Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-08-12
THE BANKS OF JAPAN
NATIONAL SPECIALIZATION AP-
PARENT IN HIGH DEGREE.
Four Main Institutions Handle Gov
eminent Finances, Agricultural
and Corporate Enterprises



ent a japanese commander deliber-
ately sent a squadron of cavalry into the
fire OF a concealed battery. with instruc-
tons TO pick up and bring back pieces
of such shells as the Russians might see
fit to fire. Upon receiving tho fragments,
the Japanese commander had them meas
ured with calipers and then figured out
the caliber and range OF the Russian guns
with a degree of accuracy that made the
position of the battery quite as apparent
as II II had been in plain sight.
IL may appear far cry from incl
dent or battle to the consideration OF q
nations system OF banking: but the ana
Iytical ingenuity apparent in the first In
stance makes II somewhat easier to I'M
derstand how Japan should have devei-
oped within the last fifteen or twenty
years a national scheme of bank organiza-
ton as highly specialized IL 1t were the
product OF a country OF competitive indi-
vidual effort. 1t is safe to say that no
country has a banking system that APP
proaches Japan's in detail, and the growth
that is apparent from an examinatio Of
the oficial figures for ten years past seems
TO indicate that the details had been
handled with high degree OF skill.
First Bank Regulation.
For decade after 1872, when the ma
tional bank regulations OF Japan were pro.
mulgated first. the banking of the empire
had a somewhat Heterogeneous IL rapid
growth The original purpose of the ma
iional bank establishment was to develop
.taoe and to facilitate the redemption Of
an enormous amount Of government paper
money which had been issued In years be-
fore When. In 1876. an amendment to the
national banking law was made so that
national bank notes, convertible into gov
eihheht paper money, could be issued upon
the security OF national loan bonds there
came an incentive TO the creation OF ma
!ional banks which SO largely increased
thelr numbers that two years later tb>
government decided to prohibit the estaA-
nshment OF further national banks and to
. ."ne o'her measures TO put the currency
system on a sounder basis
The movement at that time inaupur,.e6
resulted in 1883 In the establishment of
lhe BANK OF Japan. to which was granted
exclusively the privilege of issuing notes
ms may De taken as marking the birth
OF the present japanese banking system
Inc Bank OF Japan, unlike most of it's fore
runners. the old national banks came into
oeing with certain specific objects to attain
.ne principal one OF which WAS to act as a
regulator or the banking Of the country
handling. incidentally. the receipts and dis.
oursements OF the government On this
oasis 1t undertook to unity the currency
.hroush the Issue of convertible notes and
10 put the monetary system Of the empire
on firm footing to extend discounts and
lower rate OF interest. and generally as the
ofncial Japanese financial summary puts II
TO smooth the relations between the dif.
ferent banks" In this work II has CON.
tlnued to the present time.
Yokohama Specie Bank.
Meantime there had been established in
1880 the Yokohama Specie Bank. under thu
national bank regulations. but when the
government refused with the founding of
the Bank of Japan to allow further issues
OF notes by other banks, this institution
took as Its field the foreign trade of the ma.
OILS
pre- 1t Is perhaps the best known of all the
Japanese banks. because of its peculiar re-
lation to Japans foreign interests which
was made official in 1887 through specIaI
imperial enactment and has been Illus
trated In the recent months by It's connec-
ton with the placement of the various ia.
sues of Japanese bonds
The Yokohama Specie Bank was estab.
nshed with capital of S1,5O0 600 as against
an initial capital of $1,000, 600 for the Bank
or Japan, but this was increased to So 600.
ooo IN 1857, and again to $12O000 900 in 1896,
or which 100000 was paid up. The Yoko-
hama Specie Bank has a reserve fund OF
some 100000 which has grown from
S2,Ooo,OOO in the last ten years. The Bank
OF Japan. which has increased its capital to
SloOOO0O0, fully paid up has now a "a.
serve fund of about $500. 600, which repre-
sents growth of something over 100 Der
cent In the last decade. The Yokohama
Specie Bank is. of course, the official me.
dunn for The transaction OF Japan's foreign
exchange business and It has in this con-
nectlon the general management of public
money for international account.
UP to 1S96 the accommoda ton of the az.
ricultural and Industrial interests of tha
empire was left to the miscellaneous banks
outside the official circle - some national.
some private. In that year, however, the
next important step was taken In the de.
velopment Of the national system in the esq
adjustment Of the Hypotec Bank of Japan.
under the joint stock company law, with q
capital of s., Co., 900, of which So $50 OOO has
now been paid up, The business Of tho
Hypotec Bank Is to make mortgage loans
on 1mmovable property, redeemable In In
stallmsnts covering stated terms; to mako
loans without security to procedures. dis
trtcts, cities, towns and other public cor
poratons; to make loans without security
to aid the laying out of arabic land under
the law governing such enterprises; to take
up the debentures issued by various indus
trial and agricultural banks previously es-
tablished, and to do a general deposit and
trust business
The Hypotec Bank is allowed to issue
mortgage debentures to the amount of four
times Its paid-up capital. provided such
amount does not exceed the total Of its
outstanding loans redeemable IN annual In
stallments and the amount of agricultural
and industrial debentures tn hand 1t was
authorized in 1904 also to issue savings loan