ASCJ 2009
Session 31: Room 11-305

Competitive Collaboration in Haute Finance: Japan and the West in the interwar period

Organizer/Chair: Katalin Ferber, Waseda University, SILS

The 1920s, as new historical research shows, not only redefined the meaning of international, but also encouraged various forms of cooperation between sovereign states, central banks and private financiers. This panel offers to provide an exciting and new perspective on Japanese and Western financial powers, England and the USA, attempted to secure financial and monetary hegemony in both Europe and in East Asia. As a ‘transitional stage’ of international competition and cooperation, this period offers a peculiar example to both financial and economic historians to re-examine the origin of currency colonialism and money diplomacy. Historians until recently viewed this period both as the cause of the Second World War and, therefore as an obvious failure of international efforts to create economic and financial cooperation among sovereign states. Contrary to this, our panel participants instead argue that much of the failure of cooperation was in fact, the result of changing international competition for financial resources. Thus financial hegemony is considered as a part-and-parcel of territorial domination in Michael Schiltz’s presentation on the currency history of the Japanese empire. Simon James Bytheway will shed light on the changing circumstances of Japanese financial dependency and discuss various efforts to adjust to the changing financial balance between the USA and England. Dong Zhaohua analyses how a private money doctor, Thomas Lamont tried in private garb to synchronize and organize the American high financial circles’ interests with that of his own private bank’s neutral lending activities to the Japanese government. Janis Mimura examines the new evolutionary state of Manchuria, with its revolutionary institutional setting, offers a new interpretation of the reformist (technocratic) bureaucrats and their utopian vision on the modern Japanese empire.

1) Simon James Bytheway, Nihon University
From Lombard Street to Wall Street: financial and monetary cooperation between the USA and Japan

“The United States is too much interested in the development of her own resources to take a really keen permanent interest in international finance” (Paul Einzig, The Fight for Financial Supremacy, London, Macmillan, 1931, p.81).

The transfer of financial power from London to New York, however incremental or piecemal the process may have been, forced Japan’s financial and monetary authorities to consider new ‘ways and means’ of securing their country’s interests. After enjoying an unprecedented boom during the war, and immediate post-war years; new global financial realities impelled Japan’s financial leaders to re-centre their offshore activities from Europe the United States of America during the 1920s. My presentation aims to clarify the nature of the Japanese reaction to the changing post-war circumstances, and, in doing so, explore avenues of cooperation and joint participation in financial and monetary matters, as they occurred between the Japanese and American authorities. In particular, the intimate, at times clumsy, relationship that developed between the leadership of the Bank of Japan and the Federal Reserve Bank of New York will be explored. All this, of course against the backdrop of Japanese government lending, as it relates to the refinancing its earlier war-debts, and maintenance of its gold reserves; municipal lending, as it relates to the earthquake reconstruction loans of Yokohama and Tokyo; and company lending as it relates to electrification (electric power generation) and railway-building programs. Finally, the success and failure of financial and monetary cooperation will be addressed and considered., particularly in the light of Japan’s growing aggression against China from 1931, and the coming war between the USA and Japan from 1941.

2) Dong, Zhaohua, Waseda University/Beijing University/ GSPAS
Restoration or Stabilization? Japan and her return to the Gold Standard

As Tsushima Juichi, Japan’s overseas commissioner stressed, “lifting the gold embargo was different from the Western term, which was restoration of the Gold Standard or currency-stabilization” which certainly had a different policy-implication. As this term difference symbolized, for Japan the re-turn to the Gold Standard in the twenties clearly demonstrated the conflict between national and international interests. Stabilization in the twenties thus had quite a different meaning from the late nineteenth century’s one. In my presentation, I elaborate several, often conflicting domestic views on the policy of restoration or the policy of stabilization of the Japanese, gold based currency.

I focus one of the most famous and influential American private banking representative, Thomas Lamont and his activity with Japanese financial bureaucrats, politicians and private business circles. The question I ask how national economic and financial interests were perceived by Japanese financial politicians, and how international changes influenced domestic decisions, including lifting he gold embargo. Both Lamont and Leffingwell, the private bankers of Morgan and Company put together a rather peculiar list of requirements for Japanese financial leaders in order to be a ‘normal country’ I also analyze the tension between the private American bankers’ suggestions and its broader international consequences. Japan. Because of the restoration of the Gold Standard rapidly lost of financial and monetary stability. The price of restoration was immense.

3) Katalin Ferber, Waseda University
The Conceptual Background of the “Savings Nation” in Japan

 Discussant: Kobayashi Hideo, Waseda University, Graduate School of Asian and Pacific Studies (GSAPS)