Dojima Rice Exchange
Encyclopedia
The Dōjima Rice Exchange (堂島米市場, Dōjima kome ichiba, 堂島米会所, Dōjima kome kaisho), located in Osaka
, was the center of Japan's system of rice broker
s, which developed independently and privately in the Edo period
and would be seen as the forerunners to a modern banking system
. It was first established in 1697, officially sanctioned, sponsored and organized by the shogunate
in 1773, reorganized in 1868, and dissolved entirely in 1939, being absorbed into the Government Rice Agency (日本米穀株式会社).
The Japanese economy grew rapidly throughout the 17th century, culminating in the period known as Genroku
(1688–1704) during which merchants prospered like never before. It was at this time that rice brokers and moneychangers (両替商, ryōgaeshō) gathered their shops and warehouses in the Dōjima area; the Rice Exchange can be said to have been established in 1697, the year it received a license from the shogunate. Since members of the samurai class, including daimyo (feudal lords) were paid in rice, not cash, the rice brokers and moneychangers played a crucial, and incredibly profitable, role in the emerging early modern economy of Japan. Over the course of the Edo period, the entire economy would not only shift from rice to coin, but would also see the introduction and spread of paper money initiated and facilitated by the men of Dōjima. The year 1710 marks the beginning of this development, which also brought with it the emergence of the concept of trading in futures (延べ米nobemai). The Osaka merchants, like the Kyoto rice brokers three hundred years before, developed an increasingly monopolistic grasp on the rice trade, determining prices not only within Osaka, but in the entire Kinai
(Home Provinces) area, and indirectly having a great effect on prices in Edo
.
These economic developments among the rice merchants were intricately connected to parallel developments in other trades, and the formation of a number of networks of different types of guilds including kabunakama
, rakuichi and rakuza, which developed out of the older guild types known as tonya
and za
.
In the first years of the 1730s, as the result of poor harvests and trade issues, the price of rice plummeted. Though this looked good for buyers on the face of it, this wreaked havoc with an economy which was still based largely on rice as a medium of exchange. Samurai, whose income was in rice, panicked over the exchange rate into coin, and meanwhile speculators and various conspiracies within the brokers' community played games with the system, keeping vast stores of rice in the warehouses, which ensured low prices. A series of riots against the speculators, and against the conspiratorial, manipulative system as whole, erupted in 1733; starvation was widespread, and meanwhile, speculators were acting to "corner" the market and to control prices. This was the first of a number of riots, called uchikowashi (打壊し), which would grow in frequency and size over the next century or so. The shogunate set a price floor in 1735, forcing merchants in Edo to sell for no less than one ryō
per 1.4 koku
, and in Osaka no less than 42 momme per koku. A 10 momme fine was charged of anyone found to have paid less. Over the fifteen years or so, until roughly 1750, the shogunate stepped in on a number of occasions to attempt to stabilize or control the economy. Though in 1730 the government budget as a whole was in balance (expenditures=revenue), interventions by the shogun over the ensuing years inadvertently led to economic collapse. Tokugawa Yoshimune
made so many attempts at reforms and controls that he came to be known as Kome Kubō or Kome Shōgun (the Rice Shogun). At the same time, attempts were made at monetary policy, which largely resulted in solving the problems of the rice economy, while bringing debasement of the currency.
The shogunate
re-established the Rice Exchange in 1773, under governmental sponsorship, regulation, and organization; the shogunate also established its own rice storehouse at this time. The direct impetus for this was a series of riots, as a result of famines, earlier that year. In general, however, by this point, the government realized the extreme economic power of the Rice Exchange in supporting the entire national economy, determining exchange rates, and even creating paper money. An incredible proportion of the nation's monetary transactions were handled through the private, independent, merchants of Dōjima, who stored rice for most of the daimyo, exchanging it for paper money. Dōjima held what were in essence "bank accounts" for a great number of samurai and daimyo, managing deposits, withdrawals, loans, and tax payments. Though the shogunate ultimately had little sense of modern economic theory, and thus would make some serious errors in their monetary and financial policy over the course of the following century or so, they nevertheless recognized the need for governmental control of such policies; exchange rates, monetary standards and the like had to be set by the government, and not left in the hands of an increasingly wealthy and powerful merchant class which was intended to be at the bottom of the neo-Confucian
mibunsei class system.
