Japan, its history, arts and literature (Volume 5) online

except the yearly payment of a rent not even
amounting to one-fourth of that usually charged
for the mere privilege of tenancy. It would
scarcely occur to him to claim that such a rent
should be considered as including his taxes. Yet
that is the case with the Japanese farmer. He
pays no tax whatever unless his very petty rent
can be held to be partly a tax. It is true that he
is liable for income tax in common with all his
countrymen; but the income tax in Japan is so
graduated that the lower classes are scarcely sen-
sible of its incidence, and at any rate the total
sum collected under that heading from a nation of
44,000,000 is only 550,000 pounds, or an aver-
age of three pennies per head. 1 But an inquiry
limited to the case of the agricultural population
does not satisfactorily account for the fact that
whereas the ordinary revenue of the State was
78,000,000 yen ten years ago (1891), it is now
201,000,000, having increased to the startling
extent of two hundred and eighty-six per cent in

1 See Appendix, note 7.

VOL. v. 2 I *7



JAPAN

one decade. Before inferring, however, from
these figures that the burdens of the people have
increased to a corresponding degree, it must be
noted, in the first place, that the revenue in-
cludes an important item quite independent of
taxation, namely, receipts from Government en-
terprises and properties (as railways, posts, tele-
graphs, telephones, factories, forests, etc.) ; an item
which naturally grows with the country's pros-
perity. The income from this source ten years ago
was 8, 500,000 yen; to-day it is 46,500,000. In
considering the revenue derived from taxes, prof-
its of such a nature must be omitted, and if that
correction be applied, the revenue for 189 01891
becomes 96,250,000^72, and that for 1901-1902
is reduced to i 54,500,000. Further, to correctly
estimate the weight of the people's fiscal burden,
it is necessary to exclude the taxes on sake and
tobacco, as well as the customs dues, for the two
former need not be paid by any person desiring
to avoid them, and the customs are an indirect
impost scarcely felt by buyers of imported goods.
The sake tax produced only 1 5,000,000 yen ten
years ago ; to-day it produces 55,000,000, the
tobacco tax produced nearly 2,000,000 in 1890
1891, and is now included in the receipts from
Government industries ; and the corresponding
figures for customs dues are 4,000,000 and
1 5,250,000. Thus corrected, the miscellaneous
receipts also being omitted, it results that the
revenue raised by taxation at present is 78,250,000

18



FINANCIAL CONDITIONS

yen against 48,250,000 in 1890-1891, the in-
crease being nearly sixty per cent.

Such figures cannot be said to indicate any
excessive addition to the burden of taxation, even
if the arithmetic alone be considered. It is ne-
cessary to look beyond the arithmetic, however,
and to observe that there has been a large develop-
ment of national wealth and a large appreciation
of the prices of commodities during the past ten
years. In 1891 the yen was worth three shillings
three pence, whereas it is now worth only two shil-
lings. Thus, reduced to sterling, the taxes ten years
ago were 7,900,000 pounds, whereas now they are
7,830,000. Of course it may be said that Japan
has nothing to do with sterling values, the yen be-
ing simply a yen to her people, and not so many
shillings and pence. But the price of Japanese
labour and the prices of the commodities it pro-
duces have appreciated even more sharply than
gold has appreciated during the past ten years.
The labour that' earned only twenty-four sen in
1891 can easily earn more than thirty-nine sen to-
day, and of course it is proportionately easier for
the producing classes to pay their taxes at present.
In fact, the tax-payer is much more favourably cir-
cumstanced now than he was ten years ago. People
receiving fixed salaries, as administrative and judi-
cial officials, persons engaged in education, etc.,
have had no increase of income to compensate
them for increased taxation or for the sharp appre-
ciation of prices. But such persons form a small



JAPAN

fraction of the nation. All the other classes are
earning more and possess much larger property.
On the other hand, their taxes have not under-
gone any proportionate increase, and instead of
saying that the nation is embarrassed by the pay-
ments it has to make to the State, the truth is that
it pays relatively less than it did ten years ago.

