Japan: Pleasing the Ancestors

Like chewing gum, rock ‘n’ roll and girls in slacks, people’s capitalism was unthinkable in prewar Japan. Today, an estimated 6,000,000 Japanese—many of them housewives, factory workers and shopkeepers—own stocks. An average trading day on the Tokyo Exchange sees no fewer than 100 million shares of stock change hands. The trail blazer in this phenomenal growth of stock ownership is a jovial, pipe-chewing kabuya (securities broker) named Tsunao Okumura, who has fought public apathy, occupation forces, and the power of Kabutocho, Japan’s Wall Street, to educate the Japanese public in the benefits of owning stocks.

Stubborn Man. Okumura, 60, is chairman of Tokyo’s Nomura Securities Co. Ltd., the world’s largest brokerage firm after Merrill Lynch, Pierce, Fenner & Smith. Nomura, in fact, is known as the Merrill Lynch of Japan and not by accident. As a worker in Nomura’s research department before the war, Okumura admired Merrill Lynch’s corporate philosophy of people’s capitalism, made a study of the American firm’s operations. When he took over as head of Nomura in 1948, he began to push widespread stock ownership. He put ads in newspapers, made scores of lectures and even organized tours to plants to show potential small investors what they would own a part of.

Tokyo’s Kabutocho, accustomed to the prewar idea of stocks held closely by the Zaibatsu financial combines, at first scoffed at Okumura, and occupation forces took a dim view of his plan to set up investment trusts that would operate somewhat like U.S. mutual funds. But Japan’s amazing postwar resurgence proved fertile ground for Okumura’s ideas. “I am the world’s most stubborn man,” says Okumura, “when I decide that I want something and meet opposition.” Many Japanese companies now prefer to sell shares to raise money rather than to ask the once all-powerful banks; the number of firms listed on the stock exchange has gone from 577 in 1953 to 1,291, and the total value of listed shares has soared from $1.8 billion to $25.3 billion.

Sold Like Brushes. Nomura has 8,350 employees and 125 offices in Japan, plus branches in Honolulu and New York. Its volume of stock transactions in 1962 reached $8 billion. In fact, Nomura handles nearly 20% of Japan’s entire stock business, 16.6% of all Japanese bond underwriting, 23.1% of its stock underwriting and 30.5% of all investment trust business. Its modern building in the heart of Tokyo boasts electronic data equipment, Japan’s second biggest vault, and closed circuit TV that links it with 38 main branches in Tokyo. Last year, the firm made $6,100,000 in profits.

Okumura’s sales force of 2,850 men and women sells stocks from door to door like brushes, and the company has placed 1,100,000 “million-yen savings boxes” in Japanese homes, where Nomura representatives periodically call to collect the yen and credit them to stock purchases. The firm has built branch offices in such spots as department stores and railway stations, has set up numerous investment clubs and seminars. Right after the war, Okumura was reluctant to go after foreign investors, because he felt that the low prices of Japanese stocks constituted an injustice to the work of Japan’s ancestors. Today, he is working hard to interest foreign investors in Japanese stocks. “Prices have risen to the point,” he says, “where I don’t think our ancestors would get angry.”