Underpinning Japan's industrial expansion during this period was a large increase in bank credits and securities issues. Bank advances during the war increased over 2.5 times; at the same time, deposits grew more than threefold, so there was plenty of money available in the form of savings. There were also large fiscal surpluses, used by the government mainly to redeem foreign bonds and to buy the war bonds of the Allies. Since Japan's economic expansion was concentrated in the heavy and chemical industries, massive long-term funds were needed. The number of companies nearly doubled between 1914 and 1918, and paid-in capital grew over 2.5 times. There were large increases in industrial and financial debentures and also in local government bonds. All these increases in stock and bond issues were absorbed smoothly by abundant private capital. The concentration of deposits in the large banks enabled those institutions to cope with the needs of enterprises and to take up government bonds through syndicates. Sales of stock issues were facilitated by the large liquid reserves of the banks and by the formation of a national association of spot dealers who offered issues for public subscription or underwrote new issues.
