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SOUTHERN BRAN

UNIVERSITY OF CALIFORNIA
LU3RARY,

ANQELES, CALIF




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JAPAN

Its History Arts and Literature



BY



CAPTAIN F. BRINKLEY



ILLUSTRATED



VOLUME V




J. B. MILLET COMPANY
BOSTON AND TOKYO



5 3 3 3



Copyright, 1902
BY J. B. MILLET Co.



Entered at Stationers' Hall, London, England



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13 7 7



CONTENTS



CHAPTER I

Page

FINANCIAL AND ECONOMICAL CONDITIONS ... i



CHAPTER II
JAPAN'S FOREIGN POLITICS 28

CHAPTER III
STEPS OF PROGRESS 77

CHAPTER IV
CREED AND CASTE 108

CHAPTER V
RELIGION AND RITES 142

CHAPTER VI
SUPERSTITIONS 190



APPENDIX 249



ILLUSTRATIONS

Page

Rear Corner of a Japanese House Frontispiece

Raking a Rice Field 16

People of Yedo ; Beginning of Nineteenth Century . . 32

A Japanese Cemetery 48

Yara (or Gero) of Satsuma ; End of Seventeenth Century 64

Carpenters at Work ... 80

Threshing Grain ... 96

Norimono and Kaga ...112

Washing Kimonos 128

Kiyomizu Temple, Kyoto , . 144

Weighing Tea 160

A Fair Student 176

Group of Children 192

Wooden Bridge at Iwakuni 208

Bronze Gate and Tomb, Shiba Park, Tokyo .... 224

Lunch Stand in a Public Park 240




JAPAN



ITS HISTORY ARTS AND
LITERATURE



Chapter I



FINANCIAL AND ECONOMICAL
CONDiriONS

FINANCIAL affairs naturally occupied
a prominent place in Japan's modern
career. At one time, indeed, her condi-
tion caused much uneasiness and elicited
from on-lookers many predictions of disaster.
But by skilful management her statesmen rescued
her from embarrassment and falsified all sinister
forecasts. The story of that achievement may
well occupy attention for a moment.

It has been shown that in Tokugawa days
the land throughout the Empire was regarded as
State property, and parcelled out into numerous
fiefs, the feudatories holding it in trust and being
empowered to derive certain revenue from it.
The standard of taxation varied more or less in
different districts, but, at the time of the Restora-
tion in i 867, the most generally recognised prin-



VOL. V.



JAPAN

ciple was that four-tenths of the gross produce
went into the hands of the tax-collector and six-
tenths to the farmer. This rule applied to the
rice crop only, the assessments for other kinds
of produce being levied, partly in money and
partly in manufactured goods, at rates often of a
very arbitrary nature. Forced labour also was
exacted, and tradesmen were subjected to mone-
tary levies as official necessity arose. Neglecting
all these factors of uncertain dimensions, since
they do not admit of arithmetical statement for
the purposes of a general review, and taking the
case of rice only, the data are that the total yield
of that crop in 1867 was 154,000,000 bushels,
approximately, of which the market value then
ruling was 24,000,000 pounds sterling, or
240,000,000 yen, and it follows that the grain
tax alone represented 96,000,000 yen on the
lowest calculation, the farmers' portion being
144,000,000. Thus much premised, a basis is
obtained for comparing the burdens of the people
in ante-Meiji and in post-Meiji days.

When the administration reverted to the
Throne in 1867, the central treasury was of
course empty, and the funds hitherto employed
for governmental purposes in the fiefs did not at
once begin to flow into the coffers of the State.
They continued to be devoted to the support of
the feudatories, to the payment of the samurai,
and to defraying the expenses of local adminis-
tration, the central treasury receiving only what-



FINANCIAL CONDITIONS

ever small fraction remained after these various
outlays. The Shogun himself did not, on abdicat-
ing, hand over to the sovereign either the con-
tents of his treasury or the control of the lands
from which he derived his revenues. He con-
tended that funds for the government of the
nation as a whole should be levied from the
people at large. Matters were further compli-
cated by the fact that the impecunious Ministry
had to engage in campaigns which, though they
placed the treasury in command of some limited
sources of revenue, had also the effect of aug-
menting its liabilities.

