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5,000,000 yen, and may in no case exceed the amount of notes issued against specie reserve. Notes issued beyond this limit in case of emergency are subject to a tax of 5 per cent. or more per annum. The Government has subscribed 1,000,000 yen of the shares of the bank, and the dividends accruing from these shares are added to the reserve fund of the bank for the first five years, for which period the Government is engaged not to transfer its shares. The Government has further made an advance of 2,000,000 yen in silver to the bank with no interest, which are added to the specie reserve against bank-notes issued.

The following lines of business are transacted by this bank: (1) To discount bills of exchange and other commercial bills; (2) exchange business; (3) to collect bills for companies and merchants who are regular customers of the bank; (4) to make loans on the security of immovable or movable property of a reliable nature; (5) to open current accounts; (6) to accept the custody of objects of value, such as gold and silver coins, precious metals, and documents; (7) to buy or sell gold or silver bullion; (8) to act as agents for other banks.

The island of Hokkaido being of great importance from military as well as economic points of view, its colonization and exploitation have received, and are receiving, the keenest attention of the Japanese Government. It was considered of urgent necessity to supply ample capital for the development of the island by establishing a special financial organ there, and with this object in view the Law of the Colonial Bank of Hokkaido was promulgated in March, 1899.

There is no essential difference between the purpose of the bank and that of an Agricultural and Industrial Bank. But the condition of things being considerably different in the northern island from those prevailing on the mainland of Japan, it was considered wise to establish a special bank there instead of an Agricultural and Industrial Bank.

The Colonial Bank of Hokkaido makes loans secured by shares and debentures, besides long-period loans secured by immovable property. Also it may issue debentures, receive deposits, and transact current account business.

The bank was opened to business in April, 1900, and in a few days the amount of applications for accommodation reached 1,270,000 yen.

In order to support the bank, the Government subscribed 1,000,000 yen of its shares, and for the first ten years the dividends on these shares are to be added to the reserve fund of the bank.