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Originally appearing in Volume V15, Page 217 of the 1911 Encyclopedia Britannica.
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FOREIGN PAPER (as distinguished from Japanese) o Operatives. Quantity Value. Remarks. Male. Female. produced. lb £ Had not 1897 9 164 109 46,256,649 300,662 Japanese fac- 1901 13 2,635 1,397 113,348,340 714,094 tories been 1906 22 3,774 1,778 218,022,434 1,415,778 established all this pa per must have been im- ported. 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 14 millions sterling in 1897 to 34 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 exception-ally 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 mono-polies 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, there-fore, 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 34 millions' worth of silk fabrics, suggests some marked inferiority Silk-on the part of her weavers. But the true explanation weaving. seems to be that her distance from the Occident handicaps her 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 pre-historic 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 Kioto 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 K10to; an era when an essential part of every aristocratic mansion's furniture was a collection of magnificent silk robes for use in the sumptuous NO. 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. KiOto 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 un uestionably 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 Kidto 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 yearl 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 shogun'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' 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 shoguns 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 Tokyo (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 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 mercantie 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 whole-sale 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 ' 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.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, to 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.' 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 £8o 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 to 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 shogun'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 shogun 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 shogun and of the feudal 2 In T725, 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. 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 to 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 shogun or the daimyo 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 remark-able 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 shogun (16o5-1623) 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 shogun's chief minister, Mizuno Echizen-no-Kami, withdrew all trading licences, dissolved the gilds and pro-claimed 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 out-side 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 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 14 millions sterling, and raw silk to the extent of 124 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 mil-lions, 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 1o. when the figures are added, it is found that the excesses of exports aggregated only I I millions sterling, whereas the excesses of imports totalled 71 millions, there being thus a so-called " unfavourable balance " of 6o 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 princi- Trade with pally engaged in it may be seen from the following various table : Countrie . 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 The Foreign part of an almost ideal agent. As an exporter, middleman. his command of cheap capital, his experience, his 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 Balance during the 35-year period ending in 1907, imports exceeded of Trade. exports in 21 years and exports exceeded imports in 11 years. This does not suggest a very badly balanced trade. But closer examination accentuates the difference, for Total (millions). 22 15 14 9 6 5 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, to; Moji, 5; and Nagasaki, 2. VI.—GOVERNMENT, ADMINISTRATION, &C. Emperor and Princes.—At the head of the Japanese State stands the emperor, generally spoken of by foreigners as the mikado (honourable gate'), a title comparable with sublime porte and by his own subjects as tenshi (son of heaven) or tenno (heavenly king). The emperor Mutou Hito (q.v.) was the 121St of his line, according to Japanese history, which reckons from 66o B.C., when Jimmu ascended the throne. But as written records do not carry us back farther than A.D. 712, the reigns and periods of the very early monarchs are more or less apocryphal. Still the fact remains that Japan has been ruled by an unbroken dynasty ever since the dawn of her history, in which respect she is unique among all the nations in the world. There are four families of princes of the blood, from any one of which a successor to the throne may be taken in default of a direct heir: Princes Arisugawa, Fushimi, Kanin and Higashi Fushimi. These families are all direct descendants of emperors, and their heads have the title of shinno (prince of the blood), whereas the other imperial princes, of whom there are ten, have only the second syllable of shinno (pronounced wo when separated from shin). Second and younger sons of a shinno are all wo, and eldest sons lose the title shin and become wo from the fifth generation. The Peerage.—In former times there were no Japanese titles of nobility, as the term is understood in the Occident. Nobles there were, however, namely, kuge, or court nobles, descendants of younger sons of emperors, and daimyo (great name), some of whom could trace their lineage to mikados; but all owed their exalted position as feudal chiefs to military prowess. The Meiji restoration of 1867 led to the abolition of the daimyos as feudal chiefs, and they, together with the kuge, were merged into one class called kwazoku (flower families), a term corresponding to aristocracy, all inferior persons being heimin (ordinary folk). In 1884, however, the five Chinese titles of ki (prince), ko (marquis), haku (count), shi (viscount) and dan (baron) were introduced, and patents were not only granted to the ancient nobility but also conferred on men who had rendered conspicuous public service. The titles are all hereditary, but they descend to the firstborn only, younger children having no distinguishing appellation. The first list in 1884 showed II princes, 24 marquises, 76 counts, 324 viscounts and 74 barons. After the war with China (1894–95) the total grew to 716, and the war with 1 Some derive this term from mikes, an ancient Japanese term for " great," and to, " place." Imports from Exports to 4 (millions). 4 (millions). 4 United States 132 82 China . . . 8; 61 Great Britain 21 II4 British India I. 71 Germany 18 4i France 41 3 Korea 31 12 Russia (1904-5) increased the number to 912, namely, 15 princes, 39 marquises, too counts, 376 viscounts and 382 barons. Household Department.—The Imperial household department is completely differentiated from the administration of state affairs. It includes bureaux of treasury, forests, peerage and hunting, as well as boards of ceremonies and chamberlains, officials of the empress's household and officials of the crown prince's household. The annual allowance made to the throne is £300,000, and the Imperial estate comprises some 12,000 acres of building land, 3,850,000 acres of forests, and 300,000 acres of miscellaneous lands, the whole valued at some 19 millions sterling, but probably not yielding an income of more than £200,00o yearly. Fqrther, the household owns about 3 millions sterling (face value) of bonds and shares, from which a revenue of some £250,000 is derived, so that the whole income amounts to three-quarters of a million sterling, approximately. Out of this the households of the crown prince and all the Imperial princes are supported; allowances are granted at the time of conferring titles of nobility; a long list of charities receive liberal contributions, and considerable sums are paid to encourage art and education. The emperor himself is probably one of the most frugal sovereigns that ever occupied a throne. Departments of State.—There are nine departments of state presided over by ministers—foreign affairs, home affairs, finance, war, navy, justice, education, agriculture and commerce, communications. These ministers form the cabinet, which is presided over by the minister president of state, so that its members number ten in all. Ministers of state are appointed by the emperor and are responsible to him alone. But between the cabinet and the crown stand a small body of men, the survivors of those by whose genius modern Japan was raised to her present high position among the nations. They are known as " elder statesmen " (genro). Their proved ability constitutes an invaluable asset, and in the solution of serious problems their voice may be said to be final. At the end of 1909 four of these renowned statesmen remained—Prince Yamagata, Marquises Inouye and Matsukata and Count Okuma. There is also a privy council, which consists of a variable number of distinguished men—in 1909 there were 29, the president being Field-Marshal Prince Yamagata. Their duty is to debate and advise upon all matters referred to them by the emperor, who sometimes attends their meetings in person. Cieil Officials.—The total number of civil officials was 137,819 in 1906. It had been only 68,876 in 1898, from which time it grew regularly year by year. The salaries and allowances paid out of the treasury every year on account of the civil service are 4 millions sterling, approximately, and the annual emoluments of the principal officials are as follow: Prime minister, £96o; minister of a department, £boo; ambassador, £5oo, with allowances varying from £2200 to £3000; president of privy council, £500; resident-general in Seoul, £600; governor-general of Formosa, £600; vice-minister, £400; minister plenipotentiary, £400, with allowances from £i000 to £1700; governor of prefecture, £300 to £36o; judge of the court of caseation, £200 to £500; other judges, £6o to £400; professor of imperial university, from £8o to £16o, with allowances from £4o to £12o; privy councillor, £400; director of a bureau, £300; &c. Legislature.—The first Japanese Diet was convoked the 29th of November, 189o. There are two chambers, a house of peers (kizoku-in) and a house of representatives (shugi-in). Each is invested with the same legislative power. The upper chamber consists of four classes of members. They are, first, hereditary members, namely, princes and marquises, who are entitled to sit when they reach the age of 25; secondly, counts, viscounts and barons, elected—after they have attained their 25th year—by their respective orders in the maxi-mum ratio of one member to every five peers; thirdly, men of education or distinguished service who are nominated by the emperor; and, fourthly, representatives of the highest tax-payers, elected, one for each prefecture, by their own class. The minimum age limit for non-titled members is 30, and it is provided that their total number must not exceed that of the titled members. The house was composed in 1909 of 14 princes of the blood, 15 princes, 39 marquises, 17 counts, 69 viscounts, 56 barons, 124 Imperial nominees, and 45 representatives of the highest tax-payers—that is to say, 210 titled members and 169 non-titled. The lower house consists of elected members only. Origin-ally the property qualification was fixed at a minimum annual payment of 30s. in direct taxes (i.e. taxes imposed by the centralgovernment), but in rgoo the law of election was amended, and the property qualification for electors is now a payment of £r in direct taxes, while for candidates no qualification is required either as to property or as to locality. Members are of two kinds, namely, those returned by incorporated cities and those returned by prefectures. In each case the ratio is one member for every 130,000 electors, and the electoral district is the city or prefecture. Voting is by ballot, one man one vote, and a general election must take place once in 4 years for the house of representatives, and once in 7 years for the house of peers. The house of representatives, however, is liable to be dissolved by order of the sovereign as a disciplinary measure, in which event a general election must be held within 5 months from the date of dissolution, whereas the house of peers is not liable to any such treatment. Otherwise the two houses enjoy equal rights and privileges, except that the budget must first be submitted to the representatives. Each member receives a salary of £200; the' president receives £500, and the vice-president £300. The presidents are nominated by the sovereign from three names submitted by each house, but the appointment of a vice-president is within the independent right of each chamber. The lower house consists of 379 members, of whom 75 are returned by the urban population and 304 by the rural. Under the original property qualification the number of franchise-holders was only 453,474, or 11.5 to every t000 of the nation, but it is now 1,676,007, or 15.77 to every moo. By the constitution which created the diet freedom of conscience, of speech and of public meeting, inviolability of domicile and correspondence, security from arrest or punishment except by due process of law, permanence of judicial appointments and all the other essential elements of civil liberty were granted. In the diet full legislative authority is vested: without its consent no tax can be imposed, increased or remitted; nor can any public money be paid out except the salaries of officials, which the sovereign reserves the right to fix at will. In the emperor are vested the prerogatives of declaring war and making peace, of concluding treaties, of appointing and dismissing officials, of approving and promulgating laws, of issuing urgent ordinances to take the temporary place of laws, and of conferring titles of nobility. Procedure of the Diet.—It cou]d scarcely have been expected that neither tumult nor intemperance would disfigure the proceedings of a diet whose members were entirely without parliamentary experience, but not without grievances to ventilate, wrongs (real or fancied) to avenge, and abuses to redress. On the whole, however, there has been a remarkable absence of anything like disgraceful licence. The politeness, the good temper, and the sense of dignity which characterize the Japanese, generally saved the situation when it threatened to degenerate into a " scene." Foreigners entering the house of representatives in Tokyo for the first time might easily misinterpret some of its habits. A number distinguishes each member. It is painted in white on a wooden indicator, the latter being fastened by a hinge to the face of the member's desk. When present he sets the indicator standing upright, and lowers it when leaving the house. Permission to speak is not obtained by catching the president's eye, but by calling out the aspirant's number, and as members often emphasize their calls by hammering their desks with the indicators, there are moments of decided din. But, for the rest, orderliness and decorum habitually prevail. Speeches have to be made from a rostrum. There are few displays of oratory oreloquence. The Japanese formulates his views with remarkable facility. He is absolutely free from gaucherie or self-consciousness when speaking in public: he can think on his feet. But his mind does not usually busy itself with abstract ideas and subtleties of philosophical or religious thought. Flights of fancy, impassioned bursts of sentiment, appeals to the heart rather than to the reason of an audience, are devices strange to his mental habit. He can be rhetorical, but not eloquent. Among all the speeches hitherto delivered in the Japanese diet it would be difficult to find a passage deserving the latter epithet. From the first the debates were recorded verbatim. Years before the date fixed for the promulgation of the constitution, a little band of students elaborated a system of stenography and adapted it to the Japanese syllabary. Their labours remained almost without recognition or remuneration until the diet was on the eve of meeting, when it was discovered that a competent staff of shorthand reporters could be organized at an hour's notice. Japan can thus boast that, alone among the countries of the world, she possesses an exact record of the proceedings of her Diet from the moment when the first word was spoken within its walls. A special feature of the Diet's procedure helps to discourage oratorical displays. Each measure of importance has to be submitted to a committee, and not until the latter's report has been received does serious debate take place. But in ninety-nine cases out of every hundred the committee's report determines the attitude of the house, and speeches are felt to be more or less superfluous. One result of this system is that business is done with a degree of celerity scarcely known in Occidental legislatures. For example, the meetings of the house of representatives during the session 1896–1897 were 32, and the number of hours occupied by the sittings aggregated 116. Yet the result was 55 bills debated and passed, several of them measures of prime importance, such as the gold standard bill, the budget and a statutory tariff law. It must be remembered that although actual sittings of the houses are comparatively few and brief, the committees remain almost constantly at work from morning to evening throughout the twelve weeks of the session's duration. Divisions of the Empire.