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Bank of Chōsen

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Bank of Chōsen
Head office in Seoul
Japanese name
Kanji朝鮮銀行
Transcriptions
RomanizationChōsen Ginkō
Korean name
Hangul조선은행
Hanja朝鮮銀行
Transcriptions
Revised RomanizationJoseon eunhaeng
McCune–ReischauerChosŏn ŭnhaeng

The Bank of Chōsen or Bank of Joseon (Japanese: 朝鮮銀行, Korean: 조선은행), known in 1909-1911 as the Bank of Korea (Japanese: 韓國銀行, romanized: Kankoku Ginkō, Korean: 한국은행, romanized: Hanguk Eunhaeng), was a colonial bank that served as bank of issue for Korea under Japanese rule as well as being a commercial bank, with significant operations beyond Korea. It issued the Korean yen from 1910 to 1945. Its seat was initially established in Seoul (known at the time as Hanseong, then Keijō), relocated to Tokyo in May 1924, and subsequently relocated back to Keijō.[1]: 7 

Following the division of Korea in 1945, the Bank of Chōsen was succeeded in North Korea by the Central Bank of the DPRK. In South Korea, it continued its activity and issued the South Korean won until 1950, when it was replaced by the Bank of Korea.

Establishment

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The bank was established by the Governor-General of Chōsen in July 1909 as the Kankoku Ginkō, taking the place of the Korean branch of Dai-Ichi Bank which had held a central role in Korea's financial system since 1878. The Bank of Korea assumed responsibility for the banknotes issued by the Dai-Ichi Bank that were still in circulation (which totalled 12,000,000 yen), the Dai-Ichi Bank would further transfer to the Bank of Korea the 4,000,000 yen in specie reserves which backed its banknotes. The balance was converted by the Bank of Korea to a loan of 20 years without interest to the Dai-Ichi Bank.[2]

Japanese colonial era

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After the annexation of Korean Empire by Japan in 1910, the bank was reorganized and its name was changed to reflect the official name for Korea.

The bank remained a privately held corporation with stock owned by a number of Japanese banks and companies; however, its board was appointed by the Governor-General of Korea.

The bank was responsible for issuing currency in Korea, regulated domestic prices, and serviced international trade with branches in Manchukuo, and major ports in China and in Japan, as well as in London and New York City.

It played a role as a colonial issuing bank that issued banknotes, which are legal currency exchanged one-to-one with Japanese banknotes.

Therefore, the bank held more than a third of its issuance amount in reserves consisting of Japanese bank notes and gold and silver now. However, the total issuance of banknotes increased from 25 million won at the end of 1911 to 3.574 billion won in March 1945 by adjusting the amount of other issuance according to the bill issuance limit designated by Japan.

In addition to handling foreign exchange transactions between Japan, Korea, Manchuria, and China, it played a role as a commercial and trade bank by taking charge of deposits and loans in the region. In Korea alone, 9 million won in 1911 and 755 million won in 1944 were loaned, while commercial loans accounted for 60-70%. Also, the amount of deposits increased from 6 million won in 1911 to 583 million won in 1944. However, unlike the Bank of Japan, it was in a competitive position in loans and deposits with other banks.

It expanded its business as a general bank in Japan, Manchuria and China to promote foreign investment of Japanese capital. In other words, from mid-1910, while expanding loans in Japan and Manchuria, they participated in Japanese loans to China and allocated more than 50% of all loans to the region. At the end of 1924, the loan amount reached 80 million won in Joseon, 1.75 billion won in Japan, and 1.25 billion won in Manchuria.

By 1929, the Bank of Chōsen had 19 offices outside of Japan and its colonies, the second-largest such network among all Japanese banks, surpassed only by the Yokohama Specie Bank.[3]: 3 

Postwar development and transition to the Bank of Korea

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Despite the disruption associated with the surrender of Japan and division of Korea in 1945, the Bank of Chōsen did not itself undergo significant change in the late 1940s.[1]: 12 

See also

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References

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  1. ^ a b Howard Kahm (2012), Colonial Finance: Daiichi Bank and the Bank of Chosen in Late Nineteenth and Early Twentieth Century Korea, Japan, and Manchuria, University of California Los Angeles
  2. ^ Joseph E. Boling, NLG (1988). "Korea - A Numismatic Survey. (This article has been transposed to this format from a July 1988 supplement issue included with Coin World. Its original title was: Beyond Cash - A Numismatic Survey of Korea.)" (PDF). Moneta-Coins.com. Retrieved 3 October 2019.
  3. ^ Makoto Kasuya (January 2009), The Activities of a Japanese Bank in the Interwar Financial Centers: A Case of the Yokohama Specie Bank (PDF), Center for Advanced Research in Finance
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