Twentieth Century Chronicle

Page 176

The bureaucrats, who had always advocated for a strict crackdown on peasant movements and liberal democratic thought, showed remarkable restraint this time in the face of the public outcry over the expropriation of land by landlords in the Toyo Keizai Shimbun. They did not visit the newspaper to warn it or demand that it change its reporting direction. As a result, public opinion continued to ferment throughout late July, and even the Democratic Party members in the House of Representatives felt that reforming the current land system seemed to have become a unanimous desire of the public.

At this point, reducing the military and streamlining state spending were no longer the focus of public attention; rather, promoting land system reform became the major concern. This led to a split among agrarian capitalists. Conservatives finally stated their position on this crucial issue: they opposed any changes to the land system, while reformists believed that land could be appropriately adjusted, but opposed the state forcibly seizing land from landlords.

The split among agrarian theorists caused turmoil among all parties in the parliament, forcing Hara Takashi of the Seiyukai to visit Prime Minister Saionji in order to understand the government's views on the land reform issue, which was the focus of public opinion at the time.

Although Hara Takashi has left the current government, he remains the core of the Seiyukai party, and an increasingly important one at that. While the Seiyukai has become the largest party in the parliament, its membership is still less than 4, representing less than 3% of the 150 million eligible voters.

Therefore, after Saionji formed the cabinet, Hara Takashi began to promote reforms to the Seiyukai. On the one hand, he invited technocrats to join the Seiyukai to formulate the party's economic policies, and on the other hand, he united with local dignitaries in an attempt to break down the localism within the current Seiyukai.

The prominent members of the Seiyukai (Political Friends Association) can be divided into eight major factions: Kyushu, Chugoku, Shikoku, Kinki, Hokushin, Tokai, Kanto, and Tohoku. Each faction has its own representatives, and even its own party groups and staff systems. This is a historical legacy of the Seiyukai's founding, indicating that the organization was not established for a unified political ideology, but rather for the sake of power.

Matsuda Masahisa, as the leader of the Kyushu faction, was a moderate within the party, while Hara Takashi was a radical who advocated for party reform. Hara Takashi clearly understood the meaning and goals of a political party better than Matsuda Masahisa or other party leaders. Therefore, after Saionji formed his cabinet, he actively promoted the transformation of Seiyukai's political ideology.

Before forming the cabinet, many members of the Seiyukai had close ties with the Progressive Party and were anti-tax advocates, including Hara Takashi. However, after Saionji formed the cabinet, Hara Takashi switched to supporting proactive fiscal policies to win over technocrats, while at the local level he fully supported the local elites' monopoly on politics, thus creating an alliance between central technocrats and local elites.

The policy of nationalizing private railways was precisely in the interests of this alliance. Although the nationalization of private railways was forced to be shelved due to the Navy's sudden intervention, Hara Takashi did not believe that his party reform policy was wrong. On the contrary, he realized the importance of cooperating with the military. If he had been able to obtain the Army's support beforehand, he would not have been intercepted by the Navy at the cabinet meeting.

Therefore, after resigning as Minister of Home Affairs, Hara Takashi focused his energy on contacting the army. Katsura Taro, who was forced to step down, was also trying to find political allies. Katsura Taro was also dissatisfied with his downfall. He felt that he had not been able to truly express his political ideas to the people before being brought down by public opinion. He believed that it was due to unfavorable timing rather than his own incompetence.

Katsura Taro knew he wasn't Yamagata Aritomo and couldn't readily use the Emperor's name to fight public opinion, so he wanted to cooperate with the Kuomintang in hopes of a comeback. The contact between Hara Takashi and Katsura Taro was entirely a political alliance based on mutual benefit.

However, before Hara Kei could sort out the relationships within the party, the land reform issue ignited the conflict between local luminaries and farmers, which also caused a split within the Seiyukai. Of course, he couldn't let these local luminaries be disappointed in the Seiyukai, so he hurriedly came to pay a visit to Prime Minister Saionji.

Saionji Kinmochi summoned Hara Takashi immediately. He still trusted this pillar of the Seiyukai quite a bit, and even though Hara's proposed plan to nationalize private railways failed, he didn't think Hara would be discouraged. So when he saw Hara, he couldn't help but complain a few times, "Your departure from the government has really made me turn a lot of gray hair... Matsuda can't control the bureaucrats in the Ministry of Home Affairs, and the situation is getting more and more chaotic."

Hara Takashi was already used to Saionji's speaking style. He knew that sometimes taking Saionji's words seriously would only cause trouble for himself. When he was still in the Ministry of Home Affairs, Saionji probably told Matsuda that he had made quite a few enemies for the cabinet as Minister of Home Affairs.

Therefore, after exchanging a few pleasantries with Saionji, Hara Kei got to the point: "Recently, criticism of the land system has been rampant, and there are countless rumors about major reforms to the land system. Doesn't the government intend to curb this? If rumors are allowed to influence politics, public opinion will become increasingly unrestrained in the future. I don't think this is a good thing for the country."

