The Return of Postal Savings to the Regions: The Ministry of Finance Deposit Bureau as a Reallocation Mechanism

Hikaru Tanaka ()
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Hikaru Tanaka: Chuo University

Chapter Chapter 5 in Micro-Credit in Modern Japan, 2024, pp 99-134 from Springer

Abstract: Abstract This chapter tries to clarify how the system of returning Deposit Bureau funds of the Ministry of Finance to the regions came into being in Japan in the prewar period. In order to achieve this aim it examined the background to and role of the supply of special funds by the Deposit Bureau in 1914 in the specific case of Nagano Prefecture. Before the Deposit Bureau reform of 1925, the system was characterized by a lack of written investment rules, and the investment of Deposit Bureau funds was left to the discretion of the Ministry of Finance. However, even before the reform of 1925, the system for returning Deposit Bureau funds to the regions was an important part of Japan’s financial system and supported local economy. The return of the Deposit Bureau’s special funds to the regions in 1914 was the first case of large-scale relief lending provided for an economic crisis unrelated to a natural disaster. In the process of providing relief lending on a constant basis and in emergencies, the return to the regions of Deposit Bureau funds formed the route for suppling funds to small businesses and farmers organized in industrial cooperatives which acted as intermediaries between Nihon Kangyō Bank, prefectural agricultural and industrial banks, and prefectural and other local governments. This shows the formation of a funding route that differed from the flow of funds in the multi-layered financial structure headed by the BOJ.

Date: 2024
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DOI: 10.1007/978-981-97-6940-7_5

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