Tokugawa Yoshimune's Kishu Domain Financial Reform: The Reality of 'Ambidextrous Management' of Defense and Offense

Introduction

The 22-year-old young lord faced a dual crisis: debt exceeding 100,000 ryo and the recovery from a major earthquake.
However, he successfully led this desperate situation to a surplus in just over a decade.

What was the secret?

Tokugawa Yoshimune is known for the 'Kyoho Reforms' as the 8th Shogun of the Edo Shogunate.
However, the origin of his reforms lay in his time as the Lord of the Kishu Domain before becoming Shogun.
He promoted 'ambidextrous management' by simultaneously pursuing 'defense' through thorough expenditure reduction and 'offense' through expanding revenue sources.
This management style shows us universal wisdom that is applicable to modern business as well.

In this article, we will approach the reality of the financial reforms Yoshimune implemented in the Kishu Domain.

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Table of Contents

1. The Severity of the Financial Crisis: A Double Punch of Debt and Earthquake

2. The 'Defense' Strategy: Leading by Example in Frugality

3. The 'Offense' Strategy: Increasing Revenue through New Field Development

4. Utilizing Commercial Economy: Promoting the Mandarin Orange Industry

5. Results of the Reforms and the Path to Shogun

6. Implications for the Modern Era: The Essence of Ambidextrous Management

1. The Severity of the Financial Crisis: A Double Punch of Debt and Earthquake

1-1. Unexpected Appointment as Domain Lord

In 1705 (Hoei 2), 22-year-old Tokugawa Yoshimune unexpectedly became the 5th Lord of the Kishu Domain.
This was because his father, Mitsusada, and his two older brothers had died of illness one after another.

The Kishu Domain was a major domain boasting a nominal yield of 555,000 koku as one of the Tokugawa Gosanke, but its finances were in a critical state.

1-2. 100,000 Ryo in Debt

The debt held by the domain, including loans from the Shogunate, exceeded 100,000 ryo.
The main causes of this enormous debt were expenses such as funeral costs for successive lords and castle renovations.
One ryo at the time is said to be equivalent to approximately 100,000 to 130,000 yen in today's value, making 100,000 ryo a massive debt equivalent to over 10 billion yen in modern currency value.

1-3. The Hoei Earthquake That Added Insult to Injury

Furthermore, in 1707 (the 4th year of Hoei), two years after he became the domain lord, the Hoei earthquake, estimated to have a magnitude of 8.6 to 8.7, struck the Kishu domain.
This major disaster, accompanied by a tsunami, caused immense damage throughout the domain and required enormous recovery costs.

What Yoshimune inherited was the worst financial situation in the history of the Kishu domain, burdened with the double weight of accumulated debt and disaster reconstruction.

2. 'Defensive' Strategy: Leading by Example in Frugality

2-1. The Domain Lord's Own Example

The first pillar of Yoshimune's financial reform was thorough frugality.
However, this was not merely about saving money; it was intended to reform the consciousness of the entire vassal group by having the domain lord himself take the lead in practicing it.

In April 1710 (the 7th year of Hoei), when Yoshimune entered Wakayama Castle for the first time, he appeared on horseback in extremely simple attire: 'a cotton haori over a Kokura-weave hakama'.
It is said that the vassals who welcomed him in luxurious attire felt ashamed at the sight of their lord's simple appearance.

2-2. Thorough Moderation in Daily Life

Throughout his tenure as domain lord, Yoshimune consistently wore cotton clothes instead of silk.
He also adhered to the principle of one soup and one side dish for breakfast and dinner, maintaining a two-meal-a-day system. Such thorough self-discipline was not mere performance, but a powerful message demonstrating his seriousness.

2-3. Building a Surveillance System

To ensure the effectiveness of the frugality edicts, Yoshimune deployed 20 surveillance officers called 'Machimawari Yokome'. They monitored luxury in the castle town morning and evening and provided direct guidance to violators.

For example, if there was a samurai's child wearing silk, he would summon the parents and admonish them, saying, 'If you wear silk from a young age, you will become weak. Wear cotton.' This was not just a crackdown, but an educational approach to help them understand the significance of frugality.

2-4. Installation of a Litigation Box

Yoshimune installed a litigation box in front of the Otemon Gate of Wakayama Castle, creating a mechanism to directly hear the opinions of commoners regardless of their status. This became the prototype for the later 'Meyasubako' (suggestion box) at Edo Castle (installed in 1721) and demonstrated a flexible stance of revising policies while absorbing public opinion.

3. 'Offensive' Strategy: Increasing Revenue through New Field Development

3-1. Appointment of a Remarkable Talent: Izawa Yasobei

Financial reconstruction is impossible through expenditure reduction alone. As an 'offensive' measure, Yoshimune worked on new field development and industrial promotion.

At the core of this was the appointment of an outstanding civil engineer named Izawa Yasobei Tamenaga. Izawa was from Mizonokuchi Village in Kainan City (present-day Nogami-shin) and had been employed by Tokugawa Mitsusada in 1690 (the 3rd year of Genroku) to serve in the accounting department.

