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The following lines of business are transacted by these banks:

To make loans on the security of immovable property, redeemable in annual instalments within a period of not more than thirty years; to make loans on a similar security, redeemable in a fixed term within a period of not more than five years, provided the total amount of such loans does not exceed one-fifth of the total amount of loans redeemable in annual instalments (loans made on the security of any immovable property may not exceed two-thirds of the value thereof, as appraised by the banks); to make loans on the same conditions without security to cities, towns, villages, and other public bodies organized by law; to make loans without security, redeemable in a fixed term within a period of not more than five years, to more than twenty persons combined with joint liability, who are engaged in agriculture or industry, and whose reliability is recognised; to receive fixed deposits, and accept the custody of gold and silver bullion and negotiable instruments. Besides, the banks may be entrusted with the receipt and disbursement of the public funds of prefectures. Each of these banks is authorized, when at least one-fourth of its capital is made up, to issue mortgage debentures to an amount not exceeding five times its paid-up capital. Such debentures may not, however, exceed the total amount of outstanding loans redeemable in annual instalments. The debentures shall be redeemed at least twice a year by means of drawings, in proportion to the amount of the redemption of the said loans. In accordance with the provisions of the Law for supporting the Agricultural and Industrial Banks (Law No. 84, 1886), the Government gave over to the prefectures funds for subscription of the shares of Agricultural and Industrial Banks. The amount of the said fund is limited by the law to the proportion of 70 yen per 100 cho of taxed lands in each prefecture, excepting building sites, mineral spring lots and swamps. The total amount assigned to each prefecture may under no circumstances be more than 3,000,000 yen, nor may it exceed one-third of the paid-up capital of each bank.

The Bank of Formosa was created by the Law of the Bank of Formosa (Law No. 38, 1897), for the purpose of promoting the economical development of the island. It is a joint stock company with a capital of 5,000,000 yen, and is granted the privilege of issuing bank-notes convertible in silver yen against the reserve of gold or silver coins or bullion and Government bonds, Treasury bills, notes of the Bank of Japan, and any other negotiable papers or commercial bills of reliable nature. The amount of notes not covered by the specie reserve is limited to