In February 1895, The Japanese Minister to Korea, Shin Inoue, submitted a report on the economic situation in Korea to Foreign Minister Mutsu Munemitsu. In 1894, North Korea's revenue was 7.49 million yen (converted from 1:0.644 to 1:644 yen to silver, which is about 4.824 million taels of silver). Among the sources of revenue in North Korea, the land tax is 5 million yuan, the land rent of Pyongan Province is 500,000 yuan, the red participation tax is 180,000 yuan, the fishery tax and salt industry tax are 12,000 yuan, the Tuntian tax is 300,000 yuan, the household tax is 1 million yuan, and the customs tariff is 500,000 yuan. Shockingly, north Korea's accumulated foreign debt (including borrowings from Japan's Daiichi Bank, Yokohama Shokin Bank, Qing Dynasty Merchants Bureau, Tongshuntai ticket number, etc.) was as high as 712 million yen (458.5 million taels), and domestic debt was as high as 946 million yen (609 million taels). The North Korean government's debt repayment capacity is about 960,000 yen per year, which means that even if interest is not calculated, it will take North Korea 1727 years to pay off these foreign debts. In order to repay the debt, it is necessary to reduce the annual national budget expenditure of the DPRK to less than 6.5 million yen on the one hand, and on the other hand, to try to increase the DPRK's government revenue.
Although there are many provisions that should be implemented for the sake of social development, which is conducive to the transformation of Korea into a modern country, it has caused a fierce backlash in Korea because it was implemented under the background of Japan's armed forces and presided over by pro-Japanese factions. At the end of 1895, Princess Min tried to use Russian power to eliminate Japanese power, and was killed by Japanese minister Miura Wulou to send Japanese soldiers and ronin. The fourth Kim Hiroki cabinet, which was subsequently formed, was encouraged by Japan to promote a more radical "B-mun- and-jang", including the promulgation of the "Jianyang" era name, the use of the Gregorian calendar, the establishment of postal networks, the construction of primary schools throughout the country, the implementation of pox and other measures, and the order of men throughout the country to cut their hair, which caused a violent riot in Korean society and broke out a large-scale volunteer movement. In February of the following year, King Lee Hee of Korea, who could not bear japanese hostages, fled into the Russian legation, and Kim Hongji's cabinet collapsed, and a pro-Russian regime was established with Kim Byung-sik as prime minister and Lee Wan-ong as foreign minister.
Photograph of officials during the Joseon Dynasty
In August 1897, the Korean era name was changed to "Gwangmu", and on October 12 of the same year, Gojong Lee Hee of Joseon became emperor and established the "Korean Empire" with a lifespan of only thirteen years. During this period, the reform of Korea was based on the basic line of "old and new reference" (referring to taking the old system as the foundation and considering new things), and became politically conservative, while promoting economic and military modernization. From 1897 to 1904, a series of reform measures implemented by the Korean Imperial government were summarized by later generations as the "Guangmu Reforms".
The reform measures implemented by the "Guangwu Reform" are very similar to the "Cixi New Deal" implemented by the late Qing government after the Xinugu Treaty, and both have a strong and rapid Westernization color. The most notable feature is the extreme expansion of the monarchy's power, the gradual weakening of the power of the ministries, the nominalization of the central house that was once prepared to be transformed into a parliament, the concentration of all power in the palace, which represents the power of the palace, and the inner chamber under the palace house replaces the degree branch and becomes the core institution of the national financial taxation; The Imperial Guard House replaces the Police Agency and is in charge of national police affairs; The Miyauchi Prefectural Railway Institute manages the national railway trunk line; The Communications Department of the Miyauchi Government, in place of the E-mail Office, manages the national post and telecommunications... This is similar to the "imperial cabinet" promoted in the late Qing Dynasty.
In terms of postal railways, in 1899, the Korean Empire took back the laying rights of the Gyeongui Line Railway (Seoul-Sinuiju) from the French, and built new railway trunk lines such as the Gyeongwon Line (Seoul-Wonsan) and the Hunan Line (Seoul-Daejeon-Mokpo). However, the laying of two important railway trunk lines, the Gyeongin Line (Seoul-Incheon) and the Gyeongbu Line (Seoul-Busan), was controlled by the Japanese. In 1900, South Korea joined the Universal Postal Union, and by 1902 it had opened long-distance telephones between Seoul, Incheon, Pyongyang, and Busan. In terms of breeding and developing industry, during the Korean Empire, a policy of encouraging industry and commerce was adopted, and before the Russo-Japanese War, a series of new enterprises such as the Great Korean Ramie Silk Making Association, the Seoul Weaving Association, the Seoul Electric Society, the Incheon Post and Shipping Association, the Daehan Tianyi Bank, and the Seoul Bank appeared.
During the "Gwangmu Reform" period, the Korean Empire took the initiative to open up the trade ports of Mokpo, Jinnampo (present-day Nampo, North Korea), Masan, Gunsan, and Seongjin (present-day Kimce, Korea), as well as inland cities such as Pyongyang, allowing foreign merchants and overseas Chinese to stay freely. At the same time, foreign investment in the United States, Russia and other countries is used to develop public utilities such as trams and running water. In 1898, the Seoul Electric Power Society, a joint venture with the United States, was approved to build the capital's power supply system and tram system, and the Seoul Water Company also had the participation of American businessmen.
In order to meet the needs of economic development, the Korean Empire announced the implementation of the gold standard system in 1901, asked the Osaka Mint of Japan to mint the era name "Kwangmu", with gold coins in denominations of 5, 10 and 20 yuan (90% gold, 10% copper, equivalent to the yen), and in 1903 established the Central Bank of Korea. Another major measure of the "Guangwu Reform" was the national land surveying work known as the "Guangwu Measuring Field", which hired American surveyors to measure the land according to the Western method and re-grant the land title according to the results of the measurement. This was forced to be suspended after 2/3 of the country was carried out. The process of the "Guangwu Reform" was terminated in 1904 with the outbreak of the Russo-Japanese War.