After looking at Hara Kei for a few seconds, Saionji said, "Indeed, we can't let rumors affect politics, but the country is currently facing financial difficulties. It's better for the people to focus their energy on the issue of land system reform than to let them keep focusing on the country's financial problems."

This war cost us at least 13 to 14 billion yen, and if we include the post-war recovery efforts, the figure is estimated to be well over 15 billion yen. According to the Ministry of Finance's calculations, we will have to rely on loans for at least ten years. Therefore, we urgently need to find new sources of funding to solve the government's financial problems.

Regarding land system reform, frankly, that is also a possible option…

Hara Takashi frowned and said, “Your Excellency, the land system may indeed have its unfair aspects, but it is probably inappropriate for us to push for land reform. Many of our comrades in the Seiyukai are prominent figures from the local area, and they all oppose land reform. Your decision may cause a split within our party. I urge Your Excellency to consider this issue carefully.”

Saionji Kinmochi scratched his head, then said with a troubled expression, "Actually, this isn't my opinion, but rather the view of many people. Of course, they don't really want to push for land system reform nationwide; they just hope that at this time, the public can patiently wait for the government to make a decision."

Therefore, we might choose one or two places as pilot areas to delay the process until the economy improves. Then we can declare the pilot program a failure and maintain the status quo. Even if some members of the Political Friends Association oppose it, they cannot hinder the government's overall strategy.

Hara Takashi realized that there were downsides to leaving the government. If he were still the Minister of Home Affairs, he would know exactly what changes had occurred, but now he could only guess. Saionji's words almost indicated that the pilot land reform was unstoppable, and even if it caused a split within the Seiyukai, he would not back down. This was a very bad sign.

Yuan Jing pondered in silence for a moment before finally speaking again and asking, "Does this opinion of many people include the military?"

After a few seconds of contemplation, Saionji nodded and replied, "While the Army's stance is still unclear, the Navy is in favor."

Suddenly remembering something, Yuan Jing asked again, "Is the Navy's support for land reform related to the Navy's proposed plan to strengthen the industrial base?"

Saionji nodded in agreement, and Hara Kei thought for a moment before asking, "So where will the pilot site be chosen?"

After pondering for a moment, Saionji said, "We decided to choose the Kanto region. Many people prefer to find a place near Tokyo to test it, so that everyone can keep an eye on it and we can stop it in time if there are any problems."

Hara Kei abandoned his idea of ​​opposing land reform. Since Saionji had already pushed the work to this point, continuing to oppose it wouldn't change his stance; on the contrary, it would only put him at odds with Saionji. The current local luminaries weren't qualified to make him do that. He began to consider how the Seiyukai could use this event to gain any benefit.

Chapter 601

If the financial and bureaucratic forces led by Inoue Kaoru and Matsukata Masayoshi had some reservations about the Chiba Prefecture heavy industry base plan, their main concern was that the budget bill would be blocked in the House of Representatives. Although the House of Peers ultimately decides on the national budget, if the budget bill fails to pass in the House of Representatives, it cannot be submitted to the House of Peers for a vote.

Previously, in order to concentrate power in the hands of the Meiji Restoration elites, Ito Hirobumi and others chose the British-style bicameral structure rather than the German-style bicameral structure, even though the Japanese Constitution was almost entirely based on the German Constitution. The biggest difference between the two parliamentary structures is that the German parliament has greater autonomy in fiscal budgeting, and while the Bundestag (Federal Council) has veto power, it cannot veto indefinitely.

This regime, which attempts to concentrate all power in the hands of a small group of people, naturally leads to the opposition between the House of Commons and the House of Lords. This situation also occurred in Britain. However, the British monarchy has accepted itself as a symbol of the country rather than a representative of national power. Therefore, the power of the House of Commons has been expanding since the Napoleonic Wars, and the nobility in the House of Lords have lost control over national affairs.

However, Japan follows a German-style constitutional monarchy system, even going a step further than Germany. At least in Germany, the emperor acknowledged that the effective constitution bound him, but in Japan, the constitution does not bind the monarch. Therefore, the House of Peers, relying on the emperor's authority, almost never cares about the background of bills proposed by the House of Representatives. They only care about the attitude of the upper echelons of the government towards the bills. If the upper echelons are dissatisfied with the bills proposed by the House of Representatives, they will not hesitate to veto them, completely disregarding whether the veto will provoke dissatisfaction among members of the House of Representatives and the public.

The House of Nobles' misconduct directly led to fierce confrontation between the House of Representatives and the government. When members expressed dissatisfaction with the government, any bills proposed by the government would be rejected, preventing government bills from reaching the House of Nobles and thus making the government unable to function and ultimately causing its collapse. After all, the so-called clan politics actually referred to the control of the Choshu and Satsuma clans over the government and the House of Nobles, thus disregarding public opinion.

