Mr. Dun to Mr. Olney.
Tokyo, Japan, February 23, 1897. (Received March 24.)
Sir: I have been informed by Count Okuma that during the present session of the Diet a Government coinage bill will be presented for the consideration of that body which will, if passed, change the standard of value in Japan from silver to gold.
[Page 369]It is proposed to fix the Government parity of or ratio between the two metals at 32 to 1. The unit of value will be a gold yen, which will be one-half the weight and fineness as the gold dollar of the United States. The proposed unit of value will therefore be the exact equivalent of 50 cents United States money, and approximately of the same value as the present unit of value in Japan, the silver yen, which at the current rate of exchange of to-day is worth about 51 cents United States money. It is proposed that the smallest gold coin minted shall be a 5–yen piece.
The further coinage of silver will be limited to subsidiary coins. The silver yen now in circulation will be maintained at par with the gold yen by the Government being prepared to redeem them in gold whenever called upon to do so. In this connection it is important to note that there are about 140,000,000 of Japanese silver yen in circulation, of which it is estimated that about 70,000,000 are in circulation as money in China and the English, French, and other colonies and settlements in the East. Should the ratio between gold and silver become greater than 1 to 32, the tendency would seem to be to drive the outstanding silver coin back to Japan for redemption.
The vernacular press reports considerable dissatisfaction among the manufacturing and commercial classes with the proposed change of standard, and it is reported that the Cotton Spinners’ Association have prepared a protest against it to present to the Diet. Those interested in manufactures in Japan are at present very prosperous and satisfied with the returns their investments are bringing in. They are, naturally, as a class, not disposed to view favorably a proposed change the effects of which upon their interests they have no means of determining beforehand.
It is generally believed, however, that the Government bill will, in perhaps a modified form, become a law. It is supposed that the principal object the Government has in view in bringing about the change is to enable it, should such a measure become necessary or expedient, to negotiate a loan in Europe on better terms than would be possible, as they believe, if Japan remained on a silver basis.
I have, etc.,