'As Close as Lips and Teeth' The Daiichi Ginkō and Megata Tanetarō in Korea

It is by now established knowledge that Japanese interventionist policies versus Korea cannot have been motivated by economic profits. Literature in this respect instead points to socio-political, perhaps military explanations of this instant of Japanese imperialism. Whereas this insight is certainly more satisfying, it does not pay attention to the role of a series of monetary and financial reforms both the Japanese government and the Government-General in Korea sought to implement immediately after the peninsula had been turned into a protectorate. In this paper, we will turn to the pre-history of Korea's annexation; we will highlight a number of inconsistencies at the core of Japanese policies vis-à-vis Korea, and demonstrate that financial and economic considerations eroded the very strategy of establishing Korea as a mere political 'line of interest'. Instead, the very alliance between politicians and people of high finance only reinforced the employment of finance and monetary matters as instruments in facilitating Korea's societal transformation. We will demonstrate how the 'Megata reform', as it came to be called, factually turned Korea into a subsidiary of the Japanese economy. It was a tool aimed to relegate the position of Korea in the Japanese Lebensraum —to which later generations of politicians would refer as the Greater East-Asian Co-Prosperity Sphere (dai tōa kyōeiken 大東亜共栄圏). The Megata reform was thus not an economic answer to an economic problem in the conventional sense. Instead, it was developed in reaction to a strategic need.