Since the opening a port in 1876, Japan had used every means to circulate its own money legally in Korea. In 1902, the Daiichi Bank, a commercial bank in Japan, issued bank notes and circulated them compulsorily, in spite of the violent rejection move...
Since the opening a port in 1876, Japan had used every means to circulate its own money legally in Korea. In 1902, the Daiichi Bank, a commercial bank in Japan, issued bank notes and circulated them compulsorily, in spite of the violent rejection movement of all Korean people.
In 1905 the monetary reform was carried into effect in Korea, under the politicael and military pressure of Japan. Then the exchang rate of old money for new one was determined <2:1> and the differencial exchange was adopted in nickel coins. As a result, Korean people were deprived of their monetary assets about 2/3. What was worse, some of the traditional financial mechanism and means of credit were abolished all at once.
By the natural outcome of what had taken place, a tremendous financial panic was occured in Korean society, and it came to the fore agan in 1909. Moreover Korean peoples were struck by the fact that the bank notes of Daiichi Bank were authorized to be legal tender in Korea.
In 1910, Korea became a colony of Japan. Since then the finance of Korea was absolutey subordinated to Japanese government and its central bank, to say nothing of Korean economy.
It can be pointed out that the followings are colonial characters of Korean money and finance in 1910's.
First, Whan, the unit of Korean money, was changed into Yen.
Second, Choseon Bank, colonial central bank of Korea, was absolutely subordinated to Japanese government and the central bank of Japan, Nihon Bank.
Third, bank notes of Choseon Bank were subordinated to those of Nihon Bank. Such a phenomenon was very elear from the fact that bank notes of Nihon Bank were greatly involved in the specie reserve of bank notes of Choseon Bank.
Fourth, Choseon Bank and Siksan Bank managed the commericial banking business as well as their own special business.
Fifth, Japanese took possession of overwhelming large ratio of deposits and loans in all the financial institutions in Korea.
Sixth, the level of interest rate in Korea was considerably higher than that of Japan.
There is no doubt that all these feautures of Korean money and finance in 1910's were, of course, brought about by Japanese colonial policy.