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Founded by Mitsui Takatoshi (1622–1694), who was the fourth son of a shopkeeper in Matsusaka, in what is now today's Mie prefecture. From his shop, called Echigoya (越後屋), Mitsui Takatoshi's father originally sold miso and ran a pawn shop business. Later, the family would open a second shop in Edo (now called Tokyo).
Takatoshi moved to Edo when he was 14 years old, and later his older brother joined him. Sent back to Matsutaka by his brother, Takatoshi waited for 24 years until his older brother died before he could take over the family shop, Echigoya. He opened a new branch in 1673; a large gofukuya (kimono shop) in Nihonbashi, a district in the heart of Edo. This genesis of Mitsui's business history began in the Enpō era, which was a nengō meaning "Prolonged Wealth".
In time, the gofukuya division separated from Mitsui, and is now called Mitsukoshi. Traditionally, gofukuyas provided products made to order; a visit was made to the customer's house (typically a person of high social class or who was successful in business), an order taken, then fulfilled. The system of accountancy was called "margin transaction". Mitsui changed this by producing products first, then selling them directly at his shop for cash. At the time, this was an unfamiliar mode of operation in Japan. Even as the shop began providing dry goods to the government of the city of Edo, cash sales were not yet a widespread business practice.
At about this time, Edo's government had struck a business deal with Osaka. Osaka would sell crops and other material to pay its land tax. The money was then sent to Edo—but moving money was dangerous in middle feudal Japan. In 1683 the shogunate granted permission for money exchanges (ryōgaeten) to be established in Edo. The Mitsui "exchange shops" facilitated transfers and mitigated that known risk.
After the Meiji Restoration, Mitsui was among the enterprises that could expand to become zaibatsu not simply because they were already big and rich at the start of modern industrial development. Firms like Mitsui and Sumitomo were led by non-family managers such as Minomura Rizaemon, who guided the business by accurately forecasting the coming political and economic situations, by acquaintance with high-ranking government officials or politicians, and bold investment.
Mitsui's main business in the early period were drapery, finance and trade, the first two being the businesses it inherited from the Tokugawa Era. It entered into mining because it acquired a mine as collateral from the loan it had made, and partly because it could buy a mine cheaply from the government, Mitsui then diversified to become the biggest business in pre-war Japan. The diversification was made mainly into related fields to take advantage of accumulated capabilities; for instance, the trading company entered into chemicals to attain forward integration.
On July 1, 1876, Mitsui Bank, Japan's first private bank, was founded with Takashi Masuda (1848–1938) serving as president. Mitsui Bank, which following a merger with Taiyō-Kobe Bank in the mid 1980s became part of Sakura Bank, survives as part of the Sumitomo Mitsui Banking Corporation. During the early 20th century, Mitsui was one of the largest zaibatsu, operating in numerous fields.
After the end of the war and the dissolution of the zaibatsu, Mitsui lagged somewhat behind its rival Mitsubishi Group and Sumitomo Group in reorganization. Mitsui Bank, which should have been the mainstay and principal capital provider of the group, declined in size due to the collapse of the Imperial Bank of Japan, which resulted in reduced cohesion of the conglomerate. Many companies that were once part of the Mitsui Group have become independent or tied to other conglomerates. Specifically, Toshiba, Toyota Motors, and Suntory, once part of the Mitsui Group, became independent, with the Toyota Group becoming a conglomerate in its own right. Ishikawajima-Harima Heavy Industries is now considered to be part of the Mizuho Group, and many companies in the Sumitomo Mitsui Financial Group are now more closely tied to the Sumitomo Group than the Mitsui Group. Recently there have been signs that Mitsubishi UFJ Financial Group and the Mitsubishi Group could be taking over other parts of the Sumitomo Mitsui Financial Group. Mitsukoshi merged into Isetan, a major department store with a close tie to the Bank of Tokyo-Mitsubishi UFJ, to form Isetan Mitsukoshi Holdings in April 2008.
As part of the Japanese plans for the exploitation of China, during the 1930s and '40s the subsidiary tobacco industry of Mitsui had started production of special "Golden Bat" cigarettes using the then-popular in the Far East trademark. Their circulation was prohibited in Japan and was used only for export. Local Japanese secret service under the controversial Imperial Japanese Army General Kenji Doihara had the control of their distribution in China and Manchuria where the production exported. Within the mouthpiece were small discreet doses of opium or heroin, and consequently millions of unsuspecting consumers became addicted to these narcotics, while huge profits were created for the company. The mastermind of the plan, Doihara, was later prosecuted and convicted for war crimes before the International Military Tribunal for the Far East, sentenced to death; but no actions ever took place against the company which profited from their production. According to testimony presented at the Tokyo War Crimes trials in 1948, the revenue from the narcotization policy in China, including Manchukuo, was estimated in 20 million to 30 million yen per year, while another authority stated that the annual revenue was estimated by the Japanese military at US$300 million a year.
Companies currently associated with the Mitsui family include Mitsui & Co., Sumitomo Mitsui Trust Holdings, Japan Steel Works, Mitsui Chemicals, Mitsui Construction Co., Mitsui Engineering and Shipbuilding, Mitsui Fudosan, Mitsui-gold, Mitsui Mining & Smelting Co., Ltd., Mitsui Oil Exploration Co. (MOECO), Mitsui O.S.K. Lines, Mitsui Petrochemical Industries Ltd, Mitsui-Soko, Mitsui Sumitomo Insurance Group, Oji Paper Company, Pacific Coast Recycling, Sumitomo Mitsui Banking Corporation, Taiheiyo Cement, Toray Industries, Toshiba Corporation, Tri-net Logistics Management, Mitsui Commodity Risk Management [MCRM].
Mitsui Engineering and Shipbuilding Co. owns just over 50% of the shares in MODEC Inc.