Mitsubishi Corporation

vol.14 Yanosuke Resolves to Build Japan's First Modern Business District

Our Roots A history of rising to the challenge

vol.14 Yanosuke Resolves to Build Japan's First Modern Business District

We focus on the purchase of property in Tokyo's Marunouchi district by Yanosuke Iwasaki, Mitsubishi's second president.

In 1889, the Japanese military was looking to build modern barracks in Tokyo's Azabu district. The estimated cost of the project was 1.5 million yen—more than 10% of the military's yearly budget. The government eventually decided to raise money for the project by selling off some land located next to the Imperial Palace. Officials hoped to sell the property to a single buyer that could properly develop the area, but few parties possessed the financial resources to make such a large purchase. The City of Tokyo was considered, but this proved to be impractical as the government's asking price was more than three times the city's annual budget.
Later, the government attempted to sell the land as 16 individual plots. Mitsubishi submitted the highest tenders for all but three of these plots, but the government called off the sale because the bids had fallen far short of expectations. Japan's finance minister later asked Yanosuke to purchase the property at the government's target price. Yanosuke mulled the proposal at length before announcing his decision: "Mitsubishi owes its very existence to the nation. Let's accept the deal for the good of the country."

The contract, which was concluded in March 1890, covered the sale of approximately 110,000 tsubo (nearly 90 acres) of real estate at a price of 1.28 million yen. This was a staggering sum that shook the very foundations of Mitsubishi's management . However, Yanosuke's decision was not solely based on his desire to support the government. Mitsubishi executives who were away in England on business had proposed building "an office district like the one in London" and this vision gradually began to take shape in Yanosuke's mind . Therefore, Yanosuke's decision to purchase the land coincided with his resolve to build Japan's first modern business district.

After becoming president in 1885, Yanosuke acquired interests in mines across Japan. He purchased and expanded the Nagasaki Shipyard, developed financial business and finally set out to build the Marunouchi business district. Meanwhile Hisaya, Yataro's eldest son, had acquired two years of experience as a vice president at Mitsubishi after spending more than five years studying in the U.S. With the enactment of Japan's commercial code in 1893, Yanosuke reorganized Mitsubishi-Sha into Mitsubishi Goshi Kaisha as a fifty-fifty joint venture with Hisaya. He then yielded the presidency to Hisaya and assumed a supervisory role, equivalent to chairman or senior corporate advisor. At the time, Yanosuke was 42 and Hisaya just 28. In accordance with Yataro's last wishes, Yanosuke had only seen himself as a substitute, filling in for his nephew until he was ready to lead the company, and this explains the early transition between the two generations.

Mitsubishi's Magnificent Guest House

Yanosuke purchased the former Takanawa estate of Japanese statesman Hirobumi Ito while he and his family were still living in a different part of Tokyo. In 1903, Yanosuke had the family's Japanese-style residence moved to the hilltop estate in Takanawa, while proceeding to construct a two-story western-style brick building designed by the British architect Josiah Conder. Yanosuke and his wife finally moved to the Takanawa estate in 1907, but Yanosuke was hospitalized soon thereafter and he eventually passed away in the spring of 1908. After that, the western-style residence was used to receive guests of the Iwasaki family and Mitsubishi. Koyata Iwasaki, Mitsubishi's fourth president, named the residence "Kaitokaku" when the property was transferred to Mitsubishi in 1938. The building survived the air raids of World War II, although the interior was severely damaged by fire. In 1964, the residence was restored as the guest house of the Mitsubishi group. Kaitokaku has undergone further remodeling since then and today it provides a luxurious setting for welcoming distinguished guests.