Japan by the Japanese/Chapter 17.3

A very low rate of tariff is now in force, and the spirit which sways the Customs duty is more English than Continental, roughly speaking, raw materials paying 5 per cent. and manufactured goods 20 per cent. duties.

The exports and imports of commodities, which stood at 15,553,473 yen and 10,693,072 yen respectively in 1868, had risen to 258,303,065 yen and 271,731,259 yen in 1902. The leading articles of trade are as follows, the figures being those for 1902:

It can be said from the above that Japan exports mostly raw materials, importing manufactured goods. As the following table explains, the direction of trade can also, with few exceptions, be summed up by saying that she imports from Europe and America, exporting to China and other countries. The exports to these latter countries being more or less manufactured goods.

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Hence much stress is laid on the furtherance of trade with Far Eastern countries, especially that with China and Corea.

Restricting ourselves to questions of importance, as well as to those related with finance and economy, we come first to that of the taking off of the strict controls placed on the business in the stock and rice exchanges. The Government, as well as those upholding sounder ways of doing business, incline to further restriction, while the people related with business, as well as those of a more speculative tone of mind, incline toward relaxation. Undoubtedly it is better not to add fuel to the fire of speculation, but to encourage a sound, sure, and regular way of doing business. There are thirteen rice exchanges, four stock exchanges, and forty-nine other exchanges.

Next comes the question of improving the Chambers of Commerce, which number in all fifty-eight, by increasing their power and exercising greater selection of their members. Some urge their total abolition unless great improvements are made. Such is, no doubt, too extreme a view, but the necessity of improvement must be admitted, because as they now stand their utility and influence cannot be said to be great.

How to increase the savings of the people seems now to be in the mind of the thoughtful, some going so far as to urge the necessity of adopting the lottery system in postal savings. ​Whatever may be the advantages or disadvantages of such a proposal, it is impossible to be satisfied with the small amount of thrift which prevails at present, and much must be done to encourage the habit of saving among the public, especially among the lower classes of people.

In political circles the questions of drastic retrenchment in public finances and of thorough reforms in the administrative system are much to the fore. The Government is trying hard to carry them out, but it is doubtful whether it can succeed.

Recently the debts of the local bodies, such as Prefectures, districts, cities, and towns, have been increasing year by year. Not only that, some of them are paying a very exorbitant rate of interest. Hence the necessity arises of consolidating them and equalizing the rate of interest. Scrutiny must be exercised on the local finance at the same time as attention is paid to that of the State, in order to make good the entire system of finance.

Another necessary measure is the shortening of the time for the military service to two years, instead of the present period of three years. By so doing, not only can savings in the expenditure be made, but also the loss accruing from withdrawing so many adult males from their occupation may be avoided.

Being just now in the stage of growth, progress and improvement, especially as regards her industry and commerce, what is needed by Japan is capital.

She has already made use of her own capital, not only in various private undertakings, but in supplying the needs of the State. By far the greater portion of the national debt is owned by her own people. To sum up, the demand for capital is felt keenly, while the supply is rather limited, because the habit of saving, or rather making proper use of savings, is not fully developed among the people.

The result is a dearth of money and high rate of interest, which on an average has been oscillating somewhere about 10 per cent. on loans throughout the country, and is a little over 7 per cent., according to the present official rate of the Bank of Japan, although the discount rate is much lower.

The only way by which it will be possible to go on with various enterprises is to import foreign capital. So general is this feeling that ‘the importation of foreign capital’ has become a commonplace phrase. There is every necessity for the removal of every conceivable barrier to the influx of foreign capital, such as the restriction of the ownership of land by aliens, the limitation placed by the Railways Act upon the pledging of ​railway properties, and other prohibitions on foreigners as regards mining, etc. There is no doubt that these measures will be brought forward in Parliament by those interested.

But even until these barriers are removed, there exist means whereby satisfactory arrangements can be offered to foreign capitalists. The need of money can be met by their subscribing to the debentures of the Industrial Bank of Japan (Nippon Kogyo Ginko), or by their making the bank an intermediary or guarantee of various undertakings. This bank was established by the Government for such purposes, and by standing between the capitalist on one side and industrial undertakings on the other, it is able to give satisfaction to both, by affording safe investment, or by giving guarantees to the former, and by supplying useful capital to the latter after strict investigation and discrimination.

In fact, this bank has already proved to be a useful channel for the introduction of foreign capital, by buying 50,000,000 yen bonds from the Imperial Japanese Government, and re-selling them to a London Syndicate formed in October, 1902.

The population of the empire is estimated at 44,805,937 for the year 1900, and of the total 22,608,150 are males. The rate of increase is extraordinary, because, numbering 35,929,023 in 1880, the population rose to 40,453,461 in 1890.

The central portions are the most densely populated, and are under the obligation of sending out emigrants, not only to Formosa and Hokkaido, but to Corea, China, Hawaii, and districts on the Pacific Coast of America. The total number of emigrants in 1890 amounted to 123,971.

To accommodate this ever-increasing population, Japan has two islands—Hokkaido on the north, and the newly-acquired Formosa on the south. The former is very thinly. populated, and gives ample room for emigrants from the main island. Though it lies far to the north, it is well fitted for agriculture, fishery, and mining, and is developing steadily, though somewhat slowly. Formosa, on the contrary, is thickly populated, it being calculated for 1899 that there were 2,758,161 people, including 33,120 Japanese. But, being rich in agricultural and mineral resources, and much of it still remaining to be explored, it is capable of receiving emigrants from the home country.

This may perhaps be a fit place to dwell a little upon the colonial system of Japan as carried into practice in Formosa, the only Colony of the empire in the strict sense of the term.

Formosa is placed in charge of a Governor-General, who has ​power to issue orders in council, having the power of laws, if sanctioned by the Government.

Within seven years, more than 90,000,000 yen has been spent, while about 60,000,000 yen has been raised in the island, chiefly by taxation and monopolies in opium, salt, and camphor. The deficit was made good by means of loans and subsidies from the State Treasury. But her revenue is fast increasing, and before long she will be self-supporting. Now the Formosan Government is busily occupied in making railways, in completing railways, cadastration of lands, harbour works, roads, and other improvements.

One thing to be specially taken notice of is the fact that a separate system of currency prevails as a provisionary measure, till the time shall come when the natives, who have always had a silver currency, become used to the system of currency in use in Japan. At present one-yen silver coins are allowed to be used as legal tender, together with the standard gold currency, the ratio between the two being fixed from time to time by the Governor-General.^[2]

As was said before, the Bank of Formosa plays almost the same part as the Bank of Japan does in the motherland, the only difference being that the former issues silver notes instead of the notes convertible into gold.

At first the natives were troublesome on account of misunderstandings, but now they are contented with Japanese rule, and the island is making rapid advance, not only in the way of material progress, but also in other directions, notably such as education, sanitation, etc.

One of the most striking features is that the direct trade with Japan is taking the place of that with China. Judged by the test of Formosa, Japan has shown herself to be a colonizing power.