Let`s enjoy English eleventh

【The bubble was born and burst】

〈From going up the price on land to going up the price on stock〉

...and caused a big fad on luxury items and traveling abroad among the Japanese, for if comparing them with the price on land and stock in Japan, it looked like the expense on the luxury items in foreign countries and traveling abroad were by far lower.

〈A phenomenon on CIMA happened〉

Thus the bubble swelled.

Nissan which is an automobile company started to sell CIMA January in 1988, though it was a high quality and its price was five million yen, it was sold like hotcakes. Japanese economy...

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【The bubble was born and burst】

〈A phenomenon on CIMA happened〉

Japan economy newspaper sent out questionnaires to businessmen in 1989, which car did they want to buy? then CIMA was in the first rank.

Why did the high priced car sold like that? There were varied disputes on it.

The price on land was so high that lots of people gave up buying their own houses, but they prepared for money to buy the house, so they used the money for buying CIMA. Some people thought like that.

As the price on land and on stock went up rapidly, people who were in a mood being rich increased so much that..

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【The bubble was born and burst】

〈A phenomenon on CIMA happened〉

...people who were in a mood being rich increased so much that they bought that high quality car. Other people analyzed like that.

Membership on a golf course in Koganei country club which was a long established golf course on suburb in Tokyo reached no less than three hundred thirty million yen.

As watching the membership on the golf course was sold at high price, salaried workers who borrowed money and bought the membership for 財テク increased.

When selling and buying paintings, lots of money were used for it. An art...

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【The bubble was born and burst】

〈A phenomenon on CIMA happened〉

An art dealer said on the situation then like the next.

At first, I bought a painting at a gallery in Ginza. Its price was millions yen. When walking around there, we came across other gallery at once, then we sold the painting we bought a short while ago. Then we could make money about three million yen in a few minutes.

When selling and buying paintings in Japan, its price is always unclear. As lots of money was used for paintings, every time selling and buying, its price went up. Aiming that the price went up, a large ...

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【The bubble was born and burst】

〈A phenomenon on CIMA happened〉

As aiming that the price on paintings went up, a large amount of money was used again.

Ryoei Saito who was an honorary president of company on paper manufacturing won both of works painted by Gogh and Renoir in an auction overseas. Their price was over ten billion yen. It was extremely unusual deed.

He said after his death he wanted both of paintings to burn with his body, and the ones who concerned art in America and Europe criticized him he appropriated the treasure which was in common for humankind.

Both of the Ancient...

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【The bubble was born and burst】

〈A phenomenon on CIMA happened〉

Both the Ancient Roman Empire and British Empire collected rich from the world when its economic power was in peak. The bubble in Japan resembles it, but it doesn`t always mean that money was used so as to protect art.

Downtowns were alive at night so much that we couldn`t catch an empty taxi easily in Tokyo at night. A store which was open until midnight was born one after another, a bus ran in midnight, the time for the last train went to suburb was postponed. The whole Japan made merry owing to the bubble then.

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【The bubble was born and burst】

〈No one could raise the interest rate in order to stop the bubble〉

The Bank of Japan started to consider to raise the official discount rate. If raising the official discount rate, a bank rate would rise when banks lent money to companies, so movement of borrowing money from bank in order to buy land and stock cool down. The Bank of Japan thought like that.

However stock prices dropped sharply in America then. Average stock price plunged to the lowest price in the past at the stock market in New York October in 1987. It was called a black Monday.

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【The bubble was born and burst】

〈No one could raise the interest rate so as to stop the bubble〉

Why did the stock price drop sharply in America?

It is said that investors were worried about in America like the next.

Both of the Japanese and the German were excited because of the good times, but they wouldn`t be able to stand it any more, for the central banks which were afraid of overheated economy would raise the bank rate.

Then interest rate became low relatively in America, so American investors would invest their money overseas, so they would withdraw their money from the stock...

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【The bubble was born and burst】

〈No one could raise the official discount rate in order to stop the bubble〉

...so they would withdraw their money from the stock market in America, as a result the stock price dropped.

