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no industry can possibly make progress. Again, the Law of Accounts to which I have alluded may have been suitable to the time at which it was framed, but subsequent changes have necessitated some alterations. Considered as a whole, in its present form, it has a tendency to encourage the importation of supplies from abroad. Fifty million yen a year can be secured to native enterprise. Even half the amount will do for the present to retard the exodus of gold. This consideration induces me to urge the necessity of a systematic development of industry. It is advisable to suspend all railway enterprises for two or three years hence, inasmuch as the Government, having established an iron foundry in Wakamatsu with an outlay of 14,000,000 yen in specie (in addition to expenses incurred in harbour building), will probably soon be in a position to supply rails. The inconvenience resulting from delaying certain railway enterprises for a few years will not, I am confident, be so great as to counterbalance the advantage of using the iron foundry’s rails. It is necessary to stop the spirit of speculation in railways and such enterprises, and nothing will achieve this but an attitude of moderation on the part of capitalists and enterprising men; even laws and ordinances would be comparatively ineffectual. The aggregate total of exports and imports from the 1st to the 31st year of Meiji shows an excess of 225,960,000 yen in favour of the latter. To that amount, therefore, specie must have gone abroad. Against this remark some may point to the indemnity of over 350,000,000 yen from China and to other sums, making a total of 365,000,000 yen approximately. Out of this amount appropriations were made for the extension of the navy and army, and for the establishment of an iron foundry, while considerable amounts were included in special accounts, and also in general accounts for the 30th year of Meiji, as well as in the grants to the Imperial household. A portion was also set apart as a capital fund for education, a natural calamities reserve, and a fund for war vessels and torpedoes, while, again, other sums were carried to the general account for the 31st year of Meiji, the remainder being reserved for liquidation of industrial liabilities.

Attention to the Chinese markets is also as necessary as the adjustment of domestic industrial conditions. Japanese business men are very little in evidence in China. This is not because of the inefficiency of our diplomacy, but to the want of enterprise on the part of our commercial classes. Our merchants in China are unworthy to be called merchants; their transactions are petty. In the case of England, the efforts of merchants precede action by the Government. Representations are made to the Government by business men or corpora-