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As trade links such as these became established between the three main cities—Osaka, Edo, and Kyoto—and extended to castle towns throughout the country, institutions to support commerce were also established. For example, in Osaka, a business called ryogaesho (“money changing”) evolved to support trade, which was being conducted using bills of exchange and promissory notes. The Italian word banco, a root of the English word “bank,” means a table or bench used for weighing coins. In Japan, although merchants who charged fees for exchanging money in this way first emerged in the latter half of the 15th century, the economic developments of the 17th century propelled their business to a higher stage of sophistication.
As the money-changing business developed, Osaka merchants kept less cash at their places of business, preferring to deposit extra cash with a money changer they could trust. The money changers, realizing that their reputation for trustworthiness was of prime importance, would only deal with merchants whom they felt were trustworthy as well. This relationship of mutual trust supported the growth of commercial credit, and like today’s banks, money changers came to take deposits, issue loans, and cut drafts.
In 1670, just as business in Osaka was beginning to prosper in earnest, the government chartered 10 of Osaka’s money changers to handle its accounts as a way of making the financial system, the basis of commerce, run smoothly. Tomosada (1648–1696), the younger brother of the third Sumitomo patriarch Tomonobu (1647–1706), was among those 10.
Exactly 40 years after the second head of the House of Sumitomo, Tomomochi (1607–1662), had moved the Sumitomo base of operations from Kyoto to Osaka, the company was growing along with the flourishing commercial metropolis it nestled in, expanding its foothold from copper refining to imports and on into financial services. |
