“The establishment of a cash economy and community of foreigners in Hawai‘i during the early years of the Pacific whaling industry also led to the development of commercial fisheries in the waters around the islands.” (Schug)
Then came sugar … A shortage of laborers to work in the growing (in size and number) sugar plantations became a challenge. The only answer was imported labor.
The first to arrive were the Chinese (1852.) The sugar industry grew, so did the Chinese population in Hawaiʻi. Concerned that the Chinese were taking too strong a representation in the labor market, the government passed laws reducing Chinese immigration. Further government regulations, introduced 1886-1892, virtually ended Chinese contract labor immigration.
In March 1881, King Kalākaua visited Japan during which he discussed with Emperor Meiji Hawaiʻi’s desire to encourage Japanese nationals to settle in Hawaiʻi.
Kalākaua’s meeting with Emperor Meiji improved the relationship of the Hawaiian Kingdom with the Japanese government and an economic depression in Japan served as motivation for agricultural workers to move from their homeland. (Nordyke/Matsumoto)
The first 943-government-sponsored, Kanyaku Imin, Japanese immigrants to Hawaiʻi arrived in Honolulu aboard the Pacific Mail Steamship Company City of Tokio on February 8, 1885. Subsequent government approval was given for a second set of 930-immigrants who arrived in Hawaii on June 17, 1885.
With the Japanese government satisfied with treatment of the immigrants, a formal immigration treaty was concluded between Hawaiʻi and Japan on January 28, 1886.
“Japanese social conventions compelled established residents in Hawai’i to offer guidance and support to new arrivals, who could expect assistance especially from ken-jin, fellow immigrants from the same region of Japan.”
“The transition to American society was eased for Japanese immigrants by the establishment of tightly knit communities. … These cohesive communities were important sources of financial and social capital for budding entrepreneurs.” (Schug)
“Plantation workers had no credit and minimal income, so banks were quick to deny them loans.” (CUInsights)
“Families … banded together in times of hardship and celebration. Families not only shared their harvests, but also helped others out financially through a feudal Japanese system known as ‘tanomoshi.’ Families regularly invested to create a large sum of money to provide financial assistance.” (Nancy Iwasaki Saiki; Zentoku Foundation)
“In the Tanomoshi the Japanese have put a unique concept of co-operation into effect. Tanomoshiko as used in Western Japan comes from ‘tanomui’ which means “dependable.’”
“The procedure seems to have originated in pooling contributions to a given fund and drawing lots to see who might go on pilgrimages to the shrines and temples. During the early part of the Tokugawa Period [1603–1867],Tanomoshi took on a definite economic meaning.” (Bogardus)
“If a man needs money to pay debts, to build a house, or to bear the expenses of marrying off his daughter, he invites a group of friends, usually on payday, to drink tea.”
“There is no limit to the uses of the tanomoshi. One group of women held a five dollar one until they all had wrist watches. Among men a suit tanomoshi is favored.” (Bradford Smith)
Tanomoshi required mutual trust among its members because these loans did not have collateral. Families trusted one another that loans would be paid back and acted in the best interest of the community. (Kanase, Zentoku Foundation)
Tanomoshi is an informal collaborative funding pool that participants can draw on. Call it venture capital. The system is somewhat intricate and was used to fund hundreds of businesses and other ventures. (HPR)
“The tanomoshi-ko is normally promoted by a person who is in urgent need of money. Suppose, for instance, he needs $100 and decides to organize a tanomoshi.”
“He asks nine friends to subscribe $10 a month each to his tanomoshi. They meet and each deposits the $10, making the total of $100.”
“The first month’s receipts always go to the promoter, who gets the entire amount, interest free.”
“Because the promoter is not required to pay interest to the other members, who must thereafter pay interest besides their $10 when they want to use the capital, the tanomoshi is often described as ‘aid for a friend in need,’ insofar as the promoter is concerned.”
“Each month thereafter for nine months, all the members contribute their regular $10 shares and, depending upon their immediate needs, bid for the use of the capital.”
“At all subsequent meetings, the members who wish to draw the principal submit bids of the interest they are willing to pay for the use of the money.”
“At times there is considerable competition for the use of the capital. The member making the highest bid gets the principal for the month, but he must also pay each shareholder the amount of interest he bids.”
“If the highest bid in the second month is $2, the bidder has to pay this amount to each member what has not received his share. Thus, he would have to pay out a total of $16 to the eight members whose shares have not been drawn, leaving him with $84.”
“After a person draws his share, he does not benefit thereafter from interest payments, although he continues to make his monthly payments until the tanomoshi has run its course.” [“When everyone has had the pot, the ko ends.” (Bradford Smith)]
“Each member before receiving his share must have two persons stand witnesses for him. These witnesses must be members of the ko.”
“If a borrower can not finish his payments after drawing his share, the witnesses are obliged to meet his payments thereafter. If tanomoshi they cannot pay, their share is withheld from them.” (SB Nov 4, 1939)
“Private money clubs or mutual financial aid and saving associations are commonly identified as one of the contributing factors to high small business ownership rates among Chinese, Japanese, and Korean immigrants in the United States.” (Yoon)
“While the first tanomoshi groups were bound by a shared ethnicity or culture, they soon evolved into circles of individuals that had common jobs or interests. From those groups, credit unions were born.” (CUInsights)
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