—The earliest traditional divisions of Japan into provinces was made by the emperor Seimu (131–190), in whose time the sway of the throne did not extend farther north than a line curving from Sendai Bay, on the north-east coast of the main island, to the vicinity of Niigata (one of the treaty ports), on the north-west coast. The region northward of this line was then occupied by barbarous tribes, of whom the Ainu (still to be found in Yezo) are probably the remaining descendants. The whole country was then divided into thirty-two provinces. In the 3rd century the empress Jingo, on her return from her victorious expedition against Korea, portioned out the empire into five home provinces and seven circuits, in imitation of the Korean system. By the emperor Mommu (696–707) some of the provinces were subdivided so as to increase the whole number to sixty-six, and the boundaries then fixed by him were re-surveyed in the reign of the emperor Shomu (723–756). The old division is as follows I. The Go-kinai or " five home provinces " i.e. those lying immediately around Kyoto, the capital, viz.: Yamashiro, also called Joshu Izumi, also called Senshu Yamato „ Washu Seitsu „ Sesshu Kawachi Kashu II. The seven circuits, as follow:-- 1. The Tokaido, or " eastern-sea circuit,” which comprised fifteen provinces, viz.: Hoki or Hakushu Izumo „ Unshu Iwami Sekishu Oki (group of islands) The Sanyodo, or " mountain-front circuit,” which comprised eight provinces, viz. : Harima or Banshu Bingo or Bishu Mimasaka „ Sakushu Aki „ Geisha Bizen „ Bishu SuwO „ Boshu Bitcniu Bishu Nagato „ Chbsha 6. The Nankaido, or " southern-sea circuit,” which com- prised six provinces, viz.: Kii or Kishu Sanuki Awaji (island) „ Tanshu Iyo Awa „ Ashu Tosa ' The names given in italics are those more commonly used. Those in the first column are generally of pure native derivation; those in the second column are composed of the Chinese word shu, a " province,” added to the Chinese pronunciation of one of the characters with which the native name is written. In a few cases both names are used. 7. The Saikaido, or " western-sea circuit,” which comprised nine provinces, viz: Chikuzen or Chikushu Chikugo „ Chikushu Buzen „ HOshu Bungo Hoshu Hizen Hishu I. Tsushima or Taishu j 2. Iki or Ishu Upon comparing the above list with a map of Japan, it will be seen that the main island contains the Go-kinai, TokaidO, Tozando, Hokurikudo, Sanindo, Sanyodo, and one province (Kishu) of the NankaidO. Omitting also the island of Awaji, the remaining provinces of the Nankaido give the name Shikoku (the " four provinces ") to the island in which they lie; while Saikaido coincides exactly with the large island Kiushiu (the " nine provinces "). In 1868, when the rebellious nobles of Ostia and Dewa, in the Tozando, had submitted to the emperor, those two provinces were subdivided, Dewa into Uzen and Ugo, and Oshu into Iwaki, lwashiro, Rikuzen, Rikuchu and Michinoku (usually called Mutsu). This increased the old number of provinces from sixty-six to seventy-one. At the same time there was created a new circuit, called the Hokkaido, or " northern-sea circuit," which comprised the eleven provinces into which the large island of Yezo was then divided (viz. Oshima, Shiribeshi, Ishikari, Teshibo, Kitami, Iburi, Hiaka, Tokachi, Kushiro, and Nemuro) and the Kurile Islands (Chishima). Another division of the old sixty-six provinces was made by taking as a central point the ancient barrier of Osaka on the frontier of Omi and Yamashiro,—the region lying on the east, which consisted of thirty-three provinces, being called Kwanto, or east of the barrier," the remaining thirty-three provinces on the west being styled Kwansei, or " west of the barrier.” At the present time, however, the term Kwanto is applied to only the eight provinces of Musashi, Sagami, KOzuke, Shimotsuke, Kazusa, Shimosa, Awa and Hitachi,—all lying immediately to the east of the old barrier of Hakone, in Sagami. Chu-goku, or " central provinces,” is a name in common use for the Sanindo and Sanyodo taken together. Saikoku, or " western provinces,” is another name for Kiushiu, which in books again is frequently called Chinsei. Local Administrative Divisions.—For purposes of local administration Japan is divided into 3 urban prefectures (fu), 43 rural prefectures (ken), and 3 special dominions (cho), namely Formosa; Hokkaido and South Sakhalin. Formosa and Sakhalin not having been included in Japan's territories until 1895 and 1905, respectively, are still under the military control of a governor-general, and belong, therefore, to an administrative system different from that prevailing throughout the rest of the country. The prefectures and Hokkaido are divided again into 638 sub-prefectures (gun or kori); 6o towns (shi); 125 urban districts (chO) and 12,274 rural districts (son). The three urban prefectures are Tokyo, Osaka and K10to, and the urban and rural districts are distinguished according to the number of houses they contain. Each prefecture is named after its chief town, with the exception of Okinawa, which is the appellation of a group of islands called also Riukiu (Luchu). The following table shows the names of the prefectures, their areas, populations, number of sub-prefectures, towns and urban and rural divisions: cs -s, 4s t U U s. 'C a , a Area in o - Q Prefecture. sq. m. Population. p, F p; Tokyo . 749'76 1,795,128 2 8 I 20 157 Kanagawa. 927.79 776,642 II I 19 202 Saitama . 1,585.30 1,174,094 9 — 42 343 Chiba . . 1,943.85 1,273,387 12 69 286 Ibaraki 2,235.67 1,131,556 14 I 45 335 Tochigi 2,854.14 788,324 8 I 30 145 Gumma 2,427.21 774,654 11 2 38 169 Nagano . 5,088.41 1,237,584 16 I 22 371 Yamanashi 1,727.50 498,539 9 1 7 235 Shizuoka 3,002.76 1,199,805 13 I 38 306 Aichi 1,864.17 1,591,357 19 1 74 592 Miye 2,196.56 495,389 15 2 19 325 Gifu 4,001.84 996,062 18 I 42 299 Shiga . . 1,540.30 712,024 12 I 12 190 Fukui . . 1,621.50 633,840 II I 9 171 Ishikawa 1,611.59 392,905 8 I 16 259 Toyama 1,587.80 785,554 8 2 31 239 The above 17 prefectures form Central. Japan. Niigata 4,914.55 1,812,289 16 1 47 401 Fukushima 5,042.57 1,057,971 17 I 37 388 Miyagi. 3,223.11 835,830 16 I 31 172 Yamagata 3,576.89 829,210 II 2 24 206 Akita . 4,493.84 775,077 9 1 42 197 2 This is not the population of the city proper, but that of the urban prefecture. Iga Ise Shima Owari Mikawa Totomi Suruga Izu or Ishu Seishu Shinshu Bishu Sanshu Enshu Sunsha Dzushu Kai Sagami Musashi Awa Kazusa Shimosa Hitachi Koshya Soshyu Bushyu Boshu Soshu SOshu Joshu or 2. The Tozando, or "eastern-mountain circuit," which comprised eight provinces, viz.: Omi Mino Hide Shinano Goshu Noshu Hishu Shinshu Kozuke Shimotsuke Mutsu Dewa Joshu Yashu Osha Ushu or or 11 11 „ The Hokurikudo, or " northern-land circuit,” which comprised seven provinces, viz. : 3. Wakasa Echizen Kaga Noto or Jakushu Esshu Kasha Noshu Etchiu or Esshu Echigo , Esshu Sado (island) „ Sashu 4. Tamba Tango Tajima Inaba 5. The Sanindo, or " mountain-back circuit,” which comprised eight provinces, viz.: or Tanshu Tanshu Tanshu „ Inshu or 71 Sanshu Yoshu Tosha Higo Hiuga Osumi Satsuma Hishu Nisshu Gushu Sasshu or 71 71 Prefecture. Area in Population. w 3 l; sq. m. Y o U p H 'V ^Q mq cn a Iwate . 5,359.17 726,380 13 1 23 Aomori 3,617.89 612,171 8 2 9 The above 7 prefectures form Northern Japan. Kioto 1,767.43 931,576' 18 1 20 Osaka . 689.69 1,311,9091 9 2 13 Nara . . 1,200.46 538,507 to 1 18 Wakayama 1,851.29 681,572 7 1 16 Hiogo . . 3,318.31 1,667,226 25 2 29 Okayama . 2,509.04 1,132,000 19 1 29 Hiroshima . 3,103'84 1,436,415 16 3 27 Yamaguchi 1,324'34 986,161 10 Shimane 2,597.48 721,448 16 1 14 Tottori . . 1,335'99 418,929 6 1 8 The above to prefectures form Southern Japan. Tokushima . 1,616.82 699,398 10 1 2 Kagawa 976.46 700,462 7 2 12 Ehime . 2,033'57 997,481 12 1 18 Kochi . . 2,720.13 61¢,549 6 1 14 The above 4 prefectures form the island of Shikoku. Nagasaki . 1,401.49 821,323 9 2 15 Saga 984.07 621,011 8 1 7. Fukuoka . 1,894.14 1,362,743 19 4 38 Kumamoto 2,774.20 1,151,401 12 1 33 Oita . . 2,400.27 839,485 12 — 28 Miyazaki . 2,904'54 454,707 8 — 9 Kagoshima . 3,589'76 1,104,631 12 1 — Okinawa 935.18 469,203 5 2 The above 8 prefectures form Kiushiu. Hokkaido . 36,328.34 610,155 88 3 19 Local Administrative System.—In the system of JAPAN 205 456 he summons a prefectural assembly, opens it and closes it, and has company that contracts for the execution of public works or the supply of articles to a local administration, as well as from persons unable to write their own names and the name of the candidate for whom they vote. Members of assembly are not paid. For prefectural and sub-prefectural assemblies the term is four years; for town and district assemblies, six years, with the pro-vision that one-half of the members must be elected every third year. The prefectural assemblies hold one session of 3o days yearly; the sub-prefectural assemblies, one session of not more than 14 days. The town and district assemblies have no fixed session; they are summoned by the mayor or the head-man when their deliberations appear necessary, and they continue in session till their business is concluded. The chief function of the assemblies is to deal with all questions of local finance. They discuss and vote the yearly budgets; they pass the settled accounts; they fix the local taxes within a maximum limit which bears a certain ratio to the national taxes; they make representations to the minister for home affairs; they deal with the fixed property of the locality; they raise loans, and so on. It is necessary, however, that they should obtain the consent of the minister for home affairs, and sometimes of the minister of finance also, before disturbing any objects of scientific, artistic or historical importance; before contracting loans; before imposing special taxes or passing the normal limits of taxation; before enacting new local regulations or changing the old; before dealing with grants in aid made by the central treasury, &c. The governor of a prefecture, who is appointed by the central administration, is invested with considerable power. He oversees the carrying out of all works undertaken at the public expense; he causes bills to be drafted for discussion by an assembly; he is responsible for the administration of the funds and property of the prefecture; he orders payments and receipts; he directs the machinery for collecting taxes and fees; competence to suspend its session should such a course seem necessary. Many of the functions performed by the governor with regard to prefectural assemblies are discharged by a head-man (gun-cite)) in the case of sub-prefectural assemblies. This head-man is a salaried official appointed by the central administration. He convenes, opens and closes the sub-prefectural assembly; he may require it to reconsider any of its financial decisions that seem improper, explaining his reasons for doing so, and should the assembly adhere to its original view, he may refer the matter to the governor of the prefecture. On the other hand, the assembly is competent to appeal to the home minister from the governor's decision. The sub-prefectural head-man may also take upon him-self, in case of emergency, any of the functions falling within the competence of the sub-prefectural assembly, provided that he reports the fact to the assembly and seeks its sanction at the earliest possible opportunity. In each district also there is a head-man, but his post is always elective and generally non-salaried. He occupies towards a district assembly the same position that the sub-prefecture head-man holds towards a sub-prefectural assembly. Over the governors stands the minister for home affairs, who discharges general duties of superintendence and sanction, has competence to delete any item of a local budget, and may, with the emperor's consent, order the dissolution of a local assembly, provided that steps are taken to elect and convene another within three months. The machinery of local administration is completed by councils, of which the governor of a prefecture, the mayor2 of a town, or the head-man of a sub-prefecture or district, is ex officio president, and the councillors are partly elective, partly nominated by the central government. The councils may be said to stand in an executive position towards the local legislatures, namely, the assemblies, for the former give effect to the measures voted by the latter, take their place in case of emergency and consider questions submitted by them. This system of local government has now been in operation since 1885, and has been found to work well. It constitutes a thorough method of political education for the people. In feudal days popular representation had no existence, but a very effective chain of local responsibility was manufactured by dividing the people—apart from the samurai—into groups of five families, which were held jointly liable for any offence committed by one of their members. Thus it cannot be said that the people were altogether unprepared for this new system. The Army.—The Japanese—as distinguished from the aboriginal inhabitants of Japan—having fought their way into the country, are naturally described in their annals as The Ancient a nation of soldiers. The sovereign is said to have system. been the commander-in-chief and his captains were known as o-omi and o-muraji, while the duty of serving in the ranks devolved on all subjects alike. This information is indeed 2 The.mayor of a town (shicho) is nominated by the minister for home affairs from three men chosen by the town assembly. local administration full effect is given to the principle of popular representation. Each prefecture (urban or rural), each sub-prefecture, each town and each district (urban or rural) has its local assembly, the number of members being fixed in proportion to the population. There is no superior limit of number in the case of a prefectural assembly, but the inferior limit is 30. For a town assembly, however, the superior limit is 6o and the inferior 30; for a sub-prefectural assembly the corresponding figures are 40 and 15, and for a district assembly, 30 and 8. These bodies are all elective. The property qualification for the franchise in the case of prefectural and sub-prefectural assemblies is an annual payment of direct national taxes to the amount of 3 yen; and in the case of town and district assemblies, 2 yen; while to be eligible for election to a prefectural assembly a yearly payment of to yen of direct national taxes is necessary; to a sub-prefectural assembly, 5 yen, and to a town or district assembly, 2 yen. Under these qualifications the electors aggregate 2,009,745, and those eligible for election total 919,507. In towns and districts franchise-holders are further divided into classes with regard to their payment of local taxes. Thus for town electors there are three classes, differentiated by the following process: On the list of ratepayers the highest are checked off until their aggregate payments are equal to one-third of the total taxes. These persons form the first class. Next below them the persons whose aggregate payments represent one-third of the total amount are checked off to form the second class, and all the remainder form the third class. Each class elects one-third of the members of assembly. In the districts there are only two classes, namely, those whose payments, in order from the highest, aggregate one-half of the total, the remaining names on the list being placed in the second class. Each class elects one-half of the members. This is called the system of o jinushi (large landowners) and is found to work satisfactorily as a device for conferring representative rights in proportion to property. The franchise is with-held from all salaried local officials, from judicial officials, from ministers of religion, from persons who, not being barristers by profession, assist the people in affairs connected with law courts or official bureaux, and from every individual or member of a ' This is not the population of the city proper, but that of the urban prefecture. 