Around 1897 Fujita and Co. faced a management crisis. Over the period 1894-95 its President, Denzaburö Fujita, suffered losses of approximately one million yen as a result of speculation in shares7. ln 1896, moreover, their main business, the Kosaka Mines, had virtually ceased to be profitable. Also, in connection with the Kojima Bay Reclamation Project9, for which planning had started in 1882, they had expended approximately one million yen in trying to placate local opinion and on lobbying politicians and government officials. Despite this, however, there was a campaign of opposition, and no progress had been made. All these» “factors combined to push Fujitagumi & Co. to the very brink of bankruptcy.
The core business of the Kosaka Mine had originally been the smelting and refining of silver; When Kuhara became Office Manager in 1897, he over to copper smelting and refining, and by 1900 had developed new technology for this purpose, In the five-year period from 1906 to 1910 me Kosaka Mine posted profits of ¥15.9 million. Permission tó start Work on the Kojima Bay Reclamation Project was received in 1898, thanks to the efforts of Hikoichi Motoyama, the General Manager of Fujitagumi & Co., and in 1902 the reclamation of the main sections was completed.
By 1902, thanks to the resurgence of the Kosaka Mine and the progress of the Kojìma Bay Reclamation Project, the fortunes of Fujitagumi & Co. had been reestablished, and from about this time Denzaburö Fujita started thinking about his successor. Shikatarö, one of the joint managers of Fujitagumi & Co., had died in 1896, and his son, Kotarö Fujita, had joined the management team. Shözaburö, one of the other joint managers, had retired in 1905, to be replaced by his son, Fusanosuke Kuhara. Denzaburö had three sons, Heitarö, Tokujirö, and Híkosaburö. The profits earned thanks to the resurgence of the Kosaka Mine were considerable, and Fusanosuke’s standing Within the company was high. Denzaburö was well aware that if he were to choose his successor on the basis of managerial ability the choice would be Fusanosuke. However, Denzaburö tried to designate his eldest son, Heitarö, as his successor. In the background to this issue lay the fact that despite the fact that Denjirö had been the youngest among his siblings, he had continued to run Fujitagumi & Co. as President, thanks to the policy of putting ability above other considerations.
A struggle started over the succession between Denjirö, the current President, and Fusanosuke, who wished to succeed him in that post. Denzaburö came to a decision that if he could not get agreement on Heitarö as his successor, that the three should all become independent and separate. Bluntly put, he had made the decision to force Kotarö and Fusanosuke out of Fujitagumi & Co..
The year 1905 was spent fighting this power struggle. In summer of that year it was finally decided that Kotarö and Fusanosuke would leave Fujitagumi & Co., and go independent,
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