2280 COMMEKCIAL JAPAN. [December, 



under obliiration to exchange for gold coins. Now, a portion of these notes was redeemed previous to the passage of the coinage law in 

 excliange fur the convertible note.s and turned into bullion, to be coined into subfeidiary currency, while the rest was exchanged for gold 

 coins simultaneously with the enforcement of the coinage law. 



In other words, the total of 1-yen silver coins and the promissory notes of the mint withdrawn from circulation in connection with 

 the adoption of the gold standard was altogether 75,093,822 yen 4 sen 2 rin. * * * 



Chapter X. — Final Disposal of the Retired Silver Yen. 



The aggregate total of 1-yen silver coins retired in consequence of the enforcement of the coinage law (law Xo. XVI of the thirtieth 

 year of Meijij and of the silver Ijullion corresponding to the promissory notes of the mint to pay coins (also retired) was 75,093,822 yen 

 4 sen 2 rin. Out of this total the sum of 27,567,011 yen 58 sen 4 rin was set apart for minting subsidiary silver coins, and the sum of 

 40,780,002 yen 45 sen 8 rin was sold at Hongkong, Shanghai, and elsewhere, while the sum of 6,740,148 yen was sent over to i^ormosa, 

 Korea, etc., to be placed in circulation in these countries. In this way in December, 1898, was completed the final disposal of the retired 

 1-yen silver coins and of the silver bullion corresponding to the promissory notes of the mint (also retired). 



Section IV. 



The aggregate total of 1-yen silver coins withdrawn from circulation and the silver bullion corresponding to the promis-sory notes 

 of the mint (also retired) was 75,093,822 yen 4 sen 2 rin, and,' as stated in the preceding section, the disposal of this whole ainount was 

 completed in December, 1898, wliile the total price obtained from the sale of this whole amount was 69,696,240 yen 85 sen 3 rin. (This 

 price wan on an average at the rate of 92 yen 81 sen 2 rin per 100 yen silver, which, reduced to the rate per ounce of English ^tandard 

 silver, etjiials 27.0570d. per ounce; compared with actual average quotation on silver bars on both advance and immediate sal- s i-niingin 

 London, during the period in which the above-mentioned sale was effected, was higher by 0.2660d., the average quotation in London 

 being 26. 7:)10d.) The transaction thus produced a discrepancy of 5,.397,58i yen 18 .sen 9 rin; added to this there were the expenses 

 incidental to the retirement and the sale, amounting to 15.5,730 yen 63 sen 1 rin in March 31, 1899, so that the total lo.ss came u;)To the 

 sum of 5,553,31] yen 82 sen. In order to make good this loss the sum of 5,651,960 yen 91 sen, being the net profit realized by the mint 

 bureau for the thirtieth and thirty-first fiscal years of Meiji, was transfered to the currency adjustment fimd special comjuaMlite, in 

 accordance with law No. XVII of March, 1897. (The profits to the mint bureau were mainly the profits arising from the minting of 

 subsidiary silver coins, whose amount for the thirtieth fiscal year was 2,035,860 yen 82 sen 1 rin, and that for the thirtv-first year 

 3,616,100 yen 8 sen 9 rin.) 



In looking back over the circumstances attending the retirement and dispo.sal of the silver yen, we must note the fact that the scarcity 

 of money prevailed throughout the thirtieth fiscal year (1897) as a result of the sudden expansion of business and industrial enterrjiises 

 following the victorious war with (Jhina (1894-95); and it being impos.«ible in consequence to fioat in the home market the Government 

 bonds iscued as a post-belkim measure, the Government itself had to buy them by appropriating 14,670,000 yen out of the indemnity 

 moiiey. Coming to the thirty-first fiscal year (1898), the stringency of the money market yet more increased, so that in order to 

 ameliorate this condition of affairs the Government made a further disbursement of over 36,990,000 yen out of the indemnity money for 

 buying Government bonds, and of over 3,040,000 yen for buying the bonds, to be newly issued, of the Industrial Bank of Jai,'an. Even 

 yet the condition of the market did not allow the floating of a public loan. Under these circumstances the Government had to make 

 further temporary ajjpropriations out of the indemnity money to the extent of over 70,650,000 yen to cover the expenditures which were 

 to be met Ijv floating Government bonds and of over 15,000,000 yen to meet the deficit in the general account, owing to the delay in the 

 passage of the law for increased taxation. For these rea.sons it was apparent that if the retired silver yen were kept idle in the 