4 U 'Y wQ R: 217 159 260 289 142 215 403 383 420 215 276 227 137 166 283 183 288 127 340 331 251 91 380 52 derived from tradition only, since the first written record goes back no further than 712. We are justified, however, in believing that at the close of the 7th century of the Christian era, when the empress Jito sat upon the throne, the social system of the Tang dynasty of China commended itself for 'adoption; the distinction of civil and military is said to have been then established for the first time, though it probably concerned officials only. Certain officers received definitely military commissions, as generals, brigadiers, captains and so on; a military office (hyobu-sho) was organized, and each important district throughout the empire had its military division (gundan). One-third—some say onefourth—of the nation's able-bodied males constituted the army. Tactically there was a complete organization, from the squad of 5 men to the division of 600 horse and 400 foot. Service was for a defined period, during which taxes were remitted, so that military duties always found men ready to discharge them. Thus the hereditary soldier—afterwards known as the samurai or bushi—did not yet exist, nor was there any such thing as an exclusive right to carry arms. Weapons of war, the property of the state, were served out when required for fighting or for training purposes. At the close of the 8th century stubborn insurrections on the part of the aborigines gave new importance to the soldier. The conscription list had to be greatly increased, and it came to be a recognized principle that every stalwart man should bear arms, every weakling become a bread-winner. Thus, for the first time, the distinction between " soldier " and " working man "1 received official recognition, and in consequence of the circumstances attending the distinction a measure of contempt attached to the latter. The next stage of development had its origin in the assumption of high offices of state by great families, who encroached upon the imperial prerogatives, and appropriated as hereditary perquisites posts which should have remained in the gift of the sovereign. The Fujiwara clan, taking all the civil offices, resided in the capital, whereas the military posts fell to the lot of the Taira and the Minamoto, who, settling in the provinces and being thus required to guard and police the out-lying districts, found it expedient to surround themselves with men who made soldiering a profession. These latter, in their turn, transmitted their functions to their sons, so that there grew up in the shadow of the great houses a number of military families devoted to maintaining the power and promoting the interests of their masters, from whom they derived their own privileges and emoluments. From the middle of the loth century, therefore, the terms samurai and bushi acquired a special significance, being applied to themselves and their followers by the local magnates, whose power tended more and more to eclipse even that of the throne, and finally, in the 12th century, when the Minamoto brought the whole country under the sway of military organization, the privilege of bearing arms was restricted to the samurai. Thence-forth the military class entered upon a period of administrative and social superiority which lasted, without serious interruption, until the middle of the r9th century. But it is to be observed that the distinction between soldier and civilian, samurai and commoner, was not of ancient existence, nor did it arise from any question of race or caste, victor or vanquished, as is often supposed and stated. It was an outcome wholly of ambitious usurpations, which, relying for success on force of arms, gave practical importance to the soldier, and invested his profession with factitious honour. The bow was always the chief weapon of the fighting-man in Japan. " War " and " bow-and-arrow " were synonymous terms. Weapons. Tradition tells how Tametomo shot an arrow through the crest of his brother's helmet, in order to recall the youth's allegiance without injuring him; how Nasuno Michitaka discharged a shaft that severed the stem of a fan swayed by the 1 The term hyaku-sho, here translated " working man," means literally " one engaged in any of the various callings " apart from military service. In a later age a further distinction was established between the agriculturist, the artisan, and the trader, and the word hyaku-sho then came to carry the signification of " husbandman " only.wind ; how Mutsuru, ordered by an emperor to rescue a fish from the talons of an osprey without killing bird or fish, cut off the osprey's feet with a crescent-headed arrow so that the fish dropped into the palace iake and the bird continued its flight; and there are many similar records of Japanese skill with the weapon. Still better authenticated were the feats performed at the " thirty-three-span halls " in Kit-no and Yedo, where the archer had to shoot an arrow through the whole length of a corridor 128 yards long and only 16 ft. high. Wada Daihachi, in the 17th century, succeeded in sending 8133 arrows from end to end of the corridor in 24 consecutive hours, being an average of over 5 shafts per minute; and Masatoki, in 1852, made 5383 successful shots in 20 hours, more than 4 a minute. The lengths of the bow and arrow were determined with reference to the capacity of the archer. In the case of the bow, the unit of measurement was the distance between the tips of the thumb and the little finger with the hand fully stretched. Fifteen of these units gave the length of the bow—the maximum being about 7i. ft. The unit for the arrow was from 12 to 15 hand-breadths, or from 3 ft. to 3; ft. Originally the bow was of unvarnished boxwood or zelkowa; but subsequently bamboo alone came to be employed. Binding with cord or rattan served to strengthen the bow, and for precision of flight the arrow had three feathers, an eagle's wing being most esteemed for that purpose, and after it, in order, that of the copper pheasant, the crane, the adjutant and the snipe. Next in importance to the bow came the sword, which is often spoken of as the samurai's chief weapon, though there can be no doubt that during long ages it ranked after the bow. It was a single-edged weapon remarkable for its three exactly similar curves—edge, face-line and back; its almost imperceptibly convexed blade; its admirable tempering; its consummately skilled forging; its razor-like sharpness; its cunning distribution of weight, giving a maximum efficiency of stroke. The loth century saw this weapon carried to perfection, and it has been inferred that only from that epoch did the samurai begin to esteem his sword as the greatest treasure he possessed, and to rely on it as his best instrument of attack and defence. But it is evident that the evolution of such a blade must have been due to an urgent, long-existing demand, and that the katana came as the sequel of innumerable efforts on the part of the sword-smith and generous encouragement on that of the soldier. Many pages of Japanese annals and household traditions are associated with its use. In every age numbers of men devoted their whole lives to acquiring novel skill in swordsmanship. Many of them invented systems of their own, differing from one another in some subtle details unknown to any save the master himself and his favourite pupils. Not merely the method of handling the weapon had to be studied. Associated with sword-play was an art variously known as shinobi, yawara, and jujutsu, names which imply the exertion of muscular force in such a manner as to produce a maximum of effect with a minimum of effort, by directing an adversary's strength so as to become auxiliary to one's own. It was an essential element of the expert's art not only that he should be competent to defend himself with any object that happened to be within reach, but also that without an orthodox weapon he should be capable of inflicting fatal or disabling injury on an assailant. In the many records of great swordsmen instances are related of men seizing a piece of firewood, a brazier-iron, or a druggist's pestle as a weapon of offence, while, on the other side, an umbrella, an iron fan or even a pot-lid served for protection. The samurai had to be prepared for every emergency. Were he caught weaponless by a number of assailants, his art of yawara was supposed to supply him with expedients for emerging unscathed. Nothing counted save the issue. The methods of gaining victory or the circumstances attending defeat were scarcely taken into consideration. The true samurai had to rise superior to all contingencies. Out of this perpetual effort on the part of hundreds of experts to discover and perfect novel developments of swordsmanship, there grew a habit which held its vogue down to modern times, namely, that when a man had mastered one style of sword-play in the school of a teacher, he set himself to study all others, and for that purpose undertook a tour throughout the provinces, challenging every expert, and, in the event of defeat, constituting himself the victor's pupil. The sword exercised a potent influence on the life of the Japanese nation. The distinction of wearing it, the rights that it conferred, the deeds wrought with it, the fame attaching to special skill in its use, the superstitions connected with it, the incredible value set upon a fine blade, the honours bestowed on an expert sword-smith, the traditions that had grown up around celebrated weapons, the profound study needed to be a competent judge of a sword's qualities—all these things conspired to give the katana an importance beyond the limits of ordinary comprehension. A samurai carried at least two swords, a long and a short. Their scabbards of lacquered wood were thrust into his girdle, not slung from it, being fastened in their place by cords of plaited silk. Sometimes he increased the number of swords to three, four or even five, before going into battle, and this array was supplemented by a dagger carried in the bosom. The short sword was not employed in the actual combat. Its use was to cut off an enemy's head after overthrowing him, and it also served a defeated soldier in his last resort—suicide. In general the long sword did not measure more than 3 ft., including the hilt; but some were 5 ft. long, and some 7. Considering that the scabbard, being fastened to the girdle, had no play, the feat of drawing one of these very long swords demanded extraordinary aptitude. Spear and glaive were also ancient Japanese weapons. The oldest form of spear was derived from China. Its handle measured about 6 ft. and its blade 8 in., and it had sickle-shaped horns at the junction of blade and hilt (somewhat resembling a European ranseur). This weapon served almost exclusively for guarding palisades and gates. In the 14th century a true lance came into use. Its length varied greatly, and it had a hog-backed blade tempered almost as finely as the sword itself. This, too, was a Chinese type, as was also the glaive. The glaive (naginata, long sword) was a scimitar-like blade, some 3 ft. in length, fixed on a slightly longer haft. Originally the warlike monks alone employed this weapon, but from the 12th century it found much favour among military men. Ultimately, however, its use may be said to have been limited to women and priests. The spear, however, formed a useful adjunct of the sword, for whereas the latter could not be used except by troops in very loose formation, the former served for close-order fighting. Japanese armour (gusoku) may be broadly described as plate armour, but the essential difference between it and the European Armour. type was that,whereas the latter took its shape from the body, the former neither resembled nor was intended to resemble ordinary garments. Hence the only changes that occurred in Japanese armour from generation to generation had their origin in improved methods of construction. In general appearance it differed from the panoply of all other nations, so that, although to its essential parts we may apply with propriety the European terms —helmet, corselet, &c.—individually and in combination these parts were not at all like the originals of those names. Perhaps the easiest way of describing the difference is to say that whereas a European knight seemed to be clad in a suit of metal clothes, a Japanese samurai looked as if he wore protective curtains. The Japanese armour was, in fact, suspended from, rather than fitted to, the person. Only one of its elements found a counterpart in the European suit, namely, a tabard, which, in the case of men of rank, was made of the richest brocade. Iron and leather were the chief materials, and as the laminae were strung together with a vast number of coloured cords—silk or leather—an appearance of considerable brilliancy was produced. Ornamentation did not stop there. Plating and inlaying with gold and silver, and finely wrought decoration in chiselled, inlaid and repousse work were freely applied. On the whole, however, despite the highly artistic character of its ornamentation, the loose, pendulous nature of Japanese armour detracted greatly from its workmanlike aspect, especially when the horn was added—a curious appendage in the shape of a curtain of fine transparent silk, which was either stretched in front between the horns of the helmet and the tip of the bow, or worn on the shoulders and back, the purpose in either case being to turn the point of an arrow. A true samurai observed strict rules of etiquette with regard even to the garments worn under his armour, and it was part of his soldierly capacity to be able to bear the great weight of the whole without loss of activity, a feat impossible to any untrained man of modern days. Common soldiers were generally content with a comparatively light helmet and a corselet. The Japanese never had a war-horse worthy to be so called. The mis-shapen ponies which carried them to battle showed qualities of War-horses. hardiness and endurance, but were so deficient in stature and massiveness that when mounted by a man in voluminous armour they looked painfully puny. Nothing is known of the early Japanese saddle, but at the beginning of historic times it approximated closely to the Chinese type. Subsequently a purely Japanese shape was designed. It consisted of a wooden frame so constructed that a padded numnah could be fastened to it. Galled backs or withers were unknown with such a saddle: it fitted any horse. The stirrup, originally a simple affair resembling that of China and Europe, afterwards took the form of a shoe-sole with upturned toe: Both stirrups and saddle-frame were often of beautiful workmanship, the former covered with rich gold lacquer, the latter inlaid with gold or silver. In the latter part of the military epoch chain-armour was adopted for the horse, and its head was protected by a monster-faced mask of iron. Flags were used in battle as well as on ceremonial occasions. Some were monochrome, as the red and white flags of the Taira Early and the Minamoto clans in their celebrated struggle strategy during the 12th century; and some were streamers and Tacdcs.emblazoned with figures of the sun, the moon, a dragon, a tiger and so forth, or with religious legends. Fans with iron ribs were carried by commanding officers, and signals to advance or retreat were given by beating drugis and metal gongs and blowing conches. During the military epoch a campaign was opened or a contest preluded by a human sacrifice to the god of war, the victim at this rite of blood (chi-matsuri) being generally a prisoner or a condemned criminal. Although ambuscades and surprises played a large part in all strategy, pitched battles were the general rule, and it was essential that notice of an intention to attack should be given by discharging a singing arrow. Thereafter the assaulting army, taking the word from its commander, raised a shout of " Ei ! Ei ! " to which the other side replied, and the formalities having been thus satisfied, the fight commenced. In early medieval days tactics were of the crudest description. An army consisted of a congeries of little bands, each under the order of a chief who considered himself independent, and instead of subordinating his movements to a general plan, struck a blow wherever he pleased. From time immemorial a romantic value has attached in Japan to the first of anything: the first snow of winter; the first water drawn from the well on New Year's Day; the first blossom of the spring; the first note of the nightingale. So in war the first to ride up to the foe or the wielder of the first spear was held in high honour, and a samurai strove for that distinction as his principal duty. It necessarily resulted, too, not only from the nature of the weapons employed, but also from the immense labour devoted by the true samurai to perfecting himself in their use, that displays of individual prowess were deemed the chief object in a battle. Some tactical formations borrowed from China were familiar in Japan, but their intelligent use and their modification to suit the circumstances of the time were inaugurated only by the great captains of the 15th and 16th centuries. Prior to that epoch a battle resembled a gigantic fencing match. Men fought as individuals, not as units of a tactical formation, and the engagement consisted of a number of personal duels, all in simultaneous progress. It was the samurai's habit to proclaim his name and titles in the presence of the enemy, sometimes adding from his own record or his father's any details that might tend to dispirit his hearers. Then some one advancing to cross weapons with him would perform the same ceremony of self-introduction, and if either found anything to upbraid in the other's antecedents or family history, he did not fail to make loud reference to it, such a device being counted efficacious as a means of disturbing an adversary's sangfroid, though the principle under-lying the mutual introduction was courtesy. The duellists could reckon on finishing their fight undisturbed, but the victor frequently had to endure the combined assault of a number of the comrades or retainers of the vanquished. Of course a skilled swordsman did not necessarily seek a single combat; he was equally ready to ride into the thick of the fight without discrimination, and a group of common soldiers never hesitated to make a united attack upon a mounted officer if they found him disengaged. But the general feature of a battle was individual contests, and when the fighting had ceased, each samurai proceeded to the tent' of the commanding officer and submitted for inspection the heads of those whom he had killed. The disadvantage of such a mode of fighting was demonstrated for the first time when the Mongols invaded Japan in 1274. The invaders moved in phalanx, guarding themselves change of with pavises, and covering their advance with a Tactics. host of archers shooting clouds of poisoned arrows .2 When a Japanese samurai advanced singly and challenged one of them to combat, they opened their ranks, enclosed the challenger and cut him to pieces. Many Japanese were thus slain, and it was not until they made a concerted movement of attack that they produced any effect upon the enemy. But although the advantage of massing strength seems to have been recognized, the Japanese themselves did not adopt the formation which the Mongols had shown to be so formidable. Individual prowess continued to be the prominent factor in battles down to a comparatively recent period. The great captains Takeda Shingen and Uyesugi Kenshin are supposed to have been Japan's pioneer tacticians. They certainly appreciated the value of a formation in which the action of the individual should be subordinated to the unity of the whole. But when it is remembered that fire-arms had already been in the hands of the Japanese for several years, and that they had means of acquainting themselves with A tent was simply a space enclosed with strips of cloth or silk, on which was emblazoned the crest of the commander. It had no covering. 