1901.] COMMEECIAL JAPAN. 2279 



making the revised total of the new gold coins to be issued 73,000,000 yen altogether. Accordingly the amount of new gold coins turned 

 out by the mint from October, 1897, to April, 1898, was altogether 24,808,575 yen. 



The total sum of gold coins minted by the Government between April, 1897, and April, 1898, in preparation for effecting the 

 coinage reform was thus altogether 74,455,735 yen, and this amount was now devoted to making the exchange of silver yen. 



THE MIXTIXO OF SCBSIDIARY SILVER COIXS. 



In order to place the currency system of a country on a sound basis, it is essential that a sufficient supply of coins be provided for 

 the use of the community at large. It is particularly important that coins be used by the pooijle in their smaller daily transactions. Now, 

 the amount of 1-yen convertible notes issued by the Bank of Japan had reached the vast sum of over 06,000,000 (estimate at the end of 

 March, 1897). And since a greater portion of these notes was being used in daily transactions by the people, it was thought proper to 

 order the Bank of Japan to commence withdrawing gradually its 1-yen convertible notes, along with the adoption of the gold standard, 

 in order that the Government might issue hard money in their place; ')ut in regard to the nature of the hard money to be ti:us issued in 

 exchaiigc for these notes it was feared that 1-yen gold pieces, if coined, would be too small, and hence inconvenient for handling. For 

 this reason in the coinage law no provision was made for the minting of gold 1-yen. Accordingly the Government adopjtcd the plan of 

 issuing an additional amount of subsidiary silver coins, consisting of 50, 20, and 10 sen pieces, and of making them take the X'lace of 1-yen 

 convertible notes, so far as these were being used in daily transactions by the people. 



THE WITHDRAWAL FROM CIRCULATION OF THE 1-YEN iSILVEK COIN — "fELE PREPARATIONS FOR EXCHANGING 1-YEN SILVER COINS. 



By Article XVI of the coinage law of 1897 (law No. XVI), it was provided that all the 1-yen silver coins then in circulation should 

 be, at the convenience of the Government, exchanged at the rate of 1-yen gold for 1-yen silver. As this law was to be put in force on 

 the 1st day of October of the same year, the Government at once took up the work of providing the fund needed for the exchange of 1-yen 

 silver coins. But early in July of the same year some of the foreign banks at our treaty ports, being doubtful as to the actual working 

 of the coinage law, sent out circulars to their customers notifying them to the effect that, after the 1st of October, those l^anks should 

 exercise the liberty of choosiijg either gold or silver coins in making specie payments. Under these circum.stances, the outlook wxs not 

 free from the danger that if things were allowed to proceed as they were they would eventually lead to a change in the market ratio 

 between gold and silver; and, perceiving that in order to prevent such a contingency it would be a matter of the most urgent necessity 

 to effect the change of 1-yen silver coins with all possible dispatch and promptness, the finance minister (Count Matsukata) decided on 

 adopting the following course: 



1. On the 1st day of October to get all the 1-yen silver coins in the possession of the Bank of Japan and of the Yokohama Specie 

 Bank exchanged for the gold coins in the possession of the Government. 



2. To allow foreign banks in the treaty ports to get the 1-yen silver coins in their possession exchanged for gold coins after the Ist 

 day of October, the transactions connected with this business to be intrusted to the Bank of Japan. 



3. In view of the above-mentioned course taken by the Government, to mstnict the Yokohama Specie Bank and its branches to use 

 gold in all their payments. 



4. That the president of the Bank of Japan should endeavor to induce the foreign banks to also make their payments in gold. 

 Then, on the 15th of July, the following instruction was issued to the Bank of Japan: 



Since the coinage law goes into operation on the 1st day of October of the current year, the Bank of Japan is hereby ordered to 

 undertake the exchange of 1-yen silver coins now in circulation according to the following method: 



1. One-yen silver coins which may be in the possession of the Bank of Japan on the 1st day of October, as well as those that may 

 come into itspossession after that date, the bank shall get exchanged for gold coins at the Government treasury. 



