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the public loans at a rate of interest much lower than those it had hitherto been paying. The result was the promulgation in 1886 of the ‘Consolidated Loan Act,’ which enabled the Government not only to lighten the treasury charge, but to simplify the management of the business connected with public debts. By means of the Consolidated Public Bonds—5 per cent. interest—issued under the above-mentioned Act, the Government redeemed the Kinsatu Exchange Loan—bearing 6 per cent. interest; the Voluntary Capitalized Pension Bonds—bearing 6 per cent. interest; the Public Works Loan—bearing 6 per cent. interest; the Voluntary Capitalized Pension Bonds—bearing 7 per cent. interest; the Nakasendo Railway Bonds—bearing 7 per cent. interest; and the money borrowed from the Fifteenth Bank—bearing 7.5 per cent. interest.

The Government also borrowed from the Bank of Japan in 1890 the funds required for redeeming the Government paper money, but no interest is paid on this loan.

5. As a result of the war with China in the years 1894–1895, the Government again found it necessary to undertake the adjustment of the financial administration, and to take steps for the development of economical affairs, and initiate and extend public works of all sorts which were needed after the restoration of peace. The Government determined to issue the Public Works Loan for the improvement of the existing Government railways, the construction of Hokkaido railways, the establishment of steel works, the extension of the telephone service, the establishment of the leaf tobacco monopoly, and so forth. This loan was issued in 1894 with the consent of Parliament, the interest being 5 per cent. per annum. The Government further felt the necessity of issuing bonds for the public works in Formosa, and, getting the consent of Parliament in 1899, it promulgated the ‘Formosan Public Works Loan Law,’ for the financing of special works of importance, such as the construction of railways and harbours and the survey of the land and woods. A portion of the above-mentioned Public Works Loan, amounting to 10,000,000 pounds sterling, was issued in London in 1899 at 4 per cent. interest. The Public Works Loan and the Formosan Loan have not yet been completely issued.

As above mentioned, the Government has frequently issued public loans for the reformation of institutions, the adjustment of financial administration, and the prosecution of various public works.

In all there have been twenty-one issues of public loans, but eleven of them have been already redeemed, so there remain only ten of them to be redeemed in the future. In