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The first substantial order for the G-type tape recorder came from the Supreme Court. Masao Kurahashi showed one to the chief of the High Public Prosecutor's Office in Nagoya, through the introduction of Yoshichika Tokugawa, and heard a very useful suggestion.
"I'm sure this machine will be invaluable for the Justice Ministry to record investigation proceedings. We will buy one for our office, but why don't you go and ask the Ministry? I'll write you a letter of introduction." Encouraged, Kurahashi promptly went to the Justice Ministry to promote the tape recorder.
In the post-war period, the Supreme Court was unable to train a sufficient number of stenographers. Kurahashi was convinced that the tape recorder could take the place of a stenographer. "This is such a useful machine, but can recordings on tape be accepted as verifiable evidence...?" The Public Prosecutor General, chief public prosecutors, and other important officials gathered to discuss the question.
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Masaru Ibuka suggested having the recording technicians testify. Another question arose, "What if the tape snaps?" To this the technician responded, "It can be lined and then stamped." This settled the problem. When the first 24 units were delivered, everyone was relieved. And from this sale, Kurahashi at last produced a profit of 1 million yen for the Tokugawa family.
"It is no longer enough for Yagumo Sangyo alone to be selling this product," thought Kurahashi, who was preoccupied with the idea of being a wholeseller. Needing a profitable margin, he asked Akio Morita, "Could I pay 75%, instead of the present 80%, of the invoice price so I can sell it at a 15 to 17% discount?" Morita understood his position and agreed to discount the initial 50 units.
Needless to say, Kurahashi thought about the benefit Yagumo Sangyo. But he was severely scolded by Michiharu Tajima. "You seem to want to be the sole national tape recorder sales agent. Tokugawa household will never permit this." As a conservative ex-banker, Tajima preferred to be on the safe side. He thought to himself, "Kurahashi does work very hard, but he is unpredictable. He used 6 million yen of the Tokugawa's finances and could not sell the products for six months. And yet, when they sold, he had the nerve to ask for a 75% invoice price going back to the initial purchase. A man like him could do more harm than good to Tokugawa household and Tokyo Tsushin Kogyo (Totsuko)." Involved in the management of Tokugawa householdas well as Totsuko, Tajima was especially apprehensive about this matter.
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 | | Inside a Totsuko tape factory in the early days. |
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Kurahashi visited Morita at his residence in Setagaya. "So long as Mr.Tajima forbids this, I cannot get exclusive selling rights. But I like Totsuko very much and know that the tape recorder will do well in the future. Totsuko is a good manufacturer, but you need good sales channels," Kurahashi explained enthusiastically.
"You're right," Morita said. "I have been thinking that Totsuko needs good distribution channels to grow. Why don't you join us? I'll set you up in a separate company to do just that." Morita's response stunned Kurahashi. He had never dreamed of handling Totsuko's marketing directly. Would Tajima and the other Yagumo Sangyo directors permit this? Although he was more than inclined to accept Morita's proposal, Kurahashi could only reply, "I cannot quit without Mr. Murase's permission." Naokai Murase, who was the president of Yagumo Sangyo, also served Totsuko as an auditor at that time.
"Kurahashi is employed by the Tokugawa family. We cannot let him go. I hate trading in human beings like this," said Tajima, giving Ibuka and Morita a tongue-lashing. But Ibuka and Morita did not give up, returning again and again. Finally, one week later, they recruited Kurahashi from Yagumo Sangyo.
Kurahashi joined Totsuko in January 1951 and started marketing the tape recorder as managing director and sales manager of Tokyo Recording Company, a subsidiary established in February of that year.
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