In 1860, a special Japanese envoy stopped in Honolulu on the way to Washington, DC, thus beginning formal recognition between the Japanese and Hawaiians.
In 1868, members of the Japanese working class came as contract labor to the relatively unpopulated young city of Honolulu to fill job openings in the sugar plantations.
Although the arrangement was originally temporary, many stayed, such that by 1908 the Japanese constituted 40% of the population of the Territory of Hawaiʻi, and had expanded to some of the professional fields. (LOC-HABS)
The government-supported Yokohama Specie Bank, founded in Japan in 1880, was international in origin. It developed an extensive network of branches, facilitating trade through its participation in foreign exchange activities, trade financing and even long-term financing of the raw material needs of Japanese industry. (Jones)
The bank was named after the ‘specie,’ a silver coin (as distinguished from bullion or paper money) used as an international currency for settling payments among traders. The word is Latin for “in kind;” we similarly use the term ‘species’ as a class of individuals having some common characteristics or qualities (distinct sort or kind.)
The Yokohama Specie Bank set up its first representative office in Shanghai, associated with the growing triangular cotton trade among Japan, India and China. It did so at the request of Japanese businessmen, who – when India ended free coinage of silver that year – had major difficulties with foreign exchange transactions. (Jones)
Japanese banking came to Hawaiʻi on August 8, 1892, with the opening of the Honolulu branch of the Yokohama Shokin Giriko, the Yokohama Specie Bank, Ltd.
The bank first operated from offices in the Japanese consulate. By 1900, the bank had moved to the Republic Building on King Street between Bethel and Fort Streets. Most of the bank’s depositors were Japanese, although the Chinese and Hawaiians had accounts there in smaller numbers.
It did not come under the monarchy’s jurisdiction in a commercial sense, as it was established as an agency and acted as a part of the Japanese consulate. However, it incorporated in Hawaiʻi in 1895, its increasing business making certification necessary under the Government’s Foreign Corporation Law. (LOC-HABS)
Although the Yokohama Specie Bank conducted a merchant bank business in Hawaiʻi, its principal function remained that of transacting foreign exchange business.
In 1907, the Yokohama Specie Bank bought the property at the corner of Merchant and Bethel Streets. From the mid-nineteenth century, this site had been occupied by the Sailor’s Home, which was a three-story structure whose cornerstone was laid by King Kamehameha IV on July 31, 1855.
The new bank building was the design of architect Harry Livingston Kerr, responsible for more than 900 buildings erected in Honolulu (from 1897 to 1937.)
The cornerstone was laid on October 20, 1908. A group photograph of the staff of the bank was included in the items placed in the cornerstone. It opened on the April 18, 1910, with separate receptions for Caucasians, Japanese and Chinese, and general public.
The brick and steel building was considered the most fireproof building in town, having no exposed wood (it has copper and marble window casings, copper doors and sashes.) The architect Kerr modestly proclaimed it “the finest structure in Honolulu today.”
Visitors to the new building were particularly struck by the steel desks, including roll tops, which were made to look like wood. The vaults, too, received much attention, the one on the first floor being for the deposit of cash, and two in the basement, one for storage and one for the safe deposit, with a capacity for 3,000 boxes.
The bank followed the Japanese teller procedure, in which one main cashier controlled all cash from a central desk. The tellers acted as his agents, working from desktops instead of the customary tellers’ cages.
Following the Japanese attack on Pearl Harbor (December 7, 1941,) the building was confiscated by the Alien Custodian Agency.
During the war, the first floor was used for storing confiscated possessions, while the basement was converted into a 250-man drunk tank for inebriated military personnel. Showers, toilets and cell bars were installed.
In February of 1941 the United States Treasury Department started liquidating the $12,000,000 in assets of the three Japanese banks in Hawaii at that time.
The Yokohama Specie Bank was the hardest hit of the three, because it was the only one solely owned by Japanese interests. Despite claims filed, $1.3 million belonging to Japanese depositors was still impounded in 1943. (Non-enemy aliens and U.S. citizens received their impounded money almost immediately.) The Justice Department authorized payment on March 2, 1948.
By late 1949 it had paid out $1.1 million to Yokohama Specie Bank depositors. However, the government refused to pay any interest on the impounded funds, until forced to do so by lawsuits which were not settled until April of 1967.
The US Justice Department had completed liquidation of Yokohama Specie Bank assets when it was sold to City Realty in 1954. The city of Honolulu then leased the building for the Honolulu Police Department Traffic Citation Bureau. It’s now the downtown site for Cole Academy. It is part of the Merchant Street Historic District. (LOC-HABS) (Lots of information here is from HABS.)