Conscription insurance in pre-war Japan - Private enterprise and national interest

ABSTRACT

Japan’s Conscription Law of 1873 constituted a core element of the military reforms implemented by the Meiji government. The law implied an additional burden in the form of a “tax in kind” which would not be shared equally, because only a small portion of those eligible to serve were actually recruited. As the government neither alleviated the hardship nor corrected the inequalities created by the conscription system, local communities and private entrepreneurs took initiative. One response was conscription insurance. Introduced toward the end of the 19^th century, it established itself as an important segment of Japan’s insurance industry in pre-war Japan with a performance comparable to that of the life insurance industry. Despite its success, Japan’s conscription insurance has so far not attracted the attention of international scholars. This paper takes a first step towards filling the gap. It describes the background of the major companies, evaluates their core product and analyses the performance of the industry. It argues that a major factor in the success of the industry was the ability of the companies to position themselves and their product as serving the national interest.

KEYWORDS:

• Conscription insurance
• conscription
• Pre-war Japan
• Japanese military
• public good

After the Meiji Restoration, a vital issue for Japan’s new ruling elite was the establishment of a national army and navy (Hirayama 1953a, 16; Gordon 2003, 66-67). Centralized armed forces were needed to protect the new regime against domestic opposition, but also deemed necessary for regaining full sovereignty from the Western powers and for defending and promoting Japan’s geopolitical interests in the region. However, whereas the need for a national military was undisputed, the fundamental question about how the armed forces should be staffed was highly contested. Should the government recruit volunteers by relying mainly on members of the Samurai class, or should it use its yet-to-be-tested powers and establish a national conscription system, which would legally oblige all young men to serve in the military? Against fierce opposition even from among the political elite, the Meiji leaders opted for national conscription (Katō 1996, 45; Drea 2009, 19-34). The respective law took effect in 1873, long before military service was defined as the duty of every Japanese subject by the Meiji Constitution of 1889.

A core issue of any conscription system is the burden it imposes on the draftees and their families, and the fact that this burden is not being shared equally (Duindam 1999, 1-4; Simon, Abdel, and Mohamed 2011, 17-18). Conscription constitutes a tax in kind, which only those who are actually drafted must pay. To resolve this core issue, some kind of compensation and/or cost sharing schemes are needed. One quite obvious solution would be a conscription tax. It would be paid by those who avoided military service and the revenue could be used to compensate those who paid the tax in kind. However, the Japanese government, especially its military leaders, strongly opposed the idea (Hirayama 1953a; Katō 1996). The inaction of the state prompted the search for private solutions, the most comprehensive and systematic of which was conscription insurance (Hirayama 1954). It allowed families to insure against the income losses incurred during their son’s military service. The first conscription insurance companies were founded after the Sino-Japanese War (1894-95). Four companies came to finally comprise the industry. In terms of number of policies, three of them would be able to rival even the largest life insurance companies.

Japan’s conscription insurance has attracted surprisingly little attention, especially among international scholars. One reason might be that the subject matter lies at the intersection between two otherwise separate areas of research, namely military history on the one side and insurance history on the other side. The lack of research might also be due to the fact that conscription insurance never played such an important role outside of Japan, and, therefore, did not present itself as a subject worthy of investigation.

This paper aims at drawing scholarly attention to conscription insurance in pre-war Japan, not only as an important branch of Japan’s domestic insurance industry, but also as an example of a private enterprise engaging in a business considered to be of national interest. The public mission pursued and national interest served by conscription insurance was not only emphasized by the companies, which sold the product, it was also acknowledged by the government, including those in charge of military affairs. Last, but not least, it manifested itself in the background and close connections of those directly engaged in the business, which extended into politics as well as the military.

The next section will provide background about Japan’s conscription system, the struggles surrounding its establishment, its original design and later evolution, and how the core issue of burden sharing was conceived and dealt with. The third section will introduce conscription insurance. It will provide information about the four companies that comprised the industry, describe and analyze their core product and assess their performance. Section four will discuss the factors that contributed to the success of conscription insurance. It will especially emphasize the private-public nature of the business, which represented an important asset for the industry, but could, at times, also become a liability. The final section will conclude by summarizing the main findings, addressing limitations and pointing to directions for future research.

Military conscription

Military reform after the Meiji Restoration

Under the Tokugawa Shogunate, Japan’s military had been organized at the level of feudal domains. When the restoration of imperial rule was officially declared on January 3, 1868, the newly proclaimed government had to rely on military support from Daimyos (feudal domain lords) (Drea 2009, 10-19). Reliance on Daimyos was, however, only a temporary solution. The new Meiji rulers soon realized that the centralization of administrative and political power also required centralization of military affairs. From the very beginning, military reform was an integral and essential element in Japan’s transformation from a feudal state to a modern nation. The military was not only the object of reform, it was at the same time needed to protect the profound and far-reaching reform process against violent protests and to thereby safeguard imperial rule. During the first decade, the armed forces were mainly deployed to suppress revolts against the new government and its policies (Drea 2009, 35-46). The most violent and decisive of such conflicts were the Boshin Wars (1868-1869), which broke the final resistance of the Shogunate troops and their allies, and the Seinan War of 1877, the last Samurai rebellion led by Saigō Takamori, which was fueled, among other things, by protests against the establishment of military conscription.¹

Military conscription was introduced in January 1873. It obliged in principle every Japanese man between 20 and 40 years of age to serve in the army or navy.² The conscription system formed a core pillar of military reform besides the centralization of military affairs, and it was by far the most contested element confronting strong resistance both before and after its promulgation. Even within the government, opinions about how the imperial armed forces should be staffed were deeply divided (Katō 1996, 45; Drea 2009, 19-24). Some favored a professional volunteer military force recruited from among the Samurai class. It seemed a natural choice given the Samurai’s status as warriors and their role in the restoration and the new government. It would have certainly been a less radical decision than universal conscription.

Ōmura Masujirō, a military leader of the Chōshū clan, who had become vice minister of military affairs in the new government and had positioned himself publicly as an outspoken supporter of universal conscription, was fatally attacked by masterless Samurai in 1869 (Drea 2009, 20). Yamagata Aritomo, also from Chōshū, who succeeded Ōmura as vice minister, continued to strongly advocate universal conscription after his return from Europe in 1870 (Gordon 2003, 66). In Europe, the Napoleonic wars (1803-1815) had introduced a new era of mass conscription (Levi 1996). Napoleon’s early victories had demonstrated the power of the “levée en masse” and had triggered similar responses by other European states, including Prussia (Obinger 2020, 7). Japanese officials like Yamagata were impressed by the success of conscript armies, not least because they afforded a much smaller budget (Katō 1996, 45, 68-69). For Japan, too, professional armed forces staffed by volunteers were considered as too expensive. It was also expected that such volunteers would mainly come from the Samurai class. It was doubted whether they would be loyal to the new central government. There was also skepticism as to whether Samurai would easily adapt to modern warfare (Katō 1996, 45, 68-69). Universal conscription was fully in line with the general policy of dismantling the feudal order. It was legitimized as an important pillar of “restoring” imperial power (Norman 1943a; Ogawa 1921, 5-7).

