Cipango - French Journal of Japanese Studies English Selection

4 | 2015 Japan and Colonization

The Beginnings of Japan’s Economic Hold over Colonial Korea, 1900-1919 Les débuts de l’empire économique japonaise en Corée coloniale, 1900-1919

Alexandre Roy

Electronic version URL: https://journals.openedition.org/cjs/1046 DOI: 10.4000/cjs.1046 ISSN: 2268-1744

Publisher INALCO

Electronic reference Alexandre Roy, “The Beginnings of Japan’s Economic Hold over Colonial Korea, 1900-1919 ”, Cipango - French Journal of Japanese Studies [Online], 4 | 2015, Online since 17 November 2017, connection on 08 July 2021. URL: http://journals.openedition.org/cjs/1046 ; DOI: https://doi.org/10.4000/cjs.1046

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Cipango - French Journal of Japanese Studies is licensed under a Creative Commons Attribution 4.0 International License. The Beginnings of Japan’s Economic Hold over Colonial Korea, 1900-1919 1

The Beginnings of Japan’s Economic Hold over Colonial Korea, 1900-1919 Les débuts de l’empire économique japonaise en Corée coloniale, 1900-1919

Alexandre Roy

1 Few observers at the dawn of the twentieth century, such as Kōtoku Shūsui 幸徳秋水 (1871-1911),1 believed that Japanese capitalism was capable of maintaining a colonial empire for any length of time. Despite Japan’s recent victory over the Chinese (Sino‑Japanese War 1894‑95) and acquiring of Taiwan,2 the loss of face inflicted by the immediate retrocession of the Liaodong Peninsula 遼東3 as imposed by the Triple Intervention (sankoku kanshō 三国干渉, led by Russia, Germany and France), the initial struggle to “pacify” the island of Taiwan and the penetration of China by the West during that same period, all put Japan’s presence in the region starkly into perspective. Japan’s victory over the Tsarist army (1904-05) enabled it to turn the tables and assert itself, namely by recovering its rights to the Liaodong Peninsula (the Kwantung 関東 Leased Territory), obtaining the southern half of Karafuto and establishing Korea as a protectorate with a Resident‑General (tōkan 統監) from 1905 to 1910 before finally “annexing” (heigō 併合) the country in 1910 (the Government‑General regime or sōtokufu 総督府).4 In ten years Japan had built a peripheral colonial empire in East Asia to the north of the French and British colonial territories. Although Japan’s colonial empire was completed after World War I, at the beginning of the twentieth century Korea represented its linchpin: spanning 220,000 square kilometres (81% of Japan’s colonial territory), it was the largest and most heavily populated colony with approximately fourteen to fifteen million inhabitants in 19105 (almost a third of the metropolitan population and more than three quarters of Japan’s colonial population).

2 This article proposes to examine the economy of colonial Korea during an initial phase spanning the early twentieth century to the period immediately following World War I and the bursting of the “war bubble”. The sweeping historical panoramas describing the peninsula’s colonial economy tend to offer a review of the entire colonial period from 1905 to 1945, or else focus solely on the period of intense industrialisation that

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characterised the end of the colonial era. And yet, it is this author’s opinion that the period preceding World War I stands apart. Because colonisation was in its early stages and still finding its way; because Japan’s economic power was not yet assured even in the homeland; and finally, because Japan’s economic expansion during this period is inseparable from the 1914‑1918 “bubble”.

3 In this article I propose to draw on statistical reports drawn up by the Government‑General of Korea itself. These documents present primary data that describe the peninsula’s economic activity and generally underline Japan’s efforts.

4 During the building of its colonial empire Japan was unable to sustain both its overseas expansion and its economic growth. However, the outbreak of war in Europe (1914-1918) brought a new turn of events. With the colonial powers focusing their economic strength on Europe, Oriental and American markets became accessible to Japanese products, rapidly generating a large trade surplus (with exports outstripping imports by 35%).6 Japan’s previous difficulties were swept away, forgotten; this was the “boom of the Great War” (taisen būmu 大戦ブーム) which represented the second acceleration in Japan’s economic expansion after the “boom in entrepreneurship” (kigyō bokkō 企業勃興) of 1885-1890. This situation was exacerbated by the suspension of the gold standard (introduced in October 1897) and the thirst for investments to produce difficult-to-import goods, resulting in a gigantic bubble that considerably drove up living costs. The problem culminated at the end of the war in the Rice Riots (kome sōdō 米騒動) of the summer of 1918. The government that came to power in September that same year implemented a policy of supporting the bubble, encouraging a fresh outbreak of speculative fever in 1919 against a backdrop of economic recovery in the United States. This bubble was short‑lived: the dominos began to fall once and for all on 15 March 1920, as the annual results of the Tokyo stock exchange were due to be announced, and delinquent loans caused the closure of many banks and industrial firms. A major crisis broke out; a harsh selection by capital took place, wreaking havoc on the Japanese economy in general and its colonial economy in particular. The influence of this crisis on the colonial economy in Korea thus dictated my decision to focus on the period chosen.

5 Additionally, the historiography shows that most research on the Japanese colonial economy has adopted a perspective encompassing all of Japan’s colonial empire, either chronologically (up until 1945) or spatially (encompassing Taiwan and Manchuria).7 This method has been encouraged by a debate focusing on the opposition of “positive” and “negative” views of the problem. The “positive”8 view generally claims that the colonial economy benefitted the colonial population while ignoring, downplaying or glossing over its damaging aspects; or suggests more generally a positive relationship between the colonial economy and subsequent economic growth (in Taiwan and South Korea). Such studies often take pains to state briefly in the foreword that their aim is not to glorify colonisation, even if it means contradicting themselves in their content.9 On the contrary, the “negative” viewpoint considers the colonial economy in terms of the exploitation and alienation of the native population, with a tendency to focus on the 1930s and 1940s. This viewpoint includes studies from the school of Marxist historiography (primarily Japanese, such as the work of Asada Kyōji 浅田喬二 10 and Kaneko Fumio 金子文夫11)12 and studies by South Korean nationalists (in the sense that their objective is to depict a wounded but resistant national economy).13 While colonial studies, in Japan and elsewhere, are generally characterised by radical

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opposition, the economic growth seen in South Korea and Taiwan from the 1980s onwards has encouraged the development of a “colonial industrialisation” paradigm that has provided some common ground.14 Since then, some South Korean authors have even come to consider that the era of binary opposition is over,15 but is such a change possible without a change of method?16 Surely exploring “colonial industrialisation” necessarily entails considering the early years of colonisation in relation to the 1930s and 1940s17? Hence the importance, once again, of understanding the economic history of the early years of colonisation, giving due consideration to the specific context spanning the end of the Russo-Japanese War to the end of World War I.

6 This article comprises three main sections examining the evolution of Korea’s infrastructure, production and trade, from the first infrastructure developed by Japan in Korea in 1900 to the March First Movement of 1919.18

INFRASTRUCTURE: RAILWAYS AND BANKS

THE COLONIAL RAILWAY

7 The first step towards developing a modern infrastructure in Korea was achieved in 1900 when the Japanese government completed work on a first railway line. Given the tense geopolitical context surrounding Korea, the Japanese continued to pursue this endeavour until 1910 in order to equip the peninsula with a network for rapidly transporting troops. Construction slowed in the 1910s and the development of this network designed primarily with military considerations in mind encountered some financial difficulties. The first line linked the capital Seoul (Hansŏng) with its port at Chemulp’o (also known as Inch’ŏn), involving some thirty kilometres of track decided on in June 1894 as the threat of hostilities with Chinese troops in Korea was imminent. This line was strategic as it provided the Japanese with rapid access to the Korean capital after landing at Chemulp’o (taking up position around the capital was a key element in military-diplomatic pressure tactics at the time). Although the Korean government initially succeeded in resisting Japanese pressure to grant the concession to an American businessman (in 1896), financial difficulties caused the entrepreneur to sell it on to Japan in 1898 (something facilitated by an agreement passed that year between Tokyo and Saint Petersburg concerning the peninsula). Nevertheless, the Japanese government went to great lengths to secure the necessary funds (the concession was purchased by the government for the sum of 1.8 million yen) and industrialists (led by the financier Shibusawa Eiichi 渋沢 栄一)19 and have them finish construction by July 1900.20 Such difficulties encountered in building the short line between Seoul and Inch’ŏn did not bode well for the construction of the Seoul‑Busan 釜 山 line, which was fifteen times longer and of major strategic importance.

8 Busan was the border port with Japan, lying 200 kilometres from the great port cities of western Japan (Moji, Shimonoseki, Nagasaki and Hakata). The existence of a railway connecting it to the rest of the peninsula made it an ideal bridgehead for the disembarkation of troops and material. As with the first railway line, geopolitical conditions pushed the Japanese government to take the initiative, firstly by obtaining the concession (July 1989), then, since by 1900 no headway had been made due to “indecisiveness and delaying tactics”,21 by founding a company to oversee it in June 1901 (the Seoul‑Busan Railway Corporation, Keipu Tetsudō Kabushiki Gaisha 京釜鉄

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道株式会社). Finally, seeing how slowly construction of the line was progressing, the Japanese government was forced to directly oversee the works itself as of late 1903.22

9 The railway company was given a capital of twenty-five million yen, eighty percent of which was borrowed from Europe due to the lack of available capital in Japan. On a domestic level a campaign was necessary to convince Japanese investors to stump up the remaining approximately five million yen (despite the generous guarantees provided by the government and an initial payment limited to just a tenth of the sum committed).23 Despite these incentives, the financial crisis afflicting Japan at that time created new obstacles to obtaining the first payments: in autumn 1903, just 115 of the 400 kilometres of track had been laid, and this on the flattest section of the route. Alarmed by the situation, the Japanese government once again took charge. In November the railway’s managing company was merged with that of the Seoul‑Inch’ŏn line, and in December the newly created firm received large subsidies and senior bureaucrats were put in charge. Three months later, the Japanese Navy commenced hostilities with Russia and the entire line went into service for the final battles one year later (January 1905).24

10 Concession rights for the 500‑kilometre‑long northern section of the Trans‑Korean line, from Seoul to Sinŭiju (on the Chinese border) via P’yŏngyang, were also initially granted to the French, but once again financial difficulties ultimately derailed the project.25 The concession was briefly granted to a group of Koreans (1899) before immediately being taken back by the Korean government (1900) and construction of the line entrusted once again to a Frenchman. Despite construction work beginning in October 1901, things struggled to progress under pressure from the Russians and the Japanese (both camps being racked by internal disputes over the policy adopted). The outbreak of war in early 1904 enabled the Japanese to regain control of the rail concession for military purposes. The line was completed in 1906 and the transport of freight and passengers began in 1908.26 Between 1909 and 1910 a short 55‑kilometre‑long line linking P’yŏngyang to the port of Chinnamp’o completed a network spanning a total of 1,221 kilometres.

11 When the railways were nationalised in Japan in 1906 the Korean lines were repurchased and placed under the direct control of the army.27 Fear of a “revanchist” war initiated by Russia28 drove Japan to link the South Manchurian and Korean railways to create a Japanese continental network running from Busan to Changchun. Accordingly, in 1910 Tokyo obtained permission from the Chinese government to take the military line established during the war against Russia between the port of Andong (now Dandong, on the Korean border) and Mukden (Chinese provincial capital located midway between Dalian and Changchun, the largest city in the region, now called Shenyang) and transform it into a railroad (covering 275km) linking the South Manchurian and Trans‑Korean railways. A railway bridge almost one kilometre long over the Yalu River linked the two frontier posts of Andong and Sinŭiju in 1911. In 1912, followed by 1914, the lines leading to Mokp’o and Wŏsan were completed. Measuring 1,220km in 1918,29 the railway network built by Japan met essentially military objectives with a route focused on the Northern front (Manchuria and Russia).

