1911 Encyclopædia Britannica/Japan/05 Economic Conditions

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V.—Economic Conditions

Communications.—From the conditions actually existing in the 8th century after the Christian era the first compilers of Japanese history inferred the conditions which might have existed in the 7th century before that era. One of their inferences was that, in the early days, communication Roads and Posts
in Early Times.
was by water only, and that not until 549 B.C. did the most populous region of the empire—the west coast—come into possession of public roads. Six hundred years later, the local satraps are represented as having received instructions to build regular highways, and in the 3rd century the massing of troops for an over-sea expedition invested roads with new value. Nothing is yet heard, however, about posts. These evidences of civilization did not make their appearance until the first great era of Japanese reform, the Taika period (645-650), when stations were established along the principal highways, provision was made of post-horses, and a system of bells and checks was devised for distinguishing official carriers. In those days ordinary travellers were required to carry passports, nor had they any share in the benefits of the official organization, which was entirely under the control of the minister of war. Great difficulties attended the movements of private persons. Even the task of transmitting to the central government provincial taxes paid in kind had to be discharged by specially organized parties, and this journey from the north-eastern districts to the capital generally occupied three months. At the close of the 7th century the emperor Mommu is said to have enacted a law that wealthy persons living near the highways must supply rice to travellers, and in 745 an empress (Koken) directed that a stock of medical necessaries must be kept at the postal stations. Among the benevolent acts attributed to renowned Buddhist priests posterity specially remembers their efforts to encourage the building of roads and bridges. The great emperor Kwammu (782-806) was constrained to devote a space of five years to the reorganization of the whole system of post-stations. Owing to the anarchy which prevailed during the 10th, 11th and 12th centuries, facilities of communication disappeared almost entirely, even for men of rank a long journey involved danger of starvation or fatal exposure, and the pains and perils of travel became a household word among the people.

Yoritomo, the founder of feudalism at the close of the 12th century, was too great a statesman to underestimate the value of roads and posts. The highway between his stronghold, Kamakura, and the imperial city, Kiōto, began in his time to develop features which ultimately entitled it to be called one of the finest roads in the world. But after Yoritomo’s death the land became once more an armed camp, in which the rival barons discouraged travel beyond the limits of their own domains. Not until the Tokugawa family obtained military control of the whole empire (1603), and, fixing its capital at Yedo, required the feudal chiefs to reside there every second year, did the problem of roads and post-stations force itself once more on official attention. Regulations were now strictly enforced, fixing the number of horses and carriers available at each station, the loads to be carried by them and their charges, as well as the transport services that each feudal chief was entitled to demand and the fees he had to pay in return. Tolerable hostelries now came into existence, but they furnished only shelter, fuel and the coarsest kind of food. By degrees, however, the progresses of the feudal chiefs to and from Yedo, which at first were simple and economical, developed features of competitive magnificence, and the importance of good roads and suitable accommodation received increased attention. This found expression in practice in 1663. A system more elaborate than anything antecedent was then introduced under the name of “flying transport.” Three kinds of couriers operated. The first class were in the direct employment of the shōgunate. They carried official messages between Yedo and Osaka—a distance of 348 miles—in four days by means of a well organized system of relays. The second class maintained communications between the fiefs and the Tokugawa court as well as their own families in Yedo, for in the alternate years of a feudatory’s compulsory residence in that city his family had to live there. The third class were maintained by a syndicate of 13 merchants as a private enterprise for transmitting letters between the three great cities of Kiōto, Osaka and Yedo and intervening places. This syndicate did not undertake to deliver a letter direct to an addressee. The method pursued was to expose letters and parcels at fixed places in the vicinity of their destination, leaving the addressees to discover for themselves that such things had arrived. Imperfect as this system was, it represented a great advance from the conditions in medieval times.

The nation does not seem to have appreciated the deficiencies of the syndicate’s service, supplemented as it was by a network of waterways which greatly increased the facilities for transport. After the cessation of civil wars under the sway of the Tokugawa, the building and improvement of roads went on steadily. It is not too much to say, indeed, that when Japan opened her doors to foreigners in the middle of the 19th century, she possessed a system of roads some of which bore striking testimony to her medieval greatness. The Tōkaidō. The most remarkable was the Tōkaidō (eastern-seaway), so called because it ran eastward along the coast from Kiōto. This great highway, 345 m. long, connected Osaka and Kiōto with Yedo. The date of its construction is not recorded, but it certainly underwent signal improvement in the 12th and 13th centuries, and during the two and a half centuries of Tokugawa sway in Yedo. A wide, well-made and well-kept avenue, it was lined throughout the greater part of its length by giant pine-trees, rendering it the most picturesque highway in the world. Iyeyasu, the founder of the Tokugawa dynasty of shōguns, directed that his body should be interred at Nikkō, a place of exceptional beauty, consecrated eight hundred years previously. This meant an extension of the Tōkaidō (under a different name) nearly a hundred miles northward, for the magnificent shrines erected then at Nikkō and the periodical ceremonies thenceforth performed there demanded a correspondingly fine avenue of approach. The original Tōkaidō was taken for model, and Yedo and Nikkō were joined by a highway The Nakasendoō. flanked by rows of cryptomeria. Second only to the Tōkaidō is the Nakasendō (mid-mountain road), which also was constructed to join Kiōto with Yedo, but follows an inland course through the provinces of Yamashiro, Omi, Mino, Shinshū, Kōtzuke and Musashi. Its length is 340 m., and though not flanked by trees or possessing so good a bed as the Tōkaidō, it is nevertheless a sufficiently remarkable highway. A The Oshūkaido. third road, the Oshūkaidō runs northward from Yedo (now Tōkyō) to Aomori on the extreme north of the main island, a distance of 445 m., and several lesser highways give access to other regions.

The question of road superintendence received early attention from the government of the restoration. At a general assembly of local prefects held at Tōkyō in June 1875 it was decided to classify the different roads throughout the empire, and to determine the Modern Superin-tendence of Roads. several sources from which the sums necessary for their maintenance and repair should be drawn. After several days’ discussion all roads were eventually ranged under one or other of the following heads:—

I. National roads, consisting of—

Class 1. Roads leading from Tōkyō to the various treaty ports.
Class 2. Roads leading from Tōkyō to the ancestral shrines in the province of Isē, and also to the cities or to military stations.
Class 3. Roads leading from Tōkyō to the prefectural offices, and those forming the lines of connexion between cities and military stations.

II. Prefectural roads, consisting of—

Class 1. Roads connecting different prefectures, or leading from military stations to their outposts.
Class 2. Roads connecting the head offices of cities and prefectures with their branch offices.
Class 3. Roads connecting noted localities with the chief town of such neighbourhoods, or leading to seaports convenient of access.

III. Village roads, consisting of—

Class 1. Roads passing through several localities in succession, or merely leading from one locality to another.
Class 2. Roads specially constructed for the convenience of irrigation, pasturage, mines, factories, &c., in accordance with measures determined by the people of the locality.
Class 3. Roads constructed for the benefit of Shintō shrines, Buddhist temples, or to facilitate the cultivation of rice-fields and arable land.

Of the above three headings, it was decided that all national roads should be maintained at the national expense, the regulations for their up-keep being entrusted to the care of the prefectures along the line of route, and the cost incurred being paid from the Imperial treasury. Prefectural roads are maintained by a joint contribution from the government and from the particular prefecture, each paying one-half of the sum needed. Village roads, being for the convenience of local districts alone, are maintained at the expense of such districts under the general supervision of the corresponding prefecture. The width of national roads was determined at 42 ft. for class 1, 36 ft. for class 2, and 30 ft. for class 3; the prefectural roads were to be from 24 to 30 ft., and the dimensions of the village roads were optional, according to the necessity of the case.

The vehicles chiefly employed in ante-Meiji days were ox-carriages, norimono, kago and carts drawn by hand. Ox-carriages were used only by people of the highest rank. They were often constructed of rich lacquer; the curtains suspended in Vehicles. front were of the finest bamboo workmanship, with thick cords and tassels of plaited silk, and the draught animal, an ox of handsome proportions, was brilliantly caparisoned. The care and expense lavished upon these highly ornate structures would have been deemed extravagant even in medieval Europe. They have passed entirely out of use, and are now to be seen in museums only, but the type still exists in China. The norimono resembled a miniature house slung by its roof-ridge from a massive pole which projected at either end sufficiently to admit the shoulders of a carrier. It, too, was frequently of very ornamental nature and served to carry aristocrats or officials of high position. The kago was the humblest of all conveyances recognized as usable by the upper classes. It was an open palanquin, V-shaped in cross section, slung from a pole which rested on the shoulders of two bearers. Extraordinary skill and endurance were shown by the men who carried the norimono and the kago, but none the less these vehicles were both profoundly uncomfortable. They have now been relegated to the warehouses of undertakers, where they serve as bearers for folks too poor to employ catafalques, their place on the roads and in the streets having been The Jinrikisha. completely taken by the jinrikisha, a two-wheeled vehicle pulled by one or two men who think nothing of running 20 m. at the rate of 6 m. an hour. The jinrikisha was devised by a Japanese in 1870, and since then it has come into use throughout the whole of Asia eastward of the Suez Canal. Luggage, of course, could not be carried by norimono or kago. It was necessary to have recourse to packmen, pack-horses or baggage-carts drawn by men or horses. All these still exist and are as useful as ever within certain limits. In the cities and towns horses used as beasts of burden are now shod with iron, but in rural or mountainous districts straw shoes are substituted, a device which enables the animals to traverse rocky or precipitous roads with safety.

Railways.—It is easy to understand that an enterprise like railway construction, requiring a great outlay of capital with returns long delayed, did not at first commend itself to the Japanese, who were almost entirely ignorant of co-operation as a factor of business organization. Moreover, long habituated to snail-like modes of travel, the people did not rapidly appreciate the celerity of the locomotive. Neither the ox-cart, the norimono, nor the kago covered a daily distance of over 20 m. on the average, and the packhorse was even slower. Amid such conditions the idea of railways would have been slow to germinate had not a catastrophe furnished some impetus. In 1869 a rice-famine occurred in the southern island, Kiūshiū, and while the cereal was procurable abundantly in the northern provinces, people in the south perished of hunger owing to lack of transport facilities. Sir Harry Parkes, British representative in Tōkyō, seized this occasion to urge the construction of railways. Ito and Okuma, then influential members of the government, at once recognized the wisdom of his advice. Arrangements were made for a loan of a million sterling in London on the security of the customs revenue, and English engineers were engaged to lay a line between Tōkyō and Yokohama (18 m.). Vehement voices of opposition were at once raised in private and official circles alike, all persons engaged in transport business imagined themselves threatened with ruin, and conservative patriots detected loss of national independence in a foreign loan. So fierce was the antagonism that the military authorities refused to permit operations of survey in the southern suburb of Tōkyō, and the road had to be laid on an embankment constructed in the sea. Ito and Okuma, however, never flinched, and they were ably supported by Marquis M. Inouye and M. Mayejima. The latter published, in 1870, the first Japanese work on railways, advocating the building of lines from Tōkyō to Kiōto and Osaka; the former, appointed superintendent of the lines, held that post for 30 years, and is justly spoken of as “the father of Japanese railways.”