Yoshimune highly valued Izawa's specialized skills regardless of his status and entrusted him with important projects. This was the introduction of meritocracy in domain administration, and by giving authority to experts, he improved the domain's own infrastructure development capabilities.

3-2. Construction of Kameike: A Phenomenal 3-Month Construction Period

In 1710 (the 7th year of Hoei), under Izawa's command, 'Kameike', one of the largest reservoirs in the prefecture, was built. This massive irrigation reservoir was completed in just over three months, starting on January 16th of the same year and finishing on April 20th, at a phenomenal speed.

The Kameike pond covered an area of approximately 10 cho (about 10 hectares) with a circumference of about 4 km, and it had the capacity to stably supply water to a vast expanse of 325 hectares of rice paddies. As a result, the surrounding area was freed from the long-standing threats of water shortages and droughts, and rice yields increased dramatically.

3-3. Establishment of the Kishu-style Engineering Method

The method Izawa used was an advanced engineering technique that would later be called the 'Kishu style.' Its technical characteristics are as follows:

1. Separation of irrigation and drainage

2. Straightening of rivers and reinforcement of embankments

3. Large-scale irrigation through the installation of weirs and sluice gates

These techniques were considered more advanced than the conventional Kanto style (Ina style) and were later adopted by the Shogunate. During the Kyoho Reforms implemented by Yoshimune as Shogun, they contributed to an increase in revenue of approximately 500,000 to 600,000 koku in Shogunate-controlled territories.

4. Utilization of Commercial Economy: Promotion of the Citrus Industry

4-1. History of Kishu Citrus

Yoshimune's 'offensive' strategy was not limited to increasing rice production. He recognized the importance of incorporating the vitality of the commodity economy into the domain's finances.

The history of Kishu citrus is long, beginning in 1574 (Tensho 2) when Ito Magoemon of Itoga-cho, Arida City, introduced seedlings from Yatsushiro in Higo Province (present-day Yatsushiro City, Kumamoto Prefecture). The first domain lord, Tokugawa Yorinobu (in office 1619–1671), considering the topography of Wakayama, which had little flat land and limited harvests from fields, actively encouraged full-scale citrus cultivation by taking advantage of the warm climate and mountainous forests.

4-2. Organization by the Citrus Office

Yorinobu had the forests cleared to build stone-walled terraced orchards, expanding citrus cultivation primarily in the Arida region. Furthermore, he granted official domain recognition to the 'Citrus Office,' Japan's first joint citrus shipping organization, and in 1698, he imposed a 'citrus tax' (okuchigin) on the sales of the Citrus Office, making it an important source of revenue for the domain's finances.

4-3. Shipping to Edo and High-Price Trading

Yoshimune inherited this policy from his grandfather, Yorinobu, and maintained and developed the citrus industry. In 1634 (Kanei 11), the 400 baskets (about 6 tons) first shipped to Edo by Tobei of Takigawara Village were traded at the high price of 1 ryo (equivalent to 100,000–130,000 yen today) per 1.5 baskets (22.5 kg).

Thereafter, shipping volume expanded rapidly, reaching 50,000 baskets in 1656 (Meireki 2) and 500,000 baskets shipped to Edo during the Kyoho era (1716–1736). The citrus tax became a valuable source of revenue for the domain's finances, and it grew into a major industry that produced wealthy merchants such as Kinokuniya Bunzaemon.

4-4. Understanding of the Monetary Economy

The management of citrus transactions in the Kishu domain became an extremely valuable practical education for Yoshimune. He gained the opportunity to come into direct contact with the core of the monetary economy, such as commodity crops, trade outside the domain, trade associations, and cash-based taxation.

This experience became the foundation for the advanced economic policies he would later implement one after another as Shogun, such as measures to stabilize rice prices and currency recoinage.

5. Achievements of Reform and the Path to Shogun

5-1. Achieving a Surplus in About 5 Years

Yoshimune's financial reforms steadily produced results. Although full-scale reform began after his entry into the domain in April 1710, it is said that the finances turned to a surplus trend in about five years.

Over the 12-year cumulative period, he generated a surplus of 140,000 ryo in gold and over 110,000 koku of rice, and also fully repaid the 100,000 ryo debt to the Shogunate. The forced loans from domain retainers were also returned, clearly demonstrating the success of the financial reconstruction.

5-2. Evaluation for Shogun Appointment

This successful experience became an important evaluation factor when Yoshimune was appointed the 8th Shogun at the age of 32 in August 1716 (the first year of the Kyoho era). Because the 7th Shogun, Tokugawa Ietsugu, passed away at the age of 8 and the direct bloodline of the Tokugawa clan was severed, a Shogun had to be produced from the Gosanke (the three Tokugawa branch families).

Yoshimune brought about 40 Kishu domain retainers (later increasing to 205) to Edo and officially appointed Izawa Yasobei as a Shogunate retainer in 1723 (the 8th year of Kyoho). This was a clear manifestation of his will to replicate the successful model from Kishu at the national level.

