--'We had to undergo much financial difficulty. Before the Imperial régime gold and silver constituted practically double standards. At the early stage of the new Government gold was adopted as the standard in theory, but it took a long time before it came into actual operation. The Government had to issue much paper money, and that, too, inconvertible, hence much depreciation of the paper. The strenuous efforts of the Government had been successful in improving the situation when the Satsuma war broke out in 1877. The expense of that war occasioned more issue of paper money, which caused a further depreciation. At one time the difference between silver, which was practically the legal tender at the time, and the paper rose to 100 : 180. 'There was another cause for the depreciation of paper money. It was the issue of notes by the national banks, which were established in all parts of the country after the abolition of the feudal system, and which numbered at one time more than 150. The Government had to meet with these difficulties, and to place the financial and economical condition of the country on a firmer and more satisfactory basis. This the Government began to undertake a few years after the Satsuma war, without hindering the necessary works for the development of the national resources. The Government decided to apply strict economy in all branches of its administration. The money thus saved was partly used for the redemption of the over-issued paper money, and partly to accumulate reserve funds for making the paper currency convertible. The Bank of Japan was established with the view of making it the sole central economical organ of the empire. A scheme was provided for redeeming the notes issued by the so-called national banks, and for converting those banks into strictly private banks in due time. 'The process began in earnest in 1881; it made far quicker progress than was contemplated; thus in 1885 the difference between the silver and the paper money disappeared. From January 1886 the total redemption of the paper money was begun. In 1899 the circulation of the Government paper money and the notes of the national banks altogether ceased to exist, the convertible notes of the Bank of Japan having taken their place. In the same year all national banks ceased to exist, most of them having become private banks, and a few having wound up their business. Two years previously gold had been at last effectively adopted as the Japanese national standard of currency, which was the realisation of the idea cherished by the Imperial Government from the beginning.' --'What was the nature of the national banks?' asked one; 'and have they proved quite meaningless?'