The local re-allocation function of the Ministry of Finance Savings Deposit Fund (MoF-SDF): a case study of Nagano prefecture and the 1914 nationwide bailout

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  • 大蔵省預金部資金の地方還元機能 : 1914年緊急救済融資と長野県
  • オオクラショウ ヨキンブ シキン ノ チホウ カンゲン キノウ : 1914ネン キンキュウ キュウサイ ユウシ ト ナガノケン

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Abstract

The Ministry of Finance Savings Deposit Fund (MoF-SDF), which mainly derived from Postal Savings Deposits, had developed into a relatively large fund by the early 20th century. Previous studies have shown the importance of this fund's role in the Japanese financial system, but there is a lack of concrete research based on primary sources. One of the aims of the Postal Savings Deposit system was encouragement of self-help among ordinary people, and from this we can see that from the beginning the MoF-SDF had a social security function. However, the fund gradually gained an economic development support function also. MoF-SDF's basic operation rules were first determined in 1909. In addition to the large part of the fund invested in national bonds for stability, the new operating concept called for capital re-allocation to the regions. In the early days of this program, a 'special fund' of MoF-SDF was allocated explicitly for re-construction following natural disasters. The bailout for export industries in 1914 was the first time the MoF-SDF was used for relief in an economic crisis, rather than one from a natural disaster. After this event, MoF-SDF began to allocate funds in economic bad times. This paper examines the 1914 bailout process as a way to understand the role played by the MoF-SDF loan program. As Nagano prefecture received the largest allocation from this relief program, I have taken Nagano's case as an example.

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