The period of the third shōgun, Iyemitsu (1624-1651), perhaps marks the height of the vigor and efficiency of the Tokugawa feudalism. He was assisted by able councilors, and his strong administration was emulated by many great local barons in their respective fiefs, so that a profound peace reigned over the country broken only by the Christian insurrection at Shimabara. From the latter half of the seventeenth century, however, signs of the decline of the Edo power began to manifest themselves. At the accession of the fourth shōgun, Iyetsuna (1651-1680), Yuino Shōsetsu and Marubashi Chūya, two military captains not attached to any feudal baron, collected a great number of rōnin ("wave men," samurai attached to no lord) in Suruga and in Edo, their project being to raise the standard of revolt simultaneously in the west and in the east. Their attempt was unsuccessful, but its failure did not deter two other rōnin from plotting a similar insurrection in Edo the following year. They, too, were discovered and punished before their plans matured. Thereafter, for a time, owing doubtless to the fact that the feudal barons were too frequently deprived of their estates, their vassals found themselves homeless and resourceless, and the peace of the country was broken here and there by bands of rōnin. These troubles, however, were speedily dealt with. Nor was the Edo castle itself free from trouble, for toward the close of Iyetsuna's shōgunate, the tairō, Sakai Tadakiyo, acquired so much influence that the authority of the shōgun himself was somewhat impaired.

The next shōgun, Tsunayoshi (1680-1709), however, returned to the vigorous policy of the first three of his predecessors. He dismissed Tadakiyo, and appointed Hotta Masatoshi, a statesman of great acumen, in his stead as tairō. The shōgun and his ministers alike devoted themselves unwearyingly to promoting the welfare of the country. This era is worthy of close attention. We find, among other things, that Tsunayoshi greatly encouraged the study of literature. Tokugawa Iyeyasu, though essentially a soldier and statesman, fully appreciated the importance of literature, which he conceived as an indispensable factor in encouraging the pursuit of virtue and promoting the peace of society. Even while his hands were busy with campaigns and battles, he invited great savants and listened to their lectures on the Chinese classics. He also caused his officers to collect and reprint valuable books that would otherwise have been lost to the nation. His three successors followed his example in this respect, but it was the fifth shōgun, Tsunayoshi, who above all contributed to the spread of literary pursuits. Devoted from his youth to the study of the Chinese classics, he made a habit, after his succession, of delivering lectures to the feudal barons and vassals, and Shintō and Buddhist priests, and it may well be supposed that this action gave a great impetus to literary pursuits.

Prior to this time, it had been customary for the military men to neglect the study of reading and writing. Such occupations were abandoned to the priests, and it resulted that, even after the conclusion of the wars, men having a predilection for literature generally drifted into the ranks of the priests. Such persons, however, were not required to adopt the tonsure or to give up their position as samurai. The learned family of Hayashi were a case in point. The succeeding shōguns paid them high respect, and a school founded by them, at first in the character of a private establishment, but afterward taken under government protection, grew into an institution of much importance under the name of the Shōhei-kō. The example of Edo was widely followed in various provinces of Japan, and numerous institutions of learning sprang up in all the fiefs, from which the most distinguished pupils were selected and sent to the central school, Shōhei-kō, for purposes of further study. So far was the study of Chinese literature carried by the Japanese of the time that some of their publications in that line elicited admiration of the Chinese themselves. The Edo epoch may thus be described as the golden era of Chinese literature in Japan, although unfortunately this record is somewhat marred by the acrimonious disputes that sprang up among the different schools of philosophy, each considering itself orthodox and denouncing the teachings of others as spurious. The study of the Chinese classics also called forth the revival of Japanese history and belles lettres. Fiction, dramatic pieces called kikyoku, and the popular, pithy verses known as haikai, flourished greatly, particularly during the Genroku era (1688-1703). Education among the masses also at last made its appearance, for in almost every temple there existed a private school, called tera-koya, in which the children of farmers, merchants, and artisans were taught rudimentary lessons in reading, writing, and arithmetic.