Looking at the figures from another point of
view, it is necessary to admit that excellent
financial management is required in order that
the nation of 43,500,000 inhabitants, which
maintains an army of half a million men and a
fleet of 258,000 tons, may pay its way at a cost
of some 16,000,000 pounds sterling. Such a
feat presents itself in a scarcely credible light to
Occidental statesmen. Again, observing that the
annual expense of maintaining the army and navy
is only 55,000,000 yen, whereas the tax on sake
(rice wine) alone yields 55,000,000, and noting
that this tax which falls on a luxury grew
from 4,000,000 yen in 1891 to 55,000,000 in
1900, it seems plain that if the country has
greatly increased its armaments, there has been
found, at the same time, a compensatory source
of revenue which does not add seriously to the
burdens of the people at large.

Another factor which has operated injuriously
to Japan's credit is that her politicians, by as-
saults upon the budget in the Diet and by clam-
ouring for a reduction of the land tax as well as
of official salaries, greatly misled the foreign

20



FINANCIAL CONDITIONS

public. That this outcry was merely a conven-
ient weapon for attacking the Cabinet and court-
ing favour with the constituencies, was amply
proved in the sequel, when these same agitators
voted to increase the land tax and to augment
official salaries. But they had sustained the clam-
our so vigorously and incessantly during session
after session of the Diet, that the world ulti-
mately learned to think of Japan as a country
crushed by a weight of taxation which the
people's representatives were vainly struggling
to lighten, and preyed upon by a number of
overpaid officials whom the Diet was seeking to
deprive of their excessive emoluments. Accept-
ing the estimates made by the Japanese them-
selves, Europe and America regarded Japan as an
embarrassed State, instead of recognising the
abundance and elasticity of her resources.

The wealth of Japan is a subject which has
not yet been investigated so thoroughly that an
altogether trustworthy statement can be made.
The following figures are the closest approxi-
mations possible at present:

Millions of Yen.

Value of lands (agricultural, building, forest, etc.) . 3,600

Value of buildings 1,100

Value of household furniture and utensils .... 550

Value of cattle, horses, fowls, etc 60

Value of railways 250

Value of mercantile marine 33

Value of merchandise 430

Gold and silver bullion and coins 250

Miscellaneous 2,000

Total 8,273

21



JAPAN

It will be observed that this sum is approxi-
mately one-tenth of the accumulated capital of
the United Kingdom of Great Britain and Ire-
land. That is what might have been expected,
for, speaking roughly, money is ten times as valu-
able in Japan as in England.

With regard to the income derived by Japan
from her capital, the following figures are de-
duced from the best statistics:

Millions of Yen.

Products of agriculture, forestry, and fisheries ... 750

Produce of mines ........... 30

Manufactured articles .......... 400

Land transport earnings ......... 90

Water transport earnings ... ...... 15

House rent ............. 28

Profits on foreign trade ......... 25

Banking profits ............ 27

Profits on business ........... 98



Total



Concerning the distribution of wealth in Japan,
it has only recently become possible to form a
trustworthy estimate. Careful investigations now
show, however, that the number of men possess-
ing property valued at fifty thousand pounds
sterling and upwards, does not exceed 441.
Comparing this record with American statistics,
for example, it appears that whereas there are
3,828 persons in the United States credited with
possessing at least two hundred thousand pounds,
or in other words one for every twenty thousand
inhabitants, there is in Japan only one owner of
fifty thousand pounds for every hundred thousand

22



FINANCIAL CONDITIONS

of the population. The contrast is very striking.
Japan differs from America in another respect
also, namely, that few Japanese amass great for-
tunes in a lifetime. Of the 441 persons spoken
of above, not more than sixty are nouveaux riches.

Reference may be made here to the question
of Japan's gold-mining capacity, about which
many doubts have been expressed by European
and American writers. At present her annual
output of the yellow metal is not quite two tons,
a small contribution to the total of 470 tons
produced throughout the world. Nevertheless
the ratio of her auriferous area to the whole
extent of her territory is a larger figure than that
for any other country, her gold-mines being scat-
tered all over the Empire from north to south.
The trouble is that metallurgical art is very im-
perfectly developed. Various restrictions have
hitherto debarred Western enterprise from enter-
ing this field, and the Japanese themselves lack
capital, if not knowledge, to apply the latest
scientific methods. Very little of the gold pro-
duced in former times remains in the country.
Calculations indicate that between 1620 and
1766 about 15,000,000 sterling worth of the
metal were exported to China and Holland, with
at least an equal quantity of silver.