12 Let us now examine the accounting results for the Korean colonial rail network as presented by the Government-General.

13 Although the balance sheets for the Korean railway always showed a profit, it does not follow that the company was truly profitable, as end-of-year profits were mostly used

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to pay back the loans taken out to finance construction works.30 Furthermore, the railway’s military route was not necessarily compatible with encouraging the network’s economic development31, limited as it was to a main line running north-south onto which any auxiliary lines had to be linked, making saturation of the network ultimately inevitable. When loan repayments are taken into account, the only truly profitable year seems to have been 1917, when the volume of freight traffic and revenues generated increased by thirty percent and thirty-eight percent respectively.32 The demand for rail transport had been greatly stimulated by the lack of merchant ships caused by the war in Europe (in 1916 the deficit had already been reduced to virtually nothing).33

14 As shown in graph I (see the appendices), the Korean railway’s freight activity was highly diversified, in contrast to a traditional colonial railway oriented towards one single resource. This diversity was such that the category “various others” exceeded even that of agricultural products between 1918 and 1922. Between them agricultural products and ore represented the majority of freight traffic (53%) between 1910 and 1920. The most important item was coal, accounting for a quarter of the volume alone (23%). Since this fuel was vital for the running of the railway itself, it had to be imported from Japan and Manchuria (three quarters of the volume consumed in Korea in 1918-1920).34 If we add forest and sea products to agricultural products, the primary sector accounts for an overwhelming proportion of the categories listed (90%). The finished products sector (kōsan‑hin 工産品) accounted for the remaining 10%. Rice did not achieve any significant growth; on the contrary, we can see that the volume transported plateaued during the war while other foodstuffs (soybean, wheat, corn, etc.) continued to rise.

15 In terms of volume (in tonnes), growth was constant but inconsistent: the significant increases seen in 1910, 1912 and 1914-17 (+22% on average) were all followed by growth rates close to zero (+3% on average in 1911, 1913 and 1918). This instability only heightened towards the end of the period: after the record highs of 1917 (+30%) and 1919 (+40%) came a correspondingly sharp slump in 1920 (-13%). The growth in question was highly unstable, linked as it was to an economic bubble. This instability ate into profits (see graph II), which plummeted between 1918 and 1920 after having shown strong growth up until 1917. The entire period was marked by an increase in freight traffic but this reached a clear peak between 1917 and 1919 (+25%, compared to +11% between 1914 and 1916) before the fallout of 1920 (-13%). Passenger traffic provides an even more forceful illustration of the change that came about in 1917, when passenger numbers rose from 240,000 to 350,000.

16 The profits published (graph II) do not take into account investment costs (which were met by the colonial administration), for otherwise they would quite simply not have existed. Graph II provides a clear picture of the trends at play: intensive growth followed by an even sharper decline, despite the fact that the volumes being transported (freight, and in particular passengers) were continually rising. In fact, the colonised society could not afford the Japanese colonial railway.

17 This section gave a brief overview of land-based transport networks; now let us move on to the question of the colony’s financial movements.

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COLONIAL FINANCES

18 As we have already seen, Japanese capitalism at the beginning of the twentieth century lacked the necessary power to have motivated Japan to establish colonies. Indeed, the literature produced by the Government-General of Korea after 1910 indicates that under the protectorate regime in Korea, the administrative costs borne by Tokyo, in addition to rail construction costs, were high: 104 million yen between 1907 and 1910 alone.35 Although the colony’s true economic activity cannot be measured in this way, it should be noted that the switch to direct rule in 1910 allowed Japan to overhaul the colonial authorities’ budget and restructure it entirely around the development of colonial domination, as can be seen in table I.

19 Although in Kwantung (South Manchuria) and Korea dependence on subventions undeniably waned significantly, the amounts received remained considerable. Table I shows an upturn in Korea’s finances such that one might be tempted to believe the country had achieved—albeit after a long and difficult road—financial autonomy towards the end of the period, at the very moment that railway profits plummeted. Yet as the actual ordinary budget balance (B) indicates, instability and deficit were structural, meaning that the suspension of subsidies in 1919 owing to substantial ordinary tax revenue was as symbolic as it was temporary. The increase in ordinary income relied to the extent of eighty‑five percent on soaring tax revenue:36 customs revenue was up twenty‑eight percent (thanks to soaring imports, +75%) and this despite the abolition of the duty on exports to the metropole (ishutsu-zei 移出税)37 and the tax on products for mass consumption (sugar, opium, tobacco, alcohol and printed fabric) yielded a significant profit (+3.7 million yen). Various other public revenues also added their contribution, such as those from logging and the contribution of the South Manchurian Railway Company as part of its management of the Korean railways, or even prison labour (+3 million yen). Tax gains for the year 1919 thus came “from the bottom up”, through the taxing of products for mass consumption (imported or otherwise), thereby exacerbating inflationary pressure on the buying power of the native population and nourishing the growing unrest in the colony

20 One of the reasons why subsidies from the metropole disappeared in 1919 is that in reality Tokyo no longer gave but rather sold its money to the colonial government. The latter took out increasingly large loans, thus guaranteeing a permanent income to Japanese investors, something that must be investigated in more detail in order to analyse the extent of colonial expropriation. In concrete terms, in 1910 the amount of money sent to the Korean colony—before subsequently returning to investors—had already grown to more than twenty-one million yen under the weight of financing the construction of transport and communication infrastructure (primarily the railway). The ordinary budget being unable to cover such expenditure, the ceiling on these loans was quadrupled between 1915 and 1920 (from 56 million to 206.5 million yen),38 representing 161 percent of the colonial administration’s own income (excluding metropolitan subsidies) in 1918. This share subsequently dropped slightly in 1919 (159%), then more significantly in 1920 (119%), which was primarily due to the runaway inflation of the time and measures as exceptional as they were artificial (increase in tax receipts, return of subsidies from the metropole, launch of new public loans) designed above all to pay off the interest and, according to the Government‑General of Korea, to temporarily reduce the total “debt”. 39 Refilling the leaky coffers of Korea’s colonial

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finances was a lucrative endeavour for the metropole; most of all, it was yet another means of dominating the peninsula.

21 To conclude this section on Korea’s public finances, a word must be said about the cost of maintaining the military garrisons (almost 18 million yen over the two‑year period 1916‑17 alone, financed directly by the metropole).40 This considerable sum could be interpreted as an injection of money into Korea, but given that the soldiers were metropolitan Japanese and that army expenditure stemmed in the main from metropolitan endeavours, taking this figure into account in calculating gains and losses in the relationship between coloniser and colonised seems rather irrelevant. Ultimately, administrative subsidies and military expenditure represented a significant and fixed proportion of colonial expenses (a quarter, or 25%, between 1913 and 1920). It is clearly impossible, then, to talk of financial “autonomy” in the colony during the period in question, Korea being, as we can see, subject to the economic might of the metropole. It is thus from this angle that the issue of foreign trade in the peninsula must be analysed.

22 Throughout the entire period Korea’s foreign trade was largely in deficit (graph III), on average to the tune of thirty million yen per year (or 19%).41 More specifically, the trade deficit with the metropole was very high, (averaging sixty‑nine million yen over the period from 1912 to 1917), while subsidies flowing in the opposite direction stood at just fifty‑one million yen. This deficit represented almost all of the Korean colonial government’s “commercial debt” in 1910‑12, but it would nonetheless diminish thanks to the sudden increase in Japanese imports of Korean rice at the end of World War I and the drop in Korean imports, since the peninsula was unable to keep up with rising prices in Japan. These factors were nonetheless negative phenomena for the Korean people and exacerbated the economic difficulties.

23 In this context, the metropole granted less and less subsidies as its trade surplus with Korea shrank, being careful not to “give” more than it received. The colony’s overall trade deficit was thus an extra burden for the Korean economy.

24 Let us now move on to the peninsula’s financial institutions during this period.

FROM DAI‑ICHI BANK TO THE BANK OF CHŌSEN

25 Aside from the country’s rail infrastructure and administrative bodies, the only Japanese institution of significance established in Korea from the beginning of colonisation was Dai‑Ichi Bank (Dai‑ichi ginkō 第一銀行, or the First National Bank) created by Shibusawa Eiichi. In fact, it was the longest-standing modern company to be created in the country, having been established in Korea in 1878 at the behest of Tokyo in order to develop trade with Japan and strengthen Japan’s presence in the peninsula. 42 The Kanghwa Island Incident (1875) had ended with a win for Japan, allowing it to force the peninsula to officially open up to bilateral trade (Treaty of Kanghwa, 1876). The activity of Dai‑Ichi Bank was initially limited to financing trade operations (with the bank even managing Korean Customs from 1883)43 before helping to supply Japanese troops during the Sino‑Japanese War.

26 During the war, military expenditure caused an influx of yen onto the peninsula at a time when Korea was already struggling with its system of multiple and more or less ancient currencies (it was engaged in a policy of blindly forging ahead by increasing the amount of currency created, notably with the creation of nickel coins, truly a kind of

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“monkey’s money”).44 The imbroglio caused by pressure from the Japanese and Russians exacerbated the situation: despite the Japanese adopting the gold standard in 1897, Japan succeeded in keeping its silver yen in circulation in Korea (the gold yen would impose itself come what may in bilateral trade). However, under pressure from Russia, Seoul did an about-turn in 1901 and banned the silver yen, establishing instead its own gold currency (beginning in 1902).45 Yet at that very same moment Dai‑Ichi Bank was authorised by the Korean government, after granting it a loan,46 to issue its own gold-backed banknotes,47 in other words guaranteeing the circulation of this currency over the all‑new national gold money. These Dai‑Ichi Bank banknotes became the official currency48 under the protectorate regime until the yen was officially adopted in 1910. Korea’s gold and silver currencies were gradually taken out of circulation in the years running up to 1920 (in a campaign riddled with deception over the various exchange rates, notably on behalf of money‑lenders).49 In fact, these silver and (above all) gold currencies were reserved for transactions of consequence; whereas the masses generally used small denomination copper coins. The popularity of these coins and their scant exchange value in gold convinced the Japanese authorities to limit their legal use to sums under one yen rather than force their withdrawal.50

27 With the establishment of a colonial administration came the need for a central bank based in Korea, leading to the creation in 1909 of the Bank of Korea (kankoku ginkō 韓国 銀行). It took onboard the Korean employees of Dai‑Ichi Bank (to which it was obliged to refund almost eight million yen over twenty years interest free)51 and in 1910 became the Bank of Chōsen (chōsen ginkō 朝鮮銀行, henceforth BoC).52 As the central bank, the BoC was far from limiting itself to the role of money issuer: it took over the Dai‑Ichi Bank’s commercial business and this dual role saw it handle vast sums of money. The continued existence of earlier currencies coupled with the existence of traditional credit institutions had already led the BoC to advance significant funds to absorb them, and with the external trade imposed on the peninsula heavily in deficit, in theory it must also have been necessary to support exports and the country’s nascent industrial production. This left room for a certain number of commercial banks which had developed during the 1910s, constituting a network of 58 branches in 1919.53 They seem to have been of considerable assistance in domestic trade, but internationally only the BoC had the means to carry any real weight. In fact, the only new BoC branches to open were located outside the peninsula.