2 The Japanese never at any time of their history used poisoned arrows; they despised them as depraved and inhuman weapons. the tactics of Europe through their intercourse with the Dutch, it is remarkable that the changes attributed to Takeda and Uyesugi were not more drastic. Speaking broadly, what they did was to organize a column with the musqueteers and archers in front; the spearmen and swordsmen in the second line; the cavalry in the third line; the commanding officer in the rear, and the drums and standards in the centre. At close quarters the spear proved a highly effective weapon, and in the days of Hideyoshi (1536-1598) combined flank and front attacks by bands of spearmen became a favourite device. The importance of a strong reserve also received recognition, and in theory, at all events, a tolerably intelligent system of tactics was adopted. But not until the close of the 17th century did the doctrine of strictly disciplined action obtain practical vogue. Yamaga Soko is said to have been the successful inculcator of this principle, and from his time the most approved tactical formation was known as the Yamagaryu (Yamaga style), though it showed no other innovation than strict subordination of each unit to the general plan. Although, tactically speaking, the samurai was everything and the system nothing before the second half of the 17th century, and although strategy was chiefly a matter of deception, surprises and ambushes, it must not be supposed that there were no classical principles. The student of European military history searches in vain for the rules and maxims of war so often invoked by glib critics, but the student of Japanese history is more successful. Here, as in virtually every field of things Japanese, retrospect discovers the ubiquitous Chinaman. The treatises of Sung and 'Ng (called in Japan Son and Go) Chinese generals of the third century after Christ, were the classics of Far-Eastern captains through all generations. (See The Book of War, tr. E. F. Calthrop, 1908.) Yoshitsune, in the 12th century, deceived a loving girl to obtain a copy of Sung's work which her father had in his possession, and Yamaga, in the 17th century, when he set himself to compose a book on tactics, derived his materials almost entirely from the two Chinese monographs. These treatises came into the hands of the Japanese in the 8th century, when the celebrated Kibi no Mabi went to study civilization in China, just as his successors of the 19th century went to study a new civilization in Europe and America. Thenceforth Son and Go became household words among Japanese soldiers. Their volumes were to the samurai what the Mahayana was to the Buddhist. They were believed to have collected whatever of good had preceded them, and to have forecast whatever of good the future might produce. The character of their strategic methods, somewhat analogous to those of 18th-century Europe, may be gathered from the following: " An army undertaking an offensive campaign must be twice as numerous as the enemy. A force investing a fortress should be numerically ten times the garrison. When the adversary holds high ground, turn his flank; do not deliver a frontal attack. When he has a mountain or a river behind him, cut his lines of communication. If he deliberately assumes a position from which victory is his only escape, hold him there, but do not molest him. If you can surround him, leave one route open for his escape, since desperate men fight fiercely. When you have to cross a river, put your advance-guard and your rear-guard at a distance from the banks. When the enemy has to cross a river, let him get well engaged in the operation before you strike at him. In a march, make celerity your first object. Pass no copse, enter no ravine, nor approach any thicket until your scouts have explored it fully." Such precepts are multiplied; but when these ancient authors discuss tactical formations, they do not seem to have contemplated anything like rapid, well-ordered changes of mobile, highly trained masses of men from one formation to another, or their quick transfer from point to point of a battlefield. The basis of their tactics is The Book of Changes. Here again is encountered the superstition that underlies nearly all Chinese and Japanese institutions: the superstition that took captive even the great mind of Confucius. The positive and the negative principles; the sympathetic and the antipathetic elements; cosmos growing out of chaos; chaos re-absorbing cosmos—on such fancies they founded their tactical system. The result wasa phalanx of complicated organization, difficult to manoeuvre and liable to be easily thrown into confusion. Yet when Yamaga in the 17th century interpreted these ancient Chinese treatises, he detected in them suggestions for a very shrewd use of the principle of echelon, and applied it to devise formations which combined much of the frontal expansion of the line with the solidity of the column. More than that cannot be said for Japanese tactical genius. The samurai was the best fighting unit in the Orient—probably one of the best fighting units the world ever produced. It was perhaps because of that excellence that his captains remained indifferent tacticians. In estimating the military capacity of the Japanese, it is essential to know something of the ethical code of the samurai, the bushido (way of the warrior) as it was called. A typical example of the rules of conduct prescribed by feudal chieftains is furnished in the code of Kato Kiyomasa, a celebrated general of the rah century: Regulations for Samurai of every Rank; the Highest and Lowest alike. 1. The routine of service must be strictly observed. From 6 a.m. military exercises shall be practised. Archery, gunnery and horsemanship must not be neglected. If any man shows exceptional proficiency he shall receive extra pay. 2. Those that desire recreation may engage in hawking, deer-hunting or wrestling. 3. With regard to dress, garments of cotton or pongee shall be worn. Any man incurring debts owing to extravagance of costume or living shall be considered a law-breaker. If, however, being zealous in the practice of military arts suitable to his rank, he desires to hire instructors, an allowance may be granted to him for that purpose. 4. The staple of diet shall be unhulled rice. At social entertainments one guest for one host is the proper limit. Only when men are assembled for military exercises shall many dine together. 5. It is the duty of every samurai to make himself acquainted with the principles of his craft. Extravagant displays of adornment are forbidden in battle. 6. Dancing or organizing dances is unlawful; it is likely to betray sword-carrying men into acts of violence. Whatever a man does should be done with his heart. Therefore for the soldier military amusements alone are suitable. The penalty for violating this provision is death by suicide. 7. Learning shall be encouraged. Military books must be read. The spirit of loyalty and filial piety must be educated before all things. Poem-composing pastimes are not to be engaged in by samurai. To be addicted to such amusements is to resemble a woman. A man born a samurai should live and die sword in hand. Unless he is thus trained in time of peace, he will be useless in the hour of stress. To be brave and warlike must be his invariable condition. 8. Whosoever finds these rules too severe shall be relieved from service. Should investigation show that any one is so unfortunate as to lack manly qualities, he shall be singled out and dismissed forthwith. The imperative character of these instructions must not be doubted. The plainly paramount purpose of these rules was to draw a sharp line of demarcation between the samurai and the courtiers living in Kioto. The dancing, the couplet-composing, the sumptuous living and the fine costumes of the officials frequenting the imperial capital were strictly interdicted by the feudatories. Frugality, fealty and filial piety—these may be called the fundamental virtues of the samurai. Owing to the circumstances out of which his caste had grown, he regarded all bread-winning pursuits with contempt, and despised money. To be swayed in the smallest degree by mercenary motives was despicable in his eyes. Essentially a stoic, he made self-control the ideal of his existence, and practised the courageous endurance of suffering so thoroughly that he could without hesitation inflict on his own body pain of the most horrible description. Nor can the courage of the samurai justly be ascribed to bluntness of moral sensibility resulting from semi-savage conditions of life. From the 8th century onwards the current of existence in Japan set with general steadiness in the direction of artistic refinement and voluptuous luxury, amidst which men could scarcely fail to acquire habits and tastes inconsistent with acts of high courage and great endurance. The samurai's mood was not a product of semi-barbarism, but rather a protest against emasculating civilization. He schooled himself to regard death by his own hand as a normal eventuality. The story of other nations shows Military Principles. Ethics of the Samurai. epochs when death was welcomed as a relief and deliberately invited as a refuge from the mere weariness of living. But wherever there has been liberty to choose, and leisure to employ, a painless mode of exit from the world, men have invariably selected it. The samurai, however, adopted in harakiri (disembowelment) a mode of suicide so painful and so shocking that to school the mind to regard it with indifference and perform it without flinching was a feat not easy to conceive. Assistance was often rendered by a friend who stood ready to decapitate the victim immediately after the stomach had been gashed; but there were innumerable examples of men who con-summated the tragedy without aid, especially when the sacrifice of life was by way of protest against the excesses of a feudal chief or the crimes of a ruler, or when some motive for secrecy existed. It must be observed that the Suicide of the samurai was never inspired by any doctrine like that of Hegesias. Death did not present itself to him as a legitimate means of escaping from the cares and disappointments of life. Self-destruction had only one consolatory aspect, that it was the soldier's privilege to expiate a crime with his own sword, not under the hand of the executioner. It rested with his feudal chief to determine his guilt, and his peremptory duty was never to question the justice of an order to commit suicide, but to obey without murmur or protest. For the rest, the general motives for suicide were to escape falling into the hands of a victorious enemy, to remonstrate against some official abuse which no ordinary complaint could reach, or, by means of a dying protest, to turn a liege lord from pursuing courses injurious to his reputation and his fortune. This last was the noblest and by no means the most infrequent reason for suicide. Scores of examples are recorded of men who, with everything to make existence desirable, deliberately laid down their lives at the prompting of loyalty. Thus the samurai rose to a remarkable height of moral nobility. He had no assurance that his death might not be wholly fruitless, as indeed it often proved. If the sacrifice achieved its purpose, if it turned a liege lord from evil courses, the samurai could hope that his memory would be honoured. But if the lord resented such a violent and conspicuous mode of reproving his excesses, then the faithful vassal's retribution would be an execrated memory and, perhaps, suffering for his family and relatives. Yet the deed was per-formed again and again. It remains to be noted that the samurai entertained a high respect for the obligations of truth; " A bushi has no second word," was one of his favourite mottoes. However, a reservation is necessary here. The samurai's doctrine was not truth for truth's sake, but truth for the sake of the spirit of uncompromising manliness on which he based all his code of morality. A pledge or a promise must never be broken, but the duty of veracity did not override the interests or the welfare of others. Generosity to a defeated foe was also one of the tenets of the samurai's ethics. History contains many instances of the exercise of that quality. Something more, however, than a profound conception of duty was needed to nerve the samurai for sacrifices such as he seems to have been always ready to make. It is true Religious that Japanese parents of the military class took pains Influence. to familiarize their children of both sexes from very tender years with the idea of self-destruction at any time. But superadded to the force of education and the incentive of tradition there was a transcendental influence. Buddhism supplied it. The tenets of that creed divided themselves, broadly speaking, into two doctrines, salvation by faith and salvation by works, and the chief exponent of the latter principle is the sect which prescribes meditation as the vehicle of enlightenment. Whatever be the mental processes induced by this rite, those who have practised it insist that it leads finally to a state of absorption, in which the mind is flooded by an illumination revealing the universe in a new ,aspect, absolutely free from all traces of passion, interest or affection, and showing, written across everything in flaming letters, the truth that for him who has found Buddha there is neither birth nor death, growth nor decay. Lifted high above his surroundings, he isprepared to meet every fate with indifference. The attainment of that state seems to have been a fact in the case both of the samurai of the military epoch and of the Japanese soldier to-day. The policy of seclusion adopted by the Tokugawa administration after the Shimabara insurrection included an order that no samurai should acquire foreign learning. Abolition of Nevertheless some knowledge could not fail to the Samurai. filter in through the Dutch factory at Deshima, and thus, a few years before the advent of the American ships, Takashima Shahan, governor of Nagasaki, becoming persuaded of the fate his country must invite if she remained oblivious of the world's progress, memorialized the Yedo government in the sense that, unless Japan improved her weapons of war and reformed her military system, she could not escape humiliation such as had just overtaken China. He obtained small arms and field-guns of modern type from Holland, and, repairing to Yedo with a company of men trained according to the new tactics, he offered an object lesson for the consideration of the conservative officials. They answered by throwing him into prison. But Egawa, one of his retainers, proved a still more zealous reformer, and his foresight being vindicated by the appearance of the American war-vessels in 1853, he won the government's confidence and was entrusted with the work of planning and building forts at Shinagawa and Shimoda. At Egawa's instance rifles and cannon were imported largely from Europe, and their manufacture was commenced in Japan, a powder-mill also being established with machinery obtained from Holland. Finally, in 1862, the shogun's government adopted the military system of the West, and organized three divisions of all arms, with a total strength of 13,600 officers and men. Disbanded at the fall of the shogunate in 1867, this force nevertheless served as a model for a similar organization under the imperial government, and in the meanwhile the principal fiefs had not been idle, some—as Satsuma—adopting English tactics, others following France or Germany, and a few choosing Dutch. There appeared upon the stage at this juncture a great figure in the person of Omura Masujiro, a samurai of the Choshu clan. He established Japan's first military school at Kioto in 1868; he attempted to substitute for the hereditary soldier conscripts taken from all classes of the people, and he conceived the plan of dividing the whole empire into six military districts. An assassin's dagger removed him on the threshold of these great reforms, but his statue now stands in Tokyo and his name is spoken with reverence by all his countrymen. In 187o Yamagata Aritomo (afterwards Field-Marshal Prince Yamagata) and Saigo Tsugumichi (after-wards Field-Marshal Marquis Saigo) returned from a tour of military inspection in Europe, and in 1872 they organized a corps of Imperial guards, taken from the three clans which had been conspicuous in the work of restoring the administrative power to the sovereign, namely, the clans of Satsuma, Choshu and Tosa. They also established garrisons in Tokyo, Sendai, Osaka and Kumamoto, thus placing the military authority in the hands of the central government. Reforms followed quickly. In 1872, the hyobusho, an office which controlled all matters relating to war, was replaced by two departments, one of war and one of the navy, and, in 1873, an imperial decree substituted universal conscription for the system of hereditary militarism. Many persons viewed this experiment with deep misgiving. They feared that it would not only alienate the samurai, but also entrust the duty of defending the country to men unfitted by tradition and custom for such a task, namely, the farmers, artisans and tradespeople, who, after centuries of exclusion from the military pale, might be expected to have lost all martial spirit. The government, however, was not deterred by these apprehensions. It argued that since the distinction of samurai and commoner had not originally existed, and since the former was a product simply of accidental conditions, there was no valid reason to doubt the military capacity of the people at large. The justice of this reasoning was put to a conclusive test a few years later. Originally the period of service with the colours was fixed at 3 years, that of service with the first and second reserves being 2 years each. One of the serious difficulties encountered at the outset was that samurai conscripts were too proud to stand in the ranks with common rustics or artisans, and above all to obey the commands of plebeian officers. But patriotism soon overcame this obstacle. The whole country—with the exception of the northern island, Yezo—was parcelled out into six military districts (headquarters Tokyo, Osaka, Nagoya, Sendai, Hiroshima and