September 1—The Fateful Day When Everything Was Lost

With the success of the Sharp Pencil, business grew rapidly. At the same time that the brothers were expanding the factory, they introduced assembly-line operations and installed sophisticated imported machinery to improve work efficiency, and the business grew to employ more than 200 people. Then, one day, a greatest earthquake struck Tokyo—the Great Kanto Earthquake. A massive fire engulfed the entire Tokyo area. Tokuji lost his factory, and his two children, who were more important to him than anything else, perished. His wife was badly burned, and also died soon thereafter. To add to the misfortune he found himself in, a dealer company saw a risk that Hayakawa Brothers Shokai would not survive, and demanded repayment of loans, including deposits made for unfulfilled contracts. Tokuji consulted with his brother, and together, they decided to dissolve Hayakawa Brothers Shokai and transfer the remaining machinery and the business itself to the company it was in debt to in order to discharge these debts. In addition, for the transfer of business operations, it was decided that the remaining employees and Tokuji himself would go to the creditor company in Osaka to supply technical guidance related to the Sharp Pencil. Tokuji arrived in Osaka with nothing but the clothes on his back.