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Moreover, the army and navy could use the Special Account at their discretion.

Russo-Japanese War - The Largest Battle Before WW1 (1904-1905) 2/2

Further, the army and navy only had to provide an outline of expected expenditures for the fiscal year, and the Special Account allowed for additional budgets when necessary. World War I broke out in Europe in July Japan declared war on Germany on 23 August of the same year. National Treasury revenue and National Treasury budget surpluses, both the result of previous administrative and financial reforms, provided the initial sources of funding for the Special Account.

And a further 1. In the following years the Imperial Diet approved every additional budget request to cover temporary military expenses — from providing an additional 16,, yen at the thirty-sixth Imperial Diet in to approving the eleventh additional budget of 75,, yen at the forty-fifth Imperial Diet in Overall war costs rose dramatically with the Siberian Intervention, so those costs were met through the very same Special Account that had been established four years earlier.

It ceased to exist on 1 April , after the full withdrawal of Japanese troops from Siberia. From the standpoint of accounting for war costs, then, World War I and the Siberian Intervention should be seen as a virtually continuous war. During this period, the Special Account operated for a total of consecutive months.

Russo-Japanese War

This constituted the longest of the four periods in which the Special Account was active in pre-war Japan. This section identifies the war expenditures of World War I and the Siberian Intervention and their place in modern Japanese history. This total sum is 2. This far surpasses the This low monthly spending stands despite the fact that military expenditures surged from to with the Siberian Intervention see figure.

Next, let us show the total breakdown of war expenditures during World War I. This amounted to 1. It includes army and navy expenses, strategy costs, and the relative percentage spent by both the army and navy during this period. First, the army spent a total of ,, yen And the navy spent Third, navy spending only amounted to Moreover, navy spending rose to an even greater percentage of war costs during World War II, reaching The equipment costs were dominated primarily by weapons, transportation, and provisions and fodder.

The distribution of such funds to relevant ministries included the following:. Table 1: Distribution of Funds to Ministries [9]. The Japanese military made use of military tickets and military currency in its areas of activity to pay for war expenditures. In general, paying war costs in coin requires large sums of money for transportation, safekeeping, and disbursements. Therefore it was necessary to curb, to the extent possible, the spending of large amounts of specie.

Further, military tickets and military currency were influenced greatly by the local monetary systems. The Japanese military found itself, without exception, bound by these conditions during World War I and the Siberian Intervention. Consequently, during its campaign to capture the German territory of Qingdao and, later, during its occupation, Japan used military tickets worth a total of 11,, yen that were convertible into silver yen.

Further, in areas of operation in which the gold standard had been adopted during the Siberian Intervention, Japan issued 30 million yen in military currency notes that were convertible into gold. While the Russian ruble depreciated in the wake of the failure of the counter-revolutionary movement in Russia , Japan used military currency together with bank notes from the Bank of Korea, which were also convertible into gold.

This amount included transfers of ,, yen Further, the selling off of government-owned property provided the Special Account with 24,, yen approximately 2. World War I later brought Japan an economic boom of special procurements, which fortunately led to a natural increase in tax revenue. Terauchi Masatake's cabinet October to September carried out a tax reform that established a wartime excess profits tax it also revised the income tax and liquor tax. This excise tax, along with the treasury surplus, formed a primary source of revenue to pay for wartime costs. The wartime excess profits tax was imposed on the income of both corporations and private individuals.

In the case of corporations, Japan imposed a tax rate of 20 percent on excess profits, or any earnings 20 percent greater than the average net income during peacetime years. In the case of individuals, the government applied a 15 percent tax rate on surplus income, which was defined as any earnings 20 percent more than their average income during the two years of and Profits of less than 3, yen, however, were exempt from taxation.

Thus as expenses skyrocketed with the Siberian Intervention, the Nikolayevsk Incident, and the dispatch of troops to Karafuto see figure , Japan advanced policies that had the Special Account for Emergency War Expenditures rely on government bonds for annual revenue. Japan publicly offered war bonds domestic bonds , which had an annual interest rate of 5 percent and a maturity of between one and eight years, eleven times from Through these bond offerings, Japan raised a net total of ,, yen. Although the Battle of Mukden was a major defeat for the Russians and was the most decisive land battle ever fought by the Japanese, the final victory still depended on the navy.

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The logistics of such an undertaking in the age of coal power was astounding. The weight of the ships' stores needed for such a long journey was to be another major problem. Admiral Rozhestvensky's only hope now was to reach the port of Vladivostok. There were three routes to Vladivostok, with the shortest and most direct passing through Tsushima Strait between Korea and Japan.

However, this was also the most dangerous route as it passed between the Japanese home islands and the Japanese naval bases in Korea. Battle plans were laid down and ships were repaired and refitted to intercept the Russian fleet. The Japanese Combined Fleet , which had originally consisted of six battleships, was now down to four two had been lost to mines , but still retained its cruisers, destroyers, and torpedo boats.

The Russian Second Pacific Squadron contained eight battleships, including four new battleships of the Borodino class , as well as cruisers, destroyers and other auxiliaries for a total of 38 ships. By the end of May, the Second Pacific Squadron was on the last leg of its journey to Vladivostok, taking the shorter, riskier route between Korea and Japan, and travelling at night to avoid discovery. Unfortunately for the Russians, while in compliance with the rules of war , the two trailing hospital ships had continued to burn their lights, [67] which were spotted by the Japanese armed merchant cruiser Shinano Maru.