Heigoro Shoda

2018/05/01

Image: Collection of the Keio University Fukuzawa Memorial Center for Modern Japanese Studies

Heigoro Shoda, often described as a representative businessman of the Meiji era, was known as the "Chief Manager" of Mitsubishi. He laid the foundation for the Mitsubishi Zaibatsu, one of Japan's four major conglomerates, and served three generations of the Iwasaki family, starting with the founder, Yataro Iwasaki. Shoda was also a figure who studied at Keio University, taught at Keio University, and lived up to the great expectations placed upon him by Fukuzawa.

Shoda was born in 1847 in the Usuki Domain of Bungo (present-day Usuki City, Oita Prefecture) as the eldest son of Confucian scholars Gatarou and Setsuko Shoda. Although his father was a Confucian scholar, there was a movement at the time encouraging the study of Western sciences over Chinese classics, and various domains began sending their sons to study at Western learning schools in Nagasaki and Osaka. Shoda showed outstanding academic performance at the domain school, and in 1867, at the age of 19, he was selected as a domain student to study abroad and entered the Aochi Shinkei Juku, a school for English studies in Edo. After briefly moving to the Kaiseijo of the Satsuma Domain, he returned to Tokyo in 1870 at the age of 23 to enter Keio University and study under Yukichi Fukuzawa.

Immediately after entering the Juku, Shoda demonstrated insight and talent that stood out from those around him, and Fukuzawa quickly recognized his ability. In March 1871, he became a teacher at Keio University, and around 1872–1873, he also served as President. Furthermore, when the branch schools of Osaka Keio University and Kyoto Keio University were established, he was dispatched to the Kansai region and worked hard toward their founding.

In this way, Shoda demonstrated a sense for practical matters that went beyond the world of academia. Fukuzawa reportedly praised him as a "master of two swords," saying, "Whether you let him do academic work or have him use an abacus, he can do both." People also began to recommend that he enter the business world.

In 1875, Shoda joined Mitsubishi at the invitation of Ryohei Toyokawa, a cousin of Yataro Iwasaki and a graduate of Keio University.

To begin with, Fukuzawa hoped that the talented individuals who studied at the Juku would be active in the world of business rather than officialdom, both to break down the culture of "revering officials and despising the people" and to create a new society. In Shoda's case, it seems he also had a strong personal desire to test his talents in the business world.

Shoda's first major task after joining Mitsubishi was the drafting of the "Mitsubishi Steamship Company Regulations" announced in 1875. These were the company regulations Mitsubishi prepared to receive shipping subsidies from the government. It is said to be a painstaking work by Shoda that incorporated Yataro Iwasaki's philosophy. At the time, while Eiichi Shibusawa introduced the concept of a joint-stock company and argued that businesses develop by gathering capital widely and sharing wisdom among many people, Mitsubishi was a company where the head of the Iwasaki family led the organization with his own personality. This simultaneously led to the idea that whether the company made a profit or suffered a loss, it all returned to the president personally. It was Shoda who incorporated these characteristics into the company regulations. Shoda was said to be a person who put great effort into reconciling ideals with reality, and this work clearly reflects that.

Furthermore, two years after drafting these company regulations, he compiled the "Postal Steamship Mitsubishi Company Bookkeeping Method," which served as the regulations for accounting. As a result, Mitsubishi adopted double-entry bookkeeping, which Fukuzawa had advocated in his 1873 work "Bookkeeping" (Chogai no Ho), and subsequently established a modern management system.

In 1880, Shoda became a manager, a position second only to the president. He then sought to diversify the business from the core shipping industry into related fields. For example, he was involved in the establishment of Tokio Marine Insurance, Meiji Life Insurance, and Tokyo Warehouse, and brought the 119th National Bank, which had been established by former samurai of the Usuki Domain, under the company's umbrella.

In 1889, Shoda visited England. The purpose was to inspect the actual conditions of the shipbuilding industry and other sectors.

After a long journey by ship, Shoda arrived in England and was staying in London. One day, while reading a newspaper from Japan in his hotel room, he saw an article in the column section. The article stated that the Japanese government had put the parade ground in Marunouchi up for sale to build modern army barracks, but no buyers could be found. Shoda had been impressed by the streets of London, especially the landscape of the City financial district, and believed it was urgent to construct Western-style office streets in Japan. Upon reading this article, he had a flash of inspiration that Marunouchi was the perfect place for a Japanese office district.

Shoda immediately sent a telegram to Yanosuke Iwasaki in Japan, stating that Marunouchi should be purchased at once. In response, Yanosuke purchased the land in Marunouchi in 1890. This area eventually became an office district lined with brick buildings and came to be called "London Block" (Iccho London). It was as if this one corner was just like London.