A few words may be said regarding the literary productions of this period. Mitsukuni, lord of Mito and grandson of Iyeyasu, himself a distinguished scholar and munificent patron of literature, established in his Edo mansion a historiographical bureau, where, under his direction, a number of savants undertook the compilation of the history of Japan from the days of the Emperor Jimmu. This work, "Dai Nihon shi" (History of Great Japan), in 243 books, written in the Chinese style of composition stands at the head of Japanese histories of this era, the second in order being the "Honchōtsugan" (Mirror of Our Dynasty), in 300 books, compiled under the direction of Hayashi by order of the shōgun's government. In the same category may be placed the "Fusōshuyōshu," 30 volumes of Mitsukuni, and the "Reigiruiten," 510 volumes, of the same author. Of other greater works, the "Kansei Choshu Shokafu," in 1053 books, the "Chōya Kyubuniko," in 1083 books, and the "Tokugawa Jikki," in 516 books, may be mentioned. There was also a large work on botany called "Shobutsuruisan," in 1054 volumes. Hanawa Hokiichi, a renowned scholar, though blind, made a business of collecting old rare works, as the "Gunsho Ruijū" (1821 volumes). Arai Hakuseki was the author of over three hundred books on classics, history, and law. The novels of Kyokutei Bakin aggregated more than two hundred. And in addition there were numerous works by less prolific students. On the whole, in the variety and height of literary development the Tokugawa period is unrivaled in the history of Japan. The monopoly of learning of the Buddhist priest was completely broken, and the intellectual power of the nation, long held in abeyance under the stress of continual warfare, now asserted itself with tremendous vigor.

At the same time proofs became more abundant that the prime of the real greatness of the Tokugawa had been passed. The same fifth shōgun who so vigorously encouraged learning, and under whom the glorious era of Genroku occurred, unduly promoted Yanagizawa Yoshiyasu, a man of humble origin, and treated him with unbecoming favor. Peace had then lasted for eighty years, and both the government and the people had begun to fall into luxurious and extravagant ways, so that, for the first time in the history of the Tokugawa, the government found itself straitened for funds. The total revenue of the empire derived from land then amounted to 30,000,000 koku, of which 23,000,000 koku belonged to the feudal barons, and 3,000,000 koku to the bannerets, shrines, and temples, the remaining 4,000,000 representing the income of the government. Of this last named sum, 1,400,000 koku were absorbed by the shōgun's household, a paltry sum of 150,000 being considered sufficient for the maintenance of the sovereign, the payment of the civil nobles' allowances, and the other expenses of the court in Kyōto. The method of taxation varied according to provinces, but the general rule was that the government, or the feudal lord, took forty per cent., and the cultivator sixty per cent., of the gross produce. In the early years of the shōgunate large reserves of money were accumulated by Iyeyasu, Hidetada, and Iyemitsu, but Tsunayoshi expended the whole, and found himself reduced to considerable straits. Yoshiyasu prevailed upon him to adopt a scheme proposed by one Hagiwara Shigehide, namely, the issue of a debased currency. The coins issued in the early years of the Tokugawa, namely, the Keichō-kingin (gold and silver of the Keichō era), were very pure, but in the recoinage of Tsunayoshi, gold was alloyed with silver and copper, and copper with lead and tin, so that the cost of the coins was below their face value. Many hundreds of thousands of ryō were obtained by this device, and thereby the embarrassed finances of the shōgun seemed to have resumed their normal state. But the evils incidental to currency debasement did not fail to ensue. Prices appreciated suddenly and counterfeiting took place on a large scale. Subsequently, however, the government corrected these abuses by restoring the currency to its pristine purity, and substituting administrative economy for false finance. The bad example once set by the shōgun, however, was followed by the feudal barons long after he had mended his ways, for they, also, finding themselves in an impecunious state, began to issue fiat paper money, hansatsu, for circulation within their own fiefs. It is a point well worthy of the attention of students of history, that from the time of their accession to power until the day of their downfall, the Tokugawa shōguns never resorted to the device of issuing fiduciary notes.