Reorganized in the Meiji period
along with nearly every other element of the economy and polity, the Dōjima Rice Exchange was formally dissolved in 1939, when its function was overtaken and replaced by the Government Rice Agency.
Osaka
is a city in the Kansai region of Japan's main island of Honshu, a designated city under the Local Autonomy Law, the capital city of Osaka Prefecture and also the biggest part of Keihanshin area, which is represented by three major cities of Japan, Kyoto, Osaka and Kobe...
, was the center of Japan's system of rice broker
Rice broker
Rice brokers, which rose to power and significance in Osaka and Edo in the Edo period of Japanese history, were the forerunners to Japan's banking system...
s, which developed independently and privately in the Edo period
Edo period
The , or , is a division of Japanese history which was ruled by the shoguns of the Tokugawa family, running from 1603 to 1868. The political entity of this period was the Tokugawa shogunate....
and would be seen as the forerunners to a modern banking system
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
. It was first established in 1697, officially sanctioned, sponsored and organized by the shogunate
Tokugawa shogunate
The Tokugawa shogunate, also known as the and the , was a feudal regime of Japan established by Tokugawa Ieyasu and ruled by the shoguns of the Tokugawa family. This period is known as the Edo period and gets its name from the capital city, Edo, which is now called Tokyo, after the name was...
in 1773, reorganized in 1868, and dissolved entirely in 1939, being absorbed into the Government Rice Agency (日本米穀株式会社).
The Japanese economy grew rapidly throughout the 17th century, culminating in the period known as Genroku
Genroku
was a after Jōkyō and before Hōei. This period spanned the years from September 1688 through March 1704. The reigning emperor was .The years of Genroku are generally considered to be the Golden Age of the Edo Period. The previous hundred years of peace and seclusion in Japan had created relative...
(1688–1704) during which merchants prospered like never before. It was at this time that rice brokers and moneychangers (両替商, ryōgaeshō) gathered their shops and warehouses in the Dōjima area; the Rice Exchange can be said to have been established in 1697, the year it received a license from the shogunate. Since members of the samurai class, including daimyo (feudal lords) were paid in rice, not cash, the rice brokers and moneychangers played a crucial, and incredibly profitable, role in the emerging early modern economy of Japan. Over the course of the Edo period, the entire economy would not only shift from rice to coin, but would also see the introduction and spread of paper money initiated and facilitated by the men of Dōjima. The year 1710 marks the beginning of this development, which also brought with it the emergence of the concept of trading in futures (延べ米nobemai). The Osaka merchants, like the Kyoto rice brokers three hundred years before, developed an increasingly monopolistic grasp on the rice trade, determining prices not only within Osaka, but in the entire Kinai
Kinai
is a Japanese term denoting an ancient division of the country. Kinai is a name for the ancient provinces around the capital Nara and Heian-kyō. The five provinces were called go-kinai after 1760....
(Home Provinces) area, and indirectly having a great effect on prices in Edo
Edo
, also romanized as Yedo or Yeddo, is the former name of the Japanese capital Tokyo, and was the seat of power for the Tokugawa shogunate which ruled Japan from 1603 to 1868...
.
These economic developments among the rice merchants were intricately connected to parallel developments in other trades, and the formation of a number of networks of different types of guilds including kabunakama
Kabunakama
Kabunakama were merchant guilds in Edo period Japan, which evolved out of the more basic merchants' associations known as nakama. The kabunakama were entrusted by the shogunate to manage their respective trades, and were allowed to enjoy a monopoly in their given field.Some kabunakama, known as...
, rakuichi and rakuza, which developed out of the older guild types known as tonya
Tonya (Japan)
, called toiya outside of Edo, were trade brokers in Japan, primarily wholesalers, warehouse managers, and shipment managers; the term applies equally to the traders themselves and to their shops or warehouses...
and za
Za (guilds)
The ' were one of the primary types of trade guilds in feudal Japan.- Origins and purpose:They grew out of protective cooperation between merchants and temples and shrines; merchants would travel and transport goods in groups, for protection from bandits and the vacillating whims of samurai and...