Strengthening Japan's heavy industry base was an excellent policy for the business community and technocrats, but for rural communities and various social strata, it meant spending their tax revenues on businesses that benefited a select few. The government-run enterprises of the early Meiji era consumed vast amounts of tax revenue from the national treasury, only to be essentially given away to private individuals, thus creating the major conglomerates of today. Naturally, the public was no longer willing to believe the lie that government-run enterprises could enrich the nation.

According to the common people's simple thinking, rather than spending a large amount of tax money on projects that benefit only a few, it would be better to reduce various taxes on agriculture, so that at least everyone could benefit. This absolute egalitarianism, which originated from small-scale farming, was particularly supported by the landowning class. Therefore, spending hundreds of millions of yen in one region, and then continuing to invest funds afterward, would seem like exploitation of other regions, and naturally, it would be difficult to gain the approval of members of the House of Representatives.

Although Lin Xinyi proposed instigating conflict between peasants and landlords, then using the guise of land reform pilot programs to divert public attention and promote the construction of heavy industrial bases, this plan, while sounding promising, lacked confidence and uncertainty about its feasibility. However, the intense public debate on land reform in late July, which led to the isolation of local dignitaries, created an opportunity for the passage of bills aimed at strengthening the industrial base and the land reform pilot program.

The financial and bureaucratic circles finally began to formally study plans for heavy industry development and started to invest resources in promoting public opinion in favor of national policies that favored land reform pilot programs and strengthening the industrial base. The purpose of the land reform pilot programs was to obtain cheap land from landlords for industrial construction and infrastructure, while strengthening the industrial base was to increase the value of land and obtain excess profits from land appreciation.

Whether the completion of the heavy industrial base would open up the Chinese and Indian markets and recoup the investment is no longer the main concern of the financial community. The short-term profits from land appreciation are enough to make them willing to take the risk. Thus, the construction of the heavy industrial base, spearheaded by a few banks and conglomerates, has once again become the focus of fierce competition.

After the war, the military supply market shrank rapidly, and various conglomerates were considering post-war investment directions. Originally, with the nationalization of private railways, everyone planned to get involved in the railway industry, since they could obtain two benefits simply by selling the completed railway lines to the state: one was the premium on the railway itself, and the other was the appreciation of the land near the railway.

However, the blocking of the private railway nationalization plan and the emergence of the heavy industry center plan have changed the chaebols' thinking. If the private railway nationalization plan was about equal distribution of benefits, with each region able to build private railway lines and the state ultimately paying for them, which would benefit all local powers, then the heavy industry center plan is a plan that benefits only a few.

However, major conglomerates prefer plans for heavy industrial centers because building private railways and then selling them to the state involves a large investment cycle and risks. The railway lines first need government approval, and land acquisition requires cooperation with local luminaries. Although the profits on paper are good, the amount of money used to bribe officials and buy off local luminaries is staggering.

However, the planning for heavy industrial centers is different. Concentrated investment will minimize construction costs and the costs of cultivating relationships, while the land premium brought by industrial cities is much higher than that of land near railway lines. Finally, through pilot land reforms, the government will be able to obtain cheap land when building heavy industrial centers without worrying about landlords demanding exorbitant prices, which is certainly better than investing in railway lines in a scattered manner.

However, the greedy nature of the zaibatsu gradually became apparent in this struggle for dominance. Mitsui, Mitsubishi, Yasuda, and Okura all wanted to win the largest share of the plan, and even wanted to squeeze others out. Mitsui and Mitsubishi were the most powerful, with Inoue Kaoru behind Mitsui and Matsukata Masayoshi behind Mitsubishi. The other zaibatsu were a level below these two, so they all rallied around Shibusawa Eiichi, attempting to rival these two top zaibatsu.

Aside from historical conflicts with Mitsubishi, Eiichi Shibusawa generally maintained good relationships with other zaibatsu (financial conglomerates). For instance, the Mitsui family rules were jointly formulated by Inoue Kaoru, Shibusawa Eiichi, Hozumi Norishige, and Tsuzuki Kaoruro, and the First Bank building was purchased from the Mitsui family. However, his conflict with the Mitsubishi Group stemmed from Mitsubishi's attempt to monopolize the shipping industry, leading to a commercial war between the two groups.

However, Shibusawa Eiichi's relationship with other zaibatsu was not good either. As his cooperative businesses with other zaibatsu improved, these zaibatsu, like the Mitsubishi zaibatsu, wanted to monopolize the businesses and monopolize the profits. This greatly aroused the dissatisfaction of Shibusawa Eiichi, a capitalist. Although Shibusawa mostly chose to back down, these zaibatsu remained wary of him, worried that Shibusawa would start his own business and compete with them.

In short, the political and business traditions of the Edo period profoundly influenced Japanese merchants. They were accustomed to monopolizing businesses, excluding competitors, and then managing their businesses as family heirlooms passed down through generations. In this respect, Shibusawa Eiichi was completely different from the traditional image of Japanese merchants. Although he opposed overly fierce competition, he believed that moderate competition was beneficial to the economy, and that cooperative business practices were more conducive to economic prosperity than monopolistic family businesses.