September 1872 saw the first official opening of a railway (the Tōkyō-Yokohama line) in Japan, the ceremony being performed by the emperor himself, a measure which effectually silenced all further opposition. Eight years from the time of turning the first sod saw 71 m. of road open to traffic, the northern section being that between Tōkyō and Yokohama, and the southern that between Kiōto and Kobe. A period of interruption now ensued, owing to domestic troubles and foreign complications, and when, in 1878, the government was able to devote attention once again to railway problems, it found the treasury empty. Then for the first time a public works loan was floated in the home market, and about £300,000 of the total thus obtained passed into the hands of the railway bureau, which at once undertook the building of a road from Kiōto to the shore of Lake Biwa, a work memorable as the first line built in Japan without foreign assistance.[1] During all this time private enterprise had remained wholly inactive in the matter of railways, and it became a matter of importance to rouse the people from this apathetic attitude. For the ordinary process of organizing a joint-stock company and raising share-capital the nation was not yet prepared. But shortly after the abolition of feudalism there had come into the possession of the former feudatories state loan-bonds amounting to some 18 millions sterling, which represented the sum granted by the treasury in commutation of the revenues formerly accruing to these men from their fiefs. Already events had shown that the feudatories, quite devoid of business experience, were not unlikely to dispose of these bonds and devote the proceeds to unsound enterprises. Prince Iwakura, one of the leaders of the Meiji statesmen, persuaded the feudatories to employ a part of the bonds as capital for railway construction, and thus the first private railway company was formed in Japan under the name Nippon tetsudo kaisha (Japan railway company), the treasury guaranteeing 8% on the paid-up capital for a period of 15 years. Some time elapsed before this example found followers, but ultimately a programme was elaborated and carried out having for its basis a grand trunk line extending the whole length of the main island from Aomori on the north to Shimonoseki on the south, a distance of 1153 m.; and a continuation of the same line throughout the length of the southern island of Kiūshiū, from Moji on the north—which lies on the opposite side of the strait from Shimonoseki—to Kagoshima on the south, a distance of 2323/4 m.; as well as a line from Moji to Nagasaki, a distance of 1631/2 m. Of this main road the state undertook to build the central section (376 m.), between Tōkyō and Kōbe (via Kiōto); the Japan railway company undertook the portion (457 m.) northward of Tōkyō to Aomori; the Sanyō railway company undertook the portion (320 m.) southward of Tōkyō to Shimonoseki; and the Kiūshiū railway company undertook the lines in Kiūshiū. The whole line is now in operation. The first project was to carry the Tōkyō-Kiōto line through the interior of the island so as to secure it against enterprises on the part of a maritime enemy. Such engineering difficulties presented themselves, however, that the coast route was ultimately chosen, and though the line through the interior was subsequently constructed, strategical considerations were not allowed completely to govern its direction.

When this building of railways began in Japan, much discussion was taking place in England and India as to the relative advantages of the wide and narrow gauges, and so strongly did the arguments in favour of the latter appeal to the English advisers of the Japanese government that the metre gauge was chosen. Some fitful efforts made in later years to change the system proved unsuccessful. The lines are single, for the most part; and as the embankments, the cuttings, the culverts and the bridge-piers have not been constructed for a double line, any change now would be very costly. The average speed of passenger trains in Japan is 18 m. an hour, the corresponding figure over the metre-gauge roads in India being 16 m., and the figure for English parliamentary trains from 19 to 28 m. British engineers surveyed the routes for the first lines and superintended the work of construction, but within a few years the Japanese were able to dispense with foreign aid altogether, both in building and operating their railways. They also construct carriages, wagons and locomotives, and they may therefore be said to have become entirely independent in the matter of railways, for a government iron-foundry at Wakamatsu in Kiūshiū is able to manufacture steel rails.

The total length of lines open for traffic at the end of March 1906 was 4746 m., 1470 m. having been built by the state and 3276 by private companies; the former at a cost of 16 millions sterling for construction and equipment, and the latter at a cost of 25 millions. Thus the expenditure by the state averaged £10,884 per mile, and that by private companies, £7631. This difference is explained by the facts that the state lines having been the pioneers, portions of them were built before experience had indicated cheap methods; that a very large and costly foreign staff was employed on these roads in the early days, whereas no such item appeared in the accounts of private lines; that extensive works for the building of locomotives and rolling stock are connected with the government’s roads, and that it fell to the lot of the state to undertake lines in districts presenting exceptional engineering difficulties, such districts being naturally avoided by private companies. The gross earnings of all the lines during the fiscal year 1905–1906 were 7 millions sterling, approximately, and the gross expenses (including the payment of interest on loans and debentures) were under 31/2 millions, so that there remained a net profit of 31/2 millions, being at the rate of a little over 81/2% on the invested capital. The facts that the outlays averaged less than 47% of the gross income, and that accidents and irregularities are not numerous, prove that Japanese management in this kind of enterprise is efficient.

When the fiscal year 1906–1907 opened, the number of private companies was no less than 36, owning and operating 3276 m. of railway. To say that this represented an average of 91 m. per company is to convey an over-favourable idea, for, as a matter of fact, 15 of the companies Nationalization of Private Railways. averaged less than 24 m. Anything like efficient co-operation was impossible in such circumstances, and constant complaints were heard about delays in transit and undue expense. The defects of divided ownership had long suggested the expediency of nationalization, but not until 1906 could the diet be induced to give its consent. On March 31 of that year, a railway nationalization law was promulgated. It enacted that, within a period of 10 years from 1906 to 1915, the state should purchase the 17 principal private roads, which had a length of 2812 m., and whose cost of construction and equipment had been 231/2 millions sterling. The original scheme included 15 other railways, with an aggregate mileage of only 353 m.; but these were eliminated as being lines of local interest only. The actual purchase price of the 17 lines was calculated at 43 millions sterling (about double their cost price), on the following basis: (a) An amount equal to 20 times the sum obtained by multiplying the cost of construction at the date of purchase by the average ratio of the profit to the cost of construction during the six business terms of the company from the second half-year of 1902 to the first half-year of 1905. (b) The amount of the actual cost of stored articles converted according to current prices thereof into public loan-bonds at face value, except in the case of articles which had been purchased with borrowed money. The government agreed to hand over the purchase money within 5 years from the date of the acquisition of the lines, in public loan-bonds bearing 5% interest calculated at their face value; the bonds to be redeemed out of the net profits accruing from the purchased railways. It was calculated that this redemption would be effected in a period of 32 years, after which the annual profit accruing to the state from the lines would be 51/2 millions sterling. But the nationalization scheme, though apparently the only effective method of linking together and co-ordinating an excessively subdivided system of lines, has proved a source of considerable financial embarrassment. For when the state constituted itself virtually the sole owner of railways, it necessarily assumed responsibility for extending them so that they should suffice to meet the wants of a nation numbering some 50 millions. Such extension could be effected only by borrowing money. Now the government was pledged by the diet in 1907 to an expenditure of 111/2 millions (spread over 8 years) for extending the old state system of roads, and an expenditure of 61/4 millions (spread over 12 years) for improving them. But from the beginning of that year, a period of extreme commercial and financial depression set in, and the treasury had to postpone all recourse to loans for whatever purpose, so that railway progress was completely checked in the field alike of the original and the acquired state lines. Moreover, all securities underwent such sharp depreciation that, on the one hand, the government hesitated to hand over the bonds representing the purchase-price of the railways, lest such an addition to the volume of stocks should cause further depreciation, and, on the other, the former owners of the nationalized lines found the character of their bargain greatly changed. In these circumstances the government decided to take a strong step, namely, to place the whole of the railways owned by it—the original state lines as well as those nationalized—in an account independent of the regular budget, and to devote their entire profits to works of extension and improvement, supplementing the amount with loans from the treasury when necessary.

In the sequel of the war of 1904–5 Japan, with China’s consent, acquired from Russia the lease of the portion of the South-Manchuria railway (see Manchuria) between Kwang-cheng-tsze (Chang-chun) on the north and Tairen (Dalny), Port Arthur and Niuchwang on the south—a total length South Manchuria Railway. of 470 m. At the close of 1906 this road was handed over to a joint-stock company with a capital of 20 millions sterling, the government contributing 10 millions in the form of the road and its associated properties; the public subscribing 2 millions, and the company being entitled to issue debentures to the extent of 8 millions, the principal and interest of these debentures being officially guaranteed. Four millions’ worth of debentures were issued in London in 1907 and 4 millions in 1908. This company’s programme is not limited to operating the railway. It also works coal-fields at Yentai and Fushun; has a line of steamers plying between Tairen and Shanghai; and engages in enterprises of electricity, warehousing and the management of houses and lands within zones 50 li (17 m.) wide on either side of the line. The government guarantees 6% interest on the capital paid up by the general public.

Not until 1905 did Japan come into possession of an electric railway. It was a short line of 8 m., built in Kiōto for the purposes of a domestic exhibition held in that city. Thenceforth this class of enterprise grew steadily in favour, so that, in 1907, there were 16 companies with an Electric Railways. aggregate capital of 8 millions sterling, having 165 m. open to traffic and 77 m. under construction. Fifteen other companies with an aggregate capital of 3 millions had also obtained charters. The principal of these is the Tōkyō railway company, with a subscribed capital of 6 millions (31/2 paid up), 901/2 m. of line open and 149 m. under construction. In 1907 it carried 153 million passengers, and its net earnings were £300,000.

The traditional story of prehistoric Japan indicates that the first recorded emperor was an over-sea invader, whose followers must therefore have possessed some knowledge of ship-building and navigation. But in what kind of craft they sailed and how they handled them, there is Maritime Communications. nothing to show clearly. Nine centuries later, but still 500 years before the era of surviving written annals, an empress is said to have invaded Korea, embarking her forces at Kobe (then called Takekura) in 500 vessels. In the middle of the 6th century we read of a general named Abe-no-hirafu who led a flotilla up the Amur river to the invasion of Manchuria (then called Shukushin). All these things show that the Japanese of the earliest era navigated the high sea with some skill, and at later dates down to medieval times they are found occasionally sending forces to Korea and constantly visiting China in vessels which seem to have experienced no difficulty in making the voyage. The 16th century was a period of maritime activity so marked that, had not artificial checks been applied, the Japanese, in all probability, would have obtained partial command of Far-Eastern waters. They invaded Korea; their corsairs harried the coasts of China; two hundred of their vessels, sailing under authority of the Taikō’s vermilion seal, visited Siam, Luzon, Cochin China and Annam, and they built ships in European style which crossed the Pacific to Acapulco. But this spirit of adventure was chilled at the close of the 16th century and early in the 17th, when events connected with the propagation of Christianity taught the Japanese to believe that national safety could not be secured without international isolation. In 1638 the ports were closed to all foreign ships except those flying the flag of Holland or of China, and a strictly enforced edict forbade the building of any vessel having a capacity of more than 500 koku (150 tons) or constructed for purposes of ocean navigation. Thenceforth, with rare exceptions, Japanese craft confined themselves to the coastwise trade. Ocean-going enterprise ceased altogether.

Things remained thus until the middle of the 19th century, when a growing knowledge of the conditions existing in the West warned the Tokugawa administration that continued isolation would be suicidal. In 1853 the law prohibiting the construction of sea-going ships was revoked and the Yedo government built at Uraga a sailing vessel of European type aptly called the “Phoenix” (“Howo Maru”). Just 243 years had elapsed since the founder of the Tokugawa dynasty constructed Japan’s first ship after a foreign model, with the aid of an English pilot, Will Adams. In 1853 Commodore M. C. Perry made his appearance, and thenceforth everything conspired to push Japan along the new path. The Dutch, who had been proximately responsible for the adoption of the seclusion policy in the 17th century, now took a prominent part in promoting a liberal view. They sent to the Tokugawa a present of a man-of-war and urged the vital necessity of equipping the country with a navy. Then followed the establishment of a naval college at Tsukiji in Yedo, the building of iron-works at Nagasaki, and the construction at Yokosuka of a dockyard destined to become one of the greatest enterprises of its kind in the East. This last undertaking bore witness to the patriotism of the Tokugawa rulers, for they resolutely carried it to completion during the throes of a revolution which involved the downfall of their dynasty. Their encouragement of maritime enterprise had borne fruit, for when, in 1867, they restored the administration to the Imperial court, 44 ocean-going ships were found among their possessions and 94 were in the hands of the feudatories, a steamer and 20 sailing vessels having been constructed in Japan and the rest purchased abroad.

