Count Matsukata's Speech of March 3d, 1897. After an historical account of the currency history of Japan, and an explanation of the terms of the new bill, Count Matsukata said : "A retrospect of our past progressive history shows that the trade as well as the productive industry of our country can not fail to be developed to a state of marked prosperity.

With the exception of such an unusual year as the last, the average excess of imports from silver-using countries, since the 21st year of Meiji, was 10,500,000 yen, but the excess of exports to gold-using countries being over 11,000,000 yen, the balance shows a sum which we may look to receive in gold. If we may hope to progress in that degree then we need not entertain any fear. Moreover, as Japan is closely connected by her geographical position with gold-producing countries, such as Australia and California, and since gold is annually exported to us from China and Korea, there will be no difficulty in obtaining the yellow metal if we but take the trouble to do so. Anxiety is also felt by some as to our foreign commerce. It is true that the trade of our country seems to have progressed, to a certain extent, in consequence of the depreciation of silver, until the rise of wages and the appreciation of commodities have become extremely remarkable. Of late years, Japan's foreign commerce has made considerable strides. But that cannot be attributed to the depreciation of silver alone. Facilities of transportation and communication, combined with the progress of education, must have been the principal cause of the development. When the prices of commodities rise so extravagantly as they have now done, not only do we fail to reap any benefit from the depreciation of silver, but we are likely to be overwhelmed with injury from that cause.

The change of our standard to gold may not handicap us sensibly in competing with other gold countries for the trade of a silver-using nation like the Chinese, for we continue to enjoy the advantages of proximity to the Oriental markets and of cheapness of all sorts of labour.

It is feared by some that should the gold price of silver fall hereafter, considerable embarrassment will be felt in connection with China's silk and tea, with which we have to compete in the markets of gold countries. Such embarrassment, if it be felt at all, will be only temporary, and will be amply compensated by the benefits resulting from gold monometallism, which guarantee us against fluctuations in the rate of exchange."

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"The next strongest opposition comes from those that advocate the adoption of bimetallism. That tendency prevails among learned men in Europe and America, and also among persons engaged in Oriental trade. The problem is, in itself, very difficult to solve with a view to the practical enforcement of bimetallism. The principle of bimetallism amounts, in fact, to the simultaneous or optional use of gold and silver, and can not possibly be asserted in practice by the independent strength of a single country. Here I must say a word about the international Coinage Conference. It was convened several times with a view to the rehabilitation of silver and to re-introduce the system of bimetallism, but its labors were quite unfruitful. The latest conference was held in the 25th year of Meiji (1892) at the suggestion of America, in the city of Brussels, and representatives from 20 countries were present. This assembly, however, was closed without coming to any decision. Later on, namely, in the year before last, a suggestion for holding an International Conference with regard to coinage emanated from various states of Europe and America, but no practical result has been attained up to the present day. England, which is financially the most influential among the Powers of Europe, having revised her system of Indian coinage in the year following the International Conference, there is little ground for anticipating the international adoption of bimetallism. Even supposing that the States on the West form a union for that purpose, and that bimetallism be introduced, the adoption of gold monometallism on our own part will present no obstacle. In short, the system of bimetallism can not be carried into effect without the safeguard of international agreement, and since there is great difficulty in effecting such agreement, it would be most unwise to defer such an important reform as that now engaging our attention merely on the chance of the bimetallic problem's being solved. From all these circumstances it will be seen that no anxiety need be felt of opposition organized with respect to the present question.

I will now lay before you some of the advantages accruing from revision of the coinage system, as well as the necessity of revision. The chief economic advantage we may expect to gain is that we shall avoid fluctuations in the prices of the commodities. The adoption of the gold system can not fail to lessen such fluctuations, so that the anomaly of constant ups and downs in the price of commodities may eventually be avoided. Great

appreciation of price may produce a temporary state of prosperity in the market, but as materials and wages must be gradually influenced by the anomaly, the final issue must be not only injury to production but the decrease of exports. On the other hand, any sudden fall of the price of commodities is sure to inflict loss on the commercial community, and to impair the circulation of money. These abuses and injuries, however, are inseparable from the silver system, and cannot be avoided except by recourse to gold monometallism.

