I NORTHWESTERN UNIVERSITY I
I LIBRARY I
X Ä
I EVANSTON, ILLINOIS |
Count Matsukatá'B
Speech on Gold Monometallism,
in the House of Representatives, on March 3rd, 1897.
Before advancing the reasons for revising the Coinage
Regulations, I desire to .state- that though I have just
heard Mr. Komuro's interpellation, I will reply upon
receiving it in due form and that his remarks appear to
me to he couched in terms really unworthy of this August
Assembly.
Turning now to the proposed revision of the Coinage
Regulations, I need hardly say, gentlemen, that the
quality of the coinage system in its economical hearings is
intimately connected with the interests of the state and
the welfare of the people ; and in the discussion of any
revision of the system, the closest attention and the most
minute investigation are of course essential. I crave your
patience while I first touch upon the system of coinage in
our country.
Omitting all records that go back to ancient times, we
may assert that it was during the Keicho era (150G—1614)
that the coinage system was first brought into shape
which became the basis of the present currency. Mints
were then opened by the Tokugawa Government; gold
and silver coins were struck for general circulation ; and
the media of exchange throughout the country thus took
a definite form. The system brought into concurrent
circulation gold, silver, and copper. Later on, the recoin-
ing of gold and silver became frequent, and the quality of
the metal deteriorated so that the coinage was debased.
Moreover, tlie relative values of gold and silver underwent
irequent fiuctuations and were very different from those
the time the Treaties were con¬
cluded in the Ansei era (1854—1859), the ratio in our
country was one hoban to one silver hu, that is, one of
gold to eight and a fraction of silver, whereas it was one
to fifteen or sixteen abroad. Commercial intercourse with
the outer world having been suddenly opened under such
a monetary system, the exodus of gold was inevitable.
The Tokugawa Government, therefore, attempted to check
the efflux by changing the coinage and raising the ratio
between the two metals ; but as the measures adopted were
merely temporary expedients, they utterly failed to effect
their object. In the beginning of the Meiji era, the
Government revised the system of coinage and after
comj)aring the best foreign systems and Japanese usages,
minted new coins of perfectly uniform character ; and by
the adoption of the gold standard, the disorganised state
of the currency was effectually corrected and the export
of gold and silver checked. Still the press of business
upon the inauguration of the new Government, the war
measures that had to be taken, and the depletion of the
Treasury resulted in an increased issue of inconvertible
paper and led once more to the export of specie. It was
in January of the 1st year of Meiji (1868) that the
Government decided to resort to a fiat currency, being
compelled to take that step by the financial embar¬
rassment which had then reached its culmination. The
notes (Kinsatsu) thus issued, known as Daijokwan-satsu,
were inconvertible money which was to remain in circula¬
tion for a period of thirteen years. Subsequently Mim-
busho-satsu (Home Department notes) and other currency
of -various denominations were issued to a considerable
amount. But, notwithstanding the marked increase of the
Government paper currency in circulation, the notes did
not depreciate at first as their amount was within the
business requirements of the time ; and circulated for some
3
years at par with hard money. Still, being inconvertible
notes, they gradually began to affect our foreign trade
and to stimulate the excess of imports of commodities and
the exodus of specie. Moreover, in the 9th year of Meiji
(1876), the National Banks Kegulations were revised and
hank paper-money was also made inconvertible ; and
the amount issued by these banks rose to 34,000,000 yen.
