Evening star., 1898-12-15
JAPANESE FINANCES.
Statements Showing Them to BE in
Healthy Condition.


To the Editor of The Evening Star:
The letter from your special correspon-
dent at Yokohama published in yesterdays
Star contains statements so gravely erron
eCus that am compelled to ask an oppor
tunity to reply. This duty becomes all the
more imperative in view of what you edi
torialIy say in the same issue under the
caption "Japan's Financial Difficulties"
The Stars well-deserved reputation for ac
curacy and impartiality furnish, feel as
sured. ample warrant for believing that
you Will welcome ii correction of the seri
Gus errors into which your comments show
you have been betrayed by your CORE
spondcnt's statements.
You observe that it is plain from what
your correspondent says that Japan is in
serious financial straits. The great Chinese
war indemnity" you proceed to remark,
has melted in a mysterious manner, and
the people are eager for explanations as to
the ways and means of its use. Their rep
resentatives in the diet have been unable
10 secure information, and the frequent in
terpelations of the cabinet have caused
periodical collapses." These assertions dis
play a very mistaken idea both concerning
the facts and as regards Japans financial
methods. In the first place, there is not
the slightest mystery in relation to the
disposition which has been made of the
Chinese indemnify. Ii has been set aside
to meet part of the cost of the plans of
military and naval increase adopted after
the war with China. and the great bulk of
it remains unexpended in the Bank of Eng
land. The diet sanctioned this use of the
fund, and no Interpolation on the subject
has ever caused the collapse of a cabi-
net. The disposal of public moneys is as
strictly safeguarded in Japan as II is in
this country, and such a disappearance of
government funds as that you relate would
be practically impossible.
Your correspondent alleges that the Jana
nese currency is in bad way, that there is
substantially no gold basis, and that the
foreign banks might precipitate a crisis by
demanding gold for notes. A statement of
the facts IS sufficient reply to this The
Bank of Japan is the only authorized
agency for the issue of paper money. Gov
ernment and national bank notes are being
redeemed and retired as rapidly they are
presented. AT present the total amount of
both still unredeemed is proba bly not more
than 20 Goa 600 yen. i -,e weekly statements
issued in accordance with law in the official
Gazette by the Bank of Japan prove that
the paper currency is upon a perfectly
sound and healthy basis. According to the
most recent one at hand the notes in circu-
lation amount to H. .1O4 III yen, the gold
reserve to S23IO,3I6 yen, and the silver re-
serve to 100000 yen.
AS regards the alleged falling off in the
revenues of the empire and the increasing
excess of expenditures the answer is equal
ly y ain, The plans of military and naval
increase already alluded to have undoubt-
edly produced Il deficit. But it should not
be forgotten that these extraordinary eX-
penditures are limited to a period of four
years. In the meantir it is estimated that
the annual deficit will not exceed 30 600 900
yen. The japanese are on the whole a
lightly taxed nation ard the question of
meeting this deficit without imposing heavy
burdens or injuring vested interests does
not involve a very serious problem Some
difference of opinion exists among japanese
public men regarding the choice of meth
ods, but this by no means implies the belief
in any well-informed quarter that Japan is
nearing the limit of her revenue-producing
capacity.
Your correspondent includes among other
causes Tor Japanese financial depression the
fact that recently imports have exceeded
exports. lie should have gone farther and
explained that the excess is due to excep-
uonal and temporary causes. Part of if
may be ascrbed to the fact that imports
have been largely increased in authorization
of the L.gher customs duties which are
soon to be enforced. while the poor rice
crops of the past two years. each at least
20 per cent below the average will doubt
less account for the residue With trade in
normal operation under the new customs
arrangements and with rice crop like
that of the present year, % per cent above
the average, ii is only reasonable to antici-
pate that japanese commerce will soon re-
sumo its customary prosperous belance
ID. W. STEVENS.
December A. 1898.