Traditional financing and distant trades during modernization process of financial industry: a case of Yamaguchi prefecture in the 1870s.

This paper investigates traditional financing and distant trades during modernization process of financial industry in Japan. Especially, a case of Yamaguchi prefecture in the 1870s is focused on. At the beginning of the Meiji era, although the system of the remittance draft was sufficiently developed, that of the commercial bill, which should be crucial for distant trades to expand, was in an undeveloped stage. In such a stage, what sustained the expanding distant trade? To answer the question, this paper investigates the commodity collateral loan, which had developed through the Tokugawa era. "Jun-eki-sha", which was established in 1874 at Yamaguchi prefecture, is the one of the representatives of such a traditional financial organization. Through the investigation of their books, "Jun-eki-sha" was found to be managed rather healthily, and it provided the commission merchants with the short term operating capital. Thus, expanding trades at the begging of the Meiji era were sustained, at least partially, by the heritage from the Tokugawa era: That is, the commodity collateral loan.