Financing activity based on morality
In Japan, at the end of the Edo period, due to the frequent famine and penetration of product and money economy, the finance situation of shogunate and the clan were extreme poverty. The household of Jyube Hattori, chief retainer of Odawara clan (Kanagawa prefecture), had become impoverished.
On the other hand, there was a young man who was 24-year-old and became a landowner of 1.4ha which were above the area that his father had. It was Sontoku Ninomiya. His family lost land in the flood of Sakawa river, and Sontoku lost parents until he became 16 years of age. But he repurchased the land by frugality and diligence, and his story of family revival became a reputation in the castle town. The story also entered the Chief retainer ‘s ears, and Sontoku was expected to rebuild Hattori’s households, and he decided to be a dedication.
The Hattori house was said to have 1200 koku (koku = rice productivity revenue unit), but in fact it had only 400 koku. It was impossible for such house to live expending three times of its revenue. Hattori house promised with Sontoku regarding “bundo”, which meant the spending commensurate with the income. Hattori house was also promised that “Meals shall be simple,” “wear kimono(clothe) made of cotton,” “do not useless play.” (Tatsuya Naramoto, “Sontoku Ninomiya”). He also ordered the servants keep the frugality.
At that time, Sontoku Ninomiya invented the “Gojyoko (mutual credit organization based on 5 Confucian virtues) ” which is now said to be the prototype of credit cooperatives.
One of the servants asked to borrow money to Sontoku. The servant said he could not return money even if borrowed. Sontoku taught him how to return money.
“First, dropping the Nabesumi (Charcoal of pot). You can save money by cooking while keeping trees not to smoke but to impinge on the bottom of the pot. By such way, if you can cook by only 3 trees instead of 5 trees, you should ask your master purchase the remaining 2 trees.”
“It was the opportunity to establish Gojyoko by organizing the servants,” said Mr. Seiichiro Saito, Deputy Director of the Hotoku Museum (Odawara city, Kanagawa Prefecture).
Gojyo (5 Confucian virtues) are “Jin (benevolence)”, “Gi (righteousness)”, “Rei (courtesy)”, “Chi (wisdom)” and “Shin (belief)” in the Confucianism. It must keep them all the time. “Jin” is to accumulate a small amount of money by saving and labor, and to lend money to people in need. “Gi” is to return it. “Rei” is to give the interest of it. “Chi” is to devise for repayment. “Shin” is the situation that people are connected in such relationship. It means lending and borrowing based on trust between people. Concept of modern credit cooperatives has come from here.
Common people finance such as Tanomoshiko (= Mujin (mutual aid finance)) existed for a long time, but it can be said that Gojyoko had originality because its main concept was morality.
Solidarity, short-term redemption with sense of responsibility
Lower class of clans were also in poverty. There is no money to purchase materials even to try internal jobs such as umbrella cladding. In 1820 (Bunsei 3 year), the lord Tadazane Okubo lent 300 cars money to lower samurai as funds to save them. Samurai participated in Gojyoko, Sontoku became as a lender agent, and samurai borrowed money from Gojyoko and repaid the debt.
At lending money, Sontoku decided the rule that ” One set shall be consisted of 100 people. Member can borrow money from one 1 to three cars without interest to 100 days.” The rule at the delay of repayment are as follows;
1) If delinquency of 1 car occurred, 10 people selected by member list shall repay by sharing.
2) If delinquency of 2 cars occurred, 10 people selected by member list (total of 20 people) shall repay by sharing.
3) If delinquency of 3 cars occurred, everyone shall repay by sharing.
“When repaying, Gojyoko makes borrowers to redeem money in the short term with solidarity and sense of responsibility. After the repayment, they could borrow again. Borrowers could escape from the debt by circulating funds and turn their life stable gradually,” said Mr. Saito, Deputy Director of the Museum.
History of Sontoku Ninomiya
1787 Sontoku (childhood name was Kinjiro) Ninomiya, born in Kayama village. (Odawara city, Kanagawa Prefecture)
1788 In 1791 Sakawa River collapsed, rice fields flowed out.
1800 Father Riemon died (He was 48 years old).
1801 Mother Yoshi died (She was 36 years old). The family diverged, Sontoku (Kinjiro) stayed at his uncle Manbe. Sontoku planted discarded seedlings of rice in open spaces and gained one bales so that Sontoku mastered the sense of “Sekisyo-idai = importance of every day stacking of little efforts.”
1806 After independence, Sontoku started reviving the Ninomiya family
1810 His fields expanded into 1.4ha.
1811 Sontoku became Wakato (clerk) of chief retainer Hattori family of Odawara clan.
1917 Sontoku married Kimoto. His fields expanded into 3.8ha.
1818 Sontoku started rebuilding Hattori family.
1819 Eldest son Tokutaro was born, but soon Tokutaro died of illness. Sontoku divorced Kino.
1820 Sontoku re-married Namiko.
1822 Sontoku took a job in Odawara Domain. Sontoku was ordered to revive Sakuramachi territory (Mooka city, Tochigi prefecture) as the apposition role of headman.
1823 Sontoku sold off all the fields and household goods and moved to Sakuracho by listing the family.
1824 The eldest daughter Fumiko was born.
1825 Sontoku was promoted to Okumikachikaku.
1834 Sontoku wrote “Sansai-hotoku-kinmoroku”
1835 Sontoku started reconstruction of Motegi clan.
1836 Sontoku completed “hotoku-kun (teaching)”.
1837 Sontoku rescued the poor in Odawara clan.
1842 Sontoku was elevated to the Shogunate. Since then. Sontoku called himself “Sontoku.”
1843 Sontoku was ordered to make “Reconstruction Model of Nikko”.
1844 Sontoku started the reconstruction method of the Soma Clan
1848 Sontoku transferred to Higashigo-Jinya (Mooka city, Tochigi Prefecture)
1853 Sontoku started Reconstruction of Nikko. Fumiko died (She was 30 years old).
1854 Sontoku transferred into Imaichi Hotoku office
1855 Sontoku was promoted to Gofushinyaku. Sontoku died on October 20.