28 The BoC’s favourite area for expansion was Manchuria and by 1918 it owned even more branches there than in Korea (16 compared to 12).54 This network was supplemented with two branches elsewhere in China (Shanghai and Qingdao) and three in Japan (Tokyo, Kobe and Osaka), bringing the total number of BoC branches across Northeast Asia to thirty‑three. This “Manchurian shift” was implemented over a short period of time beginning in 1916: between 1910 and 1914 the BoC’s Manchurian branches held just six percent of the bank’s deposits, compared to four times this amount (21%) between 1916 and 1919, and five percent of loans between 1910 and 1915 compared to twenty‑eight percent between 1916 and 1919. At the same time, deposits and loans in the metropole soared: from four percent of deposits in 1915 to sixty‑one percent between 1917 and 1919; from seven percent of loans between 1910 and 1914 to forty- four percent between 1917 and 1919.55 Accordingly, the share of the bank’s business handled by its Korean branches no longer exceeded that of their Manchurian counterparts between 1918 and 1919.

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29 By the end of our period the BoC’s activities on the peninsula had come to represent a minority of its operations, despite it being the central bank of Korea. The BoC itself was fleeing the moribund colonial economy, the very one it was supposed to stimulate. This “evasion” became obvious in 1915 but it should be noted that the BoC’s first place of refuge was the metropole, where capital was needed to respond to the economic “boom” of the Great War. The BoC only became a conduit channelling Japanese capital into Manchuria after this date, in 1916, after Terauchi Masatake 寺内正毅, the first Governor‑General of Korea (1910-1916), rose to power in Tokyo as prime minister. The BoC’s history thus offers fertile ground for further study and exploration.

30 Whether in terms of the surplus of capital to be invested or the importance of these investments for Japanese industry, it is important to note that this situation stemmed from the runaway economy in the metropole. It can thus never be over emphasised how important it is to understand the financial bubble created by the Great War in order to analyse the history of Korea’s economic and industrial development, as well as the concurrent shift in the focus of Japan’s foreign policy towards Manchuria.

31 I shall now move on to another key element in Japan’s economic policies in Korea: the productive sectors of the economy.

THE ORGANS OF PRODUCTION: COMPANIES AND “INDUSTRY”

32 As shown in graph VI, created using data published by the Government-General and which generally tally with the historiography, agriculture accounted for almost all (85%) of Korea’s material economic production throughout the entire period. This share dropped to eighty percent between 1918 and 1920, which can be explained by the increase in industrial production. According to the estimation made by Kim Nak Nyeon and his colleagues, agriculture accounted for sixty‑eight percent of the gross national product between 1911 and 1913, and sixty‑five percent in 1920, with services accounting for twenty‑five percent of the total in 1911 and twenty‑seven percent in 1919.56 Beyond these figures, the period saw considerable changes in terms of economic production; in order to understand the exact nature of these changes I will first analyse the capital of colonial businesses followed by the various business sectors concerned.

COLONIAL BuSINESSES BY CApITAL

33 In order to understand the reality and dynamics of the network of colonial businesses, I shall present and analyse a series of statistical data on the ownership and location of capital between 1910 and 1920, then on its distribution by business sector between 1914 and 1920, keeping in mind that official data are imperfect and that the approach adopted here does not necessarily provide an understanding of all colonial businesses, particularly the smallest ones in Korea’s economic fabric. Furthermore, given my focus on the colonial phenomenon, foreign businesses will not be taken into account. The reason for this is that these businesses were highly distinct structures which, despite being few in number (10 in 1910), exceeded their Korean counterparts in terms of capital. This is notably because they included representations for companies such as the Standard Oil Company founded by the multi‑billionaire John D. Rockefeller. They

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were involved in trade and mining, in particular gold mining, where they controlled almost all of production (notably the American firm Oriental Consolidated Mining Company). Gold was the main ore extracted in Korea between 1905 and 1915 (69% of mining) but was rapidly overtaken by iron and coal (14.5% of mining production in 1919-1920).57 The gold mining sector’s foreign ownership and fairly rapid relative decline explain the lack of attention paid to this issue in the historiography and the fact that it will not be examined in further detail here. Let us begin by looking at the general evolution of companies between 1910 and 1920 according to whether their headquarters were located in Korea (Korean-headquartered companies) or the homeland (metropolitan companies).

34 Graphs VII and VIII show the change in the composition of Korea-headquartered companies according to their owners’ nationality, by number (see graph VII) and by the amount of paid‑in capital they possessed (see graph VIII). Generally speaking, we can see a discrepancy between the multipolarity of companies when viewing them by number and a hegemonic structure in the distribution of capital. The structural multipolarity of companies nonetheless became less marked with the rise of Japanese stock companies beginning in 1917 (a third of Korea-headquartered companies between 1911 and 1916; half in 1919 and 1920). Stock companies, including Korean and Nippo‑Korean businesses (gōdō 合同), thus rose ten points and came to account for two thirds of the total in 1918‑20 (compared to 57% between 1911 and 1916). Moreover, limited partnerships represented a third of the total between 1911 and 1913 and only lost two points during the war (31% between 1914 and 1917) but subsequently fell to twenty percent in 1920. Finally, the share of general partnerships remained stable at eleven percent. In terms of nationality, the fall in Nippo-Korean companies is striking: after climbing three points between 1911 and 1916, the share of these companies fell by over half in 1917 alone (from 14% to 6%). They were replaced by Japanese companies, the share of which rose from sixty‑nine percent to seventy-seven percent between 1911‑16 and 1917‑20. Sandwiched between these two, the share of Korean companies remained stable at eighteen percent. It remains to be seen if this squeeze on Nippo‑Korean companies as of 1916, caused by the growth of Japanese stock companies, is mirrored in the distribution of capital.

35 In terms of capital (graph VIII), and once again based on official data (no doubt intended more specifically to evaluate metropolitan businesses), not only is this trend confirmed, it is also more starkly evident: the stock market capital financing Nippo- Korean companies shrunk drastically as of 1916, falling suddenly in 1917 by more than a third (36%). The amount lost (nine million yen) was mirrored by an identical rise that same year in the capital of Japanese stock companies (which tripled in volume). This “siphoning off” continued in 1917: while Nippo‑Korean stock companies lost eleven million yen (leading to a massacre, with 12 out of 25 companies liquidated), their Japanese counterparts yet again doubled their capital and saw their numbers rise from seventy-six to ninety-four. As we can see on graph IX, their share of capital on the peninsula jumped from sixteen percent to seventy‑two percent in two years. As part of this trend, the share of capital held by Korean stock companies dropped from seventeen percent in 1911 to eleven percent in 1920.

36 Among the companies headquartered in Korea, Nippo-Korean businesses had on average five to ten times more capital than the others until 1915. The least well‑endowed in terms of capital were Japanese companies, which possessed even less

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than Korean businesses, indicating that early colonisation was carried out by small businessmen. This situation was turned on its head as of 1916 by the large-scale penetration of Japanese stock market capital and the dwindling funds of Korean businesses. Yet the capital invested in companies on the peninsula came overwhelmingly from the stock market over the entire period (on average 90%, though it should be borne in mind that this figure is perhaps the best measured), in other words, the general trend was marked by a concentrating of stock market capital in Japanese businesses (which received 99.6% of this new capital between 1915 and 1920). What was the situation for metropolitan companies?

37 The capital invested in the latter was quite unlike that of Korean-headquartered businesses, being fifty times greater in amount despite the fact that there were five times less of these companies. They possessed on average twelve times more capital (between 1911 and 1917). According to the data, they were always overwhelmingly stock companies (on average 98%, with a variation rate of just 3.4%; cf. table II); unless such companies were merely better identified. While growth in invested capital remained sluggish until 1916, it soared between 1917 and 1920 (increasing fivefold). Taking into account inflation, metropolitan business capital in Korea doubled between 1917 and 1920. Once again, the force driving this situation was Japanese stock market capital, leading the Japanese share of the total capital to increase from seventy‑eight percent in 1915 to ninety‑five percent between 1917 and 1920.

38 Beyond these colonial data, the variations recorded raise the question of what drove the dramatic growth in Japanese capital. It resulted more from market speculation in the metropole58 than from a genuine development in Korea’s productive forces. On the one hand, there is once again the watershed of 1916-17, mentioned in my discussion of colonial finances; on the other hand, we can see that this watershed was caused by a massive influx of Japanese capital into Korea in the context of Japan’s booming economy, as mentioned in the introduction.

39 In order to better understand this change we must further explore the sectors in which the above capital was concentrated.

THE BuSINESS SECTORS AND THEIR EVOLuTION

40 Table III shows the distribution of capital by sector according to whether the company was headquartered in Korea or in Japan.

41 The first observation to be made echoes my preceding analysis: metropolitan companies in colonial Korea had more than twice as much capital as locally headquartered businesses. Also striking is the overwhelming preponderance of the banking (30%), commerce (25%) and transport (16%) sectors, together representing almost three quarters (71%) of the invested capital. They were the driving force behind a colonial penetration centred on commerce, in other words banks to finance trade, transport firms to move merchandise and merchant companies to handle transactions. 59

42 The commerce and transport sectors were almost exclusively metropolitan (83%), a sign of Japan’s hold over colonial Korea, while the capitalisation of Korean and metropolitan banks appears to be equal (48% compared to 52%). However, the equity of Korean banks was also primarily Japanese, which amounts to the same thing. The

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preferred sphere of activity of these banks was the peninsula’s domestic economic life: lending to farmers, merchants and landowners, and collecting funds. In a country experiencing a demographic boom (a 24% increase in inhabitants over 10 years between 1910 and 1920)60, these were promising activities.

43 Outside of the top three, the agricultural sector is notable for its size, occupying eleven percent of the total when added together with the Tōtaku Company. This sector was overwhelmingly headquartered in Korea (78%), which is unsurprising given that in this sector decision-makers were more or less obliged to be present locally. Gas and electricity suppliers were undeniably important in terms of the capital mobilised and the innovations introduced but not in terms of the physical scope of their activity, limited as it was to the largest cities. The fishing industry was dominated by the Japanese fishermen overrunning Korean waters, to which they now had full access; however, accounting for just 0.4 percent of the capital invested, its economic impact was virtually imperceptible. The industrial production sectors were at the cutting edge of technology, but being great demanders of capital they were insignificant at the beginning of colonisation. How did this situation change? A look at table IV reveals the state of affairs in 1920.

44 Commerce had made clear progress and now far outstripped the competition (with a share of more than 37% it exceeded the combined total of the sectors in second and third position). The banking sector had lost more than half of its share (dropping from 25% to 10%) and transport was also on the decline (although to a much lesser extent, dropping from 19% to 15%). Similarly, the agricultural sector had seen a reduction in its share of capital from fourteen percent to nine percent. This can be explained by the development of the manufacturing sector, which while admittedly weak (15%), was highly dynamic (up from just 3% in 1914) and now stood in second position (held jointly with the transport sector). The rapid expansion seen in the late 1910s thus rested on the development of commerce and industry. In other words, as we can see, the statistics compiled by the Government‑General of Korea quite clearly show a “successful” economic colonisation whose beginnings were marked by political initiative, the importance of public and semi-public businesses (banks and the railway) and growth that was fairly rapidly marked by the importance of the private sector, industry and commerce.

45 Let us now take a more detailed look at the reality of the most dynamic sector during the 1910s, that of manufacturing and industry.

THE MANuFACTuRINg AND INDuSTRIAL SECTOR

46 Colonial statistics used the term kōjō 工場 (traditionally translated as factory) to refer to any production unit relying on mechanical means or employing more than five workers (shokkō 職工), and whose output value exceeded five thousand yen per year. Accordingly, medium-sized workshops could also be classed as “factories”. Yet while the number of industrial and manufacturing production units showed strong and continuous growth between 1911 and 1917 (cf. table V), the average amount of capital invested slumped, a sign that small structures were on the rise. This trend saw a widening gulf appear between Korean and Japanese units: while in 1911 the former had on average over five times less capital than the latter, by 1919 this gap had tripled. It now took sixteen Korean units to attain the average capital invested in a Japanese unit.