2. As regards 1-yen silver coins in the possession of the Yokohama Specie Bank and of the foreign banks in the treaty ports after 

 the 1st day of October of this year, the bank shall endeavor to persuade their possessors to exchange them for gold coins. 



3. As regards all payments made at the head office of the Yokohama Specie Bank, whether these payments are made by it &3 

 an agency of the Bank of Japan or not, the Bank of Japan shall see that after the 1st day of October those payments are made entirely 

 in gold coins. 



The exchange of 1-yen silver coins for gold coins is a matter requiring great care on the part of the Government, since it is virtually 

 connected with the successful working of the coinage law; for it would be a very grave thing, indeed, if, on account of the lack of 

 promptness in exchanging 1-yen silver for gold coins, there should be produced a change in the ratio between gold and silver. Particular 

 care and caution need to be exercised therefore, both preceding and following the going into operation of the coinage law; and by entering 

 into a very thorough consultation on this matter with the Yokohama Specie Bank, and also by ascertaining the state of feeling among 

 foreign bankers, the Bank of Japan sliall regulate things in such a way as to bring about the successful completion of this work of exchange. 



In accordance with the foregoing instruction, the Bank of Japan commenced making the necessary preparations for the coming 

 event, while the Yokohoma Specie Bank, after consulting with the Bank of Japan, sent out the following circular to its customers: 



"We beg herewith to state that on and after the 1st day of October of this year we shall meet all our obhgations, which are already 

 due to our customers or which will become due, with gold coins, regardless of our pi-omLse to pay them in silver. Further, while thi'a 

 bank will accept silver coin in payments made to it, silver coin will not be used in making our payments. 



"We remain, etc." 



P. S. — We beg to further notify our customers that we have received orders to exchange for gold coin on demand after the date 

 mentioned above the convertible notes of the Bank of Japan up to any amount. 



This course of action had the effect of dispelling the doubt at first entertained by foioigners concerning the actual working of the 

 coinage law, and the foreign exchange also came to resume its normal rate. 



Then, besides, as stated in Section IV, Chapter V, the regulations for the exchange of 1-yen silver coins were issued by the finance 

 department notification No. LXI of the 21st of September, same year. In the meanwhile, the work of minting new gol'd coins to be 

 used for exchanging the silver yen ha\-ing made good progress while that of coining subsidiary currency to fill the place of retired 1-yen 

 silver pieces was also completed, the finance minister (Count INIatsukata) on the 2d day of September submitted to the cabinet council a 

 measure for forbidding the circulation of the 1-yen silver coins after the 1st day of April, 1898. * * * 



Accordingly the Government decided to prohibit the circulation of 1-yen silver coins after the 1st day of AprU, 1898, and to announce 

 the fact of that prohibition by imperial ordinance No. CCCXXXVIII of "the 18th day of September. The imperial ordinance runs aa 

 follows: 



IMPERIAL ORDINANCE NO. CCCXXXVIII OF THE IStH DAY OP SEPTEMBER, 189 (. 



The circulation of 1-yen silver coins, hitherto issued, will be prohibited after the 1st day of April, 1S9S. 



AMOUNT OF 1-YEN SILVER COINS AND OF TUE PROMISSORY NOTES OF THE MINT WITHDRAWN FROM CIRCUL.VTION. 



The exchange of 1-yen silver coins, commenced on October 1, 1897, as stated in the preceding section, was concluded, according to 

 law No. V, of June, 1898, on the 31st of July of the latter year, as was related in Section IV, Chapter V. During the interval the 

 number of 1-ven silver coins exchanged for gold coins amounted to 45,588,369 yen. Of this sum 38,648,297 yen was received in direct 

 exchange for gold coins, and 3,977,099 yen was first received into the Government treasury in the form of revenues and other pnbhc 

 payments, and then exchanged for gold, while the amount received into the Government treasury at Formosa and there exchanged was 

 2,962,973 ven. 



Besides these, there was the sum of 29,505,453 yen 4 sen 2 rin, which had been received into the mint bureau in bullion form 

 previous to the promulgation of the coinage law, and which had not yet been minted into 1-yen silver coins, but against which the 

 promissory notes of the" mint to pay silver yen had been issued. This' amount of promissory notes, therefore, the Government was 