Although Eiichi Shibusawa gave up his public office to devote himself to business, he actually viewed economic issues from the perspective of an official, rather than simply a profit-seeking businessman. This was the basis of his opposition to the monopoly of all by zaibatsu (financial conglomerates). He believed that when businessmen monopolized all industries, Japan's economy would revert to the stagnant state of the Edo period, where everyone would only focus on maintaining stable profits rather than developing businesses and expanding operations. The prosperity of Western capitalism would then be impossible to replicate in Japan.

Therefore, the zaibatsu (financial conglomerates) were very interested in the businesses Shibusawa had started, but they unanimously refused Shibusawa Eiichi's interference in how these businesses were managed after their development. Although Shibusawa Eiichi participated in the establishment of almost all of Japan's modern businesses, the only one he was able to protect was the First Bank. In reality, the First Bank was still the purse strings of Ito and Inoue, which is why others dared not try to take it over.

Eiichi Shibusawa's influence was primarily among small and medium-sized businessmen, mainly in the Tokyo area. His influence within the zaibatsu (financial conglomerates) was steadily declining because, with the improvement of modern talent development mechanisms, the major zaibatsu no longer needed Shibusawa as their leader. Especially after the maritime war between Mitsubishi Mail Steamship Company and Kyodo Transport Company, the zaibatsu realized that cooperation was more advantageous than competition. As a result, Shibusawa, who opposed Mitsubishi's monopoly on shipping, was marginalized within the zaibatsu.

Shibusawa Eiichi still enjoys high prestige in the business world, but he has actually been excluded from the core circle of the business community. The government's respect for him is mainly to gain his support when issuing economic policies, rather than to invite him to formulate economic policies. This is the real dilemma faced by businessmen who do not have political power to rely on.

While Lin Xinyi's heavy industry center plan required the support of Tokyo's local business forces, represented by Shibusawa Eiichi, Shibusawa Eiichi also needed this plan to return to the core circle of the business world. Neither side can say who promoted whom in this plan; rather, it should be said that cooperation would benefit both sides, while separation would harm both.

For example, Shibusawa himself can withstand the pressure from Mitsui and Mitsubishi, but the small and medium-sized businessmen around him cannot. Therefore, he has no choice but to ask Hayashi Shin-yi to come and discuss how to resolve the issue of the leading role in the planning of this heavy industrial center.

However, Lin Xinyi was somewhat absent-minded today, because he was still thinking about picking up Mu Zi that evening to watch the "Ryogoku River Opening" fireworks display, which was a major summer event in Tokyo. Therefore, he was a bit more direct in response to Shibusawa's question, "Of course, the various conglomerates can invest in heavy industrial centers according to their own wishes, but if they want to monopolize ports, transportation, and industrial land, they are probably dreaming."

What the Navy and the government need is a competitive coal, steel, and energy conglomerate, not a fragmented, independent system. In other words, we will not allow key sectors to be monopolized by individuals, thus preventing certain conglomerates from using bottlenecks to pocket the profits of the entire industry.

What we need is a vibrant and complete industrial chain. What does "complete" mean? It means that we control everything from ore mining to the final sale of machinery or industrial products, or at least have bargaining power. What does "vibrant" mean? It means that each link has at least two factories; if one has a problem, then at least another one continues to maintain the operation of the entire industrial chain.

However, it's clear that whether it's Mitsui, Mitsubishi, or other conglomerates, what they want is exclusive profits. Once they gain control, they will inevitably abandon unprofitable links and only retain profitable ones. But others aren't fools either. If production becomes unprofitable, they will inevitably reduce production scale or even stop supplying us, ultimately breaking the supply chain. Our machinery and industrial products will then become incredibly expensive and lose competitiveness in the market.

If Japan's industry loses its competitiveness, it will not be the zaibatsu (conglomerates) that will be hit, but the ordinary people of the country, because they will lose their jobs. Since rural areas cannot accommodate so many laborers, it will eventually lead to social unrest.

Therefore, I oppose allowing a few large conglomerates to lead the construction of heavy industrial centers. Their goal is to make money, not to develop Japan's industry. If they lead the effort, they will either line their own pockets or completely distort the entire plan, ultimately causing a break in the supply chain and leading to failure…

Shibusawa Eiichi was able to understand the meaning behind Hayashi Shin-ichi's words. He had dealt with these zaibatsu more than once or twice, and he certainly knew how much these zaibatsu valued money and monopolistic businesses. Perhaps at first the zaibatsu would be patient, but once the heavy industry center began to take shape and enter the production stage, they would feel that they were no longer useful and would start to plan to take over the entire business.

Shibusawa nodded seriously in agreement, saying, "I agree with your point of view. If there were any chance, I would not want the zaibatsu to be the leader of this plan. However, if the heavy industry center is to be built in Chiba, the investment in infrastructure such as docks and roads alone will be an astonishing figure. Without sufficient capital, it will be difficult to realize this plan. Therefore, the capital of the zaibatsu is still necessary."