The little band of men who had assumed the
direction of national affairs saw no exit from the
dilemma except an issue of paper money. This
was not a novelty in Japan. Paper money had
been known to the people since the middle of
the seventeenth century, and at the moment of
the mediatisation of the fiefs, no less than sixteen
hundred and ninety-four varieties of notes were
circulating in the various districts. There were
gold notes, silver notes, cash notes, rice notes, um-
brella notes, ribbon notes, lathe-article notes, and so
on through an interminable list, the circulation of
each kind being limited to the confines of the issu-
ing fief. Many of these notes had served a useful
purpose in tradal transactions, but those officially
issued by the feudal chiefs had in some cases ceased
to have any purchasing power, and must in every
case have become valueless when the fiefs ceased



JAPAN

to exist. The first duty of a centralised, pro-
gressive administration should have been to re-
form the currency : to substitute uniform and
sound media of exchange for these unsecured
tokens, which hampered trade, destroyed credit,
and opposed barriers to commercial intercourse
between neighbouring provinces and districts.
The political leaders of the time appreciated that
duty, but instead of proceeding to discharge it,
they saw themselves compelled by stress of cir-
cumstances to adopt the very device which, in
the hands of the feudal chiefs, had produced
such bad results. It was an irksome necessity,
and the new Government sought to relieve its
conscience and preserve its moral prestige by
pretending that the object of the issue was to
encourage wealth-earning enterprise, and that the
notes would be lent to the fiefs for the purpose
of promoting commerce and industry. The
people appraised these euphemisms at their true
worth, and the new notes fell to a discount of
fifty per cent. Then ensued a brief but sharp
struggle between rulers and ruled. The Govern-
ment resorted to arbitrary measures, sometimes of
great severity, to force its notes into circulation
at par with silver. But there was no continuity
of policy. One day, men were imprisoned for
discounting paper tokens ; the next, they were
released. In December the authorities officially
recognised a depreciation of twenty per cent ; in
the following April they withdrew the recogni-

4



FINANCIAL CONDITIONS

tion and proclaimed the equality of specie and
paper. Now they promised to redeem the notes
in thirteen years ; then they shortened the period
to five, and again they postponed it indefinitely.
Nothing is more notable than the fact that, de-
spite this bewilderment and vacillation, the
Government's financial credit gradually acquired
strength, so that within five years, though the
issues of fiduciary paper aggregated nearly
60,000,000 yen, the notes circulated freely
throughout the whole Empire at par with silver,
and even commanded, at one time, a small
premium. It is true that by this epoch the
revenues of all the fiefs had become available
for the service of the State, and that only one-
tenth of their total had been appropriated for the
support of the territorial nobles. But the Central
Government, having diminished the taxes to
about one-half of their former total, as will pres-
ently be shown, found the public income too
small for the expenditures. The paper money of
the fiefs, amounting to 25,000,000 yen, had been
exchanged for treasury notes. The building of
railways had been commenced. The foundations
of an army and a navy had been laid. A postal
system, a telegraph system, a prison system, a
police system, and an educational system had
been organised. The construction of roads, the
improvement of harbours, the lighting and buoy-
ing of the coast, had been vigorously under-
taken. A mercantile marine had been created.



JAPAN

Public works had been inaugurated on a consid-
erable scale. Many industrial enterprises had
been started under official auspices as object-
lessons for the people, and large sums in aid of
similar projects had been lent to private persons.
Thus the Government, living far beyond its in-
come, had unavoidable recourse to further issues
of fiat paper, and in proportion as the volume
of the latter exceeded the actual currency re-
quirements of the time, its value depreciated,
until, in 1881, fourteen years after the Restora-
tion, notes to the face value of 150,000,000^72
had been put into circulation, and eighteen paper
yen could be purchased with ten silver coins of
the same denomination. On the other hand, the
treasury held only 8,000,000 yen in specie, or
about one-nineteenth of its total note issues, and
no prospect of a return to hard-money payments
could be discerned by the public. The Gov-
ernment indeed was not without a sense of its
responsibilities. Fitful efforts had been made
to strengthen the specie value of the fiat paper
by purchasing quantities of it from time to time,
an operation which inured chiefly to the benefit
of speculators on 'change, and large sums-
totalling 23,000,000 yen had been devoted to
the promotion of various industries in the hope
that their products would go to swell the list of
exports and thus draw gold and silver into the
country. But, in 1881, it became evident that
these superficial devices must be abandoned, and

6



FINANCIAL CONDITIONS

that unless a sound programme were adopted
and steadily pursued, the credit of the country
would be seriously injured. The Government
therefore determined to shape its policy in acord-
ance with two distinct ends, first, reduction of
the volume of fiduciary notes in circulation, and,
secondly, accumulation of a specie reserve. The
means chosen were simple.

