, originally named the , was a

commercial bank A commercial bank is a financial institution which accepts deposits from the public and gives loans for the purposes of consumption and investment to make profit. It can also refer to a bank, or a division of a large bank, which deals with cor ...

based in

Tokyo Tokyo (; ja, 東京, , ), officially the Tokyo Metropolis ( ja, 東京都, label=none, ), is the capital and largest city of Japan. Formerly known as Edo, its metropolitan area () is the most populous in the world, with an estimated 37.468 ...

Japan Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...

. It was founded in 1877 and managed by Watanabe Jiemon IX, who ranked as the fifth wealthiest landlord in

Tokyo City was a Cities of Japan, municipality in Japan and part of Tokyo Prefecture (1868–1943), Tokyo-fu which existed from 1 May 1889 until its merger with its prefecture on 1 July 1943. The historical boundaries of Tokyo City are now occupied by ...

during the first decade of the 20th century. Upon his death in 1909, his son Genjiro took over presidency and renamed himself Watanabe Jiemon X.

Bankruptcy

During

World War I World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...

, the Watanabe family made investment in unsound ventures by making the bank put out more than 26 million yen to them. After the war and the

Great Kantō earthquake Great may refer to: Descriptions or measurements * Great, a relative measurement in physical space, see Size * Greatness, being divine, majestic, superior, majestic, or transcendent People * List of people known as "the Great" *Artel Great (born ...

, they began to have trouble repaying the debts, most of which were unsecured. The president borrowed cash from usurers and diverted the working capital of its subsidiaries through fraud and misappropriation to avoid bankruptcy. The bank became nearly insolvent as its shoestring operation came to light in business magazines in February 1927. Its senior managing director was sent to the Ministry of Finance to ask for a government-financed bailout on 14 March 1927. However, due to some miscommunication, Finance Minister

Kataoka Naoharu was a Japanese entrepreneur and politician during the prewar period. He served as Minister of Commerce and Industry (1924), Minister of Finance (1927), and a member of the House of Peers (1930-1934). Biography Kataoka was born on October 1 ...

stated in the Imperial Diet that the bank had just gone bankrupt. His false statement led to a

bank run A bank run or run on the bank occurs when many clients withdraw their money from a bank, because they believe the bank may cease to function in the near future. In other words, it is when, in a fractional-reserve banking system (where banks no ...

and the bank's real bankruptcy, triggering the

Shōwa financial crisis The was a financial panic in 1927, during the first year of the reign of Emperor Hirohito of Japan, and was a foretaste of the Great Depression. It brought down the government of Prime Minister Wakatsuki Reijirō and led to the domination of ...

References

{{Reflist Defunct banks of Japan Banks established in 1877 Banks disestablished in 1927 1877 establishments in Japan