The financing of silk reeling industry in Kobe : a comparison with Yokohama

Abstract

The purpose of this paper is to clarify the nature of genshikin-maegashi [unsecured abvances to raw-silk producers] at Kobe in the period from the Kanto Earthquake of 1923 to May 1933. Chapter I analyzes the extent to which city banks provided funds for the kiito urikomitonya [raw-silk provider for export merchants] and how this was done. City banks in Kobe provided more funds than city banks in Yokohama, and were more succesful in recovering their loans. Chapter II analyzes the process of establishment of Kobekiito Co., Ltd. and Shineikiito Co., Ltd. both large Kobe raw-silk providers, as well as examining their stockholders and genshikin-maegashi. Both companies were established in order to start a market for raw silk in Kobe. In the l92Os the stockholders of both companies were either entrepreneurs or citizens of Kobe. Both companies supplied raw-silk producers with genshikin that was composed of immense capital funds and money borrowed from city banks. In the 1920s the accounts of Kobekiito Co., Ltd. were in good condition, but Shineikiito Co., Ltd. had advances, which had turned out irrecoverable, to raw-silk producers in Shinshu area. After the Great Depression, the accounts of both companies were in a bad condition. They redeemed their advances through capital reduction in 1933. Both the raw-sillk producers in the Kansai area and the entrepreneurs and citizens of Kobe had great hopes when the raw-silk market at Kobe was first started. At Kobe genshikin-maegashi were developed through capital contributed by entrepreneurs and citizens and loans from city banks in Kobe. These aspects of genshikin-maegashi at Kobe signify a change in the historical features of the financing of silk reeling industry in Japan.