The total circulation of inconvertible paper was thus
enormously augmented ; and this increased circulation of
the Government and bank paper-money resulted in its
depreciation, in the efflux of specie, the excess of imports
in foreign trade, in a rise in the prices of commodities and
rate of interest, and in the depreciation of public loan
bonds. Luxurious habits became prevalent; a speculative
spirit sprang up ; and the national economy and finance
fell into a critical state. The Government, therefore,
after a most careful consideration, elaborated a general
2:)rogramme of financial adjustment and resolutely jmt it
into practice. In the 14th year of Meiji (1881), the
Specie Bank was reorganised with a view to the extension
of its operations as a monetary organ abroad ; and in the
loth year (1882), the Nippon Ginko (Bank of Japan)
was established in order to facilitate the circulation at
home while the revision of the National Banks Regula¬
tions and the promulgation of the Convertible Bank-notes
Regulations in the same year were both due to the desire
to reorganise and consolidate the paper currency. More¬
over, all paj^er-currency issued out of the reserve was
Avitlidrawn ; bonds were issued to re^Jace paper money
(Kinsatsu) ; the surplus obtained by the increase of the
revenue and the reduction of the expenditure was devoted
jo the redemiffion of paper; and the reserve fund was
biployed to collect specie for augmenting the joaper-
ionversion fund. These carefully-jilanned measures were
successful. The resumption of specie payments took place
4
ill the 19th year of Meiji (1886); and the paper currency
which had at one time fallen as low as 70 per cent, below
the price of silver was now restored to par, and all the
incidents connected with fiat jiaper were thus brought to
a close. In the interior, however, the circulation of specie
was exceedingly small ; and after the employment of the
one-yen trade-dolla r had been extended in scope by
Notification No. 12 in May of the 11th year of Meiji
(1878), the gold monometallic system became bimetallic.
But silver being actually used as the medium of exchange
in all transactions, an absolute silver-monometallism
prevailed, while gold, retaining little more than the name,
did not appear in circulation at all. ' Silver, however, has
continued to fall since the Gth year of Meiji (1873) until
it is now only one-half its original value in terms of gold;
and in addition to its depreciation, its instability is so
great that its price at any given moment cannot be
counted upon.
These fluctuations in the relative values of gold and
silver appear to be chiefly due to the comparative output
of the two metals. Of late the silver produced in the
world has reached an enormous amount. The ¡production,
the year before last, was 170,000,000 ounces, and last
year, 200,000,000 ounces, a figure nearly three times as
great as that recorded twenty years ago. Notwithstanding
this large increase in the world's production of silver,
the output of gold amounted only to 9,000,000 ounces the
year before last, and 10,000,000 ounces last year, a quan¬
tity not more than double of that produced twenty years
ago. These figures are mostly taken from the reports of
the Superintendent of the United States Mints. This
extraordinary difference in the production of gold ancj
silver has induced a corresponding divergence in thef
relative value, the ratio of which has risen from one oi
gold to fifteen of silver twenty years ago to one to thirtr
5
or more. Though it is true that the relative value of the
metals is determined not only by their production, hut
also by other artificial causes, still the divergence, even
regarded in reference to their comparative output, is
remarkable enough.
The relative value of the two metals then, being so
changeable, those countries which had adopted the bime¬
tallic or the silver-monometallic system were seriously
embarrassed aud, feeling uneasy about the prospects of
silver, one after another rejected it in favour of gold, or
while legally retaining bimetallism, suspended the free
coinage of silver and became in fact gold-standard countries.
On reviewing the reforms made by various nations in their
systems of coinage since the Gth year of Meiji (1873), we
must attach great importance to the monetary reforms of
Germany. The political union of the various German
states had not yet been followed by the unification of the
coinage system and, as is observed in the original program¬
me of monetary reform, there were at the time seven
distinct systems on vogue in Germany, most of which had
the silver thaler for their standard. And as, through every
locality having its own method of calculation, indescribable
inconvenience was experienced in fiscal and commercial
affixirs, it was proposed to unify the monetary system, and
at length in 1871, that is, the 4th year of Meiji, a notifi¬
cation was issued providing for the coinage of gold.
