Taking the Article 25 emergency loan, and rebuilding on a split ledger (1965)

¥47.7 billion carried by a firm worth ¥7.0 billion

A company with net assets of $19.4M (¥7bn) was carrying $132.5M (¥48bn) of 運用預り. The Ministry of Finance had guided firms to keep the figure to about twice net assets; as the slump deepened, Yamaichi had run to nearly seven times it. Hidaka Teru accepted the presidency without being told this, and only assembled the true picture through the restructuring committee after taking office. That the emergency loan was justified by contagion to the credit system as a whole suggests the issue was never one firm’s cash position: 運用預り behaved much like a bank deposit, and redemptions would have run straight through to other brokers and to the banks behind them.

Nor is it accurate to read the repayment — done in a little over four years — as management effort alone. A recovering equity market carried it, together with the ¥6.73 billion refunded when the securities-holding association was dissolved, about 30% of the amount repaid. And the decision to keep the nameplate had a second consequence: it installed the planning side of the house, the people skilled at negotiating with outsiders, as the main line of succession to the top. That same strength turned into a constraint at the moment the firm could no longer put the losses on its clients’ accounts into the open. The Bank of Japan loan that saved the company in 1965 went bad for the first time in its history when the company failed, 32 years later.