Kumamoto) each furnishing a division of all arms and services. There was also from 1876 a guards division in Tokyo. The total strength on a peace footing was 31,680 of all arms, and on a war footing, 46i350. The defence of Yezo was entrusted to a colonial militia. It may well be supposed that to find competent officers for this army greatly perplexed its organizers. The military school—now in Tokyo but originally founded by Omura in Kioto—had to turn out graduates at high pressure, and private soldiers who showed any special aptitude were rapidly promoted to positions of command. French military instructors were engaged, and the work of translating manuals was carried out with all celerity. In 1877, this new army of conscripts had to endure a crucial test: it had to take the field against the Satsuma samurai, the very flower of their class, who in that year openly rebelled against the Tokyo government. The campaign lasted eight months; as there had not yet been time to form the reserves, the Imperial forces were soon seriously reduced in number by casualties in the field and by disease, the latter claiming many victims owing to defective commissariat. It thus became necessary to have recourse to volunteers, but as these were for the most part samurai, the expectation was that their hereditary instinct of fighting would compensate for lack of training. That expectation was not fulfilled. Serving side by side in the field, the samurai volunteer and the heimin' regular were found to differ by precisely the degree of their respective training. The fact was thus finally established that the fighting qualities of the farmer and artisan reached as high a standard as those of the bushi. Thenceforth the story of the Japanese army is one of steady progress and development. In 1878, the military duties of the empire were divided among three offices: namely, the army department, the general staff and the inspection department, while the six divisions of troops were organized into three army corps. In 1879, the total period of colour and reserve service became to years. In 1883 the period was extended to 12 years, the list of exemptions was abbreviated, and above all substitution was no longer allowed. Great care was devoted to the training of officers; promotion went by merit, and at least ten of the most promising officers were sent abroad every year to study. A comprehensive system of education for the rank and file was organized. Great difficulty was experienced in procuring horses suitable for cavalry, and indeed the Japanese army long remained weak in this arm. In 1886, the whole littoral of the empire was divided into five districts, each with its admiralty and its naval port, and the army being made responsible for coast defence, a battery construction corps was formed. Moreover, an exhaustive scheme was elaborated to secure full co-operation between the army and navy. In 1888 the seven divisions of the army first found themselves prepared to take the field, and, in 1893, a revised system of mobilization was sanctioned, to be put into operation the following year, for the Chino-Japanese War (q.v.). At this period the division, mobilized for service in the field, consisted of 12 battalions of infantry, 3 troops of cavalry, 4 batteries of field and 2 of mountain artillery, 2 companies of sappers and train, totalling 18,492 of all arms with 5633 horses. The guards had only 8 battalions and 4 batteries (field). The field army aggregated over 120,000, with 168 field and 72 mountain guns, and the total of all forces, field, garrison and depot, was 220,580 of all arms, with 47,220 horses and 294 guns. Owing, however, to various modifications necessitated by circumstances, the numbers actually on duty were over 240,000, with 6495 non-combatant employees and about 100,000 coolies who acted as carriers. The infantry were armed with the Murata single-loader rifle, but the field artillery was inferior, and the only two divisions equipped with magazine rifles and smokeless powder never came into action. The experiences gained in this war bore large fruit. The total term of service with the colours and the reserves was slightly increased; the colonial militia of Yezo (Hokkaido) was organized as a seventh line division; 5 new divisions were added, bringing the whole number of divisions to 13 (including the guards) ; a mixed brigade was stationed in Formosa (then newly added to Japan's dominions) ; a high military council composed of field-marshals was created; the cavalry was brigaded ; the garrison artillery was increased ; strenuous efforts were made to improve the education of officers and ' The general term for commoners as distinguished from ; and lastly, sanitary arrangements underwent much modification. An arsenal had been established in Tokyo, in 1868, for the manufacture of small arms and small-arm ammunition; this was followed by an arsenal in Osaka for the manufacture of guns and gun-ammunition; four powder factories were opened, and in later years big-gun factories at Kure and Mororan. Japan was able to make 12-inch guns in 1902, and her capacity for this kind of work was in 1909 second to none. She has her own patterns of rifle and field gun, so that she is independent of foreign aid so far as armaments are concerned. In 1900, she sent a force to North China to assist in. the campaign for the relief of the foreign legations in Peking, and on that occasion her troops were able to observe at first hand the qualities and methods of European soldiers. In 1904 took place the great war with Russia (see RUSSO-JAPANESE WAR). After the war important changes were made in the direction of augmenting and improving the armed forces. The number of divisions was increased to 19 (including the guards), of which one division is for service in Korea and one for service in Manchuria. Various technical corps were organized, as well as horse artillery, heavy field artillery and machine-gun units. The field-gun was replaced by a quick-firer manufactured at Osaka, and much attention was given to the question of remounts—for, both in the war with China and in that with Russia, the horsing of the cavalry had been poor. Perhaps the most far-reaching change in all armies of late years is the shortening of the term of service with the colours to 2 years for the infantry, 3 years remaining the rule for other arms. This was adopted by Japan after the war, the infantry period of service with the reserves being extended to 143 years, and of course has the effect of greatly augmenting the potential war strength. As to this, figures are kept secret, nor can any accurate approximation be attempted without danger of error. Rough estimates of Japan's war strength have, how-ever, been made, giving 550,000 as the war strength of the first line army, plus 34,000 for garrisons overseas and 150,000 special reserves (hoji) ; 370,000 second line or kobi, and 110,000 for the fully trained portion of the territorial forces, or Kokumin-hei. All these branches can further draw upon half-trained elements to the number of about 800,000 to replace losses. Japan's available strength in the last resort for home defence was recently (1909) stated by the Russian Novoye Vremya at 3,000,000. In 20 years, when the present system has produced its full effect, the first line should be 740,000 strong, the second line 780,000, and the third line about 3,850,000 (3,000,000 untrained and 850,000 partly trained). Details can be found in Journal of the R. United Service Institution, Dec. 1909-Jan. 1910. At 20 years of age every Japanese subject, of whatever status, becomes liable for military service. But the difficulty of making service universal in the case of a growing population is Recruiting. felt here as in Europe, and practically the system has elements of the old-fashioned conscription. The minimum height is 5.2 ft. (artillery and engineers, 5.4 ft.). There are four principal kinds of service, namely, service with the colours (genyeki), for two years; service with the first reserves (yobi), for 73 years; service with the second reserves (kobi), for 7 years; and service with the territorial troops (ko kumin-hei) up to the age of 40. Special reserve (hoju) takes up men who, though liable for conscription and medically qualified, have escaped the lot for service with the colours. It consists of two classes, one of men remaining in the category of hoju for 71 years, the other for 13 year, before passing into the territorial army. "Their purpose is similar to that of special or ersatz reserves elsewhere. The first class receives the usual short initial training. Men of the second class, in ordinary circumstances, pass, after their 13 year's inability, to the territorial army untrained. As for the first and second general reserves (yobi and kobi), each is called out twice during its full term for short ' refresher " courses. After reaching the territorial army a man is relieved from all further training. The total number of youths eligible for conscription each year is about 435,000, but the annual contingent for full service is not much more than 100,000. Conscripts in the active army may be discharged before the expiration of two years if their conduct and aptitude are exceptional. A youth is exempted if it be clearly established 2 that his family is dependent upon his earnings. Except for permanent deformities men are put back for one year before being finally rejected on medical grounds. Men who have been convicted of crime are disqualified, but those who have been temporarily deprived of civil rights must present themselves for conscription at the termination of their sentence. Educated men may enrol themselves as one-year volunteers instead of drawing lots, this privilege of entry enduring up to the age of 28, after which, service for the full term without drawing lots is imposed. Residence in a foreign country secures exemption up to the age of 32—provided that official permission to go abroad has been obtained. A man returning after the age of 32 1s drafted into the territorial army, but if he returns before that age he must volunteer to receive training, otherwise he is taken without lot for service with the colours. The system of volunteering is largely resorted to by persons of the better classes. Any youth who 2 The privilege at first led to great abuses. It became a common thing to employ some aged and indigent person, set him up as the head of a " branch family," and give him for adopted son a youth liable to conscription. possesses certain educational qualifications is entitled to volunteer for training. If accepted after medical inspection, he serves with the colours for one year, during three months of which time he must live in barracks—unless a special permit be granted by his commanding officer. A volunteer has to contribute to his maintenance and equipment, although youths who cannot afford the full expense, if otherwise qualified, are assisted by the state. At the conclusion of a year's training the volunteer is drafted into the first reserve for 6; years, and then into the second reserve for 5 years, so that his total period (124 years) of service before passing into the territorial army is the same as that of an ordinary conscript. The main purpose of the one-year voluntariat, as in Germany, is to provide officers for the reserves to territorial troops. Qualified teachers in the public service are only liable to a very short initial training, after which they pass at once into the territorial army. But if a teacher abandons that calling before the age of 28, he becomes liable, without lot,' to two years with the colours, unless he adopts the alternative of volunteering. Officers are obtained in two ways. There are six local preparatory cadet schools (yonen-gakko) in various parts of the empire, for Officers. boys of from 13 to 15. After 3 years at one of these schools2 a graduate spends 21 months at the central preparatory school (chuo-yonen-gakko), Tokyo, and if he graduates with sufficient credit at the latter institution, he becomes eligible for admission to the officers' college (shikan-gakko) without further test of proficiency. The second method of obtaining officers is by competitive examination for direct admission to the officers' college. In either case the cadet is sent to serve with the colours for 6 to 12 months as a private and non-commissioned officer, before commencing his course at the officers' college. The period of study at the officers' college is one year, and after graduating successfully the cadet serves with troops for 6 months on probation. If at the end of that time he is favourably reported on, he is commissioned as a sub-lieutenant. Young officers of engineers and artillery receive a year's further training at a special college. Officers' ranks are the same as in the British army, but the nomenclature is more simple. The terms, with their English equivalents, are shoi (second lieutenant), chui (first lieutenant), tai (captain), shosa (major), chusa (lieut.-colonel), taisa (colonel), shosho (major-general), chujo (lieut.-general), taisho (general), gensui (field-marshal). All these except the last apply to the same relative ranks in the navy. Pro-motion of officers in the junior grades is by seniority or merit, but after the rank of captain all promotion is by merit, and thus many officers never rise higher than captain, in which case retirement is compulsory at the age of 48. Except in the highest ranks, a certain minimum period has to be spent in each rank before promotion to the next. There are three grades of privates: upper soldiers (jolo-hei), first-class soldiers (itto-sotsu), and second-class soldiers (nito-sotsu). A Soldiers. private on joining is a second-class soldier. For proficiency and good conduct he is raised to the rank of first-class soldier, and ultimately to that of upper soldier. Non-commissioned officers are obtained from the ranks, or from those who wish to make soldiering a profession, as in European armies. The grades are corporal (gocho), sergeant (gunso), sergeant-major (socho) and special sergeant-major (tokumu-socho). The pay of the conscript is, as it is everywhere, a trifle (is. tod.–3s. old. per month). The professional non-commissioned officers are better paid, the lowest grade receiving three times as much as an upper soldier. Officers' pay is roughly at about three-quarters of the rates prevailing in Germany, sub-lieutenants receiving about £34, captains £71, colonels £238 per annum, &c. Pensions for officers and non-commissioned officers, according to scale, can be claimed after 11 years' colour service. The emperor is the commander-in-chief of the army, and theoretically the sole source of military authority, which he exercises through a general staff and a war department, with the assistance of a board of field-marshals (gensuifu). The general staff has for chief a field-marshal, and for vice-chief a general or lieutenant-general. It includes besides the usual general staff departments, various survey and topographical officers, and the military college is under its direction. The war department is presided over by a general officer on the active list, who is a member of the cabinet without being necessarily affected by ministerial changes. There are, further, artillery and engineer committees, and a remount bureau. The headquarters of coast defences under general officers are Tokyo, Yokohama, Shimonoseki and Yura. The whole empire is divided into three military districts—eastern, central and western—each under the command of a general or lieutenant-general. The divisional headquarters are as follows: Guard Tokyo, I. Tokyo, II. Sendai, III. Nagoya, IV. Wakayama, V. Hiroshima, VI. Kumamoto, VII. Asahikawa, VIII. Hirosaki, IX. Kasanava, X. Himeji, XI. Senzui, XII. Kokura, XIII. Takata, XIV. Utsonomia, XV. Fushimi, XVI. Kioto, XVII. Okayama, XVIII. Kurume. Some of these divisionsare permanently 'Conscription without lot is thus the punishment for all failures to comply with and attempts to evade the military laws. 2 Sons of officers' widows, or of officers in reduced circumstances, are educated at these schools either free or at reduced charges, but are required to complete the course and to graduate.on foreign service, but their recruiting areas in Japan are maintained. There are also four cavalry brigades, and a number of unassigned regiments of field and mountain artillery, as well as garrison artillery and army technical troops. The organization of the active army by regiments is 176 infantry regiments of 3 battalions; 27 cavalry regiments; 30 field artillery regiments each of 6 and 3 mountain artillery regiments each of 3 batteries; 6 regiments and 6 battalions of siege, heavy field and fortress artillery; 20 battalions engineers; 19 supply and transport battalions. The medical service is exceptionally well organized. It received unstinted praise from European and American experts who observed it closely during the wars of 190o and 1904-5. The Medical establishment of surgeons to each division is approxi- Service. mately too, and arrangements complete in every detail are made for all lines of medical assistance. Much help is rendered by the red cross society of Japan, which has an income of 2,000,000 yen annually, a fine hospital in Tokyo, a large nursing staff and two specially built and equipped hospital ships. During the early part of the campaign in Pechili, in 1900, the French column entrusted its wounded to the care of the Japanese. The staple article of commissariat for a Japanese army in the field is hoshii (dried rice), of which three days' supply can easily be carried in a bag by the soldier. When required for use the rice, SuuPIY• being placed in water, swells to its original bulk, and is eaten with a relish of salted fish, dried sea-weed or pickled plums. The task of provisioning an army on these lines is comparatively simple. The Japanese soldier, though low in stature, is well set up, muscular and hardy. He has great powers of endurance, and manoeuvres with remarkable celerity, doing everything at the run, if necessary, and continuing to run without distress for a