Germany had, fortunately for her, at that time acquii-ed
the enormous sum of 1,395,000,000 thalers in consequence
of the war with France. Gold monometallic law was
promulgated in July of the Gth year of Meiji (1873) by
the appropriation of 340,000,000 thalers of the indemnity
for minting gold coins, and by the gradual sale of silver
for gold. Subsequently, however, these sales were, owing
to the great depreciation of silver, unavoidably suspended
about the 12th year of Meiji (1879). This reform of
6
Germany's coinage system was the foremost canse of the
fluctuations in the relative value of the world's gold and
silver, and ojiened the way to the appreciation of gold at
the expense of silver. The introduction of gold monome¬
tallism in Germany was immediately followed by a
similar measure in Sweden and Norway. France, more¬
over, restricted the receipt of silver at her mints. In the
following year (1874), France, Italy, Switzerland and
Belgium of the Latin Union mutually agreed to restrict,
with the exception of subsidiary coins, the coinage of
silver for three years. In the 8th year of Meiji. (1875),
Holland, too, made gold her legal tender and suspended
the coinage of silver ; and Switzerland in the Latin Union
abolished the coinage of silver for domestic circulation.
In the following year, a similar course was adopted hy
Belgium and France. Both Spain and Russia also sus¬
pended the coinage of silver, and the United States of
North America demonetized that metal. Thus the
German coinage reform ¡rroduced a great consternation in
Europe and America and led them to check the efflux of
gold and the influx of silver with the result that the price
of the white metal through this universal rejection fell to
an unprecedentedly low figure. Efforts were then made
for its rehabilitation not only by silver-possessing countries
but also by those in which the metal is largely produced ;
and the United States monetized it again by the Bland
Bill in the 11th year of Meiji (1878) ; but in the 18th
year (1885), the coinage of silver was again susj^ended.
In the 23rd year (1890), however, the Sherman Bill was
passed, which increased the purchase of silver ; himetal-
lism was strongly advocated and various other schemes
were broached, but without success. The differentiation
of the values of gold and silver became more pronounced
than ever.
In the 25th year of Meiji (1892), Austria-Hungary
7
resolutely raised a gold loan of 183,456,000 gulden with
which new gold Krone was coined and gold monomet¬
allism was inaugurated. In the 26th year of Meiji (1893),
India, famous for its absorption of silver, also stopped the
free coinage of that metal, and giving the silver rupee a
scarcity value that is, a sort of price fixed by law, made the
English sterling pound legal tender in the country by
fixing the value of the rupee at a figure not exceeding one
shilling four pence. Russia also suspended the coinage
of silver and directed her efforts to the purchase of gold in
both home and foreign markets, while the United States
at length repealed the Silver Purchase Bill. More
recently among the countries of South America, Chili be¬
came a gold-using state in the 28th year of Meiji (1895)
and Costa Rica adopted the gold standard last year.
In the United States whose interests in silver are
mount, the gold theory has gained ground ; and the
general tendency of the world is toward the preference
of gold over silver.
Thus the various powers of Europe and America having
either adopted the gold standard or even in the case of
those that have not adopted it, taken measures for its
absorption, the demand for gold as coin has of late
remarkably increased ; and further, as divers nations are
evincing a decided partiality for gold, its employment in
art manufactures is by no means small. Being, moreover,
highly valuable and secure from depreciation, it is
privately hoarded. While these circumstances have com¬
bined to increase the demand for gold, the case is entirely
the reverse with the demand for silver. Not only has the
demand for coinage 2)urposes steadily decreased ; but also
its employment in art manufactures and the tendency to
hoard it have not kept pace with the growth of the supply.
The absorptive power of India which had shown a great
partiality for silver has undergone a change; and the
8
uncivilised countries wliicli were expected to increase their
demand for silver have not yet justified these expectations.
Thus while the supply of gold is insufficient to meet the
demand, the supply of silver is in excess of the demand ;
hence the appreciation of gold and the depreciation of
silver are inevitable consequences.
