Part 18

Five years previously the nation had passed through a crisis in its financial affairs due to the difficulties arising from a superabundant issue of paper currency, and trade had been temporarily affected in a way to give the maximum of concern to the Ministry. Brave efforts were made, and with an appreciable measure of success, to economise in every department of State. With the revival of commercial prosperity to some extent in the autumn there was promulgated the imperial decree granting a Constitution, to take effect in 1889, and for the assembly of a Parliament in 1890. These gracious fulfilments of the promise vouchsafed to his people by the sovereign at his accession filled the nation with joy, and it was resolved that steps should be taken to frame a Constitution which should be acceptable to the monarch and at the same time satisfy all the legitimate aspirations of his loyal subjects. To this end it was agreed that Marquis Ito should visit Europe, there to complete his studies of Constitutional law and history, in order that he should be in a position to offer the Emperor advice on every point in connection with which information might be desired. By 1884 the internal progress of the Empire was such as to give the utmost confidence to the administration of which Prince Sanjo remained the head, and it had become practicable to regard the unrestricted opening of the country to foreign commerce and residence as being within the domain of practical politics, and indeed within measurable distance.

By the time that it had become desirable, in 1886, to reconstitute the Government on a model more suited to the requirements of a regime based upon parliamentary procedure, the new army of Japan had attained dimensions which warranted the Ministry in entertaining high hopes of its future serviceability as the safeguard of the national interests, and simultaneously the navy had risen to the condition of being a formidable force. The army mustered at this stage over 100,000 of all ranks, and in the fleet there were twenty-six vessels, five of them ironclads, in all mounting some 225 guns. The railway system had grown to a total of nearly 300 miles, and there were 5000 miles of telegraph. In one way and another the outgoing governing council was able to give a thoroughly satisfactory account of its stewardship, for while in Korea there had been rioting resulting in the deaths of a number of Japanese, and the War party at Tokio had clamoured for retaliatory measures at Seoul, a treaty had been negotiated on acceptable terms with the Peking Government and Japan had, by the moderation of her demands for redress, averted the danger which threatened of an open rupture with consequences for which Japan was herself at that period but ill prepared.

On being relieved of his office of Dai-jo-dai-jin Prince Sanjo went nominally into retirement, but his services as an adviser to the Crown were not infrequently called for, until his health failed him in 1889.

His decease took place in February 1891, of influenza, and just before his death the Emperor visited him and conferred on him, as an old and faithful servant, the highest rank that it is possible for a Japanese subject to attain, and which had not been bestowed by an Emperor of Japan on anyone since the Eleventh Century.