If the Tokugawa had been energetic in this respect, the new government was still more so. It caused the various maritime carriers to amalgamate into one association called the Nippon-koku yubin jokisen kaisha (Mail SS. Company of Japan), to which were transferred, free of charge, the steamers, previously the property of the Tokugawa or the feudatories, and a substantial subsidy was granted by the state. This, the first steamship company ever organized in Japan, remained in existence only four years. Defective management and incapacity to compete with foreign-owned vessels plying between the open ports caused its downfall (1875). Already, however, an independent company had appeared upon the scene. Organized and controlled by a man (Iwasaki Yataro) of exceptional enterprise and business faculty, this mitsubishi kaisha (three lozenge company, so called from the design on its flag), working with steamers chartered from the former feudatory of Tosa, to which clan Iwasaki belonged, proved a success from the outset, and grew with each vicissitude of the state. For when (1874) the Meiji government’s first complications with a foreign country necessitated the despatch of a military expedition to Formosa, the administration had to purchase 63 foreign steamers for transport purposes, and these were subsequently transferred to the mitsubishi company together with all the vessels (17) hitherto in the possession of the Mail SS. Company, the Treasury further granting to the mitsubishi a subsidy of £50,000 annually. Shortly afterwards it was decided to purchase a service maintained by the Pacific Mail SS. Company with 4 steamers between Yokohama and Shanghai, and money for the purpose having been lent by the state to the mitsubishi, Japan’s first line of steamers to a foreign country was firmly established, just 20 years after the law interdicting the construction of ocean-going vessels had been rescinded.

The next memorable event in this chapter of history occurred in 1877, when the Satsuma clan, eminently the most powerful and most warlike among all the former feudatories, took the field in open rebellion. For a time the fate of the government hung in the balance, and only by a flanking movement over-sea was the rebellion crushed. This strategy compelled the purchase of 10 foreign steamers, and these too were subsequently handed over to the mitsubishi company, which, in 1880, found itself possessed of 32 ships aggregating 25,600 tons, whereas all the other vessels of foreign type in the country totalled only 27 with a tonnage of 6500. It had now become apparent that the country could not hope to meet emergencies which might at any moment arise, especially in connexion with Korean affairs, unless the development of the mercantile marine proceeded more rapidly. Therefore in 1881 the formation of a new company was officially promoted. It had the name of the kyōdō unyu kaisha (Union Transport Company); its capital was about a million sterling; it received a large subsidy from the state, and its chief purpose was to provide vessels for military uses and as commerce-carriers. Japan had now definitely embraced the policy of entrusting to private companies rather than to the state the duty of acquiring a fleet of vessels capable of serving as transports or auxiliary cruisers in time of war. But there was now seen the curious spectacle of two companies (the Mitsubishi and the Union Transport) competing in the same waters and both subsidized by the treasury. After this had gone on for four years, the two companies were amalgamated (1885) into the Nippon yusen kaisha (Japan Mail SS. Company) with a capital of £1,100,000 and an annual subsidy of £88,000, fixed on the basis of 8% of the capital. Another company had come into existence a few months earlier. Its fleet consisted of 100 small steamers, totalling 10,000 tons, which had hitherto been competing in the Inland Sea.

Japan now possessed a substantial mercantile marine, the rate of whose development is indicated by the following figures:—

Year. Steamers. Sailing Vessels. Totals.
 Number. Tons.  Number. Tons.  Number. Tons.
1870 35  15,498 11  2,454 46  17,952
1892 642  122,300 780  46,065 1,422  168,365

Nevertheless, only 23% of the exports and imports was transported in Japanese bottoms in 1892, whereas foreign steamers took 77%. This discrepancy was one of the subjects discussed in the first session of the diet, but a bill presented by the government for encouraging navigation failed to obtain parliamentary consent, and in 1893 the Japan Mail SS. Company, without waiting for state assistance, opened a regular service to Bombay mainly for the purpose of carrying raw cotton from India to supply the spinning industry which had now assumed great importance in Japan. Thus the rising sun flag flew for the first time outside Far-Eastern waters. Almost immediately after the establishment of this line, Japan had to engage in war with China, which entailed the despatch of some two hundred thousand men to the neighbouring continent and their maintenance there for more than a year. All the country’s available shipping resources did not suffice for this task. Additional vessels had to be purchased or chartered, and thus, by the beginning of 1896, the mercantile marine of Japan had grown to 899 steamers of 373,588 tons, while the sailing vessels had diminished to 644 of 44,000 tons.

In 1897 there occurred an event destined to exercise a potent influence on the fortunes not only of Japan herself but also of her mercantile marine. No sooner had she exchanged with China ratifications of a treaty of peace which seemed to prelude a long period of tranquillity, than Russia, Germany and France ordered her to restore all the continental territory ceded to her by China. Japan then recognized that her hope of peace was delusive, and that she must be prepared to engage in a struggle incomparably more serious than the one from which she had just emerged. Determined that when the crucial moment came she should not be found without ample means for transporting her armies, the government, under the leadership of Prince Ito and with the consent of the diet, enacted, in March 1896 laws liberally encouraging ship-building and navigation. Under the navigation law “any Japanese subject or any commercial company whose partners or shareholders were all Japanese subjects, engaged in carrying passengers and cargo between Japan and foreign countries or between foreign ports, in their own vessels, which must be of at least 1000 tons and registered in the shipping list of the Empire, became entitled to subsidies proportionate to the distance run and the tonnage of the vessels”; and under the ship-building law, bounties were granted for the construction of iron or steel vessels of not less than 700 tons gross by any Japanese subject or any commercial company whose partners and shareholders were all Japanese. The effect of this legislation was marked. In the period of six years ended 1902, no less than 835 vessels of 455,000 tons were added to the mercantile marine, and the treasury found itself paying encouragement money which totalled six hundred thousand pounds annually. Ship-building underwent remarkable development. Thus, while in 1870 only 2 steamers aggregating 57 tons had been constructed in Japanese yards, 53 steamers totalling 5380 tons and 193 sailing vessels of 17,873 tons were launched in 1900. By the year 1907 Japan had 216 private ship yards and 42 private docks,[2] and while the government yards were able to build first-class line-of-battle ships of the largest size, the private docks were turning out steamers of 9000 tons burden. When war broke out with Russia in 1904, Japan had 567,000 tons of steam shipping, but that stupendous struggle obliged her to materially augment even this great total. In operations connected with the war she lost 71,000 tons, but on the other hand, she built 27,000 tons at home and bought 177,000 abroad, so that the net increase to her mercantile fleet of steamers was 133,000 tons. The following table shows the growth of her marine during the ten years ending 1907:—

Steamers. Sailing Vessels. Totals.
Year.  Number.  Gross
 Number.  Gross
 Number.  Gross
1898 1130 477,430 1914 170,194 3044 648,324
1899 1221 510,007 3322 286,923 4543 467,930
1900 1329 543,365 3850 320,572 5179 863,937
1901 1395 583,532 4026 336,528 5471 920,060
1902 1441 610,445 3907 336,154 5348 946,600
1903 1570 663,220 3934 328,953 5504 992,173
1904 1815 798,240 3940 329,125 5755 1,127,365
1905 1988 939,749 4132 336,571 6170 1,276,320
1906 2103 1,041,569 4547 353,356 6700 1,395,925
1907 2139  1,115,880 4728 365,559 6867  1,481,439

With regard to the development of ship-building in Japanese yards the following figures convey information:—

Numbers of Vessels Built in Japan and Numbers Purchased Abroad

Built in Japan. Purchased abroad.
Year.  Steamers.   Sailing Vessels.   Steamers.   Sailing Vessels. 
1898  479 1301 194  9
1899  554 2771 199 12
1900  653 3302 206  7
1901  754 3559 215  6
1902  813 3585 220  6
1903  855 5304 233  8
1904  947 3324 277  8
1905 1028 3508 357 11
1906 1100 3859 387 11
1907 1150 4033 419 12

In the building of iron and steel ships the Japanese are obliged to import much of the material used, but a large steel-foundry has been established under government auspices at Wakamatsu in Kiūshiū, that position having been chosen on account of comparative proximity to the Taiya iron mine in China, where the greater part of the iron ore used for the foundry is procured.

Simultaneously with the growth of the mercantile marine there has been a marked development in the number of licensed mariners; that is to say, seamen registered by the government as having passed the examination prescribed by law. In 1876 there were only 4 Japanese Seamen.subjects who satisfied that definition as against 74 duly qualified foreigners holding responsible positions. In 1895 the numbers were 4135 Japanese and 835 foreigners, and ten years later the corresponding figures were 16,886 and 349 respectively. In 1904 the ordinary seamen of the mercantile marine totalled 202,710.

There are in Japan various institutions where the theory and practice of navigation are taught. The principal of these is the Tōkyō shōsen gakkō (Tōkyō mercantile marine college, established in 1875), where some 600 of the men now serving as officers arid engineers have graduated. Well Education of Mariners. equipped colleges exist also in seven other places, all having been established with official co-operation. Mention must be made of a mariners’ assistance association (kaiin ekizai-kai, established in 1800) which acts as a kind of agency for supplying mariners to shipowners, and of a distressed mariners’ relief association (suinan kyūsai-kai) which has succoured about a hundred thousand seamen since its establishment in 1899.

The duty of overseeing all matters relating to the maritime carrying trade devolves on the department of state for communications, and is delegated by the latter to one of its bureaus (the Kwansen-kyoku, or ships superintendence bureau), which, again, is divided into three sections: Maritime Administration. one for inspecting vessels, one for examining mariners, and one for the general control of all shipping in Japanese waters. For the better discharge of its duties this bureau parcels out the empire into 4 districts, having their headquarters at Tōkyō, Osaka, Nagasaki and Hakodate; and these four districts are in turn subdivided into 18 sections, each having an office of marine affairs (kwaiji-kyoku).