length of time astonishing to European observers. He is greatly subject, however, to attacks of kakke (beri-beri), and if he has recourse to meat diet, which appears to be the best preventive, he will probably lose something of his capacity for prolonged rapid movement. He attacks with apparent indifference to danger, preserves his cheerfulness amid hardships, is splendidly patriotic and has always shown himself thoroughly amenable to discipline. Of the many educational and training establishments, the most important is the rikugun daigakko, or army college, where officers, (generally subalterns), are prepared for service in the Military upper ranks and for staff appointments, the course of Schools. study extending over three years. The Toyama school stands next in importance. The courses pursued there are attended chiefly by subaltern officers of dismounted branches, non-commissioned officers also being allowed to take the musketry course. The term of training is five months. Young officers of the scientific branches are instructed at the hokogakko (school of artillery and engineers). There are, further, two special schools of gunnery—one for field, the other for garrison artillery, attended chiefly by captains and senior subalterns of the two branches. There is an inspection department of military education, the inspector-general being a lieutenant-general, under whom are fifteen field and general officers, who act as inspectors of the various schools and colleges and of military educational matters in general. The Japanese officer's pay is small and his mode of life frugal. He lives out of barracks, frequently with his own family. His uniform is plain and inexpensive,' and he has no desire to exchange it for mufti. He has no mess expenses, contribution to a band, or luxuries of any kind, and as he is nearly always without private means to supplement his pay, his habits are thoroughly economical. He devotes himself absolutely to his profession, living for nothing else, and since he is strongly imbued with an effective conception of the honour of his cloth, instances of his incurring disgrace by debt or dissipation are exceptional. The samurai may be said to have been revived in the officers of the modern army, who preserve and act up to all the old traditions. The system of promotion has evidently much to do with this good result, for no Japanese officer can hope to rise above the rank of captain unless, by showing himself really zealous and capable, he obtains from his commanding officer the recommendation without which all higher educational opportunities are closed to him. Yet promotion by merit has not degenerated into promotion by favour, and corruption appears to be virtually absent. In the stormiest days of parliamentary warfare, when charges of dishonesty were freely preferred by party politicians against all departments of officialdom, no whisper ever impeached the integrity of army officers. The training of the troops is thorough and strictly progressive, the responsibility of the company, squadron and battery commanders for the training of their commands, and the latitude granted them in choice of means being, as in Germany, the keystone of the system. Originally the government engaged French officers to assist in Uniform does not vary according to regiments or divisions. There is only one type for the whole of the infantry, one for the cavalry, and so on (see UNIFORMS, NAVAL AND MILITARY). Officers largely obtain their uniforms and equipment, as well as their books and technical literature through the Kai-ko-sha, which is a combined officers' club, benefit society and co-operative trading association to which nearly all belong. organizing the army and elaborating its system of tactics and strategy, and during several years a military mission of French Foreign officers resided in Tokyo and rendered valuable aid to the Assistance. Japanese. Afterwards German officers were employed, with Jakob Meckel at their head, and they left a perpetually grateful memory. But ultimately the services of foreigners were dispensed with altogether, and Japan now adopts the plan of sending picked men to complete their studies in Europe. Up to 1904 she followed Germany in military matters almost implicitly, but since then, having the experience of her own great war to guide her, she has, instead of modelling herself on any one foreign system, chosen from each whatever seemed most desirable, and also, in many points, taken the initiative herself. When the power of the sword was nominally restored to the Imperial government in 1868, the latter planned to devote one-fourth Mil of the state's ordinary revenue to the army and navy. Finance Had the estimated revenue accrued, this would have given a sum of about 3 millions sterling for the two services. But not until 1871, when the troops of the fiefs were finally disbanded, did.the government find itself in a position to include in the annual budgets an adequate appropriation on account of armaments. Thenceforth, from 1872 to 1896, the ordinary expenditures of the army varied from three-quarters of a million sterling to 11 millions, and the extraordinary outlays ranged from a few thousands of pounds to a quarter of a million. Not once in the whole period of 25 years —if 1877 (the year of the Satsuma rebellion) be excepted—did the state's total expenditures on account of the army exceed 11 millions sterling, and it redounds to the credit of Japan's financial management that she was able to organize, equip and maintain such a force at such a small cost. In 1896, as shown above, she virtually doubled her army, and a proportionate increase of expenditure ensued, the outlays for maintenance jumping at once from an average of about I; millions sterling to 24 millions, and growing thenceforth with the organization of the new army, until in the year (1903) preceding the outbreak of war with Russia, they reached the figure of 4 millions. Then again, in 1906, six divisions were added, and additional expenses had to be incurred on account of the new over-seas garrisons, so that, in 1909, the ordinary outlays reached a total of 7 millions, or about one-seventh of the ordinary revenue of the state. This takes no account of extraordinary outlays incurred for building forts and barracks, providing new patterns of equipment, &c. In 1909 the latter, owing to the necessity of replacing the weapons used in the Russian War, and in particular the field artillery gun (which was in 1905 only a semi-quickfirer), involved a relatively large outlay. The Navy.—The traditions of Japan suggest that the art of navigation was not unfamiliar to the inhabitants of a country Early consisting of hundreds of islands and abounding in Japanese bays and inlets. Some interpreters of her cosmo- War- graphy discover a great ship in the " floating bridge vessels of heaven " from which the divine procreators of the islands commenced their work, and construe in a similar sense other poetically named vehicles of that remote age. But though the seas were certainly traversed by the early invaders of Japan, and though there is plenty of proof that in medieval times the Japanese flag floated over merchantmen which voyaged as far as Siam and India, and over piratical craft which harassed the coasts of Korea and China, it is unquestionable that in the matter of naval architecture Japan fell behind even her next-door neighbours. Thus, when a Mongol fleet came to Kiushiu in the 13th century, Japan had no vessels capable of contending against the invaders, and when, at the close of the 16th century, a Japanese army was fighting in Korea, repeated defeats of Japan's squadrons by Korean war-junks decided the fate of the campaign on shore as well as on sea. It seems strange that an enterprising nation like the Japanese should not have taken for models the great galleons which visited the Far East in the second half of the 16th century under the flags of Spain, Portugal, Holland and England. With the exception, however, of two ships built by a castaway English pilot to order of Iyeyasu, no effort in that direction appears to have been made, and when an edict vetoing the construction of sea-going vessels was issued in 1636 as part of the Tokugawa policy of isolation, it can scarcely be said to have checked the growth of Japan's navy, for she possessed nothing worthy of the name. It was to the object lesson furnished by the American ships which visited Yedo bay in 1853 and to the urgent counsels of the Dutch that Japan owed the inception of a naval policy. A seamen's training station was opened under Dutch instructors in 1855 at Nagasaki, a building-slip was constructed and an iron factory established at the same place, and shortly afterwards a naval school was organized at Tsukiji in Yedo, a war-ship the " Kwanko Maru "1—presented by the Dutch to the shogun's government—being used for exercising the cadets. To this vessel two others, purchased from the Dutch, were added in 1857 and 1858, and these, with one given by Queen Victoria, formed the nucleus of Japan's navy. In 1860, we find the Pacific crossed for the first time by a Japanese war-ship—the " Kwanrin Maru "—and subsequently some young officers were sent to Holland for instruction in naval science. In fact the Tokugawa statesmen had now thoroughly appreciated the imperative need of a navy. Thus, in spite of domestic unrest which menaced the very existence of the Yedo government, a dock-yard was established and fully equipped, the place chosen as its site being, by a strange coincidence, the village of Yokosuka where Japan's first foreign ship-builder, Will Adams, had lived and died 250 years previously. This dockyard was planned and its construction superintended by a Frenchman, M. Bertin. But although the Dutch had been the first to advise Japan's acquisition of a navy, and although French aid was sought in the case of the important and costly work at Yokosuka, the shogun's government turned to England for teachers of the art of maritime warfare. Captain Tracey, R.N., and other British officers and warrant-officers were engaged to organize and superintend the school at Tsukiji. They arrived, however, on the eve of the fall of the Tokugawa shogunate, and as the new administration was not prepared to utilize their services immediately, they returned to England. It is not to be inferred that the Imperial government underrated the importance of organizing a naval force. One of the earliest Imperial rescripts ranked a navy among " the country's most urgent needs " and ordered that it should be " at once placed on a firm foundation." But during the four years immediately subsequent to the restoration, a semi-interregnum existed in military affairs, the power of the sword being partly transferred to the hands of the sovereign and partly retained by the feudal chiefs. Ultimately, not only the vessels which had been in the possession of the shogunate but also several obtained from Europe by the great feudatories had to be taken over by the Imperial government, which, on reviewing the situation, found itself owner of a motley squadron of 17 war-ships aggregating 13,812 tons displacement, of which two were armoured, one was a composite ship, and the rest were of wood. Steps were now taken to establish and equip a suitable naval college in Tsukiji, and application having been made to the British government for instructors, a second naval mission was sent from England in 1873, consisting of 30 officers and warrant-officers under Commander (afterwards Vice-Admiral Sir) Archibald Douglas. At the very outset occasions for active service afloat presented themselves. In 1868, the year after the fall of the shogunate, such ships as could be assembled had to be sent to Yezo to attack the main part of the Tokugawa squadron which had raised the flag of revolt and retired to Hakodate under the command of the shogun's admiral, Enomoto. Then in 1874 the duty of convoyinga fleet of transports to Formosa had to be undertaken; and in 1877 sea power played its part in crushing the formidable rebellion in Satsuma. Meanwhile the work of increasing and organizing the navy went on steadily. The'first steam war-ship constructed in Japan had been a gun-boat (138 tons) launched in 1866 from a building-yard established at Ishikawajima, an island near the mouth of the Sumida river on which Tokyo stands. At this yard and at Yokosuka two vessels of 897 tons and 1450 tons, respectively, were launched in 1875 and 1876, and Japan now found herself competent not only to execute all repairs but also to build ships of considerable size. An order was placed in England in 1875, which produced, three years later, the " Fuso," Japan's first ironclad (3717 tons) and the " Kongo " and " Hiei," steel-frame sister-cruisers of 2248 tons. Meanwhile training, practical and theoretical, in seamanship, gunnery, torpedo-practice and naval architecture went on vigorously, and in 1878 the Japanese flag was for the first time seen in European waters, 1 The term maru subsequently became applicable to merchantmen only, war-ships being distinguished as kan. floating over the cruiser " Seiki " (1897 tons) built in Japan and navigated solely by Japanese. The government, constantly solicitous of increasing the fleet, inaugurated, in 1882, a pro-gramme of 30 cruisers and 12 torpedo-boats, and in 1886 this was extended, funds being obtained by an issue of naval loan-bonds. But the fleet did not yet include a single battleship. When the diet opened for the first time in 1890, a plan for the construction of two battleships encountered stubborn opposition in the lower house, where the majority attached much less importance to voting money for war-ships than to reducing the land tax. Not until 1892 was this opposition overcome in deference to an order from the throne that thirty thousand pounds sterling should be contributed yearly from the privy purse and that a tithe of all official salaries should be devoted during the same interval to naval needs. Had the house been more prescient, Japan's position at the outbreak of war with China in 1894 would have been very different. She entered the contest with 28 fighting craft, aggregating 57,600 tons, and 24 torpedo-boats, but among them the most powerful was a belted cruiser of 4300 tons. Not one battleship was included, whereas China had two ironclads of nearly 8000 tons each. Under these conditions the result of the naval conflict was awaited with much anxiety in Japan. But the Chinese suffered signal defeats (see CHINO-JAPANESE WAR) off the Yalu and at Wei-hai-wei, and the victors took possession of 17 Chinese craft, including one battleship. The resulting addition to Japan's fighting force was, however, insignificant. But the naval strength of Japan did not depend on prizes. Battleships and cruisers were ordered and launched in Europe one after the other, and when the Russo-Japanese War (q.v.) came, the fleet promptly asserted its physical and moral superiority in the surprise of Port Arthur, the battle of the loth of August 1904, and the crowning victory of Tsushima. As to the development of the navy from 1903 onwards, it is not possible to detail with absolute accuracy the plans laid down by the admiralty in Tokyo, but the actual state of the fleet in the year 1909 will be apparent from the figures given below. Japan's naval strength at the outbreak of the war with Russia in 1904 was: Totals . 157 Losses during the war were:—Battleships Cruisers (second and smaller classes) . Destroyers .. Torpedo-boats 8 2 7 Totals 19 . . . . 46,571 The captured vessels repaired and added to the fleet were: Battleships 5 62,524 Cruisers II . . 71,276 Destroyers 5 1,740 Totals 21 . . . . 135,530 The vessels built or purchased after the war and up to the close of 1908 were: Battleships .. 4 71,500 Armoured cruisers 4 56,700 Other cruisers . 5 . 7,000 Destroyers . . 33 12,573 Torpedo-boats . 5 760 51 . . . . 148,533 superannuated, and the serviceable 191,380 130,683 165,253 20,508 7,258 515,082 To the foregoing must be added two armoured cruisers—the " Kurama " (14,000) launched at Yokosuka in October 1907, and the " Ibuki " (14,700) launched at Kure in November 1907, but no other battleships or cruisers were laid down in Japan or ordered abroad up to the close of 1908. There are four naval dockyards, namely, at Yokosuka, Kure, Sasebo and Maizuru. Twenty-one vessels built at Yokosuka since 1876 included a battleship (19,000 tons) and Naval an armoured cruiser (14,000 tons) ; seven built at Kure Dockyards. since 1898 included a battleship (19,000 tons) and an armoured cruiser (14,000 tons). The yards at Sasebo and Maizuru had not yet been used in 1909 for constructing large vessels. Two private yards—the Mitsubishi at Nagasaki and Kobe, and the Kawasaki at the latter place—have built several cruisers, gunboats and torpedo craft, and are competent to undertake more important work. Nevertheless in 1909 Japan did not yet possess complete independence in this matter, for she was obliged to have recourse to foreign countries for a part of the steel used in ship-building. Kure manufactures practically all the steel it requires, and there is a government steel-foundry at Wakamatsu on which more than 3 millions sterling had been spent in 1909, but it did not yet keep pace with thecountry's needs. When this independence has been attained, it is hoped to effect an economy of about 18 % on the outlay for naval construction, owing to the cheapness of manual labour and the disappearance both of the manufacturer's profit and of the expenses of transfer from Europe to Japan. There are five admiralties—Yokosuka, Kure, Sasebo, Maizuru and Port Arthur; and four naval stations—Takeshiki (in Tsushima), Mekong (in the Pescadores), Ominato and Chinhai (in southern Korea). The navy is manned partly by conscripts and partly by volunteers. About 5500 are taken every year, and the ratio is, approximately, 55% of volunteers and 45% of conscripts. The period personnel. of active service is 4 years and that of service with the reserve 7 years. On the average 200 cadets are admitted yearly, of whom 5o are engineers, and in 1906 the personnel of the navy consisted of the following: Admirals, combative and non-combative . 