IX

COUNT INOUYE KAORU

Like others who have been prominent in the making of modern Japan, Count Inouye was a soldier before he became a statesman. To most of the foreign residents in Japan at the period immediately following the Restoration of Imperial rule he was best known as the Finance Minister, Inouye Bunda. To his countrymen he was the dashing Choshiu leader who had commanded the samurai troops of the southern clan in the fierce and prolonged strife of pre-Restoration days between his lord and the Bakufu, or Government of the Shogun. He and many of his colleagues in the first Imperial Government had made names for themselves as deft wielders of the long keen swords that they wore in their belts rather than for sage advice in the council chamber, but they speedily gave proof of exceptional ability in directions far removed from the ordinary path of the _bushi_, whose province it was of old “to follow his chief to the field.” But prior to his defeat of the Tokugawa forces the future financier had spent more than a year in England and the capitals of the Continent, having contrived to make his escape from his own land when foreign travel was still interdicted. A batch of students left Japan in 1863 intending to remain abroad for a five years’ course of study, but Inouye heard of the troubles that were thickening in connection with his own province consequent upon the attitude of its lord towards foreign intercourse, and having had opportunities of judging of the military strength of the Occidental nations in the course of his journey through Europe resolved in company with his friend Ito Shunsuke to return forthwith and warn the Choshiu baron of the risks that were being incurred by the clan. They left their fellow-students behind them in Europe and hastened to Yokohama, where they found the combined squadron on the point of sailing for Shimonoseki, to punish the daimio of Choshiu for firing on passing ships. Armed with letters from the Foreign Ministers to the baron Mori, their lord, Ito and Inouye took passage in one of the warships, and were at their own desire landed at a point on the coast, in the Suwo Nada, as that part of the Inland Sea is termed, and made their way by road to Hagi, where the daimio was then in residence. Hagi is some forty miles across country from the Suwo Nada, and Inouye and his companion ran considerable risk of being discovered and brought to book for having quitted the province without leave. They assumed the disguise of medical men, who were permitted in those days to wear one sword, and were thus not wholly without means of defence had they been attacked in the mountains, and they succeeded in reaching the castle town to which they were bound without being delayed on the road. But they found the baron Mori entirely averse to the proposition that he should withdraw his standing order to the forts to fire on strangers, and on the other hand, though their reception had not been unkindly, they were ordered to return with a message of defiance to the squadron they had left in the Inland Sea. Three days in all had elapsed when they rejoined the British man-of-war _Barrosa_ and communicated the purport of their lord’s reply. One course only remained open to the British and other commanders, and the vessels steamed to a selected position in the straits, just out of the strong current, and early the next morning prepared for the assault. Not without warning, however, for due notice was given of the intention, failing surrender. The Choshiu batteries were eight in number, beginning at Chofu, three miles east of the town of Shimonoseki,—and now the first railway station on the Sanyo line towards Kobé,—and extending thence to the hill, opposite Moji Point, where the main street of Bakan—another name for Shimonoseki, and in general use—begins. Seventy-four guns were mounted in the eight batteries, and the instant that the guns of the squadron opened fire, on the expiration of the allotted time, the most vigorous response was made by the Japanese gunners. The most powerful of Choshiu’s ordnance was mounted at Maita-mura, a village midway between Bakan and Chofu. After some severe fighting, in the course of which the town of Bakan took fire and burned fiercely, the batteries were silenced, and the British ship _Barrosa_ landed a party of bluejackets and marines to aid in extinguishing the conflagration. During the engagement one man on board a foreign ship was killed by an arrow, the Choshiu men having fallen back on archery to help them in the defence of their positions. On the surrender of the forts a document was drawn up for the baron’s signature, agreeing to certain conditions for the withdrawal of the attacking squadron, and Ito and Inouye were once more despatched at the request of the local government to represent the utter impossibility of holding out against superior force. The envoys returned two days later with the agreement sealed, and seventy-two guns, then supposed to be the total number in use, were taken on board the allied vessels. Two guns were unwittingly left in position on the hillside, commanding the straits, for the writer found them there when surveying the locality ten years afterwards, all but hidden in the dense undergrowth. The Choshiu samurai were not a little proud of the resistance which they had been able to offer to the foreign ships’ attack, and the townspeople never forgot the magnanimous behaviour of the victors in going ashore to quench the flames that the battle had originated.

[Illustration: COUNT INOUYE KAORU]

The men of Choshiu, some fifty or more in all, who fell in the memorable fight were interred in a special cemetery situated on rising ground in the rear of the town, and the graves are still tended with that loving care which is invariably bestowed everywhere in Japan on the burial-places of relatives and friends. The Frenchmen,—it is said there were three,—who were killed aboard the French warships, were taken ashore on the Moji side for interment, and at a later date the French admiral visited the spot, and, according to report, discovered that the graves had been wilfully desecrated, indeed,—as it was said,—wholly destroyed. That some misapprehension must have existed on this point is certain, since the writer was conducted by a farmer, who dwelt near Moji point, to the spot where the three sailors had been buried, and to all appearances the graves, though surrounded by dense vegetation, were intact. This was in the year 1873, when a submarine cable was being laid across the Straits to form part of the Japanese telegraph system. The farmer knew that those who fell on the side of the allies lay in that secluded spot, and expressed his regret that being a poor man he could do nothing to show his respect for those who had perished at the post of duty. The undergrowth was cleared away, and the soil had been purposely left untouched by rake or hoe. This was more than thirty years ago, and it is impossible for the writer to say whether or not some suitable memorial to the French victims of the battle has since been set up at the place indicated, but in any case there must still be people dwelling near it who know where the interments took place, as the story of the combined attack on the forts and the incidents of the struggle is told with zest by father to son, and on the Shimonoseki side the festival of the dead is regularly held at the tiny graveyard at the back of the main street.

