Short Introduction
Shortly after its entry in world society (around 1850; since 1600 it had more or less been isolated from international trade, international political relations, and any cultural exchange), Japan experienced the gravest financial crisis of its history. The reasons for this crisis can be found in its late-feudal monetary regime. First of all, the parity of gold and silver had been incompatible with the parity used in international trade at the time. Next, Japanese feudal economy was characterized by a definition of money as token coinage (as opposed to bullion coinage, typical of e.g. the Mexican dollar, used as currency in pre 1900 East-Asia) (Frost 1970; Ono 2001): coin value was not directly related to the bullion content of coins, but was strongly dependent on political decision (consequently, there existed no strongly fluctuating exchange values between coins). And because of a variety of reasons, Gresham’s Law (bad coinage drives out good coinage) had far less devastating effects in this currency ‘system’ (Yoshikawa 1991). The confrontation with the (Yoshikawa 1991) realities of world economy at the time was profoundly destabilizing. Political friction with the Great Powers was followed by a creeping inflation and an even more destructive speculation. The result: a large-scale export of Japan’s gold reserves. Only in 1897, after the Chinese payment of war indemnity of the Chinese-Japanese War on an English bank account, Japan would recover from the crisis (and adopt the Gold Standard).

This project is part of a larger one on institutional and semantical reform in the domains of finance, the police system, and the law during the Meiji-period.
It has been generously supported by the Fund for Scientific Research, Flanders; grant number O6260
Project period: January 2004-January 2008