Furthermore, Mitsui and Mitsubishi have the support of two veterans, Inoue and Matsukata, and there are even signs of a joint effort between them. Without a convincing reason, it would be difficult to oppose their proposals.

After pondering for a moment, Lin Xinyi said, "It's not difficult to refute the zaibatsu's claims. The biggest problem is getting the two elders on our side. As long as the elders choose to support us, then Mitsui and Mitsubishi will naturally have no objections."

Shibusawa Eiichi nodded slightly and replied, "I have already tried, but the two elders, Inoue and Matsukata, still favor Mitsui and Mitsubishi. It will probably be quite difficult to get them to stand on our side."

After a moment's thought, Lin Xinyi said, "Actually, persuading Elder Song Fang is relatively simple."

Shibusawa looked at Lin Xinyi with some surprise and said, "Matsukata Elder and Iwasaki Yanosuke are related by marriage. Although Yanosuke has just passed away, Matsukata Elder will not give up on Mitsubishi so easily."

Lin Xinyi, however, said confidently, "Yanosuke's eldest daughter is the wife of Matsukata Genro's second son, Matsukata Kojiro. Matsukata Kojiro is the president of Kawasaki Shipyard. If Matsukata Kojiro is one of our people, then how can Matsukata Genro possibly compete with his son?"

Shibusawa stared at Lin Xinyi, speechless for a moment, before asking, "How do you plan to get Matsukata Kojiro to give up his father and in-laws and become one of us?"

Lin Xinyi said: "Actually, before 1885, the cabinet had a Ministry of Industry, but because there were not many affairs and the central government was in financial straits, it was abolished in 1885 and its business was taken over by the Ministry of Agriculture and Commerce."

However, the scale of Japan's industry today is different from that of 20 years ago. Its industrial and commercial economy is not much weaker than its agricultural economy. With the construction of the Chiba Heavy Industries Center, it is estimated that within ten years, the scale of Japan's industrial and commercial economy will surpass that of its agricultural economy, and our country will officially become a country dominated by industry and commerce.

Therefore, the commercial and industrial affairs currently managed by the Ministry of Agriculture and Commerce could actually be reassigned to a separate ministry, which would be more efficient. I believe that Matsukata Kojiro was qualified to serve as the first Minister of Commerce and Industry, and I have had contact with him. He is quite interested in politics, but he simply didn't have the opportunity.

We approached him for cooperation and nominated him to be the Minister of Industry and Commerce. To avoid any appearance of impropriety, Mitsubishi Corporation would naturally be unable to demand dominance over the heavy industry center. Since Mitsubishi couldn't gain dominance, it wouldn't be willing to let Mitsui or other zaibatsu gain dominance over the heavy industry center. This way, we could force Mitsui to make concessions.

Once Mitsui loses confidence in leading the project, we can talk to Inoue about the distribution of land profits. I believe Inoue won't turn against us for the sake of a hesitant Mitsui zaibatsu. That way, we'll still have control…”

Chapter 602

Shibusawa Eiichi tried hard to recall Matsukata Kojiro's character, but this second son of Matsukata elder did not leave much of an impression on him. On the other hand, he had dealt with his brother Matsukata Ichiro, who was the president of the Fifteenth Bank. He was a glamorous and sociable person.

After thinking for a while, he couldn't help but say, "Speaking of which, it seems that Matsukata Iwao is more likely to gain the approval of Matsukata Genro. Without Matsukata Genro's support, it would be difficult for Matsukata Kojiro to become a minister based solely on his reputation. Does Matsukata Kojiro really have the courage to compete for the position of minister despite the opposition from Matsukata Genro and his elder brother?"

Sitting upright on the tatami mat, Hayashi Shinji lowered his head and took a sip of tea. The slightly scalding tea went down his throat, and a faint sweetness quickly rose on his tongue, instantly dispelling the summer heat. Faced with Shibusawa's question, his slightly calmed mind and body quickly provided an answer, "Firstly, I am not familiar with Matsukata Genji, and secondly, Matsukata Kojiro has at least one talent sufficient to serve as a minister, so I advocate choosing him."

Shibusawa Eiichi immediately pressed, "What kind of talent does he have?"

Lin Xinyi looked up at him and replied frankly, "He is good at accepting advice from others and will not act on his own. At least Kawasaki Shipbuilding is operating quite well, and the system and development direction that Baron Sonoda set for Kawasaki Shipbuilding have not been changed. What we need is a minister who can implement the heavy industry development plan, not some capable leader, so President Matsukata is a suitable candidate for minister."

Shibusawa Eiichi was speechless. The second son's status in the family was not high to begin with. Obeying the parents and serving as a substitute for the family heir was the fate of the second son. Therefore, the second son in each family was almost always docile and rarely a rebellious one. On the other hand, the younger sons did not have to bear any responsibility and would not pose a threat to their elder brothers' right to inherit the family, so they often appeared spoiled.