The implementation of universal conscription stirred violent opposition from among the Samurai class, as it basically deprived them of their privileges as warriors. The strongest revolts against the conscription system were the Saga rebellion (1874) and the above-mentioned Seinan War (1877) (Hirayama 1953b; Drea 2009, 35-46). The conscription system was also strongly opposed by the common people, especially the peasants, from among whom the new soldiers were to be recruited (Norman 1943b, 153; Drea 2009, 30). For them, the “blood tax”³ was yet another burden, which the new government had inflicted upon them in addition to compulsory education and land taxes. During the first years, their protests led to several local riots, and many boycotted the system by escaping registration or by avoiding drafting in other ways.

The political and social acceptance of universal conscription depended largely on its success on the battlefield. After the conscripted army and navy had defeated domestic revolts, they proved their combat power in the Sino-Japanese War (1894-95) and the Russo-Japanese War (1904-05). The victories in these wars not only helped Japan to undo the unequal treaties, they also strengthened the reputation of Japan’s military and increased the acceptance of the system of conscription, which provided the military’s foundation (Hirayama 1953b).

Design and scope of the conscription system

The law of 1873, which established Japan’s conscription system, required all men between 17 and 40 years of age to register, so that they could be called upon to serve in the army or navy (Ogawa 1921, 11-15; Katō 1996, 51-55). There were three different kinds of service: regular and reserve services during peace time and combat service in war time. Men, who had reached 20 years of age, would have to serve a three-year regular service. They would live in barracks away from home to receive military training as well as moral education. The government would pay them a minimal compensation, provide free meals and a uniform. The three years were followed by a first and a second reserve service each lasting another two years. Reserve service meant that recruits had to be on standby, ready to be called for short-term exercises. In contrast to the three-year regular service, they would live at home and pursue their ordinary business.

The first conscription law included a long list of exemptions. Freed from service were men with criminal records, bad health conditions or insufficient body height, public service employees, students, household heads, only sons, or brothers of current recruits. From among those eligible for service, the actual number needed was decided by a lottery. Those drawn could still avoid service by paying a ransom or commutation fee of 270 yen, which at the time amounted to several times the average annual income of a male worker in manufacturing and agriculture and was therefore only affordable by the wealthy.⁴

Over the first three decades, the conscription law was regularly revised to improve its acceptance and implementation and to adjust to changes in the domestic and international environment (Katō 1996, 46-50). The various revisions between 1879 and 1904 gradually increased the length of the two reserve services for the army to four years plus four months and ten years, respectively. For the navy, the regular service was extended from three to four years, the first reserve service to three years and the second reserve service to five years. The reforms drastically reduced the exemptions from military service and, instead, established a deferment system for those who would not immediately be able to serve. The commutation fee, by which the sons of richer families could avoid military service, was abolished as well. The reforms also introduced the possibility for the better educated to serve voluntarily and to apply for an officer training course. In 1927, after another overhaul, the name of the law was changed from military conscription to military service.

Between 1874 and 1891, the percentage of those actually drafted for regular service from among the male population in the relevant age brackets was generally below 6% (Katō 1996, 20; Yoshida 2002, 19). Conscription was, therefore, universal only in principle, but not in practice. In 1898, three years after the end of the Sino-Japanese War, the rate doubled to more than 10%. In 1911, six years after the Russo-Japanese War, it had again doubled to 20%. After the Washington Conference (1921-22), it slightly declined to about 15%. With the Manchurian Incident (1931) it increased again to about 20%, where it stayed until Japan started to mobilize for the Pacific War (1941-1945). Given Japan’s high population growth from 35 million in 1872 to 70 million in 1936,⁵ the threefold to fourfold increase in the conscription rate meant a sixfold to eightfold increase in absolute numbers. The increase reflects not only the imperialist ambitions of the Japanese state, but also the acceptance of military service among the Japanese population.

Liberalism, efficiency and fairness

Even before the Napoleonic Wars, conscription was considered to be not only the cheaper option for a government, but also the best way to integrate the military with society and to prevent military revolts (Duindam 1999, 11-14). The modern age of conscription, however, introduced two novel conditions (Obinger 2020, 7-8). First, as a result of progress in military as well as transportation and communication technology, fighting had been transformed into mass warfare, which meant that a much larger portion of the population had to be trained in order to be called upon in times of war. Second, the conscripts had turned from subjects ruled by an autocratic emperor into citizens protected by a constitution, which, in principle, ensured freedom, equal rights and political participation.

Political debates and intellectual discourses about conscription have since focused on three topics, namely liberalism, efficiency and fairness. Western scholars tend to point out that a compulsory military service contradicts the ideals of liberalism (Levi 1996, 134). Such a contradiction was, however, not evident when mass conscription was introduced. In 19^th century Europe, conscription was not prescribed by liberal regimes. It was rather the other way around, the need for universal conscription forced autocratic regimes to concede liberal rights. The French Revolution had shown how concessions in the form of constitutional rights, such as the right to vote, created the national identity needed to legitimate and implement mass conscription (Obinger 2020, 16-17). Like taxation, conscription came to constitute a political arena where the duties and rights of citizenship were bargained (Levi 1996, 134). It represented a tax-in-kind, which was preferred by the government because it was easier to collect than a tax in cash sufficient enough to finance voluntary armed forces of similar combat capability (Siu 2008).

Like in Europe, Japan’s military conscription system was introduced when the feudal system was transformed into a modern nation state. The conscription law was justified along two lines (Ogawa 1921, 4-7; Makihara 1990, 61). The first one stressed that restoring the power of the emperor also meant restoring the military order, which had existed before the rise of the Samurai warrior class, when all subjects could be called to arms. The second line of argument stressed that compulsory military service was the price for freedom and equal human rights. The Charter Oath promulgated by the Emperor in April 1868 promised political participation, the abolishment of class differences, and the free pursuit of one’s aspirations. It took, however, another 21 years until these rights would become protected under Chapter II of the Meiji Constitution. Under the same Chapter II, military service was defined as the duty of Japanese subjects (Article 20). The only other explicitly mentioned duty was taxation (Article 21).

