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 sented the bulk of the State's liabilities during the first twenty-five years of the Meiji period. The Government had also to take over the debts of the fiefs, amounting to 41,000,000 yen, of which 21,500,000 were paid with interest-bearing bonds, the remainder with ready money. If to the above figures be added two foreign loans aggregating 16,500,000 yen (completely repaid by the yen 1897); a loan of 15,000,000 yen incurred on account of the only serious rebellion that marked the passage from the old to the new régime—the Satsuma revolt of 1877; loans of 33,000,000 yen for public works, 13,000,000 yen for naval construction, and 14,500,000 in connection with the fiat currency, there results a total of 305,000,000 yen, being the whole national debt of Japan during the first twenty-eight years of her new era under Imperial administration.

The above statements sufficiently explain the liabilities incurred by the country during what may be called the first epoch of her modern financial history. There remains to be considered the second epoch, dating from the war with China, which occurred in 1894–1895.

The direct expenditures on account of the war aggregated 200,000,000 yen, of which total 135,000,000 were added to the national debt, the remainder being defrayed with accumulations of surplus revenue, with a part of the indemnity