Neither the sixth nor the seventh shōgun held his office long enough to accomplish much. In 1716 the shōgunate passed to Yoshimune of the Kii branch of the Tokugawa family. He was gifted with rare administrative talent, and during the thirty years of his rule sought to reform the government so as to place it again on a sound and strong basis. At this period the impecuniosity of Edo, which had been going from bad to worse under succeeding shōguns, and which resulted chiefly from extravagant and useless expenditure in the Tokugawa household, began to be a subject of serious embarrassment. Yoshimune had no sooner assumed administrative control than he set himself to restore financial order by closing or destroying several of the splendid mansions kept for the shōgun's amusement, and dismissing their female and male inmates, while he himself sought to set an example to his people by wearing rough garments and faring in the simplest manner. Finally, he issued an edict urging the necessity of economy in all affairs both public and private, and as the nation had practical evidence of this spirit in the conduct of its rulers, not alone the ministers of state, but also the feudal barons adopting and following the admonition of the shōgun by the exercise of strict frugality, economy became one of the most marked features of the era. Yoshimune not only sought to foster this spirit of frugality, but also endeavored to promote industrial and agricultural enterprise. He encouraged the cultivation of Korean ginseng as well as Batavian and sweet potatoes; he inaugurated the planting of Japanese sugar cane, and at the same time dispatched officials to various parts of the empire to promote the growth of other products. Naturally there appeared many persons in the different clans who devoted themselves to industry and agriculture. Enumerating the principal developments of the time, we find that sericulture was greatly extended and its methods were improved throughout the eastern provinces; that indigo was cultivated in Awa, and oranges were grown in Kiushū; that the raising of tobacco and the operation of drying bonito were considerably encouraged in Satsuma; that salt was manufactured in Shikoku and Chiukoku, and the hardware, lacquer, goldsmith's and furrier's trades were greatly developed. Regulations were enacted for the protection and encouragement of farmers, providing, among others, that, in the event of a farmer being prevented from carrying on the necessary operations of agriculture, his nearest neighbors must assist him. Indiscriminate transactions in real estate were prohibited. The sale and purchase of land were forbidden; measures were framed to prevent the undue growth of large estates, as well as to protect the humble classes and obviate their dispersal through poverty. Further, the shōgun encouraged the development of water-ways for the transport of goods and for the irrigation of lands. The result of all this beneficent administration was such a marked increase of the production of rice that the people called Yoshimune the kome (rice) shōgun. His policy, so far as concerned the promotion of industry and agriculture, was adopted and pursued by several of his successors.

From the middle ages of Japanese history taxes on land constituted the chief item of state revenue. It will be remembered that during the Tokugawa period four-tenths of the produce of the land went to the government and six-tenths to the farmer. There were two methods of collecting the tax. One was called kemmi-dori. According to this system, the quality of the rice raised from each particular place had to be determined annually and the rate of tax fixed accordingly. As the procedure was tedious, Yoshimune gave preference to the other method, jōmen-dori, the principle of which was to fix the rate of tax according to the average rice-harvest of the preceding five or ten years, and thenceforth, during the interval of years to which this rate applied, the farmers were required to pay the tax thus determined whatever might be the nature of the crops, exceptions being made, however, in the event of drought, tempest, or floods.