Only a little while before the date of the Shimonoseki bombardment the Choshiu retainers at the baronial mansion in Kioto had engaged in hostilities with the Shogun’s supporters at the capital, and so close to the imperial palace were the combatants that the walls were repeatedly struck by bullets. This was during the lifetime of the Emperor Komei, and the now reigning sovereign was then only ten years of age, this early experience of hearing shots fired in anger, and particularly in the immediate vicinity of the imperial palace, though indicative of the pitch to which clan jealousy and animosity had at that period attained, being such as his Majesty was not likely to forget.

As to Choshiu, the sequel to the attack made by the clansmen on the Shogun’s troops was that the Emperor Komei issued an edict deposing the lord Mori and directing the Shogun, as Commander-in-chief of the forces, to punish him for his rebellious behaviour. The Choshiu clan thus found itself in a position of antagonism to the imperial house, as well as to the Bakufu, and as at the same moment it was assailed by the combined foreign fleets at the Straits of Shimonoseki, in consequence of its attacks on passing vessels, the head of the clan was driven to the necessity of defending both flanks as best he could. He contrived to stall off the assault of the Shogun’s troops for the few days that he was engaged at Shimonoseki, where his forts were demolished by the fire of Admiral Kuper’s men-of-war and their allies, and when that trouble was past he raised the standard of rebellion in real earnest and defied the Shogun openly. Discipline and drill (for they were armed with Tower rifles, and had been partially trained on a Western system) served the men of Choshiu well, and they succeeded in inflicting a severe defeat on the forces of Iyemochi, who led his men in person. In this encounter between the forces of Choshiu and the Shogun the Satsuma clan stood aloof, possibly as the result of private negotiations between the clan leaders, for there were at this time several persons making their way to the front who were destined at no very remote date to play the most important parts in the affairs of the nation. On the Choshiu side were Ito and Inouye, on the Satsuma side were Saigo and Okubo, all men whose names will never fade in the history of their country’s emancipation from feudalism. The leaders of the two clans were united, moreover, by a bond of common interest, inasmuch as all desired to bring about the abolition of the Shogunate and secure the revival of direct imperial rule by the Emperor himself. The future Marquis Ito and Count Inouye had at this time only just returned from their first visit to Europe, as already recorded, and they lost no time in impressing upon their fellow-clansmen of Choshiu the advantages of military preparation for the coming struggle. The spirit of loyalty to the clan with which they were animated prompted them to ensure, as far as was practicable, that it should be in a position to do itself justice in the final effort which was then about to be made to restore the personal authority of the Ten-shi.

Inouye Bunda was invested with the control of the Choshiu forces in the field, and many engagements took place in the region bordering the Inland Sea. After the death of the Shogun Iyemochi in 1866, however, the encounters between the Bakufu troops and those of Choshiu became less frequent, and there was practically a truce during the later months of the year 1867, the situation in October being such as to prompt the Shogun Keiki, whose tenure of the office had been but brief, to prefer a request to be relieved of duties which circumstances had made it all but impossible for him to fulfil. The lord Mori made his submission to the Court, at Kioto, but the hostility of the clan to the Bakufu remained latent, notwithstanding its temporary suppression, and when, at the close of December 1867, the supremacy of the southern clans was established at the capital, followed by the departure, on the 3rd of January, of the Shogun Keiki for Osaka, the Choshiu clan was prepared to play a very

## active part in the restoration of direct imperial rule in substitution

for that delegated authority which the Tokugawa house had so long wielded.

But Inouye Bunda had shown capacity of a different kind to that which had so far been demanded of him as a military leader, and he at once took his place as one of the most well-informed members of the new administration,