All of them thought the stock price would drop, so they tried to sell their stock before the stock price fell, but it caused to drop the stock price actually.

Though Japan waited for a chance to raise the official discount rate, but lost it thanks to the Black Monday. If raising the official discount rate, and raising the interest rate in Japan, outflow of money from...

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【The bubble was born and burst】

〈No one could raise the official discount rate so as to stop the bubble〉

...and outflow of money from America went ahead then, the stock price dropped more and more in America, and it would have a serious influence over American economy, the Bank of Japan judged like that.

We can express the Bank of Japan thought over America in international way, or it hesitated to raise the official discount rate for America.

Without any hesitation, Germany raised the bank rate, so the bubble didn`t break out in Germany.

In short it was May in 1989 when the Bank of...

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【The bubble was born and burst】

〈No one could raise the interest rate in order to stop the bubble〉

In short it was May in 1989 when the Bank of Japan raised the interest rate finally. Extremely low interest rate of 2.5% went on two years and three months. No one could prevent the bubble from swelling until then.

Consideration to America made the bubble worst rapidly in Japan.

〈Banks were hot on looking for the ones banks lent money〉

It is pointed out a structural factor caused the price on land to go up and the bubble was born.

When Japanese economy grew rapidly, big companies ...

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【The bubble was born and burst】

〈Banks were hot on looking for the ones who banks lent money〉

When Japanese economy grew rapidly, big companies borrowed money from banks, expanded their equipments, and making a profit, returning the money to banks.

However in 1980s, without borrowing money from banks, top-rated companies could won a large amount fund as long as they issued their stock in the stock market.

If being able to get fund by issuing the stock, the companies have to pay some money for a dividend every year, but they don`t have to return the money. It`s a profitable way of...

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【The bubble was born and burst】

〈Banks were hot on looking for the ones who banks lent money〉

It was a profitable way for getting fund for the companies. Besides, the top-rated companies issued their corporate bond and could get their fund. The corporate bond is a debt on a company.

A company issued the bond and gathered fund. When the bond falls mature, the company returned the one who bought the bond the money with an interest. If adopting the way, its interest is less than that of borrowing money from banks.

When gathering money, it doesn`t have to consult with banks about money.

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【The bubble was born and burst】

〈Banks were hot on looking for the ones who banks lent money〉

Banks were losing good ones who banks lent money. If being unable to lend money big companies as they did until then, they had to break a new ground. They had to look for small and medium sized companies with which they didn`t keep company until then.

However as the ones who were in charge of financing in big banks found it hard to judge whether or not each of small and middle sized company grew or developed.

As long as they owned a land, financing the money with the land as collateral. The way..

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【The bubble was born and burst】

〈Banks were hot on looking for the ones who banks lent money〉

The way was adopted.

The ones who were in charge of finance at a branch office in a big bank on suburb were urged to look for an empty land. If finding the empty land, it appealed its owner to build an apartment there.

We are going to finance money with this land as collateral, I recommend you build an apartment with the money.

The banker said like that.

Banks started a job like a development on real estate in order to look for the ones they lent money. A banker who had some doubt on the way...

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【The bubble was born and burst】

〈Banks were hot on looking for the ones who banks lent money〉

A banker who had a doubt on the way or the one who protested to the way were demoted. No one could put on the brakes.

〈A land shark 地上げ屋 was active behind the scenes〉

As to the land shark, it was expressed in English like the next.

A speculator who uses strong arm methods to buy up small parcels of land, driving out tenant, and then resells the land in a large block to a developer, usually at a tremendous profit.

The land shark was active behind the scene in a place where houses were crowded...

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【The bubble was born and burst】

〈A land shark was active behind the scene〉

A land shark was active behind the scene in a place where houses were crowded in the center of a city. It was a necessary job to develop a land again, but when being in bubble it was overboard, and a gangster organization often intervened in the development.

The gangster organization sometimes intimidated the owner of a land and pressed it to sell the land. An outbreak of fire of which cause was unclear happened one after another. It happened sometimes in some places.