Although he didn't have much of an impression of Matsukata Kojiro, Hayashi Nobuyoshi's evaluation made Matsukata Kojiro's image clear to him. He was a typical second son of a large family. Under the strict education of his parents and the fear of his older brother, he inevitably appeared weak in character. For the Minister of Commerce and Industry they needed, this was indeed an advantage.

Lin Xinyi continued, "Since Wuhan blocked inland waterway shipping above Jiujiang, the Empire's shipping business in the Yangtze River basin has also fallen into difficulties, hasn't it? Don't you have shares in Daito Steamship Company and Hunan Steamship Company? How do you think the Empire will develop its inland waterway shipping business in China next?"

Although Lin Xinyi's words were quite a leap, Shibusawa Eiichi wasn't puzzled. After all, Daito Kisen Kaisha and Hunan Kisen Kaisha had become a thorn in his side. Since Kyodo Transport Co., Ltd. merged with Mitsubishi Shipping under government guidance to form Nippon Yusen Kaisha, Shibusawa's influence within the company had rapidly diminished, leading him to consider starting his own venture.

As a capitalist, Eiichi Shibusawa had an extremely strong ambition for the shipping business. After all, the prosperity of the British Empire was built on its powerful shipping industry. However, the mutual destruction caused by the competition between Kyodo Transport and Mitsubishi Shipping has greatly eased the intensity of competition among Japanese zaibatsu.

At this time, Japan's shipping industry was controlled by two major shipping companies: Nippon Yusen Kaisha (NYK), formed by the merger of Kyodo Transport and Mitsubishi Shipping, and Osaka Shosen Kaisha (OSK), established by the Kansai Chamber of Commerce. The two companies controlled 33 domestic shipping routes and 3 coastal shipping routes, making it difficult for the domestic shipping market to accommodate another large shipping company.

In this situation, Shibusawa Sakae set his sights on the inland waterway shipping business of neighboring countries. The Yangtze River basin was a brand new shipping market for all countries. After the Boxer Rebellion, all countries finally gained the right to enter the upper reaches of the Yangtze River. As a result, many Japanese businessmen, including Shibusawa, had the idea of ​​competing with other countries. Daito Kisen Kaisha was the first Japanese shipping company to open up the Yangtze River shipping business, while Hunan Kisen Kaisha was the Japanese businessmen's invasion of the middle and upper reaches of the Yangtze River shipping business after the Boxer Protocol.

However, compared to the shipping capital invested by various countries in the Yangtze River basin, Japanese shipping companies were too small in scale, and Japan's shipbuilding industry could not compare with industrial giants like Britain, France, and Germany. Therefore, Japanese shipping companies were at a complete disadvantage in the Yangtze River basin. Before the Wuhan Incident, Japanese shipping companies could rely on privileges to open up local markets, but after the Wuhan Incident, the Wuhan regime forcibly expelled foreign warships from the middle reaches of the Yangtze River and took the opportunity to prohibit various privileges for foreign merchant ships navigating the Yangtze River.

Japan suffered the most from Wuhan's actions. France, with little interest in the Yangtze River basin, withdrew from the competition for shipping in the region in the face of Wuhan's dominance. Germany and the United States, however, benefited from Wuhan's rapid industrialization. In the past, even with privileges, Germany and the United States could hardly compete with Britain, France, and Japan because they all had the advantage of being close to China. France's Indochina and Britain's colonies in Southeast Asia and South Asia ensured that many intra-Asian trade transportation businesses were monopolized by these countries. Germany and the United States could only export industrial goods from their home countries to China, and naturally could not compete with the Asian shipping routes of Britain, France, and Japan.

However, after Wuhan shifted to a development path focused on industrialization, the proportion of machinery imports from Germany rose rapidly. Coupled with raw materials such as crude oil and copper from the United States, China's imports from Germany and the United States increased rapidly. Although these two countries lost a series of privileges, they actually gained more market share in China than before.

British long-term operations in the middle and lower reaches of the Yangtze River, particularly their control over the Shanghai area, meant that although Britain lost shipping business in the upper and middle reaches of the Yangtze, it benefited from the industrialization of the middle Yangtze region through transshipment trade via Shanghai. In 1907, the cargo throughput of Shanghai Port exceeded 1.5 million tons, with 70% of the increase coming from transshipment trade with Wuhan.

Therefore, although Wuhan forcefully overturned the agreement reached between the Qing Dynasty and various countries and drove the powers out of the middle and upper reaches of the Yangtze River, the countries still tolerated Wuhan's violation of the agreement in the face of the benefits that Wuhan's development brought to them. Of course, the defeats of Britain and Russia on the two battlefields also made the countries unwilling to risk launching an Eastern war with an unknown outcome, especially given the increasingly tense situation in Europe.