Rapid development of the country's resources
has taken place during the Meiji era, and is still
taking place. The conditions were never pre-
viously so favourable. All classes of the people

23



JAPAN

are now equal in the sight of the law, per-
fect security exists for life and property, the
people are guaranteed against oppression or ex-
tortion on the part of their rulers, and a full
measure of personal freedom is enjoyed. A com-
prehensive idea of the growth that has been en-
couraged by these circumstances may be obtained
from the table on pages 26 and 27, where the
statistical facts are tabulated for intervals of every
five years.

Japan's great difficulty is want of capital. The
capital actually engaged in public and private enter-
prises is 60,000,000 pounds sterling, in round
numbers, and 79,000,000 more are pledged
though not yet paid up. On the other hand, the
volume of circulating media is only 25,000,000, of
which amount 22,000,000 consist of convertible
notes ; the deposits in the banks total 33,000,000,
and their capitals aggregate 49,5OO,ooo. 1 Under
such circumstances the rate of interest is neces-
sarily high it averages about twelve per cent
throughout the Empire and many profita-
ble enterprises remain undeveloped. Recourse
to cheap foreign capital would be the nat-
ural exit from the dilemma. But so long as
her currency was on a silver basis, Japan hesitated
to contract gold debts, and European capitalists
would not lend in terms of silver. Now that
she has adopted the gold standard, her situation
should be more favourable. Europe and America,

1 See Appendix, note 8.

24



FINANCIAL CONDITIONS

however, have not yet acquired confidence in her
integrity, or ceased to regard her as a terra incog-
nita^ and in the meanwhile a great opening for
foreign capital vainly offers in the field of indus-
trial enterprise. Recent returns issued by sixty-
eight joint stock companies show that they paid
an average annual dividend of sixteen and one-
half per cent, and it is not to be doubted that
still better results could be attained were foreign
business experience and cheap capital available.



JAPAN





1883


1888


1893


1898


Average rate of interest


p


14.34


13-5


10.8


Loans issued by banks (in










millions of yen)


207


35 1


5*3


2,659


Deposits in banks by private










persons (in millions of










yen)


342


489


i, 068


539


Deposits remaining in banks










at close of year (in millions










of yen)


20


29


59


319


Clearing-house transactions










in Osaka and Tokyo (in










millions of yen)





*9%


II#


914


Average price of 42 staple










articles, the figure for 1 887










being taken as 100





102


118


181


Average rate of wages for










50 kinds of artisans, etc.,










the figure for 1887 being










taken as 100





101


125


'97


Price of rice in Tokyo (in










yen per hoku 4. 96










bushels)


6.44


4-97


7.40


14.71


Total foreign trade (in mil-










lions of yen) ....


65


131


178


443


Production of rice (in mil-










lions of bushels)


152


i 9 i#


184^2


235 1


Production of wheat (in mil-










lions of bushels)


58M


65^


82 %


9'X


Production of tea (in mil-










lions of Ibs. )


44 K


60


6 3 %


70


Production of cocoons (in










millions of bushels)


5.50


5.87


8.36


10.05


Production of sugar (mil-










lions of Ibs.) ....


?


"&


IIO^


109


Production of gold (Ibs.) .


67*^


1,025^


i>545#


2,023^


Production of silver (Ibs.) .


38,373


78,644


13^395


122,362


Production of copper (tons)


5.536


10,905


20,464


20,098


Production of iron (tons) .


14,623


15,050


18,600


27, 59 1


Production of coal (tons) .


929,213


1,746,296


3,176,640


5,888,157


Production of petroleum










(erallons^


806, 505


332,686


c ? ? .21 O


9. I 70. J. 7 3 ^


Production of sulphur (tons)


1,742


10,627


3 3 3~ *
20,193


> / 7 >*r / 3

13,388


Production of raw silk (Ibs.)


3,398,476


6,168,194


10,193,327


12,322,305


Production of cotton yarns










(millions of Ibs.) .




13


83 M


*77#


Production of woven goods










(value in millions of yen)


?


30^


58^


143^



1 An abnormal year. The rice crop in Japan is subject to great fluctuations owing to climatic influences,
Thus the crop in 1897 was only 16} millions of bushels.

1 There has been a great development of the petroleum industry during recent years.

26



FINANCIAL CONDITIONS





1883


1888


1893


I8g8


Production of matches (mil-
lions of cases each contain-
ing 144 doz. boxes) .
Production of salt (millions
of bushels)


?

