). In contrast to Fukuzawa, who was a prolific writer and emphasized human relationships, Nakamura's whereabouts were often unknown, and multiple letters from Fukuzawa exist checking his location with those around him. Also, when Fukuzawa asked Nakamura, who had gone bankrupt after the Rice Merchant Association Incident, "Surely you have something prepared in secret?", Nakamura replied, "Nothing at all," surprising Fukuzawa. While Nakamura was a man of great talent, it is evident that he was far from the kind of person who would have the prudence to secretly accumulate wealth or the temperament to use low cunning. Fukuzawa likely described him as a hermit for that reason as well. Fukuzawa continued to send letters to Nakamura even after his bankruptcy and retirement, maintaining their relationship and sharing news. In the last letter to Nakamura found to date (dated January 5, 1898), out of 78 letters (including those in "Modern Japanese Studies"), Fukuzawa wrote, "I am also gradually getting older. The care of my children is over, and now I have ten grandchildren, making things quite noisy" ("Collected Letters of Yukichi Fukuzawa" 9, p. 10).

Michita Nakamura was a person who provided funds for many of the projects Fukuzawa undertook from the 1870s to the 1890s and made a great contribution to Fukuzawa and Keio University. This achievement does not disappear because of his downfall as a result of being caught in political strife; rather, his noble way of life, taking responsibility by giving up his private fortune without a single word of excuse, is worthy of special mention.