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

RESOURCES FOR DEFRAYING WAR EXPENSES

53

minimum issue price. Although the settlement of debits was
to be made at their market price in accordance with provisions
of the Commercial Law, a special exception was made in
favor of the war bonds, making them acceptable in payment
for these debits at the minimum issue prices, irrespective of
the current market rates. Besides giving by such direct
means a higher valuation to the war bonds, it was also provided
that the interest on the loans should be exempt from liability
to assessment for the income tax, thus increasing the profit
of the bonds and providing against their depreciation in market rates.1 These measures conferred direct benefits on the
holding of the war bonds. The government also tried other
measures to increase the circulating power not only of war
bonds but of public bonds in general by extending the uses to
which these bonds could be put. Of course, this was done to
indirectly increase the profit from the bonds, and thereby raise
the value of the bonds in general and facilitate the issue of
war loans. So when the unregistered national-loan bonds the
redemption of whose capital had already commenced, and the
coupons attached to the unregistered national-loan bonds
whose interest was already due, were tendered in payment for
taxes and other revenues to the Treasury, it accepted them in
lieu of cash at the face value in respect of the bonds and also
at the face value, as a general rule, in respect of coupons,
treating the presentation of such bonds or coupons as demands
for the payment of capital or interest.2 These measures
covered the government bonds in general, but no doubt conferred special benefits on the exchequer bonds issued for war
loans. While thus taking steps, on the one hand, to advance,
directly or indirectly, the incomes derived from the holding
of national bonds, and thereby to maintain the prices of these
Financial Department Order No. 48, October, I904, Naval Department Notice
No. 26, November, I905, and Imperial Ordinance No 20, January, I905, provided
for special treatment to be accorded war bonds deposited as securities in lieu of
cash. Statute No 20, February, I905, provided for an exception in the settlement
of debits in accordance with the Commercial Law Statute No. I9, February,
1905, provided for the exemption of the interest on war bonds from the income tax
2 Payment with national-loan bonds and coupons to the Treasury in lieu of cash
was provided for by Imperial Ordinance *No. 34 and by Financial Department
Ordinance No. 7, both issued in February, 1905