Dual Pathways in the Formation of the Japanese Empire’s Colonial Monetary System in the Early Twentieth Century — Transfer in Taiwan and Transformation in Korea —

This study provides a comparative analysis of the colonial monetary systems established by the Japanese Empire in Taiwan and Korea during the early twentieth century. Although both the Bank of Taiwan and the Bank of Joseon were institutionally modeled after the Bank of Japan, their note-issuing systems diverged fundamentally. While Bank of Taiwan notes were issued on a gold-backed basis, Bank of Joseon notes relied primarily on Bank of Japan notes as reserves. This article conceptualizes these divergent trajectories as two distinct pathways: “transfer” in Taiwan and “transformation” in Korea. In Taiwan, the establishment of the Bank of Taiwan exemplified the direct transfer of Japan’s gold standard to a colonial context. Following Japan’s adoption of the gold standard in 1897, the bank transitioned from an initial silver standard to a gold standard in 1904 via a colonial ordinance(律令, ryōrei). By contrast, the Bank of Joseon followed a transformed pathway, inheriting the unconventional practices of the First Bank of Japan(Dai-Ichi Bank), which had issued banknotes since 1902 backed by Bank of Japan notes rather than specie. This institutional configuration was formalized through the Bank of Korea in 1909 and subsequently integrated into the Bank of Joseon following the 1911 annexation through the Bank of Joseon Act. These dual pathways resulted in structurally distinct outcomes. First, gold produced in Taiwan remained within the colony as part of the Bank of Taiwan’s reserves, whereas gold produced in Korea was absorbed into Japan’s central bank reserves, with the Bank of Joseon substituting Bank of Japan notes as its primary reserve asset. Second, currency issuance constraints differed: the Bank of Taiwan’s issuance was limited by its gold holdings, whereas the Bank of Joseon’s issuance was conditioned by the availability of Bank of Japan notes. Third, these institutional disparities generated contrasting legal controversies within the Imperial Diet. Debates regarding the Bank of Taiwan(1905–1906) focused on the domestic circulation of its notes and the constitutional validity of using a ryōrei(律令) to amend legislation(法律, hōritsu) enacted by the Imperial Diet, which members decried as an infringement on legislative authority. Conversely, the 1911 debates over the Bank of Joseon centered on the allocation of supervisory power, where the Diet rejected gubernatorial autonomy(seirei system; 制令) in favor of central government oversight. Ultimately, while their manifestations differed, both controversies reflected the indeterminate legal relationship between the metropole and its colonies. By tracing the legislative evolution of the Bank of Taiwan and Bank of Joseon Acts, this study demonstrates that Japanese colonial monetary policy functioned through a dual logic: integrating colonial economies into the imperial financial sphere while institutionally insulating the Japanese metropole from colonial economic instability.