ABSTRACT
One of the key national goals of Meiji was external expansion. Japanese political leaders, spearheaded by Yamagata Aritomo who served as prime minister in 1889-91 and 1898-1900, felt that it was necessary to create a sphere of influence around the nation to protect its interests from interventions of the West or neighboring countries. When the first session of the Imperial Parliament was convened in 1890, the hottest issue was whether Japan should adopt fiscal activism or fiscal austerity. Britain adopted the gold standard in 1821 and all other major Western countries, including the United States, also shifted to the gold standard by the end of the 1870s. The price of silver gradually declined against gold in the late nineteenth century. This meant that the Japanese yen, tied to silver, automatically depreciated against the world's major currencies, lowering Japanese costs and providing a favorable condition for export promotion.
