Abstract
In the interwar depression period, the rate of unemployment in Japan was comparatively lower than in other countries. It was because the tertiary industry could absorb the unemployed temporarily and worked as a 'cushion for employment'. But at the same time, this absorption became one of the causes of 'small retail trade issues', which consisted of an excess in the number of retail shops and their financing difficulties. This financing problem was commonly said to be difficulty in borrowing from banking institutions and caused by the convergence of small banks after the banking crisis in 1927. The analysis in this paper, however, suggests that the financing problem for small retail shops was not difficulty in borrowing but a credit crisis between retail and wholesale merchants. And the analysis, which is based on a commercial survey taken in Tokyo city in 1930 and newspaper articles at that time, reveals that the excess in the number of retail shops affected this credit crisis. These results imply the 'small retail trade issues' were caused by the excess entry into retail trades at the time of recession, one of the characteristics of the labor market in modern Japan.