From today’s perspective, the Meiji Constitution granted only limited political participation, but compared to the feudal system it represented a liberal revolution (Gordon 2003, 92-93). It does, therefore, not seem far-fetched that conscription was equated with the liberal rights granted under the Constitution. Leaders of Japan’s civil rights movement did not reject the idea of compulsory military service. They were mainly critical of how conscription had originally been introduced by a government not legitimated by a constitution, and they requested a constitutional form of government to justify the “blood tax” (Ohara 2019, 1499-1595).

Conscription has been regularly challenged on efficiency and welfare grounds by liberal economists starting from Adam Smith (Duindam 1999, 1-3; Siu 2008). The fact that it represents the cheaper option for the government does not mean that it is superior from a social welfare perspective, which explicitly considers the opportunity costs of the recruits. In a voluntary army, these opportunity costs are zero, because military service offers itself as the best employment opportunity for those who choose it. Under conscription, the government can avoid paying recruits a salary that compensates them for the income they forego in other activities. This results in positive opportunity costs.

Ogawa Gōtarō (1876 – 1945), a professor of economics at Kyoto University who had studied public finance in Austria and Germany and who would become Minister of Commerce and Industry in the mid-1930s, introduced the Japanese conscription system to a Western audience in a book published by Oxford University Press in 1921. His monograph includes a comprehensive evaluation of the economic effects of universal conscription. While he recognizes that “military life is conducive to the improvement of character, gives to the illiterates who are enrolled a knowledge necessary for livelihood and contributes to the cultivation of physical strength” (Ogawa 1921, 151), he nevertheless concludes “that the system of conscription robs our productive world of the most valuable laboring power” (Ogawa 1921, 236). Ogawa also emphasized that the lower-income families were to bear the major burden: “That the greatest number of the actives come from the lower classes, that their families suffer from the double effect of the loss of labor and the amount of money that they have to send to those enrolled …, all these circumstances show that the largest number of the lower classes suffer most from the effects of conscription” (Ogawa 1921, 235).

It was not a uniquely Japanese phenomenon that the less well-off people had to bear the major burden of conscription. It also occurred in Europe. The most straightforward way to establish more fairness would have been to either ensure a fairer drafting system or to levy some kind of conscription tax on those who avoided being drafted. By using the revenues of such a tax to improve the conditions of the conscripts, the unfair draft outcome could at least have been compensated in monetary terms. However, neither of the two measures were widely applied. Instead, some scholars argue, European governments countered discontent by introducing progressive taxation and social policies (Obinger 2020). In Japan, even such countermeasures could not be observed. Conscription was not a bargain between a revolutionary populace and a weak government, but “autocratic in the manner of its establishment and counter-revolutionary in its design and effect” (Norman 1943b).

However, the idea of a conscription tax gained some popularity even among the government (Katō 1996, 108-109, 181-185). Fukuzawa Yukichi (1835-1901), a leading educator and liberal intellectual of Meiji Japan, accepted military service as a duty of the subjects of the state, but he strongly argued to levy a conscription tax. Such a tax would not only have improved the efficiency or welfare effects of the system, it would have also reduced its unfair outcome. He proposed that, at age 20, a young man should be able to choose whether he wanted to serve in the military. If he wanted to avoid military service, he should be obliged to pay a “military service tax” of five yen per year for the three years which, at the time, corresponded to the length of regular service. Fukuzawa expected that the better-off would pay the tax to avoid military service. Those who could not afford the tax would be paid an extra allowance of 100 yen per person at the time they had completed their service. The allowance would be financed out of the tax revenues amounting to 15 yen per non-drafted man. The ratio of 15 to 100 implied a conscription rate of 6.7%, which corresponded more or less to the actual rate between 1874 and 1891. If more recruits were needed, the tax would have to be increased.

The idea of a conscription tax was categorically rejected by the Army Ministry and other military leaders (Katō 1996, 55). For them, not only did it run counter to the principle that military service was the duty of every male Japanese subject; they also argued that it would be too difficult to increase taxes. Increasing taxes represented a double hurdle for the Meiji government. It not only invited opposition from tax payers, it also increased the bargaining power of the Diet, whose main constitutional influence was in budget matters.

As the central government was not taking action, local communities started organizing mutual aid schemes for recruits and their families. The initiatives, which took various forms, resembled a conscription tax. They redistributed resources from those who avoided getting drafted to those who got drafted. While those in charge of military affairs rejected the idea of a conscription tax, they endorsed the functionally equivalent private solutions. The mutual aid organized by local communities was generally supported by the local military affairs section or county-level military affairs boards (Yoshida 2002, 54-55).

Conscription insurance

Major companies

Conscription insurance was the fourth branch of the insurance business established by domestic companies in Meiji Japan, after marine insurance (1879), life insurance (1881) and fire insurance (1888). It was the first branch where no foreign companies had been active in the Japanese market (Miura 1932).

In the mid-1890s and under the shadow of the Sino-Japanese War, Narita Fumikichi, an Ōmi merchant from Shiga Prefecture, who was in charge of the conscription office at his local village, became highly concerned about the hardship military service inflicted on the poorer population.⁶ Seeing the government unable to offer relief, he and his senior colleague, Teramura Tomiei, came to believe that private insurance would be an option. After consulting with Awatsu Kiyosuke, a leading insurance expert, they persuaded Okada Jiemu, one of the founders of Shinshu Shinto Life, a company with a Buddhist background established in 1895, to join their project. Okada was a native from Yamaguchi Prefecture with close ties to politicians of Chōshū descent. In 1896, after gaining the support of high-profile figures like Yamagata Aritomo and other high-ranking members of the army, their application for setting up a stock company named Chōhei Hoken, which literally means conscription insurance, was approved by the Ministry of Agriculture and Commerce. However, at the founding shareholder meeting no agreement about the appointment of the board of directors could be reached. It was only after reorganizing and receiving a second approval that the company finally started operation in 1898, with Okada as the first president.⁷ In 1904, Okada was succeeded by Ozawa Takeo, an Army General and a member of the House of Peers.

Chōhei Hoken was to become the first major company in the field. There were at least three other companies that entered the business around the same time: Teikoku Chōhei Hoken from Mie Prefecture (1898-1904), Yamaguchi Chōhei Hoken from Yamaguchi Prefecture (1898-1902) and Dainippon Heieki Hoken (1900-1901). However, they had to close down within a few years due to poor business performance and even illegal activities. Chōhei Hoken also encountered difficulties when Kawamura Takashi, who had been entrusted with the management of the company in 1906, misappropriated company assets. The fraud was detected in 1907 and the company was ordered to reorganize its management team and to take measures to build the financial reserves needed to fulfil their obligations towards their policyholders.

