During the Meiji era, Viscount Shinagawa Yajirō and Count Hirata Tosuke studied European cooperative models, particularly the Schulze-Delitzsch and Raiffeisen systems, as a means to address Japan’s rural economic challenges. Confronted with widespread tenant indebtedness, falling agricultural incomes, and increasing commercialization, they sought to adapt these foreign models to support farmers through affordable credit and collective cooperation. Their efforts culminated in the establishment of Japan’s first comprehensive cooperative law in 1900.1
During the 1870s and 1880s, Yajirō and Tosuke travelled to Germany and studied social and economic systems. What captured their attention were the Schulze-Delitzsch and Raiffeisen models of savings and credit cooperatives. The Schulze-Delitzsch model, developed by Hermann Schulze-Delitzsch, sought to protect “the independence of our lower-middle-class tradespeople” against “the monstrous development of big industry,” and advocated for credit, warehousing, producing, marketing, and consumer cooperatives.2 F.W. Raiffeisen developed his own version – one that crucially extended the concept of cooperatives to rural and farming communities and one that encouraged a single cooperative for each village.3
Shinagawa and Hirata recognized that similar institutions could benefit Japan’s countryside. By the mid-1880s, about 70% of the working population was employed in agriculture, with the sector making 40% of the nation’s gross national product.4 Farmers faced a decrease in net agricultural income of 17 to 22% caused by the new land tax as well as frequent fluctuations in rice prices.5 Japan, like Germany, also saw an increase in commercialisation. Tenants typically paid rent in kind for rice land, with rates fixed annually based on expected harvests and adjusted only if yields dropped below 10%. Increasingly during the Meiji period (1868-1912), tenants began to supply their own capital borrowing from landlords and hiring additional labour.6 Amidst this context, Viscount Shinagawa and Count Hirata recognised that the Raiffeisen and Schulze-Delitzsch cooperative models could be introduced, to supply cheaper credit to farmers.7
In 1891, as Shinagawa became Minister of the Interior and Hirata joined the Legislative Bureau, the pair drafted a Cooperative Credit Society Bill based on the German models. The bill was proposed to the Second Imperial Diet in 1891 but failed to be enacted when the Lower House was dissolved after a budget crisis. Six years later, the same bill was presented to the Tenth Imperial Diet as the First Industrial Cooperative Bill. Again, although deliberated, the bill was shelved when the Diet session ended early.8
This process was accompanied by a heavy campaign of propaganda led by Shinagawa and Hirata advertising the benefits of cooperative societies. Ogata argues that there was much collaboration between Shinagawa and Hirata, and the Hotokusha, an altruistic mutual savings and credit society founded in 1843.8 The drafters formed two pioneer societies in 1892 in Kakegawa and Mitsuke in Shikzuoka Prefecture, a stronghold of the Hotokusha. The propaganda campaign was also helped by Mr. Fukuzumi, and the pioneer societies were organized by Mr. Okada and Mr. Ito, all of whom were leading spirits of the Hotokusha Movement. Ogata also cites evidence of a meeting between Hirata and Mr Fukuzumi to integrate the German system of credit cooperatives with “the high moral and ethical principle of the Hotokusha.”9
According to Fisher, the bill was criticised on two main grounds. The first was its perceived foreignness.10 An ‘almost exact imitation’ of the German Co-operative Law, more native organisations like the Hotokusha found the law alien from their system (which functioned more as a charitable social institution).8 The second reason was the failure of many of the credit societies’ new ventures, which Fisher accords as unsurprising given the lack of competent and trustworthy management.
By 1896, however, official surveys recorded 101 credit societies; two years later, 144 societies with over 21,000 members and assets exceeding 922,000 yen were in operation. Around this time, the forerunners of marketing and purchasing cooperatives also appeared, helping farmers collectively buy seeds, fertilizers, tools and machinery.
Recognizing this momentum, the government decided to provide a comprehensive legal framework for cooperative activity. In 1897, a new bill, this time sponsored by the Department of Agriculture and Commerce, was presented to the House of Peers. Drawing inspiration from both the Rochdale consumer cooperative model in Britain and the German Raiffeisen credit model, the proposed law covered multiple types of cooperatives: credit, purchasing, marketing, and production cooperatives, which could manage shared equipment, hospitals, or kitchens. The law was finally enacted in March 1900.
Hirata worked for the 1900 bill as a member of the House of Peers, and Shinagawa witnessed the bill turn into law just a few days before his death. 8
- G.M. Fisher, ‘The Cooperative Movement in Japan’, Pacific Affairs, 11:4 (1938). [↩]
- H. Schulze-Delitzsch, Assoziationsbuch fiir deutsche Handwerker und Arbeiter (Leipzig, 1853), p. 56. [↩]
- B. Fairbairn, ‘The Rise and Fall of Consumer Cooperation in Germany ‘ in E. Furlough and C. Strikwerda (eds) Consumers against Capitalism? Consumer Cooperation in Europe, North America, and Japan, 1840-1990 (Oxford, 1999), pp 270-273. [↩]
- B.R. Tomlinson, ‘Rural Society and Agricultural Development in Japan, 1870–1920: An Overview,’ Rural History 6:1 (1995), p. 46. [↩]
- Ibid, pp. 49, 51. [↩]
- M.V. Madane, Agricultural Cooperatives in Japan: The Dynamics of Their Development (International Co-operative Alliance, 1990), p. 54. [↩]
- Fisher, ‘The Cooperative Movement in Japan’, p. 479. [↩]
- Ibid. [↩] [↩] [↩] [↩]
- K. Ogata, The Co-operative Movement in Japan, (London, 1923), p. 46. [↩]
- Fisher, ‘The Cooperative Movement in Japan’, p. 479. [↩]