Osaka and Niihama: Part 1

Third Director-General Masaya Suzuki’s aspirations

Masaya Suzuki
Masaya Suzuki
Photo courtesy of Sumitomo Historical Archives

The previous section focused on Teigo Iba, the second director-general, known as a “man of noble character” in Ishiyama and praised as a “man of the utmost integrity,” who did so much to modernize Sumitomo. Continuing the narrative of Sumitomo’s modernization, in this section Iba’s successor Masaya Suzuki, the third director-general, is in the spotlight as we explore his personality, managerial style, and other attributes.

Masaya Suzuki was only 44 years old when he was appointed director-general, 10 years younger than his predecessor Teigo Iba had been when he rose to the top position at the age of 54. Serving as director-general for 19 years until his death in 1922, Suzuki equipped Sumitomo with a modern organizational structure and expanded the business without ever deviating from a management policy based on the virtues of loyalty and filial piety. In Suzuki’s own words: “Do justice, emphasize morality, and earn the confidence of society” and “Prioritize the national benefit over self-interest.”

Sumitomo has had seven director-generals, including Saihei Hirose, the first director-general, and Teigo Iba, the second. Among all these distinguished leaders, Masaya Suzuki had the longest tenure.

When the House of Sumitomo was plunged into crisis in the years leading up to and following the Meiji Restoration, Hirose prevented the sale of the Besshi Copper Mines, which was Sumitomo’s mainstay business, achieved a turnaround, and laid the foundation for present-day Sumitomo. Iba tackled the pollution problem head-on, seeking a definitive solution, addressed the concerns of the local people who had suffered damage, and embarked on an afforestation campaign to restore the environment. Sumitomo was fortunate in that its director-generals were individuals eminently suited to exercising leadership during a period of dramatic change. Their acumen and capabilities enabled them to address numerous tough issues and develop the business.

In his 19-year tenure as director-general, Suzuki made an immense contribution to Sumitomo by inheriting the policies of his predecessors, Hirose and Iba, and continuing the great work that they had begun. Suzuki was also the right person to exercise leadership in that period.
Mr. Teruaki Sueoka, Deputy Director of Sumitomo Historical Archives, explains: “Suzuki relinquished his post as an official at the Ministry of Home Affairs to join Sumitomo because he empathized with Sumitomo’s creed of pursuing development beneficial to the country and its people. Considering himself as much a representative of Japan as of Sumitomo, Sumitomo sought to serve the national interest by expanding into new business fields and, for that purpose, he hired many excellent graduates to manage the new businesses. The foundation of today’s Sumitomo was systematically reinforced while Suzuki was director-general.

On joining Sumitomo in 1896, Suzuki was appointed deputy general manager of Osaka Head Office. Since Tomoito, who had just become the 15th head of the Sumitomo family, and Director-General Teigo Iba believed Masaya Suzuki was a person to whom they could entrust the future of Sumitomo, they recruited Suzuki from the civil service or, to use contemporary terminology, they headhunted him.

Upon joining Sumitomo, Suzuki said: “I am an official and know nothing about business… I will put virtue first, and profit second. I aim to gain profit through virtue. If that is agreeable to you, then I accept your offer.” Suzuki’s values were synonymous with Sumitomo’s business philosophy.

Sumitomo family head Tomoito and Suzuki were both in their 30s. They went on to fulfill leading roles in drawing up the grand design for Sumitomo in the modern world. Suzuki’s tenacity was evident from the start of his career at Sumitomo, as deputy general manager of Osaka Head Office. On being appointed director-general of Sumitomo in 1904, he strengthened his resolve: “Acting together with like-minded people, I intend to tread the path of justice and equity, undertaking projects beneficial to the nation from a long-term perspective.”

Suzuki viewed Sumitomo not just as a commercial enterprise but also as an organization whose activities contributing to a flourishing state and nation inspired respect and affection. Adhering to his convictions, Suzuki established several new businesses, including Japan’s first manufacturer of telephone cables and high-voltage electrical cables and a manufacturer of seamless steel pipes to meet the navy’s needs for condensate pipes. Sumitomo businesses launched by Suzuki that would benefit the nation from a long-term perspective continue to flourish to this day.

Disaster-stricken Besshi and afforestation

Masaya Suzuki relinquished his post in the civil service as a counselor at the Ministry of Agriculture and Commerce to join Sumitomo when he was 36, in the prime of life.
In January 1899, three years after joining Sumitomo as deputy general manager of Osaka Head Office, Suzuki was appointed general manager of Besshi Kogyo-sho (Besshi Mine Office). In August 1899, only seven months after Suzuki had moved to Besshi, the Besshi Copper Mines were struck by an unprecedented disaster. A landslide triggered by a rainstorm destroyed all the mine facilities and took the lives of 514 people, mostly miners and their wives and children.

