July 16, 2015
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2015 July 15 - 21 [POLITICS]
How did prewar Japan’s war expenditures proceed? |
According to the book, “direct war expenditures” from the 1880’s until the end of World War II accounted for 30% up to 90% of the annual national budget.
Sino-Japanese War
The direct war expenditures included the Army and Navy Ministries’ spending, extraordinary military expenses, and military conscription costs. These expenditures did not include war-related funds hidden in other categories of the general account of the national budget.
The book illustrates three peaks in the curve in terms of the history of military spending: the Sino-Japanese War (1894-1895), the Russo-Japanese War (1904-1905), and the Pacific War (1941-1945).
Military spending accounted for 69.2% of the state budget at the time of the Sino-Japanese War and jumped to 82.3% during the Russo-Japanese War. At the end of the Pacific War, it amounted to 85.5%.
The war between the Empire of Japan and the Qing Dynasty of China actually triggered the growth in budgetary allocations for military spending. Then, the government began spending an enormous sum of money as “war expenditures” directly associated with wars, not as just general military expenditures, drawing from the Special Account for Emergency War Expenditures. From the outbreak of the Sino-Japanese War until the end of the Pacific War, the government of the Empire of Japan continued to increase the budget for wars every single year without interruption.
The total amount of war expenditures was 233.4 million yen in the Sino-Japanese War and 1.83 billion yen in the Russo-Japanese War.
As the Pacific War expanded in scope, the expenditure soared by more than 3,000 times. The total expense stood at 755.9 billion yen during the period between 1937 and 1945. With battle zones proliferating and the war situation getting worse, the Special Account for Emergency War Expenditures grew at an accelerated pace. The cost for weaponry rose rapidly as mechanized and large-scale weapons came into common use in battlefields while military pay was drastically slashed. As a result, more than 80% of the military expenditures were used to purchase arms and munitions.
70% of war expenditures went to large corporations
At that time, weapons supply was mainly produced by private companies and supplemented by military-run factories. The book estimates that at least 70% of the military expenditures were spent on purchases from corporations.
The government used a Bank of Japan account to make large-scale payments to munitions companies. According to transaction records of the BOJ, Mitsubishi Heavy Industries, Hitachi and other machinery manufacturers received around 60% of the military procurement orders, and trading and transportation companies like Mitsui and Mitsubishi took the rest. The book notes that member companies of major industrial conglomerates (zaibatsu) obtained a huge amount of war-related government orders.
The late Ouchi Hyoe, an editor of the book, pointed out that during the Asia-Pacific War, as the government was unable to cover the military spending by tax revenue, it issued an enormous amount of national bonds. He also pointed out that at the final stage of the war, the government imposed heavy financial burdens on its occupied territories and colonies.
Ouchi said, “The expansion of the military budget may only postpone the solving of economic difficulties. It will never solve the fundamental problems. Instead, it would make it more difficult to solve these problems.” He hinted that military buildup policy paves the way for war which will inevitably lead to more military-related expenses.
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