The progress of private bank was steady after the Restoration, and their number reached 954 in 1884. At the time, however, the national banks still exercised great power in the money market, and as there was little necessity for the central government to exercise strict super vision over other banks, the latter were Tele.: gated to the control of local governments; Sub-, sequently, the nationni banks were Converted into private banks, due to the amendment of the National Bank •Regulations, as already mentioned, and independent of this there was a tendency 'for the steady increase of the num ber of private banks. To cope with the situ ation the government, in 1890, promulgated the Banking' Regulations and the Savings Bank Regulations. These laws were not put in force till 1893, to which date the operation of the Commericial Code was postponed.
These laws constituted almost a perfect sys tem, of legislation relating to banks, except with regard to the function of making loans of a long term for agriculture and industry. In order to make good this defect the government, In 1896, issue the Law of the Hypothec Bank of Japan and Law of the Agricultural and In dustrial Banks. The former bank was then es tablished in Tokio and the latter in Tokio and in each of the other prefectures.
In 1895 japan came into possession of For mosa, and in order to improve the monetary conditions in that island the }government, in 1897, promulgated the Law of the Bank of For mosa. The bank was established in 1899 and conducted the issue of convertible notes and general banking business.
As there was no financial organ for the coIonikation of Hokkaido, the government en acted in 1899 the Laws of the Colonial Bank of Hokkaido, and the bank was established in the following year.
Meanwhile the number of various industrial companies in Japan kept increasing, and the amount of shares and debenture issued by these companies reached huge figures. In spite of this fact, Japan had few banks which could make sufficient loans on these shares and de bentures. This circumstance being considered detrimental to the progress of the nation's in dustry, the government, in 1900,promulgated the Law of the Industrial Bank of Japan, and a bank on the basis of this law was established in 1902.
In view of the increasing number of Japan ese banks carrying on their business in foreign countries, the government, in 1905, promulgated a law for the control of such banks, providing that imperial ordinances may be issued for the said control according to the conditions pre vailing in the country where the banks are engaged in business. In the same year an im
perial ordinance was issued in relation to the Ginko, Ltd., carrying on its business in Korea. By the ordinance the bank was au thorized to issue bank notes in Korea. In 1909 the Bank of Korea (later renamed Bank of Chosen) was established and succeeded to the business of the Dai-ichi Ginko, Ltd., and be came the central bank in Chosen.
The Yokohama Specie Bank obtained the right to issue bank notes in foreign countries in 1901, and has been exercising that right in China. In 1906 an imperial ordinance was issued to control the issue of business of the Yokohama Specie Bank.
Special Banks 1. The Bank of Japan.— The Bank of Japan is the central ban 1c of the empire, established in accordance with the Law of. the Bank of Japan. At the end of 1915 it knad a registered capital amounting to $30,000, 000, of which $18,750,000 had been paid up, and possessed reserves amounting to $15,112,5001 Its business consists of discounting or pur chasing public loan bonds and commercial bills, purchase and sale of gold and silver bullion, making loans on security of gold or silver or of bonds guaranteed by the collec tion of bills, receiving deposits for safety and making cash accounts for the state treasury.
The bank has the privilege to issue bank notes convertible to gold coins. In principle the bank has to keep the same amount of gold and silver as conversion fund. But at the same time it is allowed to substitute the specie re serve with sound bonds to the extent of $60, 000,000. In the event of the money market de manding a large amount of currency, the bank, subject to permission by the government, may issue notes in excess over the legal limit. The excess issue must be, of course, backed by security reserves. In this case, a tax of not less than 5 per cent per annum is imposed on the amount issued over the legal limit. At the end of 1915 the amount of convertible notes issued stood at $215,069,005, of which the•sum of $124,208,900 was backed by specie•reserVe.
The government exercises the most strict supervision over the bank, being represented by standing inspectors. The governor and vice governor of the bank are appointed by the government, and the bank cannot change its regulations (company contract) and take im portant measures without permission or sane. tion of the Minister of Finance.