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【The bubble was born and burst】

〈A land shark was active behind the scenes〉

The land was bought up by the land shark one after another and a place bought up became a vacant lot in an instant, and it was as if the vacant lot had been scattered in the residential lot, for the land shark intended to pressure the rest owners psychologically by the situation.

A community in the residential area existed for a long time started to collapse.

After selling the land we got some money, and if buying other land with the money, a tax is exempted. It`s an exemption law when buying other land. Some...

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【The bubble was born and burst】

〈A land shark was active behind the scenes〉

Some people took advantage of the exemption law and sold land in the center of city and got some money and bought a new house on suburb. They increased, so the price on land went up in the center of city alone, but it spread out suburb around the city.

〈A step against the price on land started〉

An ordinary salaried worker`s dream for having its own house disappeared because the price on land went up. Average price on a condominium in a development project when starting to be sold reached about nine times as high...

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【The bubble was born and burst】

〈A step against the price on land started〉

Average price on a condominium in the development project when starting to be sold in Tokyo reached about nine times as high as annual income on a salaried worker, so criticism was heightened against the step on the price for the land by the government.

The amount of money which banks lent the ones who concerned real estate increased violently until then, but the Ministry of Finance requested banks to stop it, saying to stop lending money real estate any more March in 1990.

Moreover the Ministry introduced a new...

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【The bubble was born and burst】

〈A step against price on the land started〉

In addition, a new taxation of its rate 0.3%, the tax on the price on land was introduced from January in 1992, and the fixed property tax from in the past was also raised, as a result, if having a large land, it was forced to pay a large amount of tax.

The Bank of Japan decided to do away with the bubble as well, so it started to raise the official discount rate. It made up its mind and started to raise the bank rate five times only three months and a year from May 1989.

The official discount rate rose from 2.5%...

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【The bubble was born and burst】

〈A step on the price on land started〉

The official discount rate was raised rapidly from 2.5% to 3.25%, to 3.75%, to 4.25%, to 5.25%, and to 6%. Making the official discount rate raise made the whole bank account in Japan, so no one could borrow money from banks easily.

Not only the ones who concerned real estate but ordinary companies were hard to borrow money from banks, so the Bank of Japan tried to aim at letting overheat on the whole business condition calm down.

『Column, Onihe in Heise』

Yasushi Mieno who used to be a president in the Bank of Japan...

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【The bubble was born and burst】

〈Column, Onihe in Heise〉

Yasushi Mieno who used to be a president of the Bank of Japan was called Onihe in Heise from Makoto Sataka who was a critic. Onihe is a hero on a novel in Edo era, Heizo Hasegawa.

He kept atrocious fiends like arsonists and robberies under strict control in Edo which was an old capital in Japan in the past, and he was so strict to the atrocious fiends and was feared from them so was called Oni.

Yasushi Mieno was the president in the Bank of Japan who promoted to do away with the bubble was compared with Onihe, but he was pleased...

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【The bubble was born and burst】

『Column,Onihe in Heise』

...and he was pleased with his nickname so much that he overdid on removing the bubble and caused depression. Some people pointed out like that.

〈The bubble burst and vacant lands were left〉

As no one could borrow money from banks so as to buy lands, people and companies who tried to buy lands newly disappeared. If there was no one buy the land, its price would drop. When the price on the land dropped, the ones who lost sold their stocks in order to make up their deficit, and the price on stocks also dropped. The bubble collapsed.

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【The bubble was born and burst】

〈The bubble burst and vacant places were left〉

Vacant places which were on the way by forcing and buying up the land were left here and there in a city, for no one tried to buy the land, but even if no one bought the land, there was a tax on the land.

Land owners were so troubled that lots of them built coin operated parking in the vacant places. They gave up constructing a building for a while, instead constructed a parking area so as to change land where there was the parking area into a vacant lot at once in the future when it would be sold, and got...

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【The bubble was born and burst】

〈The bubble was burst and vacant places were left〉

...and they`ve got income in cash at present, and it was a remain of the bubble.