By applying the pruning-knife boldly to ad-
ministrative expenditures ; by transferring certain
charges from the treasury to the local communes ;
by suspending all grants in aid of provincial pub-
lic works and private enterprises, and by a mod-
erate increase of the tax on alcohol, an annual
surplus of revenue, totalling 7,500,000 yen, was
secured. This was employed in reducing the vol-
ume of the notes in circulation. Then, in order
to amass a specie reserve, it was resolved that
all officially conducted industrial and agricultural
works should be sold since their purpose of in-
struction and example seemed now to have been
sufficiently achieved, and that the proceeds, to-
gether with various securities held by the treas-
ury and aggregating 26,000,000 yen in face value,
should be used for purchasing gold and silver.
The latter was a delicate and difficult operation.
Had the Government entered the market openly
as a seller of its own fiduciary notes for specie, its
credit must have suffered. There were, also,
ample reasons to doubt whether any available
stores of precious metal remained in the country.

7



JAPAN

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 80,000,000 yen
worth of gold and silver coins between that date
and 1 88 1, when the policy here described was
inaugurated, the customs returns showed that a
great part of this metallic currency had flowed
out of the country. Under these circumstances
Japanese financiers decided that only one course
offered : the treasury must play the part of na-
tional banker. The State must advance paper
money to producers and manufacturers engaged in
the export trade, on condition that when their
goods were sold abroad, the specie thus obtained
should be handed over to the treasury. This
programme required the establishment of Consu-
lates in the chief marts of the Occident, and the
organisation of a great central bank the present
Bank of Japan as well as of a secondary bank
the present Specie Bank of Yohohama, the
former to conduct transactions with native pro-
ducers 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 1 1 9,000,000 yen, their
depreciation had fallen to three per cent, and
the metallic reserve of the treasury had in-
creased to 45,000,000 yen. The resumption of
specie payments was then announced, and be-

8



FINANCIAL CONDITIONS

came, in the autumn of that year, an accom-
plished fact.

Viewed by the light of results, the above facts
constitute a fine economical feat, nor can it be
denied that the statesmen who directed Japan's
finances at that critical time showed clear insight,
good organising capacity, and courageous energy.
While these events were in progress, however,
they elicited a great deal of adverse criticism
from Europeans and Americans. Many onlooking
strangers were prepared each with an infallible
nostrum of his own, the rejection of which con-
vinced him of Japan's hopeless stupidity. Now,
she was charged with robbing her own people be-
cause she bought their goods at home with paper
money and sold them abroad for specie ; again,
she was accused of an official conspiracy to ruin
the foreign local banks because she purchased ex-
porters' bills on Europe and America at rates that
defied ordinary competition ; and while some de-
clared that she was plainly without any under-
standing of her own doings, others, averring that
she could not possibly extricate herself from the
slough of an inflated and largely depreciated fiat
currency without recourse to European capital,
predicted that her heroic method of dealing with
the problem would paralyse industry, interrupt
trade, produce wide-spread suffering, and, in short,
bring about the advent of the proverbial " seven
other devils." Undoubtedly, to carry the cur-
rency of a nation from a discount of fifty or sixty

