Yusuku Kashiwagi Oral History Interview
Conducted by Makoto Iokibe,
Masayuki Tadokoro (National Defense University, Japan)
Yoshiko Kojo (University of Tokyo)
February 29, 1996
Tadokoro: When the protection of the dollar became a problem in the latter half of the 1960s, was there an effort to link it with the protection of Japan's security?
Kashiwagi: I never had anything to do with the security issue.
Tadokoro: For example, in Germany's case, in 1967, Breshing and Martin used the burden of U.S. protection as a reason for formally telling the U.S. that Germany would not exchange its dollar balance for gold. Did America try to get Japan to do anything similar to that?
Kashiwagi: I was in the embassy from 1958 to 1961 and....
Tadokoro: The embassy in America, right?
Kashiwagi: At that time, Japan had finally begun to obtain foreign currency reserves. The director general of the International Finance Bureau at the time recommended that because Japan had few gold reserves and because that fact could become a problem, Japan should obtain gold reserves. From that point, we slowly began to buy gold. Soon thereafter, I was at a party at the embassy and someone from the U.S. Department of the Treasury came up and said, "Mister Kashiwagi, it seems that Japan has been buying gold, do you need a loan from the World Bank or the U.S. EX-IM Bank?" It was a bald threat.
Tadokoro: So he meant that if you were going to do something as unnecessary as buying gold...?
Kashiwagi: If you want to call it that... he basically wanted an arrangement where Japan borrowed U.S. dollars to buy gold. You see, before the security protection guarantee by the U.S., Japan couldn't have bought gold. Japan had tried to figure out how to secretly buy it, but the U.S. had raised a fuss about it and Japan could have bought it anyway. In Japan, civilians were buying gold. They bought gold bars and gold coins. The government, however, still hadn't bought much.
Tadokoro: So the gold reserves were very small then?
Kashiwagi: Japan did not make any commitment that it would cheat on its security relations with the U.S. by trying to buy gold. It just tried to bring as much foreign capital into the country as possible and make the best of the World Bank and EX-IM Bank loans. Also, the real state of affairs was that while it was increasing its debt, Japan did not have the means to buy gold.
Tadokoro: Before the Nixon shock, what kind of forecast had you made regarding the appreciation of the yen?