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

178 ECONOMIC EFFECTS OF THE RUSSO-JAPANESE WAR

Fund for purchase of silver bullion, ~1,368,I29; foreign
coins, $676,265; total in Japanese money, I4,546,055 yen.
Fund for purchase of Mexican silver bullion, ~596,075;
total in Japanese money, 5,761,540 yen.
The government, moreover, tried its best to curtail the expenses to be defrayed in foreign countries, in order to economize the payment in specie as much as possible. General expenditures were curtailed of course, but those to be paid
abroad, excepting the items absolutely and urgently necessary,
were postponed. To attain this end the monthly amount
payable abroad by each department of the government was
fixed in March, 1904. In the following year, 1905, the same
policy was maintained; and again in I906, although the war
had come to an end, the industrial boom, the payment of
principal and interest of national loans, and post bellum military expenditures all still demanded an outflow of specie. As a
matter of fact, the actual payment abroad always exceeded
the prescribed amount. In 1904, for instance, I36,I80,000
yen was paid, against 79,850,000 yen in the estimate; in I905,
203,350,000 yen was paid up to the end of the year, against
94,670,000 yen of the first estimate, though later the revised
estimate allowed 236,510,00o yen to be paid abroad. However,
there is no doubt that such a measure of precaution resulted
in restricting payment to foreign countries.
In regard to the utilization of foreign exchange for the same
object, the government directed the Bank of Japan, as war
became inevitable, to let the Yokohama Specie Bank buy up
outgoing bills of exchange as much as possible at its offices in
Japan, eventually allowing them to buy such bills even at a
premium to compete with foreign banks in the country. These
were placed at the disposal of the government in payment
to foreign countries. Restriction was also put on the incoming bills of exchange, and thus efforts were made to accumulate funds for payment in foreign countries. In this way the
government employed every possible means for the maintenance of specie reserve. The following table shows that the
foundation of our conversion system was not shaken at all.