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are not likely to be hampered by the prejudices that create a barrier between China and Western nations. These things are well understood in Japan, and the people are not slow to avail themselves of such manifest advantages.

Undoubtedly such advantages may justly be regarded as wealth-producing resources, and may be cited in support of my view that Japan’s economic future is full of brightness and hope. I admit that we have not acquired the experience and business qualities possessed by some Western peoples, but, on the other hand, I cannot forget that it is only some thirty years since my countrymen entered the sphere of international industry. Considering the shortness of the time, they deserve some credit, I think, for what they have achieved. It is a wholesome sign that they recognise their faults and are anxious to correct them. Judging from the skill, versatility and adaptability they have displayed in other lines of work, it does not seem unreasonable to expect that not many years will be needed for them to develop the qualities essential to commercial and industrial success.

What they really need is more capital. They need it to develop industries; they need it to enable them to conduct their present industries on a larger and consequently more economical scale. I therefore advocate the introduction of foreign capital. Opinion has been expressed that such a course would give renewed activity to the factors responsible for present depression. As to that, it is certainly true that the receipt of the Chinese indemnity, and the consequent inflation of the currency, encouraged the starting of many speculative industries without proper regard to their real worth. But it is equally true that a part at least of the late depression was due to the fact that many hopeful industries have been checked and even brought to ruin owing to want of funds to complete their development, with the result that money already invested in them has been sacrificed. I do not advocate the importation of foreign capital in a lump sum—as, for example, in the form of a loan for buying up private railways. That might result in creating an excessive supply of money seeking investment, and might thus become the means of again promoting speculative enterprise. What I suggest is that foreign capital should be obtained for employment in the development of specific enterprises, now either unessayed or in a languishing condition. At the same time, it must be fully realized that foreign capitalists will not invest their money in Japan without adopting ample precautions to insure the safety of their investments. Such means must be furnished, and I am confident that, were the course followed which I have indicated, the result would be beneficial equally to foreigners and to Japanese.