Such being the constant fluctuations in the value of
silver, the effects of which are far-reaching on a silver-
using country like ours, the Government, by an Imperial
Ordinance issued in October of the 26th year of Meiji
(1893) a2)pointed a commission to investigate the various
systems of coinage. The principal ^wints of investigation
were :—
1. The causes and the s-encral effect of the recent flue-
O
tuations in the relative value of gold and silver.
2. The effects produced on the national economy by
the recent flnctnations in the relative value of gold and
silver.
3. Whether the recent fluctuations in the relative value
of gold and silver necessitate the reform of our existing
coinage system ; and if so, what system should be adopted
and what measures should he taken to that end.
The commission began its work in October of the same
year, and after twenty-two months of diligent labour,
completed its investigations in July of the 28th year of
Meiji (1895). According to the Report of the Commis¬
sion, divers arguments were adduced, the details of which
may here he omitted as they are fully given in that re2)ort ;
hut it may he mentioned that the Commission reached its
final decision respecting the ado2)tion of a new standard
by a vote of six members for gold monometallism against
only two for bimetallism. Thus the general 02)inion of
the Commission favoured the alteration of the present
system into gold monometallism. It was, however, found
at the time difficult to obtain gold sufficient for the
A
adoption of that standard, and moreo-vci, " tho pî-fceè of
commodities had not yet risen to any great extent. And
as the country still possessed, even though for a time,
more or less advantages in the matter of trade, she was
not yet in a position to carry out the Commission's
decision. By the Shimonoseki Treaty, however, in con¬
sequence of the affair of the 27th and 28th years
(1894—5), we acquired from China a war indemnity of
two hundred million taels, together with an additional
sum of thirty millions in compensation for the retrocession
of the Liaotung Peninsula.
As these sums were to be procured by China's raising
gold loans in the markets of Europe, it was stipulated
with a view to mutual convenience, that Japan should
receive the money in sterling gold. The amount thus
received up to the end of last year exceeded £ 22,400,000
sterling and by its utilization, the Nippon Ginko's gold
reserve is expected shortly to reach the sum of over
109,300,000 of new gold yen. Of that total, over
36,700,000 yen is actually lying at the Bank, and the
remaining 72,600,000 yen which had been borrowed by
the Government from the Bank by means of current
account, will he repaid in gold. It is further expected
that the silver reserve will exceed 49,000,000 yen, and
thus total reserve, gold and silver, will be 158,000,000
yen, which is more than half of the total paper currency
of 200,000,000 yen. Under these circumstances, it may
be as.serted that the provision of the gold necessary for
introducing gold monometallism, on account of which
great anxiety has hitherto been entertained, is now
complete.
Now, turning to the prices of commodities in our
country, we find that, after the conclusion of the afiair of
the 27th and 28th years (1894—5), they rose con¬
siderably so that serious disadvantages were inflicted upon
w
our {¡oiïwuéiîôe Statistics show that the prices of the
staples, last year were thirty per cent, higher on the
average than in the 21st year of Meiji (1888), and
twenty-six per cent, higher than they were immediately
before the war. It may be necessary to refer briefly here
to the canses of this rise. Some have attributed this rise
solely to the expansion of the currency. The volume of
the ciu-rency, it is true, has more or less expanded, hut if
we deduct the amounts sent to China, Corea, and Formosa
and make an allowance for the development of enterprise
in various localities and the growth of foreign trade, we
cannot believe that the rise of prices is solely the result
of the expansion of the currency. In seeking the prin¬
cipal causes of the appreciation of commodities, we cannot
but admit that though the demand for them has increased,
the depreciation of silver has also contributed to it.
Even granting that the causes are manifold and cannot
be definitely stated, it will at any rate be acknowledged
that commodities have risen remarkably in price and
produced results very unfavourable to our trade; and the
consequence, though to some extent attributable in the
21)th year of Meiji (1895) to the late war, is the astonish¬
ing excess of imports over exports to the amount of
53,000,000 yen. I feel sure now it is clear that whether
we take into consideration the provision of the gold
reserve or the appreciation of commodities, the present
moment offers a unique opportunity for the adoption of
the gold standard. I proceed, therefore, to explain the
plans and measures necessary for the reform of our
monetary system.