8 3/


I0 1


*9


22 %

10 l />


Marine products (millions of
ven^ .


?


iiK 2


20 M


6o 2 A


Area of rice land (millions
of acres)


6. 1 I Q


6.581


6 ?8c




Area of wheat land (millions
of acres)


3. < SA








Area of tea-plantations (acres)
Area of mulberry plantations
facres^


102,956

27 C.4.I I


1 19,021
c 1 7.662


149,665


143,687


Capital of agricultural com-
panies (millions of yen) .
Capital of commercial com-
panies (millions of yen) .
Capital of industrial com-
panies (millions of yen)
Capital of railway com-
panies (millions of yen) .
Capital of banks (millions
of yen)


1.234
31.451
5.048

5-9 6 5

7 C. 6 CO


1.620

39.870
39.032
31.870


2,542
57.616
78.258

57-945


3,612
144.312
177.452
214.006
384 876


Amount of marine insu-
rance policies issued (mil-
lions of yen) ....
Amount of fire insurance
policies issued (millions of
ven) .


15.464


20.299

. IA7


139.992

21 . 5O2


794.058
142.486


Amount of life insurance
policies issued (millions of
yen)
Number of persons adjudi-
cated bankrupt
Total liabilities of bank-
rupts (yen)


1.005
22,492

3. C4.2, 186


3- 2 35
6,663

i .4.62. 1 6 c


23.048

3>*4- 1

AOQ,4.SO


152.194
1,203
i 72,001


Development of railways
(miles)


188


861


I.6Q7


3,4.20


Developments of telegraphs
(mileage of lines) mer-
cantile marine ...
Steamers (number) .
Steamer (tonnage) .
Volume of media of exchange
in circulation (millions of
yen) .


5 T 75
39
45.350

I 1Q


6,534
524
81,066

171


9,049
680
110,205

2O7 \t,


13,922
1,130

477,430

221 %













1 This figure is for 1889, the earliest record of the match industry, which began to be followed about the
year 1886.

1 This figure is for 1889, exact statistics not being previously obtainable.



Chapter II

JAPAN'S FOREIGN POLITICS

ONE of the most memorable incidents of
Japan's modern career was her recovery
of judicial autonomy ; in other words,
the removal of disabilities which had
excluded her from the comity of Western States.
It has always been considered expedient that
the subjects and citizens of Occidental Christian
countries, when they visit or reside in non-Chris-
tian Oriental lands, should be exempted from the
penalties and procedure prescribed by the latter's
criminal law ; that they should continue, in short,
to enjoy, even within the territories of such coun-
tries, the privilege of being arraigned before tri-
bunals of their own nationality and tried by judges
of their own race. In civil cases a division of ju-
risdiction is effected, the question at issue being
always adjudicated by a tribunal of the defendant's
nationality ; but in criminal cases jurisdiction is
wholly reserved. In pursuance of that principle
the various Powers having treaties with Oriental
nations establish Consular Courts within the
latter's borders, and the jurisdiction exercised by
these Courts is called " extra-territorial " to dis-

28



JAPAN'S FOREIGN POLITICS

tinguish it from the jurisdiction exercised by
native, or territorial, tribunals. The system was
applied to Japan's case, as a matter of course, in
1858. It had been similarly applied in the six-
teenth century, in the days of her first foreign in-
tercourse ; and just as it had then been one cause
of the Dutch traders' imprisonment within the
narrow limits of the island of Deshima at Naga-
saki, so, in the nineteenth century, it necessitated
the confinement of the foreign residents in settle-
ments grouped around the sites of their consular
courts ; for plain principles of prudence forbade
that these residents should have free access to pro-
vincial districts far remote from the only tribunals
competent to control them. The Japanese nego-
tiators in Yedo raised no objection to the embodi-
ment of this system in the treaties. But it was
one of the features most vehemently condemned
by the conservative statesmen and politicians in
Koyto, and no sooner had the administration been
restored to the Emperor than an embassy was
despatched to Europe and America with the ob-
ject of inducing Occidental Governments to re-
vise the treaties in the sense of abolishing consular
jurisdiction and changing the tariff so as to enable
Japan to obtain a larger revenue from customs
duties. 1

This embassy sailed in 1871. It had a specific
right to raise the question, for the treaties con-
tained a provision declaring them to be subject to

1 See Appendix, note 9.



JAPAN

revision in that year. As a matter of course, the
embassy failed. The conditions originally neces~
sitating consular jurisdiction had not undergone
any change justifying its abolition. Neither the
character of Japan's laws nor the methods of her
judicial procedure were such as to warrant foreign
Governments in entrusting to her care the lives
and properties of their subjects and citizens.

