Japan by the Japanese/Chapter 17.2

In order to make the actual economic condition of the empire of Japan plain, I make a brief note on national revenue and expenditure, and a few other items and an explanation of the changes thereof, in the following pages. The tables of figures are divided into two sections, showing the development in the five years before the Chinese War and in the subsequent five or six years.

From 1881 to 1895, during fourteen years, there was no variation to speak of either in the revenue or in the expenditure of the empire, each being between 70,000,000 and 80,000,000 yen. But after the Chino-Japanese War in 1895, the Government, adopting a so-called ‘ten-years’ plan for public works,’ increased its enterprises along all lines, beginning with the work for national defence and all other public works. This caused a sudden aggrandisement, the revenue increasing in 1897 to 187,019,423 yen, and the expenditure to 168,856,508 yen. Thence they increased yearly; in the year 1903, for the revenue there was appropriated the large sum of 251,681,961 yen, and 244,752,346 yen for the expenditure. If we compare the revenue and the expenditure of 1901 with those we had before the Chino-Japanese War, we see that in only a few years they both were almost tripled. (See Table, p. 392.)

During the period between 1874 and 1895 the total sum of public debts amounted to between 230,000,000 or 240,000,000 yen and 260,000,000 or 270,000,000 yen, and there was not any marked change in the amount of the public debts. Indeed, since 1890 the national indebtedness rather inclined to diminish.

​But in 1895 the Government called for the War Loan of 100,000,000 yen, and in 1899 a Foreign Loan of 97,630,000 yen (£10,000,000). Thus, the public debts increasing enormously after the war with China, the total indebtedness in 1900 reached the large sum of 526,664,194 yen, which was double that of the indebtedness of the empire before the war.

The amount of money in circulation has yearly increased along with the recent growth of commercial transactions. Especially is this true since April of 1899, when the limit of the convertible notes of the Bank of Japan which were being issued reached an amount above the reserve, having risen from 85,000,000 yen to 120,000,000 yen. In 1890 it was not more than 120,000,000 yen, but in 1899 it reached 250,000,000 yen. However, the Government notes and bank-notes have been gradually withdrawn from circulation, especially the latter, since the abolishment of the national banks in 1899. In 1900 it was seriously discussed whether it would be advisable to coin more silver subsidiary coins and also 1 yen pieces to take the place of the smaller notes and to supplement them, but no such decision was come to definitely.

The number of cheques in circulation has increased enormously in accordance with the increase of commercial transactions and with the better equipment of monetary organs. In 1890 the total cheques cleared through the clearing-houses of Tokyo and Osaka amounted only to 57,450,000 yen, but in 1896 it went up to 555,830,000 yen. Since the new clearing-houses were established at Kobe (1897), at Kyoto (1898), and at Yokohama (1900), the cheques cleared through these clearing-houses had increased in 1902 to 2,937,891,319 yen.

The rate of interest in Japan, as elsewhere, varies according to the state of the money market. But, generally speaking, after the Chino-Japanese War the rate of interest inclined to increase. Judging from the discount rate of the Bank of Japan, we find that between the years 1890 and 1895 the rate was not more than two sen per day per 100 yen, but after 1896 in every year except 1898 it increased to more than two sen, and in 1900 2 sen 4 rin was the rate.

Prices in Japan have risen as the standard of living has been raised. Especially was this the case when, as the result of the war with China, a great increase of enterprises of various kinds took place, and a large sum of money was distributed among the labouring classes, thus naturally increasing the purchasing power of the people. This helped very much to raise the prices. Since 1890, taking into consideration fifteen of the principal articles of the Tokyo market, although there are somewhat different rates of rise, yet it is certain that the price of every article has risen, which makes it evident that there has been a general upward tendency in prices in the empire.

Accompanying the industrial development and also the advanced standard of living, wages have been raised gradually. Since the war of 1895 they have risen considerably. Taking the wages in Tokyo during the last fourteen years, although there has been more or less variation in the rate of increase according to the time and kind of occupation, all without exception have risen, especially those of the carpenter, of the stonemason, and of the blacksmith.

Since the Restoration in 1868, and since the introduction of Western ideas in science and art, industry and commerce have made considerable progress. Especially is this true of the corporation system. The system, after 1888, made wonderful progress, and in 1894 the number of corporations was 2,967, and the paid-up capital 249,760,000 yen. But after the war with China it advanced, and in 1899 the number of corporations reached 7,829, with the paid-up capital of nearly 700,000,000 yen. Comparing the number of companies in 1894—just before the war—with those in 1899, we find that there were two and a half times as many as before the war, and that the amount of paid-up capital was two and seven-tenths times as great as it was before the war.

