Michita Nakamura

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

Around Yukichi Fukuzawa, there were many businessmen who succeeded by utilizing 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 approach 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. He was born into a family whose specialties were 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 he was a master of the abacus in particular. Nakamura, who had become interested in Fukuzawa after reading "Things Western (Seiyō Jijō)," visited Teppozu without an introduction when he went to Edo on domain orders in 1866 and was able to meet Fukuzawa. Fukuzawa welcomed Nakamura, who was close to him 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, but he never formally studied at the Keio University Juku; rather, he was an ally to whom Fukuzawa could entrust practical business matters.

In October 1872, upon Fukuzawa's recommendation, Nakamura joined Maruya Shosha (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 Maruya Shosha in 1873. He also established the Asakuraya Deposit Office, a banking organization, in his hometown of Toyohashi, and worked hard to establish the Eighth National Bank, which opened in February 1877.

Afterward, he served as the head of Atsumi District in Aichi Prefecture, but resigned at Fukuzawa's urging 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, becoming the first president of the Yokohama Specie Bank in February 1880. 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 to 90 yen from a par value of 100 yen. In May 1884, Maruya Bank reached a deadlock, and he also worked hard to resolve that situation.

Later, he sold the Specie Bank shares, which had risen due to the economic recovery, to Mitsui for 300 yen. Using that as 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 new Rengakodo (Auditorium) at Keio University (construction started in 1886, completed in 1887, and used as a school building when the college was established in 1890) and 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 became the local manager, was arrested in the secret letter incident addressed to the Korean government, and the plan fell through.

Now, 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 reserves such as broker identity deposits and trading deposits 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 1 year and 6 months of imprisonment with labor, a 15 yen fine, and 6 months of surveillance).

Regarding this incident, there are theories that the Matsukata Cabinet tried to destroy Nakamura, a source of funds, 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 addressed to Minister of Home Affairs Yajiro Shinagawa.

"The talk 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 shows that Mutsu, at least, intended to attack Okuma and the Rikken Kaishinto (Constitutional Progressive Party) by targeting Nakamura as their source of funds. However, the "efforts" of Shuichiro Saito, the Officer of the Bureau of Commerce and Industry of the Ministry of Agriculture and Commerce, are thought to refer to the fact that he had likely been working on the organizational reform of the Rice Merchant Association for some time. The Ministry of Agriculture and Commerce 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 prices caused by rice 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 security deposits and was worried that the association could not settle accounts immediately. For the Ministry, the rumors of malpractice by President Nakamura, Fukuzawa's ally, became a golden opportunity to win public opinion over and proceed with reforms.

To incite a split between the Liberal Party and the Kaishinto, Mutsu requested Home Minister Shinagawa to avoid stopping or dispersing public speaking events planned by Kentaro Oi and others of the Liberal Party regarding the Rice Merchant Association Incident as much as possible, as follows: "This public speaking will attack Nakamura, and its aftereffects will 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 dispersed if it is generally acceptable (legally permissible). These things are difficult to state clearly even to subordinates, but I ask for your discretion in giving orders to the Metropolitan Police Department" (Ibid., pp. 161–162).

In the eyes of 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 source of funds, strike 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 left the government. Ten years later, in order to oust the Okuma faction again, Nakamura was singled out by the power of politics and forced out of the business world. Fukuzawa lamented, "Michita Nakamura has finally collapsed. The shortage of money is said to be about 400,000. Now, setting Nakamura aside, the existence of the Rice Merchant Company has become 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 whose sentence of 1 year and 6 months of imprisonment (1 year and 2 months excluding 4 months of detention pending trial) was finalized, took responsibility by giving up his private fortune. For a time, he had Fukuzawa speak to Hikojiro Nakamigawa in hopes of a loan from Mitsui, but when that failed, he decided to live in seclusion and never appeared on the public stage again. Regarding his life after retirement, stories have been passed down that he succeeded as the head of the Yuraku-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 there are several letters from Fukuzawa 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 having the kind of prudence to secretly accumulate wealth or the temperament to use low cunning. Fukuzawa likely described him as a hermit with that point in mind as well. Fukuzawa continued to send letters and share news to maintain their relationship even after the bankrupt Nakamura went into seclusion. In the last letter to Nakamura found so far (dated January 5, 1898) among the 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 up in political strife; rather, his clean way of living, taking responsibility by giving up his private fortune without a single word of excuse, is worthy of special mention.