5-3. Development into the Kyoho Reforms

The experience in the Kishu domain was utilized in the Kyoho Reforms implemented as Shogun. Annual tax revenue increased by an average of 160,000 koku per year, and the total yield of Shogunate lands also increased by about 500,000 to 600,000 koku, reaching 4.5 to 4.6 million koku.

Around the 16th year of Kyoho (1731), the Shogunate's finances shifted to a surplus trend, achieving the goal in about 10 years from the start of the reforms. This can be said to be a replication of the 'surplus in about 5 years' experience from the Kishu domain on a much larger scale.

6. Implications for the Modern Era: The Essence of Ambidextrous Management

6-1. Integrated Strategy of Defense and Offense

The 'defense' and 'offense' strategies that Tokugawa Yoshimune practiced in the Kishu domain were not independent policies, but rather a single integrated management strategy where each complemented the other.

The financial stability and surplus funds created by the 'defense' of frugality enabled investment in the capital-intensive 'offense' of new field development and industrial promotion. Austerity was not the goal, but a means to achieve sustainable growth.

6-2. Application to Modern Business

This concept of 'ambidextrous management' shows universal wisdom that applies to modern business as well:

Defensive elements:

• Cost reduction and efficiency improvement

• Optimization of existing businesses

• Risk management and financial discipline

Offensive elements:

• Investment in new businesses

• Promotion of innovation

• Diversification of revenue sources

6-3. The Importance of Leadership

The key to Yoshimune's success lay in the fact that he, as the lord of the domain, led by example. He fostered a sense of voluntary participation rather than a feeling of being forced to act.

In modern organizations, the importance of top management demonstrating genuine commitment remains unchanged. Just as Yoshimune wore cotton clothes and ate simple meals, leaders who set an example themselves can enable a transformation of consciousness throughout the entire organization.

6-4. Utilization of Experts

Appointing the technical expert Izawa Yasobei regardless of his social status and granting him authority was also a crucial point. This can be called a precursor to what is known today as 'meritocracy'.

For organizational transformation, it is essential to identify appropriate experts and create an environment that allows them to maximize their abilities.

6-5. Emphasis on Public Opinion

As seen in the installation of the suggestion box, Yoshimune maintained an attitude of listening to opinions widely, regardless of social status. In modern terms, this is open communication that listens to the voices of stakeholders.

In order for an organization to avoid stagnation and respond flexibly to change, a mechanism to accept diverse opinions is necessary.

Conclusion

Tokugawa Yoshimune's Kishu domain financial reform is not merely a historical event. It provides an answer to the universal challenge of how an organization facing a crisis can achieve recovery.

The dual crisis of debt and earthquakes faced by the young 22-year-old lord. However, he overcame this crisis through 'ambidextrous management' that simultaneously promoted 'defense' to reduce expenditures and 'offense' to expand revenue.

And above all, the most important factor was the leadership that executed the reform. Leading by example, appointing experts, and listening to public opinion—these attitudes changed the consciousness of the entire organization and led the reform to success.

What we should learn from Yoshimune today may not just be the strategy for overcoming a crisis, but the way of leadership required to execute it.

Tokugawa Yoshimune, who rebuilt the Kishu domain on the verge of bankruptcy and later accomplished the Kyoho Reforms as Shogun. The origin of this lay in his dozen or so years in Kishu during his youth.

References

Primary Sources

• "Nanki Tokugawa Shi" edited by Shin Horiuchi (compiled 1888-1901), Seibundo Publishing edition (reprinted 1970-1972)

• "Tokugawa Jikki" (Official Shogunate Records)

• "Kishu Mikan Denraiki" (Record of the Introduction of Kishu Mandarin Oranges), 1735

Secondary Sources

• Seijiro Fujimoto, "Kishu Domain Lord Tokugawa Yoshimune: The Legend of the Wise Ruler, the Hoei Earthquake, and Secret Missions," Yoshikawa Kobunkan, 2016

• Tetsuro Takasaki, "Master of Water, Guardian of Water: The Kishu School, Founder of Flood Control and Water Utilization - Izawa Yasobei," Kajima Institute Publishing, 2009

• Kenji Hosono, "Formation and Development of Mandarin Orange Production Areas: Tradition and Innovation of Arida Mandarins," Norin Tokei Publishing, 2009

• Tatsuya Tsuji, "Tokugawa Yoshimune," Yoshikawa Kobunkan, 1958

• Shinzaburo Oishi, "Expanded Edition: Economic Policies of the Kyoho Reforms," Ochanomizu Shobo, 1968

Web Resources

• Wakayama History Story, "The Kishu School of Civil Engineering Resounds Nationwide! Remembering the Legacy of Kameike and Izawa Yasobei," Wakayama Prefecture Official Tourism Site

• News Wakayama, "Children's Edition: 300 Years Since the Shogun's Inauguration - The Greatness of Tokugawa Yoshimune," March 9, 2016 Issue

• Wikipedia, "Tokugawa Yoshimune," "Izawa Yasobei," "Kishu Domain"

• Kainan City Official Website, "Izawa Yasobei"