However, for Japanese businessmen, without special privileges, Japanese shipping companies could not compete with other countries on the Yangtze River, and Japanese industrial products could not compete with the industrial powers of Europe. As for the raw materials such as crude oil and copper needed by Wuhan, Japan did not have abundant reserves. Therefore, the idea of ​​Japanese businessmen competing with other countries in shipping on Chinese inland waterways and making a fortune from Chinese inland shipping business was already close to bankruptcy.

Eiichi Shibusawa's dream of establishing a shipping business in China, growing it large, and then returning to Japan to compete with Nippon Yusen and Osaka Shosen Kaisha was thus shattered. Now, the shareholders of Daito Kisen and Hunan Kisen are trying to get government subsidies for the shipping business, or simply have their shares taken over, so that they can extricate themselves.

When faced with Lin Xinyi's question, Shibusawa's first reaction was that the navy or China's shipping industry had some new ideas. He naturally stated: "Judging from the current situation in China, as long as the momentum of Wuhan's rise is not interrupted, it is estimated that the shipping industry in the lower reaches of the Yangtze River will be difficult for other countries to maintain."

When Wuhan unified the country and, like my country, embarked on the path of capitalism, the Empire would face a powerful rival in East Asia. The key to Sino-Japanese peace lay in ensuring that China's development kept pace with the Empire's. Therefore, the Empire would likely find it difficult to remain aloof regarding control of China's shipping industry.

Although Eiichi Shibusawa was a pacifist who advocated for Japan-China cooperation, his cooperative approach aimed to ensure Japan's dominant position in the cooperation. To paraphrase the Japanese terminology of later generations, this was the "flying geese theory," in which Japan was to occupy the leading position, while China could only follow behind and should not surpass or attempt to seize the leading position.

Although this was wishful thinking, Shibusawa ignored the huge population and resource gap between Japan and China, and forcibly tried to make China and other Asian countries accept Japan's permanent leading position through some legal or moral concept, based on the temporary leading position that Japan had formed due to the Meiji Restoration government.

However, compared to those militarists who tried to conquer China, Shibusawa Eiichi was already a very pragmatic Japanese. Besides, if the Chinese could accept the Manchurian shaving order, why couldn't they accept Japan's permanent leading position? In comparison, the Japanese were at least more Chinese than the Manchurians, who were considered barbarians.

This idea had become almost universally accepted axiom among the Japanese during the Meiji era. Munakata Kotaro, in his article "An Open and Sincere Admonition to the Heroes of the Eighteen Provinces," stated:

The Manchus, a barbarian tribe from beyond the Great Wall, were neither ordained by divine mandate nor had they rendered any service to China. Taking advantage of the decline of the Ming Dynasty, they violently seized power and established a temporary, pseudo-establishment…

Your esteemed nation shares the same race, culture, and ethics as our Japanese nation. We share a bond of mutual prosperity and have no enmity with each other. I earnestly hope that you will understand the sincerity of my followers, dispel any suspicion, discern the will of Heaven and the people, follow the general trend of the world, raise an army of heroes in the Central Plains, unite brave men and revolutionary forces to drive the Manchu Qing dynasty out of the country, and raise true heroes from the common people to undertake a great cause. Then, we will reform corrupt practices, eliminate the scourges on the people, discard empty formalities and follow the teachings of Confucius and Mencius, strive for truth and restore the rule of the three dynasties.

This article, written with a tone of lamenting the people's suffering and punishing the guilty, refuses to recognize the Manchus as the legitimate rulers of China, stating that Japan launched the First Sino-Japanese War to liberate the people of Korea and China from the "barbarians." Therefore, the Japanese did not consider the First Sino-Japanese War to have created any deep-seated hatred with the Chinese. When Li Hongzhang attempted to use Sino-Japanese friendship to sway Ito Hirobumi's pressure, he was naturally ridiculed. This was because Ito Hirobumi did not believe the Manchus were qualified to represent China, nor did he believe the Chinese would avenge the Manchus. He argued that the reparations paid by the Manchus to Japan were a ransom to continue their rule over China, not reparations demanded by Japan from China.

Therefore, the Japanese held a divided view on the Manchu Qing government and the Han Chinese revolutionaries. They believed that the latter were the true representatives of China, so it was normal for the Han Chinese revolutionaries to resist the Manchu Qing. Since Japan and the Han Chinese revolutionaries shared the same language and culture, Japan should naturally support the Han Chinese revolutionaries. As for the Manchu Qing, like the Western powers, they were all colonizers who invaded China, only the Manchus arrived earlier and the Westerners arrived later.

However, precisely because the Qing Dynasty lacked legitimate rule over China, the Qing government was the most suitable proxy for Japan to extract benefits from China. If the Han Chinese revolutionaries had actually overthrown the Qing government, theoretically, Japan would have lost its legal justification for invading China. This explains the complex stance of the Japanese towards the Qing Dynasty and the Han Chinese revolutionaries: dealing with the former was for personal gain, while supporting the latter was to demonstrate Japan's membership in the Chinese cultural sphere, thus justifying its moral support for the Han Chinese revolutionaries. This also forms the basis for Japan's leadership of Asian nations against Western powers.