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This development is far worse than the one outlined in my analysis of the general distribution of capital: six times worse to be exact (between 1911 and 1920 the discrepancy between the average capital invested in Korean and Japanese businesses merely grew by half, whereas the difference between the capital invested in Korean and Japanese factories tripled). Accordingly, the development of Korea’s industrial output led to the creation of many small —and mainly Korean—enterprises, which we might speculate were in the service of older and larger firms that were overwhelmingly Japanese.61

47 Japanese units were capitalistically crushing their less-well-endowed Korean counterparts, with the former evidently snapping up high‑tech activities that required capital and the latter remaining limited to the least sophisticated activities. Accordingly, output also evolved in favour of Japanese businesses, with that of Japanese firms more than doubling (+126%) while the average output of their Korean competitors stagnated. In reality, if we take into account inflation, the true average value of Korean output had been halved, while that of Japanese factories remained stable. However, if we look at how the capital-output ratio evolved, we can see that the gap between Korean and Japanese industries, after widening between 1911 and 1915 (the Japanese sector up 16% and the Korean sector up 7%), subsequently shrunk in favour of Korean industry in 1917 (+24% compared to +35%) before the post‑war crisis struck the final blow (the Korean sector’s ratio shrunk by just 10% between 1917 and 1919, while that of the Japanese sector lost a third of its value). It would appear that while the war “bubble” had encouraged the development and growth of Japanese output, the end of the war brought this rapid expansion to a close. The Japanese side was thus the first and hardest hit by the crisis, although this did not reduce the huge gap that had opened up between colony and metropole. Although the Korean sector did lose less than its Japanese counterpart, the fact that it had much less capital to begin with means that the social consequences of this “small” loss must have been considerable (and further studies on this subject would be useful). The bubble in the metropole had weakened Korea’s socio-economic fabric and this situation only worsened after the bubble burst. For Japanese companies, the post-war crisis primarily meant a concentration of capital (trebling of the average capital per company between 1917 and 1919) for those businesses concerned.

48 In terms of activities, despite using the term “industrial”, in reality production remained that of a primarily agrarian economy. According to annual colonial statistical reports more than half of so‑called “industrial” production (57%)62 came from rice refineries, a sector that had even greater importance for Koreans (representing 72% of their output) than for the Japanese (55%). The domination of rice lessened somewhat during the period in question, dropping from sixty-three percent in 1911 to forty‑nine percent in 1916, before immediately rising back up to fifty‑six percent in 1918-19. This rise was mainly due to the strong growth in rice exports to the metropole during these years (see the discussion below), something which also explains why Korean “industry” was better able to resist (in terms of dynamics) the crisis than its Japanese counterpart.

49 Outside of this key sector, metalworking and tobacco‑making were tied in second position (13% over the period). While the tobacco sector remained stable despite going through a bad patch between 1916 and 1917 (dropping to 7%), the metalworking industry had a much more chaotic trajectory: after expanding from a tiny four percent in 1911 to twenty-seven percent in 1917, it returned to an insignificant level (6%)

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in 1919 (more of this crisis later). Spinning mills, tanneries, breweries, pottery workshops and so on made up the remaining twenty percent of production. An official report published in 1922 on the “progress” made in Korea between 1918 and 1921 was unable to hide the reality of the crisis in non‑agricultural sectors. Although the subject was not explored in detail, it was nonetheless alluded to on several occasions and the report insisted tactically, to explain the crisis, on the “abnormal” conditions surrounding industrial development caused by the fallout of the war in Europe.63 This assessment contrasts with the praise heaped on the agricultural sector, henceforth destined to systematically provide large quantities of cheap rice to the metropole.

50 Finally, in order to understand the true scale of this “industrial development” we must examine its mechanical power and the number of employees: 48,705 workers across 1,900 production sites in 1920, but only 828 machines driven by 37,501 horsepower.64 The fact that there were more workers than horsepower neatly summarises the limit of Korea’s “industrial” development. Japan’s role in this trend was important, with the country employing 22,747 people in 1916 of which 18,279 were Korean.65 This was nonetheless an insignificant number for a country with fifteen to sixteen million inhabitants; just like infrastructure and agricultural colonisation, industrial production experienced limited development and significant difficulties towards the end of the period.

51 Let us now examine the commercial sector, theoretically the largest of all, using two specific case studies: rice and iron.

THE COMMERCIAL CAPTURE OF RICE AND IRON

52 As we have already seen, Korean “trade” was in reality to a great extent a captive of its relationship with Japan; we must thus proceed cautiously when discussing the “balance of trade” figures provided by the Government‑General. (In fact, any analysis of these figures would require a careful examination of the “prices” applied during these “transactions”.) In this context of economic domination, rice, the most highly exported item to the metropole (representing 38% of the total value of exports to Japan), was of particular importance. Another commodity had great importance in Korea’s economic ties with the metropole, despite representing just one percent of the value of Korean exports to Japan throughout the period: iron ore, which was vital to Japan’s industrial development.

THE RICE ISSuE

53 Beginning in the late 1900s, as the first stage in establishing a colonial empire came to a close, “the rice issue” gradually yet clearly emerged as a crisis in Japan. Rice production in the metropole had stalled at less than fifty million koku66 while the population was booming (up 11% per year on average between 1900 and 1920, from 43.8 million to 56 million inhabitants). Over the ten-year period from 1900‑1910 there was annual shortfall of four million koku.67 This was exacerbated by a particularity of the international rice market in Japan, where merchants exported the best Japanese rice— renowned around the world for its high quality—and imported cheap foreign rice of inferior quality,68 thus profiting from both ends of the market. This state of affairs drove up ceiling prices on the most expensive rice and lowered the minimum quality of

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the cheapest rice consumed by the poorest inhabitants. This situation emerged in the 1890s and had intermittently caused a certain amount of local unrest. The rise in rice prices (+30% between 1890 and 1910)69 satisfied landowners but caused growing popular discontent, encouraging social conflicts and threatening to lead to a forced rise in industrial wages. At the crux of the problem was the industrial development in the metropole: more workers called upon to work in the industrial sector meant an equivalent number of workers taken away from agricultural production. The low wages of these ever‑increasing workers had to be maintained and importing more cheap Korean rice was one solution to the problem.

54 Initially this approach encouraged imports of cheap foreign rice (see graph IX): in the late 1900s Japan was still importing over half a million koku of Indochinese rice. 70 During the 1900s and 1910s this situation gradually increased in scale to become a long- running issue, though confined to the lower echelons of society. Far from the government, the problem grew intermittently, as in 1911, and became pressing. That same year, a bad harvest in Japan caused rice imports to double (from just over a million to more than two million koku).71 The masses stayed silent in the face of the vagaries of the weather, still largely unaware of the slow and disastrous evolution underway, but the economic powers, including French colonisers in Indochina, took a keen interest in this “rice issue”.72 In Indochina, a lowering in Japan’s tariffs was eagerly awaited in order to penetrate the market on a massive scale (at the time rice accounted for almost two thirds of Indochinese exports). It was to no avail, the Japanese government remained under the powerful influence of the landowners.73 It was only at the end of the period examined here, faced with the riots of 1918, that Tokyo temporarily abolished the duty on imports (between 1 November 1918 and 31 October 1919). Until then, rather than paying for imports in gold money, the metropole had found a solution in the purchasing of colonial rice that allowed them to kill two birds with one stone: developing the colonial economic system and feeding Japan’s ever‑growing working classes at a low cost, thereby avoiding a rise in wages.

55 As Japan’s first colony, Taiwan was also the first to be called on to contribute: less populated and blessed with a subtropical climate well suited to growing rice, the island provided almost a quarter (23%) of Japan’s overseas supply until 1918,74 exporting almost a fifth (18%) of its production.75 This contribution, which was substantial considering Taiwan’s small size and population, was as much as it could provide. Its production capacity was limited to a surplus of a little under one million koku per year between 1905 and 1920.76 Most importantly, rice‑growing could not be allowed to threaten sugarcane cultivation. This so‑called “rice and sugarcane rivalry” (beitō sōkoku 米糖相剋) would become critical in the 1920s but was already a sensitive issue in the period under examination here. Given this context, purchases of Korean rice by Japan continued to rise (graph IX).

56 Initially it was difficult to import Korean rice: local production did not yield a surplus, the Korean population itself was booming (from 13.3 million inhabitants in 1910 to 17.3 million in 1920) and rice‑growing had not been developed to the extent desired. Furthermore, the Japanese government had only been able to remove the duty on imports after annexing the country, in April 1912, despite having promised the foreign powers that it would not modify Korea’s customs system before 1916.77 This measure clearly shows how pressing the problem had become. Despite this, Korean rice came to predominate over Indochinese, Burmese and Chinese rice on a Japanese import market

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that showed no notable peaks between 1913 and 1918 (graph X). This situation was made possible by the war:78 the European colonies could no longer find merchant ships available to sail to Japan since they were being used in European waters. Consequently, between 1914 and 1917 Japanese colonial rice represented eighty percent of rice imports, with the metropole thereby increasing its already considerable share of Korean rice exports (from 81% between 1912 and 1916 to 90% between 1917 and 1921).79 In 1918, this mass‑purchasing from the metropole created a trade surplus in favour of Korea’s colonial landowners for the first time.

57 If we compare data from the period 1898‑1911 with 1912‑19 (graph IX) we can see the extent of Korea’s contribution, which covered sixty-two percent of the growth in imports, thereby reducing the use of foreign rice to thirty-seven percent of this growth. Although this graph shows the war years as a slack period, it was during this period in particular that the Japanese drain on Korean rice began to be felt: the value of the Korean rice exported to the metropole represented just four percent of output between 1910 and 1913 but had already doubled by 1914 and subsequently grew to eighteen percent and twenty‑one percent in 1915 and 1919 (giving an average of 13% between 1914‑1919). The conditions surrounding Korean production mattered little; despite unpredictable harvests and a burgeoning population, Japanese demand for rice took precedence and became increasingly burdensome. Was it not to escape Japan’s hijacking of rice production that the Korean production of wheat, soybean and Italian millet almost doubled between 1910 and 1920?80 Graph II shows the intensity of this change in the shrinking share of rice in the total volume of agricultural products being transported. The population boom during this period explains why Korean farmers sought first to produce crops for themselves and the local market rather than grow rice for the metropole on flooded parcels of land. Rice‑growing required not only a greater investment but was also subject to unpredictable pressure from a faraway market with numerous and powerful middlemen. Faced with the unstable nature of faraway trade and the particularly unequal conditions of the colonial market, local production took refuge in domestic niches found in a local economy that had remained primarily food‑producing.81 It was only in the 1920s that the Korean rice-growing sector was modernised through a fifteen-year programme implemented by the Government‑General, while the duty on imports to the metropole was abolished in 1919. As previously mentioned, metropolitan Japan was reeling from the “rice riots” of the summer of 1918 and the failure of the trade policy implemented in Korea over the previous decade, leading it to further tighten its grip on Korean agriculture.

58 I have mentioned that the Korean “rice issue” went hand in hand with the industrial issue, namely that providing cheap rice in order to keep the salaries of the Japanese proletariat—in other words production costs—low was vital to Japanese industry and its development. Colonial Korea also played an important role in this industrial issue by supplying iron ore.

