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 beneficial effect. It will be noticed that the agreement (it has not been made public, but I was able to see a copy) provides for the collection of taxes by the bank. This in itself involves a most important reform. It has been the custom, under the Korean regime, to farm out the collection of the taxes to the local magistrates, with the same evil results that have always accompanied the system everywhere. This agreement marks the first encroachment of the Japanese upon the purely local functions of the Korean Government.

However, promising as this plan seems to be in helping to straighten out the tangled financial system of the kingdom, it was not considered an entirely wise measure by some men (foreigners) of recognized ability and long experience in Korean fiscal affairs, who pointed out imperfections in its proposed modus operandi. When the plan was put into effect these forebodings were amply realized. The circumstances under which the old nickels were redeemable created difficulties that led to great confusion and worked injustice upon thousands of the poorer classes and merchants, while at the same time bringing, through manipulation, considerable profit to certain classes of Japanese. Riots occurred in places, which the Japanese military suppressed with scant ceremony. The merchants appealed to the Emperor for relief, and, although he was not responsible for the condition complained of, he made a loan out of his private purse to relieve the panic. It is perhaps too soon to condemn this attempt of the Japanese to reform the financial system of the country (it certainly