- Business History Society of Japan
- 経営史学 (ISSN:03869113)
- vol.44, no.2, pp.2_59-2_84, 2009 (Released:2012-03-23)
This article analyzes the basic characteristic of the investment in Korean railways, centering on a relationship between the colonial Government and the investors. We deal with the case of a merger with six railway companies in 1923 as an example.In Korea in the era of colonization, a lot of railway companies were established in 1918-20. But, after the crisis of the postwar period, they could not make profits on their business. The Government had given the railway companies protections and aids to encourage establishing a network of railways, and railway companies, given the Government grants, could keep paying dividends.Early 1920s, the railway companies had difficulties of their business, and their investors were made fluctuated. The government enacted the Private Railway Aid Act to calm down the investors. On the other hand, railway companies bargained about merger as a means of breaking difficulties of their business. Although the Government, at first, opposed it, under the curtailed budget, it became to back up the merger.The railway company which was merged with six companies in 1923, wanted the Government to take burdens to break its difficulties. Kaichi Watanabe who was the president—director of the company, urged that the Government should set up the big project including buying out the lines of the railway companies. He tried to make its difficulties broken by the nationalization of the lines.The Government needed private companies to build a part of railways network. The investors wanted colonial government to take burdens in order to break difficulties of their business. Thus, there was a relationship between colonial government and investors, which restricted each other. While the Government should secure the investments in railways, the investors could parasitize on the Government budget in this scheme.