The Toyotomi Shogunate: (1603 - 1609)
Economics and Trade
One of the unspoken rules of economics is that the only businesses that do well in wartime are arms dealers and undertakers. Japan had been in a state of war on and off for over a century, so suffice to say Japan wasn't in the best shape economically. As a bureaucrat by trade, Mitsunari had a unique insight into Japan's economic situation and the role that the merchant and artisan classes played in Japan's economy. An insight to which the daimyo and upper classes, blinded by Confucian orthodoxy, would be unable to see.
Mitsunari cut taxes in order to boost growth, decreeing that taxes for the merchant, artisan and peasant classes should never exceed 50 percent of their total income. By cutting taxes, merchants would have more money to spend on goods produced by artisans who would use their increased profits to produce more goods. Common sense today perhaps, but a radical concept for 16th century feudal Japan.
Mitsunari was not the first lord to do this, (that would be Oda Nobunaga) nor was he the first lord to see potential in trading with foreign nations when the opportunity presented itself. Mitsunari was the first to see the massive potential in Japanese merchants trading overseas. Japan would no longer wait for merchants to come to them, Japan would seek it's own opportunities.
The most obvious market for Japan was Ming China. China was a rich country, geographically close to Japan, which had products Japan wanted (deer, whose skins and horns were used in Japanese armour) and were in need of products the Japanese specialised in, namely katanas. China wasn't the only country interested in Japanese weapons though. The arquebus was originally introduced to Japan in 1544 by Portuguese merchants. Japanese craftsmen had studied the weapon intensely and began producing duplicates. Not satisfied with mere duplicates though, Japanese craftsmen began to develop arquebuses superior to the Portuguese originals - indeed the best anywhere in the world - and sell these to the Europeans. Praised for both their practical uses and for their aesthetic qualities, Japanese arquebuses and katanas fetched a high price in European auction houses.
At the time of Hideyori's ascension, Japan had two major trading ports: Nagasaki in Hizen (Otomo Yoshinobu's "capital") and Sakai, the Port city of Osaka (Toyotomi powerbase and now
de facto capital of Japan) which had both operated in this capacity for around 60 years. Mitsunari knew that foreign trade was both a a great asset and a potential threat to his rule lest less than loyal daimyo use it for their own nefarious purposes. He did not see the two existing ports to be a threat, Sakai was essentially in his own backyard and Nagasaki was controlled by one of his most loyal supporters, so he passed legislation to make these two ports Japan's "staple ports" (to use a contemporary European term). There was to be no limit on whom would be allowed to trade at these ports though in practice Portuguese merchants were preferred in Nagasaki (whose daimyo was a devout catholic) while Dutch merchants had the largest foreign stake in Sakai. Mitsunari still wanted to encourage foreign trade elsewhere, and in 1608, permitted the establishment of seven other trade ports in western Japan, many of which had experienced some form of foreign trade in the past.
In order to preserve Sakai and Nagasaki as the principal trading ports, Mitsunari developed a system of regulation whereby all merchants had to belong to a particular za[2], or "trading station" in order to trade in a particular port. Trade stations were determined by nationality (for instance, Japanese merchants belonged to Japanese trading stations, Portuguese merchants to Portuguese trading stations, etc.) and were operated much in the same way as factories did in India and the New world, except that the Japanese ran them all. The right to a trading station was one awarded through Mitsunari (a "Kampaku Charter" if you will) and thus by banning merchants from trading outside their designated trading stations, Mitsunari was able to play foreign powers against one another in the seven new ports while simultaneously maintaining Nagasaki and Sakai's dominance as they were the trading ports with the most stations.
The nine licensed trading ports in 1609, and their trading stations listed in order of importance and value.
This particular brand of protectionism was a roaring success, and financially a boon for the young shogunate. By making himself and his fellow daimyo very rich indeed, and by passing the savings unto the populace in the form of tax cuts, Mitsunari was able to cement his clan's rule in Japan for centuries to come.
The trading stations weren't just a domestic institution. Japanese merchants affiliated with a domestic trade station began setting them up overseas too, in Ryukyu, Macau and Taiwan at first, but later as far as Ayutthara, Malacca and Dai Nam. Again, as the Japanese trade stations in Sakai and Nagasaki were the largest, the majority of the proceeds of these foreign trade stations went to those two ports. This began to be known as the "Red Seal System" after the red seals on permits granted to Japanese merchants licensed to trade at Japanese trading posts.
