Prior to the Restoration Japan possessed no institutions exactly corresponding to the modern bank. There was what was termed a “rice bank” which advanced rice to the retainers of the Shogun, and this, it is declared, dated back at least as far as the days of Iyemitsu, in 1724. The plan of operations was for certain business houses in Yedo to receive the grain as it came from the domains under the direct control of the Shogunate, and to distribute it among the Shogun’s officers in remuneration for their services. In this way the houses in question were often called on to advance sums on account of the forthcoming crops, the liabilities of the retainers to be met out of the proceeds of the grain when received from the farmers and sold. Needless to say, the normal condition of many of the samurai was one of indebtedness to the “rice banks.” When, in 1870, the present Marquis Ito was authorised to proceed to the United States to investigate financial affairs in America, especially with respect to the public debt, banking, and the monetary standard, he aroused extraordinary interest by his report on the National Bank Act of the United States, a copy of which he sent to Tokio for perusal. The need of some such system was much felt in the then existing crisis in monetary matters, and though the proposal made at that time could not be adopted in its entirety, the financiers were led to consider the advisability of setting up a bank on those lines in the near future. The reception of the idea was quickened by the cumbersome method in vogue of paying taxes in rice, a plan which not only caused delay, but resulted in loss owing to difficulties attendant on the transport of large quantities of grain from places at a distance. The question arose, should the tax be still paid in rice or in legal currency according to the market price of the commodity? If it were allowable to pay in money, then there ought to be some institution at which rice could be exchanged for ready cash. The necessities of the hour pointed to a bank as the medium which must forthwith be established. But there was another thing that made the notion additionally attractive, and this was the position of the country’s finances in respect of the inconvertible paper currency termed “Da-Jo-Kwan Satsu”—notes issued by the Government, which were depreciated, though not to any great extent so far, and it was deemed unwise to keep them floating so long as thirteen years, the period assigned for their redemption. It had been ascertained that the United States had established a National Bank to facilitate the management of the inconvertible notes issued at the time of the Civil War, known as “Greenbacks,” and the similarity of the situation at the moment in Japan to that of America in 1860 struck everyone.