The novel business method of kimono merchant Mitsui Echigoya

The most famous business method of the prominent kimono merchant Mitsui Echigoya in early modern Japan was a cash business without interest through store sales. Although the actual interest rates of the time have remained unknown to date, Echigoya's cash business was just one of their business methods, and a substantial portion of their business was composed of credit sales, in which prices varied according to the interest period. This study aimed to reveal these interest rates. To this end, we investigated Echigoya's new business method established in the Kyoho period (1719), called "Koban Rokuju-me no Kakeho," which was a double-price tag sales method that used the multiplication table based on the fixed exchange rate of 60 momme of silver to 1 ryo of gold Koban. This particular business method is neither well known nor well understood and the present study is the first to successfully elucidate it in detail. As a result of determining the specific calculation method, the various interest rates of items sold by Echigoya were identified. The socioeconomic situation of early modern Japan was also revealed, such as the fixed exchange rate system of the Edo commodity market and the hyperinflation that occurred immediately after the enforcement of the Kyoho law of 1718 that ordered the correct exchange rates according to the quality of various recoinage coins. These findings are significant discoveries in the early modern economic history of Japan. This study enabled a deeper understanding of early modern Japan's socioeconomic situation through the comprehensive elucidation of Echigoya's business styles, which helped them survive difficult times by introducing the double-price tag sales strategy in response to the chaotic monetary policy of the shogunate.