It must be confessed, on the other hand, that
the consular courts themselves were not be-
yond reproach. A few of the Great Powers,
notably England and the United States, organised
competent tribunals and appointed expert judicial
officials to preside over them. But a majority of
the treaty States were content to delegate consu-
lar duties to merchants, who not only lacked legal
training of any kind, but were themselves engaged
in the commercial transactions upon which they
might at any moment be required to adjudicate
in a magisterial capacity. Thus it happened,
sometimes, that a Japanese subject desiring to in-
voke the aid of the law against a foreigner who
seemed to have wronged him, found that the de-
fendant in the case would also be the judge.
Under any circumstances, the dual functions of
consul and judge could not be discharged by the
same official without anomaly, for the role of
consul compelled him to act as advocate in the
initiatory stages of complications about which his
role of judge might ultimately require him to
deliver an impartial ruling. It would be an



JAPAN'S FOREIGN POLITICS

error to suppose, however, that the course of con-
sular jurisdiction in Japan was disfigured by many
abuses. On the whole the system worked satis-
factorily, and if it hurt the feelings of patriotic
Japanese, it also saved them from innumerable
complications into which they would have blun-
dered inevitably had they been entrusted with a
jurisdiction which they were not prepared to
exercise satisfactorily.

Nevertheless, they determined from the first
that no effort should be spared to qualify for the
exercise of a right which is among the funda-
mental attributes of every sovereign State, the
right of judicial autonomy. Under any circum-
stances, the recasting of their laws and the reor-
ganisation of their law courts would have
occupied a prominent place in the programme
of general reform suggested by contact with
the Western world ; but the " extra-territo-
rial " question certainly stirred them to special
legislative efforts. With the aid of foreign ex-
perts they set themselves to elaborate codes of
criminal and civil law, excerpting the best fea-
tures of European jurisprudence and adapting them
to the conditions and usages of Japan. They also
remodelled their law courts, and took steps, slower
but not less earnest, to educate a judiciary compe-
tent to administer the new codes.

After twelve years devoted, with partial success,
to these great works, Japan, in 1883, renewed
her request for the abolition of consular jurisdic-

3 1



JAPAN

tion. She asked that all foreigners within her
borders, without distinction of nationality, should
be subject to her laws and judicable by her law
courts as foreigners found within the borders of
every sovereign State in the Occident are subject
to its laws and judicable by its tribunals of justice,
and she supplemented her application by promis-
ing that its favourable reception should be fol-
lowed by complete opening of the country and
removal of all restrictions hitherto imposed on
foreign trade, travel, and residence in her realm.
From the first it had been the habit of Occiden-
tal peoples to upbraid Japan on account of the
barriers opposed by her to full and free interna-
tional intercourse, and she was now able to claim
that the barriers were no longer created by her
intention or maintained by her desire, but that
they existed because of a system which theoreti-
cally proclaimed her unfitness for free association
with Western nations and practically made it im-
possible for her to throw open her territories
completely for the ingress of strangers.

A large volume might be filled with the de-
tails of the negotiations that followed Japan's pro-
posal. Never before had an Oriental State sought
such recognition, and there was extreme reluctance
on the part of Western Powers to try the unpre-
cedented experiment of entrusting the lives and
properties of their subjects and citizens to the
keeping of a " pagan " people. Only the outlines
of the story can be sketched here, though several



JAPAN'S FOREIGN POLITICS

of its incidents do as much credit to Japan's
patience and tact as its finale does to the justice
and liberality of Occidental Governments.

There is one page of the history that calls for
special notice, since it supplies a key to much
which would otherwise be inexplicable. The
respect entertained by a nation for its own laws,
and the confidence it reposes in their adminis-
trators are in direct proportion to the efforts it
has expended upon the development of the for-
mer and the education of the latter. Foreigners
residing in Japan naturally clung to consular juris-
diction as a privilege of inestimable value. They
saw, indeed, that such a system could not be per-
manently imposed on a country where the con-
ditions justifying it had nominally disappeared.
But they saw, also, that the legal and judicial re-
forms effected by Japan had been crowded into