The Banque Nationale de Belgique as Model for the Bank of Japan

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The Banque Nationale de Belgique as Model for the Bank of Japan

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An ‘ideal bank of issue’:
TheBanque Nationale de Belgique
As A Model for theBank of Japan
Michael Schiltz, Ph. D Postdoctoral Research Fellow of the Fund for Scientific Research Section of Japanese Studies, KULeuven
***Note: this is a preprint version of an article which will be published inFinancial History Review (Cambridge University Press); in case you want to cite this article, please refer to the finally authorized peer-reviewed version.***
Keywords: financial history, Japanese modern history, Bank of Japan, National Bank of Belgium
Abstract: It is established historical knowledge that theBank of Japan hereafter BOJ) was (1882; modeled upon theBanque Nationale de Belgique(1850; hereafter BNB). In this article, I point out how Japan’s recurrent frustration with foreign dependence nurtured a social Darwinist view of international politics and finance: Japan’s capability to survive in the world was believed to be dependent on its capability to assimilate foreign knowledge and institutions. In the field of finance, Matsukata Masayoshi, Japan’s most enlightened financial policy maker at the time, turned to Belgium. I explain that Matsukata was dedicated to the emulation of Belgium’s financial infrastructure, in which several public institutions would each be responsible for a specific area of the credit system. I indicate how efforts to adopt Belgian institutions and banking ideas proceeded meticuluously; yet, in the end, Japanese and Belgian finance developed along quite distinct pathways.
I. Historical Introduction: 1850-1880
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At a time when Japan’s economic achievements are widely acknowledged and acclaimed, the question of the reasons of this success has been extensively investigated. After all, Japan’s success is not an obvious matter: it has not always been an international forerunner. In its early experience of modernity, it was brutally confronted with the far superior political, economic and cultural organization of the expansionist Western powers. Yet it rapidly rose from the crippled state of its development. Roughly fifty years after being forced into internationalization, it defeated both China (1894-1895) and Russia (1904-1905). On the eve of the First World War, it gained the status of first rank international power. Financially, it developed from a doubtful debtor nation into a creditworthy modern state. How had this been made possible? Most commonly, Japan specialists point to Japan’s rich experiment with foreign institutional and ideological models. In the field of finance, for instance, policy makers had looked to Belgium when founding a Japanese central bank. Traditionally, banking historians refer to Matsukata’s stay in Paris (March and December 1878), during which the French Minister of Finance, Léon Say discouraged Matsukata from studying theBanque de France (Matsukata’s original intention), but instead praised the recently established Banque Nationale de Belgique. The latter ‘is of very recent date,’ he is quoted as having said, ‘and is unrivalled when it comes to orderly arrangement and perfect organization.’1 Impressed by Say’s statement, Matsukata left Katō Wataru加藤済, his aide, behind in Brussels, and charged him with the task of studying the history of the BNB, as well as its organization. After a three year stay in Belgium, Katō returned to Japan, and played a role of formidable importance in the discussions on the establishment of a central bank. Later, he was appointed head of the banking department of the newly founded BOJ. Few authors have inquired into the historical settings of the very strategy of adapting foreign knowledge. What exactly made reformers look at the institutions of the Western powers, and why were certain institutions favored over others? In a broad sense, what was the ideological context of the experiment with foreign models? In this particular case, does our understanding of the spirit of the times add to our understanding of Matsukata’s quest for national finance? Were Matsukata’s experiences in Europe of any importance in framing his ideas on the latter’s organization and priorities? How did the actual process of adoption work? Did adoption go beyond the conscientious copying of the BNB statutes, or did it have an impact on Japan’s financial 1Nihon Ginkō, Nihon Ginkō hyakunenshi(Tokyo, 1982), p. 119; herafter:Nihon Ginkō  hyakunenshi.
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