The Paper Currency Policy and the Centralization of the feudal Rights in the early Meiji Era

Abstract

The purpose of this study is to clarify the relation between the paper currency policy, especially the paper gold exchange policy (1869-70) of the central government and the centralization of the feudal rights of each Han (clan) in Japan. The conclusion is as follows. The paper currency (Kinsatsu), which was first put in 1868, and expected to assist the industrial development, once dropped 50 per cent discount, and in the loacl districts it was sometimes refused to accept. It also sometimes depressed the foreign trade. The papar gold exchange policy was intended to improve these states and to circulate the paper currency, assisting several other paper currency policies, such as forbidding the premium under penalty, showing the way to redeem it. In this policy, the government collected the paper currency at Tokyo, Kyoto, and Osaka, gave it to each Han, and in return took the gold currency at par by force, and then gave it back to the big cities. In those cities, the policy was excuted mainly by the Kawasegaisha (bill companies), which were controlled by the government. The paper currency gradually became the ordinary medium of exchange, and its premium against gold and silver currency became negligible. This policy sustained not only getting the paper currency into circulation, but also weakening the feudal rights of each Han. The result of this policy enabled the government to unite the monetary system and to control the commodities of each Han. The process to circulate the paper currency by force, often raised the resistances of peasants and poor citizens, and they also weakened the Han. Thus the central government was establishing in Japan.