Lin Xinyi certainly cannot overthrow this Greater Japan mentality based on civilizational spheres and nationalism; this would only make him an object of opposition from both the left and right wings of Japanese society. The best way to deal with this Greater Japan mentality is to restore China to its central position in Asia, which would then allow the Japanese to recognize reality.

As this thought flashed through Lin Xinyi's mind, he said without hesitation, "No, in my opinion, the development of China and India is Japan's future opportunity."

Shibusawa Eiichi frowned slightly as he looked at Lin Xinyi. He wondered where the other man’s confidence came from. As long as China and India developed, Japan would become a small country confined to a corner of the world. How could that be considered an opportunity for Japan?

Before he could ask any further questions, Lin Xinyi explained: "Currently, 70 percent of the world's trade volume occurs in Western Europe, while Asia's trade volume is less than a quarter of the world's total. However, the total population of Western Europe is not even greater than that of the Indian subcontinent. If we add up the population of Asia, it would be close to three times that of Western Europe. Based on population, Asia's trade volume should be 12 times that of the present."

So why does Western Europe, with a much smaller population than Asia, have a far higher per capita trade volume? I believe this is because industrialization transformed Western Europe's trade environment. The combined steel production of Britain, France, and Germany exceeds 2500 million tons, while Asia's production is only around 100 million tons, primarily concentrated in Japan and China.

Based on the calculation that each ton of steel production capacity generates 4 tons of transportation volume, when Asia's steel production capacity reaches 2500 million tons, then it will require an increase of 9600 million tons of cargo transportation volume, which is 64 times the cargo throughput of Shanghai Port last year.

Therefore, restricting China's shipping industry would not benefit Japan other than slowing down China's development and allowing the Chinese to completely control its own shipping industry. Conversely, promoting the economic development of China and India, although we would have to give up competing for China's inland shipping business, would give Japan an advantage in the Asian shipping industry through coal and iron transportation based on the Asian steel trade. This is because both China and India lack ocean-going merchant fleets, the ability to build large-tonnage merchant ships, not to mention the protection and services available for maritime navigation, all of which Japan possesses an absolute advantage over.

The construction of the Chiba Heavy Industries center will inevitably require support from Indian iron ore mines and Chinese coal mines, while the overseas shipping businesses of China and India will also need Japan's protection. We should encourage the faster development of China and India, forcing them to rely on the regional logistics system we have established, rather than suppressing their development. That would allow them to build their own overseas trade and logistics systems from scratch.

Shibusawa Eiichi had previously had in-depth exchanges with Hayashi Shin-yi regarding the Chiba Prefecture heavy industry center, but they had not exchanged many ideas about overseas transportation. This was because Shibusawa Eiichi felt that no matter how talented Hayashi Shin-yi was, he couldn't possibly know everything. Even he had failed several times in the maritime shipping business, so he didn't think Hayashi Shin-yi could come up with a plan to change the landscape of Japan's shipping industry.

However, today's conversation made him realize that he had underestimated the young man in front of him. Lin Xinyi had not only studied the development of heavy industry, but had also seriously considered the logistics system involved in the heavy industry center. This kind of consideration was very much in line with Lin Xinyi's style. He always took a holistic approach, and others only needed to implement the details.

Shibusawa admired Hayashi Nobuyoshi most for this: since Okubo and Kido left, few people in Japan have had such a broad vision to see Japan's future. Even Ito Hirobumi could only occasionally look ahead and could not always stand at a high level to plan Japan's future.

Just as Shibusawa Eiichi was considering the feasibility of a joint coal and iron transport project among Japan, China, and India, Hayashi Shinichi continued, "Let Matsukata Kojiro promote the joint transport projects among Japan, China, and India, establishing standardized wharves, ships, loading and unloading methods, and fuel supply. Invest in building necessary standard wharves, coal and iron transport railways, inland cargo ships, highways, and freight trucks. This would break down transport barriers within Asia, reduce costs, improve efficiency, and create technical and contractual barriers against European and American capital, protecting the security of intra-Asian trade. If President Matsukata can accomplish this, there will be no need for the approval of Matsukata's elders, and Mitsubishi will be unable to coerce him into favoring Mitsubishi's shipping business..."

Chapter 603

After leaving the Shibusawa family home, Hayashi Shin-yi went to the editorial department of the New Women's Weekly in Ginza 1-chome to pick up Ichiki Kiko and take her home for dinner, and then go to Ryogokubashi to watch the fireworks festival.

With the support of Shin-Yi Hayashi and the investment from the Oriental Culture and Arts Foundation, Akiko Hiratsuka quickly united alumni and female literature enthusiasts to launch this publication specifically for women.

Compared to Ichiki Kiko, Hiratsuka Akiko was clearly more influential among her alumni. After all, Ichiki Kiko hadn't grown up in their circle, and Kiko's passion for dance and music was actually greater than her love for literature. However, for upper-class women of that era, literature was considered more prestigious than music and dance, because they couldn't showcase their talents to men.