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1886, when the monetary system was finally put on a sound basis.

Under the new system the national banks were deprived of the privilege of issuing notes, which privilege was lodged exclusively in the hands of the newly-created Bank of Japan. Most of them changed themselves into private banks, according to the Law for the Settlement of National Banks on the Expiration of their Term of Charter and the Law for the Special Settlement of National Banks prior to the Expiration of their Term of Business; while a few of them wound up their business, so that by February, 1899, there existed no national bank in the country.

Meanwhile, private banks and bank-like companies which did not come under the National Bank Regulations had considerably increased, until in 1884 their total number reached 954. These private banks and companies might be freely established, the only condition being that they should be under the supervision of local authorities. To bring these institutions under a uniform and more efficient control, the Government promulgated the Bank Regulations and the Savings Bank Regulations, putting them in force in July, 1891, on which date a part of the Commercial Law also came into operation. Again, in April, 1896, the Bank Consolidation Law was enacted, with a view of facilitating the consolidation of existing banks by omitting the formalities of dissolution and so forth. As the result of these legislations, a great improvement is noticeable in the condition of private banks.

The use of cheques and credit notes had long been extensively practised among business men in Osaka. The practice, after a temporary and partial suspension during the general confusion brought about by the War of the Restoration, was soon revived with the revival of trade and confidence under the new régime. To improve the system of credit which had thus grown up in that emporium of commerce, and bring it more in harmony with the requirements of modern business, the leading banks of Osaka formed an association in 1879, and in September of the same year they applied to the Government for permission to establish a clearing-house, which was opened to business three months later. This was the first clearing-house ever established in Japan.

Since then the system of clearing bills has witnessed a steady and remarkable development. Clearing-houses are now in operation in Tokyo, Nagoya, Kobe, and other important centres of business throughout the country.

In November, 1879, a bank was established in Yokohama, under the National Bank Regulations, with a capital of 3,000,000 yen, for the purpose of affording facilities to Japanese merchants engaged in foreign trade. This is the progenitor of the present well-known Yokohama Specie Bank. It applied for