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has not spared any effort to encourage their use in commercial transactions. As the result of these efforts the discount business has grown to a considerable amount. The bills cleared in the clearing-houses in Tokyo and Osaka during 1901 amount to 1,268,802,079 yen and 528,122,083 yen respectively. Bills offered for discount to the bank must be endorsed by at least two substantial names, and be payable within one hundred days. Those which bear a single name must be accompanied by collateral either in the form of warehouse receipts of merchandise or of the shares and bonds classed as securities of good credit.

The loans made by the bank upon securities are much smaller in amount than the discounts. These securities are the bonds of the Imperial Government of Tokyo and Osaka municipalities, and also those shares and bonds guaranteed by the State. Loans can be made for a period of three months or less, and renewal is allowed only once when necessary.

The bank receives deposits and makes advances on current accounts. The Bank of Japan does not pay interest on current deposits. Customers place their surplus money in the vault of the bank to secure the convenience of drawing cheques upon it. The banks belonging to the clearing-house association also settle their daily balances with their current accounts in the bank. The bank also issues deposit receipts, draft and transfer cheques. The distribution of various kinds of coins and bank-notes to the different districts of the empire constitutes no inconsiderable portion of the business of the bank.

Formerly the bank allowed loans and discounts exclusively to bankers, being literally the bank of banks; but since June, 1897, the way has been opened to deal directly with individuals and corporations which have good business standing. This measure has been taken to extend the benefit of the low rate of interest to the general market, and to check the excessive profit often secured by other bankers as mere intermediaries between the bank and the public. The change of the rates of interest on loans and discounts is subject to the sanction of the Minister of Finance.

The Bank of Japan has no direct dealings in foreign markets. But it uses its sister institution, the Yokohama Specie Bank, as its foreign agent. Indeed, to encourage foreign commerce, the Bank of Japan assists this institution in many ways. Among other favours, the former advances to the latter up to the amount of 15,000,000 yen in rediscounting foreign bills at a specially low rate of interest. The indemnity money received from China was also transferred from London to Japan through this institution either by the purchase of bullion or by exchange operations.

The total business transactions of the bank for 1901 amounted