Competition between Japanese and foreign ships in the carriage of the country’s over-sea trade soon began to assume appreciable dimensions. Thus, whereas in 1891 the portion carried in Japanese bottoms was only 11/2 millions sterling against 121/2 millions carried by foreign vessels, the Competition
between Japanese and Foreign Ships.
corresponding figures in 1902 were 201/2 millions against 321/4 millions. In other words, Japanese steamers carried only 11% of the total trade in 1891, but their share rose to 39% in 1902. The prospect suggested by this record caused some uneasiness, which was not allayed by observing that while the tonnage of Japanese vessels in Chinese ports was only 2% in 1896 as compared with foreign vessels, the former figure grew to 16% in 1902; while in Korean ports Japanese steamers almost monopolized the carrying trade, leaving only 18% to their foreign rivals, and even in Hong-Kong the tonnage of Japanese ships increased from 3% in 1896 to 13% in 1900. In 1898 Japan stood eleventh on the list of the thirteen principal maritime countries of the world, but in 1907 she rose to the fifth place. Her principal company, the Nippon yusen kaisha, though established as lately as 1885, now ranks ninth in point of tonnage among the 21 leading maritime companies of the world. This company was able to supply 55 out of a total fleet of 207 transports furnished by all the steamship companies of Japan for military and naval purposes during the war with Russia in 1904-5. It may be noted in conclusion that the development of Japan’s steam-shipping during the five decades ended 1907 was as follows:—

At the end of 1868 17,952
At the end of 1878 63,468
At the end of 1888 197,365
At the end of 1898 648,324
At the end of 1907 1,115,880

There are 33 ports in Japan open as places of call for foreign steamers. Their names with the dates of their opening are as Open Ports. follow:—

Name. Date of Opening. Situation.
Yokohama 1859 Main Island.
Kobe 1868 Main Island.
Niigata 1867 Main Island.
Osaka 1899 Main Island.
Yokkaichi 1899 Main Island.
Shimonoseki 1899 Main Island.
Itozaki 1899 Main Island.
Taketoyo 1899 Main Island.
Shimizu 1899 Main Island.
Tsuruga 1899 Main Island.
Nanao 1899 Main Island.
Fushiki 1899 Main Island.
Sakai 1899 Main Island.
Hamada 1899 Main Island.
Miyazu 1899 Main Island.
Aomori 1906 Main Island.
Nagasaki 1859 Kiūshiū.
Moji 1899 Kiūshiū.
Hakata 1899 Kiūshiū.
Karatsu 1899 Kiūshiū.
Kuchinotsu 1899 Kiūshiū.
Misumi 1899 Kiūshiū.
Suminoye 1906 Kiūshiū.
Izuhara 1899 Tsushima.
Sasuna 1899 Tsushima.
Shikami 1899 Tsushima.
Nafa 1899 Riūkiū.
Otaru 1899 Yezo.
Kushiro 1899 Yezo.
Mororan 1899 Yezo.
Hakodate 1865 Yezo.
Kelung 1899 Formosa.
Tamsui 1899 Formosa.
Takow 1899 Formosa.
Anping 1899 Formosa.

Emigration.—Characteristic of the Japanese is a spirit of adventure: they readily emigrate to foreign countries if any inducement offers. A strong disposition to exclude them has displayed itself in the United States of America, in Australasia and in British Columbia, and it is evident that, since one nation cannot force its society on another at the point of the sword, this anti-Asiatic prejudice will have to be respected, though it has its origin in nothing more respectable than the jealousy of the labouring classes. One result is an increase in the number of Japanese emigrating to Korea, Manchuria and S. America. The following table shows the numbers residing at various places outside Japan in 1904 and 1906 respectively:—

Place. Number in
Number in
China 9,417 27,126
Korea 31,093 100,000
Manchuria 43,823
Hong-Kong 600 756
Singapore 1,292 1,428
British India 413 530
Europe 183 697
United States of America 33,849 130,228
Canada 3,838 5,088
Mexico 456 1,294
S. America 1,496 2,500
Philippines 2,652 2,185
Hawaii 65,008 64,319
Australasia 71,129 3,274

Foreign Residents.—The number of foreigners residing in Japan and their nationalities in 1889, 1899 and 1906, respectively, were as follow:—

1889. 1899. 1906.
Americans 899 1,296 1,650
British 1,701 2,013 2,155
Russians 63 134 211
French 335 463 540
Portuguese 108 158 165
Germans 550 532 670
Chinese 4,975 6,372 12,425
Koreans 8 188 254

There are also small numbers of Dutch, Peruvians, Belgians, Swiss, Italians, Danes, Swedes, Austrians, Hungarians, &c. This slow growth of the foreign residents is remarkable when contrasted with the fact that the volume of the country’s foreign trade, which constitutes their main business, grew in the same period from 13½ millions sterling to 92 millions.

Posts and Telegraphs.—The government of the Restoration did not wait for the complete abolition of feudalism before organizing a new system of posts in accordance with modern needs. At first, letters only were carried, but before the close of 1871 the service was extended so as to include newspapers, printed matter, books and commercial samples, while the area was extended so as to embrace all important towns between Hakodate in the northern island of Yezo and Nagasaki in the southern island of Kiūshiū. Two years later this field was closed to private enterprise, the state assuming sole charge of the business. A few years later saw Japan in possession of an organization comparable in every respect with the systems existing in Europe. In 1892 a foreign service was added. Whereas in 1871 the number of post-offices throughout the empire was only 179, it had grown to 6449 in 1907, while the mail matter sent during the latter year totalled 1254 millions (including 15 millions of parcels), and 67,000 persons were engaged in handling it. Japan labours under special difficulties for postal purposes, owing to the great number of islands included in the empire, the exceptionally mountainous nature of the country, and the wide areas covered by the cities in proportion to the number of their inhabitants. It is not surprising to find, therefore, that the means of distribution are varied. The state derives a net revenue of 5 million yen approximately from its postal service. It need scarcely be added that the system of postal money-orders was developed pari passu with that of ordinary correspondence, but in this context one interesting fact may be noted, namely, that while Japan sends abroad only some £25,000 annually to foreign countries through the post, she receives over £450,000 from her over-sea emigrants.

Japan at the time of the Restoration (1867) was not entirely without experience which prepared her for the postal money-order system. Some 600 years ago the idea of the bill of exchange was born in the little town of Totsugawa Postal Savings Bank. (Yamato province), though it did not obtain much development before the establishment of the Tokugawa shōgunate in the 17th century. The feudal chiefs, having then to transmit large sums to Yedo for the purposes of their compulsory residence there, availed themselves of bills of exchange, and the shōgun’s government, which received considerable amounts in Osaka, selected ten brokers to whom the duty of effecting the transfer of these funds was entrusted. Subsequently the 10 chosen brokers were permitted to extend their services to the general public, and a recent Japanese historian notes that Osaka thus became the birthplace of banking business in Japan. Postal money-orders were therefore easily appreciated at the time of their introduction in 1875. This was not true of the postal savings bank, however, an institution which came into existence in the same year. It was altogether a novel idea that the public at large, especially the lower sections of it, should entrust their savings to the government for safe keeping, especially as the minimum and maximum deposited at one time were fixed at such petty sums as 10 sen (21/4d.) and 50 sen (1s.), respectively. Indeed, in the circumstances, the fact that £1500 was deposited in the first year must be regarded as notable. Subsequently deposits were taken in postage stamps, and arrangements were effected for enabling depositors to pay money to distant creditors through the bank by merely stating the destination and the amount of the nearest post office. In 1908 the number of depositors in the post office savings bank was 8217, and their deposits exceeded 10 millions sterling. Thirty per cent. of the depositors belonged to the agricultural classes, 13 to the commercial and only 6 to the industrial.

Rapid communication by means of beacons was not unknown in ancient Japan, but code-signalling by the aid of flags was not introduced until the 17th century and was probably suggested by observing the practice of foreign merchantmen. Its use, however, was peculiar. The central office stood Telegraphs. at Osaka, between which city and many of the principal provincial towns rudely constructed towers were placed at long distances, and from one to another of these intelligence as to the market price of rice was flashed by flag-shaking, the signals being read with telescopes. The Japanese saw a telegraph for the first time in 1854, when Commodore Perry presented a set of apparatus to the shōgun, and four years later the feudal chief of Satsuma (Shimazu Nariakira) caused wires to be erected within the enclosure of his castle. The true value of electric telegraphy was first demonstrated to the Japanese in connexion with an insurrection in 1877, under the leadership of Saigo, the favourite of this same Shimazu Nariakira. Before that time, however, a line of telegraph had been put up between Tōkyō and Yokohama (18 m.) and a code of regulations had been enacted. Sudden introduction to such a mysterious product of foreign science created superstitious dread in the minds of a few of the lower orders, and occasional attempts were made at the outset to wreck the wires. In 1886 the postal and telegraph offices were amalgamated and both systems underwent large development. Whereas the length of wires at the end of the fourth year after the introduction of the system was only 53 m., and the number of messages 20,000, these figures had grown in 1907 to 95,623 and 25 millions, respectively. Several cables are included in these latter figures, the longest being that to Formosa (1229 m.). Wireless telegraphy began to come into general use in 1908, when several vessels belonging to the principal steamship companies were equipped with the apparatus. It had already been employed for some years by the army and navy, especially during the war with Russia, when the latter service installed a new system, the joint invention of Captain Tonami of the navy, Professor S. Kimura of the naval college and Mr M. Matsushiro of the department of communications. The telegraph service in Japan barely pays the cost of operating and maintenance.

The introduction of the telephone into Japan took place in 1877, but it served official purposes solely during 13 years, and even when (1890) it was placed at the disposal of the general public its utilities found at first few appreciators. But this apathy soon yielded to a mood of eager employment, and Telephones. the resources of the government (which monopolized the enterprise) proved inadequate to satisfy public demand. Automatic telephones were ultimately set up at many places in the principal towns and along the most frequented highways. The longest distance covered was from Tōkyō to Osaka (348 m.). In 1907 Japan had 140,440 m. of telephone wires, 262 exchanges, 159 automatic telephones, and the approximate number of messages sent was 160 millions. The telephone service pays a net revenue of about £100,000 annually.

Agriculture.—The gross area of land in Japan—excluding Formosa and Sakhalin—is 89,167,880 acres, of which 53,487,022 acres represent the property of the crown, the state and the communes, the rest (35,680,868 acres) being owned by private persons. Of the grand total the arable lands represent 15,301,297 acres. With regard to the immense expanse remaining unproductive, experts calculate that if all lands inclined at less than 15° be considered cultivable, an area of 10,684,517 acres remains to be reclaimed, though whether the result would repay the cost is a question hitherto unanswered. The cultivated lands are thus classified, namely, wet fields (called also paddy fields or rice lands), 6,871,437 acres; dry fields (or upland farms), 5,741,745 acres, and others, 2,688,115 acres.

Paddy fields are to be seen in every valley or dell where farming is practicable; they are divided into square, oblong or triangular plots by grass-grown ridges a few inches in height and on an average a foot in breadth—the rice being planted in the soft mud thus enclosed. Narrow pathways intersect Rice. these rice-valleys at intervals, and rivulets (generally flowing between low banks covered with clumps of bamboo) feed ditches cut for purposes of irrigation. The fields are generally kept under water to a depth of a few inches while the crops are young, but are drained immediately before harvesting. They are then dug up, and again flooded before the second crop is planted out. The rising grounds which skirt the rice-land are tilled by the hoe, and produce Indian corn, millet and edible roots. The well-wooded slopes supply the peasants with timber and firewood. Thirty-six per cent. of the rice-fields yield two crops yearly. The seed is sown in small beds, and the seedlings are planted out in the fields after attaining the height of about 4 in. The finest rice is produced in the fertile plains watered by the Tone-gawa in the province of Shimōsa, but the grain of Kaga and of the two central provinces of Settsu and Harima is also very good.

Not only does rice form the chief food of the Japanese but also the national beverage, called sake, is brewed from it. In colour the best sake resembles very pale sherry; the taste is rather acid. None but the finest grain is used in its manufacture. Of sake there are many varieties, from the best Sake. quality down to shiro-zake or “white sake,” and the turbid sort, drunk only in the poorer districts, known as nigori-zake; there is also a sweet sort, called mirin.

