They would basically argue: "(1) Articles of daily use may be pawned, but the term for wearing apparel is limited to a year and that of weapons to two years

(2) the rate of interest must be within fifty per cent

(3) Those who do the business without sufficient funds shall be punished, and if they abscond, the liability must be borne by the people of the district" (Soyeda)

An interesting aspect of the early stages money lending in Japan is that the creditors would often require a guarantee. And this guarantee would be a certain good held by the debtor until the creditor paid back his debt. In other words, the mechanism was that of the modern day pawn shops. Future laws would be introduced to regulate the treatment of pawned items. In this order of ideas, in 1790, the Hundred Clauses clearly stated that pawned items could only be sold by the creditor after eight months and that the creditors who broke this rule stood to face severe repercussions.

In the aftermath of these laws, which, amongst other things, recognized the existence and importance of pawns, the lending money institutions would increase in role, presence and weight. The elements of secrecy would be significantly reduced and the behind-street and in-the-dark operations would be replaced with money lending operations, which occurred in broad daylight and in the specially created locations of the lenders. By this time, the money lending houses and the pawn brokers had become more popular.

Difficulties were however raised by the existence of several currencies. Each district would issue its own coins as the country had not promoted a single official currency. The people used a myriad of gold and silver coins, some of the most common ones being the Joji-han, the Koshu-kin, the Juyei-han or the Yeiji-han (all gold coins)....

Yet, the coins would generically be approved of by the shogun. The Shogunate would also approve of the people in charge of lending money and also exchanging money, would support their activities and offer protection, but would also collect taxes from them (Takekoshi, 2004). Gradually, the houses which lent and exchanged money would become more developed, increase their offering and eventually turn into the first banks.
3. Conclusions

The realization of the problems faced by the contemporaneous Japanese banking sector takes the thoughts to the moments when the first transactions with money occurred in the Asian country. Initially, dealing with money was distinguished as shameful business and the Samurais would think of money as to the filthiest thing there was. At this time, the lending of money would be done in secrecy and limited by social perceptions and commodity trade.

Yet, as the necessity for more money increased, the authorities of the days developed new laws and legislations which recognized the utility of money lending as well as regulated the practices. The central aspect in the initial laws was that of the treatment of the pawned goods.

In time, the pawn brokers, together with the money exchangers, developed as an independent economic sector. The traditional exchange and pawn houses of the pre-nineteenth century eventually evolved into banking institutions.