The industrious hand of Yoshimune extended also to the domain of law. Throughout the government of Iyeyasu and his first successors no code of criminal law was specially enacted, the administrative maxim of the time being that moral doctrines should guide all officials, and that the judges should consult the dictates of their own conscience in dealing with criminals. But as popular knowledge increased, it became obviously necessary that uniformity of punishments should be secured by fixed and universally applicable laws. Yoshimune caused the various old laws to be collated and embodied into a fifteen-volume code, called "Hatto-sho." Another volume of law, the "Kujikata-sho," popularly called "Gojō-sho hyak-ka-jō," was prepared after consultation with various jurists and officials. These enactments constituted the complete criminal code of the Tokugawa. From its provisions were expunged all punishments such as had been practiced in times of war; examination by torture was restricted to cases the circumstances of which obviously dictated its application, and on the whole the object aimed at was to lighten the scale of punishment as far as possible. These criminal laws were not, however, made public. The people to whom they applied knew little of their precise provisions, only the officers charged with the duty of administering them having cognizance of their purport. The object of this system was to inculcate respect for the laws themselves rather than fear of the consequences of violating them.

Among the judicial officers of the time was one Ōoka Tadasuke, whose acumen in judging offenses was so remarkable that the people credited him with almost supernatural ability. Many of his judgments were such as to be thought worthy of perpetual record. As to the punishments commonly inflicted, we find manacling, scourging, and exile, the most severe being transportation to a distant island and death. The degree of punishment in the same class varied with the nature of the crime. There were also other punishments, as branding, public exposure, confiscation of property, and the like. In the case of samurai, it was assumed that, being sufficiently conversant with the code of etiquette and the principles of morality, minor penalties were not required for their control. Hence the methods resorted to with them were confinement to their own residences, shutting them off from general intercourse, dismissal from office, or compulsory suicide. Samurai who had been guilty of an offense were first degraded from their class and then suitably punished. With regard to priests, also, special penalties were applied; as, for example, exposure to public view, expulsion from the temple at which they officiated, or absolute suspension from religious duties. In all the fiefs care was taken to preserve a close relation between local penalties and those inflicted by the central government, but differences in the degree of severity exercised made themselves apparent in the sentences of different judges, and further, since the judiciary was not independent of the executive, miscarriages of justice were not infrequent.

Another feature of the feudal society of the time which Yoshimune deeply regretted was the general neglect by the samurai of their military practices under a long reign of peace. For this grave fault the shōgun strongly rebuked his vassals, encouraging them to practice equestrian archery, fencing, spear-exercise, swimming, gymnastics (jiūjitsu), and other martial arts, and reviving the long-discarded pastime of pursuing game with hawks on the Kogane plain. Originally fond of such pursuits, he applied himself to them with added ardor in order to popularize them among the samurai. Fencing with the sword was the most practiced and most esteemed of all military exercises. Every member of the feudal class, from the shōgun downward, received regular instruction in this art, and regarded his two swords with the utmost love and veneration, the skill and spirit shown by him in their use being justly a source of pride to Japan. Spears and firearms were also widely employed, and the practice of jiūjitsu—a species of gymnastics based on the laws of balance and reaction and directed to purposes of self-defense—received general attention. Men conspicuous for skill in fencing and other martial exercises built schools and became teachers of their respective specialties. Thus theoretically the military training was very perfect, but as there had been no occasion for the practical exercise of the art of war during many years, the samurai became gradually unfit for service in the field, and would doubtless have lapsed into an even worse condition but for the strenuous efforts made by Yoshimune on his accession to power. Subsequently, toward the end of the eighteenth century, Matsudaira Sadanobu, a minister of state, spared no pains to encourage the pursuit of martial exercises, but the continued absence of any practical need of such attainments told steadily upon the samurai, and toward the close of the shōgunate not only had the nation become comparatively enervated, but also its military systems were old-fashioned and inefficient from foreign points of view. The government then found it necessary to remodel the organization, creating such offices as rikugun bugyō (minister of war) and kaigun bugyō (minister of the navy), adopting the European system, adding cavalry, artillery, and engineers, to the army, and establishing iron foundries and docks for the use of the navy. At the same time, the restrictions imposed upon shipbuilding were removed, and official encouragement was given to the construction of sea-going vessels and to the art of navigation. Thus the foundations of the present army and navy were laid.