The various cereal and other crops cultivated in Japan, the areas devoted to them and the annual production are shown in the following table:—

Rice 7,044,060 7,117,990 7,246,982
Barley 1,649,240 1,613,270 1,674,595
Rye 1,703,410 1,688,635 1,752,095
Wheat 1,164,020 1,210,435 1,107,967
Millet 693,812 652,492 594,280
Beans 1,503,395 1,488,600 1,478,345
Buckwheat 450,100 414,375 402,575
Rape-seed 377,070 392,612 352,807
Potatoes 92,297 105,350 140,197
Sweet Potatoes 668,130 693,427 717,620
Cotton 100,720 51,750 24,165
Hemp 62,970 42,227 34,845
Indigo (leaf) 122,180 92,982 40,910
  1903.   1905.   1906.
Sugar Cane 41,750 43,308 45,087

It is observable that no marked increase is taking place in the area under cultivation, and that the business of growing cotton, hemp and indigo is gradually diminishing, these staples being supplied from abroad. In Germany and Italy the annual additions made to the arable area average 8% whereas in Japan the figure is only 5%. Moreover, of the latter amount the rate for paddy fields is only 3.3% against 7.9% in the case of upland farms. This means that the population is rapidly outgrowing its supply of home-produced rice, the great food-stuff of the nation, and the price of that cereal consequently shows a steady tendency to appreciate. Thus whereas the market value was 5s. 5d. per bushel in 1901, it rose to 6s. 9d. in 1906.

Scarcely less important to Japan than the cereals she raises are her silk and tea, both of which find markets abroad. Her production of the latter staple does not show any sign of marked development, for though tea is almost as essential an article of diet in Japan as rice, its foreign consumers are Silk and Tea. practically limited to the United States and their demand does not increase. The figures for the 10-year period ended 1906 are as follow:—

Area under
cultivation (acres).
Tea produced
(℔ av.).
1897 147,230 70,063,076
1901 122,120 57,975,486
1906 126,125 58,279,286

Sericulture, on the contrary, shows steady development year by year. The demand of European and American markets has very elastic limits, and if Japanese growers are content with moderate, but still substantial, gains they can find an almost unrestricted sale in the West. The development from 1886 to 1906 was as follows:—

Raw silk produced
yearly (℔).
Average from 1886 to 1889  8,739,273
1895 19,087,310
1900 20,705,644
1905 21,630,829
1906 24,215,324

The chief silk-producing prefectures in Japan, according to the order of production, are Nagano, Gumma, Yamanashi, Fukushima, Aichi and Saitama. At the close of 1906 there were 3843 filatures throughout the country, and the number of families engaged in sericulture was 397,885.

Lacquer, vegetable wax and tobacco are also important staples of production. The figures for the ten-year period, 1897 to 1906, are as follow:—

wax (℔).
1897 344,267 25,850,790 110,572,925
1906 668,266 39,714,661 101,718,592

While the quantity of certain products increases, the number of filatures and factories diminishes, the inference being that industries are coming to be conducted on a larger scale than was formerly the case. Thus in sericulture the filatures diminished from 4723 in 1897 to 3843 in 1906; the number of lacquer factories from 1637 to 1123 at the same dates, and the number of wax factories from 2619 to 1929.

It is generally said that whereas more than 60% of Japan’s entire population is engaged in agriculture, she remains far behind the progressive nations of Europe in the application of scientific principles to farming. Nevertheless if we take for unit the average value of the yield per hectare Agricultural Improvements. in Italy, we obtain the following figures:—

Yield per hectare
Italy 100
India  51
Germany 121
France 122
Egypt 153
Japan 213

In the realm of agriculture, as in all departments of modern Japan’s material development, abundant traces are found of official activity. Thus, in the year 1900, the government enacted laws designed to correct the excessive subdivision of farmers’ holdings; to utilize unproductive areas lying between cultivated fields; to straighten roads; to facilitate irrigation; to promote the use of machinery; to make known the value of artificial fertilizers; to conserve streams and to prevent inundations. Further, in order to furnish capital for the purposes of farming, 46 agricultural and commercial banks—one in each prefecture—were established with a central institution called the hypothec bank which assists them to collect funds. A Hokkaidō colonial bank and subsequently a bank of Formosa were also organized, and a law was framed to encourage the formation of co-operative societies which should develop a system of credit, assist the business of sale and purchase and concentrate small capitals. Experimental stations were another official creation. Their functions were to carry on investigations relating to seeds, diseases of cereals, insect pests, stock-breeding, the use of implements, the manufacture of agricultural products and cognate matters. Encouragement by grants in aid was also given to the establishment of similar experimental farms by private persons in the various prefectures, and such farms are now to be found everywhere. This official initiative, with equally successful results, extended to the domain of sericulture and tea-growing. There are two state sericultural training institutions where not only the rearing of silk-worms and the management of filatures are taught, but also experiments are made; and these institutions, like the state agricultural stations, have served as models for institutes on the same lines under private auspices. A silk-conditioning house at Yokohama; experimental tea-farms; laws to prevent and remove diseases of plants, cereals, silk-worms and cattle, and regulations to check dishonesty in the matter of fertilizers, complete the record of official efforts in the realm of agriculture during the Meiji era.

One of the problems of modern Japan is the supply of cattle. With a rapidly growing taste for beef—which, in former days, was not an article of diet—there is a slow but steady diminution in the stock of cattle. Thus while the number of the latter in 1897 was 1,214,163, out of which Stock-breeding. total 158,504 were slaughtered, the corresponding figures in 1906 were 1,190,373 and 167,458, respectively. The stock of sheep (3500 in 1906) increases slowly, and the stocks of goats (58,694 in 1897 and 74,750 in 1906) and swine (206,217 in 1897 and 284,708 in 1906) grow with somewhat greater rapidity, but mutton and pork do not suit Japanese taste, and goats are kept mainly for the sake of their milk. The government has done much towards the improvement of cattle and horses by importing bulls and sires, but, on the whole, the mixed breed is not a success, and the war with Russia in 1904-5 having clearly disclosed a pressing need of heavier horses for artillery and cavalry purposes, large importations of Australian, American and European cattle are now made, and the organization of race-clubs has been encouraged throughout the country.

Forests.—Forests occupy an area of 55 millions of acres, or 60% of the total superficies of Japan, and one-third of that expanse, namely, 18 million acres, approximately, is the property of the state. It cannot be said that any very practical attempt has yet been made to develop this source of wealth. The receipts from forests stood at only 13 million yen in the budget for 1907–1908, and even that figure compares favourably with the revenue of only 3 millions derived from the same source in the fiscal year 1904–1905. This failure to utilize a valuable asset is chiefly due to defective communications, but the demand for timber has already begun to increase. In 1907 a revised forestry law was promulgated, according to which the administration is competent to prevent the destruction of forests and to cause the planting of plains and waste-lands, or the re-planting of denuded areas. A plan was also elaborated for systematically turning the state forests to valuable account, while, at the same time, providing for their conservation.

Fisheries.—From ancient times the Japanese have been great fishermen. The seas that encircle their many-coasted islands teem with fish and aquatic products, which have always constituted an essential article of diet. Early in the 18th century, the Tokugawa administration, in pursuance of a policy of isolation, interdicted the construction of ocean-going ships, and the people’s enterprise in the matter of deep-sea fishing suffered a severe check. But shortly after the Restoration in 1867, not only was this veto rescinded, but also the government, organizing a marine bureau and a marine products examination office, took vigorous measures to promote pelagic industry. Then followed the formation of the marine products association under the presidency of an imperial prince. Fishery training schools were the next step; then periodical exhibitions of fishery and marine products; then the introduction and improvement of fishing implements; and then by rapid strides the area of operations widened until Japanese fishing boats of improved types came to be seen in Australasia, in Canada, in the seas of Sakhalin, the Maritime Province, Korea and China; in the waters of Kamchatka and in the Sea of Okhotsk. No less than 9000 fishermen with 2000 boats capture yearly about £300,000 worth of fish in Korean waters; at least 8000 find a plentiful livelihood off the coasts of Sakhalin and Siberia, and 200 Japanese boats engage in the salmon-fishing of the Fraser River. In 1893, the total value of Japanese marine products and fish captured did not exceed 1¼ millions sterling, whereas in 1906 the figure had grown to 5½ millions, to which must be added 3⅛ millions of manufactured marine products. Fourteen kinds of fish represent more than 50% of the whole catch, namely, (in the order of their importance) bonito (katsuo), sardines (iwashi), pagrus (toi), cuttle-fish and squid (tako and ika), mackerel (saba), yellow tail (buri), tunny-fish (maguro), prawns (ebi), sole (karei), grey mullet (bora), eels (unagi), salmon (shake), sea-ear (awabi) and carp (koi). Altogether 700 kinds of aquatic products are known in Japan, and 400 of them constitute articles of diet. Among manufactured aquatic products the chief are (in the order of their importance) dried bonito, fish guano, dried cuttle-fish, dried and boiled sardines, dried herring and dried prawns. The export of marine products amounted to £900,000 in 1906 against £400,000 ten years previously; China is the chief market. As for imports, they were insignificant at the beginning of the Meiji era, but by degrees a demand was created for salted fish, dried sardines (for fertilizing), edible sea-weed, canned fish and turtle-shell, so that whereas the total imports were only £1600 in 1868, they grew to over £400,000 in 1906.

Minerals.—Crystalline schists form the axis of Japan. They run in a general direction from south-west to north-east, with chains starting east and west from Shikoku. On these schists rocks of every age are superimposed, and amid these somewhat complicated geological conditions numerous minerals occur. Precious stones, however, are not found, though crystals of quartz and antimony as well as good specimens of topaz and agate are not infrequent.

Gold occurs in quartz veins among schists, paleozoic or volcanic rocks and in placers. The quantity obtained is not large, but it shows tolerably steady development, and may possibly be much increased by more generous use of capital and larger recourse to modern Gold. methods.

The value of the silver mined is approximately equal to that of the gold. It is found chiefly in volcanic rocks (especially tuff), in the form of sulphide, and it is usually associated with gold, copper, lead or zinc.Silver.

Much more important in Japan’s economics than either of the precious metals is copper. Veins often showing a thickness of from 70 to 80 ft., though of poor quality (2 to 8%), are found bedded in crystalline schists or paleozoic sedimentary rocks, but the richest (10 to 30%) occur in tuff and other volcanic Copper. rocks.

There have not yet been found any evidences that Japan is rich in iron ores. Her largest known deposit (magnetite) occurs at Kamaishi in Iwate prefecture, but the quantity of pig-iron produced from the ore mined there does not exceed 37,000 tons annually, and Japan is obliged to import from the Iron. neighbouring continent the greater part of the iron needed by her for ship-building and armaments.

Considerable deposits of coal exist, both anthracite and bituminous. The former, found chiefly at Amakusa, is not greatly inferior to the Cardiff mineral; and the latter—obtained in abundance in Kiūushiū and Yezo—is a brown coal of good medium quality. Altogether there are 29 coal-fields now actually worked Coal. in Japan, and she obtained an important addition to her sources of supply in the sequel to the war with Russia, when the Fushun mines near Mukden, Manchuria, were transferred to her. During the 10 years ending in 1906, the market value of the coal mined in Japan grew from less than 2 millions sterling to over 6 millions.

Petroleum also has of late sprung into prominence on the list of her mineral products. The oil-bearing strata—which occur mainly in tertiary rocks—extend from Yezo to Formosa, but the principal are in Echigo, which yields the greater part of the petroleum now obtained, the Yezo and Formosa Petroleum. wells being still little exploited, the quantity of petroleum obtained in Japan in 1897 was 9 million gallons, whereas the quantity obtained in 1906 was 55 millions.

Japanese mining enterprise was more than trebled during the decade 1897 to 1906, for the value of the minerals taken out in the former year was only 3½ millions sterling, whereas the corresponding figure for 1906 was 11 millions. The earliest mention of gold-mining in Japan takes us back to the year A.D. 696, and by the 16th century the country had acquired the reputation of being rich in gold. During the days of her medieval intercourse with the outer world, her stores of the precious metals were largely reduced, for between the years 1602 and 1766, Holland, Spain, Portugal and China took from her 313,800 ℔ (troy) of gold and 11,230,000 ℔ of silver.