〈Heaped of bad loans were left〉

The ones who were engaged in real estate who borrowed money with their lands as collateral were at a standstill on their business and went bankrupt one after another, so banks couldn`t return money from them. We call it bad loans.

A bond is a right of returning money from the one who borrowed the money. A situation in which the money they lent was returned smoothly was called a good loan.

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【The bubble was born and burst】

〈Heaped of bad loans were left〉

On the other hand, when being unable to return and having high possibility of being unable to return were called bad loans.

When the bad loans increase, it hits management on banks direct. Banks lend money from depositors and make use of it and get interest, so it`s their profit, their income, but if the money which Banks lent wasn`t returned, and there was no income as interest, banks can`t have enough money which to return to depositors.

Thus increasing of bad loans undermined the ones who managed banks.

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【The bubble was born and burst】

〈Jusen became a big news〉

Jusen which was up to ears in debt December in 1995. How should we deal with Jusen? It was a big political problem then.

Jusen was a special company which lends money on housing for possessing its own home even a salaried worker easily, and it was established one after another in 1970.

As to housing loan, its amount of money was from ten million to twenty million yen originally, so its amount of money was small for banks, though even if it`s a small amount for banks it`s a large amount for ordinary ones like me.

As a result it...

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【The bubble was born and burst】　

〈Jusen became a big problem〉

As a result, it was thought the loan on housing wasn`t a job for banks, so major financial institutions established as subsidiary company, but with the development of Japanese economy, building its own house arose a big fad among salaried workers, so the job on Jusen grew up smoothly.

Moreover as computer system on banks were arranged well, even if the money lent to a single salaried worker was small amount, it didn`t cost so much that major banks started a job on the loan of having house for salaried workers , but the...

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【The bubble was born and burst】

〈Jusen became a big problem〉

...but customers were taken away from Jusen, so Jusen was in difficult, and when being in the time of bubble, it lent money not only for salaried workers but the ones who were engaged in real estate.

When banks were limited to lend money to real estate, the ones who were engaged in the real estate rushed to Jusen. Besides, farming houses sold their lands and got a large amount money, and the money gathered to agricultural cooperative, but there weren`t any experts who could make use of the money efficiently there, so the money...

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【The bubble was born and burst】

〈Jusen became a big problem〉

...so the money was entrusted to Jusen. The money from the agriculture cooperative was made use for the money for buying the land through Jusen, but the bubble burst and the price on land dropped sharply.

As a result the management on companies which were engaged in real estate were at standstill one after another and the money which Jusen lent became bad loans. There used to be eight companies on Jusen, but seven of them went bankrupt and brought up.

『Column,a problem on introducing public fund』

Mass media expressed that...

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【What I`ve thought】

I`ve sometimes had a comment on other thread and talked with a female. The place was limited to two of us, she and me. Some kind people pushed a button for sympathy, but she rejected it. She asked others not to push the button any more, so I`m sorry for the ones who were rejected, for they didn`t pushed the button from ill intentioned, but from a good will.

She used to have a bitter experience here, so she can`t trust anyone easily here except for me. Please forgive her and don`t be displeased with her. I apologize all of them on behalf of her. I`m verry sorry for it.

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【The bubble was born and burst】

『Column, a problem on introduction of public fund』

Mass media expressed it was an introduction of public fund to the loss by Jusen in the beginning.

Then the author was in charge of a news program for children on TV, NHK週間子供ニュース. He expressed like the next.

Jusen lost their money and its deficit would be made up for by our tax, and after that an expression of a problem on using for the nation`s tax was firmly established.

Even if the phrase of introduction of public fund was used, lots of the people didn`t ring a bell, but when expressed our tax...

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【The bubble was born and burst】

『Column, a problem on introduction of public fund』

...but if expressed using nations` tax, lots of the Japanese started to get angry, saying it must not be allowed.

〈Confrontation over the shoulder on Jusen〉

When it was decided that. Jusen was brought up, what should we deal with loss by Jusen? Who should pay the loss?

