Saturday, June 1, 2013

Bank of Taiwan, The Japanese Empire Wealth over Asia

A postcard depicted The Bank of Taiwan Building in Surabaya in Kembang Jepun, on the corner of Songgoyudan Street (left) and Slompretan Street (right). (date unknown - Source: Leiden University Library) 
The First Sino-Japanese War broke out between Qing Dynasty China and Japan in 1894 following a dispute over the sovereignty of Korea. Following its defeat, China ceded the islands of Taiwan and Penghu to Japan in the Treaty of Shimonoseki, signed on April 17, 1895.  One of the most notable features of Japanese rule in Taiwan was the "top-down" nature of social change. While local activism certainly played a role, most of the social, economic, and cultural changes during this period were driven by technocrats in the colonial government. With the Japanese Government as the primary driving force, as well as new immigrants from the Japanese Home Islands, Taiwanese society was sharply divided between the rulers and the ruled. The properity of Japan Empire were significantly growth in the late of 19th century, thus its colony were developed as well as the Japan itself. In order to maintain the currency used  in the colony, the Japanese Rule in Taiwan began to developed a local bank.  

The Bank of Taiwan office, in Jurnatan, on the west side
of the Jurnatan Central Station and the Bank of Taiwan logo's.
(Source: Krisna Wariyan and Wikipedia)
The Bank of Taiwan was established as Taiwan's central bank in 1899 by Taiwan's Japanese government. The bank's creation was authorized in 1897 by the Bank Act of Taiwan which encouraged Japanese enterprises, such as the Mitsubishi and Mitsui Groups, to invest in Taiwan. The money invested in the Taiwan Bank came directly from the Japanese government. The Taiwan Bank was the second largest Japanese bank in Southeast Asia.  The bank branches itself were created in other parts of Asia as the empire expanded, including areas in China and Southeast Asia. In Dutch-Indie, the bank firstly established in Surabaya in 1915, then followed by Semarang then Batavia, in the next few years. The branch of Bank of Taiwan in Semarang was in Jurnatan, by the side of Indische Motor Club office. Curently, the huilding was demolished and changed into Jurnatan business complex. The Architect firms of Karsten, Lutjens & Toussaint is the designer of this fancy building. One more, the Karsten's masterpiece, unfortunatelly the building was demolished around 1970's.

Since the Japanese seized the Dutch-Indies, the banking regulation were all taken over by the Japanese. Soon the Japanese Bank like Bank of Taiwan, and then Yokohama Specie Bank have a big roles taken over the banking system from the Nederlands Bank. A large number of Japanese companies were encouraged to launch into business in the Dutch-Indies, this also made those Japanese Bank gained a great chance to developed , but this did not last long. In March 1942  The Southern Development Bank was founded by Japanese Government. The Japanese Government urge to established the central bank in their occupied areas which would be empowered to issue banknotes. In fact, the SDB utilized both the YSB and the Taiwan Bank to establish its representations and branches, which means in fact that its business actually conducted through these banks. That’s why, the roles of Yokohama Specie Bank and the Bank of Taiwan reduced, those were become of mere bit players in the financial world in Dutch-Indies .

After the war is over and the Dutch-Indies turn into Republik Indonesia, the fortune didn’t improved. In the late of 50’s decades, while the Dutch-owned banks were all nationalized, under the spirit of inciting nationalism and independence and through Government Regulation No. 2 of 1959, other foreign banks (non-Dutch) were all liquidated, as well as Bank of Taiwan. Indonesia’s foreign and domestic political policies as well as the nationalization move by the Indonesian government sparked foreign customers to close their bank accounts and return to their home countries. A number of foreign individuals and companies shifted their banking activities to Bank Negara Indonesia (BNI). As a result, the amount of funds extended by the foreign banks dropped sharply. The extending of development and trading credits was finally taken over by the national banks. The nationalizing of the Dutch banks was a preliminary step of the national banks’ existence in the Indonesia’s economy.

History of Bank Indonesia : Banking Period from 1953-1959
Indonesia and the War Myths and Realities (KITLV)
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