9



JAPAN

per cent to par in the course of four years, reduc-
ing its volume at the same time from 150,000,000
to 1 1 9,000,000, was a financial enterprise violent
and daring almost to rashness. The gentler ex-
pedient of a foreign loan an expedient of re-
cently proved efficacy in Italy's case would
have commended itself to the majority of econo-
mists. But it may be here stated, once for all,
that until her adoption of gold monometallism in
1897^ t ^ ie foreign money market was practi-
cally 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 dis-
charge 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 nine per cent loan,
placed in England in 1868 and paid off in 1889,
produced 4,750,000 yen, and cost altogether
1 1,750,000, in round figures ; and a seven per cent
loan, made in 1872 and paid off in 1897, pro-
duced 10,750,000, and cost 36,000,000. These
considerations were supplemented by a strong
aversion to incurring pecuniary obligations to
Western States before the latter had consented to
restore Japan's judicial and tariff autonomy, a
point which will be explained by and by. The
example of Egypt showed what kind of fate
might overtake a semi-independent State falling

1 See Appendix, note i.

10



FINANCIAL CONDITIONS

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 all, nothing succeeds
like success. Japanese financiers made a signal
success. Having undertaken to re-organise the
administration of an empire, and to inaugurate a
vast programme of reform, they met the difficulty
of an empty treasury by issuing fiat notes, and then,
fourteen years later, grappling boldly with the
problem of this inflated and heavily depreciated
currency, they restored its value to par and re-
sumed specie payments in the brief space of four
years.

It is advisable at this point to examine the ques-
tion of the national debt incurred by Japan since
the unification of the Empire.

As already stated, when the fiefs were surren-
dered to the sovereign, it was decided to provide
for the feudal nobles and the samurai generally
by the payment of lump sums in commutation,
or by handing to them public bonds the interest
on which should constitute a source of income.
The result of this transaction, the details of
which need not be set forth, was that bonds
having a total face value of 191,500,000 yen
were issued, and ready-money payments aggre-
gating 21,250,000 yen were made. 1 This was
the foundation of Japan's national debt. Indeed,
these public bonds may be said to have repre-

1 See Appendix, note 2.

II



JAPAN

sented the bulk of the State's liabilities during
the first twenty-five years of the Meiji period.
The Government had also to take over the debts
of the fiefs, amounting to 41,000,000 yen, of
which 21,500,000 were paid with interest-bear-
ing bonds, the remainder with ready money. If
to the above figures be added two foreign loans
aggregating 16,500,000 yen (completely repaid
by the yen 1897); a loan of 15, 000,000 yen in-
curred on account of the only serious rebellion
that marked the passage from the old to the new
regime the Satsuma revolt of 1877; loans
of 33,000,000^72 for public works, 13,000,000
yen for naval construction, and 14,500,000 1 in
connection with the fiat currency, there results
a total of 305,000,000 yen, being the whole
national debt of Japan during the first twenty-
eight years of her new era under Imperial
administration.

The above statements sufficiently explain the
liabilities incurred by the country during what
may be called the first epoch of her modern finan-
cial history. There remains to be considered the
second epoch, dating from the war with China,
which occurred in 18941895.

The direct expenditures on account of the
war aggregated 200,000,000^/2, of which total
135,000,000 were added to the national debt,
the remainder being defrayed with accumulations
of surplus revenue, with a part of the indemnity

1 See Appendix, note 3.

12



FINANCIAL CONDITIONS

received from China, and with voluntary contribu-
tions from patriotic persons. In the immediate
sequel of the war, the Government elaborated a
large programme of armaments' expansion and
public works. The army, at the time of the
war, consisted of six divisions and the Imperial
Guards ; the peace establishment being 70,000,
and the war strength, 268,000. The navy com-
prised thirty-three vessels exclusive of twenty-
six torpedo boats representing a displacement
of 63,000 tons. It was resolved to raise the
number of divisions to twelve, with a peace es-
tablishment of 145,000 and a war strength of
560,000, and the navy to sixty-seven ships 1 (be-
sides eleven torpedo-destroyers and one hundred
and fifteen torpedo boats) with an aggregate dis-
placement of 258,000 tons. The expenditures for
these unproductive purposes, as well as for coast
fortifications, dockyards, and so on, came to
3 1 4,000,000 yen, and the total of the productive
expenditures included in the programme was
1 90,000,000 yen, namely, 120,000,000 for rail-
ways, telegraphs, and telephones; 20,000,000 for
riparian improvements ; 2 20,000,000 in aid of
industrial and agricultural banks, and so forth
the whole programme thus involving an outlay
of 504,000,000 yen. To meet this large figure,
the Chinese indemnity, surpluses of annual reve-
nue and other assets, furnished 300,000,000, and
it was decided that the remaining 204,000,000

