RESOURCES OF THE TREASURY DEPOSIT BUREAU
TREASURY DEPOSIT BUREAU
THE funds at the disposal of the Treasury Deposit Bureau as of September 5, 1937, exceeded 5,000,000,000 yen. The story of the fifty years of the Bureau may itself be taken as the history of the growth of Japan's economic strength. Since its creation in 1885 as an institution to receive and invest deposits of various descriptions under the Regulations on Deposits, promulgated by a Notification of the Dajokwan,1 the Treasury Deposit Bureau has made steady development and its loanable funds increased from 100 million yen in 1906 to 500 million yen in 1917, 1,000 million in 1920, 2,000 million in 1927, 3,000 million in 1930 and 4,000 million in 1933, until at present the figure reaches over 5,000 million yen. With this huge amount of funds at its disposal, the Treasury Deposit Bureau extensively administers loans and advances.
One of the noteworthy features of the Bureau's activity during recent years is the fact that the Deposit Bureau has come to make its influence strongly felt also in the short loan market, so that the organization is now a governmental financial institution of veritable influence in Japanese financial circles.
Now, what is the Treasury Deposit Bureau ? What is the nature of the resources at its disposal, and how are the funds employed ? During the early years of its existence, the function of the Deposit Bureau lay in receiving and employing in a reasonably lucrative way deposits of funds that afterwards came to be known as Postal Savings, and of other funds belonging to governmental departments and private individuals. Subsequently, deposits of a much wider scope were received, including funds in the Government's Depository, or belonging to the Government's Special Accounts and Surplus Funds together with Reserve Funds of the Central and local governments, as well as deposits of special banks and companies. In 1925, the Deposit Law and Law Concerning Special Accounting of the Treasury Deposit Bureau were either amended or newly enacted, as the result of which the operations of the Treasury Deposit Bureau have been greatly systematized.
The Deposit Bureau employs deposits it receives, together with its
own reserve and surplus funds, chiefly in taking up or purchasing government bonds and in making loans and advances to local public bodies. Being a government institution, the Bureau is not primarily concerned in making profits as such. On the contrary, by supplying funds at very low rates of interest, it endeavours to aid public bodies. Today, the resources of the Deposit Bureau equal those of Japan's five leading banks (Mitsui, Mitsubishi, the First, Yasuda and Sumitomo) put together and half as much as the total deposits at all ordinary banks.
As has already been mentioned, the resources of the Treasury Deposit Bureau consist of various kinds of deposits and of reserve and surplus funds of its own. Of the deposits, as much as 3,800 million yen represents Postal Savings which comprise all the savings deposits received at Post Offices not only in Japan proper but also in Chosen, Taiwan, Karafuto, Kwantung Province and the Mandated Islands in the South Seas. These deposits, which barely exceeded 100 million yen in 1907, have grown steadily reaching 1,000 million in 1922, 2,000 million in 1929, and 3,000 million in 1934. Today, in spite of the national emergency, they aggregate no less than 3,800 million yen. There are 50 million depositors with an average credit of 70 yen. Thus, Postal Savings deposits account for 84 per cent of the total deposits at the Treasury Deposit Bureau.
Next to Postal Savings in order of importance come deposits of the Government's special accounts, which at present amount to 500 million yen. The balance of the deposits of about 700 million yen is contributed by funds held in custody by, or deposited with, the Government, surplus funds of the prefectural governments, and various other deposits. The reserve funds of the Treasury Deposit Bureau also have grown by degrees from 39,000 yen in 1885 to 620 million yen at the present writing.
How, then, are these funds employed ? The Law Concerning the Deposits at the Treasury Deposit Bureau prescribes that the resources of the Bureau be employed in such a manner as to promote public good by sound and profitable methods. A Committee is created for the purpose of passing on any proposed investment and employment of funds. The nature of investments may be seen from the fact that 85 per cent of the total resources are invested in Government bonds and in loans and advances to local governments. The amount of Government bonds taken up by the Deposit Bureau has increased sharply. For 1936 alone, this amount reached 200 million yen, a sum likely to be more than doubled in 1937. The holdings of Government bonds to date aggregate something over 2,300 million yen, which correspond to 20 per cent of the amount of the Government's
internal loan bonds outstanding.
In view of the fact that an important portion of the funds coming to the Treasury Deposit Bureau represent Postal Savings gathered from all parts of the country, it is imperative that the Bureau administer to the needs of all districts of the country. In fact, the loans and advances of the Bureau cover the whole land extending to Chosen, Taiwan and Karafuto. They are given to various kinds of public utilities and relief works in the prefectures, municipalities, towns and villages, or to the readjustment of obligations incurred mostly by the agrarian population. The outstanding amount of these loans and advances, comprising some 190,000 items, rises in the neighbourhood of 2,000 million yen.
From 1932 onwards, increasingly large amounts of relief funds have been released to local governments by the Deposit Bureau, with the result that they are responsible for one-third of the local government loans outstanding. Various agricultural, commercial, and industrial associations, such as housing, irrigation, fishery, forestry, cattle raising, brewery, and export trade, are all benefited by the disbursements of the Treasury Deposit Bureau funds. One can hardly travel into the country without seeing the fruits of the Bureau's activities. Small- and medium-sized tradespeople and industrialists, who are very likely to be neglected by the banks, find ready assistance from the Deposit Bureau. It may also be noted that loans administered in the outlying regions such as Chosen, Taiwan and Karafuto are mostly long-term credits.
Short-term credits extended by the Treasury Deposit Bureau are assuming more and more importance in recent years. Indeed, the practice of the Bureau has been to release from time to time, according to the needs of the money market, short-term funds through the special banks. The present emergency is making especial call upon the resources of the Deposit Bureau to facilitate the nation's industrial activities and to ease money market conditions. Thus, the outstanding amount of the short-term loans made by the Deposit Bureau through the special banks and local public bodies now totals 260 million yen.
As has been seen, the rapidly increasing resources of the Treasury Deposit Bureau now exceed 5,000 million yen and its holdings of Government bonds reach 2,300 million yen. About 2,000 million yen is employed as loans and advances in all parts of the country, the balance on hand is employed in the shape of short-term loans in the money market. Thus, it will be seen that in the economic and financial development of Japan the rôle of the Treasury Deposit Bureau is a leading one.
1 The Dajokwan was the central administrative organ of the Meiji Era, prior to the establishment of the present Cabinet in 1885.