Mr. Yoshinari Tatara, director and advisor of YUTAKA TRUSTY SECURITIES CO., LTD., resigned due to expiration of term on June 29. He had been called “The prince of the commodity futures industry”in Japan since he was a young age and had continue to serve as many important posts of associations and organizations in the industry, but he is 87 years old now. The gold futures market in Japan wouldn’t have come true without him. As a manager, he became the president of Yutaka Shoji Co., Ltd. (YUTAKA TRUSTY SECURITIES CO., LTD. at present), leading the company for many years and developed it to a big company such as an industrial leader. He was born in Shimane prefecture on April 30, 1936, and after he graduated from Hiroshima Prefectural Hiroshima Kokutaiji High School and Faculty of Economics, the University of Tokyo in 1960, entered the Sumitomo Marine & Fire Insurance Co., Ltd. After that, he entered Yutaka Shoji in 1962, and four years later, in 1966, he became the managing director, and the president in 1969. At that time, he was only 33 years old. And then, he did hard work for over thirty years and became the chairman of the company in 1990. Also he served important posts of associations and organizations in the industry that came to him one after another. Therefore, showing respect to his work in the industry for over sixty years and his great achievements, I would like to look back his turbulent footprints. He is still fine and enjoys bus trips with his wife recently.（the photo was taken in the boardroom of the company on June 28, 2023, the day before the general meeting of shareholders）

Heavenly dispensing, meeting of Shintaro Abe and Yoshinari Tatara

A year has passed since the former Prime Minister, Sinzo Abe was gunned down. On the pillow of Yoshinari Tatara, a photo of him playing golf with the former prime minister has been placed. The day they played golf together was June 18, 2019 and the golf course was Three Hundred Club in Chigasaki city, Kanagawa prefecture. He looks at Mr. Shinzo Abe in the photo every night at bedtime. He also spoke sadly “If the former prime minister had lived, we could have played more golf together and we could have drunk more together”.

Mr. Shintaro Abe (1924―1991), Shinzo’s father, was a member of the House of Representatives and served as important posts in cabinet such as Minister of Agriculture and Forestry, Minister of International Trade and Industry, Minister of Foreign Affairs, Chief Cabinet Secretary, etc. He was a contributor of gold futures market founding. The movement of gold futures market founding in Japan started with a secret meeting of Shintaro Abe and Yoshinari Tatara.

In September 1980, a daughter of Mr. Masao Kitauchi, who was in charge of Hokushin group, one of major commodity futures groups in those days, married and her wedding ceremony was held at a hotel in Tokyo, and many of his business people attended the ceremony. Shintaro Abe also attended it.

The reason why he attended it was that there was Kanmon Commodity Exchange, one of commodity futures exchanges in Japan in those days, in his constituency (Shimonoseki city, Yamaguchi prefecture) and that he had a deep connection with the commodity futures industry. At the wedding ceremony hall, Shintaro whispered to Yoshinari “I can‘t speak in a crowd. I want to talk with just the two of us ”. After the ceremony, they met at a luxury club in Ginza, a prime location in Tokyo.

Shintaro suddenly brought up the subject and said “I am thinking about founding of a public gold market. I want to hear your opinion”. To his inquiry, Yoshinari appealed for necessity of a gold futures market leaning forward and delivered an impassioned speech on market theory. At that time, Shintaro nodded one by one and listened to him.

In those days, Yoshinari was the president of Yutaka Shoji (YUTAKA TRUSTY SECURITIES at present) and had served the chairman of National Federation of Commodity Futures Traders Association at the young age of 44 years old, so he was the face of the industry as “Prince of the commodity futures industry”in Japan. Meanwhile, Shintaro was in the position of the next presidential candidate, so generally speaking, the meeting of the two persons would have been considered as a composition that wasn’t dynamically balanced.

However, the connection between the two persons was very strong at that point. Their first meeting dates back to the time Yoshinari was in the University of Tokyo. Yutaka Shoji was founded by Yoshinari’s uncle, Matsuro Tatara. Matsuro was the executive of Kanmon Commodity Exchange and his family had supported Shintaro with the company. One time, Yoshinari was called for election support of Shintaro. About that time, Yoshinari says “I was tempted by the words to pay a per diem and give a feast, too”. Also he reminisces“I was cheeky”and says he got involved with Shintaro at the drinking table.

Their age difference was 12 years. Shintaro’s birthday was April 29 and Yoshinari’s birthday was April 30. April 29 is “Showa Day” now, a holyday, was Birthday of Emperor Showa. Yoshinari got involved with Shintaro for his birthday and told him without reserve “You couldn’t do your best a little more, could you？ I endured all day in my mother’s tummy”. On the other hand, Shintaro answered “Even if you say that…”while reacting seriously. At that time, Shinzo was only 3 years old.

Ever since, Yoshinari came to be called on Shintaro’s birthday party held on April 29 every year, but his participation was once every two years and he played golf in non-participating years.