At the devastated site, Suzuki took charge of implementing remedial measures. He relocated Besshi Mine Office to the Sobiraki Smelter in Niihama.

Suzuki attributed the disaster to deforestation brought about by clearcutting to secure sufficient timber for use in copper smelting. He said: “Since mining is work that damages the land, which is the nation’s heritage, we must engage in work that protects the land. The forestry business is an ideal way of atoning for the damage.”

Mr. Sueoka explains: “On viewing the disaster-stricken site, Suzuki immediately grasped the magnitude of the calamity. He also realized it was the bitter fruit of environmental degradation caused by ill-considered development and deforestation. So Suzuki decided to restore the mountains damaged by mining to their original state by embarking on an ambitious tree-planting program, taking Director-General Iba’s afforestation project to the next level.”

Mr. Sueoka pointed out another reason for Suzuki’s afforestation campaign: “Struck by the Great East Japan Earthquake, Japan is facing various difficulties. In these circumstances, helping hands have been extended to the disaster-stricken areas not only from other parts of Japan but also from around the world, in the form of monetary donations, relief supplies, and so forth. In fact, when Besshi suffered this calamity, monetary donations and items, such as blankets, were received from around Japan. The spirit of mutual aid cultivated among the Japanese since ancient times is apparent whenever disaster strikes as offers of assistance to those in difficulty attest. Suzuki wanted to reciprocate this generosity of spirit. Thus, he forged ahead with the ambitious afforestation plan. For him afforestation was also an act of atonement by Sumitomo.”

Forest at Shiiba Village in Miyazaki Prefecture
A letter written by Masaya Suzuki to Korou Otsuka (deputy manager of Sumitomo Ringyo-sho in 1920)
It states, “Forestry should be a major nationwide project.”
Photo courtesy of Sumitomo Historical Archives

Suzuki’s ambitious afforestation initiative built on the achievements of his predecessor Director-General Teigo Iba. Suzuki visited sites and personally supervised the planting of saplings. Indeed, he himself planted saplings on the Besshi mountains and in neighboring areas. In 1917, Suzuki launched the forestry business across Japan, extending from Kitami in Hokkaido in the north to Shiiba Village in Miyazaki Prefecture in Kyushu in the south, as well as in Korea. Forestry projects were launched in response to requests from municipalities. Suzuki established the Forestry Department (predecessor of Sumitomo Ringyo-sho) at Sumitomo General Head Office in 1919 to undertake forestry projects beneficial to the nation from a long-term perspective.

The land where Sumitomo conducted afforestation had been purchased or was leased from its owners, either governmental or private. Terms and conditions for lease of these mountainous tracts required the lessee to restore the land to its original forested state upon expiry of the term of the lease. Therefore, Sumitomo conducted afforestation on all the land regardless of whether it was owned or leased.

Suzuki said, “Sumitomo’s forestry business should be a hundred-year project, and I want the flourishing mountain forests to be the expression of all that Sumitomo cherishes.” As for the Shisakajima Smelter’s smoke pollution problem, Suzuki declared his determination to solve it: “Sumitomo will construct facilities to remove emissions at any cost. I am determined to do it even if the cost exceeds the compensation fees.” It was not until 1939, 17 years after Suzuki’s death, that a definitive solution was implemented, namely, a plant for neutralizing sulfurous acid gas.

Projects beneficial to the nation from a long-term perspective

Masaya Suzuki assumed office as director-general of Sumitomo in 1904. In his inaugural speech, he expressed his resolve: “Acting together with like-minded people, I intend to tread the path of justice and equity, undertaking projects beneficial to the nation from a long-term perspective.” Suzuki envisioned Sumitomo not just as a commercial enterprise but also as an organization whose activities contributing to a flourishing state and nation inspired respect and affection. In other words, he expressed his determination to engage in business that would benefit both Sumitomo and the nation based on a business plan formulated from a long-term perspective.

Although the mid-career move from government administration to the private sector may have been temporarily disconcerting for Suzuki, he soon found his feet. During a trip to the West shortly after joining Sumitomo, he conceived the aspiration to make Japan a leading state comparable to the developed European countries and the U.S. He committed himself to making that aspiration the wellspring of practical action.

