Hayashi Chujiro a retired naval officer and surgeon was born in 1880. He was a Soto Zen practitioner , who included Shinto in his practice.
Hayashi began his studies with Usui Mikao in May 1925, only 10 months before Usui died. He continued with the Usui Reiki Ryoho Gakkai until 1931.
After leaving the Usui Reiki Ryoho Gakkai, Hayashi opened his own healing centre in Tokyo, where he is credited with running the first commercial Reiki centre. He used much of what he had learned from Usui, but also incorporated some of his own interpretations, developing his own method, the Hayashi Reiki Ryoho Kenkyu Kai. This included a system of 'degrees' or levels. Rather than using reiju, Hayashi used the attunement process. This included the use of the symbols and mantras. This is the teaching method he passed onto to his students, including Mrs Takata, who brought Reiki to America.
Hayashi's focus was more inclined to the healing aspects of Reiki, prior to this healing seems to have taken second place to spiritual development. Using the detailed knowledge he gained from carrying out many treatments Hayashi created standard hand positions for both self-treatment and the treatment of others. People came to him for treatments and to learn Reiki.
One way Hayashi encouraged practitioners to his clinic was to give Level one attunements in return for a three month commitment as unpaid help. After this time he would offer the better students the second Level in return for a further nine month commitment. Those who completed this had the chance of receiving the Master symbol or third degree. After two years further commitment (which involved assisting Hayashi in the classroom), practitioners were taught the attunements and were allowed to teach. No money exchanged hands in this training - practitioners simply had to work an eight hour shift once a week for the duration of the commitment.
He wrote in 1938 that he had trained 13 Reiki Masters. Some of his students were Tatsumi, Shouoh Matsui (not a teacher), Hawayo Takata, Hayashi Chie , and Yamaguchi Chiyoko.
He passed away on the 10th of May 1940.
Hayashi is best known in the west as the person who taught Mrs. Takata, who was then responsible for bringing Reiki to America.
This information is drawn from various sources, predominantly from The Reiki Sourcebook by Bronwen and Frans Steine.