Japanese Material Progress
Tokio, March 9th, 1888
The statistics of this empire for the year lately ended furnish many proofs of one phase of that remarkable and undeviating progesss which has come to be linked with the very name of Japan, as well as some food for interesting thought in respect of the country's future commercial relations with the outer world.
During 1887 the aggregate value of Japan's foreign trade was 95 millions of dollars.
In 1877 it was 51 million dollars only.
Thus, in ten years it has increased by more than 86 per cent.
In the days when the proposal to revise the treaties on liberal lines was hotly combated by those whose interests dictate the maintenance of the present state of semi-isolation, it used to be the fashion to minimize the possibilities of this counrtry's foreign commerce, and to say that neither the United States nor Europe had any substantial inducement to loosen the chains in which Japan was bound.
That argument is now flatly refuted by figures.
Since Japan by her own unaided strength resumed specie payments, her trade has advanced by leaps and bounds.
In 1885 her paper currency, after ten years of severe fluctuations, during which it at one time touched 45 percent. below par value, at length acquired a fair degree of stability, owing to measures of restriction which had been adopted by the Treasury.
In the summer of that year it was officially notified that the flat notes were to be exchangeable for silver from the following New Year's Day.
Under the spur of this announcement foreign trade at once revived.
Its value, which had been only 63-1/2 millions of dollars in 1884, rose to 66-1/2 millions in 1885, to 81 millions in 1886, and to 95 millions, as above related, in 1887.
Maritime statistics, it naturally follows, tell a similar tale.
Ten years ago the number of foreign vessels visiting Japanese ports annually was barely 200, with a total tonnage of 244,000.
Last year the number of vessels was 948, and their aggregate tonnage was 1,269,429.
With such facts and figures as guides, it is impossible to resist the belief that Japan is destined to become a factor of no inconsiderable importance in the world's commerce.
Another noteworthy feature of the record of 1887 is the rapid increase of railway construction-rapid, that is to say, when existing circumstances are taken into account.
The addition in a twelvemonth of 151 miles of railways in a highly progressive country, where, with an area nearly equal to that of the British Isles, the previous total mileage was only 370, would hardly excite remark but for the special conditions by which Japan is now surrounded.
With respect to railway construction, an important result of those conditions is that the face of the nation is firmly set against having recourse to foreign capital as long as the present treaties remain in force.
Japan has become gravely apprehensive lest the abuses which have grown up under the extra-territorial system should defy all efforts to prevent their gradual spread over the whole Empire.
Foreigners now live at a half-dozen settlements on the coast, where they have their own judicial tribunals - if such a term can be applied to Consular Courts presided over, in many cases, by merchants who have no legal training.
They cannot lawfully trade or own land outside of those settlements, nor can they lawfully become partners with Japanese in any commercial, industrial, or other business underaking.
Yet, as time goes on and intercourse grows closer, as railways spread and enterprises of many kinds spring up at the chief centres of activity, foreign residents can and do devise means of evading with immunity the restrictions which are imposed by the treaties.
These evasions are constantly practiced.
Many foreigners contrive to hold land in forbidden places; many more trade in the interior; and not a few are in more or less direct business partnership with Japanese.
Meanwhile, the Government, though at heart only too wiliing to see the country thrown freely open to all comers, is, nevertheless, bound by every consideration of national dignity and political duty to abstain from relaxing the prohibitions which at present render all such contrivances illegal, until foreigners consent to observe Japan's territorial laws and to place themselves under the jurisdiction of her territorial courts.
For reasons already well known to readers of The Times, eight years of earnest effort have failed to procure that consent.
One effect of this protracted and, to Japan, most grave delay is that she is now menaced by the danger of finding that, in the long run, circumstances may prove too strong for her, and that she may be driven eventually, by dint of growing and successful evasions of the treaties, to relax those restrictions upon foreigners which alone render the extra-territorial system endurable, while at the same time remaining herself tied hand and foot in submission to that system.
