Evening star. [volume] (Washington, D.C.) 1854-1972, 1900-03-05
GOLD STANDARD IN JAPAN
Its Benefits Described BY Count Natsukasa
Masayoshi
Currency Freed From Constant FIuc.
tuations and Foreign Trade
Made More Stable.

REPORT on the Adoption of the Gold
Standard in Japan, by Count Matsukata
Masayoshi, H l. ]. MS Minister of State
for Finance" is the title of a volume is
sued by the japanese government. which
has just reached the treasury bureau of
statistics. 1t discusses in great detail the
history of the currency of Japan. and
closes with n chapter, entitled Effect Of
Coinage Reform Upon the Economic Con-
dition Of Our Country" In this chapter
the writer, Count Matsukata, discussing the
effect Of the new law, which went into op-
Grafton October 1, 1897, says:
Since the adoption of the gold standard
our currency has been freed from constant
fuctuation in its exchange rate, to which
1t was subject before. Owing to this lat
ter fact, moreover, the relations between
the claims Of the creditor and the habili-
ties of the debtor become less subject to
sudden and unexpected changes; business
transactions were made safe; an improve
ment in credit took place in the community
at large; prices became more constant; in
word, the way was now opened for the
steady and orderly growth of our COM
MERGE and industry.
Leaving out OF account in this section
the questions concerning the effect of the
the country, it can be very clearly seen
that since October, 1897, the prices of COM
modiies have kept comparatively even;
that while there have been some changes,
yet, when compared with the sudden and
great changes which used to occur former
ly, we must say that the fluctuations were
remarkably small. Besides, these small
changes in the price Of commodities can be
amply explained by referring to the par
tial failure Of rice crops. to the sudden
expansion Of industry, and then to its as
sudden depression, to a stringency in the
money market, as well as to some other
causes. These changes IN the price OF COM
modities were due, therefore, to the natural
working of the economic law OF supply and
demand in the commodities themselves If
we notice the fact, moreover, that the
amount of cheques and bills cleared at
the clearing houses in Tokyo and Osaka
cent months, notwithstanding the fact that
during this very time there prevailed much
business stagnation everywhere, we cannot
but conclude that business transactions on
credit have come to prevail more widely
and freely than before.
THE beneficial result Of the coinage re-
form is seen in another direction. Since
now, that the capitalists Of the gold stan
dard countries have become assured that
they will no longer be in constant danger
of suffering unexpected losses from invest
ments made in this country, on account
of fluctuations in the price Of silver, they
seem to show a growing tendency to make
such investments at low rates of interest.
This tendency, II encouraged, will doubt
less bring about closer connection be-
tween this country and the central money
markets of the world-a state Of things
which l believe we shall be able to see
realized, more and more fully, as years
go on.
so far as our trade with gold standard
countries is concerned, our adoption Of the
gold standard, which made us use the same
standard of value as those countries, has
proved to be source of great benefit. This
may be inferred from the fact that changes
which have since taken place in the rate
of foreign exchange have been but very
slight. and these all traceable to changes
In the condition of the foreign trade of
the country, and not all traceable, for
merly, to sudden changes in the price Of
silver. For this reason there was elimi-
mated from our foreign trade much of that
speculative element which was caused by
constant changes in the value Of our cur
rency: so that the way was at last opened
for the steady and natural development of
the foreign trade OF the country. Again.
concerning our commerce with silver stan
dard countries, contrary to the gloomy
prospects INDUCED in by some critics, our
trade with those countries has not ceased
face of certain events occurring in the in
terror of China, our greatest customer
among the silver countries, events, such as
natural calamities and disturbances, which
have greatly hindered the commercial ac-
t!vity of that country.
Since our coinage reform enabled us to
avoid all the evil effects of fluctuations in
the price OF silver, We stand now no longer
sity OF making plans for financial matters
with the currency constantly changing in
value, and sometimes suffering unexpected
losses and evils In times when those fiuctu-
atoms are unusually violent. All those
fears of miscalculation and losses have now
become things Of the past. Most particu-
larly in the last few years when national
expenditures for things bought abroad,
such as war ships etc, have greatly In
creased in amount, We have doubtless been
reform, great losses on the part Of the
national treasury. Besides since our adop-
ton Of the gold standard, our government
bonds have been sold in no small amount
In the European market. so that their
names appear regularly in the price list Of
the London stock exchange. This fact at
once converted our bonds into an interna-
ticnal commodity. and will no doubt lead to
a closer relationship between our home and
the foreign money markets."
The discussion also quotes a report Of the
higher commission on agriculture, com
merce and industry, which, after an elabo-
rate discussion Of the effect Of the none
terry system, closes by saying I'VE believe
form on our foreign trade has already been
great. and We do not notice any material
evil in connection with It, Besides our
adoption of the gold standard has made it
easier for our country to enter into the
economic community OF the world at large,
80 that henceforth 1t will become practtca-
BILE for us to invite capital from other coun-
tries. where it is plentiful, to be invested
in our country. This will doubtless be an
other of the benefits conferred upon the
country by our coinage reform. We con-
c1ude, therefore, that the effect Of the
coinage reform upon our foreign trade has
been beneficial. without trace Of evil"
n