Small businesses emerged with the transfer of immigrant labor from white-owned enterprises to those of Japanese entrepreneurs, who entered businesses that required virtually no capital, such as the leasing of orchards. By 1909, the most common Japanese businesses in California were labor contracting, lodgings, and restaurants.
Entrepreneurial capitalism worked for a large number of Japanese sojourners—who had an advantage over the Chinese in being able to put women and children to work, too—partly because of economic growth in Hawaii and especially in California, but also because of their frugal habits. The issei operated farms that were much smaller than the average, but every inch of land was used. Community cooperation was exemplified in the tanomoshi, rotating credit associations, whose members often came from the same prefecture in Japan.22 The tanomoshi, which literally means “to ask for help,” constituted a mutual aid system, like the Chinese hui, in which individuals contributed money to help members save, invest, and obtain credit, a system particularly helpful since banks frequently refused loans to the Japanese. With the help of tanomoshi, Japanese men started small businesses in Hawaii and on the mainland,23 including rooming houses, restaurants, and laundries, which catered mainly to Japanese, relied upon Japanese suppliers, and were serviced by Japanese workmen. Like several other immigrant groups, the Japanese used credit associations as an effective adaptation of a homeland institution.24
In addition to credit unions, the Japanese organized employer and professional associations. By the 1920s, thirty-six farmers’ organizations combined to form the Japanese Agricultural Association and California Farmers’ Cooperative in northern and central California. Other lines of work had corresponding associations, for example, a southern California Japanese Physicians’ and Surgeons’ Association of fewer than fifteen members, which nonetheless published a journal.25
Like Jewish immigrants on the East Coast in the early 1900s, Japanese entrepreneurs worked with slight profit margins, and they often failed. Also like the Jews, a surprising number surmounted prejudice and hostility by generating business activity among their own kind. In southern California, Japanese growers sold to Japanese wholesalers, who sold to Japanese retailers. The growers obtained financing from the wholesalers instead of from banks, and looked to the wholesalers for fertilizer, seed, and equipment in return for the produce they raised.26
Even in Hawaii, where the economy was much less diversified, the Japanese could not be kept in the lowest-status jobs on the plantation. By 1901, they had gone into fishing and rice planting and dominated the coffee farms of Kona on the big island of Hawaii. The Japanese moved into skilled and semiskilled trades on the plantations; by 1901 their participation in the mechanical trades was extensive. Although their average wage was below that of Hawaiians and Portuguese and considerably below that of Caucasians for the same work, especially on the plantations, many took their new skills to Honolulu and other towns. Between 1890 and 1910, the percentage of Japanese working as laborers went down from 92 percent to 67; it was only 58 percent in 1920. Ten years later, there were 1,835 Japanese retailers in Hawaii, operating 49 percent of the retail stores of the territory.27 Although the Japanese still had slightly more than their share of common laborers among the gainfully employed nationally, their mobility in Hawaii appears to have been approximately like that reported for immigrants in northeastern and midwestern cities.28
As with the Chinese, there were thousands of anecdotes of creative entrepreneurship in the face of prejudice and the legal impediments of sojourner pluralism. One Okinawan man quit work on the plantation and invested his small savings in a ramshackle store that sold soft drinks. In 1925, his wife obtained a license to drive a taxi, becoming the first woman taxi driver on Maui. When their turn came to receive money from the tanomoshi, they built a house to put up guests for the night and served them breakfast and lunch. Their next step was to borrow $2,000 and open a gasoline station, and after that, in 1928, they established a mortuary.29 That Okinawans could overcome the restrictions of sojourner pluralism revealed the extraordinary possibilities of entrepreneurial capitalism, even in the plantation-dominated, oligarchically controlled territory of Hawaii, for they had to overcome prejudice against them by Japanese from the inner islands of Japan, the Naichi, as well as the hostility of the whites. Capitalism, which had brought the Okinawans and the Naichi to Hawaii and California, where they were expected to remain in servile jobs until they were no longer wanted, paradoxically offered them a way out of those jobs.
Under the 1907 U.S.-Japan agreement, in which the government of Japan agreed to restrain emigration, the Japanese already in the U.S. were able to send for picture brides. Once they had wives and children here, they behaved much more like European settler immigrants, seeing possibilities for the future and investing their energy and capital “kodomo no tame ni” (for the sake of the children).30 Like the Chinese, Japanese settlers found ways to bend and evade the rules of sojourner pluralism. Some Chinese purchased land in California, bypassing the Alien Land Law by setting up corporations for those eligible to own land who owned it in name only.31 Japanese settlers used straw buyers among whites and turned ownership over to their children, who, having been born in the U.S., had all the rights of citizens; thus settlers got around laws in twelve states that prohibited aliens who were ineligible for citizenship from owning agricultural property.
Once most of the Japanese in the U.S. had become settlers, they began to create the typical institutions established by other ethnic-Americans, including ethnic newspapers and civic and political clubs. Their own cultural predispositions encouraged self-restraint, but, with the birth of Japanese-American children, even some issei (the immigrant generation) became involved in American-style protest movements. An issei newspaper editor, Fred Makino, founded The Hawaii Hochi in 1912, a journal that took enormous pride in protecting Japanese culture while, at the same time, asserting the full rights of Japanese-Americans as Americans. Makino’s militancy was seen as un-American by the haole oligarchy in Hawaii, but it was quintessentially American and un-Japanese in its insistence that the American promise of equal rights be extended to the newcomers from the Far East just as it had been to the newcomers from Europe, an attitude that stimulated in the nisei generation increasing participation in integrated churches, Scout organizations, and other community groups. It also led in the 1920s to formation of many organizations in Hawaii and California, with names that usually included “loyalty league” or “citizens’ league.” These groups combined into a national Japanese-American Citizens’ League in 1930.32 The Japanese had begun to provide yet another example of Tocqueville’s maxim that patriotism grows by the exercise of civil rights.
Cracks in the System: The Mexicans
The situation of Mexican sojourners was much more complex than that of the Asians. Large numbers came in legally as well as illegally, and, unlike the Asians, those who had immigrated lawfully could choose to become citizens. All Mexicans living in the territories acquired from Mexico in the treaties of 1848 and 1853 following the Mexican War had been granted citizenship. In 1897, a U.S. district court ruled that the skin color of Mexicans was irrelevant to the issue of naturalization. The vast majority, however, had no interest in citizenship. Why bother to become an American citizen when the land one loved, the land of family, language, and la raza (the people or race) was so close by? Partly for this reason, the economic and social mobility of Mexican sojourners and even of Mexican-Americans was slower than that of immigrants and their children from Asia. The success of second- and third-generation Mexican-Americans was, however, disguised by aggregate statistics because large migrations of Mexicans continued to enter long after Asian immigration had been reduced to a trickle. Mexican-Americans began to develop roots and loyalties in the U.S. Many did not want to be identified with Mexican immigrants. By the 1920s and even more in the 1940s, there were signs of geographic and economic mobility for Mexican-Americans more typical of Euro-American populations than of native-born black Americans.33
Two out of three Mexican men were either farm laborers or other laborers in 1930; one in fifteen was a craftsman. When workers moved to nonborder states, especially to Colorado, Illinois, and Michigan, where the pay was better for farm work, there were also opportunities to obtain other kinds of jobs. By 1928, Chicago had a small middle class of Mexican-Americans and some Mexicans who had begun life in the U.S. as manual laborers