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fresh increase in expenditure, but, as the result of a general rise of prices, the original estimates for such items as the purchase of land, the construction of barracks, and other matters, were simply altered accordingly, thereby causing an increase of about 5,000,000 yen. The Okuma Cabinet collapsed after a brief period of three months, and was followed by the party of Marquis Yamagata. The new Ministry was successful in carrying through the increase of the land tax, by which about 40,000,000 yen was added to the annual revenue. In the meantime the money market began to improve. The Bank had to lower its rate and to increase the maximum limit of note issue uncovered from 85,000,000 to 120,000,000 yen. The so-called backward policy of Count Inouye was gradually replaced by the former progressive principles embodied in the post-bellum financial scheme. Owing to the heavy excess of the imports over the exports, however, the depression of the money market was again acutely felt. Consequently a reorganization in the financial and administrative systems came to be considered as imperative for alleviating the suffering in industrial circles. In 1900, on account of the Boxer outbreak in China, which compelled the despatch of our troops to that country, a sum of 20,000,000 yen had to be raised by increased taxation. On this account the necessity for the reforms referred to was all the more strongly felt. In the Diet of 1901, when the Government had a great controversy relating to financial affairs with the Upper Houses, Marquis Ito declared for the first time that the Government intended to carry out these reforms at all cost, and, at the same time, the idea that private as well as public undertakings must not be conducted on too large a scale began to become more general. Since then the Government started inquiries into matters relating to the question of reforms. The present Katsura Cabinet, which succeeded the Ito Cabinet, made another movement by appointing, with the consent of the two Houses, a special Commission for the purpose of examining into administrative affairs. In view of the decision carried out in connection with the thorough reorganization of our financial system, the Ito Ministry was compelled, as soon as the Diet was closed, to modify the Budget Estimates, which were passed by both Houses. Because, if the original estimates for 1901–1902 were put into operation, there would have been the necessity of raising a sum of 100,000,000 yen, consisting of the amounts to be obtained from the floating of a loan, from a temporary borrowing for the Boxer accounts, and from the issue of Exchequer bonds. The opinion of Mr. Watanabe, then Minister of Finance, was that the original programme would, if carried out, again seriously endanger monetary