The purpose of this article is to analyze the Bank of Chosen (Korea)'s intrusion into "Manchuria" (Northeast China) during the First World War, and thereby to shed light on the characteristics of the overseas expansion of Japanese imperialism at the time. During the First World War, there were two conditions at work behind Japanese expansion into China. First, the great powers of the West temporarily retreated from East Asia. Second, Japan was able to earn surpluses in its balance of payments because of a rapid economic development. Taking advantage of these conditions, the Terauchi cabinet (October 1916-September 1918) pursued policies of invasion into China. The Terauchi cabinet carried out its policies toward China in two steps. The policies of the first stage were aimed at turning Manchuria into an integral part of the Japanese empire like Korea. Employed as two major vehicles for attaining this goal were the banking and railway systems. The policies of the second stage were aimed at integrating not only Manchuria but China "proper" as well into the Japanese empire, and thereby turning the empire into a self-sufficient economic bloc. In order to realize this plan, loans (usually known as the Nishihara loans) were extended to Tuan Ch'i-jui. In implementing the policies of these two stages, the Bank of Chosen was assigned a crucially important role. First, in Manchuria, the Bank of Chosen was designated as the central bank for the colony replacing the Yokohama Specie Bank which had been the issue bank there. Adoption of this measure meant that Japan decided to unify that portion of the monetary system in Manchuria under Japanese control on basis of the gold notes. Furthermore, the Bank of Chosen offered loans to the Manchurian provincial government which was then facing a financial difficulty, and tried to place the financial affairs of Manchuria under its control. In the offering of the Nishihara loans to Tuan Ch'i-jui, it was also the Bank of Chosen that played a leading part. One of the important purposes of the loans was to establish a gold standard system in China and to link that system to the Japanese monetary system. In other words, the loans were meant to serve as a means for consolidating a prototype of the "Yen Bloc" to be formed later in the 1930s. To begin with, the Bank of Chosen tried to circulate its own gold notes in Manchuria so as to bring Manchuria into the sphere of its own currency circulation, that is to say, into the sphere of the Yen currency circulation. Subsequently, the Bank of Chosen further attempted to integrate the whole of China into the Yen currency sphere. Following the expansion of the Bank of Chosen into Manchuria, the whole Japanese colonial banking system consisting of the Yokohama Specie Bank, the Bank of Taiwan, the Bank of Chosen itself, etc. was reorganized. Through this reorganization process, the colonial financial facilities were strengthened and readjusted to accelerate further expansion of the Yen currency sphere. Nevertheless, the Terauchi cabinet's policies in China ended as a total failure. Although the Nishihara loans were meant to reform the Chinese monetary system to base itself on gold standard, gold notes were never issued there. This was due to the fact that as the First World War drew to its end, the Nishihara loans encountered increasingly severe criticisms both inside Japan and abroad. Not only that, Japan even failed to unify the Manchurian monetary system on the basis of gold standard. Manchuria originally belonged to the Chinese silver currency sphere. According to a plan devised after the Russo-Japanese War on the basis of this fact, the Yokohama Specie Bank was supposed to unify the Manchurian monetary system on the basis of silver standard. This scheme, however, was not put into effect due to the following two factors: 1) on the part of the Japanese banking

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