Stochastic computation employs random pulse streams to represent numbers. In this paper, we study a new method to implement the number system which uses the ratio of the numbers of ones and zeros in the pulse streams. In this number system. if P is the probability that a pulse is one in a pulse stream then the number X represented by the pulse stream is defined as P/(1-P). We propose circuits to implement the basic operations such as addition multiplication and sigmoid function with this number system and examine the error characteristics of such operations in stochastic computation. We also propose a neuron model and derive a learning algorithm based on backpropagation for the 3-layered feedforward neural networks. We apply this learning algorithm to a digit recognition problem. To analyze the results, we discuss the errors due to the variance of the random pulse streams and the quantization noise of finite length register.