Korean iron ore

59 The growth of the steel industry in Japan was concurrent with the establishment of the colonial empire: between 1897 and 1901 the first modern steelworks was built and inaugurated in Yahata82 in Northern Kyūshū, close to the Chikuhō coal field and not far from Korean and Chinese iron mines.83 What interests us here is the question of how

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these steelworks were supplied with ore and how Korean iron ore figured in this configuration.

60 The reason for this is that Japan remained dependent on its imports of foreign steel and cast iron, and in order to offset these purchases and produce itself, it had to import massive amounts of the iron ore and special coal needed for steel‑making. In this context, Japan’s colonisation of Korea provided precious resources.

61 In terms of both quantity and quality Japanese iron ore was unable to satisfy the national demand for steel. The closest external source of supply was Korea, with colonisation giving Japan total control of the peninsula. In 1917 the main mines (at Unryul and Chaeyŏng) were managed by Tokyo but the Japanese zaibatsu were also active: Mitsui at Kaechon, Mitsubishi at Hwangju and Chaeyŏng, as well as the mining capital of Chikuhō (Yasukawa and Asō families).84 However, Korean output was insufficient and the Chinese deposits at Daye (in central China, the current region of Wuhan) were called on (cf. graph X). The quality of these deposits made them the best available and Japanese capital ensured a regular supply via loans granted to the consortium running the mine as of 1903.85 Graph X shows that while imports from Korea were always considerable (26% of the total between 1912 and 1920), they were consistently outstripped by Chinese imports (46% of the total). We can also see the immediate post-war “bubble” through the rise in imports (from 1918 to 1920) and its subsequent deflation in 1921‑22 (serious financial crisis in 1922). This downturn was particularly severe for Korean iron ore, which was replaced by ore from the “Straits Settlements” (British settlements in the Strait of Malacca), specifically from Johor.86 This bubble and its subsequent bursting directly concerned the entire Japanese steel industry at the time.

THE JApANESE STEEL INDuSTRY IN NORTHEAST ASIA

62 After having thought that the war would be short-lived, the “iron famine” (tetsu no kikin 鉄の飢饉)87 and virtual doubling of the price of cast iron in 1915 alone saw Japanese capital turn to the construction of steelworks in 1916 to overcome the scarcity of iron for import. This “famine” was particularly serious, as without sufficient quantities of either iron or steel, Japan was unable to fully exploit the opportunity provided by the Great War since it needed to arm its ships in order to support its commercial expansion and ensure the development of a heavy industry capable of making the machines and equipment necessary for its light industry. Deprived of its European sources, Japan found itself dependent on a low‑cost American supply as of 1916 (cf. graph XII). With the United States joining the war in April 1917, the prospect of a total embargo on steel appeared and the problem developed into an acute crisis. The embargo became a reality in October that year but in the meantime orders had multiplied and prices had already soared.88 After October, Tokyo only received deliveries on the condition that the steel was used to arm ships destined to serve the war effort in the Atlantic Ocean.89 Doing so meant that imports were maintained, but at extremely high prices.90

63 In Japan this crisis gave rise to a “rise in steel-making fever” (seitetsu-netsu no bokkō 製 鉄熱の勃興)91 between 1917 and 1918. The largest planned steelworks were concentrated around the iron deposits in Korea and southern Manchuria, such as the Ōkura conglomerate in Benxihu 本溪湖 (1915) and the South Manchurian Railway

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Company in Anshan 安山 (1918). Mitsubishi built a complex around its Korean iron mine in Kyumip’o (between P’yŏngyang and Chinnamp’o), producing ammonium sulphate as of 1917, cast iron as of 1918 and steel as of 1919.92 Its output was destined to meet the needs of the shipbuilding industry in which the Mitsubishi Group excelled and the first orders were recorded in August 1917.93 Most of these planned Japanese steelworks became a reality in 1918, the year the war in Europe ended and the exact moment at which world steel prices plummeted. Korean cast iron production thus lost almost half of its value between 1918 and 1920 (from 15.37 to 8.27 million yen),94 a disastrous start.

64 The investments made by Japanese capital at the height of the bubble had to endure the return of Western competition, and not only in the steel industry but in all of the commercial sectors the Western economies had abandoned during the war. Just two years after talking of “boom” and “fever”, the Japanese national press was running headlines on the “collapse of the steel industry” (seitetsu-jigyō no botsuraku 製鉄事業の 没落).95 Speculators immediately turned their backs on the industry to feed off of the stock exchange and traditional commercial sectors such as rice. The bubble began to spread.96

The Korean colonial economy at the end of World War I: from speculation to impasse

65 The rising prices of industrial products had already had a knock-on effect on those of foodstuffs (graph XII), but when the former collapsed in 1919 as the latter continued to rise, the industrial bubble became a serious social problem, particularly in Korea where Japan’s mass purchasing was exporting the rise in prices. Graph XII shows the extent to which the colony was subjected to trends in the metropole: Korean prices for agricultural products had to be lower and those for industrial products higher than metropolitan prices, until the system overheated in 1918 and exploded in 1919. The situation in Korea was paradoxical in that industrial products became cheaper only when Korean production itself collapsed, just as the price of foodstuffs was climbing.

66 The rising cost of living was a crucial issue for the colonial government: it was identified in police surveys as one of the population’s main grievances with the new government as early as in 1911‑1914,97 even before price trends became critical. On 28 February 1919 the Keijō Nippō, a local newspaper read mainly by Japanese residents, finished publishing a series of five articles denouncing the situation with petroleum, which had become “more expensive than rice wine”, and charcoal, which was “even more expensive than any food item”.98

67 The policy pursued in Korea between 1905 and 1918‑1919 was an economic and social impasse. Shortly after this period, two days before the burial of Korea’s former king Kojong, just over a year after the American president Wilson made his speech proclaiming the “right of nations to self‑determination”, and in the context of a Europe itself marked by socialist revolution and social instability (Russia, Germany), a group of militant Korean intellectuals gathered in the Korean capital to publicly declare Korea independent and call for an uprising. It was like putting a match to tinder: the whole of Korean society reacted, the March First Movement was born, weakening Japan’s colonial rule.

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68 Whether in terms of infrastructure, production units or trade, the first period in Japan’s colonial rule examined in this article did not enable a stable economy to develop in Korea.

69 Investment remained insufficient until 1916 and when it did become significant after this date, it was in the context of the speculative bubble caused by the Great War or in connection with Manchuria. Furthermore, despite the annual statistical reports of the Government-General heavily stressing the “cost of colonisation”, as we have seen, Korea’s economy was and would continue to be overburdened by the metropole’s permanent drain on its natural resources and by an introduction of capital that entirely favoured Japanese ownership. The Japanese authorities depicted Korea as receiving generous investments from the metropole, but the colonial economic system acted like a bottomless barrel being permanently drained by chronic public and trade deficits which acted in favour of the metropole.

70 This raises the question of the perspective and discourse adopted in the documentation used in this article. We can see that the Government‑General liked to present itself as if Korea was an independent state with real commercial prerogatives and as if there still existed in post‑1910 Korea a “state” whose public deficit and trade balance could be analysed. But are these concepts meaningful in a colonial context? Indeed, what do the “loans” granted by the metropole to the Government‑General of Korea represent, given that in reality they were secured against Korea’s natural resources and served to strengthen Japan’s colonial apparatus? The colonial government obviously never “repaid” the metropole, other than investors: at work was a well understood mechanism in which cash and financial stocks flowed in one single direction. Similarly, any attempt at analysing colonial Korea’s financial sector raises the question of the role of the Bank of Chōsen, which like the Bank of Indochina in the case of France served above all as a regional springboard for metropolitan investors.

71 Ultimately, official information on the Korean economy produced by the colonial government merely shows the development of the Japanese apparatus in colonial Korea, without providing a clear understanding of Korea’s true economic fabric (other than in its links with Japanese economic networks, which were more or less evident depending on the sector).

72 With the end of the war in 1918, the failure of early projects in the field of heavy industry and the sharp rise in living costs in Korea between 1916 and 1919 all left their mark. It was in this context that critical Japanese writers such as Yoshino Sakuzō 吉野 作造 (1878-1933) and Ishibashi Tanzan 石橋湛山 (1884‑1973) denounced the growing and unnecessary burden imposed by the colonial empire.99 Ishibashi Tanzan in particular explained that Japan would gain from concentrating its growth on its own shores, far from the “illusions” of an armed presence in East Asia.100 This notwithstanding, the effort made in the 1920s to modernise Korean agriculture and in heavy industry beginning in the 1930s would give further weight to Korea’s colonial economy, all the while strengthening its position with regards Japan and Northeast Asia. In this specific sense, the failure of Japan’s development policy in the 1910s, followed by the March First Movement in 1919, led a different economic policy to be implemented in the colony which would render the structure of colonial Korea and the relations between colonised and coloniser even more complex.

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Tables and Graphs

Table I: The financial situation of Japan’s colonial governments (1907-1918) (unit: thousand yen)

(B): actual balance of the ordinary civil budget (ordinary receipts–metropolitan subsidies–ordinary expenditure) (E): total civil expenditure (ordinary and extraordinary) (S): metropolitan subsidies (including in the case of Kwantung the “grants” hokyū-kin 補給金received by the South Manchurian Railway Company for the management of lands bordering its tracks (mantetsu fuzoku-chi 満鉄附属地). (A): army expenditure (metropole) (SA): metropolitan expenditure (subsidies + army); E-S: Korean expenditure (expenditure–subsidies); EA: total costs (expenditure + army). * Kwantung: lands adjacent to the railway managed by the SMRC included, and only these in 1908. Sources: For Korea: Government-General of Chosen, Annual Report on Reforms and Progress in Chosen, Keijō, 1922, p. 37; 1910: Mizoguchi Toshiyuki 溝口敏行, Taiwan Chōsen no keizai seichō 台湾・ 朝鮮経済の成長 (Economic Growth in Taiwan and Korea), Tokyo, Iwanami Shoten, 1975, p. 129. Subsidies, 1907‑1910: see Government-General of Chosen, Results of Three Years’ Administration of Chosen since Annexation, p. 17. Under the Resident-General regime between 1907 and 1910 the metropole covered the expenses of the colonial administration entirely. With the creation of a Government-General in 1910, metropolitan subsidies for that year totalled just 5,291,000 yen according to Kimura (see below). The Government‑General itself put the amount (see previous source) at twenty-five million yen including military expenses. Perhaps the five million yen mentioned by Kimura can be explained as the colonial administration’s local financing (funding during this first year was evidently temporary and was just half of subsequent years). Subsidies, 1911: Kimura Mitsuhiko, “Public Finance in Korea under Japanese Colonial Rule: Deficit in the Colonial Account and Colonial Taxation”, Explorations in Economic History, vol. 26, no. 3, 1989, pp. 285-310, p. 288. For Kwantung: South Manchurian Railway, Report on Progress in Manchuria, Dairen, 1929, 6 volumes, vol. 1, p. 57; Manmō Bunka Kyōkai 満蒙文化協会 (The Manchuria and Mongolia Cultural Association), Manmō nenkan 満蒙年鑑 (Annual [Statistical] Report of Manchuria and Mongolia), Dairen, year 1924, pp. 206-207, pp. 216-217. For Taiwan: Mizoguchi T., Taiwan Chōsen…, op. cit., p. 129. For military expenditure (“Army”) in Korea: Hojin Ch’oe, Essays on Korean Economy, Seoul, Sekyungsa, 1995, p. 185.