Cable factory of Sumitomo Copper Plant (the predecessor of Sumitomo Electric Wire & Cable Works) (late Meiji era)
Photo courtesy of Sumitomo Historical Archives
Sumitomo Fertilizer Manufacturing in Niihama (early Showa era)
Photo courtesy of Sumitomo Historical Archives

As mentioned above, in addition to the afforestation project, Suzuki launched various Sumitomo businesses that continue to flourish in the 21st century. A publication by Mr. Teruaki Sueoka, Deputy Director of Sumitomo Historical Archives, gives the details: Suzuki established Sumitomo Electric Wire & Cable Works (present-day Sumitomo Electric Industries) in August 1911, the first manufacturer of telephone cables and high-voltage electrical cables in Japan. In 1912, Sumitomo Copper Plant (the predecessor of Sumitomo Metal Industries and Sumitomo Light Metal Industries) began manufacturing seamless steel pipes and responded to the navy’s demand for condensate pipes. In 1913, he established Sumitomo Fertilizer Manufacturing (present-day Sumitomo Chemical), which heralded development of the chemical industry in Japan. In 1919, he established Tosa-Yoshino River Hydro-Electric Power Company (present-day Sumitomo Joint Electric Power) to power the Besshi Copper Mines. Furthermore, in connection with afforestation at Shiiba in Miyazaki Prefecture, Suzuki also secured rights to the waters of Mimi River, which eventually led to the founding of present-day Shikoku Electric Power and Kyushu Electric Power.

All that Suzuki accomplished with a view to enabling Japan to step onto the world stage also brought Sumitomo closer to the ocean. Indeed this allure of the ocean—with operations based at convenient coastal sites where the ocean offered an opening to the world—is a constant theme in Sumitomo’s history. Ever since Sumitomo first sought a base at a key waterfront location with excellent access to shipping and started copper trading with foreign merchants via the Dutch Trading Post at Dejima in Nagasaki, Sumitomo’s development has brought it ever closer to the ocean. The many Sumitomo facilities sited on land reclaimed from the sea, or adjacent to canals or in ports, are eloquent testimony to the importance of this theme in the Sumitomo story.

Osaka used to be known as the City of Water. At its beating heart was Nakanoshima, a sandbank at the junction of the Dojima and Tosabori rivers, which came to symbolize the bustling commercial city. In the Edo period, Nakanoshima was crowded with numerous residences of daimyo and the rivers were thronged with vessels bearing cargos of every description from all over Japan. At the threshold of the modern world, with an eye to Osaka’s further development, the need to formulate a plan for the Osaka Bay waterfront area became ever more pressing.

However, Osaka’s lackluster economy during the turbulent years when Japan was undergoing the Meiji Restoration prevented the city from developing the waterfront. In 1916, the House of Sumitomo participated in Osaka City’s project to expand the wharfs of the Port of Osaka. At the same time, with a view to promoting the port facilities business and developing the coastal industrial zone, the House of Sumitomo, having formed an association with other landowners with property along the Shorenji River, launched an Osaka Bay development project centering on Shimaya and Okijima-shinden, areas owned by the House of Sumitomo to the north of the Port of Osaka. As director-general, Suzuki took charge of the development project. In 1919, Suzuki established Osaka Hokko (Osaka North Harbour Co., Ltd., the predecessor of Sumitomo Corporation), which purchased the land from the landowners association and spurred development of the area around the river mouth from Shin-yodogawa to Ajigawa.

The development of Okijima, Shimaya, Nishijima, and Tsuneyoshi (areas in the present-day Konohana Ward of Osaka City) dates back to that period. Sumitomo Electric and Sumitomo Chemical are among the companies affiliated with Sumitomo that have factories in the area. Reviewing Sumitomo’s rapid growth and Osaka’s development as a leading commercial city, Mr. Sueoka comments: “Joining Sumitomo enabled Masaya Suzuki to remain true to his ideals and promote ‘projects beneficial to the nation from a long-term perspective’ as a ‘representative of Japan.’ Sumitomo’s rapid expansion under Suzuki’s leadership and Japan’s extraordinary modernization were two aspects of a single process.”

Masaya Suzuki’s passion for fostering excellent people

“People make the enterprise” has long been a sentiment espoused by numerous companies. When we consider the development and prosperity of Sumitomo Group companies, it is evident that their success is attributable to the manifold abilities of the people constituting those enterprises—everyone from the most senior executive to the latest young recruit.

Masaya Suzuki, the third director-general, launched various pioneering businesses and developed them. His leadership was presented and discussed above. Another noteworthy attribute of Suzuki was his passion for finding and fostering excellent people. He paid the utmost attention to the recruitment and cultivation of talented individuals who could lead Sumitomo into the future. Attracted by Suzuki, talented people from diverse backgrounds were eager to work for Sumitomo, including those who eventually became director-generals.

