To most, the post office is seen as a simple system with the sole purpose of providing ease of communication and delivery throughout a nation and the rest of the world through mail and delivery services.
But would you ever consider for a moment to deposit your financial savings into a post office? Or buy life insurance from one? Exactly how big of a role does the post office even play in the economy of a nation as a whole?
Enter the Japanese postal service, officially called Japan Post Co. Ltd., offering not just mailing services but also banking and life insurance, and formerly the largest financial institution in the world.
How exactly did an institution such as this manage to achieve such huge economic growth? How did it develop, and what role does it play in Japan socially, politically, and economically?
The story of Japan’s uniquely structured postal system and how it came to be goes back hundreds of years, and includes several episodes of structuring and restructuring, adding and subtracting services, and changing names, logos, and ownership.
The Feudal Postal System of Japan
The Japanese post is believed to have gotten its start in the feudal age as an actual system during the Tokugawa Period. With Japan still in relative isolation (鎖国; sakoku) at the time, the development of communications and transportation within the country unfolded in a rather unique way. With international contact restricted by the Tokugawa regime to a few select ports, and likewise no new influences or imported technology coming in, Japan’s communication systems advanced in a different way compared to its Western counterparts.
The nation was connected via five main highways known as Go-kaido, which extended from the then-capital Edo, where the Shogunate Government was established. Under the management of the Central Government, post stations were set up all along the routes, which were responsible for supplying travelers with relay men and horses, the main method of communication over distances of that time. They also provided accommodations, such as lodging.
As large vehicles had not been employed as a method of transportation/communication yet, all travel was carried out either on horseback, via palanquin, or simply on foot. Despite being a system of expansive highways, all activity was most likely to be via foot traffic. Oddly enough, the mail-delivery part of the system (called kikyaku, literally “flying leg”) were not provided horses at all, so all mail deliveries were carried out on foot. Also, as the concept of home-delivery had not come about yet, all letters and packages were dropped off at a location specified on a map at each post-station, where the villagers would gather to greet the courier and receive their parcels. As for outgoing mail, the villagers would prepare their items ahead of time to hand to the courier when he came with the day’s deliveries. In some Edo post stations, a straw bag was attached to Nihonbashi Bridge before the courier’s arrival where villagers would deposit their mail items to be picked up by the courier (similar to a mailbox). Also, as stamps did not exist yet, postage was paid by attaching a coin to the piece before handing it over.
Eventually, the services offered by this system expanded to include money remittance for traders, which grew in necessity and importance as the postal system evolved more and more, and involved more and more businesses. This set-up would become the basis for the modern Japanese post system as we know it today, which also includes financial services similar to a bank.
Another unique fact about this feudal “postal service” was the way in which it was managed by the government. Not only were post-stations exempt from taxation, the officials who were employed by these stations received various benefits, such as an allowance of money or rice. They were also allowed to provide various labor services to the town in place of paying taxes, which is said to have come about from the policy of the Shogunate – which, despite having control over the highway system, did nothing to maintain the towns serving as post-stations.
However, this complex system would not carry on for long, as eventually, Japan would see a day when contact with the outside world would eventually come in and change everything.
The Meiji Restoration and Improved Postal Systems
Japan’s initial contact with the West brought in all kinds of new information and technology, many of which would go on to influence the development of the Japan Post as we know it today. Many of these technologies came in the form of new methods of transportation, which in turn created new ways to deliver packages and services.
The first locomotive vehicle entered Japan in 1865. Around this time a French Minister also came around and addressed the economic status of Japan under the Bakufu, and suggested they remodel their postal system according to that of the French to increase their revenue. Though this did not happen right away, with the coming of the Meiji Era and the Meiji Restoration, Japan would indeed find its postal system being restructured, and sure enough, it would included influences from not just the French system, but several other European systems, and would indeed be used as a new way to improve the economy.
A few years leading up to the Restoration, some Edo and Yokohama commissioners set up a union and began a steamer service operating between both cities, a service which lived on into the Meiji Era as a “new type” post, and would later become a forwarding agency.
The Restoration brought about many improvements, and not just to transportation and communications. A central mail and traffic office was also established as the country’s first modern postal service in 1871. Horse-drawn carriages and rickshaws (and later, bicycles) were finally employed. Pre-paid postage in the form of stamps also came about in the same year, doing away with the old, bulky system of attaching physical coins.
All in all, the government now worked with various private companies to continue this expansion in a way that not only met the transportation and communication needs of the people, but also allowed for large profits, eventually becoming a key player in the development and improvement of Japan’s economy as a whole.
The Economy and Politics of the Post Office
Until recently, the Japanese post boasted the title of the largest financial institution in the world, thanks to its available financial services which competed largely with actual banks. In the mid 1960s, the post office had approximately three trillion yen worth of deposits, about 15% of Japanese household savings, and by year 2000, this number catapulted to about 260 trillion yen, or 40% of savings.
The original Postal Services Agency (郵政事業庁, Yusei Jigyocho) was replaced on April 2, 2003 by a new, government-owned postal corporation, the Japan Post (日本郵政公社, Nippon Yusei Kosha). From 2003 to 2007, it existed as not just the nation’s largest employer, with nearly one-third of Japan working for one branch or another of the Japan Post, but also acted as the largest bank in the world, offering not just mailing services, but banking services including deposit, and even life insurance. With such high involvement in the finance and savings of Japan, the organization saw numerous ups and down, and even experienced several periods of near-bankruptcy, which they were able to have the government bail them out of.
While in the beginning, such involvement may have played a role in improving the economy in post-war Japan, after it fulfilled its purpose, it was believed by some to be no longer necessary to operate as a state-run entity, and would do more harm than good in the long run if allowed to continue. Some saw privatization as the answer, stating that without the government backing them in such financial distresses as mentioned above, they would have been more thoroughly monitored and examined in order to remain profitable and keep capital at a reasonable level. This apparent lack of market discipline is what lead former Prime Minister Junichiro Koizumi to seize the first opportunity he got to reform the postal system once more.