In reforming the existing monetary system in our
country, there are two important points that we must
study. The first is that the new gold coins shall be
exactly one-half in weight of the existing gold coins, that
is to say, shall contain two/iin (.75 grammes) of pure gold.
11
That is the monometallic basis prescribed in the new
Coinage Regulations.
The second j^oint is that the standard silver coins
hitherto issued shall be abolished and a genuine gold-
standard system established. The greatest precautions
must be taken in reforming the coinage system not to
cause changes in the prices of commodities, in the relations
between debtors and creditors, in the burden of taxation,
or in any other existing relations. The utmost attention
has been paid to these points, and it has been decided to
issue new gold coins that shall be multiples in intrinsic
value of the existing silver yen. It is most important to
determine this intrinsic value. After many considera¬
tions, an average of the relative values of gold and silver
for several consecutive years would appear to answer the
purpose ; but there would the great difficulty in determin¬
ing the average value of a metal so liable, as I have
already stated, to sudden fluctuations as silver, and an
average, even if obtained, would not fit in with our prac¬
tical experience today. There is, then, no alternative but
to rely upon tlie latest market quotations. And as the
adoption by our country of gold monometallism will, if
assured, tend more or less to enhance the price of gold, it
will be necessary to anticipate future fluctuations by
appraising gold at a slightly higher rate than it actually
commands at present. The average price of silver bullion
in London in January this year was at the rate of one of
gold to less than 32 of silver ; but it would be well to
raise the rate a little and fix it at one to 32 and a fraction.
The old one-yen gold will then become double the value
of the new, and afford great facilities in the circulation of
the old and new currency. Our reason for determining
the relative value of gold and silver by the quotation
prevailing not in this country but in London is that the
gold currency having long age ceased to circulate here, its
12
price is naturally lower than it is abroad. It may be
urged that this appréciation of gold, however slight, will
raise the prices of commodities in proportion to its excess
over the actual silver-price of that metal ; hut I do not
anticÍ2:)ate any practical consequences of the kind. If the
revision of the coinage system proceed on the above lines,
I do not believe that any changes will take place in the
prices of commodities, in wages, in the relations hetweçn
creditors and debtors, in the burden of taxation or in any
other existing relations.
Next, in regard to the disposal of the silver yen, as it
has been in unrestricted circulation as legal tender in the
country since the 11th year of Meiji (1878), we must, even
if we stop its circulation, allow an appropriate period for
the purpose and will for the present permit its use as
hitherto ; hut it is intended to withdraw it from circulation
as soon as possible. And as, in place of the silver one-
yen, fifty-sen pieces and others of lower denominations
will he struck and the one-yen convertible notes will he
retained for the present, no inconvenience will, it is
expected, he felt in business transactions. These one-yen
notes may also, upon their ceasing to he of use, he reduced
in volume.
I may here state in passing that, simultaneously with
the rise of various enterprises in the country, an increased
supply of subsidiary coins will become necessary, and that
the circulation of specie among the people by the issue of
such subsidiary coins in place of the silver yen will
especially keep to make firm the basis of the national
monetary system. Though thus the silver yen will he
withdrawn and the convertible hank notes will conse¬
quently he exchangeable against gold, I have, following
the example set by the Bank of England Regulations,
provided for future contingencies by adding a limited
amount of silver to the reserve prescribed in the Nippon
13
GinlvO Specie Reserve Regulations. Many defects that
were detected in the existing Coinage Regulations have
heen corrected ; but I will here omit further details as
they will he found in the various Law Bills which have
heen presented at the same time.
I desire now to say a few words with respect to the
fears that have been entertained in this connection.