At the verge of bankruptcy, the company asked Ōta Seizō, a wealthy businessman from Fukuoka, who would from 1908 to 1912 also be a member of the House of Representatives, to help restore the financial health of the company. With the support of the regulatory authorities, Ōta assumed the position of president in 1909. Oka Minoru, then head of the insurance section in the Ministry, confirmed to him that the authorities had no interest in prohibiting conscription insurance and that the company’s continuation of business was of national interest. Ōta persuaded Ozawa, who had not been involved in the fraud and whose political and military background had helped the company’s reputation, to stay by creating a special position for him as non-executive president. The restructuring plan stipulated that the company was not allowed to pay out dividends to shareholders or bonuses to directors for 16 and a half years. The restructuring goals were achieved ahead of time in 1918 and the restrictions on profit appropriation were consequently lifted. At the end of 1924, Chōhei Hoken changed its name to Dai-ichi Chōhei to better distinguish itself from its competitors and to emphasize its position as the first company in the industry.

In 1911, six years after the end of the Russo-Japanese War, Nippon Chōhei Hoken entered the market to become the second major player.⁸ The people behind Nippon Chōhei’s foundation were four highly educated businessmen. Hatano Shōgorō, who also became the company’s major shareholder, had been a professor at Keiō Gijuku (present Keio University), a councilor of the City of Tokyo, a journalist, a diplomat, and owner and president of a newspaper.⁹ He later became a director of Mitsui Bank and also assumed executive positions at a number of other Mitsui companies. In 1920, he served one term as a member of the House of Representatives. Iwasaki Hajime had held top management positions within the Mitsui Zaibatsu¹⁰ before founding Nippon Chōhei. Murai Sadanosuke, a graduate from Dōshisha English School who had studied theology at Yale University in the US, had business experience working for his family’s trading company. The above three persuaded Kadono Ikunoshin to become the company’s founding president. Kadono, a student of Fukuzawa Yukichi, had also taught at Keio Gijuku and had served as its vice-president. In 1904, he had founded Chiyoda Mutual Life Insurance and served as president, holding the same position concurrently in Chiyoda Fire Insurance and Chitose Marine and Fire Insurance. Kadono would later become a member of the House of Peers. With his background as founder and president of a successful mutual life insurance company, Kadano introduced the concept of policyholder dividends to conscription insurance.

In 1922, Kokka Chōhei became the third major company to specialize in the field.¹¹ The company had close ties with the Kawasaki Zaibatsu. Its first president, Kawasaki Kineo, was a grandson of Kawasaki Hachiemon, the founder of the Tokyo Kawasaki Zaibatsu. The establishment of Kokka Chōhei had been planned by Iimura Jōzaburō, the vice-president of Nippon Fire Insurance, which was another Kawasaki Zaibatsu insurance company. Kokka Chōhei benefited from the financial strength of Kawasaki Bank. However, despite its strong connections with the Kawasaki Zaibatsu, it would remain the smallest among the four conscription insurance companies.

One year later, in 1923, Fukoku Chōhei became the fourth and last of the specialized conscription insurance companies.¹² Unlike the other three, it did not incorporate as a stock company, but chose the mutual form, which had already been well established among life insurance companies (Jiang 2015). The initiator behind the foundation of the company was Yoshida Yoshiteru, manager of the Tokyo branch of Chōhei Hoken. Yoshida had been working for Chōhei Hoken since 1898. He was inspired by the idea of organizing the insurance business as a mutual enterprise and felt assured by the success of Dai-ichi Mutual Life (founded in 1902) and Chiyoda Mutual Life (founded in 1904). For him, the mutual form seemed especially fit for conscription insurance because of its strong public character. He won the support of Nezu Kaichirō, a successful investor, entrepreneur and philanthropist, who had been member of the board of directors of Chōhei Hoken from 1898 to 1902. Nezu had been a member of the House of Representatives from 1904 to 1915, and had been engaged in the founding and management of a large number of companies across many industries, including public utilities.¹³ Another key person involved in the foundation of the Fukoku Chōhei was Izu Tsuneo, a retired Army General, who had served on the board of directors of Chōhei Hoken from 1911 to 1921.

It took the founders two years to obtain the license from the regulatory authorities, who doubted the viability of yet another conscription insurance company. Nezu’s influence and the fact that the company would be organized as a mutual business finally overcame the resistance. In 1921, Nezu had argued that conscription insurance was serving the national interest by assuring that the burden of military service would be shared equally. In the same statement he complained that the incumbent companies had lost sight of their original mission and had become preoccupied with pursuing profit. When the company finally received permission to start operations, Nezu became its founding president, while Izu and Yoshida assumed the positions of senior executive director and executive director, respectively. Fukoku Chōhei would soon become the fiercest competitor of Chōhei Hoken (Dai-ichi Chōhei), the dominant incumbent.

The history of Japan’s conscription insurance industry ended with the country’s defeat in the Pacific War, which brought an end to military conscription. All companies survived the war period. However, Kokka Chōhei was only able to survived because it had merged with a life insurance company into Daihyaku Seimei Chōhei in 1941. In 1945, all four companies reregistered under new names by replacing the name chōhei (conscription) with seimei (life), indicating their new business focus. Dai-ichi Chōhei reincorporated as Shin-Nippon Life, Nippon Chōhei as Yamato Life, Daihyaku Seimei Chōhei as Daihyaku Life and Fukoku Chōhei as Fukoku Life. After 1947, the three stock companies changed their business organization to the mutual form. In this process, Shin-Nippon Life again changed its name to Tōhō Mutual Life.

The product in economic context

Conscription insurance constituted a separate branch within the insurance industry. It differed from non-life insurance, because it did not insure against the loss or damage of property. It was, however, also not a typical life insurance product, as it did not insure against the death of a family member. Moreover, it also did not provide the typical saving function of a survival or children’s insurance, which would, for example, be purchased to save for retirement or for future expenses on education or marriage. Instead, conscription insurance offered coverage against the “risk” of getting drafted.¹⁴ This risk was related to the income lost during the time of regular service. In an economy like Japan’s, which was just about to embark on the process of industrialization, the income loss would often be incurred by a family or household, which would not be able to employ their son’s labor, for example in agriculture, fisheries or other family business.