.
In the first years of the 1730s, as the result of poor harvests and trade issues, the price of rice plummeted. Though this looked good for buyers on the face of it, this wreaked havoc with an economy which was still based largely on rice as a medium of exchange. Samurai, whose income was in rice, panicked over the exchange rate into coin, and meanwhile speculators and various conspiracies within the brokers' community played games with the system, keeping vast stores of rice in the warehouses, which ensured low prices. A series of riots against the speculators, and against the conspiratorial, manipulative system as whole, erupted in 1733; starvation was widespread, and meanwhile, speculators were acting to "corner" the market and to control prices. This was the first of a number of riots, called uchikowashi (打壊し), which would grow in frequency and size over the next century or so. The shogunate set a price floor in 1735, forcing merchants in Edo to sell for no less than one ryō
Ryo
Ryo may refer to:* The Japanese kana digraph ryo, ryō, or ryoh * Ryō , a gold piece in pre-Meiji era Japan worth about sixty monme or four kan...
per 1.4 koku
Koku
The is a Japanese unit of volume, equal to ten cubic shaku. In this definition, 3.5937 koku equal one cubic metre, i.e. 1 koku is approximately 278.3 litres. The koku was originally defined as a quantity of rice, historically defined as enough rice to feed one person for one year...
, and in Osaka no less than 42 momme per koku. A 10 momme fine was charged of anyone found to have paid less. Over the fifteen years or so, until roughly 1750, the shogunate stepped in on a number of occasions to attempt to stabilize or control the economy. Though in 1730 the government budget as a whole was in balance (expenditures=revenue), interventions by the shogun over the ensuing years inadvertently led to economic collapse. Tokugawa Yoshimune
Tokugawa Yoshimune
was the eighth shogun of the Tokugawa shogunate of Japan, ruling from 1716 until his abdication in 1745. He was the son of Tokugawa Mitsusada, the grandson of Tokugawa Yorinobu, and the great-grandson of Tokugawa Ieyasu.-Lineage:...
made so many attempts at reforms and controls that he came to be known as Kome Kubō or Kome Shōgun (the Rice Shogun). At the same time, attempts were made at monetary policy, which largely resulted in solving the problems of the rice economy, while bringing debasement of the currency.
The shogunate
Tokugawa shogunate
The Tokugawa shogunate, also known as the and the , was a feudal regime of Japan established by Tokugawa Ieyasu and ruled by the shoguns of the Tokugawa family. This period is known as the Edo period and gets its name from the capital city, Edo, which is now called Tokyo, after the name was...
re-established the Rice Exchange in 1773, under governmental sponsorship, regulation, and organization; the shogunate also established its own rice storehouse at this time. The direct impetus for this was a series of riots, as a result of famines, earlier that year. In general, however, by this point, the government realized the extreme economic power of the Rice Exchange in supporting the entire national economy, determining exchange rates, and even creating paper money. An incredible proportion of the nation's monetary transactions were handled through the private, independent, merchants of Dōjima, who stored rice for most of the daimyo, exchanging it for paper money. Dōjima held what were in essence "bank accounts" for a great number of samurai and daimyo, managing deposits, withdrawals, loans, and tax payments. Though the shogunate ultimately had little sense of modern economic theory, and thus would make some serious errors in their monetary and financial policy over the course of the following century or so, they nevertheless recognized the need for governmental control of such policies; exchange rates, monetary standards and the like had to be set by the government, and not left in the hands of an increasingly wealthy and powerful merchant class which was intended to be at the bottom of the neo-Confucian
Neo-Confucianism
Neo-Confucianism is an ethical and metaphysical Chinese philosophy influenced by Confucianism, that was primarily developed during the Song Dynasty and Ming Dynasty, but which can be traced back to Han Yu and Li Ao in the Tang Dynasty....
mibunsei class system.
Reorganized in the Meiji period
Meiji period
The , also known as the Meiji era, is a Japanese era which extended from September 1868 through July 1912. This period represents the first half of the Empire of Japan.- Meiji Restoration and the emperor :...
along with nearly every other element of the economy and polity, the Dōjima Rice Exchange was formally dissolved in 1939, when its function was overtaken and replaced by the Government Rice Agency.