Kinkichi Nakada | Sumitomo Biographies: Director-Generals | About Sumitomo

Chronology

Introduction

On October 1, 1925, Kinkichi Nakada, Sumitomo’s fourth director-general, stepped down at the age of 62. Having assumed office on December 5, 1922, he had served for less than three years before his resignation.

Nakada’s subordinate Jun Kawada commented in Sumitomo Memoirs, “Far from being overburdened with work, Nakada spent much of his time playing go and smoking cigars, yet he did accomplish a major reform, namely, the introduction of mandatory retirement for employees at the age of 55 and for directors at the age of 60.” There was previously no mandatory retirement age at Sumitomo. In view of the long tenure in office of Masaya Suzuki, the third director-general, Nakada was not appointed to the top post until he was 59. Deliberately setting a mandatory retirement age younger than his own age, Nakada retired on the very day on which the rule came into force.

Early life

Kinkichi (Tadanao) Nakada was born on December 9, 1864 in Nagakura, Odate-machi, Akita-gun, Dewa-no-kuni (present-day Nagakura, Odate City, Akita Prefecture), the second son of Tarozo (Shigenao) Nakada, a retainer of the Akita Domain, and his wife Bun. The thriving castle town of Odate was controlled by the Satake clan, which exercised lordship over the Akita Domain. Kinkichi grew up in a quarter where the residences of samurai families were concentrated. The Nakada family was prominent in Odate, with Kinkichi’s father Tarozo serving as the third mayor of the town and his brother Naotsuka as the 11th.

In the closing years of the Tokugawa shogunate, the Akita Domain was split between two factions: one siding with the pro-shogunate Ōuetsu Reppan Dōmei (an alliance of the Mutsu, Dewa, and Echigo Domains) and the other consisting of fervent supporters of imperial rule. At the outbreak of the Boshin War in 1868, Yoshitaka Satake, the 12th head of the Satake clan, placed the Akita Domain firmly on the side of those seeking to return power to the imperial court. Thus, surrounded by enemies, Odate was put to the torch during a battle on August 21 and burned to the ground. Kinkichi’s father Tarozo fought on as a loyal retainer of the Akita Domain and the five-year-old Kinkichi, together with his mother and brother, sought a safe haven in the mountains. Kinkichi Nakada, known as an enthusiastic smoker, recalled: “We were told that the government forces would march on Odate, turning it into a battlefield. So my family fled to the nearby mountains, which is where I became an inveterate smoker at the age of five. Ever since, not a day has gone by without me lighting up a cigar.”

Kinkichi’s father Tarozo was known for his unswerving loyalty to his lord. In March 1872, Yoshinao, the 13th head of the Satake clan, was about to move to Tokyo following the abolition of the han system. The lord provided rice to his retainers. Tarozo wanted to be of the greatest possible service to his lord. Consulting with the other 35 retainers in Nagakura, Odate, Tarozo used 49 koku of rice (150 yen), which he received from his lord, as the principal for investment, he made a profit and donated 5,000 yen to Yoshinao. Kinkichi inherited his father’s unswerving loyalty.

大館の生家付近 — Odate where the house in which Kinkichi Nakada was born once stood
Nagakura was a quarter where samurai residences were concentrated. The house in which he was born was destroyed in a major fire in 1956 and buildings of NTT and Hokuto Bank now occupy the site. The road is National Route 7.

大館城(桂城)跡 — Former site of Odate (Katsura) Castle
The castle was burnt to the ground during the Boshin War and only parts of the moat and earthworks remain.
Now Katsurajo Park and Odate City Office occupy the site.

両親の墓石 — Graves of Kinkichi Nakada’s parents
At the cemetery of Sufukuji Temple near where the house in which Kinkichi Nakada was born once stood in Odate.
Mr. Nobunao Nakada, the great-grandson of Tarozo, takes care of the graves.

From the judiciary to Sumitomo

小坂鉱山事務所 — Kosaka Mine Office
Founded toward the end of the Tokugawa Shogunate, the Kosaka Mine was a major government-owned mine. It was sold to Fujita Gumi (present-day Dowa Holdings) in 1884.
Built in 1905, Kosaka Mine Office was designated a national important cultural property in 2002 together with Sumitomo Kakkien.

Kinkichi Nakada graduated from Tokyo Imperial University in July 1890 and became a judge at the Yokohama District Court in October. His experience of the Boshin War in childhood may well have influenced his choice of a career in the judiciary where fairness and neutrality are prized. In succession, he became a judge of the Tokyo Court of Appeals, a division head at the Yokohama District Court, and the president of the Mito District Court, eventually being promoted to division head at the Tokyo Court of Appeals in October 1899.

