Economic historians and economic theorists can make an interesting and socially valuable journey together, if they will. It would be an investigation into the sadly neglected area of economic change.

As anyone familiar with the history of economic thought will immediately recognize, practically all the economists of the nineteenth century and many of the twentieth have believed uncritically that all that is needed to explain a given historical development is to indicate conditioning or causal factors, such as an increase in population or the supply of capital. But this is sufficient only in the rarest of cases.

Japan's transformation into a modern state began shortly after the middle of the nineteenth century when she was forcibly opened to international trade. In the ensuing years, the old social, economic, and political structure was overhauled to the end that Japan might become a powerful nation able to stand on an equal footing with the more advanced Western nations. Early attention was given to land reform and peasant emancipation since the country was predominantly agricultural, with about four fifths of the population engaged in cultivating the soil. In the early 1870's the prevailing system of servile land tenure was swept away and replaced by a system of private ownership of land. Henceforth, the peasants, who had formerly held land from feudal nobles in return for certain dues and services, were given title to land on which they, as owners, paid a land tax.

During the early years of the nineteenth century the mercantile community of Boston suffered the inconvenience of a double currency system. Boston banks accepted for deposit only “Boston money,” bank notes issued by Boston banks and readily redeemable in specie on demand at the counter of the issuing bank. But the common currency for all ordinary transactions was “foreign money” or “current money,” bank notes issued by out-of-town banks usually called country banks. Originally the Boston banks had accepted the notes of country banks at par or at a small discount and had returned them to the issuing banks for redemption rather than placing them back into circulation in Boston in competition with Boston bank notes. This policy had to be abandoned because of the inability of some country banks to redeem their excessive issues and the subterfuges adopted by other banks to avoid or delay redemption on the ground that the request for redemption was an imposition which restricted their legal circulation of bank notes. Moreover, there was always the risk that a country bank might fail before its notes could be presented for redemption by the Boston banks.