Conscription insurance seems to have first been sold in France in the mid-19^th century, from where it spread to other European countries (Hirayama 1954). However, in Europe, the insurance was not bought to cover the income losses associated with military service, but to secure the money needed to pay for the commutation fee, which would allow the insured to avoid military service altogether. In Japan, the commutation fee, which existed in the original conscription law, had long been abolished before conscription insurance was introduced. Therefore, Japanese conscription insurance differed fundamentally from the product originally sold in Europe.

Typically, parents would buy the insurance when their son was still at a young age and then regularly pay the insurance premiums up to his 20^th birthday.¹⁵ Should the lottery decide that he gets drafted, the family would receive the contractually agreed upon insurance payment. Otherwise, it would only obtain the paid-in premiums. It was possible to buy conscription insuranceup until the son reached the age of 15. Of course, a shorter pay-in period implied higher annual premiums or lower coverage or both. If a son died before his 20^th birthday, the family would receive the paid-in premiums up until his death. Insurance contracts also accounted for the possibility that someone would not complete the full three years of service or would volunteer to serve. In both cases, only 80% of the coverage would be paid out.

Figure 1 shows how much coverage conscription insurance companies offered. It compares the average volume of new contracts concluded during a specific year with the average annual income earned by a male worker in manufacturing and in agriculture in the same year. The lines run more or less parallel until 1924. Then coverage continues to increase, while income levels stagnate and even decline. Insurance contracts offered on average coverage in the range of 0.8 to 1.2 times the average annual income of a male worker in manufacturing, and 1.1 to 1.5 times the average annual income of a male worker in agriculture (Figure 2).

Figure 1. Average coverage of new contracts and average male worker income (yen)

Notes: The average coverage is calculated on data from all companies in business during the respective years starting from one company in 1900 to all four companies from 1923 onwards. Annual wages were calculated by multiplying daily wages by 300.

Source: Company Business Reports from the Japan Digital Archive Center (https://j-dac.jp/infolib/meta_pub/G0000004kigyo) and Long-term Economic Statistics (LTES) Database (Japan), 8. Prices, Table 25, Series of Wage Rates by Job Data (Series A), https://d-infra.ier.hit-u.ac.jp/English/ltes/a000.html) (Compiled by the Author)

Figure 2. Ratio of average coverage to average male worker income.

Source: Same as in Figure 1 (Compiled by the Author)

The ratios indicate how much financial compensation conscription insurance offered in relative terms. However, they need to be interpreted carefully. First of all, conscripts were of young age and they often came from peasant or otherwise poorer families. This would mean that the foregone income during regular service would most likely be lower than the average annual wage in agriculture. Secondly, at least a part of their cost of living, such as housing, food and uniforms, would be paid for by the military.

Thirdly, the relevant annual income for assessing the insurance payout would not be the income at contract conclusion, but the income when the contract matured. The two dates could be 20 years apart. Figure 2 includes a lagged ratio, which relates the average coverage of new contracts to the nominal annual income in agriculture 15 years later.¹⁶ In 1915 and 1916, contracts concluded in 1900 and 1901 would just cover a single year’s annual income. The lagged ratio would then drop to as low as 0.3 over the period from 1919 to 1926, before rising again to 0.7 in 1931. Whereas the first and second caveats imply that conscription insurance offered a higher financial compensation than indicated by the coverage-income ratios shown in Figure 2, the third caveat implies a lower compensation as a result of the strong growth in income after 1917. Especially between 1919 and 1926, conscription insurance was hardly fulfilling its promise of compensating families for the income losses during regular service.

To assess the attractiveness of conscription insurance, we need to compare its performance with alternative financial products available at the time. The most obvious choice would be an ordinary postal savings account. Postal savings existed in Japan since 1875. If a household would have saved 5.5 yen annually - the average premium in 1900 - on an ordinary savings account over the period from 1900 to 1919, it would have accumulated 166 yen by the end of 1919.¹⁷ This is more than the coverage of 142 yen, which the average conscription insurance policy sold in 1900 would have offered. Even more, the 142 yen would only be paid out if the son was drafted. Otherwise, only the paid-in premiums – 20 times 5.5 yen, i.e. 110 yen – would be obtained, implying a loss of 56 yen compared to the savings option. However, the outcome crucially depends on the assumed duration of the insurance policy, which could, in principle, vary between five and 20 years. If the typical conscription insurance contract purchased in 1900 would mature after ten years, the coverage of 142 yen would compare much more favorably. It would be exactly double the accumulated savings on a postal account, which after ten years would have amounted to 71 yen. Unfortunately, the company data do not provide information about the average length of contracts.

Finally, there is the question to what extent conscription insurance was affordable. If we consider the average premium paid per insurance contract per year and compare it with the average annual income of a male worker in agriculture (Figure 3), we see that conscription insurance was relatively expensive. The average premium would have amounted to 3-8% of the annual income. Company statistics reveal that a large number of contracts had to be terminated, because policy holders no longer paid premiums. Such cancellations would regularly amount to more than 30% of the newly concluded contracts per year and in some years even surmount the number of new contracts.¹⁸ So many households, which had originally been willing to pay for conscription insurance, at some stage realized that they could no longer afford it.

Figure 3. Average premium in yen and in percent of average male income in agriculture

Note: Based on all contracts in force of all conscription insurance companies active in the respective year.

Source: Same as in Figure 1 (Compiled by the Author)

The above analysis relies on crude estimates due to the unavailability of detailed data. Nevertheless, it lends itself to three tentative conclusions. First, the insurance payment would most likely cover only a portion of the annual income foregone during regular service at the time the contract matured. Second, conscription insurance confronted competition from postal savings, which offered households an attractive alternative way to save for income losses caused by conscription. Third, conscription insurance was expensive. Despite these adversities, conscription insurance became a flourishing business.

Performance

A straightforward measure of the performance of the industry is the growth of the number of insurance contracts (policies) in force at the end of the year and the premium income collected throughout the year (Figure 4). After a slow start during the first five years, the industry experienced a steady growth in the number of policies, reaching one million by the end of 1930. The growth in premium income was relatively moderate until the end of the First World War. Looking at the average premium per contract, we see a strong increase in the average premium after 1918. Between 1898 and 1923 the average premium had fluctuated between 4 and 7 yen.

Figure 4. Growth of conscription insurance companies

Note: Number of contracts at end of year. Real premium income calculated using the expenditure price index base year 1934-1936.

