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power to issue orders in council, having the power of laws, if sanctioned by the Government.

Within seven years, more than 90,000,000 yen has been spent, while about 60,000,000 yen has been raised in the island, chiefly by taxation and monopolies in opium, salt, and camphor. The deficit was made good by means of loans and subsidies from the State Treasury. But her revenue is fast increasing, and before long she will be self-supporting. Now the Formosan Government is busily occupied in making railways, in completing railways, cadastration of lands, harbour works, roads, and other improvements.

One thing to be specially taken notice of is the fact that a separate system of currency prevails as a provisionary measure, till the time shall come when the natives, who have always had a silver currency, become used to the system of currency in use in Japan. At present one-yen silver coins are allowed to be used as legal tender, together with the standard gold currency, the ratio between the two being fixed from time to time by the Governor-General.^[1]

As was said before, the Bank of Formosa plays almost the same part as the Bank of Japan does in the motherland, the only difference being that the former issues silver notes instead of the notes convertible into gold.

At first the natives were troublesome on account of misunderstandings, but now they are contented with Japanese rule, and the island is making rapid advance, not only in the way of material progress, but also in other directions, notably such as education, sanitation, etc.

One of the most striking features is that the direct trade with Japan is taking the place of that with China. Judged by the test of Formosa, Japan has shown herself to be a colonizing power.