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years the Customs duties can be raised without any disadvantage to ourselves. It is not so easy a matter to raise tariffs, because in dealing with other nations the principle of reciprocity is essential, and we cannot raise our duties freely lest we should incur retaliation under disadvantageous circumstances. Besides the liquor and tobacco taxes there is another good source of revenue in the sugar excise.
Although we have not had enough time yet to see the results of this tax, still, it may be safely said, if we do not wish to encourage the development of our sugar industries, there is room for increasing the tax; on the contrary, if we intend to do so, it is not advisable to increase it. As the Government adopted the latter view, it was decided to leave the tax at its present rate.
In addition to the sugar excise, an excise duty on silk piece-goods has been discussed as a possible source of revenue. But on making inquiries, however, it has been found that all the methods contemplated as to how the tax should be levied are impracticable under the present conditions of the industry.
Amongst the future sources of revenue it may be mentioned that forestry is one having a good prospect of development. Much public discussion having been started on the question of forest exploitation, the Government established a committee, of which I am a member, to superintend the administration of forests, and the work of improvement is now in progress.
Now let us turn to the examination of the two best sources of revenue—namely, liquor and tobacco—which will always afford interesting items of economic study to any Ministry that may come into power in the future. Hitherto the subject of saké brewing has been studied by the Government from a revenue point of view alone. Seeing, however, that an enormous quantity of it, amounting to 4,000,000 koku (a koku is equal to 39.7 English gallons), has been annually brewed, the Government also felt the necessity of treating the matter as one of the largest national industries capable of further development. Saké resembles in many points beer, which is an important article for export in several foreign countries. The only significant difference between the two is in the material used, which is rice in one and malt in the other. In England there are about 200 breweries which turn out more liquor than 15,000 breweries in our country do in the form of saké. This fact shows very clearly that there must be some defects in our brewing industry, which is no doubt very primitive. If, therefore, our system is thoroughly improved by scientific methods, we are of opinion that there must be a good prospect of its being produced with considerably smaller cost than at present, and that at the same time it will be practicable to increase the