In this way, they deepened their relationship. Mr. Daisuke Kihara, who supported Yoshinari as a bureau chief, National Federation of Commodity Futures Traders Association. , mentions in later years “Having no brother, Shintaro had treated Yoshinari like a younger brother”.

Bombshell statement about gold market founding－A well-prepared surprise attack

The opportunity for movement of gold futures market founding was a book written by Mr. Daisuke Kihara. On December 26, 1980, the publication party of the book“The basic knowledge of futures trading”written by Mr. Kihara was held at Sankei Hall (Chiyoda ward, Tokyo) and Shintaro, chairman of the policy research council, Liberal Democratic Party at that time, who was on stage for speech and made bombshell statement “A gold exchange should be founded”, and after leaving from stage, he shook hands with Eizaburo Saito, a member of the House of Councilors, Liberal Democratic Party at that time, receiving a petition for gold listing on a exchange from him. And some mass media there reported the news in the big headlines next day and they developed into a big fuss. As a result, that led to the gold listing movement in full swing.

The detail of his speech at the publication party: “As it is a busy time, the end of the year, there are many requests for budget allocation from all directions, however, as the government hasn’t a magic mallet, there is no money. Today’s party is a publication commemorative one of the book relating to commodity futures trading, so there are many people who engage in the commodity futures industry. I would like you to make a gold exchange and do big business. If so, you pay a large transaction tax and the government distributes the money effectively among people who want it. Also, by founding a gold exchange, bad traders in private gold markets can be exterminated. Surely, it is double win. It comes to kill two birds with one stone.”

The publication party was hosted voluntarily by 10 people who came from the same hometown, Shimonoseki city, as Mr. Kihara. It was such a big party that about 200 people attended, however, participation of politicians were three persons, only Shintaro, Saito and Yoshiro Hayashi, a member of the House of Representatives at that time, later minister of Health and Welfare, and minister of Finance.

Mr. Hayashi made a remark at the beginning and mentioned that his father, Keisuke Hayashi had served as the president of Kanmon Commodity Exchange. Besides, his son, Yoshimasa Hayashi is the minister of Foreign Affaires at present.

While he was making speech at the beginning, Yoshinari greeted Shintaro at the entrance of the hall. Shintaro told his decision to Yoshinari “Today, I go to you”while moving forward. The bombshell statement wasn’t haphazard but a well-prepared surprise attack.

If the statement by Shintaro is summarized, the primary goal is development of national economy and the second goal is extermination of the gold black markets, and to realize them, a normal gold market is necessary. Yoshinari felt so excited that he got goosebumps in his words.

A negative legacy in the commodity futures industry left by gold black traders

I would like to look back the gold black markets that had become problems in those days.

In August 1953, the government changed its gold policy and amended part of the Gold Management Act. At that time, release of part (later all) of newly mined gold in Japan to the private sector is permitted. In April 1973, import of gold was opened, and in 1978, export of gold was opened, therefore, gold trading was opened completely. Although gold futures trading came to be opened four years later from the time, the background lied wide that personal injury occurred frequently in the private gold markets and that it became a social problem.

After import of gold was opened, the first gold market in Japan was “Japan Gold Market Co., Ltd.”and it was located in Nihonbashi-kayabacho, Chuo ward, Tokyo. 190 companies that had traded precious metals such as jewelry store and watch store, etc. in Japan became members of the gold market. They received buy order from customers and placed the order on the market, and sold import gold by big trading companies.

In the commodity futures industry in Japan, some traders that assumed “The day that a public gold market will be opened is near”began to enter the Japan Gold Market for the purpose of trading achievement and normal management had been done there at that time.

However, as Japan Gold Market began to make profits since its opening up, members that came to know the charm of market management created fragmentation of the market. The situation is similar to the cryptocurrency markets at present, and at that time, non-member traders that had unrelated to gold set up the similar markets, and as a result, gold markets were crowded.

Those private gold markets were called “Black market”and became a source of trouble. At that time, although futures traders were condemned, it is worth noting that the most traders that participated in the Japan Gold Market weren’t complicit to fragmentation the market and remained in the original gold market.

The traders that set up the fraudulent black markets didn’t reach the same level as the license of commodity futures trader in the act and dropped out. They went to Hong Kong, where there was no regulation of futures trading, occurred frequent international troubles in unscrupulous business like the fake futures trading of Japanese red beans.

After that, those overseas fraud traders responded the charm of the black markets sensitively and came back to the private gold markets in Japan. The movement increased troubles of gold trading from the middle of 1970s to the late 1970s and mass media denounced the black gold markets. The black markets bothered the courts and became the problem in parliament.

In August 1980, since gold was listed on Hong Kong Commodity Exchange, the black markets in Japan were going down and the black traders switched to gold futures traders in Hong Kong. However, the scars left in the commodity futures industry in Japan by those black traders were deeply rooted. Therefore, normal traders permitted by the competent ministries were equated with the black traders, resulting in promoting the image of “Futures is vice”.

（to be continued）

（Futures Tribune・issued June 30, 202 ・no.3224）