Banks which established Jusen insisted that financial institution of agricultural cooperative which lent the money to Jusen should pay.

On the other hand, the financial institution of agricultural cooperative asserted that they lent the...

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【The bubble was born and burst】

〈Confrontation over a shoulder on Jusen〉

On the other hand, the financial institution of agricultural cooperative asserted they lent the money to Jusen in confidence, for Jusen`s parent organizations were banks, so the parent organization should pay.

Two of them confronted.

If a financial institution lent some money other, and the other`s management was at a standstill, the financial institution which lent the money in confidence took the responsibility for it, and it was natural for the financial world, but it wasn`t accepted in relation to Jusen then.

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【The bubble was born and burst】

〈Confrontation over a shoulder on Jusen〉

If accepting the responsibility of the one who lent the money on the financial institution of agricultural cooperative, there were some of them which would go bankrupt. If they went bankrupt, it would have serious influence over farm houses after that.

After all with the pressure by the Liberal Democratic Party which backed up the farm house, the shoulder by the financial institution of agricultural cooperative was stayed to a minimum, and the rest of shoulder was on banks of parent organization which established Jusen

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【The bubble was born and burst】

〈Confrontation over a shoulder on Jusen〉

However there was a limit on shoulder by banks. As being unable to shoulder which wasn`t theoretically, both of the financial institution of agricultural cooperative and parental organization of banks insisted like that, so there was burden both of them couldn`t shoulder. Its amount of money six hundred eighty five billion yen.

The deficit was made up by public fund. In short, the nation`s tax was used. It was the first case of using the nation`s tax for things after the bubble.

〈There was a line for withdrawing a...〉

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【The bubble was born and burst】

〈There was a long line for withdrawing a deposit〉

Management on Sanyo of stock brokerage firm went bankrupt November in 1997. Its all amount of debt was about three hundred forty billion yen. Hokkaido colonial bank also collapsed in the same month in the same year, for unreasonable finance on real estate was done in the time of bubble, and it became a large amount of bad loans.

It was revealed gradually, so the colonial bank lost its confidence, and couldn`t finance. A major bank was at standstill due to being unable to finance, and it went bankrupt.

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【The bubble was born and burst】

〈There was a long line for withdrawing a deposit〉

It was unbelievable, but the unbelievable situation broke up then, and after a week at last the management on Yamaichi which was one of four big stock brokerage firms was at standstill, and decided to give up its business voluntarily. Thus the press conference was done by Nozawa president of Yamaichi in the opening chapter.

Besides Tokuyo City bank of which headquarter was Sendai city in Miyagi prefecture collapsed within a month.

The failure of four financial institution continued in a month one after...

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【The bubble was born and burst】

〈There was a long line for withdrawing for a deposit〉

As the failure of four financial institution continued one after another in a month alone, everybody thought a bank in which each of them deposited money was all right? An anxiety like that spread out among the whole Japan.

Depositors who were seized by uneasy feeling like that made a line at a teller`s window of banks, and began to withdraw its deposit. Running on a bank 取付騒ぎ started then.

If there was a long line outside a bank, lots of people would be aware of it, so the people were seized by uneasy...

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【The bubble was born and burst】

〈There was a long line for withdrawing a deposit〉

...each of financial institution thought like that, and guided the depositors into a meeting room in the bank as a manual beforehand, and tried to keep the line within the building of the bank.

Sometimes they distributed numbered tickets to the depositors and asked them to come again in the designated time.

When the movement broke out in the whole Japan automatically, the mass media thought reporting it just out of curiosity, more serious panic was caused, so it was reported in quiet tone, or put off the...

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【The bubble was born and burst】

〈There was a long line for a withdrawing deposit〉

...or the report was put off.

The author said he felt something eerie for financial instability which spread out in the whole Japan. It`s a kind of vague anxiety. He was impatient and thought then, what would happen in Japan in the future?

It reminded him of a financial panic in Showa.

『Column, a struggle by Kohe Nakabo』

When Jusen was broke up, an organization which collected the bad loss as much as possible was established. Its president was Kohe Nakabo and he used to be the president of alliance by...

