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the purpose of restoring our finance to its normal condition, it was the policy of those in authority to encourage the habits of thrift and economy. To do this, it was thought advisable to spread reports, possibly exaggerated somewhat, of the seriousness of the financial situation. This was done by means of the newspapers, public speeches, and private interviews. While having a healthy effect on the people of Japan, this course has had much to do with the ideas held by the outside world of the insecurity of Japanese finance. But when it is understood that those classes of people among whom the money was scattered have very primitive economic training, it is easily seen that such a course was quite essential at the time to redeem the situation, though at the risk of giving erroneous notions to the world at large.

The economic history of Japan since the war closely resembles that of Germany after the Franco-Prussian War, the commercial depression coming as it did after the period of inflated prosperity, in which business received an abnormal stimulus. Just as in Germany a change for the better occurred after four years of hard struggle, so may one be expected in Japan. Though the hard times were the means of bringing much hardship, I think that Japan undoubtedly emerged from this situation with more energy and better experience than she had before. The growth of our revenue, of our railways and marine transportation, of banks and other industrial capital has been enormous and yet regular since the war. Such rapid progress would have been impossible without the indemnity money and foreign loans. When a country’s economical ideas expand at such a rate they can hardly fail to produce a commercial panic and depression. But at the same time it is certain now that the country’s productive power has greatly increased since the war. We emerged from the commercial depression of 1900–01 better equipped to make steady progress in all departments of commerce and industry. The country will enjoy the same prosperity as has been the case in Germany.

As to the future, among many other schemes I am specially interested in giving proper economic training to the people. When I was in England for the purpose of receiving the war indemnity, I visited many of the mercantile centres, and became more and more convinced of the necessity of insisting upon a practical business education for the Japanese. As is known, under the feudal system our merchants and all business classes occupied the least honourable position in society. Although since the time of the Restoration the best talents of the people are being attracted to the business community, yet the mass of the people are still at a very primitive stage.