THE PAPER CURRENCY

IN 1878, the plan of redemption of the paper money and the national debt was prepared. It was published in the next year. By that time, the depreciation of paper money had reached over twenty-five per cent. Startled at this, the Government sold out silver to the amount of 2,400,000 yen in April. By this, the price of paper somewhat recovered, but when the sales ceased in July, the discount on paper not only advanced to the former figure, but in April, 1880, it was as much as 57.9 per cent. Again 6,000,000 yen of silver was thrown on the market, but with the same result as before, and the Government was obliged to give up the fruitless idea of artificially raising the value of paper. It is unfortunate that it did not resort to the remedy of contracting the volume of the notes. Dealings in gold and silver were prohibited on the Stock Exchange. The Yokohama Specie Bank was instituted to collect specie at home and to call it in from abroad. These precautions did not much improve the matter, and at last the Government turned toward the real remedy. The tax on sake (a beverage brewed from rice) was increased, and with the added revenue, the paper money was to be redeemed.