Japan's Private Railways

In Japan the word for a private railway, shitetsu (私鉄), is the historical opposite of kokutetsu (国鉄), the former national railway. By convention the seven JR companies — successors to Japanese National Railways after its 1987 privatisation — are not counted as "private railways" even though they too are now private firms, because they inherited the state's trunk-line network. The most important group of the shitetsu is the sixteen ōte shitetsu, the "major private railways": nine in the Kantō region around Tokyo (Tōbu, Seibu, Keisei, Keiō, Odakyū, Tōkyū, Keikyū, Tokyo Metro, and Sōtetsu), one in the Chūbu region (Meitetsu), five in Kansai around Ōsaka (Kintetsu, Nankai, Keihan, Hankyū, and Hanshin), and one in Kyūshū (Nishitetsu).

Ichizō Kobayashi (1873–1957) arrived at the idea almost by accident. A former banker, he took charge of a struggling start-up, the Minoo Arima Electric Tramway, which opened its first lines on 10 March 1910 — from Umeda in central Ōsaka out to Takarazuka, and from Ishibashi to Minoo. The line ran into empty hills with few passengers to carry. Kobayashi's insight was that a railway did not have to wait for demand; it could create it. As he is said to have put it, passengers are created by the trains themselves.

So he set about manufacturing riders. The company bought cheap farmland along the route, developed it into planned residential neighbourhoods, and sold the houses to middle-class families on instalment plans — a financing method still unusual in Japan at the time, and a development tactic that was a first in the country. New commuters meant guaranteed inbound traffic every morning and outbound every evening. To fill the trains on weekends and in the slack midday hours, Kobayashi built attractions at the rural end of the line: a zoo opened at Minoo in 1910, and a large public hot-spring bath, the Takarazuka New Hot Spring, in 1911.

The most famous of these attractions was the Takarazuka Revue, an all-female musical theatre troupe Kobayashi founded in 1913, which gave its first public performance in 1914 and remains a wholly owned part of the Hankyū group today. He later extended the same logic into professional baseball, organising the company team in 1936 that became the Hankyū Braves, and into cinema through Tōhō, whose Tokyo Takarazuka Theatre opened in 1932 and whose film arm was founded in 1937 before the two merged into the modern Tōhō company in 1943. Renamed Hanshin Kyūkō (Hankyū) in 1918, the railway had become the hub of an entertainment and property empire.

The other pillar of the model went up at the city end of the line. In 1929 Kobayashi opened the Hankyū Department Store directly above the Umeda terminal in Ōsaka — described as the world's first case of a railway company running a department store as its own business. A terminal department store captured commuters at the busiest point on the network twice a day, turning footfall the railway already generated into retail profit. The concept spread to railway termini across Japan and remains a defining feature of the country's big-city stations.

Kobayashi's competitors studied the formula and copied it. In Tokyo the industrialist Keita Gotō (1882–1959) — nicknamed "Robber Keita" for his aggressive corporate takeovers — built up the company that became Tōkyū, founding the Meguro-Kamata Electric Railway in 1922 and opening the Tōyoko Line in 1927. Japanese sources state plainly that, following Kobayashi's Hankyū method, Gotō built leisure facilities and department stores along his lines to raise the value of the surrounding land. His railway grew out of the same garden-suburb movement that produced Den-en-chōfu, the exclusive Tokyo neighbourhood developed from 1923 by the Garden City Company — founded in 1918 by the financier Eiichi Shibusawa, counted as the ancestor of Tōkyū, and the firm whose railway division was spun off as the Meguro-Kamata line. Seibu, Tōbu, Odakyū, Keiō, Kintetsu, Nankai (whose origins as the Nankai Railway date to 1884), Meitetsu and the rest followed the same playbook — which is why so many Japanese department stores, hotels, amusement parks and baseball teams still bear the names of railway companies.

The contrast with the JR companies is instructive. JR inherited the long-distance trunk lines and the Shinkansen, and it too has moved into station retail and real estate, but its DNA is that of a national common carrier knitting the country together. The major private railways grew up the other way around: they were land-development and lifestyle businesses that happened to lay track, and the train was always a means to fill the suburbs, stores, and stadiums that made the real money. Nearly a century on, Kobayashi's Ōsaka experiment is still the template by which Japan builds, shops, and commutes.

• 1873Ichizō Kobayashi, originator of the integrated private-railway model, is born.
• 1884The Nankai Railway is founded in Ōsaka, among the earliest private railways in Japan.
• 1907The Minoo Arima Electric Tramway — the future Hankyū — is established.
• 1910Hankyū's first lines open (10 March: Umeda–Takarazuka, Ishibashi–Minoo); Kobayashi begins selling suburban houses on instalment along the line; a zoo opens at Minoo.
• 1911The Takarazuka New Hot Spring opens as a weekend leisure destination at the line's terminus.
• 1913Kobayashi founds the Takarazuka Revue, an all-female musical theatre troupe, to draw off-peak riders.
• 1914The Takarazuka Revue gives its first public performance.
• 1918The Minoo Arima Tramway is renamed Hanshin Kyūkō Railway (Hankyū).
• 1922Keita Gotō founds the Meguro-Kamata Electric Railway, the seed of the Tōkyū group, spun off from the Garden City Company.
• 1923Lots in Den-en-chōfu, the garden suburb developed by the Garden City Company (founded 1918 by Eiichi Shibusawa), go on sale.
• 1927Gotō's Tōyoko Line opens between Shibuya and Kanagawa, and he applies Kobayashi's method along it.
• 1929The Hankyū Department Store opens above the Umeda terminal — described as the world's first case of a railway running a department store as its own business.
• 1932The Tokyo Takarazuka Theatre opens, beginning Kobayashi's Tōhō entertainment arm.
• 1936Kobayashi organises the professional baseball club that becomes the Hankyū Braves.
• 1942Gotō's mergers form the Tokyu Corporation (Tōkyū).
• 1987Japanese National Railways is privatised into the seven JR companies, which by convention are kept distinct from the private railways (shitetsu).