77 Officers, combative and non-combative, below the rank of admiral 2,867 Warrant officers 9,075 Bluejackets 29,667 Cadets 721 Total 42,407 The highest educational institution for the navy is the naval staff college, in which there are five courses for officers alone. The gunnery and torpedo schools are attended by officers, and also by selected warrant-officers and bluejackets, &dNaval who consent to extend their service. There is also ucat/oa. a mechanical school for junior engineers, warrant-officers and ordinary artificers. At the naval cadet academy—originally situated in Tkoyo but now at Etajima near Kure—aspirants for service as naval officers receive a 3 years' academical course and 1 year's training at sea; and, finally, there is a naval engineering college collateral to the naval cadet academy. Since 1882, foreign instruction has been wholly dispensed with in the Japanese navy; since 1886 she has manufactured her own prismatic powder; since 1891 she has been able to make quick-firing guns and Schwartzkopf torpedoes, and in 1892 one of her officers invented a particularly potent explosive, called (after its inventor) Shimose powder. Finance.—Under the feudal system of the Tokugawa (1603-1871), all land in Japan was regarded as state property, and parcelled out into 276 fiefs, great and small, which were assigned to as many feudatories. These were em- = 1" powered to raise revenue for the support of their households, for administrative purposes, and for the maintenance of troops. The basis of taxation varied greatly in different districts, but, at the time of the Restoration in 1867, the general principle was that four-tenths of the gross produce should go to the feudatory, six-tenths to the farmer. In practice this rule was applied to the rice crop only, the assessments for other kinds of produce being levied partly in money and partly in manufactured goods. Forced labour also was exacted, and artisans and tradesmen were subjected to pecuniary levies. The yield of rice in 1867 was about 154 million bushels,' of which the market value at prices then ruling was £24,000,000, or ' The reader should be warned that absolute accuracy cannot be claimed for statistics compiled before the Meiji era. Battleships . . .. 6 Armoured cruisers 8 Other cruisers . 44 Destroyers . . 19 Torpedo-boats 8o Number. Displacement. Tons. 84,652 73,982 111,470 6,519 7,119 2 283,742 27,300 18,009 705 557 Totals .. Some of the above have been fleet in 1909 was: Battleships . . . . 13 Armoured cruisers . . 12 Other cruisers, coast-defence ships and gun-boats . . 47 Destroyers 55 Torpedo-boats 77 Totals 204 240,000,000 yen.' Hence the grain tax represented, at the lowest calculation, 96,000,000 yen. When the administration reverted to the emperor in 1867 the central treasury was empty, and the funds hitherto employed for governmental purposes in the fiefs continued to be devoted to the support of the feudatories, to the payment of the samurai, and to defraying the expenses of local administration, the central treasury receiving only whatever might remain after these various outlays. The shogun himself, whose income amounted to about £3,500,000, did not, on abdicating, hand over to the sovereign either the contents of his treasury or the lands from which he derived his revenues. He contended that funds for the government of the nation as a whole should be levied from the people at large. Not until 1871 did the feudal system cease to exist. The fiefs being then converted into prefectures, their revenues became an asset of the central treasury, less to % allotted for the support of the former feudatories.' But during the interval between 1867 and 1871, the men on whom had devolved the direction of national affairs saw no relief from crippling impecuniosity except an issue of paper Paper money. money. This was not a novelty in Japan. Paper money had been known to the people since the middle of the 17th century, and in the era of which we are now writing no less than 1694 varieties of notes were in circulation. There were gold notes, silver notes, cash-notes, rice-notes, umbrella-notes, ribbon-notes, lathe-article-notes, and so on through an interminable list, the circulation of each kind being limited to the issuing fief. Many of these notes had almost ceased to have any purchasing power, and nearly all were regarded by the people as evidences of official greed. The first duty of a centralized progressive administration should have been to reform the currency. The political leaders of the time appreciated that duty, but saw themselves compelled by stress of circumstances to adopt the very device which in the hands of the feudal chiefs had produced such deplorable results. The ordinary revenue amounted to only 3,000,000 yen, while the extraordinary aggregated 29,000,000, and was derived wholly from issues of paper money or other equally unsound sources. Even on the abolition of feudalism in 1871 the situation was not immediately relieved. The land tax, which constituted Land Tax. nine-tenths of the feudal revenues, had been as- sessed by varying methods and at various rates by the different feudatories, and re-assessment of all the land became a preliminary essential to establishing a uniform system. Such a task, on the basis of accurate surveys, would have involved years of work, whereas the financial needs of the state had to be met immediately. Under the pressure of this imperative necessity a re-assessment was roughly made in two years, and being continued thereafter with greater accuracy, was completed in 1881. This survey, eminently liberal to the agriculturists, assigned a value of I,2oo,000,00o yen to the whole of the arable land, and the treasury fixed the tax at 3 % of the assessed value of the land, which was about one-half of the real market value. Moreover, the government contemplated a gradual reduction of this already low impost until it should ultimately fall to 1 %. Circumstances prevented the consummation of that purpose. The rate underwent only one reduction of %, and thereafter had to be raised on account of war expenditures. On the whole, however, no class benefited more conspicuously from the change of administration than the peasants, since not only was their burden of taxation light, but also they were converted from mere tenants into actual proprietors. In brief, they acquired the fee-simple of their farms in consideration of paying an annual rent equal to about one sixty-sixth of the market value of the land. In 1873, when these changes were effected, the ordinary ' The yen is a silver coin worth about 2s. :10 yen =r. z In addition to the above grant, the feudatories were allowed to retain the reserves in their treasuries; thus many of the feudal nobles found themselves possessed of substantial fortunes, a consider-able part of which they generally devoted to the support of their former vassals.revenue of the state rose from 24,500,000 yen to 70,500,000 yen. But seven millions sterling is a small income for a country confronted by such problems as Japan had to solve. She had to build railways; to create an army and a navy; to organize posts, telegraphs, prisons, police and education; to construct roads, improve harbours, light and buoy the coasts; to create a mercantile marine; to start under official auspices numerous industrial enterprises which should serve as object lessons to the people, as well as to lend to private persons large sums in aid of similar projects. Thus, living of necessity beyond its income, the government had recourse to further issues of fiduciary notes, and in proportion as the volume of the latter exceeded actual currency requirements their specie value depreciated. This question of paper currency inaugurates the story of banking; a story on almost every page of which are to be found inscribed the names of Prince Ito, Marquis Inouye, Banks. Marquis Matsukata, Count Okuma and Baron Shibusawa, the fathers of their country's economic and financial progress in modern times. The only substitutes for banks in feudal days were a few private firms—" households " would, perhaps, be a more correct expression—which received local taxes in kind, converted them into money, paid the proceeds to the central government or to the feudatories, gave accommodation to officials, did some exchange business, and occasionally extended accommodation to private individuals. They were not banks in the Occidental sense, for they neither collected funds by receiving deposits nor distributed capital by making loans. The various fiefs were so isolated that neither social nor financial intercourse was possible, and moreover the mercantile and manufacturing classes were regarded with some disdain by the gentry. The people had never been familiarized with combinations of capital for productive purposes, and such a thing as a joint-stock company was unknown. In these circumstances, when the administration of state affairs fell into the hands of the men who had made the restoration, they not only lacked the first essential of rule, money, but were also without means of obtaining any, for they could not collect taxes in the fiefs. these being still under the control of the feudal barons; and in the absence of widely organized commerce or finance, no access to funds presented itself. Doubtless the minds of these men were sharpened by the necessities confronting them, yet it speaks eloquently for their discernment that, samurai as they were, without any business training whatever, one of their first essays was to establish organizations which should take charge of the national revenue, encourage industry and promote trade and production by lending money at comparatively low rates of interest. The tentative character of these attempts is evidenced by frequent changes. There was first a business bureau, then a trade bureau, then commercial companies, and then exchange companies, these last being established in the principal cities and at the open ports, their personnel consisting of the three great families—Mitsui, Shimada and Ono—houses of ancient repute, as well as other wealthy merchants in Kioto, Osaka and elsewhere. These exchange companies were partnerships, though not strictly of the joint-stock kind. They formed the nucleus of banks in Japan, and their functions included, for the first time, the receiving of deposits and the lending of money to merchants and manufacturers. They had power to issue notes, and, at the same time, the government issued notes on its own account. Indeed, in this latter fact is to be found one of the motives for organizing the exchange companies, the idea being that if the state's notes were lent to the companies, the people would become familiarized with the use of such currency, and the companies would find them convenient capital. But this system was essentially unsound: the notes, alike of the treasury and of the companies, though nominally convertible, were not secured by any fixed stock of specie. Four years sufficed to prove the unpracticality of such an arrangement, and in 1872 the exchange companies were swept away, to be succeeded in July 1873 by the establishment of national banks on a system which combined some of the features of English banking with the general State Revenue. bases of American. Each bank had to pay into the treasury 6o % of its capital in government notes. It was credited in return with interest-bearing bonds, which bonds were to be left in the treasury as security for the issue of bank-notes to an equal amount, the banks being required to keep in gold the remaining 4o % of their capital as a fund for converting the notes, which conversion must always be effected on application. The elaborators of this programme were Ito, Inouye, Okuma and Shibusawa. They added a provision designed to prevent the establishment of too small banks, namely, that the capital of each bank must bear a fixed ratio to the population of its place of business. Evidently the main object of the treasury was gradually to replace its own fiat paper with convertible bank-notes. But experience quickly proved that the scheme was unworkable. The treasury notes had been issued in such large volume that sharp depreciation had ensued; gold could not be procured except at a heavy cost, and the balance of foreign trade being against Japan, some 300,000,000 yen in specie flowed out of the country between 1872 and 1874. It should be noted that at this time foreign trade was still invested with a perilous character in Japanese eyes. In early days, while the Dutch had free access to her ports, they sold her so much and bought so little in return that an immense quantity of the precious metals flowed out of her coffers. Again, when over-sea trade was renewed in modern times, Japan's exceptional financial condition presented to foreigners an opportunity of which they did not fail to take full advantage. For, during her long centuries of seclusion, gold had come to hold to silver in her coinage a ratio of 1 to 8, so that gold cost, in terms of silver, only one-half of what it cost in the West. On the other hand, the treaty gave foreign traders the right to exchange their own silver coins against Japanese, weight for weight, and thus it fell out that the foreigner, going to Japan with a supply of Mexican dollars, could buy with them twice as much gold as they had cost in Mexico. Japan lost very heavily by this system, and its effects accentuated the dread with which her medieval experience had invested foreign commerce. Thus, when the balance of trade swayed heavily in the wrong direction between 1872 and 1874, the fact created undue consternation, and moreover there can be no doubt that the drafters of the bank regulations had over-estimated the quantity of available gold in the country. All these things made it impossible to keep the bank-notes long in circulation. They were speedily returned for conversion; no deposits came to the aid of the banks, nor did the public make any use of them. Disaster became inevitable. The two great firms of Ono and Shimada, which had stood high in the nation's estimation alike in feudal and in imperial days, closed their doors in 1874; a panic ensued, and the circulation of money ceased almost entirely. Evidently the banking system must be changed. The government bowed to necessity. They issued a revised code of banking regula- tions which substituted treasury notes in the place of specie. Each bank was thenceforth required to invest of the 8o% of its capital in 6% state Banking being lodged with the treasury, the ndbankn became System. competent to issue an equal quantity of its own notes, forming with the remainder of its capital a reserve of treasury notes for purposes of redemption. This was a complete subversion of the government's original scheme. But no alternative offered. Besides, the situation presented a new feature. The hereditary pensions of the feudatories had been commuted with bonds aggregating 174,000,000 yen. Were this large volume of bonds issued at once, their heavy depreciation would be likely to follow, and moreover their holders, unaccustomed to dealing with financial problems, might dispose of the bonds and invest the proceeds in hazardous enterprises. To devise some opportunity for the safe and profitable employment of these bonds seemed, therefore, a pressing necessity, and the newly organized national banks offered such an opportunity. For bond-holders, combining to form a bank, continued to draw from the treasury 6% on their bonds, while they acquired power to issue a corresponding amount of notes which could be lent at profit-able rates. The programme worked well. Whereas, up to 1876, only five banks were established under the original regulations, the number under the new rule was 151 in 1879, their aggregate capital having grown in the same interval from 2,000,000 yen to 40,000,000 yen, and their note issues from less than 1,000,000 to over 34,000,000. Here, then, was a rapidly growing system resting wholly on state credit. Something like a mania for bank-organizing declared itself, and in 1878 the government deemed it necessary to legislate against the establishment of any more national banks, and to limit to 34,000,000 yen the aggregate note issues of those already in existence. It is possible that the conditions which prevailed immediately after the establishment of the national banks might have developed some permanency had not the Satsuma rebellion broken out in 1877. Increased taxation to meet military outlay being impossible in such circumstances, nothing offered except recourse to further noteissues. The result was that by 1881, fourteen years after the Restoration, notes whose face value aggregated 164,000,000 yen had been put into circulation; the treasury possessed specie amounting to only 8,000,000 yen, and 18 paper yen could be purchased with zo silver ones. Up to 1881 fitful efforts had been made to strengthen the specie value of fiat paper by throwing quantities of gold and silver upon the market from time to time, and 23,000,000 yen had Resumpbeen devoted to the promotion of industries whose Con of products, it was hoped, would go to swell the list of Specie exports, and thus draw specie to the country. But payments. these devices were now finally abandoned, and the government applied itself steadfastly to reducing the volume of the fiduciary currency on the one hand, and accumulating a specie reserve on the other. The steps of the programme were simple. By cutting down administrative expenditure; by transferring certain charges from the treasury to the local communes; by sus-pending all grants in aid of provincial public works and private enterprises, and by a moderate increase of the tax on alcohol, an annual surplus of revenue, totalling 7,500,000 yen, was secured. This was applied to reducing the volume of the notes in circulation. At the same time, it was resolved that all officially conducted industrial and agricultural works should be sold—since their purpose of instruction and example seemed now to have been sufficiently