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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