In July 1900, Kinkichi Nakada joined Sumitomo on the recommendation of Masaya Suzuki who had been Nakada’s senior by three years at university. At that time, Suzuki was the general manager of Besshi Mine Office and was casting his recruitment net far and wide to secure talented people to serve under Teigo Iba, the second director-general. The Sumitomo Spirit prioritizing the alignment of business interests with the public interest, advocated by Suzuki, resonated with Nakada. Since his hometown of Odate was near Kosaka Mine, Nakada was well aware of the role that the mining industry could fulfill in furthering the national interest. Upon joining Sumitomo, Nakada was appointed assistant manager of Besshi Mine Office to assist Suzuki. Given that, starting with Saihei Hirose, all Sumitomo’s director-generals had been assigned to the Besshi Copper Mines, Nakada was undoubtedly viewed as an up-and-coming man.

Smoke pollution and Besshi riot

第3通洞 — Adit No. 3 in 1902
Photo courtesy of Sumitomo Historical Archives
Commemorating the opening of Adit No. 3 in 1902. 750 meters above sea level, Adit No. 3 was connected to the Toen Inclined Shaft at the level of the eighth gallery, enabling a big increase in output from the mine. Kinkichi Nakada (extreme right) is next to Teigo Iba (second from the right) in the middle row.

Shunpei Uemura, the general manager of the head office, was appointed general manager of Besshi Mine Office in January 1902 but resigned in April without having moved to Besshi. Nakada succeeded him as general manager of Besshi Mine Office. Since September 1900, Nakada had concurrently served as the manager responsible for formulating the grand design of the Besshi Copper Mines and as the leader of three major construction projects, namely, the Shisakajima Smelter 20 kilometers offshore from Niihama, the Mine Headquarters at Tonaru at the exit of Adit No. 3, 750 meters above sea level, and an aerial cableway. Construction of Shisakajima Smelter was completed in January 1905. Relocation of the smelter from Niihama to Shisakajima was undertaken by Teigo Iba to solve the problem of smoke pollution, but counterintuitively the pollution problem only worsened, with emissions affecting four areas (Uma, Nii, Ochi, Shuso) of the Toyo region in Ehime Prefecture, owing to the rapid increase in the smelting volume and the direction of the prevailing wind. In April 1908, Nakada, who was a director of Osaka Head Office, visited the polluted areas together with the new general Manager of Besshi Mine Office who had succeeded him. Despite being besieged by a thousand angry farmers, Nakada was unintimidated. He listened attentively to their views and devoted himself to finding a definitive solution.

Meanwhile, the Besshi Copper Mines retained the mining camp system that had persisted since the Edo period. There were 17 camps, each consisting of about 100 miners and managed by a camp boss. The miners were not directly employed by Sumitomo but hired by camp bosses. Sumitomo’s Mining Department paid wages and provided rice to the camp bosses who often exploited their miners.

In September 1906, Nakada established the Mining Camp Control Regulations whereby the number of mining camps was fixed at 20 and Sumitomo paid wages directly to each miner and dismissed exploitive camp bosses. In April 1907, incited by disgruntled camp bosses opposed to Nakada’s reforms, a rumor spread that the miners would dynamite the mineshafts and other facilities, thus wrecking the mines. In a letter sent to Director-General Masaya Suzuki in April 1907, Nakada wrote, “They are threatening us, and if we are cowed by this rumor, we will fall into their trap,” and expressed his determination to deal with the situation resolutely. Eventually, on June 4, 1907, the discontented camp bosses and some 300 miners resorted to violence, setting fire to offices and company housing. Nakada conferred with Director-General Suzuki and requested mobilization of troops through the governor of Ehime Prefecture. Unnerved, the mob dispersed on June 7 before the troops arrived. Henceforth, employment relations at Besshi Copper Mines were conducted on modern principles.

東延斜坑機械場 — Machinery yard of the Toen Inclined Shaft (late Meiji era)
Photo courtesy of Sumitomo Historical Archives
Symbolizing the modernization of the Besshi Copper Mines, this shaft reaches the rich ore zone at the level of the eighth gallery.
This is where the riot occurred.

四阪島製錬所 — Shisakajima Smelter (with six chimneys)
Photo courtesy of Sumitomo Historical Archives
The chimneys were constructed in 1914 to prevent the spread of sulfurous acid gas to Niihama and Imabari, but they ceased to be used from 1917 onward because they failed to perform as envisaged. Sumitomo continued by trial and error to seek a definitive solution to the smoke pollution problem.

旧住友銀行の新居浜支店 — Niihama branch of Sumitomo Bank
Photo courtesy of Hirose Memorial Museum in Niihama City
Construction of Niihama branch was completed in 1901 in Sobiraki, Niihama. It was designated a national registered cultural property in 2001. Nowadays, it is the Sumitomo Chemical Historical Materials Museum.