First, the export of the silver yen from this country is
very great, the actual amount up to January last being
112,000,000 yen ; and the question is whether there is not
a danger of this silver being imported and gold exported
instead. The silver coins, however, exported from this
country mostly go, as is well known, to China where they
are treated as bullion and so defaced that they can no
longer be used as current coins. Actual inquiries made in
that country show that there are very few undisfigured
coins abroad except at Hongkong, Singapore, and their
neighbourhood ; and as in those places they are used for
daily transactions, I do not think they will he largely
brought hack for exchange. I have ascertained from the
latest reports that the amount is really very small ; and I
am convinced that the amount presented for exchange
will be extremely slight as the price of silver, relatively
to the new gold coins, has been fixed at a lower figure than
the current quotations. I am, therefore, confident that
there will not be any great drain of gold.
Some anxiety has been felt on the possibility that,
ample as the gold reserve is at present, it might be difii-
cult to maintain it at the same figure, but in the absence
of any increase in the productive and exporting capacity
of our country, the same apprehensions would he felt even
if we retained the silver standard. Since, however, the
past progress of our country justifies our confidence in the
increasing prosperity of its trade and productive industry,
I consider that anxiety quite groundless. Leaving out of
14
account such an exceptional year as the last, we find that
while the average annual excess of imports from silver-
using countries during the eight years from the 21st year
of Meiji (1888) was over 10,500,000 yen, the average
excess of exports to gold-using countries during the same
period was over 11,000,000 yen. Thus we receive more
in gold than pay in silver ; and on the assumption that
this proportion will be maintained, there is no need for
apprehension. As, moreover, our country is connected by
geographical position with gokl-producing countries like
Australia and California and since gold is annually
exported from China and Corea, wo shall not, if we
take the trouble, experience much difficulty in obtaining
gold. Anxiety is also felt in some quarters with respect
to our foreign trade. It is probable that the trade of our
country has until the extraordinary rise of prices and
wages, benefited more or less by the depreciation of silver ;
but this can only be temporary, for such benefits will dis¬
appear when the prices and wages rise to the same extent
as silver has depreciated. Ilcmarkable as has been the
recent development of our trade, it is not attributable to
silver depreciation alone, but is, I am certain, also due to
the increased facilities of transport and communication
and to the progress of education. When, therefore, the
prices of commodities are as high as they are now, so fai'
are we from reajiing any benefits from silver depreciation
that we are likely to get therefrom nothing but disadvan¬
tages. Nor do I think that in our competition with gold
nations in silver using countries like Cliina, there is any
danger, in the event of our adopting the gold standard, of
our failing to retain our vantage-ground with our cheai)er
labour and greater proximity to the oriental markets.
Again, fears have been expressed that in the event of a
still further depreciation of silver, we shall be handicapped
in our competition with China's silk and tea in the markets
15
of gold countries. Such handicap would be merely
tcinpoi'ary and amply compensated by the advantage of a
more stable exchange and other permanent benefits
resulting from the adoption of gold monometallism.
Similar fears were entertained by some members of the
Indian Coinage Reform Commission ; but it was ultimately
decided by the commission that such results would he of
little consequence.
It is impossible in any matter to be absolutely free from
opposition; and especially with respect to tliis question-oí
coinage system, which has been discussed in every country,
peifcct unanimity is least to be expected. The most
common opposition is that of the silver monometallists
who wish as far as possible to retain the existing system ;
hut I have already repeatedly urged that the silver stand¬
ard will certainly obstruct the future develo2)ment of our
country. The next, strongest opjjosition is offered by
himetallists. Bimetallism is strenuously advocated in
Euro2)e and America by many economists and by mer¬
chants engaged in oriental trade ; but it is a theory
difficult to put into operation. It jiractically leads to the
adoption of the alternate standard, and cannot possibly be
carried out single-handed by any one state.
