Expenditures of the Russo-Japanese war / by Gotaro Ogawa.

EFFECTS ON PUBLIC FINANCE

I25

after the war, or about a fivefold increase. The expenses for
other financial affairs, which were from I7,ooo,ooo yen to
2I,000,ooo yen, multiplied about four times, reaching figures
from 65,000,000 yen to 82,000,000 yen after the war.
We shall now explain how the expenditures for public debt
quadrupled in consequence of the war. As will be noted later
on, the public debt of Japan (excluding Treasury bills and
temporary borrowings) stood at 530,000,000 yen before the
war or at the end of the fiscal year I902-3 (March 31, I903);
but the flotation of war bonds totaling 1,584,000,000 yen
swelled the volume of public debt to 2,420,000,000 yen at the
end of the fiscal year I906-7 (March 31, I907), which was an
inflation to more than four and one-half times the amount
before the war. Besides, there was a large increase in Treasury bills and temporary borrowings due to the requirements of the war. These factors caused an enormous increase in the payment of interest and principal on the public
debt. In order to consolidate the public debt thus inflated,
the government established a sinking fund (national debt
consolidation fund) in the fiscal year I906-7, by which system
it was designed to specially dispose of the issue and redemption of public bonds and other revenues and expenditures connected with national debt. An annual amount not less than
I 0,000, yen was transferred to this fund from the general
accounts to effect the redemption of principal and payment of
interest on national debt incurred on account of the war with
Russia. The changes in the expenditures for public debt are
indicated in the table at the top of the next page.
It will have been observed from the table that the expenses for national debt after the war multiplied to about
four times the amount before the war. The expenditures for
the redemption of national bonds reached the maximum of
27,770,000 yen before the war, a sum which declined considerably during the war because the necessity of raising war
funds compelled the postponement of redemption of national
bonds. But the amount began to rise again after the war, as
a result of the increase of national debt, which greatly swelled