Assumption of office as director-general and business execution

住友伸銅所 — Sumitomo Copper Works in Ajigawa
The site was sold to Osaka City in March 1925 to accommodate a new public market.

住友生命・信託の設立書類 — Documents concerning the establishment of Sumitomo Life and Sumitomo Trust
Owned by Sumitomo Historical Archives
In light of his experience in Europe and North America where he had familiarized himself with the latest commercial and industrial developments, Director-General Nakada was eager to expand Sumitomo’s financial operations.

In May 1903 Nakada was appointed director of the Osaka Head Office but remained at Besshi. Eventually, in March 1908, he returned to Osaka, appointing Munio Kubo to succeed him as general manager of Besshi Mine Office. Nakada travelled in Europe and North America from March to December 1904 to familiarize himself with the latest commercial and industrial developments. From March 1910 he concurrently served as the general manager of Sumitomo Bank. In February 1912, he reorganized the bank as a joint-stock company and concurrently served as managing director, effectively the bank’s chief executive. Nakada subsequently became a director of Sumitomo Steel Foundry (the predecessor of Sumitomo Metal Industries) in 1915, of Osaka Hokko (the predecessor of Sumitomo Corporation) in 1919, and of The Sumitomo Electric Wire and Cable Works (present-day Sumitomo Electric Industries) and Nippon Electric in 1920. Nakada was appointed managing director of Sumitomo Goshi Kaisha (limited partnership) established in February 1921. He served adeptly as Masaya Suzuki’s right-hand man.

On December 5, 1922 Nakada succeeded Suzuki, who retired due to illness, and became the fourth director-general. Upon assuming office, Nakada declared that it was his responsibility to adhere to the Rules Governing the House of Sumitomo and inherit the policy of Director-General Suzuki, his predecessor. In a speech at the management meeting held in January 1924, he exhorted his audience: “Don’t view business as a battlefield where conflicting interests fight for profit. Devote yourself to the achievement of ethical economic development. Contribute to the sound development of the nation and to the betterment of society through Sumitomo’s business.”

During the recession that occurred after World War I, Nakada acted decisively and adeptly. In January 1924, he established the Labor Affairs Group and the Facilities Group in the Second Section of the Human Resources Department of the Sumitomo Head Office to deal with the challenges posed by the emergence of a powerful labor movement. In October 1924, he purchased a coal mine in Hokkaido and established Sumitomo Ban Coal Mining (the predecessor of Sumitomo Coal). In March 1925, he sold the extensive (27,000 tsubo 89,100m²) site of Sumitomo Copper Works (the predecessor of Sumitomo Metal Industries) and Sumitomo Warehouse in Ajigawa to Osaka City in response to the city’s plan to establish a public market there. The two companies moved to Sakurajima and Kawaguchi, respectively, on opposite banks of the Ajigawa River just before it enters the sea. In April, he established distributors of Sumitomo products in Kobe and Nagoya (the predecessor of Sumitomo Corporation). In June, he reorganized the fertilizer manufacturing plant (the predecessor of Sumitomo Chemical) into a joint-stock company and purchased Hinode Life Insurance (the predecessor of Sumitomo Life Insurance) in Osaka. In July he established Sumitomo Trust.

Retirement attesting to his probity

As mentioned at the beginning of this biographical sketch, Nakada introduced a mandatory retirement age system on October 1, 1925 and retired in accordance with the new rules.

Even as late as 1933, only 140 of 336 leading Japanese companies had introduced mandatory retirement age systems. Even Mitsui Gomei Kaisha did not introduce such a system until 1936. Sumitomo, a merchant house that had traded since the Edo period (early modern period), showed itself to be a fleet-footed innovator by introducing a mandatory retirement age system. Teigo Iba, the second director-general, who retired at the age of 58, had cautioned against “domination of the old.” The achievement of Nakada, who institutionalized this practice, was significant.

Kinkichi Nakada died of pulmonary emphysema on February 20, 1926, at the age of 63, just six months after his retirement. Kiichiro Hiranuma, who worked at the Ministry of Justice and later became prime minister, lamented over the sudden death of his best friend, saying, “I wanted him to live longer.” His Buddhist name includes “north hometown” and “probity.” His grave is at Uriwari Cemetery in Osaka City.

晩年の中田総理事 — Director-General Nakada toward the end of his life
Photo courtesy of Sumitomo Historical Archives
Kinkichi Nakada was a man of probity.

Kinkichi Nakadaの墓所 — Grave of Kinkichi Nakada
His Buddhist name alludes to his hometown of Odate.
His soul rests with his wife and children at Uriwari Cemetery in Hirano-ku, Osaka City. (Grave No. 1-3)