“It occurred to me then,” wrote Count Matsukata afterwards, “that on account of the unstable price of silver, as well as in view of the possible adoption of a gold standard by our country, it would be greatly to our advantage to receive payment of the indemnity in British, instead of Chinese money. The Minister-president of State, Marquis Ito, acting on my suggestion, negotiated with the Chinese authorities, which led to our receiving the indemnity money in pounds sterling.”
In September 1896 Count Matsukata was appointed Minister-president, for the second time in his career, and he forthwith directed his endeavours to the realisation of his highest ambition. A bill was drawn up in February of the ensuing year, to the passing of which through the Diet there was in reality but little opposition. Some critics of the proposal said that the fall in the price of silver would rather encourage trade with gold countries, while the adoption of a gold standard by Japan would tend to decrease the amount of her exports to those countries. Others said that Japan, situated as she was in the midst of the silver countries of the East, would be placed in a position of much disadvantage in her trade with these countries if she adopted gold monometallism. Again, some said that Japan could not produce a sufficient amount of gold to be able to maintain permanently a gold standard system. This was not all. It was by many urged that the silver yen coins exported to foreign lands exceeded 100,000,000, and that if all these came back for exchange, as might possibly be the case, the national treasury would have to suffer an immense loss. Count Matsukata had no notion, however, of allowing himself to be influenced by those dismal prophecies. His Cabinet stood firm in its purpose, and in March 1897, after having been passed by both Houses of Parliament, the bill received the Imperial sanction, and was promulgated as Law No. XVI. on the 29th day of the same month. The stability of Japanese finance during the nine years which have passed since that Law came into force, and especially throughout the terrible ordeal that it has lately undergone during the time that Japan has been at war with one of the Great Powers of Europe, affords an incontestible proof of the soundness of Count Matsukata’s judgment, and the nation is indebted to him for the perseverance and fortitude that he displayed in carrying his scheme, despite all opposition, to a successful conclusion. No doubt every precaution that financial skill could suggest was taken by the Government of which he was a member. One of the earlier instalments of the indemnity was converted in London into gold bullion and conveyed to Japan as fast as steam could transport it, to be minted into coins in the Government mint. In buying bullion, too, care was taken to secure it without much disturbance of the market or loss to the Government. The gold thus turned into coins between July 1897, and April 1898, as a reserve for the exchange of silver yen, amounted to roughly £7,500,000 sterling. The process of exchanging began on the 1st of October 1896, and closed on the 31st of July 1898.
It is not a little instructive to learn to what degree the foreboding as to the national treasury being swamped by the number of yen silver coins that would come back for exchange, in which some critics indulged, proved to lack solid foundation. The total number of one-yen pieces coined at Osaka from the date of the opening of the Mint was 165,000,000. Of these the number actually exchanged during the ten months specified for gold coin was 45,500,000, including 10,750,000 sent back from abroad for that purpose: the rest were in circulation in Japan. It is estimated that 99,500,000 of yen coins were exported to foreign lands and never returned. 11,000,000 of these coins were taken abroad at the time of the China-Japan war,—5,750,000 were taken to Formosa after the cession of that island to Japan by China and were never brought in for exchange,—about 500,000 were recoined at Osaka into subsidiary coins,—and about 2,750,000 could not be traced, and must have been lost or worn out, or taken away by visitors to Japan, when leaving the country. Count Matsukata was not moved by sinister prophecies, for one thing because he had had the most careful inquiries made as to the numbers of these coins circulating in Shanghai, Hong Kong, the Straits Settlements, etc.; and it was found that no inconsiderable proportion of them either bore the marks of some private stamp or “chop” which unfitted them for circulation in the land of their origin, or had been turned into Chinese taels. Then it was known that a fairly large quantity was in use as a medium of exchange in the Straits Settlements and neighbouring islands, and that there was but little prospect of any of these coming back to Japan. Altogether Count Matsukata’s estimate of the number that would have to be provided for was 10,000,000, and this was within a trifle of the true number presented for exchange. The people were invited to pay taxes and make other public settlements in Yen coins, a vast number of Government treasuries and sub-offices were opened all over the country to facilitate the work of exchanging the silver, and that no report was ever received that any failed to get exchanged went to show that the process was effectually completed.
The next thing was to dispose of the silver that had been brought in, and a large part of it was recoined into subsidiary coins, a large proportion sold in Hong Kong, Shanghai and elsewhere, and much sent to Korea. The whole amount was disposed of in a year and a quarter after the new coinage law was promulgated in Japan. The total expense incurred by the State in effecting the change was roughly £500,000 sterling, but this was more than made good by the Mint profit on the subsidiary coinage. As fast as they could be produced the ten-sen, twenty-sen, and fifty-sen pieces were put into circulation, in lieu of the paper money of small denominations, and it is estimated that the sum-total of the subsidiary coinage in actual circulation,—silver, nickel, and copper,—would be of the value of 4s. per capita, if calculated in English money. This is considered to be ample for the economic needs of the people to-day.
In October 1898 Count Matsukata was for the fourth time called upon to take the portfolio of Finance, with Marshal Yamagata as Minister-President, and in May 1899 he presented to the Premier a masterly report on the financial progress of Japan, entitled the “Adoption of the Gold Standard,” which was issued in book form, and it was followed in March of the next year by a “Report on the Post-Bellum financial administration of Japan, 1896-1900,” both affording emphatic testimony to the Minister’s untiring zeal and industry.
In October 1900 Count Matsukata retired into private life, and in the ensuing summer he visited London and the capitals of Europe. In recognition of his long and valuable services to the State the Emperor accords him as much consideration as if he were a Cabinet Minister still. He has received the Grand Cordon of the Paulownia Imperialis, and other decorations, and many foreign honours. He was twice Premier, and fourteen years Finance Minister. His achievements include land-tax reform, centralisation of fiscal administration, the redemption of the paper money, the establishment of the Bank of Japan, post-bellum finance, the adoption of the gold standard, the establishment of the Industrial Bank,—and he has rendered many other services to his sovereign and his countrymen of which it is needless to give details here. His part in the Making of Japan has been most ably and conscientiously performed, and he has won the respect and admiration of all classes of his fellow-subjects of the Japanese Emperor.
XX
ADMIRAL VISCOUNT ENOMOTO
Born on the 25th of August 1836 at Yedo, Enomoto Buyo was sent by the Tokugawa Government as a young naval officer to study in Holland, and he was in Europe for several years, ultimately returning to Japan on board the Kai-yo Maru, as she was named, a corvette built at Amsterdam to the order of the Shogunate. With him returned several of the students who had been despatched in 1862 and 1863 to Europe for purposes of study, some sent by their clans, and some by the Bakufu. Ito Shunsuke and Inouye Bunda, two of the number, had, as is elsewhere recorded, returned some years previously, in consequence of trouble in their native province of Choshiu. The Kai-yo Maru reached Japan in 1866, and she was a formidable addition to the fleet of six vessels already possessed by the Shogun’s Government. Being a native of Yedo he was of course one of the Bakufu supporters, and when the troubles of 1867 began, and which were to culminate in the fall of the Tokugawa family from power, Admiral Enomoto was loyal to his chief, Prince Keiki, and fought strenuously for his side in the War of the Restoration.
