still further extended, it is even doubtful if finality of judgment would have been reached; for in his third report he says, "The whole question, both as regards the condition of the currency and the real intentions of the Japanese Government, is involved in so much obscurity that no sound judgment can yet be formed on the subject" (May 1863).

It would be a mere weariness to the reader to attempt to elucidate a problem which an expert student found perplexing, but a few salient points brought out in Mr Arbuthnot's review may repay citation, as illustrative of the general state of relations beyond the immediate question of the currency. "We found," he says, "the Japanese with a carefully devised system of coinage, presenting indeed anomalies, when regarded from a European point of view, but apparently well adapted to their domestic wants; and their coins were found on assay in London to be well manufactured." The Chinese had no such system, and the evolution of a metallic currency entitled to such high praise, in a country from which the rest of the world had been long shut off, is one of the most striking evidences of the high originating faculty of the Japanese.

As to the stipulation in the treaties that foreign coin should be current in Japan on a par with native, weight for weight (not a word said about purity), it was not only preposterous and absolutely unworkable, but it was imposed by the ignorance of the foreign negotiators against the superior knowledge of the Japanese; for it is remarkable that in the negotiations carried on by the Americans in 1854 the Japanese took up the impregnable ground that "American coin was only bullion to them." Force alone—or the fear of it—drove them from that position in 1858, and in yielding to the unreasoning pressure of the subsequent negotiators the Japanese probably consoled themselves with their resources of secret evasion to save them from the worst consequences of the obligation—a characteristic of the whole treaty-making campaign.

It appeared to Mr Arbuthnot that the Japanese had a double standard—itself "a contradiction in terms"—gold and copper; silver occupying the position of a token currency between the two, at a highly artificial value, strictly governed by law. The fact was exemplified in many ways. Art objects in silver contained more metal than the coin paid for them, the work of the artificer thrown into the bargain. Gold and copper, on the other hand, bore about the same relationship to each other as prevailed in other countries. It was silver alone that was maintained at a conventional level three times above its value in the outer world. And the philosophy of this is explained by Mr Winchester, who tells us that, whereas the supply of gold and copper was in many hands, the sources of the supply of silver were in the exclusive control of the Tycoon's Government, which derived great advantage from maintaining the silver coinage at a high fictitious level.

The efforts of the Japanese to readjust the currency to meet the demands of the treaty were naturally first directed to silver, which was recoined and revalued, but confusion was worse confounded by all these attempts. Eventually the gold koban, worth intrinsically 18s. 4d. sterling, or 4 bus of the intrinsic value of 1s. 4d., was reduced to a sterling value of 5s. 6d., but was still rated at 4 bus, while the copper coinage was disestablished and iron substituted of no intrinsic value. "I am aware of no other example," says Mr Arbuthnot, "of so sudden and violent a rending of the monetary regulations of a country; certainly of none which has been produced by the interference of foreigners."

The effect of these inquiries by the Treasury was to discourage further interference by foreign Governments, to trust much to that great solvent of anomalies, the silent operation of commerce; while the only complete remedy was recognised as the establishment of a mint under European regulations.

The problem was still further complicated by the separate coinage of the Daimios. Their nibukin, as a general rule, passed only at first in their own provinces, but gradually they filtered down to the open ports, and at one time considerable embarrassment arose from the mixture of the coinage thus caused. In 1871-72 the Imperial Government, then just come to supreme power, took the matter up with the thoroughness they showed in all their doings. They gave secret notice to the foreign Ministers of their intention to call in all princes' nibukin, and thereupon issued an order that during one week these coins should be brought into the custom-houses at the treaty ports, where they would be fastened up in sealed packets of $100 value, and notified that coins so stamped within the week would be accepted by the Government as legal tender, but that thereafter their use would be prohibited. Now, as the Daimios' money stood at about 90 per cent discount at the time, the fact that some of the foreign officials who had access to this confidential information were also merchants created immediate speculation, with the result that within a fortnight these silver-gilt nibukin rose from 90 per cent discount to 2 or 3 per cent premium, the officially sealed packets being a most convenient form for the payment of duties.

The alacrity with which the Government applied heroic remedies to a disastrous predicament was typical of the energy of the Japanese, which has been displayed since in wider fields. They do not sit down and bemoan their troubles, but at once arm themselves against them.

When to the inherent difficulties common to currency problems generally were superadded the complexities of the monetary system of a non-commercial and long-secluded country, surprise should be felt that the regulation of the circulating medium in Japan was accomplished so soon, rather than that it took so many years to arrive at the solution. The Tycoon's Government did not live long enough to settle the currency, but left the problem as a legacy to the Restoration. A good many years elapsed before the Mikado's Government succeeded in evolving order out of chaos.

In the mean time, in spite of many drawbacks, trade was making headway in other directions besides the exportation of gold, and quaint indeed were the beginnings of it. The staple products happened to be the same in Japan as in China, tea and silk, and they soon began to be regularly brought down to Yokohama for sale. But business was at first on such a lilliputian scale, and was introduced in so dainty a manner, that to merchants accustomed to the large transactions of China the whole affair wore something of the air of comic opera, or as if children were playing at being merchants. This impression was strengthened by the aspect of the fragile wooden structures with their sliding doors and windows, but without sitting accommodation, wherein business was transacted, which to those habituated to the massive, if inelegant, buildings of Hongkong and Shanghai irresistibly suggested the idea of a doll's house. The Chinese methods also were inverted. Instead of sending samples of substantial quantities, such as a thousand chests of tea or fifty bales of silk, and the owner or his broker coming to chaffer in the silk-room or the tea-room of the foreign merchant, the latter had to go the round of the Japanese shops to find out what they had got. Early every morning the leading merchants might be seen booted to the thighs—for the rain was frequent and the roads unmade—trudging up and down the Japanese bazaar to see what novelties had come to hand. The more zealous would sometimes make a second round in the afternoon, in case there might be some late as well as early worms to be picked up. The bodily fatigue and consumption