JAPAN
In obedience to elementary economical laws, the cheap money had steadily driven out the dear, and although the Government mint at Ōsaka, founded in 1871, had struck 80,000,000 yen worth of gold and silver coins between that date and 1881, when the policy here described was inaugurated, the customs returns showed that a great part of this metallic currency had flowed out of the country. Under these circumstances Japanese financiers decided that only one course offered: the treasury must play the part of national banker. The State must advance paper money to producers and manufacturers engaged in the export trade, on condition that when their goods were sold abroad, the specie thus obtained should be handed over to the treasury. This programme required the establishment of Consulates in the chief marts of the Occident, and the organisation of a great central bank—the present Bank of Japan—as well as of a secondary bank—the present Specie Bank of Yohohama,—the former to conduct transactions with native producers and manufacturers, the latter to finance the business of exportation. The outcome of these various arrangements was that, by the middle of 1885, the volume of fiduciary notes had been reduced to 119,000,000 yen, their depreciation had fallen to three per cent, and the metallic reserve of the treasury had increased to 45,000,000 yen. The resumption of specie payments was then announced, and be-
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