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Government frequently resorted to recoinage as its invariable relief measure, which in every case, excepting the solitary case of Kioho time (A.D. 1715 to A.D. 1734), brought out coins of lighter weight and poorer quality. The coinage system was thus, though nominally kept intact, practically destroyed in the end through successive debasement. Besides, some of the Daimios (feudal princes) often took the liberty of secretly coining money, while the practice of issuing paper-money for circulation within their separate jurisdictions had become well-nigh universal. In a word, the currency system of the country at the end of the Shogunate period was in a most disordered condition.

Soon after the Restoration the Imperial Government saw the necessity of reorganizing the existing system of coinage on a sound basis, and in May, 1871 (4th year of Meiji) a new Coinage Law was promulgated, which opened the way for the final establishment of the gold standard system. This is a fact that must be particularly noted in order to clearly understand the monetary history of modern Japan. However, the gold standard could not yet be thus at once established. In those days the universal medium of exchange in the Far East was the Mexican dollar, and the Government thought the interest of foreign trade would be best served by issuing, besides the standard gold coins, the silver one-yen (or trade dollar), equal in size and quality to the Mexican dollar, and by making it legal tender only within the limits of the treaty ports. So the provision was made in the new Coinage Law of 1871 for the coinage of the silver yen to be called Boyeki ichi yen gin (or trade silver dollar). At the same time, the disordered condition of finance, especially the issuing of inconvertible paper-money, drove gold coins out of the country with enormous rapidity. Under these circumstances, situated as the country was in the midst of the silver countries of the East, it was found impossible to maintain the gold standard. These reasons, as well as the inconvenience of maintaining the two kinds of money, one for foreign and the other for home trade, led the Government to issue Imperial Ordinances Nos. XII. and XIII. in May, 1878 (11th year of Meiji), which made the trade dollar legal tender throughout the country side by side with the gold coins. Thus we no longer maintained a gold standard, but a gold and silver bimetallic system. This change must be regarded as one deviating step in the development of our monetary system.

The Government of that time should not, however, be too severely judged. The expenses of the revolutionary wars were very heavy, and the financial need most pressing. Almost the only resort of the Government was the issuing of paper money. Moreover, when feudalism was abolished in 1871 (4th year of