In the eighth month of 1867 Oguri Kōzukenosuke Tadamasa ordered Minomura Rizaemon to have Mitsui's office of shogunal business issue the “Edo–Yokohama note”. It was the beginning of convertible paper money issued formally by a Japanese government. Because it was issued in the name of the “ginza”, the silver mint, it is also called the “Edo ginza note”.
A face value of 100,000 ryō, backed by the customs revenue
“Convertible paper money” means notes issued on the understanding that they can be exchanged for specie, gold or silver coin, at any time. The handling of this Edo ginza note was left entirely to Mitsui.
The shogunate handed notes to the face value of 100,000 ryō to Mitsui's office of shogunal business, to be applied to the shogunate's payments on foreign account
Mitsui's office of shogunal business carried out the business of converting those notes
What was set aside as the reserve for conversion was the customs revenue
Notes were put in where specie most easily flowed out of the country, in payments on foreign account, and their backing was sought in the customs revenue coming in from trade. The design puts a definite source of funds between the gold and the paper.
Two months later: the note current only within the Eight Provinces
Two months behind this Edo ginza note, another kind of note was issued: the gold note current only within the Eight Provinces of the Kantō. This too was exchanged for specie at Mitsui's office of shogunal business, but for this one conversion was not allowed for three years.
The method of issue was different. Through Mitsui's office of shogunal business the shogunate gave each of the principal money changers of Edo 3,000 ryō in notes, and required 2,000 ryō in specie to be paid up to the shogunate in return. From the money changer's side, he handed over 2,000 ryō in coin for paper to the face value of 3,000. The shogunate got specie in hand, and the notes flowed out into the city from the hands of the principal money changers, the centre of Edo's finance. Sakamoto Fujiyoshi calls it “an extremely ingenious method of issuing paper money”. All of this was devised and carried out by Oguri and Minomura together.
Mitsui's office of shogunal business, born of the failure of the Kokueki Kaisho
Mitsui's office of shogunal business, which became the body issuing the convertible notes, was originally Oguri's plan for a Kokueki Kaisho, a national profit exchange, in another form. The Kokueki Kaisho was a plan on a national scale: to manage in one hand the goods coming into and going out of Edo and Osaka, to set up a bidding floor for each item, and to lend money to the producers in the growing districts. It met furious opposition from the foreign merchants who held the privilege of “free trading by foreigners” at the open ports. Complaints came through diplomatic channels as well, and it grew clear that to force it through might develop into a serious diplomatic matter.
Oguri gave up carrying the Kokueki Kaisho through in full, but had Minomura Rizaemon set up Mitsui's office of shogunal business as a way of realizing part of its intent. The Edo ginza note was the paper money born on that detour. The plan of the Kokueki Kaisho itself was put into effect after 1868 by Mitsuoka Hachirō (Yuri Kimimasa), who held the imperial army's finances on Sakamoto Ryōma's recommendation.
On to the Hyōgo Shōsha, and into the Meiji era
In the same year, 1867, Oguri set up the Hyōgo Shōsha at Osaka. That company too took in the experience of the convertible note issue he had had Minomura and Mitsui carry out. By Oguri's plan, the twenty Osaka merchants who put up the capital were to issue a million ryō in gold notes, giving Japanese merchants credit so that they could stand against the foreign merchants, and at the same time meeting the costs of opening the port of Hyōgo out of the same source. Oguri held that this note issue should be changed over to a government issue in three years' time.
How heavy the work of the notes was shows in an unexpected place. Oguri urged Mitsui Hachirōemon to take the headship of the Hyōgo Shōsha, but Hachirōemon hesitated. His reason for declining was that he was already serving in many commissions, the “office for the exchange of the Edo–Yokohama gold notes” among them. He did take the post in the eighth month, but resigned it again afterwards.
Hayakawa Keison sums up Oguri's method as the man responsible for the shogunate's finances thus: “he forbade the circulation of inconvertible paper, carried through the first unified issue of convertible notes by a government in Japan, and ventured to raise a foreign loan”. Fukuchi Ōchi wrote of the shogunate's sources of funds in its last period as follows.
How the shogunate, in its last days of many troubles, found the sources for its expenses is not only a thing we look back on now with a sense of the unaccountable; even at the time the shogunate's own officials wondered at it. And that the management was pressed forward so that there was never any want to report was in truth the work of Oguri alone. (Bakumatsu Seijika)
The note issue of Mitsui's office of shogunal business and the plan of the Hyōgo Shōsha were carried on after 1868, by Minomura Rizaemon and Shibusawa Eiichi, into two bodies, the trading company and the exchange company. The former dealt in trade, the latter in finance. The Edo ginza note stands first of all in that line.
Source: Sakamoto Fujiyoshi, Oguri Kōzukenosuke no Shōgai (the life of Oguri Kōzukenosuke), Kōdansha, 1987
→ The founding of the Hyōgo Shōsha, the first joint-stock company in Japan