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

EFFECTS ON PUBLIC FINANCE

I5I

mentioned as a result of the conversion and consolidation of
war-time loans. With this rapid increase of public debt, the
annual amount of interest to be paid advanced greatly,
aggregating over II6,000,000 yen against 25,000,000 yen
before the war.
It may easily be seen from the foregoing table how great was
the influence exerted on the conditions of our public debt by
the issue of war loans during the Russo-Japanese War. The
average per capita amounts of the total debt and of the annual
interest therefore were about 10.854 yen and 0.519 yen, respectively, before the war, which increased to 47.308 yen and
2.283 yen, respectively, after the war. The war loans issued
at a high interest rate (6 per cent) caused a rise in the average
rate of interest on public loans, the payment per Ioo yen coming up to the maximum of 5.049 yen against 4.814 yen before
the war. These figures are based on the Statistics of National
Debt, compiled in 1907-8.
Inquiring into the details of public debt, we note that the
domestic loans, which amounted before the war to 432,000,000
yen, advanced to 1,049,000,000 yen after the war. Of the
latter figure, the bonds represented 584,000,000 yen, or over
half the amount. The foreign loans, which were only 98,000,000 yen, now increased to 1,370,000,000 yen, including
war loans of 1,269,000,000 yen. Thus, the war loans took up
practically the whole of the foreign loans. The total amount
of public debt, which was only 530,000,000 yen before the war,
increased to 2,420,000,000 yen, of which 1,628,000,000 yen,
or by far the greater part of the total debt, was represented by
war loans. See Table D at end of this chapter.l
Thus, about four-fifths of the public debt before the war
came under domestic loans, while, with the inflation of national
debt after the war, foreign loans increased to one and one-half
times the former figures. Consequently, more than half of
the interest on public loans was paid to foreign countries.
Our financial and economic conditions thus became very
closely connected with those of the creditor countries, so that
1Post, p. I59.