Source: Company Business Reports from the Japan Digital Archive Center (https://j-dac.jp/infolib/meta_pub/G0000004kigyo) and Long-term Economic Statistics (LTES) Database (Japan), 8. Prices, Table 1, Summary of Expenditure Price Indexes, https://d-infra.ier.hit-u.ac.jp/English/ltes/a000.html) (Compiled by the Author)

Figure 4 distinguishes between the total number of policies in force at the end of the year (blue line) and the number of conscription insurance contracts (orange line). The blue line will be above the orange line whenever conscription insurance companies sell insurance products other than conscription insurance. Both lines more or less overlap until 1923, which reflects that the respective companies almost exclusively specialized on their core product, i.e. conscription insurance. It is only after 1924 that the blue line starts to slightly surpass the orange one, as conscription insurance companies diversified their business by selling pure endowment insurance. By 1931, the share of pure endowment policies had reached 12% of the total insurance contracts in force.

The performance depicted in Figure 4 needs to be put in perspective. How many of those eligible for military service were actually insured by their families? A rough estimate can be obtained by dividing the number of conscription insurance contracts in force at the end of the year by the size of the male population aged 19 years or younger in the same year. Chōhei Hoken alone achieved a penetration ratio of 1.5% by 1910. In 1921, Chōhei Hoken and Nippon Chōhei had pushed the ratio to 4.6%. Over the next ten years, the by then four companies were able to further raise it to 6.5%.¹⁹ This does not seem very impressive. But it would be wrong to conclude that insurance was not much needed. There are many accounts about the economic hardship caused by compulsory military service to the families of the draftees (Ogawa 1921, 235). The low insurance ratio should rather be interpreted as a sign that conscription insurance was only affordable to a small number of households. Such an interpretation would also be in line with the high number of cancelled contracts mentioned above.

Table 1. Business, political and military connections of key figures in the four conscription insurance companies

	Name	Function	Top positions in other businesses	National politics or military
Chōhei Hoken (Dai-ichi)	Okada Jiemu (1860 – ?)	Founder, President (1898-1904)	Life insurance, shipping, railways, pharmaceuticals, etc.	House of Representatives
	Nezu Kaichirō (1860 – 1940)	Founder, Executive Director (1802-1902)	Nezu Zaibatsu businesses, railways, etc.	House of Representatives House of Peers
	Ozawa Takeo (1844 – 1926)	Director, President (1904-1909) General Director (1909-1926)	Railways, etc.	House of Peers (Baron) Lieutenant General of the Army
	Ōta Seizō (1863 – 1946)	Executive Director (1909-1926) President (1926-1936), Advisor (1936-1944)	Railways, banking, etc.	House of Representatives House of Peers
	Izu Tsuneo (1864 – 1944)	Director (1911-1921)	n.a.	Major General of the Army
Nippon Chōhei	Hatano Shōgorō (1858 – 1929)	Founder, major shareholder (1911-1919)	Newspaper, railways, Mitsui Zaibatsu businesses, etc.	Foreign service
	Kadono Ikunoshin (1856 – 1938)	Founder, President (1911-1918)	Life insurance, non-life insurance, etc.	House of Peers
	Adachi Sō (1870 – 1947)	Founder, Executive Director (1911-1935) President (1936-1944)	Banking, textiles, etc.
	Murota Yoshiaya (1847 – 1938)	President (1918-1936)	Banking, railways, shipping, etc.	House of Peers
Kokka Chōhei	Kawasaki Hajime (1884 – 1948)	Founder, Director (1922-1943)	Kawasaki Zaibatsu businesses, banking, non-life insurance, etc.
	Kawasaki Kineo (1891 – 1950)	Founder, President (1922-1944)	Life insurance, non-life insurance, banking, etc.
	Takanashi Keizaburō (1864 – 1944)	Founder, Executive Director (1922-1944)	Building management, etc.	Major General of the Army
Fukoku Chōhei	Nezu Kaichirō (1860 – 1940)	Founder, President (1923-1940)	Nezu Zaibatsu businesses, railways, etc.	House of Representatives House of Peers
	Yoshida Yoshiteru (1874 – 1943)	Founder, Executive Director (1923-1940) President (1940-1943)	Life insurance, shipping, etc.
	Izu Tsuneo (1864 – 1944)	Founder, Executive Director (1922-1936) Director (1936-1944)	n.a.	Major General of the Army

Source: Own compilation from Jinji Kōshin-jo 1915, 1928.

Another way to put the performance of conscription insurance into perspective is to compare its penetration ratio with that of life insurance.²⁰ The market for life insurance encompasses the whole population. With a population of 65.5 million in 1931, the 5.1 million life insurance contracts in force at the end of the same year implied a 7.9% penetration ratio. This is not so much higher than the 6.5% achieved by conscription insurance companies in their population segment. In fact, Chōhei Hoken (Dai-ichi Chōhei) rivaled the largest life insurance company, Nihon Seimei, with regard to the total number of policies in force, even topping the life insurer in 1912 and from 1916 to 1921. In 1931, Dai-ichi Chōhei came second, Fukoku Chōhei seventh and Nihon Chōhei eighth in a combined ranking of life and conscription insurance companies in terms of number of contracts, with Kokka Chōhei occupying rank 30.

The private-public nature of conscription insurance

The success of conscription insurance depended on a variety of conditions: the social and political acceptance of both conscription and conscription insurance, the control of commercial and political risks and the competitiveness of the product. A crucial factor for all of these conditions was the blending of private enterprise with national interest.

Social and political acceptance

The success of conscription insurance as a private business required a wide social acceptance of both conscription and the idea of insurance. Conscription insurance was introduced in 1898, almost ten years after military service had been defined as a duty of Japanese subjects by the Meiji Constitution and three years after the victory in the Sino-Japanese war. By then, opposition against conscription had ceded and been replaced by national pride in the country’s military (Hirayama 1953b, 1954; Gordon 2003, 118).

Japanese people had also been familiar with insurance. Various branches of the insurance industry quickly developed in the liberal economic environment created by the Meiji Restoration (Miura 1932). Also, Japanese communities had experience with organizing mutual support for recruits and their families, which functionally resembled conscription insurance (see the section on ”Military conscription” above). Still, the acceptance of conscription insurance as a private business required more than just familiarity with the idea.

Conscription insurance implied a long-term promise. Policyholders would have to pay premiums for up to 19 years before knowing whether the promise would be fulfilled. People needed to have trust in the viability of the business and the rightfulness of the people running it. Such trust was partly generated by the regulations established for insurance businesses and by the creation of the Insurance Section within the Department of Commerce in the Ministry of Agriculture and Commerce, which would be in charge of checking business applications and monitoring the industry (Jiang 2022). However, the most important source of trust was the reputation of those affiliated with the business either as presidents, directors or major shareholders. In this respect, all four companies could present well-respected public figures with high social status gained as businessmen, politicians or in the military (Table 1). It was common to list those names in newspaper advertisements (Jiang 2018). An example is given in Figure 5.