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Table II: Metropolitan companies (1911-1920)

* The Anju coal mine opened in 1914 with a capital of five million yen under a special regime, the limited partnership stock company (kabushiki gōshi gaisha 株式合資会社); it is included in the totals from this point forward. GP: general partnership LP: limited partnership SC: stock company Source: CSTN, years 1914 and 1920 (volume 3).

Table III: The capitalisation of companies active in Korea in 1914

* elec: electricity CPTL: CAPITAL (THOUSAND YEN) NUM: NUMBER OF COMPANIES NB: there is a small amount left over which has nonetheless been included in the totals. Source: CSTN, op. cit., year 1914.

Table IV: The business sectors invested in by metropolitan capital in Korea in 1920

NB: the figures for 1914 consist of the “headquartered in Japan” column from table III along with the Tōtaku Company. Source: CSTN, year 1920, volume 3.

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Table V: Manufacturing and industrial production in colonial Korea (1911-1919)

K: Korean sector; J: Japanese sector. Mach.: number of machines; HP: number of horsepower (mechanical power). Emp.: number of workers in thousands of people. NB: strong inflation in Japan between 1917 and 1919. Source: CSTN for each year.

Graph I: Freight traffic on the Korean railway in yen (1910-1922)

Source: Chōsen Sōtokufu Tetsudō-kyoku, Chōsen tetsudō yonjū-nen ryakushi (Forty-Year History of the Korean Railway), Keijō, 1940, p. 568.

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Graph II: Freight traffic on the Korean railway in tons (1910-1920)

Source: Chōsen Sōtokufu Tetsudō-kyoku, Chōsen tetsudō ronsan, op. cit., p. 163.

Graph III: Transport activities and profits index for the Korean railway

NB: The source data for “passengers” are in number of people transported, “freight” in tonnes and “profits” in yen (less running costs and without deducting debt servicing). Source: Chōsen Sōtokufu Tetsudō-kyoku, Chōsen tetsudō ronsan, op. cit., pp. 375-375, p. 171.

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Graph IV: Korean trade balance (1910-1920) (unit: thousand yen)

Source: Yamamoto Yūzō, Shokuminchi keizai-shi kenkyū, op. cit., p. 167.

Graph V: Geography of Bank of Chōsen deposits (1910-1919)

Source: Bank of Chosen, Economic History of Chosen, op. cit., p. 179.

Graph VI: Geography of Bank of Chōsen loans (1910-1919)

Source: Bank of Chosen, Economic History of Chosen, op. cit., p. 179.

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Graph VII: Value of Korean material economic production by sector (1910-1920) (thousand yen)

Source: Chōsen Sōtokufu Tetsudō-kyoku, Chōsen tetsudō ronsan, op. cit., p. 143.

Graph VIII: Number of Korean-headquartered companies (1910-1920)

NB: foreign companies headquartered in Korea included (1 for the period 1912-19 and 2 in 1920). Source: CSTN, year 1920, vol. 3.

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Graph IX: Capital of Korean-headquartered companies

Source: CSTN, year 1920, vol. 3.

Graph X: Japanese rice imports (1911-1919) (unit: koku)

Source: Nōshōmu-shō Nōmu-kyoku, Kome no tōkei tekiyō, op. cit., 1920.

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Graph XI: Iron ore demand and imports in Japan (1912-1922) (unit: tonnes)

NB: here demand corresponds to production added to imports, minus exports. Source: Shōkō-shō Kōzan-kyoku 商工省鉱山局 (Mines Bureau at the Ministry of Commerce and Industry), Seitetsugyō sankō shiryō 製鉄業参考資料 (Documentation on the Iron and Steel Industry), June survey 1926, p. 6.

Graph XII: Steel production and imports in Japan (1912-1925) (unit: tonnes)

Source: Shōkō-shō Kōzan-kyoku, Seitetsu-gyō sankō shiryō, op. cit.

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Graph XIII: Price index for industrial and food-based products and commodities in Japan and Korea (1914-1919)

Source: For Japan, industrial products (imported steel, cast iron, coal, petroleum and cotton) and agricultural products (rice, soybean, wheat): United States Tariff Commission, The Foreign Trade of Japan. A Study of the Trade of Japan with Special Reference to That with the United States, Washington, Government Printing Office, 1922, p. 22; except for imported steel: Shōkō-shō Kōzan-kyoku, Seitetsu- gyō sankō shiryō, op. cit. For Korea, agricultural products: CSTN, each year (average of the prices of both refined and husked rice, and soybean); industrial products (mining, metals and textiles): Kim Nak Nyeon, Nihon-teikokushugi-ka no chōsen keizai, op. cit., p. 181.

BIBLIOGRAPHY

Original release: Alexandre Roy, « Les débuts de l’emprise économique japonaise en Corée coloniale, 1900-1919 », Cipango, 18, 2011, 135-187, mis en ligne le 17 juin 2013, URL: http:// cipango.revues.org/1524 ; DOI : 10.4000/cipango.1524

NOTES

1. In 1901, in L’Impérialisme, spectre du vingtième siècle (Imperialism: The Specter of the Twentieth Century), Kōtoku declared: “Although the building of empires can only hasten the road to downfall and ruin, the Western powers can pride themselves on keeping their flags aloft a few years. Japan, on the other hand, would be incapable of maintaining any empire it might build for even one day.” Translated from French, Christine Lévy, Paris, CNRS Éditions, 2008, p. 177. For more information on Kōtoku, see the detailed introduction by Christine LÉVY in her translation of the aforementioned book (pp. 1-79). 2. At that time the island was known in the West as Formosa, Taiwan being the reading (in both Chinese and Japanese) of the characters 台湾. 3. A 55,000km2 peninsula that constituted the majority of the southern Manchurian coast. 4. On the subject of attitudes towards precolonial Korea in Japan, see Lionel Babicz, Le Japon face à la Corée à l’ère Meiji (Attitudes to Korea in Meiji-Era Japan), Paris, Maisonneuve et Larose, 2002. And more generally on colonial Korea (up to 1945), see Alain Delissen, “La péninsule

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coréenne aux XIXe et XXe siècles” (The Korean Peninsula in the 19th and 20 th Centuries), in Hartmund Rotermund et alii, L'Asie orientale et méridionale aux XIXe et XXe siècles (East and South Asia in the 19th and 20th Centuries), Paris, PUF, “Nouvelle Clio”, 1999, pp. 177-195. 5. Thirteen million according to colonial statistics, but just over sixteen million according to the work of Myung Soo Cha 車明洙, “Keizai seichō shotoku bunpai kōzō henka” 経済成・長所得分・ 配構造変化 (Economic Growth, Income Distribution and Structural Change), in Kim Nak Nyeon (ed.), Shokuminchi-ki chōsen no kokumin keizai keisan 植民地期朝鮮の国民経済計算 (A Quantification of Korea’s National Economy during the Colonial Period), Tōkyō Daigaku Shuppan 東京大学出版, 2008, pp. 322-329. 6. 540 million yen in exports compared to 399 million in imports between 1915 and 1918. 7. This trend is generally visible in studies on the colonies (cultural history, policies, etc.). See Nihon Shokuminchi Kenkyūkai 日本植民地研究会 (ed.), Nihon Shokuminchi Kenkyū no genjō to kadai 日本植民地研究の現状と課題 (Present Situation and Issues in Japanese Colonial Studies), Tokyo, Atena-sha アテナ社, 2008, in particular chapter 3 on Korea (Mitsui Takashi 三ツ井崇, “Chōsen” (Korea), pp. 92-119). For a contemporary review (although Western-language research is not taken into account), see Matsumoto Takenori 松本武祝, “Keizai-shi” 経済史 (Economic History), in Chōsen-shi Kenkyūkai 朝鮮史研究会 (ed.), Chōsen-shi kenkyū nyūmon 朝鮮史研究入門 (An Introduction to Research on Korean History), Nagoya Daigaku Shuppan 名古屋大学出版 2011, pp. 256-266. 8. This is particularly visible in studies from the econometric school (Mizoguchi Toshiyuki 溝口 敏行, Yamamoto Yūzō 山本有造 and Kimura Mitsuhiko 木村光彦to cite those whose works I refer to here). American studies generally fall into this category (though not all, as the Bix-Myers controversy illustrated: Ramon H. Myers and Herbert Bix, “Economic Development in Manchuria under Japanese Imperialism: A Dissenting View”, The China Quarterly, no. 55, July-Sept. 1973, pp. 547-559). 9. Like Samuel Ho in “Colonialism and Development: Korea, Taiwan, and Kwantung” (in Ramon H. Myers and Mark R. Peattie (eds.), The Japanese Colonial Empire. 1895-1945, Princeton University Press, 1984.) who states in the introduction that “colonial development improved the economic conditions of the native populations” (p. 347) and repeats in his conclusion that the benefits of colonisation were “widely shared” with the natives before admitting immediately after that Japan, with its colonial power, “did capture a large share of the gains” (p. 386). 10. Author of a seminal work on colonial land issues but focused on the 1920s and 1930s, with the 1910s receiving no particular attention (the analysis of the Chōsen Kōgyō Kaisha, on pages 146-166, draws on data that also covers the entire decade of the 1910s but the text itself does not dwell on this). Asada Kyōji 浅田喬二, Nihon teikokushugi to kyū-shokuminchi jinushi-sei 日本帝国主 義と旧植民地地主制 (Japanese Imperialism and Land Ownership in the Former Colonies), Tokyo, Ryūkei Shosha 龍渓書舎, 1989 (an expanded version of the first edition from 1968), pp. 67-166 (chapter 3). 11. Kaneko published a series of studies on Japanese investments in Manchuria in scientific journals. Kaneko Fumio 金子文夫, Kindai nihon ni okeru tai-manshū tōshi no kenkyū 近代日本におけ る対満州投資の研究 (A Study of Japanese Investments in Manchuria), Tokyo, Kondō Shuppan- sha 近藤出版社, 1990. 12. To quote a criticism of this group by the “positive” school of thought: Ramon Myers declared it “paradoxical that while Japanese scholars [focused on the theme of exploitation] have admitted that an agricultural revolution took place in colonies like Korea, they deny that this revolution provided any favourable benefits for the colonial peoples.” (R. H. Myers, “Post-World War II Japanese Historiography of Japan’s Formal Colonial Empire”, in Ramon H. Myers and Mark R. Peattie (eds.), The Japanese Colonial Empire. 1895-1945, op. cit., p. 469). Myers does not back this

