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, formed when Japanese National Railways was privatised in 1987, are not counted as "private railways" even though they too are now private firms, because the law that restructured the national railway treats them as the successors to its business. The private railways are divided by size into major, semi-major and smaller companies, a division that grew out of history and has no clear definition or criteria. The largest are 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) came to railways 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 Ōsaka out to Takarazuka, and from Ishibashi to Minoo. The line ran through thinly populated country with few passengers to carry. Kobayashi's insight was that a railway did not have to wait for demand; it could create it. His own maxim was that passengers are created by the trains themselves.

So he set about manufacturing riders. The company bought land 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. No railway in Japan had developed housing around its stations before. The development fed straight into passenger numbers. To fill the trains, 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 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. He also moved into theatre and cinema: the Tokyo Takarazuka Theatre company, established in 1932, and Tōhō Film, founded in 1937, merged in 1943 to form the modern Tōhō. 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 at 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 drew in the passengers the railway already carried, turning that footfall into retail profit. The concept spread to railway termini across Japan.

Other private railways studied the formula and copied it. In Tokyo, the Garden City Company — the forerunner of Tōkyū, founded in 1918 by Eiichi Shibusawa and others — developed Den-en-chōfu, now one of Tokyo's most exclusive residential districts, and began selling lots there in 1923. It had already spun off its railway division as the Meguro-Kamata Electric Railway. Keita Gotō (1882–1959), an industrialist nicknamed "Robber Keita" for his aggressive corporate takeovers, took over the management of the Meguro-Kamata Electric Railway and its sister company, the Tokyo Yokohama Electric Railway. He opened the Tōyoko Line between Shibuya and Kanagawa in 1927 and, following Kobayashi's Hankyū method, built leisure facilities and department stores along it. Seibu, Tōbu, Odakyū, Keiō, Kintetsu, Nankai, Meitetsu and the rest followed the same playbook.

In Kobayashi's scheme each business fed the others: suburbs and stores created traffic for the railway, and a growing railway built up the property and retail trade in turn. The JR companies adopted the same model after privatisation, moving into retail and real estate as well.

• 1873Ichizō Kobayashi, originator of the integrated private-railway model, is born.
• 1884The Ōsaka–Sakai Railway is established and renamed the Hankai Railway that November; it is the forerunner of Nankai, which describes itself as Japan's oldest surviving private railway.
• 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 leisure destination at the line's terminus.
• 1913Kobayashi founds the Takarazuka Revue, an all-female musical theatre troupe, to draw passengers.
• 1914The Takarazuka Revue gives its first public performance.
• 1918The Minoo Arima Tramway is renamed Hanshin Kyūkō Railway (Hankyū).
• 1922The Garden City Company spins off its railway division as the Meguro-Kamata Electric Railway, the seed of the Tōkyū group; its management later passes to Keita Gotō.
• 1923Lots in Den-en-chōfu, developed by the Garden City Company (founded in 1918 by Eiichi Shibusawa and others), go on sale.
• 1927Gotō's Tōyoko Line opens between Shibuya and Kanagawa; Gotō later applies Kobayashi's method along it, building leisure facilities and department stores.
• 1929The Hankyū Department Store opens at 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 company, a forerunner of Tōhō, is established.
• 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).