It is little wonder, then, that she recoils from aggravating her present risks by contracting pecuniary obligations abroad which might possibly tend to postpone the day of her emancipation from the thraldom of the treaties.
So serious, indeed, are her apprehensions on this point that she is resolved for the present to build her railways with her own money; and, as she by no means possesses the wherewithal to justify such a proceeding - namely, surplus capital seeking investment - the work progresses, not only with comparative slowness, but also at the cost of develompent in other directions.
Hitherto the Government may be said to have been, with one exception, the only constructor.
It began to build in 1868, with funds borrowed abroad - a small sum of two millions sterling, which has been repaid.
Fourteen years later a company was formed for the purpose of constructing lines to the great silk districts north-west of the capital, as well as to the northern provinces.
The Treasury guaranteed to this company interest at 8 percent. per annum on its paid-up capital.
Altogether, 521 miles of railway have been built by the Government and the said company - 239 miles by the former and 282 by the latter.
The nature of the progress is shown by the following approximate figures.
Between 1868 and 1877 the annual rate of construction was nine miles; between 1878 and 1880 it was five miles; between 1881 and 1883 it was 36 miles; between 1884 and 1886 it was 61 miles; and in 1887 it rose suddenly to 151 miles.
At present the Government is working with money borrowed from the people.
In 1885 a domestic 8 percent. railway loan of 20 millions of dollars was announced, and this was floated in four instalments spread over two years, the whole sum, being eagerly subscribed.
Of late railroad projects have figured conspicuously in the list of internal works of development.
Last year was remarkable, not merely for the great increase of mileage actually constructed, but for the fact that it gave birth to no fewer than 11 railway companies, with an aggregate capital of 32 millions of dollars.
If only the surplus funds of the West could be placed at the disposal of this spirit of enterprise, the prospects of Japan's commercial development would be immensely brightened, and a new and profitable field of investment would be opened to foreign capitalists.
An interesting point connected with this railway question is the gradual lowering of the cost of construction.
While the first roads built by the Government cost more than 10,000 Sterling pounds per mile, those last constructed cost only about 3,600 pounds per mile.
The lines of the Japan Railway Company are paying an annual dividend of 10-1/4 per cent. with every prospect of still larger profits.
Their working expenses are about 45 percent. of the receipts.
Private lines are now surveyed and built, with hardly an exception, by Japanese engineers; and the whole service after construction is entirely managed and worked by Japanese, with rare immunity from accidents or blunders.
Turning now from railways to other aspects of Japan's material progress, signs of corresponding activity are apparent in many branches of enginnering and industrial development.
Among the public works recently undertaken, that which perhaps overshadows all others is the formation by the Government of a larger and important naval station at Kure, a well-chosen spot in the Inland Sea, within a few miles of Hiroshima.
The scale of this work may be briefly indicated by the statement that the frontage of the proposed dockyard is a mile and a half in length.
Another, but smaller, naval station is being constructed on the west coast of Kiushiu, near Nagasaki.
Tsushima Island, in the Korean Strait, is being fortified with all speed.
Water supply, one of the greatest of Japanese needs is receiving a fair share of attention.
At Yokohama the first modern waterworks in the empire, designed and carried out by an English Engineer officer, was brought to a successful completion in October last.
Projects for works of the same kind for other cities are at various stages of progress; and schemes of harbour and river improvement in many parts are either under construction or contemplated.
Still more conspicuous, however, than the energy thus displayed in the initiation and conduct of public works is the extraordinary recent growth of industrial and other business enterprises in a country where, under the feudal system which ended barely 20 years ago, all such concerns were practically unknown.
In the three cities of Tokyo, Osaka, and Kyoto no fewer than 111 large companies, industrial or commercial, were formed in the course of last year, with an aggregate capital of 21-1/2 millions of dollars.
Besides these a number of smaller undertakings found promoters and supporters throughout the provinces.
During the same period 13 banks made additions to their capital, the sum of such increments being 18 millions of dollars.
