Page:Japan by the Japanese (1904).djvu/635

In the course of time a coinage law and a subsidiary coinage law for the whole Empire were passed by the Diet, and, after receiving Imperial sanction, were promulgated on the 26th day of March, 1897. The reformation of the monetary condition in Formosa thus became imperative, and several meetings of the Special Committee appointed to consider the question were held. The Imperial Government wished to apply the gold standard to the colony’s affairs, as well as to those of the mother country, but the economic conditions prevailing in the island of Formosa precluded this, not only because the natives were unaccustomed to the use of gold coins, but also because trade relations with China and other silver countries, comprising nine-tenths of all the countries with which Japan has trade relations, and the payment of Chinese work-labourers, compelled the retention for the time being of a silver dollar currency. Stamped silver 1-yen coins were therefore brought into use as legal tender in Formosa, and enjoy unlimited circulation there, according to the market price that is officially determined and notified periodically by the Formosan Government.

The existing monetary situation in the colony may therefore be summed up thus:^[1]

1. That de facto the legal standard in Formosa is the stamped Japanese silver 1-yen piece.
2. The Bank of Formosa has power to issue notes against a reserve of silver and first-class securities to a limit of £500,000 sterling, £200,000 of that reserve being supplied by the Government.
3. That all foreign coins as aforesaid are used merely as bullion.

In the execution of its varied measures of reform, the Japanese Government has expended in all upon Formosa since the transfer in 1895 the sum of £18,112,000. These figures include, however, £8,326,000 for military expenses, so that the general expenditure has amounted to, as already shown, £9,786,000. The heavy charges for military operations having ceased, for the last fiscal year this item figured in the accounts at no more than £782,000 for the twelve months, and it is likely to be still further reduced in subsequent Budgets.

Deducting from £9,786,000 the expenditure upon public works, viz., £3,072,000, and the sum total of the revenue, £5,930,000, we find that the net cost to the mother country for civil administration has been £784,000, or £122,000 per