Figure 5. Newspaper advertisement announcing the establishment of Nippon Chōhei. Note: The large characters in the middle give the company name, the right part explains the product, the left part lists the names of the president and the directors.

Source: Hoken Ginkō Jihō [Insurance and Bank News], October 27, 1911, p.17.

Equally important was the acceptance of the business idea by the military leadership. Yamagata Aritomo had strongly opposed the proposal of a conscription tax, arguing that it ran counter the idea of military service as a public duty. However, he supported conscription insurance when he was approached by Narita, Teramura and Okada (see the section on ”Conscription insurance” above).

We do not know why Yamagata endorsed conscription insurance. The fact that its private character meant that no additional taxes had to be raised must have played a role. Also, he may have thought that the private solution did not put the idea of military service as a public duty into question. Whereas the public transfer of income under a conscription tax might have been seen as an acknowledgement by the government that military service was a sacrifice rather than a duty, the mutual support under a private insurance scheme, while having the same effect, would avoid such a conclusion. Instead, it was a way by which those who did not get drafted would still support the fulfilment of the duty, thus manifesting the broad acceptance of military service beyond the circle of recruits.

The view that conscription insurance was serving the public interest was not only propagated by the companies who sold the product. It was also shared within the government, as exemplified by Oka’s confirmation to Ōta, when the latter was entrusted with rebuilding the financial health of Chōhei Hoken. The personal involvement of high-ranking military figures and the political and public activities of some of the company’s presidents and directors further underlined the claim that conscription insurance was more than just a private, profit-oriented business.

However, the private-public character of conscription insurance was not only an asset; it also represented a liability, because it meant that public policies rendering the private solution obsolete always remained an option to legislators. The idea of introducing a conscription tax never completely disappeared from public discourses (Katō 1996, 181-185). It surfaced again in the mid 1910s, but failed to gain sufficient political support. In the mid-1920s, when the government set out to overhaul the Conscription Law, the idea of introducing a national conscription insurance was seriously considered (Ōsaka Jiji Shinpō 1926; Tōhō Seimei Hoken 1953, 267-268). The government had already shown that it was willing to engage in the insurance business when it introduced Postal Life Insurance in 1916 against the opposition of the life insurance industry. The conscription insurance companies proved more successful in fending off public competition. The proposal for a public conscription insurance submitted in January 1930 was finally rejected. Nevertheless, in 1931, public children’s insurance was implemented (Life Insurance Association of Japan (ed.) 2009).

Political risk and adverse selection

Conscription insurance faced not only an existential, but also an operational political risk. To function, it required a large pool of potential draftees. Universal conscription ensured such a pool, but the extensive exemption rules that Japan applied in the beginning, and the many ways they could be exploited by those who wanted to avoid military service, meant a drastic reduction in the number of potential draftees. The early reforms of the Conscription Law basically removed these limiting factors. Still, to make conscription an insurable risk required that the number of those who did not get drafted was much larger than the number of those who would get drafted. After all, the income earned with the premiums paid by the former had to finance the coverage provided to the latter. To meet this condition, the conscription rate had to be sufficiently low.

As shown above, Japan’s conscription rate reached 10% after the Sino-Japanese War, when conscription insurance was being introduced, and increased to 20% after the Russo-Japanese War, but it never surpassed this threshold. However, the fluctuations introduced uncertainties in the actuarial calculations of premia. When Okada asked Yasuda Zenjirō, founder of Yasuda Zaibatsu, for funding for Chōhei Hoken, Yasuda asked Morimura Kinzō, manager and actuary of Kyōsai Life (which had been founded by the Yasuda clan), to assess the soundness of conscription insurance. Morimura expressed doubts referring to the uncertainties about conscription rates, and Yasuda declined Okada’s request (Tōhō Seimei Hoken 1953, 27-28).

Another technical issue was “adverse selection,” a general problem confronted in insurance. It refers to the tendency that those with higher individual risk exposure are more likely to purchase insurance, which will force companies to raise premiums. This will crowd out those with lower risk exposure, which will again lead to higher premiums, until the market eventually ceases to exist (Finkelstein and Poterba 2004). What if only those who were likely to get drafted would purchase insurance? Openly volunteering for military service was dealt with in the insurance policy. Volunteers would receive a reduced payout. But, there still remained the possibility that the probability of being drafted could be manipulated. Reports that more than a proportionate number of sons from poorer families tended to get drafted indicated some social selection bias, although this would not necessarily have jeopardized the insurance scheme. Looking at data from Chōhei Hoken (Dai-ichi Chōhei), we see that when the first five contracts matured in 1903, all sons covered by the insurance got drafted. Until 1907, the ratio of matured contracts for which insurance payments had to be made fluctuated between 39% and 55%.²¹ At such a ratio, the business could have hardly been viable. The ratio then dropped and stabilized in a range between 22% and 29% between 1908 and 1936. This was still significantly higher than the overall conscription rate, thus suggesting the existence of an adverse selection bias. However, it was not as high as to preclude a viable business.

Competitiveness – the national interest value proposition

As for any business, conscription insurance companies needed to be sure that there was sufficient demand for their product. The decision by the government to introduce compulsory military service, the way the conscription system was designed, and the absence of government policies to relieve the hardships felt by the families of recruits created an opportunity for private insurance. But would such insurance be affordable? And would it be able to compete with alternative financial products? The analysis in the preceding section suggests that poorer families could not afford conscription insurance. It also showed that postal savings offered an attractive alternative. This meant that business success was not automatically guaranteed, but required special marketing and sales efforts.

Here again, the positioning of conscription insurance as a product that served the national interest by supporting people who fulfilled their military service constituted an important additional value proposition. To add creditability to their value proposition, companies engaged directors with military career backgrounds (see Table 1 above) and used the Military Veteran’s Association and their members for sales promotion. They also sponsored local public events organized to send off new recruits to their regular service (Tōhō Seimei Hoken 1953, 153, 169).

In various ways, companies positioned insurance as a matter of public importance by making the fact that households had purchased insurance publicly visible. For example, Chōhei Hoken published photographs of young boys, for whom their family had purchased insurance, in their company newsletter (Tōhō Seimei Hoken 1953, 152). They also provided plates to be fixed to the gates of a house indicating that the household had bought conscription insurance for their son (Tōhō Seimei Hoken 1953, 80). Similar plates were otherwise only used by fire insurance companies. The head of the local sales office would hoist a flag on the day the son of an insured household would commence his regular service (Tōhō Seimei Hoken 1953, 153).

