The ancient school system, which remained for centuries under the influence of Chinese culture, has been replaced, with the renewal of 1868, which opened the doors to Western culture, an organization that largely follows the European one while trying to adapt the spirit to the national one. The starting point of this new order was the edict issued by the emperor in 1872.
Primary schools are destined for the first level of teaching, almost entirely maintained (25,582 schools in 1923, with 195,197 teachers and 9,020,619 pupils) by local administrations, although their direction, as indeed that of all public schools, is reserved for the state. Elementary education is compulsory, and the obligation is observed so strictly that by 1923 the attendance exceeded 99%: the establishment of universal suffrage, then, which took place in 1925, has intensified even more the care of primary education. With some exceptions, teaching is free: the texts are state-of-the-art (61 million copies in 1923). The school lasts six years; but almost half of the institutes have further courses, of two or three years, of specialization and introduction to work. There are also many vocational schools (in 1925, 815, with 270,000 pupils) and many schools for abnormal. But the difficulty of this grandiose organization, which is rapidly developing, is in the recruitment of teachers, prepared by about a hundred magistral institutes (1923): their number is still much lower than needed, and their career conditions are not very brilliant.
The second level of teaching is constituted by the middle school, with a lower course of 4 or 5 years and an upper course of 3. It is accessed with the elementary license and after a severe exam that allows only 60% of the graduates to pass on average. The course of studies is not very different from that of one of our scientific high schools: the teachings of ethics are characteristic (Confucian, but also European: teaching that replaces that of religion, strictly excluded from school) and those of modern foreign languages, for the assimilation of Western culture (absent, of course, while Greek and Latin remain instead): between English, German and French, pupils choose two languages, and generally leave out French. Parallel to these schools are the girls’ middle schools, in great development: with them, for the most part, the girls’ course of study ends. Altogether, these median institutes were over 1300 in 1925 and had over six hundred thousand members.
The revenue from indirect contributions exceeds that from direct taxes; the tax on liquors, customs duties and excise duty on sugar, among the former, the general income tax and land, among the latter, give the main income. State-owned revenues, the monopolies of tobacco, salt and camphor and the profits of public enterprises are also of considerable importance. Public debt service, national defense, communications and education are the main spending items.
In addition to the general budget, Japan has 34 special budgets, also generally in surplus, among which particularly important are the budget for the railways (established in 1909) and that of the overseas territories (Korea, Formosa, Liao-tung, Sakhalin, North Pacific Mandates). However, the income and expenditure of these budgets cannot simply be added to those of the general budget to obtain the overall situation of Japan, given the complicated relations between them and the frequent duplication of chapters.
According to Proexchangerates, Japan’s public debt, mostly contracted for railway construction and public works, to meet war expenses and financial transactions, amounted to 6002 million yen as of December 31, 1931. The rapid increase in the public debt figures in the years following the World War was almost exclusively due to internal debt, which rose from 1820 million in 1920-21 to 4525 million at the end of 1931 (an increase mainly contributed by floating debt) while the foreign one remained almost stationary: 1424 and 1477 respectively.
The banking system of Japan, hit by a serious crisis in 1920-21, after the earthquake of 1923 and in the spring of 1927 (the latter crisis which can be considered as the liquidation phase of the provisional measures adopted in the first two) is currently regulated by law of 29 March 1927 (which entered into force on 1 January 1928), which largely replaced the first law of 1872, which by now had become inadequate for the country’s financial development. The privilege of the issue, first granted to the various national banks, has been the exclusive monopoly of the Bank of Japan since 1883 (Nippon Gink ō), established in 1882 as a joint stock company. The notes must be fully covered by the metal reserve, except those issued on the guarantee of government bonds and other safe securities up to a maximum limit of 120 million yen; only in case of need can the bank be authorized to exceed this limit, however paying the state a tax of at least 5%. At the end of 1931 the notes issued by the Bank of Japan amounted to 1312 million and as of September 30 of the same year the reserve was 818 million.
The monetary unit of Japan is the gold yen (divided into 100 yen), whose parity with the pound was fixed by the law of 1897 at 2 shillings and 1/2 penny. However, the yen is not minted and the gold coins in circulation are 20, 10 and 5 yen. The monetary and banking system of Japan was legally introduced in Formosa in 1911 and in Korea in 1918. The limit within which the Bank of Formosa established in 1899, and the Bank of Korea, established in 1909, is allowed to issue free of tax on convertible tickets backed by metal reserves or securities is 20 and 50 million respectively.