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statement up with any reference to Japanese Marxist historians who have recognised the existence of an “agricultural revolution” in the colonies. 13. South Korean historiography initially established itself against the “Stagnation Theory” (teitai-ron 停滞論 in Japanese) of the pre-colonial economy, which is common to all colonialisms. See Alain Delissen, op. cit., pp. 143 and 156, and the article by Iwamoto Takunari quoted in footnote 15. 14. To such an extent that the “Iwanami Lectures” series on the history of colonialism entitles its economics volume “Industrialisation and Colonisation” (Ōe Shinobu 大江志乃夫 et alii (eds.), Kindai nihon to shokuminchi 近代日本と植民地 (Modern Japan and the Colonies), vol. 3, “Shokuminchika to sangyōka” 植民地化と産業化 (Colonisation and Industrialisation), Tokyo, Iwanami Shoten 岩波書店, 1993). See for example the introduction to the entry by Kaneko Fumio (“Shokuminchi-tōshi to kōgyōka” 植民地と工業化 (Investments in the Colonies and Industrialisation), in ibid., pp. 27-28). It is also discernible, albeit in a nuanced form, in Pierre- François Souyri, “Le colonialisme japonais” (Japanese Colonialism), in Marc Ferro (ed.), Le livre noir du colonialisme (The Black Book of Colonialism), Paris, Hachette, 2004 (first edition: Paris, Laffont, 2003), pp. 561-62. 15. See for example Kim Nak Nyeon 金洛年, Nihon-teikokushugi-ka no chōsen keizai 日本帝国主義下 の朝鮮経済 (The Korean Economy under Japanese Imperialism), Tōkyō Daigaku Shuppan, 2002; and the review of this text by Iwamoto Takunari 岩本卓也 in Ajia Kenkyū アジア研究 (Asian Studies), vol. 50, no. 4 (Oct. 2004), pp. 98-102. 16. Which seems doubtful after reading a South Korean (econometric) study from this school of thought which takes a radically different stance to “nationalist” scholars by claiming in its introduction that the colonial state was “efficient, if not democratic”. Cha Myung Soo and Kim Nak Nyeon, “Korea’s First Industrial Revolution, 1911-40”, Explorations in Economic History, no. 49, 2012, pp. 60-74, p. 60. 17. A recently published article, whose title lacks any chronological delimitation despite the article discussing the 1920s and 1930s, indicates how commonplace this focus has become: Takeuchi Yūsuke 竹内祐介, “Kokumotsu-jukyū wo meguru nihon-teikoku-nai-bungyō no saihensei to shokuminchi chosen” 穀物需給をめぐる日本帝国内分業の再編成と植民地朝鮮 (The Restructuring of the Grain Market within the Japanese Empire and Colonial Korea), Shakai keizai-shigaku 社会経済史学 (Studies in Socio-Economic History), vol. 74, no. 5 (Jan. 2009), pp. 447-467. 18. On the subject of agricultural colonisation, see Alexandre Roy, “L’implantation des colons agricoles en Corée entre 1905 et 1919 : l’histoire d’un échec” (The Settlement of Agricultural Colonists in Korea between 1905 and 1919: History of a Failure), in Jean-Michel Butel and Makiko Ueda (eds.), Japon Pluriel, no. 9, Arles, Picquier, 2014. 19. On the subject of Shibusawa’s role in this matter, see Claude Hamon, Shibusawa Eiichi (1840- 1931). Bâtisseur du capitalisme japonais (Shibusawa Eiichi (1840-1931): the Builder of Japanese Capitalism), Paris, Maisonneuve & Larose, 2007, pp. 264-266. 20. Takahashi Yasutaka 高橋泰隆, “Shokuminchi tetsudō to kaiun” 植民地鉄道と海運 (Railways and Sea Transport in the Colonies), in Ōe Shinobu (ed.), Kindai Nihon to shokuminchi, op. cit., p. 271. 21. Words spoken by Shibusawa in 1908 and quoted in Claude Hamon, Shibusawa…, op. cit., p. 267. 22. Takahashi Yasutaka, “Shokuminchi tetsudō to kaiun”, op. cit., p. 272. 23. Ibid., pp. 269-271. 24. Claude Hamon, Shibusawa…, op. cit., pp. 272-73. 25. This paragraph summaries information taken from Peter Duus, The Abacus and the Sword. The Japanese Penetration of Korea, Berkeley, University of California Press, 1995, pp. 155-157. 26. Chōsen Sōtokufu Tetsudō-kyoku 朝鮮総督府鉄道局 (Railways Bureau of the Government- General of Korea), Chōsen tetsudō-shi 朝鮮鉄道史 (History of Korea’s Railways), Keijō, 1929, p. 302.

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27. Chōsen sōtokufu, Chōsen sōtokufu shisei nenpō 朝鮮総督府施政年報 (Annual Statistical Report from the Government-General of Korea), years 1918-1920, vol. 8, p. 237. 28. Yoshihisa T. Matsusaka, The Making of Japanese Manchuria, 1904-1932, Harvard University Asia Center, 2001, pp. 41-49. 29. Bank of Chosen, Economic History of Chosen, Keijō, 1920, p. 102. 30. Hirai Kōichi 平井廣一, “Nihon shokuminchi-ka ni okeru chōsen tetsudō zaisei no tenkai katei” 日本植民地下における朝鮮鉄道財政の展開過程 (Financial Evolution of the Korean Railways under Japanese Colonisation), Keizai-gaku Kenkyū 経済学 研究, vol. 34, no. 4, March 1985, pp. 12-32, p. 16. 31. Something also noted in the Korean Railway Compendium published by the colonial authorities in 1930 (Chōsen sōtokufu tetsudō-kyoku, Chōsen tetsudō ronsan 朝鮮鉄道論纂, Keijō, 1930, p. 168). 32. Chōsen ginkō 朝鮮銀行 (Bank of Chōsen), Senman keizai jūnen-shi 鮮満経済十年史 (Economic History of Korea and Manchuria Over the Past Ten Years), Keijō, 1919, p. 59. 33. Hirai Kōichi, “Nihon shokuminchi-ka…”, op. cit., p. 17. 34. From an average demand of 930,000 tonnes between 1918 and 1920. Chōsen Sōtokufu Tetsudō-kyoku, Chōsen tetsudō ronsan, op. cit., p. 201. 35. Bank of Chosen, Economic History of Chosen, op. cit., pp. 180-181. 36. The following figures are taken from the government-general’s annual statistical report (1918-19). 37. Colonial terminology distinguished between colonial commercial exports and imports (ishutsu 移出 and inyū 移入) and external commercial movements (yushutsu 輸出 and yunyū 輸 入). The abolition of this duty was intended to boost rice exports to Japan; see the final part of this article. 38. Government-General of Chosen, Annual Report on Reforms and Progress in Chosen, Keijō, 1922 volume, pp. 59-60. 39. For the exact figures see ibid., pp. 37-39. 40. 7.7 million yen in 1916; 9.9 in 1917. Bank of Chōsen, Economic Outlines of Chosen and Manchuria, Keijō, 1918, p. 11. 41. Korean trade figures are available in Yamamoto Yūzō, Shokuminchi keizai-shi kenkyū 植民地経 済研究 (Research on the Economic History of the Colonies), Nagoya Daigaku Shuppan-kai, 1992, p. 228. 42. For more information about Dai-Ichi Bank in Korea, see Claude Hamon, Shibusawa…, op. cit., pp. 251-55, 258-62 and 276. 43. Ibid., p. 254. 44. Bank of Chosen, Economic History of Chosen, op. cit., p. 48. 45. Ibid., p. 50. 46. Peter Duus, The Abacus and the Sword, op. cit., p. 167. 47. Claude Hamon, Shibusawa…, op. cit., p. 262. 48. Bank of Chosen, Economic History of Chosen, op. cit., p. 55. 49. Ibid., p. 53. See also Government-General of Chosen, Annual Report on Reforms…, op. cit., p. 63. 50. Bank of Chosen, Economic History of Chosen, op. cit., pp. 49, 54-55. 51. Bank of Chosen, Economic Outlines of Chosen and Manchuria, op. cit., pp. 31-32. 52. Chōsen being the official name given to colonial Korea by Japan (in an attempt to deny the existence of “Korea” as a national state—kankoku 韓国—and limit it to its geographical area, which is what chōsen refers to, as in chōsen hantō 朝鮮半島 or the “Korean peninsula”). 53. Bank of Chosen, Economic History of Chosen, op. cit., p. 189. 54. Ibid., p. 70. 55. Ibid., pp. 183-184.

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56. Kim Nak Nyeon (ed.), op. cit., p. 386. 57. Government-general’s annual statistical reports (CSTN), for each year. 58. “On the Stock Exchange, people have been snapping up shares in companies displaying the word ‘Korea’ without even finding out their line of business”, Tōkyō Keizai Zasshi 東京経済雑誌 (The Tokyo Economist), no. 302 (13 Dec. 1919), quoted in Kaneko Fumio, “Dai-ichi taisen-go no tai-shokuminchi tōshi” 第一大戦後の対植民地投資 (Post-World War I Investments in Colonies), Shakai-Keizai Shigaku, vol. 51, no. 6 (March 1986), reprinted in Okabe Makio 岡部牧夫 (ed.), Teikokushugi to shokuminchi 帝国主義と植民地 (Imperialism and Colonies), Tōkyō-dō Shuppan 東 京堂出版, 2001, p. 138. 59. Three quarters of the loans granted by Korean banks between 1910 and 1920 were destined for the trade sector. Kimura Mitsuhiko, “Financial Aspects of Korea's Economic Growth under Japanese Rule”, Modern Asian Studies, vol. 20, no 4, 1986, pp. 793-820, p. 808. 60. For the population in 1920 I chose a figure of 18 million inhabitants, the average of Cha Myung Soo’s estimation (18.6 million inhabitants) and the amount given in official statistics (17.3 million inhabitants). 61. This hypothesis could be confirmed or disproved through a microanalytical examination of these businesses. 62. All of the data in this paragraph were calculated using figures available in the government- general’s annual statistical reports (CSTN) for each year (1911-1919). 63. Government-General of Chosen, Annual Report on Reforms…, op. cit., in particular pp. 118-123. 64. “Chōsen no minkan-kōjō” 朝鮮の民間工場 (Private Factories in Korea), Keijō Nippō 京城日報, 9 February 1921. 65. “Chōsen no kōgyō” 朝鮮の工業 (Korean Industry), Fukuoka Nichinichi Shinbun 福岡日日新聞, 10 March 1918. 66. The koku 石 is a unit of volume equal to 180.39 litres, generally accepted in Japan to weigh 140kg. However, according to an Indochinese expert, one koku of husked rice weighed approximately 108kg while one koku of unhusked rice weighed 130kg. See “L’importation et l’exportation du riz au Japon en 1912” (The Importing and Exporting of Rice in Japan in 1912), BEI, vol. 16, no. 101, March-April 1913, p. 255. I prefer to avoid the kilogram conversion in order to retain the principle that one koku of rice corresponds to the quantity needed to feed one adult for a year (at a rate of half a litre of uncooked rice per day). 67. “La crise du riz au Japon” (The Rice Crisis in Japan), Bulletin économique de l’Indochine (hereafter abbreviated as BEI), vol. 15, no. 99, Nov.-Dec. 1912, pp. 907-908. 68. Idem. 69. Hayami Yujirō, V. W. Ruttan, “Korean Rice, Taiwan Rice, and Japanese Agricultural Stagnation: An Economic Consequence of Colonialism”, The Quarterly Journal of Economics, vol. 84, no 4, Nov. 1970, pp. 562-589, p. 566. 70. “Importations et exportations de riz au Japon en 1908, 1909 et 1910” (Imports and Exports of Rice in Japan in 1908, 1909 and 1910), BEI, no. 91, July-August 1911, vol. 14, p. 91. 71. Ōkura-shō Sozei-kyoku 大蔵省租税局 (Tax Bureau at the Ministry of Finance), Gaikoku bōeki gairan 外国貿易外覧 (General Overview of Foreign Trade) for the year 1911, p. 436. 72. See the following articles published in the BEI: “La question du riz au Japon” (The Rice Issue in Japan), vol. 13, no. 87, Nov.-Dec. 1910; “La récolte du riz au Japon” (Japan’s Rice Harvest), vol. 14, no. 88, Jan.-Feb. 1911, p. 96; “Importations et exportations de riz au Japon en 1908, 1909 et 1910” (Imports and Exports of Rice in Japan in 1908, 1909 and 1910), op. cit., p. 758; “La crise du riz au Japon” (The Rice Crisis in Japan), op. cit., pp. 907-910; “L’importation et l’exportation du riz au Japon en 1912” (Japan’s Rice Imports and Exports in 1912), vol. 16, no. 101, Mar-April 1913, pp. 254-255; “Le riz et la question du riz au Japon” (Rice and the Rice Issue in Japan), vol. 16,