I must here touch u])on the International Monetary
Conference which has been frequently convened with the
object of upholding the price of silver and carrying out
bimetallism. Its labours have so far been fruitless. The
last Conference was held at Brussels in the 25th year of
Aleiji (1892) at the suggestion of America which is
directly interested in the prospects of silver, and was
attended by the delegates of twenty Powers ; but it closed
without arriving at any definite decision. The year
before last, it was projaosed to hold another International
IMonetary Conference ; but nothing has yet come of the
proposal. There is little ho2)e, even in the event of
16
another Conference being convened, of its coming to any
eifectual conclusion. Since, moreover, England, the most
influential of the Powers, revised the Indian coinage
system in the year following that of the International
Conference at Brussels, the probability of the universal
ado^ition of bimetallism has been still further diminished.
Even if an international monetary union were formed on
the bimetallic basis, we should not find any disadvantage
in our adoption of gold monometallism. , In fine, bime¬
tallism cannot be carried out without international coope¬
ration ; but as such cooperation is difficult to bring about,
we cannot defer so important a subject as the one under
consideration on the mere chance of the eventual adoption
of bimetallism. Erom these circumstances it will be
readily perceived that there is really little to justify fear
or opposition.
I will now briefly state the circumstances necessitating
the coinage reform and the advantages accruing thereto.
The chief economic advantage is the freedom from fluc¬
tuations in the jJrices of commodities. By the adoption
of gold as our monetary basis, the variability of the
standard to which the prices of commodities is referrible,
will be lessened and consequently we shall be exempt
from the constant fluctuations in the prices. An unres¬
tricted appreciation, it is true, may for a time present a
prosperous state of things; but as raw materials and wages
will also be gradually affected thereby, the result will be
crippled production and reduced export. A sudden fall,
on the other hand, in the prices will prove injurious to
commerce and money circulation. At any rate freedom
from sudden fluctuations of prices is most important ; but
such fluctuations are inevitable with the silver standard
and can, it seems to me, be avoided only by the adoption
of gold monometallism.
The second advantage. is the increase of exports. If
17
oar standard is gold, there will be especial facilities in our
commercial transactions with the countries having the
same standard, and as the fluctuations in the prices will
be avoided, our productive power will be developed and
our export trade be consequently augmented. There is
also the advantage arising from diminished fluctuations of
the exchange. Our country as a silver-using nation, is
aifected by the instability of silver and suffers great
commercial injuries through constantly shifting rates of
exchange. Such evils can at once be removed by the
adoption of the gold standard. Finally, there is the
extension of circulation to be considered. The progress
that our country is making impresses upon us the necessity
of holding close communication with the markets of the
world ; but we are at present almost completely cut off
from the foreign countries in the matter of money circula¬
tion. I ' am, however, confident that the establishment of
our monetary system on a firm basis will induce greater
facilities of circulation between the money-markets of our
country and the Occident. Great convenience will also
be felt in financial matters. But the question of the
monetary standard is one affecting tlie national economy
and is not to be decided by considerations of financial
convenience alone.
Now, after a diligent study of our national history since
the Keicho era, a careful survey of the actual state of
affiiirs at home and abroad, and a prudent anticipation of
the future, we propose to introduce gold monometallism
with a view to the solidity of our monetary basis and the
healthy economic development of onr country. An
established opinion exists among the nations of the world
with respect to the principle underlying this question.
Austria has solved the problem eveti by raising a loan ;
and notwithstanding arguments adduced more or less in
favour of bimetallism, there cannot be the least doubt of
18'
the claims of gold monometallism as a practical question.
Moreover, our gold, if left unheeded, will be absorbed
by other countries and if once it leaves our bands, will be
difficult to recover. We should therefore, now that we
have facilities for the absorption of gold, set at once to
carry out the new system. Any hesitation at the present
juncture would result iu financial insecurity and no in¬
considerable injury. As this is a question of vital
importance to the State and has been fully sifted by the
Investigation Commission which included several members
of both Chambers, I trust you will carefully discuss and
speedily approve the measure.