Moneylending by Landlords in the Meiji Era : From the Viewpoint of the Form of Collateral

Abstract

Previous studies on the history of landlordism in Japan have examined whether moneylending by landlords was a cause of land accumulation; however, few studies have discussed the characteristics of moneylending. In particular, little attention has been given to the form of collateral, and examinations of the consequences of moneylending remain insufficient. This study examines the characteristics of moneylending by landlords and its consequences in the Meiji era (1868-1912). It focuses on the more than 4,000 loands that the Ishii family in Kanagawa Prefecture provided during the Meiji era. The conclusions are as follows: Major methods of moneylending by landlords included collateral-free loans, land mortgages, and pledges, the order of which represents from shorter term, smaller amount, lower interest and less complicated procedures to longer, larger, higher and more complicated. In addition to the methods stated above, those who were in need of money chose a method of borrowing from the methods such as the land repurchasing, which is employed to regain possession of land offered as collateral and irrevocable contention sale of land. The repayment rate by borrowers who obtained loans from the Ishii family (the annual interest rates ranged between 13% and 16%) until 1909, the 42nd year of the Meiji era, was 62% for collateral-free loans, 50% for land mortages, and 30% for pledges. Non-performing loans were settled using several methods. Collateral-free loans were repaid by mortgaging, pledging, or selling lands. Under the mortgage system, land was redirected to financing with other forms collateral; principal and interest were redirected to other collateral or collateral-free loans; or land was foreclosed for sale. As a result, the above-mentioned ascending order also became the route that borrowers who failed to repay their debt followed. The rate of non-performing loans that led to land sales was 20% for collateral-free loans, 28% for land mortgages, and 56% for pledges. With regard to loans in the 1880s, the early second decade of the Meiji era, the rates were even higher at 50%, 44%, and 67%, respectively. Thus, moneylending by landlords during this period played a role as a means of acqiring the lands of many farmers; nevertheless, the farm economy came to adapt to this system in the following decade.