Here are questions raised by students in class and the professor's answers.
Q1. Who were the members of the Privy Council which rejected the proposed imperial edict?
The Privy Council (Sumitsuin in Japanese) was originally established to discuss the draft Meiji Constitution in 1888. After the constitution was promulgated, it became a permanent advisory body to the Emperor. The members were chosen from the group of genkun (old politicians who had merits in establishing the Meiji government) and "experienced" statesmen. The members were generally conservative and disliked the government run by political parties. They also supported strong military stance against China and criticized the Shidehara diplomacy (no military intervention in China). When the government submitted the imperial edict to the Privy Council for review on April 14, 1927, its deliberation committee pointed out several "inconsistencies" in the draft edict and advised to reject it. The edict was subsequently voted down in the general session of the Privy Council.
One of the characteristics of prewar Japanese politics was multiplicity and ambiguity of authority for making important decisions (including starting and ending a war). The constitution clearly stipulated that the sovereignty rested with the Emperor, but he was not responsible for policy consequences; the responsibility was borne by his advisors, not himself. The government (the cabinet as a whole, or individual ministers) was to advise the Emperor on policy matters. But the Minister of Army or Navy often considered they had the right to advise the Emperor directly. The Privy Council also advised the Emperor. This decentralization of responsibility was in sharp contrast to the case of Nazi Germany, where Hitler alone held the final authority.
Q2. What happened to the Bank of Taiwan after its closure in April 1927? Was it liquidated?
No. The Bank of Taiwan survived. As discussed in the lecture, the government passed the law to cover the loss incurred by the Bank of Japan up to 2 million yen. This taxpayers' money was injected fully into BOJ by as early as June 1928 in order to cancel (=forgive) the bad bills held by the Bank of Taiwan. This amount, in the main, was used to repay the Bank of Taiwan's interbank "call" loans to other commercial banks. As a consequence, the entire financial market was greatly eased.
The Bank of Taiwan even expanded business during the war time, extending loans to China and Southeast Asia. After the war defeat, it was finally abolished by the order of the US occupation forces.