New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1898-01-10
GOLD-rSTNG IN JAPAN.

A highly interesting and able communication
appears in "The Financial Chronicle or TINS
week. signed by X. Nakamurn. OF TOXIC Japan
giving some results of experience thus far un-
der the gold standard in that country. III Is
stated that the remarkable rise in prices In
Japan during recent years. OF which frii details
wore given not long ago by The Tribune, has
been generally interpreted by the japanese az
a consequence Of the depreciation or their SILVER
currency in gold value. and consequently IN
purchasing power. This the writer DeheVes II
partly mistake and he observes that the gold
standard was expected to check the advancing
rate Of general prices. but has not YET accom-
"plished that aim. although 1t hns made consld-
"erable progress during the first month OF us
Experience The average OF prices given by
him Is only n tenth Of / per cent higher Octo-
Der than September |. But the writer argues
with much force that the continued advance Tor
some years had been due IN part to results OF
the war with China; to excess Of imports OF the
precious metals, amounting to 0S,I39'9SS yen
during the last fiscal year. owing to payment OF
the Chinese indemnity; to increase of convert
ible banknotes from 147,G41.Sl4 yen to 1884
2O5; to increased activity Of circulation shown
by cearngs Of 7425507 yen during the last
year. against 14S,O1S,SI1 before the war. and
to continued increase Of the currency allowed
by the Ministry from 270,0J2.210 yen Septem-
Der, 1896, to 3OO,277.693 yen October 1897.
All these are obviously changes calculated TO
influence prices. and another OF which nothing
is said must also have played an important part
namely. the new energy shown since the war
in many branches of industry, In development
Of resources and greater diverslcation OF In
dustria activity. But 1t Is pointed out that the
adoption OF the gold standard has materially
diminished trade in some respects; thus, the
trade Of cotton manufacturers with China has
been dcranged owing to tho shifting of foreign
exchange with that country, China still using
silver so that in September and October the
silver tacl OF China had fallen from 81 to 20.
and in consequence japanese cotton manufact
urers could not export their products. These
goods are hcapcd mp in large quantities IN Osa
ka. causing disturbance in the money market
80 That the pate of interest has risen from 10 to
10 per cent On the other hand. 1t Is shown
that exchange with gold-usng countries has
grown very steady. during over two months
quoted the rate Of exchange with New-lork
having varied not nj all, and the rate Of OK
change with London having varied only six
teenth OF a shilling. In consequence Il Is argued
that foreign trade hns been enormously encour-
aged and Il Is shown that in September COM
pared with the previous year imports increased
147 per cent and exports GOA per cent. while
In October the increase in imports was 3i.4 per
cent and the increase in exports BID per cent.
Another important advantage has been the
elevation Of national credit. and in consequence
marked increase In investments by foreign cnp-
italsts Thus II IS shown that English capital
ISIS have recently invested 4O.00o.000 yen In
Japanese bonds the French 1850 900 yen IN
the city bonds Of Osaka, and American capital
lists are likewise placing money In Japanese Sc
curities The demand for new capital to de-
velop industries Is shown to be very great ana
rapidly increasing so that the rate OF interest
at the Bank OF Japan has advanced from ID
sens n day in 1893 to % in 1891. and at Toxic
banks from % to sens day. This shows nm
advanc, in the rate Of interest from about I.3
are still very low. while tho usual rate OF profit
IS very high and Mr. Nakamura adds: "A bank
ION the average divides II per cent to It's stock
"holders n cotton mill about Is or ~ per cent
"and n railroad divides about 10 per cent or
"more" All these facts bring into prominence
forces which must tend TO advance the range
of prices in Japan materially for some time to
como. quite Irrespective Of the standard Of
money IN circulation. At the same time the
writer does not affirm. and doubtless would not
contend that the change from n deprecated
silver TO n gold currency has not n strong in
fuence 10 prevent the rise IN nominal prices
which resulted inevitably from the depreciation
OF silver.