Chapter 146 – Daruma-san (2)

If asked, I must answer.
With that resolve, I take a small breath.

“I want to build an industrial base comparable to that of Britain, France, and Germany, ideally within ten years. Of course, it’s not something we can accomplish on our own.”

“You sound like you could, though. Just in your current plans alone, you’ve got two large integrated steelworks, each with multiple blast furnaces. A chemical complex centered around a major refinery. ‘Complex,’ that’s not a word you hear very often. 

Then a newly built large-scale shipyard with massive dry docks, at least two major automobile factories, a tractor factory, an engine factory, a sheet-metal factory, a lathe factory, a cluster of large parts factories, a precision machinery plant, a concrete plant, an ammonium sulfate plant, and a machine tool factory. The number of different machine tools and work machines alone is staggering. You could practically build an entire nation with that.”

“According to my calculations, that still isn’t nearly enough.”

“Not enough… Who are you planning to fight?”

“Of course, the world market. Only by becoming a global industrial power can Japan stop being looked down upon by the West, especially by America. Otherwise, we’ll always be forced to stand downwind of them. I can’t tolerate that.”

“It’s not really a matter of tolerance… but you plan to spend two billion dollars for that?”

“Only about seventy percent of it will actually be spent. The rest will be held as collateral and used as working capital.”

“Even at seventy percent, that still easily exceeds the national budget for an entire year. And on top of that, oil fields in Texas? Did those make a profit too?”

“With the projected profit over the next ten years, it’s expected to exceed one hundred million yen. But since it’s more like a blessing from heaven, all the money coming into Japan will be distributed and used freely.”

“Even Ishikawa Goemon would be shocked. Anyway, back to the topic, the public investment funneled into construction. Don’t you think it’d be better to change the law?”

“The law? Well, yes, if we made it easier for landowners and others to start construction companies, or established legal measures like temporary tax exemptions, it would make the movement of labor and capital much smoother. But… is that possible?”

“To develop roads, factory sites, and residential land on a large scale, was it Komatsu, not Ootori? Just the machinery they make there and public investment alone won’t be enough. Unless the legal and tax systems are properly structured, companies can’t even be founded, no matter how many workers you have. Well, I’m not the one in charge of that, it’s another minister’s department, but I’ll mention it.”

(As expected of Korekiyo Takahashi. Needless to say, he understands everything.)

“Hm? Something wrong?”

“No, I’ll leave that part to the experts. I’m completely in favor. Let’s expand Japan’s economy and industry as much as we can!”

“Hahaha, so full of spirit, must be because you’re still a child. Well, Ootori, ever since the Showa era began, starting with the Suzuki matter, Japan as a whole has continued to receive great favors from you. So I’ll do whatever I can.

As for me, because Ootori brings in dollars and gold bars from overseas, the nation’s total income and tax revenue rise, and it becomes easier to issue government bonds, I feel I can’t thank you enough.

Well, I’ve told your great-grandfather about that, but everyone says that all the money-making and flashy moves have been done by Reiko. Whether you are a  Miko or not, even as a prodigy you’re remarkable. Truly, thank you. On behalf of all the people of Japan, allow me once again to express my gratitude.”

“Please lift your head. Lord Takahashi, you yourself have been working for Japan since around the time of the Russo-Japanese War, haven’t you? Because you are finance minister, I’ve been able to act quite freely with peace of mind. I am the one who should be grateful.”

Because he is long-winded and keeps thanking historical greats multiple times, I find myself replying quickly without meaning to.

After we bow to each other and then raise our heads, my eyes meet Korekiyo Takahashi’s and we both exchange wry smiles.

Yes, this man and I differ in everything, starting with age, but in terms of leading Japan’s economy, even if not comrades, I can at least feel we are fellow soldiers.

And seeing someone who is still made to stand on the front lines at such an age makes me resolve to work so they can retire as soon as possible.

“Hm? Is something on my face?”

“No, I was just thinking again how much Ootori has been helped by your financial policies, Lord Takahashi.”

Even after our eyes met, I kept staring, and he tilted his head slightly in an almost cute way.
Because of that, my reply came out a bit awkward.

“Well, that’s all I can really do. Hamaguchi or Inoue could probably work hard to control inflation, but that kind of approach only works for smart people who came up through the Ministry of Finance bureaucracy.”

“I personally think that tight fiscal policies rarely lead to anything good.”

“Really? Austerity has its good points too. It’s just a bit difficult to make proper use of it.”

