In Japan the regulation with regard to bank-notes is not as satisfactory as is the case in India. The first modern issue of convertible bank-notes took place under the Convertible Bank-notes Law of May 1884, which provided for the issue by the Bank of Japan of bank-notes which were convertible into silver. Upon the adoption of the gold standard in 1897 the notes became convertible into gold. The principal points of the paper currency system in Japan are, briefly, as follow: The Bank of Japan is required to hold as conversion reserve against the issue of notes gold and silver coins and bullion to the same amount as that of the notes issued; and the total value of silver coin and bullion must not exceed one-fourth of the entire conversion reserve. The Bank of Japan may also issue bank-notes to an amount not exceeding Y. 120,000,000 on the security of Government loan bonds, treasury bills and other reliable securities or commercial bills. Should the condition of the market necessitate an increase of the amount of money in circulation, bank-notes may also be issued with the permission of the Ministry of Finance on the security of the Government loan bonds, treasury bills and other reliable securities or commercial bills. At the close of 1913 the amount of coins in circulation including Y. 37,348,240 of gold was Y.179,308,909; bank-notes in circulation totalled Y.426,388,708. For this issue the reserves were as follow: gold coins and bullion Y.224,365,880, public loan bonds Y.39,683,105, and other securities Y.162,339,723. Thus the reserves were in the proportion of 52.62 per cent, specie and 47.38 per cent, securities. The noteworthy feature of the financial system in Japan is the enormous amount of paper in circulation, which is almost altogether disproportionate to the trade, or the metallic circulation. It should also be remembered that the gold reserve for Japanese issues is kept in London, and not in Japan.