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no. 102, May-June 1913, pp. 271-278; “Le riz au Japon” (Rice in Japan), vol. 17, no. 108, June- July 1914, pp. 302-303. 73. “La crise du riz au Japon” (The Rice Crisis in Japan), BEI, op. cit., pp. 907-908. 74. Nōshōmu-shō Nōmu-kyoku 農商務省農務局 (Agriculture Bureau at the Ministry of Agriculture and Commerce), Kome no tōkei tekiyō 米ノ統計摘要 (A Practical Summary of Rice Statistics), vol. 2, 1920. For a more textual account, see Liu Zhaoyan 劉照彦, Nihon teikokushugi-ka no taiwan 日本帝国主義下の台湾 (Taiwan Under Japanese Imperialism), Tōkyō Daigaku Shuppan, 1975, p. 77. 75. Kazama Hideto 風間秀人, “Shokuminchi jinushi to nōgyō” 植民地地主制と農業 (Landowners and Agriculture in the Colonies), in Asada Kyōji 浅田喬二 (ed.), Kindai Nihon no kidō 近代日本の軌 道 (The Trajectory of Modern Japan), Tokyo, Yamakawa Shuppan 山川出版, 1994, vol. 10, pp. 108-130, p. 120. 76. Liu Zhaoyan, Nihon teikokushugi-ka no taiwan, op. cit., p. 87. 77. “Le riz et la question du riz au Japon”, BEI, op. cit., p. 272. 78. More than one million koku of Indochinese rice imported in 1913, but fifty percent less in 1914, then less than one hundred thousand. 79. Chōsen Sotokufu Nōrinkyoku 朝鮮総督府農林局 (Agriculture, Wood and Forests Bureau of the Government-General of Korea), Chōsen no nōgyō 朝鮮の農業 (Korean Agriculture), volume for the year 1941, pp. 189-191. 80. Government-General of Chosen, Annual Report on Reforms…, op. cit., p. 103. 81. Between the periods 1912-1916 and 1917-1921, the share of the growth in Korean rice production exported was almost two thirds (63 %) but was less than a fifth (17 %) of the growth in grain production. Korean grain imports tripled in volume while rice imports dropped by an equivalent amount, a sign that Korean consumption was falling back on the cheapest foodstuffs, those that were the least sought-after by the metropole. These figures are available in Chōsen Sotokufu Nōrinkyoku, Chōsen no nōgyō…, op. cit., pp. 189-191. 82. Yahata 八幡. The often-seen transcription “Yawata” is an erroneous reading of this city name. 83. Kitakyūshū shishi 北九州市史 (History of the City of Kitakyūshū), “Sangyō keizai” 産業経済I (Economy and Industry I), Kitakyūshū-shi, 1991, p. 332. 84. SEE “CHŌSEN NO TEKKŌ” 朝鮮の鉄鉱 (KOREAN IRON ORE), ŌSAKA MAINICHI SHINBUN, 3 FEBRUARY 1917. ASŌ TARŌ 麻生太郎, WHO SERVED AS JAPANESE PRIME MINISTER FROM SEPTEMBER 2008 TO SEPTEMBER 2009, IS DESCENDED FROM THE ASŌ FAMILY IN QUESTION. 85. FROM THE INDUSTRIAL BANK OF JAPAN ( NIHON KŌGYŌ GINKŌ 日本興行銀行), THE INTEREST BEING PAID THROUGH THE EXPORTATION OF IRON ORE TO JAPAN (A MINIMUM OF 70,000 TONNES PER YEAR BEGINNING IN 1904, OVER 15 YEARS; CHANGED IN 1913 TO 10.5 MILLION TONNES AND 8 MILLION TONNES OF CAST IRON OVER FORTY YEARS). “SEITETSUJO SHISATSU” 製鉄所視察 (A VISIT TO THE STEELWORKS [OF YAHATA]), CHŪGAI SHŌGYŌ SHINPŌ 中外商業新報 (TRADE NEWS FROM HOME AND ABROAD), SERIES OF 10 ARTICLES, 26 JULY-4 AUGUST 1915. 86. IRON ORE WAS EXTRACTED FROM A DEPOSIT DISCOVERED BY A JAPANESE NATIONAL WHO HAD OBTAINED THE CONCESSION FOR IT AND SOLD THE ENTIRE OUTPUT TO THE YAHATA STEELWORKS. NAGURA BUNJI 奈倉文二, NIHON TEKKŌ-GYŌ TO NANYŌ TEKKŌ SHIGEN 日本鉄鋼業と「南洋」鉄鋼資源 (THE JAPANESE STEEL INDUSTRY AND IRON- PRODUCING RESOURCES OF THE SOUTH SEAS), TOKYO, KOKUSAI RENGŌ DAIGAKU (UNITED NATIONS UNIVERSITY), 1981 (NINGEN TO SHAKAI NO PUROGURAMU KENKYŪ HŌKOKU-SHO 33 – PROJECT ON JAPANESE EXPERIENCE IN THE TRANSFER, TRANSFORMATION AND DEVELOPMENT OF TECHNOLOGY: RESEARCH REPORT NO. 33).

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87. “Kōzai kyōkyū-mondai, tetsu no kikin” 鋼材供給問題 鉄の饑饉 (The Iron Famine: the Iron Supply Problem), Jiji Shinpō 時事新報, series of three articles, 17-19 July 1916. 88. An average import price of 99 yen per tonne over the period 1912-15, 174 yen in 1916, and 281 yen in 1917. Shōkō-shō Kōzan-kyoku, Seitetsu-gyō sankō shiryō, op. cit. 89. On the embargo, see Jeffrey J. Safford, “Experiment in Containment: The United States Steel Embargo and Japan, 1917-1918”, The Pacific Historical Review, vol. 39, no. 4, Nov. 1970, pp. 439-451. 90. 377 yen per tonne in 1918. Shōkō-shō Kōzan-kyoku, Seitetsu-gyō sankō shiryō, op. cit. 91. “Seitetsu-netsu no bokkō” 製鉄熱の勃興 (The Boom in Steel–making Fever), Ōsaka Mainichi Shinbun, 24 August 1918. The subject was also mentioned in the Indochinese press: “Steel Market Fluctuations in Japan in 1917”, BEI, vol. 21, no. 131, July-August 1918, p. 725. 92. Mitsubishi Shōji Kabushiki-gaisha 三菱商事株式会社 (The Mitsubishi Corporation), Mitsubishi shōjisha-shi 三菱商事社史 (History of the Mitsubishi Corporation), book 1, 1986, p. 103; and ibid., “Shiryō” 資料volume (Documents), 1987, p. 186 and p. 188. 93. Ibid., pp. 103 and 147. 94. Government-General of Chosen, Annual Report on Reforms…, op. cit., p. 120. 95. “Seitetsu jigyō no botsuraku” 製鉄事業の没落 (The Collapse of the Steel Industry), Ōsaka Asahi Shinbun, 23 November 1919. 96. “There is no doubt that with the entrepreneurial fever, [speculation] came to exhaust business in the metropole and eventually reached the colonies”, Tōkyō Keizai Zasshi, no. 302 (13 December 1919), quoted in Kaneko Fumio, “Dai-ichi-taisen-go…”, op. cit., p. 138. 97. This was revealed in “Tavern Stories” (shumaku dansō 酒幕談叢; “shumaku”, chumak in Korean being drinking establishments for the masses in Korea), compiled in secret by the Japanese police (kempeitai 憲兵隊). Matsuda Toshihiko, Governance and Policing of Colonial Korea: 1904-1919, Nichibunken 日文研, 2011, pp. 132-149. 98. “[Senman] kakuchi no bukka” [鮮満]各地の物価 (The Cost of Living [in Korea and Manchuria]), Keijō Nippō, 28 February 1919 (last in a series of five articles published beginning on 15 February). 99. See Pierre François Souyri, “Critiquer le colonialisme dans le Japon d’avant 1945” (Criticising Colonialism in Pre-1945 Japan), Cipango, no.18, 2011, pp. 189-236. 100. Title of his article published in the Tōyō Keizai Shinpō 東洋経済新報 (Oriental Economic News), 30 July 1921, cited in Narita Ryūichi 成田龍一, Taishō demokurashî 大正デモクラシー (The Taishō Democracy), Tokyo, Iwanami Shoten, 2008, p. 162.

ABSTRACTS

For this first study in French language on the economics of the Japanese colonial empire, we have chosen to focus on the Korean case, from the establishment of the first railways on the peninsula in 1900 until the crisis of the colonial system in 1919 (March 1st Movement). The colonization of Korean was promising: an extensive land with a large population located very close to Japan. But rapidly, it was hampered by several grave difficulties. The colonial main infrastructures, as railways and banking system, suffered from, alternatively, the lack of investment and the “Manchuria policy” promoted by Terauchi Masatake. The industrial production remained marginal, despite its vigorous growth. This sector has been stimulated greatly by a stock- exchange fever starting in 1916, but suddenly collapsed as the bubble burst in 1919. The exterior

Cipango - French Journal of Japanese Studies, 4 | 2015 The Beginnings of Japan’s Economic Hold over Colonial Korea, 1900-1919 35

trade of Korea (including with Japan) continued to increase its deficit. Japan used the colony just to obtain rice an iron ore, but the lack of investments in these sectors did not enable Korean production to compete successfully with other Asian producers (French Indochina, Taiwan, China etc.). This economic failure made the Japanese domination particularly unbearable to the Korean people: the bursting of the economic bubble in Japan just after the end of the War in Europe meant the end of any hope for a better life in the colony. The fast and high inflation, coupled with the absence of any economic policy, contributed greatly to the sparkling of the March First Movement.

Pour cette première étude en français de l’économie coloniale japonaise, nous avons choisi de l’analyser à partir du cas de la Corée depuis l’aménagement des premiers rails japonais sur place en 1900 jusqu’à l’éclatement de la crise globale du joug colonial au lendemain de la Première Guerre mondiale (1919). La colonisation économique de la Corée promettait un développement important sur une terre étendue, peuplée et proche de la métropole. Elle a pourtant rapidement buté sur un certain nombre d’obstacles. Les infrastructures coloniales fondamentales, les finances et le chemin de fer, ont souffert tantôt d’un manque d’investissements, tantôt de la politique mandchourienne promue par Terauchi Masatake. La production industrielle et manufacturière resta marginale, malgré son développement relativement précoce et important : stimulé par une fièvre boursière à partir de 1916, le secteur s’effondra avec l’éclatement de la bulle en 1919. Commercialement, la colonie fut déficitaire en permanence et de manière exponentielle. La métropole n’y voyait qu’une source d’approvisionnements en riz et minerai de fer, alors même que la production coréenne ne pouvait concurrencer l’offre environnante (Indochine et Taiwan pour le riz, Chine pour le fer)… du fait du manque d’investissements. Cette faiblesse de la métropole en Corée rendit la domination japonaise particulièrement insupportable : l’effondrement de la bulle métropolitaine suivant la fin de la guerre mondiale fut aussi celui de tout espoir socio-économique en Corée. L’inflation galopante et l’absence de véritable politique de développement favorisèrent et précipitèrent l’avènement du Mouvement du 1er Mars 1919.

INDEX

Keywords: Korea, history, colony, economy, industry, colnial policy Subjects: Corée, histoire, colonie, économie, industrie, politique coloniale Chronological index: Meiji Period, Taishō Period

AUTHOR

ALEXANDRE ROY CEJ-INALCO / Toulouse-Le-Mirail University

Cipango - French Journal of Japanese Studies, 4 | 2015