We end up continuing that sort of exchange for a while. From the fiscal year 1927 onward, under the Seiyukai Party, the Giichi Tanaka Cabinet, and Finance Minister Korekiyo Takahashi, what the opposition and critics call “reckless spending,” and supporters call “proactive fiscal policy,” continues.
In short, it is a deficit budget that issues government bonds within a financially manageable range. By circulating money throughout the economy, the goal is to boost overall economic activity, and through increased income and expanded budgets, eventually resolve that deficit. 

As long as the nation’s economy continues to grow, it is generally effective.

It is less effective in countries that have already reached a certain level of economic development, but tends to work well in developing or emerging nations.

In the history of Japan from my previous life, they launched a large-scale issuance of deficit government bonds under Takahashi’s fiscal policy starting with the 1932 budget, but in this world it continues from ’27 with the amounts scaled down.
The amounts are restrained to curb inflation.

Also, the Showa financial panic is left untriggered here, and thanks in part to Ootori’s flashy spending, Japan has not yet experienced a depression since entering the Showa era.
The recession will come later, so precisely for that reason we must put solid countercyclical measures in place now, or things will become awful.

Because the United States follows the Republican “laissez-faire” approach,  a passive economic policy that emphasizes free economic activity,  we must absolutely avoid letting the country fall into the very bottom.
That Korekiyo Takahashi is sitting in the finance minister’s seat at the outset of such a situation gives me more reassurance than anything.

I know from the history of my previous life what happens if you suddenly impose austerity in the current situation.
But there is one problem with Japan’s finances.

“Lord Takahashi, could you at least make sure that the government bonds I issue aren’t diverted to armaments?”

“I suppose that would be good if it were possible. But if you did that, your father might end up getting stabbed.”

“Right? But can’t you at least hold them back a little? I’m issuing these bonds for the sake of the nation. Why do I have to spend my own money for the sake of short-sighted soldiers?”

“I understand exactly what you’re saying, but it’ll be tough to confront them head-on. The moment they see sixty million yen, they’ll already be calculating what they can buy with it.”

“They’re so selfish when it comes to someone else’s wallet. Fine then, I’ll use a crafty little trick!”

“W–what are you going to do? Don’t do anything reckless.”

He looks at me with genuine concern.
But in my previous life, as soon as Korekiyo Takahashi tightened the budget to control inflation, he was murdered by those hopeless fools.

However, this time I have a good move. So I smile brightly and answer.

“I won’t do anything reckless. If anything, I’ll just promote the Ootori family and the Ootori Group. Before the budget is finalized, I’ll quietly leak that I made a donation to the government. If the military complains, I think most of the public will side with me, don’t you?”

“Ah, that tactic. Since you’re donating for the sake of the people, if word of that leaks, the military won’t be able to protest openly. But are you sure about this? Your father and uncle are going to have a rough time.”

“Those two will be fine, unless they get ambushed by a whole group out of nowhere.”

“Well then, if that’s the case, I’ll do my best too. I’d love to divert funds to something other than the military.”

“I know I’m asking a lot, but please take care of it.”

“It’s fine, it’s fine, it’s for Japan’s sake. Though it’s frustrating that the military men think the same thing.”

“I’ll try to keep them in a good mood by selling trucks and gasoline cheaply to the army, and heavy oil to the navy.”

“Good. But don’t overdo it. If they don’t get what they want next time, they’ll fly into a rage easily.”

“They’re like children.”

“The navy is still manageable, but army officers have been walking a single straight path since military preparatory school.”

He trails off at the end of his words.
Indeed, the preparatory schools have their merits, but also many flaws. They tend to narrow one’s perspective. 

It’s no longer the Meiji era, and I think their purpose has run its course, they should be abolished. 

But that’s probably impossible. Naturally, we both end up smiling wryly.

And it’s Korekiyo Takahashi, with the wisdom of age, who shifts the mood.

“Anyway, since you’ve come all this way, why don’t you tell me some stories from your travels in Europe and America?”

“Yes, gladly. I suppose the story about New York would be the most interesting?”

“Indeed. Better to hear that one first, it’s easier on the heart. I probably wouldn’t be able to sleep if you saved it for last.”

“I was in a daze for about a week myself.”

“That bad? Well, I suppose anyone would be, after seeing ten billion dollars vanish in an instant. So, what was it like?”

From there, I tell Korekiyo Takahashi about being in America, New York, at that moment, explaining earnestly how the depression there was catastrophic, on a scale entirely different from any previous downturn.
I add as many figures from that time as I can.

And finally, I conclude with these words:

“Therefore, please begin preparations to abandon the gold standard as soon as possible.”