commercial finance in the expanding trade: a comparative study of early-19th century britain and...
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Commercial Finance in the Expanding Trade: a comparative study of early-19th century
Britain and Japan
Mina Ishizu ([email protected])
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 centuriesYet, 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 1890sHowever, 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 regionsProvision 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
London Provinces
Bank of England
Rediscount network(Still developing)
Bills
Rediscount
DiscountDiscount
Chart 1: Bill discount networks in mid to late 18th century
Shift from 18th-century slave trade to more diversified trading patternsEstablished credit system underperformed to finance new trade organisationsDevelopment 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
London Liverpool
Devayne’s Bank Parr’s Bank
Brickwood’s Bank John Leigh
John Leigh’s Banking Connections 1808-1810
Failed 1810Failed 1809
Failed 1809
Chart 2: Bill discount networks in early 19th century
London Provinces
Bank of England
Banks
Merchants
Private provincial banks
Merchants
Rediscount networkAgency system
Bills
Discount
Rediscount
Discount
London Leeds
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 ExchangerSenior Exchanger
Jr exchangerJr exchanger
Merchant 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