Chapter 15 The big shopkeeper of the Mitsui family

The first task of Inoue Kaoru when she took office was to establish the currency standard, which is the most important cornerstone of the high financial frontier.It can be seen that Inoue Kaoru's vision is quite good, and she can see the crux of the financial and financial problems at a glance. The real dilemma he faces is monetary chaos.Since the Tokugawa shogunate, Japan's currency has been depreciating continuously, and the currency standard is extremely unstable.By 1869, there were 11 types of gold coins in circulation in the Japanese market, accounting for 54% of the metal currency circulation, 7 types of silver coins accounted for 42%, and 6 types of copper coins. The respective towns also issued a variety of banknotes. The Spring and Autumn Period and the Warring States Period. 【6】At that time, Okubo Toshimichi, who was in charge of Japanese finance, and even the main minds of the entire new government basically had no financial knowledge of modern countries.At the beginning, everyone believed that the silver standard should be implemented. Originally, silver was the main currency in Japan.Therefore, in February 1868, the government announced that silver was the main currency in circulation, and Mexican silver dollars were accepted as a means of payment at treaty ports.But at this time, Ito Hirobumi, who was studying the banking system in the United States, sent a letter, arguing that the gold standard should be adopted: "Austria, the Netherlands and some other countries that are still implementing the silver standard may be due to the difficulty of converting the old currency system. If they If they can choose the currency standard again, they will undoubtedly choose the gold standard. Therefore, for Japan, the wise choice is to follow the mainstream trend of the West. If Japan establishes the gold standard, silver can still be used as a supplementary currency.”【7】Everyone I was confused about this issue at first, but since Ito Hirobumi is investigating the banking industry in the United States, it must represent the latest Western thinking, so everyone can easily unify the idea of ​​the gold standard.At the same time, the "abolishing the two yuan and changing the yuan" was carried out, and the future Japanese currency was called the yen.This is more than 70 years earlier than China.

In the year when the new Meiji government was established, it immediately sent Hirobumi Ito to the United States to investigate the banking system. It can be seen that Japan is highly sensitive to financial issues, which is far beyond the comparison of the Qing Empire.In fact, Ito Hirobumi is not proficient in financial affairs. He only learned some basic frameworks of the local banking industry in the United States, and he had no time to digest and absorb them.He strongly advocated imitating the national banking system of the United States and replicating it in Japan. As a result, the 153 banks created by the vigorous National Bank Movement were all restructured into ordinary commercial banks or private banks by the end of the 19th century.

But as far as the gold standard is concerned, Hirobumi Ito does have good judgment.Japan inadvertently stood on the side of the British Empire, which is the right position.However, due to the scarcity of gold in Japan at that time, silver was still the main currency in circulation, and the actual realization of the gold standard was delayed until 1897.When the 230 million taels of silver indemnity for the defeat of the Qing Dynasty was paid from the Bank of England in the form of pounds to the London branch of the Yokohama Specie Bank of Japan, after deducting 53% of the British war loan and the purchase of arms, the remaining money was purchased separately. British treasury bonds were exchanged for gold one after another, and they were shipped back to Japan in batches, becoming the foundation of the gold standard.

Kaoru Inoue wanted to implement the new financial policy, and she had no money, so she naturally had to deal with the Mitsui family, Japan's largest financial backer, and the relationship between the two parties quickly became hot.Since Mitsui has made great contributions to the establishment of the new government, the reward for meritorious deeds will also be greatly praised, not to mention that there will be more places for Mitsui in the future, so Kaoru Inoue handed over the fat job of managing the treasury to Mitsui.However, in order to show fairness, Mitsui has to share this big cake with the other two old banks.

In 1871, when the Japanese National Mint began to mint new coins, Mitsui immediately got a job as a government chartered agent, responsible for recycling all the old coins in circulation throughout the country, and then promoting the new currency. After all, Kaoru Inoue had stayed abroad to see the world. He strongly suggested that the Mitsui family transform the traditional and outdated money bank bank into a modern bank in Europe and America.When Mitsui realized that the bank could issue its own banknotes, it immediately understood the huge benefits in the middle.With 75% of the reserve fund to issue banknotes, isn't the over-issued part just empty-handed wolves?Mitsui finally realized the secret that bank credit money can be magnified.How can such a good thing be let go, Mitsui immediately applied to the government for the right to issue banknotes of 1.5 million to 2 million yen, and it must have the effect of national legal tender.Mitsui dreams of becoming "Japan's Bank of England"!

In July 1871, Mitsui submitted an application for a bank license.This is the first ever application for a banking license in Japan. In August, the approval document from the Ministry of Finance came down, which also included the time for Inoue Kaoru to submit to the cabinet for approval, which was extremely efficient.Even better, the banknotes already printed by the government in the United States will be handed over to Mitsui immediately, and Mitsui will issue them directly, saving even printing. Mitsui was in ecstasy, but bad news came.Due to Ito Hirobumi's suggestion, the government suddenly changed its mind and wanted to learn from the United States to establish a national banking system.The so-called national bank is not a government-run bank, but a joint-stock bank with the power to issue banknotes.However, Mitsui prefers a private banking system that the family can fully control, and has little interest in cooperating with others.In order to compensate Mitsui, Kaoru Inoue handed over the issuance of 6.8 million yen fiscal bonds and 2.5 million colonial certificates to Mitsui.Both of these government bills are banknotes that claim to be convertible into gold coins, but they cannot be cashed because Japan does not have so much gold.Although Mitsui has also made a lot of money, he still misses the huge temptation of a bank that can issue banknotes. [8] With Kaoru Inoue repeatedly doing work, Mitsui reluctantly agreed to form a joint venture with two old banks to establish the First National Bank, which is mainly responsible for managing the national treasury.This is a huge deal, and all the country's fiscal revenue has to pass through its hands, which is equivalent to getting an astronomical amount of funds. Whether it is lending or investing, Mitsui's financial strength has become super strong.The fly in the ointment is that such a great benefit should be shared with others.

The opportunity to eliminate the opponent finally came. Japan’s Ministry of Finance “suddenly” realized that the joint-stock First National Bank was not necessarily reliable if all the country’s money was deposited, and planned to conduct a surprise inspection to see if the three major shareholders had sufficient capital.Due to Kaoru Inoue's tip-off, Mitsui prepared funds in advance, while the other two immediately showed their flaws.Because they couldn't come up with enough cash, they were forced to close the door by the government. With the help of Kaoru Inoue, Mitsui finally monopolized the treasury manager of the First National Bank.

No wonder Kaoru Inoue's nickname is "Mitsui's Big Treasurer" in Japanese politics.