Banking business commenced with the promulgation of the National Bank Act in 1872. Since then banks were established at several places until, in 1879, there were 153 banks. Notwithstanding the suspension of the right of establishing new national banks, several private banks were added. In 1890 there were 353 banks with a paid-up capital of 82,121,278 yen, but during the last few years there has been a marked increase, and in 1899 there were 2,105 banks, with a paid-up capital of 268,024,897 yen.

The first line of railway was constructed between Tokyo and Yokohama—eighteen miles—in 1872. Since that time the Government railroads have been yearly extended at a varying rate of increase. The first private line was built in 1883, and covered sixty-three miles. After that, the railroad construction was somewhat slow, but recently, with national progress, it has been progressing very fast. In 1890 we had 551 miles of Government lines, and 896 miles of private lines—total, 1,447 miles. Since the war with China marked development has been made, and in 1901 there were 1,059 miles of Government lines, and 2,966 miles of private lines, a total of 4,025 miles.

Navigation in Japan began to develop about 1884 or 1885, but until the war in 1895 it did not make any considerable progress. In 1890 there were only 1,450 vessels constructed after the European pattern, the tonnage of which was 145,692 tons. But since the promulgation of the Navigation Encouragement Subsidy Law and Shipbuilding Encouragement Subsidy Law of March, 1896, the work has developed remarkably. New lines to Europe, America, and Australia have been founded. Thus we find that in 1901 Japan owned 5,415 vessels of the Western pattern, the tonnage of which was 919,968 tons.

Since the Restoration the foreign trade of Japan has made wonderful strides. In 1877 the total trade with foreign countries—exports and imports—amounted to only 50,000,000 yen, but in 1890 the amount had risen to 138,330,000 yen. Ten years later, in 1900, it went up again to 491,690,000 yen, ​having quadrupled during one decade. In 1902 it reached 530,044,324 yen. There have been fluctuations according to the kinds of articles dealt with, yet as a whole the foreign trade has been extending and increasing every year. The excess of imports over exports since 1896 has been caused by the overexpansion of undertakings of all kinds at once. Prior to 1899 the value of imported goods was given at the original price at the place of purchase, but since that year the cost of insurance, transportation, and other expenses incurred up to the time of the arrival are added to it.

During the last ten or more years the tea industry has varied very much, sometimes decreasing, and the state of variation has never been similar. Generally speaking, however, from 1890 up to 1895 there was a yearly increase, but since 1895 the industry has declined. This is due to the change in the American Tariff System. In former years tea was exempt from taxation, but now there is a duty on tea. Thus the tea trade could not be carried on, and there are many who have been obliged to give up the industry.

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Grain is the principal agricultural product of the empire. The area of cultivation has recently been considerably extended, and the method of cultivation also has been improved. Notwithstanding this, the productive capacity has not been very great, compared with manufactured goods, because these are not goods for exportation, but for the consumption at home, and there is not a great increase in demand for grain. The rice crop has varied from 36,000,000 or 37,000,000 to 42,000,000 or 43,000,000 koku, while the other grain crops have varied from 15,000,000 or 16,000,000 to 20,000,000 koku.

In 1890 or 1891 the weaving industry did not make any marked development, and the value of goods woven was about 30,000,000 or 40,000,000 yen. But recently, aided by the progress of applied chemistry, and also of technology, the industry has made considerable progress, and in 1899 the weaving capacity reached 150,000,000 yen. During ten years the increase has been more than fourfold. Now, with the cotton-yarn industry, it has become one of the principal industries of the empire. (See Table, p. 405.)

This kind of industry had its origin in 1880 or 1881, and developed gradually until in 1890 the total number of spindles reached 277,895, producing 5,132,588 kwan of cotton yarn. But since, in 1894, the duty on exports of cotton yarn, and, in April, 1896, that on the import of raw cotton, were removed, the industry made marked progress, and in 1901 the number of spindles in use daily reached 1,181,762, and the productive capacity had increased to 33,323,770 kwan. To-day cotton-spinning has become the chief industry of the country.

Although the method of production of silk has been recently very much improved, yet the quantity of silk exported has shown comparatively very little increase. This is due to the increase of the export of rough finished silk goods, such as habutai, silk handkerchiefs, etc. In value silk is the most important of our exports, and in 1899 the value of the raw silk exported was calculated to be 62,000,000 yen, the quantity exported every year being from 4,000,000 or 5,000,000 to 6,000,000 or 7,000,000 kin.

Thanks to the progress of the art of mining, all the branches of this industry have gradually developed in recent times, except sulphur and antimony, which tended to diminish in quantity; copper and oil especially increased considerably. In 1890 the copper produced was 30,200,000 kin, but in 1901 almost 46,000,000 kin. The coal output was in 1890 2,600,000 tons, but in 1901 8,940,000 tons, while the output of oil, which in 1890 was over 54,000 koku, had increased in 1901 to 983,799 koku.