Itowappu is a system of importing raw silk threads in Japan during the Edo period. The merchants who imported raw silk threads in this system were called itowappa nakama (guild of raw silk thread importers) and it was the Edo Shogunate that gave this specific group of Japanese merchants called itowappu nakama the right to monopolize for buying raw silk threads from foreign merchants and the right to monopolize for selling the imported raw silk threads by wholesale to the domestic merchants.
In the early Edo period, the most important goods of import to Japan were the Chinese raw silk threads (white threads). However, at that time foreign merchants had the initiative in pricing decisions in importing raw silk threads and they monopolized the profits. Therefore, the Edo Shogunate needed to restrain these activities conducted by foreign merchants. Meanwhile, the foreign merchants' side also had suffered from sales slumps owing to the economic chaos in Japan which resulted from Japan's failure in the Bunroku-Keicho War and the effects of the Battle of Sekigahara.
Thereupon, in 1604 the Edo Shogunate established itowappu system by having selected merchants from Kyoo, Sakai, and Nagasaki form itowappu nakama (guild of raw silk threads importers); in forming the itowappu nakama, the Edo Shogunate made Shirojiro CHAYA, the government contractor, the leader. And the Shogunate allowed the member merchants of the itowappu nakama to decide the prices of the imported raw silk threads and to buy in bulk and made them distribute the imported raw silk threads to individual merchants. The itowappu nakama (guild of raw silk threads importers) was located in three places at first, but in 1631 Edo and Osaka were added that total number of itowappu nakama became five. At first the foreign merchants the itowappu nakama negotiated were Portuguese merchants only, but in 1633 Chinese merchants (Ming Dynasty to Qing Dynasty) and in 1635 Dutch merchants came to export raw silk threads under the itowappu system. Additionally, in 1641 Hirado was allowed to become the member of the itowappu nakama in return for vacating their position as a port of trade; so, the total numbers of Itowappu nakama expanded to six locations. Later, apart from Hirado, itowappu nakama came to be placed in various cities in Kyushu including Hakata.
These Itowappu nakama (guild of raw silk threads importers) were considered separate from the previously established five; accordingly they were treated as outside the established framework and this treatment was called 'bunkoku haibun.'
Those cities which were able to participate in the Itowappu were all tenryo (a shogunal demesne). The only exception in this was Hirado of the Hirado Domain, but it was a trade off in compensation for the Edo Bakuf's seizing of their trading rights to the Netherlands, which provided enormous revenue to the Hirado Domain. The effect of this inequitable financial consideration was a despicable loss of value to the Hirado Domain. It can be said that the Shogunate planned to monopolize the profit gained by trading of raw silk threads by themselves and the merchants under their influence through the Itowappu system.
In 1655 Itowappu nakama was dissolved owing to the protest the Shogunate received from the Chinese merchants; (it is said that there existed Seiko TEI [Zheng Chenggon]) in the background of this protest; afterwards, the Shogunate controlled the trade of raw silk threads by trade control called 'shibo baibai' in which appraisers selected from the merchants from the above mentioned 5 cities appraised the goods brought by foreign merchants and trade was executed with the set price based on those appraisals. In 1685, the Itowappu system was revived and the merchants under this system existed until the end of the Edo period; but the Itowappu nakama having the treatment of bunkoku habibun (outside the established framework) located in Hirado, Hakata and other cities in the Kyushu region were excluded from this revival.
However, the production of raw silk threads increased in Japan; therefore, the importance of importing raw silk threads decreased; (the function of the new itowappu system included to protect the raw silk threads made in Japan as well as to limit the amount of raw silk threads to be imported to Japan.)
For this reason, the Itowappu system gradually came to exist only in name.