A publication by Mr. Teruaki Sueoka, Deputy Director of Sumitomo Historical Archives, lists people who joined Sumitomo from the end of the Meiji era through the Taisho era. Among these who had already made their mark in the world were Kinkichi Nakada (fourth director-general) from the Tokyo Court of Appeals (the present-day Tokyo High Court), Kankichi Yukawa (fifth director-general) from the Ministry of Communications, Masatsune Ogura (sixth director-general, subsequently Minister of Finance) from the Ministry of Home Affairs, and Komatsuchi Odaira (general manager of Besshi Mine Office, subsequently vice president of the South Manchuria Railway) from the Ministry of Agriculture and Commerce. Suzuki paid just as much attention to cultivating young men fresh from university who were taking their first steps in the world of work and went on to propel Sumitomo’s development, such as Jun Kawada (managing director of Sumitomo Head Office, subsequently a poet), Kageji Washio (managing director of Sumitomo Besshi Mine), Shunnosuke Furuta (seventh director-general), and Keijiro Kitazawa (director of Sumitomo Head Office, subsequently president of Daimaru). Sumitomo alumni also included the architects Eikichi Hasebe and Kenzo Takekoshi; Banri Ebara (professor of Tokyo Imperial University) and Tadao Yanaihara (president of The University of Tokyo).

Among the surviving papers of Masatsune Ogura, who became the sixth director-general, and Komatsuchi Odaira and Kageji Washio, both of whom were later in charge of the Besshi Copper Mines, are comments on their experience of working under Masaya Suzuki that, according to Mr. Sueoka, reveal his personality.
“Ogura commented: ‘Director-general Suzuki would give a subordinate meticulous instructions until he was confident of the individual’s capability. But once he had gained that confidence, he would wholeheartedly trust the individual, putting him completely in charge and letting him get on with the work without any interference.’
Odaira formulated a plan for the comprehensive refurbishment of the Shisakajima Smelter involving heavy investment and the laying of a 20-kilometer submarine cable, the world’s longest at that time, from Niihama to Shisakajima. Overruling the naysayers, Suzuki gave the green light for the projects based on his trust in Odaira, resulting in the revival of Besshi Mine.
When Washio was working in the Mining Department at Besshi Mine Office, he proposed measures to improve labor-management relations at Besshi but his direct superior rejected the proposal. Suzuki adopted Washio’s proposal. He also supported Washio’s plan to open a private school for mineworkers and even gave it a name, ‘Jikyo-sha.’ Suzuki listened attentively to the opinions of young employees. In recalling his experience of working with Suzuki, Washio reached for a maxim: ‘A true gentleman will sacrifice his life for those who understand him.’ Washio must have been resolved to do everything for Suzuki.”

There is another episode that shows Suzuki’s character. Saying “the loss resulting from the failure to recruit a single outstandingly talented individual could never be made good,” it was the custom of Director-General Suzuki to participate in the interviews of prospective recruits, carefully appraising each candidate.
Suzuki had the Head Office handle the recruitment of all new Sumitomo employees. They were assigned to organizations directly managed by the Head Office, such as Besshi Mine Office, Copper Works, and Fertilizer Plant, or to affiliated companies, such as Sumitomo Bank, Sumitomo Steel Works, and Sumitomo Electric Wire & Cable Works. Regardless of where they were assigned, whether to offices directly managed by the Head Office or affiliated companies, a uniform system of remuneration and benefits was applied to all new employees so as to ensure assignment of the right people to the right jobs, thus enabling them to display their full potential.

Third Director-General Masaya Suzuki with employees at the Neisei Dormitory
Photo courtesy of Sumitomo Historical Archives

Furthermore, Suzuki built the Neisei Dormitory, company quarters for unmarried employees, at Unagidani in Osaka where the Sumitomo family’s main residence had once stood. “Neisei,” the dormitory’s name coined by Suzuki, alludes to the maxim “Tranquility yields transcendence” in The Three Kingdoms, a 14th century Chinese romance.
Mr. Sueoka says: “Suzuki’s commitment to fostering capable people who would be the future leaders of Sumitomo is evident in the name of the dormitory. Suzuki sometimes stayed at the dormitory and engaged in heart-to-heart discussions with the young employees, about the nation, business, and so on, sometimes offering advice to them. By doing so, Suzuki gained their affection and respect, encouraging them to develop their capabilities and giving them opportunities to apply those capabilities to the maximum extent.”

Proceed to Osaka and Niihama: Part 2