A "Red Seal ship" used by Japanese traders. In order to obtain a permit, Japanese merchants were required to sail in domestically-built ships such as these. One assumes to make them easily identifiable by Japanese port authorities.
"Anjin-sama" and the makings of a Japanese Navy
Surprisingly for an Island nation, Japan had no real navy or history of naval warfare (they were however notorious in Asia for their piracy). Ever the innovator, Nobunaga had used a fleet to good effect against the Mouri clan and several prominent clans had fleets, but nothing on the scale of the Chinese, Koreans or even the Royal Scottish Navy during the time of King James I. [2]
Mitsunari's dream was to establish a national navy at least on par with that of Portugal or the Netherlands. Unlike the domestic trade ships, these ships would be modeled on the European ships of the day: namely caravels, galleons and carracks. As luck would have it, an English pilot by the name of William Adams had recently tried to dock off Bungo province in northern Kyushu. Originally suspected to be pirates, Adams and his fellow crewmen were taken to Osaka castle to see Mitsunari.
Mitsunari was quite taken by the Englishman's skill in ship design and invited him to design and build two western-style ships for him. Adams was an Anglican which didn't endear him to Mitsunari's catholic friends Yoshinobu and Yukinaga, so he spent most of his time leading Red Seal trade missions overseas where he wouldn't cause frictions between Mitsunari and his loyal catholic retainers.
Toyotomi Maru, one of the two ships built for the Shogunate's Navy under the direction of Englishman William Adams, or Anjin-sama as he was known to the Japanese
The Invasion of Ryukyu:
In between the islands of Kyushu and Taiwan lay the Ryukyu Archipelago. Populated by ethnic Japanese yet politically separate from Japan, Ryukyu was led by it's own monarch who paid homage to the Ming Emperor. Ryukyu was an important commercial gateway to the rest of Asia, it's people spoke Japanese and worshiped the Japanese gods. To the Otomo and Shimazu clans, it was an insult that "Japanese" should pay tribute to a foreign emperor and not to a Japanese shogun.
King Sho Nei, monarch of the Ryukyu Kingdom. He was a vassal of the Ming Empire and paid an annual tribute to Beijing, but not Osaka.
Shimazu Yoshihiro and Otomo Yoshinobu both saw the economic potential in a Japanese subjugation of the Ryukyu Islands, and in 1608 petitioned the court for shogunal permission to invade the islands. With Mitsunari's acquiescence, the young shogun gave his permission and an invasion was planned for the spring of 1609. The invasion was to be led jointly by the two powerful Kyushu daimyo and in return, the islands would be appropriately split evenly between them; The Otomo gaining influence in the northern islands and the Shimazu influence in the southern islands.
Mitsunari did not want to anger Ryukyu's masters as the Ming Empire still had a much more powerful army and navy than Japan, so unfortunately outright annexation of Ryukyu was out of the question at this time. The best the Kyushu forces could hope for was an annual tribute paid to them and the shogunate; this would be enough for now.
Over 6'000 men departed Otomo and Satsuma lands for Shuri, the Ryukyuan Kingdom's capital. The Ryukyuans had few warriors and resistance was futile against the might of the Toyotomi, yet a few brave souls resisted the occupation. They were quickly overcome, and the occupation was mostly peaceful. [3]
Under the terms of the peace negotiations, Ryukyu was allowed to maintain it's independence provided that it pay annual tribute to Osaka as opposed to every ten years for Ming China. Both the Otomo and Shimazu were allowed to maintain a garrison in Ryukyu in their respective spheres of influence and Japanese merchants were given priority to buy and sell in Ryukyuan markets. The Treaty of Kagoshima, as it was known outside Japan, was signed in July 1609. Ryukyu would remain a vassal of Japan for the next 35 years.
Ambassadors of the Ryukyuan King paying tribute to the Shogun Toyotomi Hideyori in Osaka.
Notes:
[1] Za roughly translates into "guild" in English.
[2] Which was said to have possessed a a grand total of three warships.
[3] This is what actually happened. The Ryukyuans mostly gave up without a fight and paid tribute to both China and Japan until the 19th Century.