Page:Japan by the Japanese (1904).djvu/112

For convenience in reviewing the history of the finances of Japan, I should like to divide it into three periods—one covering the period from the beginning of the Meiji era to the 20th year (1887); second, from the 20th year to the 27th year (1894); and, lastly, from the 27th year to the present. I should like, with your permission, to review here at this juncture the history of the finance of the Meiji Government, and I must remind you that what I have to tell you is far from being complete or perfect. With this premise, I may briefly state that the specie that Japan had during the pre-Restoration days amounted to something like 100,000,000 yen, and this volume remained nearly constant, as the country was practically shut out at that time from the rest of the world. Then each local clan issued its own currency, aggregating about 30,000,000 yen, which was converted into consolidated loan bonds when the Restoration had been consummated. With the lapse of time the volume of specie changed more or less, but even about the year 1875 it must have stood at 100,000,000 to 80,000,000 yen. This amount had to disappear from the country; and this exodus occurred rather too suddenly, for in a year or two the majority went out of the country, and whatever amount there remained was found in the vaults of the exchequer, and only paper money was in circulation at that time. Still, the paper stood at par. Meantime the finances of the State, as also the economic market at large, had been placed in an exceedingly embarrassing situation. The Government of the day taxed their brains hard to devise measures for rescuing the country from this trouble. Their deliverance appeared in the shape of an Imperial edict issued in the spring of 1877—an edict proclaiming the reduction of the rate of land tax. The truth is the Government had decided that the only sound remedy consisted in adopting a courageous plan of economy. I well remember what a drastic reform the Government decided to carry out as their remedial measure, for I was then occupying the chair of the Public Works Department. The original estimates of that department were about 3,900,000 yen for the year 1877, and the sum was cut down to 2,000,000. This programme would have ended in success had not the civil war of Satsuma, that broke out in that same year, thrown it out of all order. Economically and financially the war proved disastrous, and at one time paper money stood at 1.80 to 1 yen of gold. The war over, the Government revived the original programme of remedy with redoubled energy; still, the specie remaining in Japan did not exceed 8,000,000 about four or five years after. The Minister of Finance of the day, Count Matsukata, adopted various devices for preventing the outflow of specie and