Copper occupied a scarcely less important place in Old Japan. From a period long anterior to historic times this metal was employed to manufacture mirrors and swords, and the introduction of Buddhism in the 6th century was quickly followed by the casting of sacred images, many of which still survive. Finding in the 18th century that her foreign intercourse not only had largely denuded her of gold and silver, but also threatened to denude her of copper, Japan set a limit (3415 tons) to the yearly export of the latter metal. After the resumption of administrative power by the emperor in 1867, attention was quickly directed to the question of mineral resources; several Western experts were employed to conduct surveys and introduce Occidental mining methods, and ten of the most important mines were worked under the direct auspices of the state in order to serve as object lessons. Subsequently these mines were all transferred to private hands, and the government now retains possession of only a few iron and coal mines whose products are needed for dockyard and arsenal purposes. The following table shows the recent progress and present condition of mining industry in Japan:—

Gold Silver Copper Lead
1897 34,553 136,834 1,809,805 208,200 19,722 869,266 746 10,343
1901 82,517 330,076 1,824,842 211,682 26,495 1,625,244 1,744 24,640
1906 90,842 363,715 2,623,212 243,914 37,254 3,007,992 2,721 49,690
Iron Coal Petroleum Sulphur
1897 35,178 103,559 5,229,662 1,899,592 9,248,800 44,389 13,138 33,588
1901 46,456 123,701 9,025,325 3,060,931 39,351,960 227,841 16,007 38,612
1906 85,203 268,911 12,980,103 6,314,400 55,135,880 314,550 27,406 61,386
Antimony Manganese Others
Total Values.
1897 1,133 27,362 13,175 8,758 3,863 3,345,662
1901 529 13,481 15,738 10,846 3,450 5,670,508
1906 293 22,862 12,322 51,365 41,338 10,839,783

The number of mine employees in 1907 was 190,000, in round numbers; the number of mining companies, 189; and the aggregate paid-up capital, 10 millions sterling.

Industries.—In the beginning of the Meiji era Japan was practically without any manufacturing industries, as the term is understood in the Occident, and she had not so much as one joint-stock company. At the end of 1906, her joint-stock companies and partnerships totalled 9329, their paid up capital exceeded 100 millions sterling, and their reserves totalled 26 millions. It is not to be inferred, however, from the absence of manufacturing organizations 50 years ago that such pursuits were deliberately eschewed or despised in Japan. On the contrary, at the very dawn of the historical epoch we find that sections of the people took their names from the work carried on by them, and that specimens of expert industry were preserved in the sovereign’s palace side by side with the imperial insignia. Further, skilled artisans from the neighbouring continent always found a welcome in Japan, and when Korea was successfully invaded in early times, one of the uses which the victors made of their conquest was to import Korean weavers and dyers. Subsequently the advent of Buddhism, with its demand for images, temples, gorgeous vestments and rich paraphernalia, gave a marked impulse to the development of artistic industry, which at the outset took its models from China, India and Greece, but gradually, while assimilating many of the best features of the continental schools, subjected them to such great modifications in accordance with Japanese genius that they ceased to retain more than a trace of their originals. From the 9th century luxurious habits prevailed in Kiōto under the sway of the Fujiwara regents, and the imperial city’s munificent patronage drew to its precincts a crowd of artisans. But these were not industrials, in the Western sense of the term, and, further, their organization was essentially domestic, each family selecting its own pursuit and following it from generation to generation without co-operation or partnership with any outsider. The establishment of military feudalism in the 12th century brought a reaction from the effeminate luxury of the metropolis, and during nearly 300 years no industry enjoyed large popularity except that of the armourer and the sword-smith. No sooner, however, did the prowess of Oda Nobunaga and, above all, of Hideyoshi, the taikō, bring within sight a cessation of civil war and the unification of the country, than the taste for beautiful objects and artistic utensils recovered vitality. By degrees there grew up among the feudal barons a keen rivalry in art industry, and the shōgun’s court in Yedo set a standard which the feudatories constantly strove to attain. Ultimately, in the days immediately antecedent to its fall, the shōgun’s administration sought to induce a more logical system by encouraging local manufacturers to supply local needs only, leaving to Kiōto and Yedo the duty of catering to general wants.

But before this reform had approached maturity, the second advent of Western nations introduced to Japan the products of an industrial civilization centuries in advance of her own from the point of view of utility, though nowise superior in the application of art. Immediately the nation became alive to the necessity of correcting its own inferiority in this respect. But the people being entirely without models for organization, without financial machinery and without the idea of joint stock enterprise, the government had to choose between entering the field as an instructor, and leaving the nation to struggle along an arduous and expensive way to tardy development. There could be no question as to which course would conduce more to the general advantage, and thus, in days immediately subsequent to the resumption of administrative power by the emperor, the spectacle was seen of official excursions into the domains of silk-reeling, cement-making, cotton and silk spinning, brick-burning, printing and book-binding, soap-boiling, type-casting and ceramic decoration, to say nothing of their establishing colleges and schools where all branches of applied science were taught. Domestic exhibitions also were organized, and specimens cf the country’s products and manufactures were sent under government auspices to exhibitions abroad. On the other hand, the effect of this new departure along Western lines could not but be injurious to the old domestic industries of the country, especially to those which owed their existence to tastes and traditions now regarded as obsolete. Here again the government came to the rescue by establishing a firm whose functions were to familiarize foreign markets with the products of Japanese artisans, and to instruct the latter in adaptations likely to appeal to Occidental taste. Steps were also taken for training women as artisans, and the government printing bureau set the example of employing female labour, an innovation which soon developed large dimensions. In short, the authorities applied themselves to educate an industrial disposition throughout the country, and as soon as success seemed to be in sight, they gradually transferred from official to private direction the various model enterprises, retaining only such as were required to supply the needs of the state.

The result of all this effort was that whereas, in the beginning of the Meiji era, Japan had virtually no industries worthy of the name, she possessed in 1896—that is to say, after an interval of 25 years of effort—no less than 4595 industrial and commercial companies, joint stock or partnership, with a paid-up capital of 40 millions sterling. Her development during the decade ending in 1906 is shown in the following table:—

Number of
Paid-up capital
(millions sterling).
(millions sterling).
1897 6,113  53  6
1901 8,602  83 12
1906 9,329 107 26

What effect this development exercised upon the country’s over-sea trade may be inferred from the fact that, whereas the manufactured goods exported in 1870 were nil, their value in 1901 was 8 millions sterling, and in 1906 the figure rose to over 20 millions. In the following table are given some facts relating to the principal industries in which foreign markets are interested:—

Cotton Yarns

  Spindles. Operatives. Quantity

Male.  Female. 

         This is a wholly new industry in Japan. It had no existence before the Meiji era.
 1897  768,328  9,933   35,059  216,913,196
 1901 1,181,762   13,481   49,540   274,861,380
 1906  1,425,406  13,032   59,281  383,359,113 

Woven Goods

  Looms. Operatives. Market value
of products.

Male.  Female. 

         Millions sterling.   It is observable that a decrease in the number of operatives is concurrent with an increase of production.
1897   947,134   54,119   987,110  19
1901  719,550  43,172  747,946 24
1906  736,828  40,886  751,605 36


Operatives. Quantity
Value. Remarks.

Male.  Female. 

        Gross. £  This is an altogether new industry. Japanese matches now hold the leading place in all Far-Eastern markets.
 1897  269  21,447   26,277   24,038,960  654,849 
 1901 261 5,656   16,504  32,901,319 926,689 
 1906 250 5,468   18,721  54,802,293  1,551,698 

Foreign Paper (as distinguished from Japanese)

   Factories.  Operatives. Quantity
Value. Remarks.

Male.  Female. 

        £  Had not Japanese factories been established all this paper must have been imported.
 1897   9 164  109  46,256,649  300,662 
 1901 13 2,635  1,397  113,348,340  714,094 
 1906 22  3,774   1,778   218,022,434   1,415,778 

In the field of what may be called minor manufactures—as ceramic wares, lacquers, straw-plaits, &c.—there has been corresponding growth, for the value of these productions increased from 11/4 millions sterling in 1897 to 31/2 millions in 1906. But as these manufactures do not enter into competition with foreign goods in either Eastern or Western markets, they are interesting only as showing the development of Japan’s producing power. They contribute nothing to the solution of the problem whether Japanese industries are destined ultimately to drive their foreign rivals from the markets of Asia, if not to compete injuriously with them even in Europe and America. Japan seems to have one great advantage over Occidental countries: she possesses an abundance of dexterous and exceptionally cheap labour. It has been said, indeed, that this latter advantage is not likely to be permanent, since the wages of labour and the cost of living are fast increasing. The average cost of labour doubled in the interval between 1895 and 1906, but, on the other hand, the number of manufacturing organizations doubled in the same time, while the amount of their paid-up capital nearly trebled. As to the necessaries of life, if those specially affected by government monopolies be excluded, the rate of appreciation between 1900 and 1906 averaged about 30%, and it thus appears that the cost of living is not increasing with the same rapidity as the remuneration earned by labour. The manufacturing progress of the nation seems, therefore, to have a bright future, the only serious impediment being deficient capital. There is abundance of coal, and steps have been taken on a large scale to utilize the many excellent opportunities which the country offers for developing electricity by water-power.

The fact that Japan’s exports of raw silk amount to more than 12 millions sterling, while she sends over-sea only 31/2 millions’ worth of silk fabrics, suggests some marked inferiority on the part of her weavers. But the true explanation seems to be that her distance from the Occident handicaps her Silk-weaving in catering for the changing fashions of the West. There cannot be any doubt that the skill of Japanese weavers was at one time eminent. The sun goddess herself, the predominant figure in the Japanese pantheon, is said to have practised weaving; the names of four varieties of woven fabrics were known in prehistoric times; the 3rd century of the Christian era saw the arrival of a Korean maker of cloth; after him came an influx of Chinese who were distributed throughout the country to improve the arts of sericulture and silk-weaving; a sovereign (Yuriaku) of the 5th century employed 92 groups of naturalized Chinese for similar purposes; in 421 the same emperor issued a decree encouraging the culture of mulberry trees and calling for taxes on silk and cotton; the manufacture of textiles was directly supervised by the consort of this sovereign; in 645 a bureau of weaving was established; many other evidences are conclusive as to the great antiquity of the art of silk and cotton weaving in Japan.

The coming of Buddhism in the 6th century contributed not a little to the development of the art, since not only did the priests require for their own vestments and for the decoration of temples silken fabrics of more and more gorgeous description, but also these holy men themselves, careful always to keep touch with the continental developments of their faith, made frequent voyages to China, whence they brought back to Japan a knowledge of whatever technical or artistic improvements the Middle Kingdom could show. When Kiōto became the permanent metropolis of the empire, at the close of the 8th century, a bureau was established for weaving brocades and rich silk stuffs to be used in the palace. This preluded an era of some three centuries of steadily developing luxury in Kiōto; an era when an essential part of every aristocratic mansion’s furniture was a collection of magnificent silk robes for use in the sumptuous . Then, in the 15th century came the “Tea Ceremonial,” when the brocade mountings of a picture or the wrapper of a tiny tea-jar possessed an almost incredible value, and such skill was attained by weavers and dyers that even fragments of the fabrics produced by them command extravagant prices to-day. Kiōto always remained, and still remains, the chief producing centre, and to such a degree has the science of colour been developed there that no less than 4000 varieties of tint are distinguished. The sense of colour, indeed, seems to have been a special endowment of the Japanese people from the earliest times, and some of the combinations handed down from medieval times are treasured as incomparable examples. During the long era of peace under the Tokugawa administration the costumes of men and women showed an increasing tendency to richness and beauty. This culminated in the Genroku epoch (1688–1700), and the aristocracy of the present day delight in viewing histrionic performances where the costumes of that age and of its rival, the Momoyama (end of the 16th century) are reproduced.

