Page:Japan by the Japanese (1904).djvu/349

by the laws. When municipal government was introduced, and the necessary laws framed, the districts framed themselves upon the new laws, and did not shape the laws to suit actual conditions. Thus also, by the practical prohibition of tariff autonomy, and the consequent inability to protect her industries, Japan was forced to import her raw materials from abroad. Such action must naturally lead to the draining of money from the country.

It seems to me that Japan’s position is so necessary to the Great Powers in maintaining the balance in the Far East that they should be prepared to amend the revised treaties, and grant Japan power to protect her industries. By such action they would enable Japan to set her trade upon a firm basis. Owing to the great importations subsequent to the war, and owing to the impossibility of changing the tariff rates, the balance of trade was for many years adverse to Japan. Thus the original imperfections of Japanese finance, the rapid Europeanization of the country, with its necessary expenditure, the craze for business expansion after the victorious war, the inability to protect our industries against foreign competition, and many other causes cursorily mentioned, contributed to bring about the great financial depression of 1900.

I will not, however, dwell upon the details of such depression, but rather, having shown the causes, will give the broad outline of a plan to steady the financial situation permanently. Foreign capital is absolutely necessary to Japan’s consistent progress. Such capital may be introduced either by the investing of money by foreign investors in Japan, or else by the raising of loans by the Government abroad. The danger of the latter plan is that the money thus obtained would be spent without bringing real benefit to Japan and Japanese industries. Also there is the danger that large loans would produce similar effects to those of the indemnity. In my opinion, there would be considerable difficulty in raising a large foreign loan simply upon the credit of the country, there being considerable distrust of Japan as an investment. I would propose the nationalization of the railways of Japan, paying the present shareholders in Government bonds. With these nationalized railways as a security, it should be easy to raise a loan abroad. Full particulars of the revenue of the railways being brought to the notice of foreign nations, the security would be recognised as sound, and favourable terms would be obtained. The money raised in this way should be employed in the redeeming of the Government bonds issued to the holders of railway shares at the time of the nationalization. In this way the loan would pay off the debt upon the security upon which the loan was raised. But the most