Capital as Will and Imagination: Schumpeter’s Guide to the Postwar Japanese Miracle

Appendix

225 Table A-1 gives basic statistics for total currency in circulation and for total bank balances. The most evident trend was for bank balances to increase as a share of total money, reflecting a seemingly universal modern tendency. It is also evident that deflationary programs have historically focused on reducing cash-currency rather than bank balances. The total volume of bank balances first came to equal the volume of cashcurrency in 1897, which was also the year Japan adopted the gold standard. Bank balances then increased very rapidly in both absolute and relative terms for the next two decades. This trend reversed during the wartime and early postwar years, when the relative increase in cash-currency brought the volume of currency temporarily back to parity with bank balances in 1947. The historical tendency for bank money to increase then resumed. In 1949, the year of the Dodge Line, the Bank of Japan began to discount bills in large volume and to buy bills outright. This makes it appear that the BoJ “loans” category declined as a result of the Dodge Line, but in fact there was a major increase in BoJ credit creation. The central bank’s outright purchase of bills was extremely large. These were the amounts purchased, in billions of yen: 1949 1950 1951 1952 1953 1954 1955 100 63 39.6 38.3 11.5 1.2 1.2 This Dodge-era program was discontinued after 1955. Later BoJ statistics combine loans, discounts, and bills bought and list them all together as “Bank of Japan lendings,” as I have also done in table A-2. Second to manufacturing, commerce was the other great destination of bank lending. At a time when both volumes increased very rapidly, the share of total bank lending that went to manufacturing was remarkably stable, fluctuating in a range between 47 and 51 percent during the years 1952–65. During the first three years of the Income Doubling Plan, 1961–63, the percentage varied even less, remaining between 50.1 and 50.7 percent. This, too, suggests active management of the investment process. Appendix TABLE A-1. Basic indicators of money and credit, 1868–1965 (in millions of yen to 1916; in billions of yen from 1917) YEAR CURRENCY (A) % CHANGE BANK BALANCES (B) % CHANGE RATIO OF BANK MONEY TO CURRENCY (B/A) 1868 24 1869 50 108.0 1870 56 12.0 1871 62 10.7 1872 72 16.1 1873 97 34.7 2.9 0.03 1874 114 17.5 3.5 20.7 0.03 1875 113 (−0.9) 1.5 (−57.1) 0.01 1876 124 9.7 2.5 66.7 0.02 1877 140 12.9 4.5 80.0 0.03 1878 189 35.0 8.1 80.0 0.04 1879 189 0.0 16.2 100.0 0.09 1880 183 (−3.2) 17.5 8.0 0.10 1881 178 (−2.7) 24.5 40.0 0.14 1882 170 (−4.5) 23.4 (−4.5) 0.14 1883 159 (−6.5) 37.3 59.4 0.24 1884 153 (−3.8) 39.9 7.0 0.26 1885 153 0.0 43.9 10.0 0.29 1886 168 9.8 49.8 13.4 0.30 1887 171 1.8 46.2 (−7.2) 0.27 1888 172 0.6 65.6 42.0 0.38 1889 178 3.5 68.5 4.4 0.39 1890 201 12.9 62.7 (−8.5) 0.31 1891 209 4.0 66.2 5.6 0.32 1892 212 1.4 85.2 28.7 0.40 1893 231 9.0 112 31.5 0.49 1894 230 (−0.4) 134 19.6 0.58 1895 260 13.0 184 37.3 0.71 1896 275 5.8 235 27.7 0.86 1897 296 7.6 305 29.8 1.0 1898 279 (−5.7) 371 21.6 1.3 1899 340 21.9 536 44.5 1.6 1900 317 (−6.8) 576 7.5 1.8 1901 303 (−4.4) 579 0.5 1.9 1902 323 6.6 692 19.5 2.1 1903 325 0.6 759 9.7 2.3 1904 384 18.2 811 6.9 2.1 1905 423 10.2 974 20.1 2.3 TABLE A-1. (continued) YEAR CURRENCY (A) % CHANGE BANK BALANCES (B) % CHANGE...