1 See Appendix, note 4. 3 See Appendix, note 5.

13



JAPAN

should be obtained by domestic loans, the pro-
gramme to be carried completely into operation
with trifling exceptions by the year 1905.
In practice, however, it was found impossible to
obtain money at home without paying a high
rate of interest. The Government, therefore, had
recourse to the London market in 1899, raising
a loan of 100,000,000 yen at four per cent and
selling the loo-yen bonds at 90. Evidently a
further loan must be obtained abroad, for money
commands such a high price in the domestic mar-
ket that the State cannot afford to use home
capital. This somewhat wearisome array of
figures may be concluded by noting that, accord-
ing to present arrangements, Japan's national
indebtedness will reach its maximum, namely,
575,000,000 yen, in the year 1903, and will
thenceforward diminish steadily. 1

It remains to consider briefly the annual reve-
nues and expenditures of the State, and the man-
ner of their growth during recent years.

The burden of taxation is small, especially
compared with the career of vigorous progress
upon which the country has embarked. Only
i 20,000,000 yen is raised by direct taxes, that is
to say, something less than three yen (six shill-
ings) per head of population. The sources are
these :
1 See Appendix, note 6.



FINANCIAL CONDITIONS

Million yen



Land tax ............

Income tax ............ 5^

Business tax ........... 6

Sake (rice wine) tax ......... 55

Soy (fish sauce) tax ......... 3

Miscellaneous Taxes ......... 4

Total ........... 120

A further sum of 8 1, 000,000 yen is obtained
by indirect taxation, namely :

Million yen

Customs and tonnage dues ........ 1 5 ^

State undertakings (railways, posts, telegraphs, to-

bacco monopoly, and forests) ...... 4-6 ^

Stamp duties ...........

Miscellaneous ...........



Total ........... 8 1

On the other hand, the ordinary expenditures
aggregate 164,000,000 yen. Thus there is a
surplus of 37,000,000 yen. At present this sur-
plus is absorbed for extraordinary and terminable
enterprises forming part of the post-bellum pro-
gramme described above, but in a short time the
country may look forward to finding itself with
a substantial annual balance on the right side.

In spite of the conclusive evidence furnished
by figures such as the above, an impression pre-
vails in Europe and America that Japan's financial
condition is not sound. People seem to be influ-
enced solely by the fact that her expenditure has
grown with striking rapidity, and to forget alto-
gether not only that the Treasury is every year

'5



JAPAN

applying large surpluses of ordinary revenue to
carry out enterprises which have nothing to do
with the usual routine 01 administration, but also
that when these post-bellum undertakings are
brought to a conclusion, the State will find itself
with an income greatly exceeding its outlays. It
is further habitually alleged that Japan's revenue
has been unduly increased during recent years,
and that the burden of taxation is becoming in-
tolerable. Perhaps the simplest way of dealing
with that allegation is to quote the statement
made by way of preface to this review, namely,
that at the time of the mediatisation of the fiefs the
people were paying a sum of at least 96,000,000
yen in the form of a grain tax alone, whereas the
corresponding impost (land tax) amounts now to
only 46,500,000. Besides, this 46,500,000 yen
cannot justly be regarded as a tax in the ordinary
acceptation of the term. Up to the time of the
mediatisation of the fiefs, all the land in the
Empire being the property of the State, its tenants
could not dispose of it at will, nor had they any
right of possession in it. The sum they paid in
kind to their rulers consequently represented a
rent for use of the land rather than a tax. That
distinction became still more emphatic after the
fall of feudalism, for the land was then declared
the absolute property of its tenants, the only con-
dition attached being perennial liability to pay as
compensation to the original owner, namely, the
State, an annual sum equal to about one and one-

16






RAKING A RICE FIELD.



FINANCIAL CONDITIONS

fourth per cent of the market value of the land.
In short, the farmers entered into absolute posses-
sion of the fields they had hitherto cultivated as
mere tenants, and in return for being transformed
into owners they were required to pay a rent
assessed on a basis of eighty years' purchase. An
agriculturist in England or America would cer-
tainly think himself singularly fortunate if a farm
were declared his property without any condition


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