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The Armaments Expansion Budgets and the Japanese Economy after the Russo-Japanese War

  • Economics
  • Political Science


?????????????????????????????????? ????????????????????????????????????????????????????????????????????????????????????????? ??????????????????????? ?????????????????????????????????????????????????????? ????????????????? ???? ??????????????????????????? ????????????????????? ??? ???????????????????????????????? ????? THE ARMAMENTS EXPANSION BUDGETS THE JAPANESE ECONOMY AFTER THE RUSSO-JAPANESE WAR* AND By MASAZO OHKAWA Assistant Professor oj Public Finance I. Ihtrodaction The Russo-Japanese War (February 1904-September 1905) cost Japan ~l,716 million including indirect war expenditures. Considering that the estimated national income of the time was roughly a little more than ~F2,000 millon, we can easily see that those war expendi- tures were a very heavy burden upon the Japenese economy. This explains why four foreign loans totaling ~700 million had to be raised to meet the immediate war expenditures of ~1,500 million. The foreign loans not only enabled Japan to carry on the unprecedentedly large-scale war without putting excessive pressure upon the domestic money market, but also they contributed to the funds for the armaments restoration and expansion program which was implemented soon after the end of the war. The armaments expansion program following the Sino-Japanese War was richly supplied with funds by Chinese reparations amounting to ~F360 million. In contrast, in the absence of reparations following the Russo-Japanese War, the new program had to depend on increased tax revenue besides the foreign loans. The tax increase required in this way aroused the strong resistance of the businessmen against the armaments expansion, for they had been planning a high level of investment which would require a huge amount of capital. It was the first time in which businessmen took the leadership of the political movement to attack the government's military policy. Their purpose was to remove the great obstacle to capital accumulation, that is, to

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