Two Land Bank Schemes at the Dawn of the 18th Century

Horike Bunkichiro

If we could offer bank notes against land credit, those notes could serve as regular bank notes against silver, on the ground that land is more stable in value than silver and has proper uses as original, indestructible and productive resource. Around 1700 in England and Scotland, Hugh Chamberlen and John Law drew up, almost simultaneously, plans to erect a land bank. Neither plan, however, came to fruition. This paper, examining the relevant documents, seeks to clarify why these land bank plans failed to materialize. The answer, in short, is that land bank notes did not have the same acceptability as cash and demand deposits. When we turn our attention to the question of a way to resolve recent issues having to do with bad loans in Japan, loans which according to an announcement by the monetary authorities now total about \40 trillion (US $ 400 billion), it is easy to see that the difficulties would be resolved if the banking industry as a whole would immediately cut about 1% of the total bank deposit, which stood at some \4300 trillion as of the end of May in 1995. It is highly unlikely that the Ministry of Finance would accept my proposal to provide complete protection for depositors. Nonetheless, I dare to say that measures should be taken immediately in order to recover the credibility of Japan's banking industry.

Two Land Bank Schemes at the Dawn of the 18th Century

Bibliographic Information

Search this article

Description

Journal

Keywords

Details 詳細情報について

Export

Report a problem