were used, and the cash value of these coins, to the great inconvenience of the users, was decided according to their relative weights. At that time the situation was somewhat eased by the fact that Japan herself was using the silver standard. But, in 1897, when the gold standard was adopted by Japan, much inconvenience arose in the business transactions between the two countries. Formosa, being then unable to adopt the gold standard, was made an exception; accordingly in July, 1898, orders were issued that in Formosa one silver yen should pass unconditionally at current rates fixed by the Governor-General. Hence the Governor-General was obliged to do bankers' work, and publish the current rate whenever any change was made. A further order was issued that only the Japanese silver yen, which bore the special official chop, could be used for paying taxes and duties. The Bank of Formosa also began issuing paper notes convertible into silver. They succeeded in recalling all the bad silver currency which had been in circulation, but losses were frequent owing to the fluctuations in the exchange rate of silver.

On the 1st of July, 1904, having decided that the gold standard should be adopted in Formosa as soon as possible, the Government allowed the Bank of Formosa to issue new paper money, hoping thereby to remedy the losses arising from the frequent changes in the value of silver. The natives' love of gold and silver being almost as intense as their craving for food, it is well-nigh impossible in a few weeks or months to make paper notes the medium of circulation.

In May, 1902, according to the returns, the unclipped Formosan silver yen numbered 23,657,428, the supplementary Japanese silver coins amounted to 1,345,798 yen, foreign silver coins to 3,228,856 yen, nickel coins to 223,000 yen, and notes issued by the Bank of Formosa to 3,353,631 yen; so the total amount then in circulation was 31,808,713 yen. To change the standard it would be necessary to issue notes convertible into gold amounting at least to 25,000,000 yen, and in order to do this we must have at least 7,000,000 or 8,000,000 yen on hand in gold. I should much like to see this accomplished if it is practicable.

The establishment of the Bank of Formosa has been the subject of much criticism, and there are many changes which

I would suggest. It has, however, been the means of giving the island a dependable currency, besides teaching the Formosans the pecuniary advantages that accrue from putting their money into circulation, instead of letting it lie idle in the seclusion of their strong rooms. One day I bought some silk in Amoy, but finding I had run out of silver money, I presented a Bank of Formosa note. The shopkeeper accepted it after a mere glance. A thing like that could not be done for any bank which was not backed by the Government.

The establishment of this bank led to another being opened, the Agricultural and Commercial Bank of Formosa. This was the result of the united efforts of the wealthy merchants in Formosa, who conduct the business of the bank on a capital of 100,000 yen. There is, in addition, the Formosa Savings Bank.

In spite of the facilities afforded by these banks, the rates of interest remain very high, from 3 to 5 sen per day, with an occasional drop to 3 sen, being the general rule. On private guaranteed loans among the Japanese the highest rates of interest per month are 6 per cent., and the lowest just under 5 per cent.; without security the highest rates are 7.3 per cent. and the lowest 6'1 per cent. That is to say, a yearly interest of 72 per cent. would have to be paid for money borrowed on security at the highest rate. The Formosan Chinese, however, charge each other still higher rates. The lowest rate of interest is 14 per cent. per month and the highest 15 per cent.; borrowers would therefore have to pay a yearly interest of 180 per cent. for money borrowed on security at the highest rate. Without security they would have to pay 19 per cent. per month, or 228 per cent. per annum.

In a country like this, with such high rates of interest, no enterprise worthy of note is to be expected. Having personally known many cases where our Japanese compatriots have borrowed money from the natives and found it to be a pitfall from which they could not extricate themselves, I could not help feeling sorry for them.

CHAPTER XVIII.

SANITATION.

Good sanitation imperative in colonies-Formosa's bad record-Marvellous improvements—The water supply-The prevention of disease-Hospital arrangements-Medical faculty subsidised by the Government-Native medical students-Causes of apparent increase of disease-Statistics.

IT is remarkable how much attention is at the present day devoted by modern Governments to the sanitary conditions of their subjects. Indeed I do not think it would be wrong to say that the degree of civilisation attained by a people may be measured by the success of its sanitary administration. This is particularly true of tropical colonies, where epidemic diseases and malaria are the most formidable enemies man has to contend with. Most tropical countries are sparsely populated; they have neither the capital nor the men required for the exploitation of their resources, so one of the first duties of the administration is to encourage immigration and attract investors. This, however, is out of the question until the country is cleared of epidemic and malarial diseases; in the meantime industries remain stagnant for want of labour and funds. Moreover, in a newly conquered country, to put down possible risings a garrison must be retained, the health and efficiency of which necessitate a constant fight with epidemics. From whatever side therefore we look at it, in a country situated like Formosa, the first question that calls for the attention of the authorities is that of sanitation.

Unfortunately the island has a very bad record, his Imperial Highness Prince Kitashirakawa having succumbed at Tainan to an attack of malarial fever, and many others having either died of epidemic diseases or been forced to leave quite broken down in health. As the tables of statistics showed such a high death rate, the people of Japan imagined that Formosa

must be a most unhealthy country. In addition to this, those Japanese who went to the island, but failed to succeed in the battle of life, brought back a bad report of the land which tallied all too well with the people's already preconceived ideas. Thus eastward from Osaka, Formosa came to be dreaded more than if it had been infested with evil spirits. In the districts west of Osaka, what with the ships from Formosa which were coming in and going out all the time, and the men and women who were returning, there were not a few who knew the real state of things; but even there, in those districts which had but little communication with the island, people had an extremely poor opinion of its sanitary condition.

When I left for the island in May, 1904, my friends all thought I was risking my life foolishly, and said if I stayed more than a month I should be sure to catch malarial fever. They therefore advised me, if I intended to stay so long, to lay in a good supply of quinine pills, and begin taking them one or two days before landing. Up to that time I had not looked upon the island as specially unhealthy, but my friends' words caused me to modify my opinion. I took an evening train from Kelung to Taihoku, and, being badly bitten by mosquitoes, I could not help feeling somewhat troubled when I remembered how people said that malaria was carried by mosquitoes.

After reaching Taihoku, but more especially on going south, I found that all the hearsay reports I had heard, all that Formosan savants had told me in Tokyo and all my own imaginings, were nothing more than bad dreams several years old. I then came as it were to myself, and was surprised to find everything so different from what I had expected. I at once wrote to my friend in Tokyo saying that I had found the heat not at all unbearable and the sanitary conditions so satisfactory that I was quite willing to send my children to the island.

I expected to find all the large towns in Formosa built like the ones in China, with narrow streets 10 or 15 feet wide, swarming with young pigs, the streets overflowing with filthy water and laid irregularly with stones of all shapes and sizes, and all the drinking water mixed with sewage. But I found all were built after the European style and had wide streets, as clean as the best in Tokyo. Some are even better