 Government treasury for any length of time it would become difficult to meet the annual expenditures. Although it was decided to 

 rccoin a part of the amount of the retired silver yen into subsidiary coins, still there was also an immediate necessity for making proper 

 disposal of the remainder. This was, moreover, at a time when silver quotation in London was depreciated to the level of 23d. (August, 

 1897). There was thus a peril that the rate might be yet further forced down, if a large amount of silver were sold off just then, and the 

 transaction might have resulted in a loss of tenor, even 20 per cent. The situation, therefore, created much anxiety in the minds of men 

 in authority. Hut toward the winter of 1897 the price of silver rose at one time above 27d., owing to the tight money market which waa 

 j)ro(iu('ed by the scarcity of currency in Shanghai, Hongkong, and their vicinities. "While in this country it happened that the harvest 

 of 1897 ]iroving unusually bad, large quantities of foreign rice were imported via Hongkong. 



Th(( situation offered a good opportunity for selling abroad 1-yen silver coins, and with the latter object in view an order was i&sued 

 to the Yokohama S])e(ie Bank to forward to and sell off the retired yen silver in the above-named regions, to employ a part of the 

 money obtained in the payment of bills drawn against the imported rice, and to send home the rest in other forms of draft. At the 

 same tim*; hen; at home, the Hongkong and Shanghai and the chartered banks having requested the Government for the sale of silver 

 yen in order to meet tlie demand of silver in Shanghai and Hongkong, a considerable amount was sold to them. By March of 1898 

 (thirty-finst year of Meiji) silver again showed signs of depreciating, but owing to the outbreak of the war between Spain and America 

 and to the policy of the Sjianish ( Jovernment to buy up silver, its i)rice again commenced to rise. I'nder these circumstances our efforts 

 to sell silver in Sluuighai and Hongkong were kept up with increased vigor, and the price obtained in payment was sent home either in 

 the form of iiiime<liate drafts on .Japan or in drafts on London. In Formosa, as will be stated in Chapter XI, the stamptnl 1-yen silver 

 coin now came to be i)ut in circulation, while after the expiration of the period allowed for the exchange of silver yen, the same in its 

 original form was i)ut in circulation, so that a portion of the retired 1-yen silver coin was forwarded thither and disbursed at current 

 valuation. Other waysof disjiosal consisted of Hhi])ping certain (juantities to Korea and there exchanging them for the convertible notes 

 of the Hank of .Tapan, and of making an attempt to circulate them in Weihaiwei, in both cases at the current rate of valuation. In these 

 latter iilaci's the |)rices obtained were higher than at others; but tiie demand for these coins never rose to very high figures. 



In this manner, within a short ]ieriod of about one year. In- December of 189S (thirty-first year of Meiji) the disposal of the retired 

 silver ven was entirely completed. The most satisfactory ])art of the whole transaction w;is that the disjiosal of this vast an:ount of 

 silver m so short a space of time not only did not cause any fluctuation in the i)rice of silver abroad, but the rate realized was actually 

 highiT than tliat ([uoted in the London market, while the loss resulting from the discrepancy between the amount retired and the price 

 rcalizeil from its .sale was nf) more than about 7 per cent, and that lo.ss was ami)ly made good by tlie net profit from the minting of 

 subsidiary silver coins, and thus giving no ad(litioi\al burden whatever to the state. 



Table XXXI X is herewith adjoined for reference concerning the present sections: 



Taiu.kXXXIX. — 1. General Accoitnt ov the Retired Silver Yen Disposed of by Sale. 



Yen. 



Total amount of 1-yen silver coins and of silver bullion corresponding to the promissory notes of the mint retired 75,093,822.042 



Items under the above: 



Amoiml of the silver yen retired by being exchanged for gold coin between October. 1S97. and July. 1S98 38,648,297.000 



Amount of the s-ilver ven retired bv being received in ]>avment of taxes and other public dues and then exclianged and 



retired '. ." " 3. 977. 099. 000 



7\ mount of the silver yen received in Formosjv and tiien exchanged and retired 2. 962, 973. 000 



Amount of the promissory notes of the mint exchanged for gold coins 25,078, 148. 840 



Amount of the i>roniissory notes of the mint retired before October, 1897, for tlie purpose of coining subsidiarv silver 



pieiis ' 3, 827, 304. 202 



Total 75, 0513, S22. 042 



Amount of retired silver yen depo.';ed of by sale 75,093,822.042 