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【The bubble was born and burst】

『Column, a struggle by Kohe Nakabo』

...and Nakabo used to be a president of alliance by lawyers in Japan. Not only the staff belonged to Jusen, but talented people were sent to the organization from the Ministry of Finance, the Public Prosecutor`s Office, the Bank of Japan, the Regional Taxation Bureau, the Police, and the Ministry of Labor, and they were engaged in collecting the bond.

Nakabo said even if being able to collect a small amount of bond, it would decrease burden from the nation, and took the lead in collecting bond, then confronted against...

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【The bubble was born and burst】

『Column, a struggle by Kohe Nakabo』

Then he confronted against companies which borrowed money but didn`t returned, and working hard to collect the bond, so the nations supported him.

〈The bubble collapsed and it caused a financial panic of Showa in the past〉

Why did it remind the author of financial panic in Showa? It used to happen in the beginning of Showa and financial institutions collapsed one after another then.

In the middle of the First World War, the whole Japan was excited over prosperity. After the war, the government feared the economic...

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【The bubble was born and burst】

〈The bubble burst and it caused financial panic of Showa in the past〉

...and the government feared the economic condition became bad, so raised the interest rate and took a policy of stimulating economic boom then.

As a result, the economic condition was overheated, both of the price on land and stock rose rapidly. It was the bubble in Taisho era in 1919, but the bubble burst in the next year, for the price on stock rose so much that the ones who were cautious for it sold their stock, and it caused a sudden fall on the price of stocks.

The collapse on...

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【The bubble was born and burst】

〈The bubble collapsed and it caused a financial panic in the past〉

The collapse on bubble caused an anxiety among depositors, is it all right on a financial institution in which I`ve deposited money? So depositors ran on a bank, and small and medium sized financial institution collapsed as well in Taisho era.

Financial panic by making an inappropriate remark broke out March in 1927 at last.

A budget committee was held at the House of Representative of Imperial assembly which was equal to National Assembly at present. Then the opposition party asked ...

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【The bubble was born and burst】

〈The bubble collapsed and it caused a financial panic of Showa in the past〉

...and the opposition party asked, whenever a bank was likely to go bankrupt, and the government helped it, a principle on a free competition would be broken soon, wouldn`t it?

Then the Naoharu Kataoka Ministry of Finance answered the government needed to go ahead with rescuing banks.

After that he said Tokyo Watanabe bank failed its management on that day actually.

Tokyo Watanabe bank was different from a small and medium sized bank, it was a kind of central bank, though its...

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【The bubble was born and burst】

〈The bubble collapsed and it caused a financial panic of Showa in the past〉

...though the management of Tokyo Watanabe Bank was worse then, its management didn`t fail then, but the remark by Kataoka triggered the Bank to suspend its business.

Even if without his remarks, the failure on management was a matter of time, but the remark triggered the suspension on the bank, and it caused a large scale of financial panic, so it was called the financial panic by making a slip of the tongue.

After the remark on Kataoka was reported, running on financial...

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【The bubble was born and burst】

〈The bubble collapsed and it caused a financial panic of Showa in the past〉

After the remark on Kataoka was reported, running on financial institutions spread out over the whole Japan, 32 banks were forced to suspend each of business, finally about no less than five hundred banks went bankrupt.

When losing confidence on banks, and running on financial institutions breaks out, even if some banks` economic conditions weren`t so bad, they also would go bankrupt. The history has shown us it.

After seventy years in Japan, its nightmare was about to appear again.

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【The bubble was born and burst】

〈The bubble collapsed and it caused a financial panic of Showa in the past〉

There was a rumor that some banks were on the verge of going bankrupt, and a press conference in which executives on banks denied the rumor were held each place.

Then the Hiroshi Mitsuzuka Ministry of Finance called to the nations under a joint signatures with the president of Bank of Japan, please take into action for yourself in cool manner.

The financial panic was barely avoided then.

『Column, running on a bank』

It means that lots of depositors rush to a financial ...

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