achieved—and the proceeds, together with various securities (aggregating 26,000,000 yen in face value) held by the treasury, were applied to the purchase of specie. Had the government entered the market openly as a seller of its own fiduciary notes, its credit must have suffered. There were also ample reasons to doubt whether any available stores of precious metal remained in the country. In obedience to elementary economical laws, the cheap money had steadily driven out the dear, and although the government mint at Osaka, founded in 1871, had struck gold and silver coins worth 80,000,000 yen between that date and 1881, the customs returns showed that a great part of this metallic currency had flowed out of the country. In these circumstances Japanese financiers decided that only one course remained: the treasury must play the part of national banker. Produce and manufactures destined for export must be purchased by the state with fiduciary notes, and the metallic proceeds of their sales abroad must be collected and stored in the treasury. This programme required the establishment of consulates in the chief marts of the Occident, and the organization of a great central bank—the present Bank of Japan—as well as of a secondary bank—the present Specie Bank of Yokohama—the former to conduct transactions with native producers and manufacturers, the latter to finance the business of exportation. The outcome of these various arrangements was that, by the middle of 1885, the volume of fiduciary notes had been reduced to 119,000,000 yen, their depreciation had fallen to 3%, and the metallic reserve of the treasury had increased to 45,000,000 yen. The resumption of specie payments was then announced, and became, in the autumn of that year, an accomplished fact. From the time when this programme began to be effective, Japan entered a period of favourable balance of trade. According to accepted economic theories, the influence of an appreciating currency should be to encourage imports; but the converse was seen in Japan's case, for from 1882 her exports annually exceeded her imports, the maximum excess being reached in 1886, the very year after the resumption of specie payments. The above facts deserve to figure largely in a retrospect of Japanese finance, not merely because they set forth a fine economic feat, indicating clear insight, good organizing capacity, and courageous energy, but also because volumes of adverse foreign criticism were written in the margin of the story during the course of the incidents it embodies. Now Japan was charged with robbing her own people because she bought their goods with paper money and sold them for specie; again, she was accused of an official conspiracy to ruin the foreign local banks because she purchased exporters' bills on Europe and America at rates that defied ordinary competition; and while some declared that she was plainly without any understanding of her own doings, others predicted that her heroic method of dealing with the problem would paralyze industry, interrupt trade and produce widespread suffering. Undoubtedly, to carry the currency of a nation from a discount of 70 or 8o% to par in the course of four years, reducing its volume at the same time from 16o to 119 million yen, was a financial enterprise violent and daring almost to rashness. The gentler expedient of a foreign loan would have commended itself to the majority of economists. But it may be here stated, once for all, that until her final adoption of a gold standard in 1897, the foreign money market was practically closed to Japan. Had she borrowed abroad it must have been on a sterling basis. Receiving a fixed sum in silver, she would have had to discharge her debt in rapidly appreciating gold. Twice, indeed, she had recourse to London for small sums, but when she came to cast up her accounts the cost of the accommodation stood out in deterrent proportions. A 9% loan, placed in England in 1868 and paid off in 1889, produced 3,750,000 yen, and cost altogether 11,750,000 yen in round figures; and a 7% loan, made in 1872 and paid off in 1897, produced 10,750,000 yen, and cost 36,000,000 yen. These considerations were supplemented by a strong aversion from incurring pecuniary obligations to Western states before t he latter had consented to restore Japan's judicial and tariff autonomy. The example of Egypt showed what kind of fate might overtake a semi-independent state falling into the clutches of foreign bond-holders. Japan did not wish to fetter herself with foreign debts while struggling to emerge from the rank of Oriental powers. After the revision of the national bank regulations, semi-official banking enterprise won such favour in public eyes that the government found it necessary to impose limits. This conservative policy proved an incentive to private banks and banking companies, so that, by the year 1883, no less than 1093 banking institutions were in existence throughout Japan with an aggregate capital of 900,000,000 yen. But these were entirely lacking in arrangements for combination or for equalizing rates of interest, and to correct such defects, no less than ultimately to constitute the sole note-issuing institution, a central bank (the Bank of Japan) was organized on the model of the Bank of Belgium, with due regard to corresponding institutions in other Western countries and to the conditions existing in Japan. Established in 1882 with a capital of 4,000,000 yen, this bank has now a capital of 30 millions, a security reserve of 206 millions, a note-issue of 266 millions, a specie reserve of 160 millions, and loans of 525 millions. The banking machinery of the country being now complete, in a general sense, steps were taken in 1883 for converting the national banks into ordinary joint-stock concerns and for the redemption of all their note-issues. Each national bank was required to deposit with the treasury the government paper kept in its strong room as security for its own notes, and further to take from its annual profits and hand to the treasury a sum equal to 21% of its notes in circulation. With these funds the central bank was to purchase state bonds, devoting the interest to redeeming the notes of the national banks. Formed with the object of disturbing the money market as little as possible, this programme encountered two obstacles. The first was that, in view of the Bank of Japan's purchases, the market price of state bonds rose rapidly, so that, whereas official financiers had not expected them to reach par before 1897, they were quoted at a considerable premium in 1886. The second was that the treasury having in 1886 initiated the policy of converting its 6 % bonds into 5 % consols, the former no longer produced interest at the rate estimated for the purposes of the banking scheme. The national banks thus found themselves in an embarrassing situation and began to clamour for a revision of the programme. But the government, seeing compensations for them in other directions, adhered firmly to its scheme. Few problems have caused greater controversy in modern Japan than this question of the ultimate fate of the national banks. Not until 1896 could the diet be induced to pass a bill providing for their dissolution at the close of their charter terms, or their conversion into ordinary joint-stock concerns without any note-issuing power, and not until 1899 did their notes cease to be legal tender. Out of a total of 1J3 of these banks, 132 continued business as private institutions, and the rest were absorbed or dissolved. Already (1890 and 1893) minute regulations had been enacted bringing all the banks and banking institutions—except the special banks to be presently described—within one system of semi-annual balance-sheets and official auditing, while in the case of savings banks the directors' responsibility was declared unlimited and these banks were required to lodge security with the treasury for the protection of their depositors. Just as the ordinary banks were all centred on the Bank of Japan I and more or less connected with it, so in 1895, a group of special Si peciainstitutions, called agricultural and commercial banks, Banks, were organized and centred on a hypothec bank, the object of this system being to supply cheap capital to farmers and manufacturers on the security of real estate. The hypothec bank had its head office in Tokyo and was authorized to obtain funds by issuing premium-bearing bonds, while an agricultural and industrial bank was established in each prefecture and received assistance from the hypothec bank. Two years later (1900), an industrial bank—sometimes spoken of as the credit mobilier of Japan—was brought into existence under official auspices, its purpose being to lend money against bonds, debentures and shares, as well as to public corporations. These various institutions, together with clearing houses, bankers' associations. the Hokkaido colonial bank, the bank of Formosa, savings banks (including a post-office savings bank), and a mint complete the financial machinery of modern Japan. Reviewing this chapter of Japan's material development, we find Review of that whereas, at the beginning of the Meiji era (1867), Banking the nation did not possess so much as one banking Develops institution worthy of the name, forty years later it meat, had 2211 banks, with a paid-up capital of £40,000,000, reserves of £12,000,000, and deposits of £147,000,000; and whereas I The Bank of Japan was established as a joint-stock company in 1882. The capital in 1909 was 30,000,000 yen. In it alone is vested note-issuing power. There is no limit to its issues against gold or silver coins and bullion, but on other securities (state bonds, treasury bills and other negotiable bonds or commercial paper) its issues are limited to 12o millions, any excess over that figure being subject to a tax of 5 % per annum.there was not one savings bank in 1867, there were 487 in 1906 with deposits of over £50,000,000. The average yearly dividends of these banks in the ten years ending 1906 varied between 9'1 and 9.9 %. Necessarily the movement of industrial expansion was accompanied by a development of insurance business. The beginnings of this kind of enterprise did not become visible, how- nsuraace. ever, until 1881, and even at that comparatively recent date no Japanese laws had yet been enacted for the control of such operations. The commercial code, published in March 1890, was the earliest legislation which met the need, and from that time the number of insurance companies and the volume of their trans-actions grew rapidly. In 1897, there were 35 companies with a total paid-up capital of 7,000,000 yen and policies aggregating 971,000,000 yen, and in 1906 the corresponding figures were 65 companies, 22,000,000 yen paid up and policies of 4,149,000,000 yen. The premium reserves grew in the same period from 7,000,000 to Io8,000,000. The net profits of these companies in 1906 were (in round numbers) 10,000,000 yen. The origin of clearing houses preceded that of insurance companies in Japan by only two years (1879). Osaka set the example, which was quickly followed by Tokyo, Kobe, Yokohama, Kibto and Nagoya. In 1898 the bills handled at Ho Cleusesaring. these institutions amounted to 1,186,000,000 yen, and in 1907 to 7,484,000,000 yen. Japanese clearing houses are modelled after those of London and New York. Exchanges existed in Japan as far back as the close of the 17th century. At that time the income of the feudal chiefs consisted almost entirely of rice, and as this was sold to brokers, Bourses. the latter found it convenient to meet at fixed times and places for conducting their business. Originally their trans-actions were all for cash, but afterwards they devised time bargains which ultimately developed into a definite form of exchange. The reform of abuses incidental to this system attracted the earl yy attention of the Meiji government, and in 1893 a law was promulgated for the control of exchanges, which then numbered 146. Under this law the minimum share capital of a bourse constituted as a joint-stock company was fixed at Ioo,000 yen, and the whole of its property became liable for failure on the part of its brokers to implement their contracts. There were 51 bourses in 1908. Not less remarkable than this economic development was the large part acted in it by officialdom. There were two reasons for this. One was that a majority of the men gifted with originality and foresight were drawn into the ranks of the administration by the great current of the revolution; the other, that the feudal system had tended to check rather than to encourage material development, since the limits of each fief were also the limits of economical and industrial enterprise. Ideas for combination and co-operation had been confined to a few families, and there was nothing to suggest the organization of companies nor any law to protect them if organized. Thus the opening of the Meiji era found the Japanese nation wholly unqualified for the commercial and manufacturing competition in which it was thenceforth required to engage, and therefore upon those who had brought the country out of its isolation there devolved the responsibility of speedily preparing their fellow countrymen for the new situation. To these leaders banking facilities seemed to be the first need, and steps were accordingly taken in the manner already described. But how to educate men of affairs at a moment's notice? How to replace by a spirit of intelligent progress the ignorance and conservatism of the hitherto despised traders and artisans? When the first bank was organized, its two founders—men who had been urged, nay almost compelled, by officialdom to make the essay—were obliged to raise four-fifths of the capital themselves, the general public not being willing to subscribe more than one-fifth—a petty sum of 500,000 yen—and when its staff commenced their duties, they had not the most shadowy conception of what to do. That was a faithful reflection of the condition of the business world at large. If the initiative of the people themselves had been awaited, Japan's career must have been slow indeed. Only one course offered, namely, that the government itself should organize a number of productive enterprises on modern lines, so that they might serve as schools and also as models. Such, as already noted under Industries, was the programme adopted. It provoked much hostile criticism from foreign onlookers, who had learned to decry all official incursions into trade and industry, but had not properly appreciated the special conditions existing in japan. The end justified the means. At the outset of its administration we find the Meiji government not only forming plans for the circulation of money, building railways and organizing posts and telegraphs, but also establishing dockyards, spinning mills, printing-houses, silk-reeling filatures, paper-making factories and so forth, thus by example encouraging these kinds of enterprise and by legislation providing for their safe prosecution. Yet progress was slow. One by one and at long intervals joint-stock companies came into existence, nor was it until the resumption of specie payments in 1886 that a really effective spirit of enterprise manifested itself among the people. Railways, harbours, mines, spinning, weaving, Closing of the National Banks. The Government and Economic Development. paper-making, oil-refining, brick-making, leather-tanning, glass-making and other industries attracted eager attention, and whereas the capital subscribed for such works aggregated only 50,000,000 yen in 1886, it exceeded 1,000,000,000 yen in 1906. When specie payments were resumed in 1885, the notes issued by the Bank of Japan were convertible into silver on demand, the Adoption of silver standard being thus definitely adopted, a corn-Ad Gold plete reversal of the system inaugurated at the Standard establishment of the national banks on Prince Ito's the return from the United States. Japanese financiers believed from the outset in gold monometallism. But, in the first place, the country's stock of gold was soon driven out by her depreciated fiat currency; and, in the second, not only were all other Oriental nations silver-using, but also the Mexican silver dollar had long been the unit of account in Far-Eastern trade. Thus Japan ultimately drifted into silver monometallism, the silver yen becoming her unit of currency. So soon, however, as the indemnity that she received from China after the war of 1894–95 had placed her in possession of a stock of gold, she determined to revert to the gold standard. Mechanically speaking, the operation was very easy. Gold having appreciated so that its value in terms of silver had exactly doubled during the first 30 years of the Meiji era, nothing was necessary except to double the denominations of the gold coins in terms of yen, leaving the silver subsidiary coins unchanged. Thus the old 5-yen gold piece, weighing 2.22221 momme of 900 fineness, became a so-yen piece in the new currency, and a new 5-yen piece of half the weight was coined. No change whatever was required in the reckonings of the people. The yen continued to be their coin of account, with a fixed sterling value of a small fraction over two shillings, and the denominations of the gold coins were doubled. Gold, however, is little seen in Japan; the whole duty of currency is done by notes. It is not to be supposed that all this economic and financial development was unchequered by periods of depression and severe panic. There were in fact six such seasons: in 1874, 1881, 1889, 1897, 1900 and 1907. But no year throughout the whole period failed to witness an increase in the number of Japan's industrial and commercial companies, and in the amount of capital thus invested. To obtain a comprehensive idea of Japan's state finance, the simplest method is to set down the annual revenue at quinquennial periods, commencing with the year 1878–1879, because it was not until 1876 that the system of duly compiled and published budgets came into existence.
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