It would be possible to draw up a formidable catalogue of the various kinds of silk fabrics manufactured in Japan before the opening of the Meiji era, and the signal ability of her weavers has derived a new impulse from contact with the Occident. Machinery has been largely introduced, and though the products of hand-looms still enjoy the reputation of greater durability, there has unquestionably been a marked development of producing power. Japanese looms now turn out about 17 millions sterling of silk textiles, of which less than 4 millions go abroad. Nor is increased quantity alone to be noted, for at the factory of Kawashima in Kiōto Gobelins are produced such as have never been rivalled elsewhere.

Commerce in Tokugawa Times.—The conditions existing in Japan during the two hundred and fifty years prefatory to the modern opening of the country were unfavourable to the development alike of national and of international trade. As to the former, the system of feudal government exercised a crippling influence, for each feudal chief endeavoured to check the exit of any kind of property from his fief, and free interchange of commodities was thus prevented so effectually that cases are recorded of one feudatory’s subjects dying of starvation while those of an adjoining fief enjoyed abundance. International commerce, on the other hand, lay under the veto of the central government, which punished with death anyone attempting to hold intercourse with foreigners. Thus the fiefs practised a policy of mutual seclusion at home, and united to maintain a policy of general seclusion abroad. Yet it was under the feudal system that the most signal development of Japanese trade took place, and since the processes of that development have much historical interest they invite close attention.

As the bulk of a feudal chief’s income was paid in rice, arrangements

had to be made for sending the grain to market and transmitting its proceeds. This was effected originally by establishing in Osaka stores (kura-yashiki), under the charge of samurai, who received the rice, sold it to merchants in that city and remitted the proceeds by official carriers. But from the middle of the 17th century these stores were placed in the charge of tradesmen to whom was given the name of kake-ya (agent). They disposed of the products entrusted to them by a fief and held the money, sending it by monthly instalments to an appointed place, rendering yearly accounts and receiving commission at the rate of from 2 to 4%. They had no special licence, but they were honourably regarded and often distinguished by an official title or an hereditary pension. In fact a kake-ya, of such standing as the Mitsui and the Konoike families, was, in effect, a banker charged with the finances of several fiefs. In Osaka the method of sale was uniform. Tenders were invited, and these having been opened in the presence of all the store officials and kake-ya, the successful tenderers had to deposit bargain-money, paying the remainder within ten days, and thereafter becoming entitled to take delivery of the rice in whole or by instalments within a certain time, no fee being charged for storage. A similar system existed in Yedo, the shōgun’s capital. Out of the custom of deferred delivery developed the establishment of exchanges where advances were made against sale certificates, and purely speculative transactions came into vogue. There followed an experience common enough in the West at one time: public opinion rebelled against these transactions in margins on the ground that they tended to enhance the price of rice. Several of the brokers were arrested and brought to trial; marginal dealings were thenceforth forbidden, and a system of licences was inaugurated in Yedo, the number of licensed dealers[3] being restricted to 108.

The system of organized trading companies had its origin in the 12th century, when, the number of merchants admitted within the confines of Yedo being restricted, it became necessary for those not obtaining that privilege to establish some mode of co-operation, and there resulted the formation of companies with representatives stationed in the feudal capital and share-holding members in the provinces. The Ashikaga shōguns developed this restriction by selling to the highest bidder the exclusive right of engaging in a particular trade, and the Tokugawa administration had recourse to the same practice. But whereas the monopolies instituted by the Ashikaga had for sole object the enrichment of the exchequer, the Tokugawa regarded it chiefly as a means of obtaining worthy representatives in each branch of trade. The first licences were issued in Yedo to keepers of bath-houses in the middle of the 17th century. As the city grew in dimensions these licences increased in value, so that pawnbrokers willingly accepted them in pledge for loans. Subsequently almanack-sellers were obliged to take out licences, and the system was afterwards extended to money-changers.

It was to the fishmongers, however, that the advantages of commercial organization first presented themselves vividly. The greatest fish-market in Japan is at Nihon-bashi in Tōkyō (formerly Yedo). It had its origin in the needs of the Tokugawa court. When Iyeyasu (founder of the Tokugawa dynasty) entered Yedo in 1590, his train was followed by some fishermen of Settsu, to whom he granted the privilege of plying their trade in the adjacent seas, on condition that they furnished a supply of their best fish for the use of the garrison. The remainder they offered for sale at Nihon-bashi. Early in the 17th century one Sukegoro of Yamato province (hence called Yamato-ya) went to Yedo and organized the fishmongers into a great gild. Nothing is recorded about this man’s antecedents, though his mercantile genius entitles him to historical notice. He contracted for the sale of all the fish obtained in the neighbouring seas, advanced money to the fishermen on the security of their catch, constructed preserves for keeping the fish alive until they were exposed in the market, and enrolled all the dealers in a confederation which ultimately consisted of 391 wholesale merchants and 246 brokers. The main purpose of Sukegoro’s system was to prevent the consumer from dealing direct with the producer. Thus in return for the pecuniary accommodation granted to fishermen to buy boats and nets they were required to give every fish they caught to the wholesale merchant from whom they had received the advance; and the latter, on his side, had to sell in the open market at prices fixed by the confederation. A somewhat similar system applied to vegetables, though in this case the monopoly was never so close.

It will be observed that this federation of fishmongers approximated closely to a trust, as the term is now understood; that is to say, an association of merchants engaged in the same branch of trade and pledged to observe certain rules in the conduct of their business as well as to adhere to fixed rates. The idea was extended to nearly every trade, 10 monster confederations being organized in Yedo and 24 in Osaka. These received official recognition, and contributed a sum to the exchequer under the euphonious name of “benefit money,” amounting to nearly £20,000 annually. They attained a high state of prosperity, the whole of the cities’ supplies passing through their hands.[4] No member of a confederation was permitted to dispose of his licence except to a near relative, and if anyone not on the roll of a confederation engaged in the same business he became liable to punishment at the hands of the officials. In spite of the limits thus imposed on the transfer of licences, one of these documents commanded from £80 to £6,400, and in the beginning of the 19th century the confederations, or gilds, had increased to 68 in Yedo, comprising 1195 merchants. The gild system extended to maritime enterprise also. In the beginning of the 17th century a merchant of Sakai (near Osaka) established a junk service between Osaka and Yedo, but this kind of business did not attain any considerable development until the close of that century, when 10 gilds of Yedo and 24 of Osaka combined to organize a marine-transport company for the purpose of conveying their own merchandise. Here also the principle of monopoly was strictly observed, no goods being shipped for unaffiliated merchants. This carrying trade rapidly assumed large dimensions. The number of junks entering Yedo rose to over 1500 yearly. They raced from port to port, just as tea-clippers from China to Europe used to race in recent times, and troubles incidental to their rivalry became so serious that it was found necessary to enact stringent rules. Each junk-master had to subscribe a written oath that he would comply strictly with the regulations and observe the sequence of sailing as determined by lot. The junks had to call en route at Uraga for the purpose of undergoing official examination. The order of their arrival there was duly registered, and the master making the best record throughout the year received a present in money as well as a complimentary garment, and became the shippers’ favourite next season.

Operations relating to the currency also were brought under the control of gilds. The business of money-changing seems to have been taken up as a profession from the beginning of the 15th century, but it was then in the hands of pedlars who carried strings of copper cash which they exchanged for gold or silver coins, then in rare circulation, or for parcels of gold dust. From the early part of the 17th century exchanges were opened in Yedo, and in 1718 the men engaged in this business formed a gild after the fashion of the time. Six hundred of these received licences, and no unlicensed person was permitted to purchase the avocation. Four representatives of the chief exchange met daily and fixed the ratio between gold and silver, the figure being then communicated to the various exchanges and to the shōgun’s officials. As for the prices of gold or silver in terms of copper or bank-notes, 24 representatives of the exchanges met every evening, and, in the presence of an official censor, settled the figure for the following day and recorded the amount of transactions during the past 24 hours, full information on these points being at once sent to the city governors and the street elders.

The exchanges in their ultimate form approximated very closely to the Occidental idea of banks. They not only bought gold, silver and copper coins, but they also received money on deposit, made loans and issued vouchers which played a very important part in commercial transactions. The voucher seems to have come into existence in Japan in the 14th century. It originated in the Yoshino market of Yamato province, where the hilly nature of the district rendered the carriage of copper money so arduous that rich merchants began to substitute written receipts and engagements which quickly became current. Among these documents there was a “joint voucher” (kumiai-fuda), signed by several persons, any one of whom might be held responsible for its redemption. This had large vogue, but it did not obtain official recognition until 1636, when the third Tokugawa shōgun selected 30 substantial merchants and divided them into 3 gilds, each authorized to issue vouchers, provided that a certain sum was deposited by way of security. Such vouchers were obviously a form of bank-note. Their circulation by the exchange came about in a similar manner.

During many years the treasure of the shōgun and of the feudal

chiefs was carried to Yedo by pack-horses and coolies of the regular

postal service. But the costliness of such a method led to the selection in 1691 of 10 exchange agents who were appointed bankers to the Tokugawa government and were required to furnish money within 30 days of the date of an order drawn on them. These agents went by the name of the “ten-men gild.” Subsequently the firm of Mitsui was added, but it enjoyed the special privilege of being allowed 150 days to collect a specified amount. The gild received moneys on account of the Tokugawa or the feudal chiefs at provincial centres, and then made its own arrangements for cashing the cheques drawn upon it by the shōgun or the daimyō in Yedo. If coin happened to be immediately available, it was employed to cash the cheques; otherwise the vouchers of the gild served instead. It was in Osaka, however, that the functions of the exchanges acquired fullest development. That city has exhibited, in all eras, a remarkable aptitude for trade. Its merchants, as already shown, were not only entrusted with the duty of selling the rice and other products of the surrounding fiefs, but also they became depositories of the proceeds, which they paid out on account of the owners in whatever sums the latter desired. Such an evidence of official confidence greatly strengthened their credit, and they received further encouragement from the second Tokugawa shōgun (1605-1623) and from Ishimaru Sadatsugu, governor of the city in 1661. He fostered wholesale transactions, sought to introduce a large element of credit into commerce by instituting a system of credit sales; took measures to promote the circulation of cheques; inaugurated market sales of gold and silver and appointed ten chiefs of exchange who were empowered to oversee the business of money-exchanging in general. These ten received exemption from municipal taxation and were permitted to wear swords. Under them were 22 exchanges forming a gild, whose members agreed to honour one another’s vouchers and mutually to facilitate business. Gradually they elaborated a regular system of banking, so that, in the middle of the 18th century, they issued various descriptions of paper-orders for fixed sums payable at certain places within fixed periods; deposit notes redeemable on the demand of an indicated person or his order; bills of exchange drawn by A upon B in favour of C (a common form for use in monthly or annual settlements); promissory notes to be paid at a future time, or cheques payable at sight, for goods purchased; and storage orders engaging to deliver goods on account of which earnest money had been paid. These last, much employed in transactions relating to rice and sugar, were generally valid for a period of 3 years and 3 months, were signed by a confederation of exchanges or merchants on joint responsibility, and guaranteed the delivery of the indicated merchandise independently of all accidents. They passed current as readily as coin, and advances could always be obtained against them from pawnbrokers.