The second profit that we may hope to derive from the gold standard is an increase of exports. A gold system secures convenience of trade with foreign countries having a similar system, and prevents fluctuations in price of commodities. Hence, productive power is developed, and the export trade is promoted. Another advantage is that fluctuations in exchange are obviated. A silver country like Japan suffers so considerably from the depreciation of silver in gold countries, that its trade is almost crippled owing to constantly shifting rates of exchange. This evil can at once be removed by the adoption of the gold standard. Finally, comes the question of access to larger stores of capital. The progress we have made in Western civilization has imposed upon us the necessity of holding close communication with the markets of the world. But we are separated from Occidental nations at present in the matter of monetary circulation. That inconvenience will be removed by bringing our coinage system into uniformity with theirs, and considerable facilities will be gained for the circulation of money and with respect to financial affairs generally. Still the question of the monetary standard is of such great economic importance that it ought not to be decided on the basis of financial convenience alone.

In deciding to introduce gold monometallism, the history of our country since the Keicho era, as well as domestic and foreign conditions have been taken into account, with the view of consolidating the basis of our coinage and promoting the healthy development of the national economy. An established opinion exists among various nations with respect to this very question. Austria has solved the problem even by the issue of a foreign loan, and though there is more or less controversy about the desirability of bimetallism, that is an academical matter at present, whereas the question that we have to deal with is essentially practical. The gold that we now possess, if left to itself,

will soon be absorbed by other nations, and it will be extremely difficult to recover it again. We have now a rare opportunity for laying in a stock of gold, and resolute steps in that sense seem desirable. Any delay must be attended with financial anxiety and not a little injury. I hope the question will be promptly investigated and approved, as it is of vital moment to the state." (Japan Mail, March 13th, 1897.)

From an editorial in the Japan Mail of March 6, 1897. "The Government mint at Osaka, during the quarter of a century included between 1871 and 1895, struck 225 million yen worth of coins. Great quantities of these found their way to China, Hongkong and the Straits Settlements for purposes of currency, or were exported to redress the balance of trade, so that, by the year 1896, such a thing as a silver yen or a gold piece was not to be seen in the hands of the people. The only hard money in daily circulation was subsidiary coins; the larger denominations (50-sen, 20-sen and 10-sen) of silver; the smaller, of nickel or copper. According to latest estimates, the metallic currency now in circulation consists of gold coins, to the value of 12,872,187 yen; silver coins to the value of 73,355,844 yen; and nickel and copper coins to the value of 15,551,608 yen. Thus, out of 225 million yen worth of coins struck by the mint, 102 million yen worth, approximately, remain in circulation. There are also lying in the vaults of the Bank of Japan gold and silver coins aggregating 66 million yen. Hence it follows that Japan retains 168 million yen worth of the coins struck by her mint, and that 57 million yen worth have left the country."

"At present, the total currency of all kinds averages only 7% yen per head, a trifling figure when compared with the rate in the United States, namely, 40 yen per head. Side by side with this record it is interesting to place the facts that during the years 1895-6, the Japanese people subscribed 120 million yen for war purposes, and started enterprises-railways, banks, industrial, commercial and agricultural companies-with capitals aggregating 1,280 million yen. In other words, currency representing 318 million yen, of which only 102 millions were in hard money-performed services representing 1,400 (million) yen; which means that every yen did the duty of five, approximately, to say nothing of the ordinary work of exchange. On the whole, it would be difficult to find a nation conducting its monetary transactions with greater economy and with less recourse to the precious metals.

Such is the state of affairs that the government proposes to alter by adopting gold monometallism. The program is in many respects so simple as to commend itself. Every silver yen now in circulation is to be reckoned as one-tenth of a standard gold tenyen coin, the latter being the approximate equivalent of an English sovereign. Thus the ratio between the precious metals becomes I to 32.34, and since the actual value of the sovereign to-day is only 9.552 yen, whereas the ten-yen piece will be worth 20s. 534 d., silver in Japan, according to the new ratio, will be 2.13 per cent. cheaper than it is at present in the markets of the Occident. The silver 1-yen pieces now in circulation are to be gradually withdrawn and replaced by gold coins, the ratio being as above stated.” . . . .

"It is understood that during the months of July, August and September, the mint will coin gold to the extent of 48 million. yen; namely 12 million yen worth of 10-yen pieces, and 36 million. yen worth of 20-yen pieces. For the purposes of this gold coinage, there is already 20 million yen worth of bullion in the Osaka mint, and arrangements have been made for 15 million yen worth to arrive by the middle of the present month (March). Moreover, the Bank of Japan holds 35 million yen worth. Hence the total stock of gold bullion immediately available for coinage purposes is 70 million yen."

'Concerning the reserves to form the basis of the gold currency the following figures are approximately correct :

"To complete these figures we append the currency in circula

tion at the end of last January: