The Japanese capital market and the Chosen Industrial Bank’s bond issuance during the interwar period

抄録

In 1920, Japan launched the “Plans for Increasing Rice Production” in Korea (“Chōsen” in Japanese) to boost rice imports through expanded rice production. The impetus for the new policy lay in two key developments: the “rice riots” that swept through Japan in 1918 amid plummeting rice prices, first of all, and the “March 1st Movement” that erupted in Korea in 1919. A vital piece of the Plans for Increasing Rice Production was the Chōsen Shokusan Ginkō (Chosen Industrial Bank; “CIB”), which represents the main focus of this paper. To procure its funding, the CIB issued bonds in enormous sums (“CIB bonds”) that made the bank not only a major channel for Japanese investments in Korea but also a key investment target in the Japanese capital market. This paper shines new light on investments in Korea through the interwar Japanese capital market by examining the issuance conditions for CIB bonds to show how the bonds occupied an increasingly important position in the capital market, delineating the ways in which the composition and underwriting approaches of the underwriting syndicates behind the bonds transformed as securities companies competed and cooperated in the capital market, and explaining financial institutions’ holdings of over 40% of the outstanding balance of CIB bonds.