Commercial Finance in the Expanding Trade: a comparative study of early-19th century Britain and Japan Mina Ishizu Workshop ‘British and Japanese Enterprise: Technology, Knowledge, Culture and the Challenges of Globalisation’ Cardiff Business School 8 August 2011

Existing literature on comparison between Britain and Japan The British Financial Revolution in late seventeenth century leading to the Industrial Revolution in late 18th and early 19th centuries Yet, mechanism of capital investment from London credit market to provincial industrialisation remains unexplored. Modernisation of credit system by Chancellor Matsukata in the 1880s preparing the industrialisation in the 1890s However, how proto-industrialisation and Smithian growth in late Tokugawa period (late 18th and 19th centuries) was financed? Comparative study of credit system

Focus on changes in credit system in early 19th century Mechanism of capital investment through credit flow from commercial capital and regions Provision of commercial credit by financial institutions enables businesses save up capital Relationships between the expansion of trade and the development of credit system Research Questions

Banks Merchants Private provincial banks Merchants LondonProvinces Bank of England Rediscount network (Still developing) Bills Rediscount Discount Chart 1: Bill discount networks in mid to late 18 th century

Shift from 18th-century slave trade to more diversified trading patterns Established credit system underperformed to finance new trade organisations Development of bill discounting system between London and the provincial cities Examples - two North West firms ventured into Brazil trade in 1808 and their failure and survival in the 1810 commercial crisis John Leigh & Co of Liverpool Lupton & Luccock of Leeds Atlantic trade and credit system in early 19th century Britain

LondonLiverpool Devayne’s Bank Parr’s Bank Brickwood’s Bank John Leigh John Leigh’s Banking Connections Failed 1810Failed 1809

Chart 2: Bill discount networks in early 19 th century LondonProvinces Bank of England Banks Merchants Private provincial banks Merchants Rediscount network Agency system Bills Discount Rediscount Discount

LondonLeeds Beckett’s Bank Lupton & Luccock Glyn’s Bank Survived 1810

Proto-industrialisation and mercantilist domain policies led to the expansion of domestic trade between Osaka (commercial capital), Edo (the government capital: today’s Tokyo) and the countryside Established Osaka-centred credit system financed it enough? Despite the fall in commodities distribution through Osaka, credit system centred on Osaka exchangers continued to function (Ishii 2007) Domestic market expansion and credit system in early 19th century Japan

Early 19th century credit system in Tokugawa Japan Senior Exchanger Jr exchanger Merchant Osaka Province

Further research Changes and continuities in Japanese credit system in the ‘opening of the ports‘ --- How were ‘exporting’ orientated Japanese merchants financed in the provinces? Changes in British credit system in mid 19th century --- commercial credit in the expanding US cotton trade