Following the construction of the Marunouchi office district, another of Shoda's achievements was the reform of the Mitsubishi Heavy Industries Nagasaki Shipyard. The Nagasaki Shipyard was originally built by the Edo Shogunate in 1861. After the government confiscated it following the Meiji Restoration, it was sold to Yanosuke Iwasaki. Shoda moved to Nagasaki with his family to modernize and greatly expand this shipyard. As the Director of the Nagasaki Shipyard, Shoda established its foundation. The modernization Shoda carried out covered both hardware and software aspects.

On the hardware side, he actively sought to expand facilities and paved the way for the construction of large vessels, such as cargo-passenger ships and warships.

On the software side, Shoda's achievements spanned various areas. It is no exaggeration to say that Shoda was the one who laid the environmental foundation for the workplace to support all aspects of life—including housing, hospitals, schools, and cultural activities—to realize the wish of founder Yataro Iwasaki that "employees be able to live their daily lives with peace of mind."

Upon taking office in 1897, Shoda quickly moved to modernize the labor management system and establish a welfare system. When Shoda arrived at the shipyard, it already employed about 3,000 workers. The first thing he tackled was the creation of individual management ledgers for the workers. Through this, each worker's place of origin, age, occupation, educational background, and family situation were recorded, allowing them to be identified and managed as individuals with names.

Furthermore, he built employee housing and opened "Mitsubishi Hospital," which was the first in-house company hospital and the first Western-style hospital in Japan. Prior to its opening, injured workers—whose numbers had increased due to business expansion, larger ships, and more employees—were transported to hospitals in Nagasaki City across Nagasaki Bay, but this delayed treatment. Shoda likely recognized the need to create an environment where immediate treatment was possible.

In December 1897, he enacted the "Worker Relief Law," making the company responsible for all medical expenses related to work-related injuries. This law also established a system for paying survivor benefits to families in the event of a work-related death, a retirement allowance system with preferential benefits after five years of service, and a severance pay system. He also introduced a new internal savings system aimed at encouraging savings. This became a pioneer for modern welfare systems in Japan's heavy industry.

The opening of a school was another of Shoda's major achievements for Mitsubishi. In 1899, he established the Mitsubishi Industrial Preparatory School within the shipyard as a training institution for mid-level technicians. To establish quality in heavy industry, basic education for technicians and a welfare system that makes employees with accumulated skills want to continue working with peace of mind are two sides of the same coin. The Mitsubishi Industrial Preparatory School at the Nagasaki Shipyard made exactly that possible. For students who had completed compulsory elementary education, it taught not only factory skills but also English, mathematics, drafting, and mechanical engineering over five years, emphasizing basic education. After several name changes and organizational reforms, the school served as Mitsubishi's unique educational institution, supporting the global Mitsubishi brand until the Mitsubishi Nagasaki Shipbuilding Technical School closed in 1970.

Today, the museum at the Mitsubishi Heavy Industries Nagasaki Shipyard contains historical materials engraved with Heigoro Shoda's name, and many items on display convey Shoda's feelings for the workers at the shipyard at that time.

Shoda served as the Director of the Nagasaki Shipyard until 1906 and supported three generations—Yataro, Yanosuke, and Hisaya—as a manager for a long time before retiring in 1910. Among the Meiji-era Mitsubishi managers, many of whom were heroic and bold types, he was said to be a British-style gentleman, which was rare for Mitsubishi at the time.

As an aside, it is said that Shoda was the one who named Kirin Beer, which remains part of the Mitsubishi Group today. Records show that it was Heigoro Shoda's idea for Japan Brewery, the predecessor of Kirin Beer, to first use the "Kirin" trademark on its beer. Shoda himself was a shareholder in Japan Brewery, which likely provided the connection.

Fukuzawa is said to have consulted Shoda and relied on his cooperation for various matters, including the establishment of the Meiji Kaido, the acquisition of the Takashima Coal Mine, and job placements for his students. As a record of these interactions, more than 50 letters from Fukuzawa to Shoda still exist today. It can be said that Shoda, whom Fukuzawa met through Keio University, later became Fukuzawa's right-hand man outside the Juku.

Upon leaving Mitsubishi, Shoda proposed the construction of a library out of a desire to improve the culture of his hometown, Usuki. In 1918, he donated a wooden building using his own wealth. This building was revitalized as the "Children's Library" attached to the Usuki Library on April 1, 2003, and continues to be cherished and used today.

*Affiliations and titles are as of the time of publication.