The financial and currency crisis in Japan during the Bakumatsu Period

Abstract

This paper examines the financial situation of the Tokugawa shogunate in the final stages of its existence during the Bakumatsu period, when the acute manifold crises of the country became evident. The crisis situation was complex and multifaceted and was exacerbated by the outbreak of civil war. At the same time, the various factors of military origin began to dominate only several years before the Meiji Restoration, so military spending was an important, but not the only reason for the deteriorating financial situation of the bakufu. For a long time, the budget of the shogunate government had a significant financial deficit, covered by the supply of additional money, which, with the rise of significant inflation, resulted in the complete bankruptcy of the shogunate. Therefore, bankruptcy was largely inflationary in nature, as the financial collapse was the result of expansion of the money supply and inflation. This, however, was not the exclusive result of the civil war, but also stemmed from key historical developments in foreign policy and foreign economic activity after the opening of the ports.