The sun. [volume] (New York [N.Y.]) 1833-1916, 1907-08-01
FINANCIAL AND ECONOMIC con-
DITEON or JAPAN.
IN.-Banks and Banking.

Commodore Perry's vista to japan in
1853 and 1854 unlocked the doors Of thai
country n incidentally paved the way
for that Restoration" OF 1897 which really
marks the beginning OF the history Of mod
ern Japan. Prior to that year and for a
few years afterward Japan had no def
nitely organized and officially regulated
banking system. There we're lenders OF
money and dealers in exchange, and COM
merciRl paper was in somewhat common
use, but tho banking system as a system
begins with the National Bank Regula-
tions act of 1877. This law was modelled
generally on the National Bank act OF the
United States.
The law then passed provided for the
establishment OF national banks and au-
thorized such institutions to issue c%onVerti-
Die notes. A amendment to the act in
1875 made the bank notes also convertible
into the paper money then and afterward
issued by the Government to a very con-
siderable amount. A period OF almost dis
astrous i~nfiation developed. New banks
were organized. In 1875 there we're four
banks, and five years later there we're l5z.
A large amount OF money was issued by
them and by the Government and the sit
uation became dangerous. The si2. 900, 600
of paper in 1858 grew 10 $50, 700, 900 ten
years later. The matter was taken up
and In 1880 the Government prohibited
further bank organization. In 1883 the
privilege OF issue was suspended in all
cases except that Of the Bank OF Japan
nippon GinkoD. established a. a joint stock
concern in 1882. To this bank there was
granted the exclusive right Of note issue,
and attention was then given to a revision
Of the banking laws. This work, begun in
1888, wa completed In 1885. Much of the
later legislation has been OF a special
nature.
The Bank Of Japan is the central and
most important figure in the Japanese bank
ing system. In addition to its ordinary
functions. such n loans. exchange. col
lection, receipt of deposits. &C. it is author
lied to issue convertible notes and is more
over intrusted with the management Of
the receipts and disbursements of the
national treasury. Its capital. twice in
creased since the bank was organized. il
now SIS. 900, 900. fully paid up. Within the last
eight years, 1899 to 1905 inclusive. this bank
has increased it's reserves from So, rs5. 900
to $40. O50, 600, besides paying IL per cent.
dividends every year. During the years
IINttullk Nlt WI WIN Abu5Hid Dhith Va
Japan shares sold around $500, sometimes
above and sometimes below. During 1905
they ranged from $500 to $500, par value
being 800. Because OF its handling OF
Government money the statement of the
deposits and balances of this bank does
not in any way indicate the economic
progress of he country.
Next in the order of their Importance,
L.. .A..- -l.z 49, =. &c.
special banks, zach Of them, like the Bank
Of Japan, created by a special law. They
are "a the Yokohama Specie Bank (Yoko-
hama Shokin Ginko), with an authorized
capital OF sl2, OOo, 900, Of which $40, 500, 900
is paid up; (2) the Industrial Bank of Japan
Nippon Kogyo Ginko,. with authorized
capital of *, $50, 900 and paid up capital Of
s6,s75,O0O IS, the Hypothec Bank OF Japan
nippon Kwangyo Ginko,, authorized CAPT.
tai IS, 600, 900 and paid up capital 81, $685.
900; az the Hokkaido Colonial (Hokkaido
Taku-shoku Ginko), authorized capital ST.
100000, paid up 1882, 1877, and (5) the Bank
of Taiwan CTaiwan GinkoD, authorized capi-
tai $500. 900, paid up s i,250,OOO.
Following these there is a group Of 40
agricultural and industrial banks (Noko
Ginkol, with an aggregate capital of Sl4,-
280, 900, paid up to within a few dollars of the
authorized sum. Then come the ordinary
banks, of which there are 1878, with aggre-
gate authorized capital of SIP. COS, O8O, Of
which sl2e, 1928. TAO is paid up, and 4s7 saw
ings banks, with authorized capital Of $685.
O3s, 800 and paid up capital of $40, t54. 5O2.
OF the ordinary banks there are POI, which
do a savings bank business in connection
with their commercial business.
Each of the five special banks operates
particularly in a distinct field. The Yoko-
hama Specie Bank makes a speciality OF
"affording financial facilities in respect of
the foreign trade The Industrial Bank
handles mainly bonds and shares Of various
kinds. The Hypothec Bank was created
for the purpose Of making long term loans
at a low rate of interest on mortgages Of
immovable property" II also makes loans
without security to -prefectures, districts,
cities, towns, villages and other public
corporations organized by law" The
speciality of the Hokkaido Bank ia the
assistance of companies the object OF which
IL the colonization and exploitation Of the
island of Hokkaido. and the Taiwan Bank
does a similar work for the island Of Formosa.
The forty-six agricultural and industrial
banks are located one in each OF the forty
six prefectures of the main islands and
serve as local financial organs for furnish
ing long term loans at a low rate of interest,"
to agricultural and industrial enterprises.
Although conducted on smaller scale, their
functions are much the same as those OF
the Hypothec Bank. The national bank
system ceased to exist in 1899, when the
charters issued to those concerns expired.
The national policy of Japan in the matter
of her banks Ia plain. II holds a definite
purpose and systematic effort 10 foster.
h~amoniously and effectively. her economic
interests. The special banks cover their
respective fields of operation and the ordi-
nary banks serve the convenience OF the
general commercial public. The ordinary
banks are under the control OF the Minister
Of Finance, and m may be established
without his approval. He may at any time
order an investigation of the condition Of
any hank. and to him every bank must
submit a semi-annual statement Of it's con-
dition. The semi-annual balance sheet ~