Page:Japan by the Japanese (1904).djvu/394

New Public Loan and Old Public Loan. This was the first issue of domestic public bonds in Japan.

In the year 1871 the Government gave permission to the feudal Princes and their retainers—except those in public service—to engage in agricultural, industrial, or commercial pursuits, which had been denied to them under the old régime. These retainers, however, did not possess the capital necessary for such purposes. In order to remove this difficulty, the Government issued pension bonds since the year 1874, and delivered them to those retainers in exchange for their hereditary pensions, and for the convenience of the beneficiaries one-half of these pension bonds were given in cash. In order to procure funds for the cash payment just mentioned, a public loan bearing 7 per cent. interest was issued in London in 1873. At that time the pensions of the feudal Princes and their retainers were estimated to cover three-fourths of the total revenue of the Government; consequently, the drain on the treasury was so heavy that these systems of pensions had to be reformed. Finally, the Government decided, to reform the institution of ‘rice-pension’ to ‘money-pension,’ and afterwards, in 1876, the ‘Voluntary Capitalized Pension Bond Act’ was promulgated, by which Act the old system of pensions was abolished, and Voluntary Capitalized Pension Bonds were delivered instead of money-pensions.

In the year 1878, as a relief to ‘Shinto’ priests, who had suffered by the reformation of the institution of ‘Shinto’ shrines, the Pension Bonds for ‘Shinto’ Priests were issued.

2. Public loans issued for the prosecution of public works. Since the Restoration, the Government recognised various administrative institutions, and issued public loans for public works. The most important of these public works was the improvement of the means of communication, especially the construction of railways. The first loan which the Government issued for this purpose was the public loan bearing 9 per cent. interest floated in London in 1870, to which allusion has already been made. With the money realized by this loan railways were constructed between Tokyo and Yokohama, and Osaka and Kobe. In course of time the issuing of public loans for public works became increasingly necessary; consequently, the Government issued these loans in 1878. This was the first issue of public loans at home. With this fund the railways between Kyoto and Otsu, Tsuruga and Ogaki, the new road along Shimizu, and the water-way of Nasu Plain, were constructed, and the methods of mineral and coal mining were improved.

In the year 1884–1885 the Government undertook to issue the Nakasendo Railway Bonds in order to connect the two