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

EFFECTS ON MONETARY CIRCULATION

I6I

up by the issue of the Treasury bills, temporary borrowings
from the Bank of Japan, accommodation from one item to
another in the Treasury finance, and the issue of war tickets.
These items of revenue wrought diverse effects on the money
market, according to their nature. The special-accounts
funds, the accommodation from one item to another in the
Treasury finance, and the surplus and increase of revenue in
the general accounts, however, had no direct effect on the
money market, as they did not draw funds from it. The
revenues from the issue of public loans, the tax increases, the
issue of the Treasury bills and temporary borrowings from
the Bank of Japan exerted the greatest influence on the monetary condition.
There was a difference in the effects on the money market
of Japan between the importation of foreign capital and the
absorption of domestic funds for supplying the war needs.
The latter naturally caused a scarcity of capital and more or
less stringency in the money market by suddenly diverting a
huge amount of funds from industrial circles. If there had
been no other circumstance to relieve the situation, a blow
would have been dealt to all new enterprises, at least for a
time, and also a stiffening of monetary circulation would have
resulted from an abrupt change in the demand for goods,
which must cause the collapse of a part of the country's industry. Fortunately, however, the foreign loans counterbalanced the above-mentioned tendency, and when the funds
raised at home began to be scattered among the people as war
expenditures the blow to the domestic industry proved comparatively slight. The imported capital lightened the pressure
on domestic funds and prevented the outflow of specie for the
purchase of military supplies from abroad. Moreover, the
amount of currency circulating in the country was augmented,
which not only made the circulation of capital easy, but also
inspired the general industrial world with a new spirit of activity and stimulated a fresh demand for capital.
The receipts from foreign loans and their monthly amounts
were as follows:
12