If to these amount be added the 32 millions representing the capital of the 11 new railway companies already mentioned, it will be seen that the shares in various public undertakings to the extent of more than 71 millions of dollars were taken up by the people during the year 1887, the total representing an average of nearly two dollars per head for the entire population.
Among the 111 companies to which reference has been made, all sorts of enterprises are included.
There are companies for cotton-spinning, paper-making, dyeing, glass-blowing, lumber-dealing, tea and silk exportation, horse-breeding, land-transport, dress-improvement, undertaking and engineering; companies agricultural, sericultural and piscicultural; and companies for the manufacture of porcelain, lacquer, bronzes, and other art objects, as well as of bricks, fans, machinery, ice, artificial manures, handkerchiefs, buttons, and a host of other commodities.
Among all these the growth of cotton manufactories is perhaps the most manifest and significant.
At the end of December there were no fewer than 22 spinning-mills at work, representing 76,000 spindles and a yearly output of 1,320,000 lbs.
Further eight large new factories, with 117,000 spindles, had been started, and were being rapidly brought into working order.
The meaning of this is plain.
Japan intends to make her own cotton goods instead of buying them abroad.
She cannot as yet supply herself with the material, and is therefore obliged to import considerable quantities.
But everything points to her success as a manufacturer.
She is within easy reach of great cotton-growing regions; she possesses an unlimited supply of probably the cheapest labour in the world; her art-artisans have no equals elsewhere; and her people enjoy the blessings of settled government and full security of life and property.
The singular and even feverish growth of trade of which a rough analysis has here been given is, however, not altogether attributable to strictly sound causes.
It, no doubt, partakes in some degree of a speculative spirit akin to that which produced so much distress both in America and England after the resumption of specie payments.
Japan returned to hard money payments by contracting the volume of her flat notes and accumulating a specie reserve obtained through the medium of the export trade.
The process was sharp and severe.
In 1880, when it was seriously undertaken, the total of flat notes in circulation was 146 millions of yen (a yen is now equal to a silver Mexican dollar).
By 1885, when resumption was announced, this volume had been reduced to 124 millions.
The reduction was accompanied by all the phenomena incidental to such operations of finance.
Prices fell; the burden of fixed obligations grew heavier; capitalists shrank from embarking in private business enterprises, and turned their attention to Government securities, the only class of investment that, under such circumstances, is necessarily appreciated.
The prices of those securities were thus driven up until they ceased to yield more than 5 percent. interest - an extraordinarily low return upon money in Japan.
It was natural at this juncture - the worst effects of currency contraction having meanwhile disappeared-that capital should return to the more profitable channels of industry and commerce.
That change, however, does not wholly account for the rapid and, in some respects, reckless enterprise that is manifested in last year's annals.
Something must certainly be set down to a pernicious appetite for speculation in shares, which, educated during the period of commercial stagnation, accompanied and immediately followed currency contraction.
Government securities having reached their extreme limit of prices, capitalists betook themselves with mischievous activity to share traffic in trading and manufacturing companies.
There is reason, therefore, to believe that some unsound enterprises were begotten during the late extraordinary boom in Japan's business operations, that the present state of things cannot be viewed without distrust, and that the Japanese money market can hardly escape a crisis more or less acute.
Perhaps the best hope under this peril lies in the fact that the country's financiers appreciate the situation, and are preparing to meet the possible consequences.
Meanwhile, the welcome growth of enterprise would assume a much healthier aspect if it were supplemented by the resources of Western skill and experience.
Nothing can so surely minister to Japan's material progress as the intimate business association of her own people with foreigners.
The latter would contribute the two things in which the former are certainly deficient - expert knowledge and organizing capacity.
In the same direction, also, lies the chief field for profitable participation by foreigners in the trade and industry in Japan.
But, under the present treaties, all such associations are necessarily prohibited.
While Western Governments are haggling over petty details of revision, their peoples are debarred from furthering and taking part in the development of this most pleasant and promising country's resources.
The Times - Apr.23th
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