The Privatization of the Postal System
In September of 2003, then-Prime Minister Koizumi proposed privatizing the government-owned organization and splitting the Japan Post into four separate companies – a bank, an insurance company, a postal service company, as well as a fourth to handle retail for the other three. Despite much opposition and a failed first attempt, in 2005 Koizumi got his wish, and winning that election, abolished the Japan Post, breaking up its branches into a shareholding company, the Japan Post Network, and began the process of privatization, a process that has been gradually unfolding over the course of the last 10-plus years.
Koizumi’s reasoning was the fact that the Japan Post as a government-owned organization had already lived past its days of being a necessary part of economic development, and was now corrupt and bloated. Privatization, he reasoned, would do away with (or at least greatly reduce) this economic corruption, and allow for more efficient used of funds by curbing government spending and the growth of the national debt. Many citizens, however, argued against the loss of jobs that would come with the movement, and the inevitable reduction in efficiency, as many postal branches were located in rural areas and run by civilians of those towns.
Koizumi’s legislation provided a 10-year transition period for savings and insurance companies to be fully privatized while the government continued to be involved in the three other companies, and that the shares of Japan Post Bank and Japan Post Insurance would be made available to the market several years later. It was finally privatized in 2015, and the support for the movement continued with the election of current Prime Minister Shinzo Abe and his political ideals of “Abenomics,” a set of policies established to boost Japan’s economy through monetary policy, fiscal consolidation, and growth strategies. However, Abe remains fully aware of the doubts and criticisms of the general population:
「郵政事業の民営化後、１０年余りが経過しました。この間、株式上場や政府保有株の売却が行われるなど、郵政民営化は着実に進展してきました。他方 … 日本郵政グループの真価が問われています。」
Over 10 years have passed since the privatization of the postal system. In this time, the privatization of postal services has seen steady progress through the listing of stocks and the sale of government shares. However… the true value of the Japan Post Network is being called into question. In a January 2019 report with the Postal Service Privatization Committee, Abe expressed his strong expectations for the Japan Post Network to improve its convenience to users, increase corporate value, and revitalize the nation.
The Postal System of Japan remains a topic of political and economic debate to this day, as the two major parties of Japan, the Liberal Democratic Party (back under power under Prime Minister Abe) and the Democratic Party, continue to butt heads over opposing views on how to best use the postal system of Japan for their highest perceived good.
However, before bringing this historical examination of one of the most important organizations of Japan to a close, let’s look at a couple of other unique parts of the Japanese Postal System.
The Japanese Mailing Address System
Worth mentioning here because of how different it is from what many of us are used to is the Japanese addressing system. If you’ve ever visited Japan, or even simply tried to mail a letter there, you likely noticed some of these differences. And it isn’t just a matter of being a different country. To make things more complicated, this address system even has other variations within the same country!
This is because, historically, it has been found that many place names conflict between regions such as Hokkaido, for example, with place names in the rest of Japan. In order to solve this, several regions in Japan have developed their own variations of the standard address system by including extra information (such as the infamous “agaru” (上) and “sagaru” (下) often seen in Kyoto addresses, which refer to whether the building is up or down the street indicated).
The standard written format begins with the largest geographical area down to the smallest, in the following order: country, prefecture, district, city, street, building, floor, apartment number. It is a slight modification of the format originally established during the Meiji Restoration. (Note that in the case of writing Japanese addresses in English, it is acceptable to reverse the order into the conventional Western format, which typically begins with the building number).
In addition to the address, a hyphenated, seven-digit postal code is also included, and is indicated by the unique postal mark, 〒, which was introduced in 1887, and is still used to this day.
The Story of the Famous 〒 Logo
So what exactly is this strange, “T” resembling symbol? Representative of the Japanese postal system, it is called the yubin kigo (literally, “postal mark”). Though some claim it stands for the “t” in “teishinshou” (the Ministry of Communication and Transportation, which was in charge of the postal system at that time), thought there has been debate as well as several theories about exactly how and why it was decided.
The story goes back to 1884, when a red circle with a red line through it was adopted as the logo after a period of having been used unofficially. However, three years later, (and two years after the above-mentioned Ministry of Communication and Transportation was formed), it was announced that the logo would be changed into a “T.” Several days after that, another announcement was made that the symbol had been misprinted, and should have been 〒, the actual symbol used today, and not a “T.”
There was some confusion as to what caused this series of mistakes. Was the T really a misprint? Or was that story made up to cover for the fact that they realized only after their announcement that a T shape would conflicted with the already-existing T-shaped symbol indicating insufficient postage? (This was a universally recognized symbol, so it’s suspected they simply wanted to spare themselves embarrassment from admitting to that mistake).
Regardless of the reason, once the 〒 was established as the “real” official logo, it was accepted, and has remained as such for over 130 years.
Other Sources
Mitsui, Baron Takaharu. “The System of Communications at the Time of the Meiji Restoration.” Monumenta Nipponica, vol. 4, no. 1, 1941, pp. 88–101. JSTOR, www.jstor.org/stable/2382515.
Kinoshita, Nobuyuki. “The Economics of Japan’s Postal Services Privatization.” Center on Japanese Economy and Business Working Papers, no. 263, 2008, pp. 22–24. Colombia University in the City of New York, https://academiccommons.columbia.edu/doi/10.7916/D8MS4182.
Gary Robinson (2017) Pragmatic financialisation: the role of the Japanese Post Office, New Political Economy, 22:1, 61-75, DOI: 10.1080/13563467.2016.1195347