All these documents, indicating a well-developed system of credit, were duly protected by law, severe penalties being inflicted for any failure to implement the pledges they embodied. The merchants of Yedo and Osaka, working on the system of trusts here described, gradually acquired great wealth and fell into habits of marked luxury. It is recorded that they did not hesitate to pay £5 for the first bonito of the season and £11 for the first egg-fruit. Naturally the spectacle of such extravagance excited popular discontent. Men began to grumble against the so-called “official merchants” who, under government auspices, monopolized every branch of trade; and this feeling grew almost uncontrollable in 1836, when rice rose to an unprecedented price owing to crop failure. Men loudly ascribed that state of affairs to regrating on the part of the wholesale companies, and murmurs similar to those raised at the close of the 19th century in America against the trust system began to reach the ears of the authorities perpetually. The celebrated Fujita Toko of Mito took up the question. He argued that the monopoly system, since it included Osaka, exposed the Yedo market to all the vicissitudes of the former city, which had then lost much of its old prosperity.

Finally, in 1841, the shōgun’s chief minister, Mizuno Echizen-no-Kami, withdrew all trading licences, dissolved the gilds and proclaimed that every person should thenceforth be free to engage in any commerce without let or hindrance. This recklessly drastic measure, vividly illustrating the arbitrariness of feudal officialdom, not only included the commercial gilds, the shipping gilds, the exchange gilds and the land transport gilds, but was also carried to the length of forbidding any company to confine itself to wholesale dealings. The authorities further declared that in times of scarcity wholesale transactions must be abandoned altogether and retail business alone carried on, their purpose being to bring retail and wholesale prices to the same level. The custom of advancing money to fishermen or to producers in the provincial districts was interdicted; even the fuda-sashi might no longer ply their calling, and neither bath-house keepers nor hairdressers were allowed to combine for the purpose of adopting uniform rates of charges. But this ill-judged interference produced evils greater than those it was intended to remedy. The gilds had not really been exacting. Their organization had reduced the cost of distribution, and they had provided facilities of transport which brought produce within quick and cheap reach of central markets.

Ten years’ experience showed that a modified form of the old system would conduce to public interests. The gilds were re-established, licence fees, however, being abolished, and no limit set to the number of firms in a gild. Things remained thus until the beginning of the Meiji era (1867), when the gilds shared the cataclysm that overtook all the country’s old institutions.

Japanese commercial and industrial life presents another feature which seems to suggest special aptitude for combination. In mercantile or manufacturing families, while the eldest son always succeeded to his father’s business, not only the younger sons but also the apprentices and employees, after they had served faithfully for a number of years, expected to be set up as branch houses under the auspices of the principal family, receiving a place of business, a certain amount of capital and the privilege of using the original house-name. Many an old-established firm thus came to have a plexus of branches all serving to extend its business and strengthen its credit, so that the group held a commanding position in the business world. It will be apparent from the above that commercial transactions on a large scale in pre-Meiji days were practically limited to the two great cities of Yedo and Osaka, the people in the provincial fiefs having no direct association with the gild system, confining themselves, for the most part, to domestic industries on a small scale, and not being allowed to extend their business beyond the boundaries of the fief

to which they belonged.

Foreign Commerce during the Meiji Era.—If Japan’s industrial development in modern times has been remarkable, the same may be said even more emphatically about the development of her over-sea commerce. This was checked at first not only by the unpopularity attaching to all intercourse with outside nations, but also by embarrassments resulting from the difference between the silver price of gold in Japan and its silver price in Europe, the precious metals being connected in Japan by a ratio of 1 to 8, and in Europe by a ratio of 1 to 15. This latter fact was the cause of a sudden and violent appreciation of values; for the government, seeing the country threatened with loss of all its gold, tried to avert the catastrophe by altering and reducing the weights of the silver coins without altering their denominations, and a corresponding difference exhibited itself, as a matter of course, in the silver quotations of commodities. Another difficulty was the attitude of officialdom. During several centuries Japan’s over-sea trade had been under the control of officialdom, to whose coffers it contributed a substantial revenue. But when the foreign exporter entered the field under the conditions created by the new system, he diverted to his own pocket the handsome profit previously accruing to the government; and since the latter could not easily become reconciled to this loss of revenue, or wean itself from its traditional habit of interference in affairs of foreign commerce, and since the foreigner, on his side, not only desired secrecy in order to prevent competition, but was also tormented by inveterate suspicions of Oriental espionage, not a little friction occurred from time to time. Thus the scanty records of that early epoch suggest that trade was beset with great difficulties, and that the foreigner had to contend against most adverse circumstances, though in truth his gains amounted to 40 or 50%.

The chief staples of the early trade were tea and silk. It happened that just before Japan’s raw silk became available for export, the production of that article in France and Tea and Italy had been largely curtailed owing to a novel Tea and Silk. disease of the silkworm. Thus, when the first bales of Japanese silk appeared in London, and when it was found to possess qualities entitling it to the highest rank, a keen demand sprang up. Japanese green tea also, differing radically in flavour and bouquet from the black tea of China, appealed quickly to American taste, so that by the year 1907 Japan found herself selling to foreign countries tea to the extent of 1¼ millions sterling, and raw silk to the extent of 12¼ millions. This remarkable development is typical of the general history of Japan’s foreign trade in modern times. Omitting the first decade and a half, the statistics for which are imperfect, the volume of the trade grew from 5 millions sterling in 1873—3 shillings per head of the population—to 93 millions in 1907—or 38 shillings per head. It was not a uniform growth. The period of 35 years divides itself conspicuously into two eras: the first, of 15 years (1873-1887), during which the development was from 5 millions to 9.7 millions, a ratio of 1 to 2, approximately; the second, of 20 years (1887-1907), during which the development was from 9.7 millions to 93 millions, a ratio of 1 to 10.

That a commerce which scarcely doubled itself in the first fifteen years should have grown nearly tenfold in the next twenty is a fact inviting attention. There are two principal causes: one general, the other special. The general cause was that several years necessarily elapsed before the nation’s material condition began to respond perceptibly to the improvements effected by the Meiji government in matters of administration, taxation and transport facilities. Fiscal burdens had been reduced and security of life and property obtained, but railway building and road-making, harbour construction, the growth of posts, telegraphs, exchanges and banks, and the development of a mercantile marine did not exercise a sensible influence on the nation’s prosperity until 1884 or 1885. From that time the country entered a period of steadily growing prosperity, and from that time private enterprise may be said to have finally started upon a career of independent activity. The special cause which, from 1885, contributed to a marked growth of trade was the resumption of specie payments. Up to that time the treasury’s fiat notes had suffered such marked fluctuations of specie value that sound or successful commerce became very difficult. Against the importing merchant the currency trouble worked with double potency. Not only did the gold with which he purchased goods appreciate constantly in terms of the silver for which he sold them, but the silver itself appreciated sharply and rapidly in terms of the fiat notes paid by Japanese consumers. Cursory reflection may suggest that these factors should have stimulated exports as much as they depressed imports. But such was not altogether the case in practice. For the exporter’s transactions were hampered by the possibility that a delay of a week or even a day might increase the purchasing power of his silver in Japanese markets by bringing about a further depreciation of paper, so that he worked timidly and hesitatingly, dividing his operations as minutely as possible in order to take advantage of the downward tendency of the fiat notes. Not till this element of pernicious disturbance was removed did the trade recover a healthy tone and grow so lustily as to tread closely on the heels of the foreign commerce of China, with her 300 million inhabitants and long-established international relations.

Japan’s trade with the outer world was built up chiefly by the energy and enterprise of the foreign middleman. He acted the part of an almost ideal agent. As an exporter, his command of cheap capital, his experience, his The Foreign Middleman. knowledge of foreign markets, and his connexions enabled him to secure sales such as must have been beyond reach of the Japanese working independently. Moreover, he paid to native consumers ready cash for their staples, taking upon his own shoulders all the risks of finding markets abroad. As an importer, he enjoyed, in centres of supply, credit which the Japanese lacked, and he offered to native consumers foreign produce brought to their doors with a minimum of responsibility on their part. Finally, whether as exporters or importers, foreign middlemen always competed with each other so keenly that their Japanese clients obtained the best possible terms from them. Yet the ambition of the Japanese to oust them cannot be regarded as unnatural. Every nation must desire to carry on its own commerce independently of alien assistance; and moreover, the foreign middleman’s residence during many years within Japanese territory, but without the pale of Japanese sovereignty, invested him with an aggressive character which the anti-Oriental exclusiveness of certain Occidental nations helped to accentuate. Thus from the point of view of the average Japanese there are several reasons for wishing to dispense with alien middlemen, and it is plain that these reasons are operative; for whereas, in 1888, native merchants carried on only 12% of the country’s over-sea trade without the intervention of the foreign middlemen, their share rose to 35% in 1899 and has since been slowly increasing.

Analysis of Japan’s foreign trade during the Meiji era shows that during the 35-year period ending in 1907, imports exceeded exports in 21 years and exports exceeded imports in 14 years. This does not suggest a very badly balanced Balance of Trade. trade. But closer examination accentuates the difference, for when the figures are added, it is found that the excesses of exports aggregated only 11 millions sterling, whereas the excesses of imports totalled 71 millions, there being thus a so-called “unfavourable balance” of 60 millions over all. The movements of specie do not throw much light upon this subject, for they are complicated by large imports of gold resulting from war indemnities and foreign loans. Undoubtedly the balance is materially redressed by the expenditures of the foreign communities in the former settlements, of foreign tourists visiting Japan and of foreign vessels engaged in the carrying trade, as well as by the earnings of Japanese vessels and the interest on investments made by foreigners. Nevertheless there remains an appreciable margin against Japan, and it is probably to be accounted for by the consideration that she is still engaged equipping herself for the industrial career evidently lying before her.

The manner in which Japan’s over-sea trade was divided in 1907 among the seven foreign countries principally engaged in it may be seen from the following table:— Trade with Various Countries.

Exports to
£ (millions).
Imports from
£ (millions).
£ (millions).
United States 131/2  81/2 22
China  83/4  61/4 15
Great Britain  21/4 113/4 14
British India  11/3  72/3  9
Germany  11/8  47/8  6
France  41/3 2/3  5
Korea  31/3  12/3  5

Among the 33 open ports of Japan, the first place belongs to Yokohama in the matter of foreign trade, and Kobe ranks second. The former far outstrips the latter in exports, but the case is reversed when imports are considered. As to the percentages of the whole trade standing to the credit of the five principal ports, the following figures may be consulted:—Yokohama, 40%; Kobe, 35.6; Osaka, 10; Moji, 5; and Nagasaki, 2.

  1. In 1877 there were 120 English engineers, drivers and foremen in the service of the railway bureau. Three years later only three advisers remained.
  2. The largest is the mitsubishi at Nagasaki. It has a length of 722 ft. Next stands the kawasaki at Kobe, and in the third place is the uraga.
  3. They were called fuda-sashi (ticket-holders), a term derived from the fact that rice-vouchers were usually held in a split bamboo which was thrust into a pile of rice-bags to indicate their buyer.
  4. In 1725, when the population of Yedo was about three-quarters of a million, the merchandise that entered the city was 861,893 bags of rice; 795,856 casks of sake; 132,892 casks of soy (fish-sauce); 18,209,987 bundles of fire-wood; 809,790 bags of charcoal; 90,811 tubs of oil; 1,670,850 bags of salt and 3,613,500 pieces of cotton cloth.