Furthermore, companies emphasized their nationalist orientation through large public donations. In 1933, for instance, Fukoku Chōhei donated two airplanes to the military, one to the Army and one to the Navy to support those in active service (Fukoku Seimei Hoken 1981, 30-31), while Dai-ichi Chōhei sponsored the Main Gate (Shinmon) of the Yasukuni Shrine in 1934, which had become the public place of worship for those who had died in military service for Japan since the Meiji Restoration (Tōhō Seimei Hoken 1953, 364-372). Fukoku Chōhei also followed suit by sponsoring two large stone lanterns (Tōrō) for the Yasukuni Shrine in 1935 (Fukoku Seimei Hoken 1981, 32). They depicted Japanese war scenes in bronze relief and are among the largest granite stone lanterns in Japan.

Through the above sales and marketing activities, the industry was able to take advantage of the growing nationalist and imperialist sentiments among the population. In combination with the successful appeal to the public interest, this is likely to have instilled an emotional element, if not social pressure, in the purchase of insurance on the side of policyholders. On the one hand, the emotional element represented a competitive advantage over alternative financial products. On the other hand, it might also be one of the reasons why many contracts were cancelled before maturity. The appeal to national interest might have been successful in increasing the willingness to pay, but it could not assure that every policyholder would in the end be also able to afford to pay.

Conclusion

The purpose of this paper was to draw scholarly attention to Japan’s conscription insurance and to describe and explain the success of the industry. Like universal conscription, conscription insurance had its origins in 19^th century Europe, but unlike the former, its design and consequent success were unique to Japan.

Based on the description of Japan’s military conscription system and the structure and evolution of the conscription insurance industry, the analysis stressed the peculiar private-public character of conscription insurance. On the one hand, conscription insurance was the outcome of private enterprise. Like in any other field of private business, companies had to win private investment and to successfully compete in order to survive and grow. On the other hand, success depended in many ways on conditions that pertained to the public rather than the private sphere. Specifically, the industry was dependent on the existence, design and implementation of universal conscription and the absence of a national redistribution scheme to correct the unequal distribution of the burden of military service, which conscription insurance addressed.

The public elements allowed the companies to claim that their product was providing a public good and that their business was of national interest. In this way, companies were able to derive an additional value proposition beyond the private utility offered by their product. Their proposition acquired credibility through the social status and background of company leaders and shareholders and through marketing and sales activities, which used semi-public organizations and networks and addressed public events. However, the public character also implied specific political risks. The design and implementation of the conscription system could change, or as a result of public pressure and in recognition of the public character of the product, the government could introduce a conscription tax or national conscription insurance.

The analysis presented in this paper is primarily explorative. The hypothesized private-public character of conscription insurance will need to be further corroborated. At the company level, this can be done by collecting more information about marketing and sales strategies of specific companies. With regard to the social and political aspects, more in-depth analyses of specific public discourses surrounding the social and economic dimensions of conscription and corresponding reform proposals offer promising directions for future research. Lastly, further international comparative research is needed to shed more light on the unique character of Japanese conscription insurance.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ Other issues included the dismantling of the feudal order in general, the refusal of the government to attack Korea and the introduction of compulsory education.

² The design will be described in more detail in the next section.

³ It was a term used to circumscribe the conscription system emphasizing that it was a tax-in-kind, which one might have to pay with one’s life in case of war. The term caused confusion as it was literally interpreted. This further increased the anger among the rural population.

⁴ In 1880, the average daily wage of a male worker amounted to 0.24 yen in manufacturing and to 0.22 yen in agriculture (Long-term Economic Statistics (LTES) Database (Japan), 8. Prices, Table 25, Series of Wage Rates by Job Data (Series A), https://d-infra.ier.hit-u.ac.jp/English/ltes/a000.html). Assuming 300 work days, this corresponds to an annual income of 72 and 66 yen, respectively.

⁵ Data is taken from Long-term Economic Statistics (LTES) Database (Japan), 2. Labor Force, Table 1, Population by Sex and Age Groups, https://d-infra.ier.hit-u.ac.jp/English/ltes/a000.html.

⁶ The account of the history of Chōhei Hoken (Dai-ichi Chōhei) is taken from Tōhō Seimei Hoken 1953.

⁷ Narita and Teramura, the initiators of the original idea, received some financial compensation for their support and acquired a minority of shares, but were otherwise no longer involved with the actual business.

⁸ In 1912, the company changed its name to Nippon Chōhei Seizon Hoken, as it started to sell pure endowment insurance, but returned to its original name in 1918 as its main line of business remained conscription insurance.

⁹ The account of the history of Nippon Chōhei Hoken is taken from Hoken Ginkō Jihō Sha 1933, 180-181.

¹⁰ It should be noted, that at the time the term zaibatsu had not yet been in use to describe these family-centered company groupings. It was only after WWI that the term became common.

¹¹ The account of the history of Kokka Chōhei is taken from Hoken Ginkō Jihō Sha 1933, 197-198.

¹² The account of the history of Fukoku Chōhei is taken from Fukoku Seimei Hoken 1981.

¹³ Today, Nezu is also remembered as the founder of Musashi Junior High and High School. In addition, Tokyo’s Nezu Museum features his garden and art collections.

¹⁴ Coverage refers to the insurance payment made in case the risk realizes.

¹⁵ The specific product design differed among companies and also changed over time. The details are explained in the accounts of the company history, see for example Tōhō Seimei Hoken 1953 or Fukoku Seimei Hoken 1981.

¹⁶ It assumes that the contracts were concluded when the son was five years of age.

¹⁷ Applying the respective annual interest rates offered by an ordinary postal savings account and assuming that all interest earned remains in the account. Postal interest rates are taken from Japan Statistical Association (1987): Historical Statistics of Japan, Vol. 3, Table 11-7, Principal Interest Rates, 1875 – 1983.

¹⁸ Own calculations based on Company Business Reports from the Japan Digital Archive Center (https://j-dac.jp/infolib/meta_pub/G0000004kigyo).

¹⁹ The population statistics were taken from Long-term Economic Statistics (LTES) Database (Japan), 2. Labor Force, Table 1, Population by Sex and Age Groups, https://d-infra.ier.hit-u.ac.jp/English/ltes/a000.html.

²⁰ Own calculations based on data from Company Business Reports from the Japan Digital Archive Center (https://j-dac.jp/infolib/meta_pub/G0000004kigyo)

²¹ Own calculations based on data from Company Business Reports from the Japan Digital Archive Center (https://j-dac.jp/infolib/meta_pub/G0000004kigyo).