## particularly on matters of finance, which he had made his especial study.

It became necessary for the Imperial Government to undertake works of public utility, more especially railways, and on this account money had to be obtained from abroad, the first loan being negotiated through the agency of the Oriental Banking Corporation, while Count Inouye, as he subsequently became, was at the Finance Department. The interest on this loan was 9 per cent., and on a subsequent one 7 per cent., both being extinguished very early in the Meiji era. In the fifth year (A.D. 1872) the wise step was taken by Inouye, then Vice-Minister of Finance, of laying by a Reserve Fund comprised of extraordinary incomes, obtained in the first place from the sale of certain Government articles which had ceased to be of any use. The idea of inaugurating such a reserve had been borne in upon the Government by the trying financial experiences of the preceding four years of the reign, consequent on the new administration having had to shoulder the responsibilities of the provincial Governments or _Hans_, by which in many instances a flood of paper money had been issued to circulate in merely their own territories, and not current beyond their boundaries. The extinction of the _Hans_ obliged the new Government to undertake the liabilities so incurred to the agricultural and other population. The Vice-minister had also in view the resumption of specie payments at the earliest possible moment, though it was long ere his wishes were realised. Altogether he found it practicable to create the “Treasury Reserve Fund” by appropriating 11,330,000 _yen_,—adding together 11,230,000 _yen_ of specie and 99,000 odd of paper money, which had been accumulating in the Government treasury. The Rules framed by him and issued in connection with this Reserve Fund are evidence of the clear perception the Vice-Minister had of the necessities of the hour, for he pointed out the urgent demand that then existed for giving support to the policy of the Government by saving up specie as a reserve, and arranging for its utilisation in a definite and unequivocal manner, in order that the circulation of paper money and the redemption of bills might be effectively provided for. A set of rules, twelve in number, was laid down for determining the method of the utilisation of the fund, in June 1872, and with slight modifications to suit changed conditions these regulations held good throughout the period antecedent to the introduction of Parliamentary Government. Such reserve funds as were in the possession of the _Hans_, kept for the redemption of the notes issued by them,—for they were not all indifferent to this obvious duty,—were added to the Government’s reserve, according to the actual sums received. And as the New Treasury’s convertible bills then totalled 6,800,000 _yen_, it was arranged that the amount thereof should be withdrawn at any time from the reserve fund of over 11,000,000 and paid in exchange for those bills whenever the demand might be made. By the following December the Reserve fund, in the Vice-minister’s management, had reached the sum of over 16,000,000 _yen_, and as the _yen_ was the equivalent of the dollar, at that time valued at from forty to forty-four pence English, the Reserve Fund was roughly £3,000,000 sterling.

But when every liability had been taken into consideration it was the Vice-minister’s somewhat mournful conviction that the Reserve was not equal to even one-tenth of the total of the bills and various other kinds of paper money in existence, for there were 20,000,000 _yen_ worth of the _Hans_ notes out somewhere, and 55,000,000 worth of the Dai-jo-kwan paper, issued to meet the unavoidable cost of setting up the new administration in 1868. This financial difficulty, indeed, was but one of the many problems that the Government of the Restored Imperial Rule was faced with at the beginning of its career, apart from all considerations of the opposition that it had to expect from those who were averse to the change and resolved to appeal to arms in support of their convictions. Indeed, the insight which even a superficial examination of the financial position in the early years of Meiji is apt to afford the student must tend to add to the wonder always experienced that the marvellous results which it is on all sides acknowledged were achieved by the men in power were attained with no greater sacrifices than those which had to be recorded. The spirit in which the individual members of the administration set about their tasks is, however, well exemplified by the tone of the memorandum addressed by the Department to the Government in December 1872. These were its terms:—

“It is our purpose to persist in our efforts to increase the Reserve Fund and bring it up to an amount which may one day prove to be of great service to the financial administration of the country. It is, therefore, our earnest prayer that not only during the time that we are in office, but down to a hundred years yet to come, in pursuance of the plan here laid out, efforts shall be made year after year to augment the fund, thus protecting and advancing the prosperity of the nation, in order to establish the foundation of popular confidence in the national currency, and furthermore that the fund shall positively never be spent for expenditures under the General Account.

Should the Cabinet find our scheme acceptable, we would most humbly beg for the immediate sanction of his August Majesty, with the counter signatures of all the Ministers of State. With these prayers we hereby submit this memorandum to the careful consideration of the Government.”

From that time forward the Government never neglected any opportunity of augmenting the Reserve Fund, and when at a later date the change to the adoption of a gold standard was in preparation the fund which had been so wisely initiated in 1872 was of the greatest help in partly paving the way for the resumption of specie payments by Count Matsukata.

In 1878 it was decided that a sum of 10,000,000 _yen_ in gold should be kept, as part of the Reserve Fund, in the Government Treasury, the remainder being turned into floating capital, and it was ordered at the same time that 20,000,000 _yen_ should be added annually out of the general account to the Sinking Fund, having for its object the redemption of public debts, both domestic and foreign.