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

RESOURCES FOR DEFRAYING WAR EXPENSES

6i

The emergency loan of March, I906, was issued directly
by the government, and the business of the loan was disposed
of by the Bank of Japan, as in the case of the exchequer bonds.
As the money market was gradually reviving at the time, the
government could secure better conditions for the loan than
for the exchequer bonds.
The minimum issue price of the March loan was fixed at
95 yen per IOO yen nominal capital, the interest rate 5 per cent
per annum, and the term of redemption 25 years after a term
of maturity of 5 years from the date of issue. The bonds were
in denominations of 50, Ioo, 500, I,000, 5,000, and Io,ooo yen.
The deposit accompanying the application was made 5 yen
per IOO yen subscribed for, to secure greater certainty as to
the payment of instalments than in the case of exchequer
bonds. The method of acceptance adopted was the same as
in the case of the fifth issue of the exchequer bonds. The six
instalments had to be paid in six months. Payments in
advance of date were encouraged, allowing a discount for
the 'nstalments paid in full at the time of the second payment,
while for the purpose of minimizing arrears a higher interest
rate was charged for the instalment paid after the proper date.
As the fourth and fifth issues of the exchequer bonds, bearing
a high interest, were being converted at this time into new 4
per cent sterling bonds, it was allowed that these exchequer
bonds be tendered in lieu of cash in payment for instalments on
the emergency loan. In such cases the face value of the exchequer bond plus its interest to the month of redemption was
taken as its valuation. When the separate amounts of emergency bonds applied for exceeded the total sum required, and
when the amount in excess was reduced from the applied sums
in proportion to their respective sizes, subscriptions to be
paid in exchequer bonds were accorded a preferential right
and exempted from being reduced. This encouraged the
payment in exchequer bonds in lieu of cash.
Though this was a loan of a far greater amount than any
previously floated at one time, it yielded results which were
highly satisfactory. The subscribers numbered 800,000,