The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1901-07-26

keen appetite should not be given too
much food, otherwise he may injure his
stomach and be ill again. The COM
plant raised in certain quarters that the
Bank hesitates to make advances On
such an important staple as silk is like
that of greedy patient bewailing the
insufficiency Of his diet. The excess of
imports over exports has continued for
years and the efflux of specie knows no
end. In this precarious state of affairs,
it is but proper for central bank to
raise it's rate of interest and withdraw
its notes from circulation in order to
maintain the stability of the conversion
system and take steps to lead the
economic world gradually back to its
normal condition. With the Bank of
Japan pursuing such course, other
banking concerns have of course to be
cautious CORRESPONDENCE, inasmuch as
they cannot freely utilize the capital Of
the central bank even if they may have
plenty of good securities or drafts in
hand while their creditors apt to
be alarmed by absurd reports and ready
to draw off their deposits at any moment.
Every bank has, therefore, to reserve a
large amount of funds against it's credi-
tors so much reducing the amount of
money in circulation. Moreover, the
credit of individuals usually fiuctuates at
times. One who could collect a million
ven yesterday may not be able to bor-
row half as much today. The necessity
of keeping large amounts of reserve
funds, coupled with the uncertainty Of
the credit of individuals, renders it i'm
possible for any bank to make advances
as freely as at better times. 1t is then
too much to say that banks are reluctant
to lend; on the contrary, they are al
WAYS anxious to lend as much as they
20 do he
certain of the resources of their debtors.
BRIGHTER FUTURE IN PROSPECT.
How long the present depression
will last is a question which every
body naturally asks. Japan's economic
organization is on very limited scale
as compared with that of Europe or
America, and it's different parts are not
related to one another as closely as in
other countries. This want of close rela-
ton does not make the whole work
smoothly under ordinary circumstances;
but then there is this advantage, that
the failure of a few banking, industrial,
or commercial concerns does not tell on
the whole to any serious extent. In q
country where the credit system is not
fully developed, such seems to be always
the case. Many firms apparently doing
we'll may really be on the verge of ruin,
and the comparative rarity of cases Of
bankruptcy may partly be accounted for
bv the fact that Japan has not yet adj
vanced to the stage when a single fall
IRE may suspend the vitality of the
whole economic mechanism. Be. the
theory whatever it may be, the Bank of
japan firmly sticks to the policy OF
Withdrawing its notes, and other bank
ing concerns have to use the utmost eau
/ ton in making advances; while all firms
whose resources are exhausted have been
doomed to their natural fate, and 1t
seems no firm of questionable standing
| remains in existence-the long continued
depression has so thoroughly swept and
+. cleansed the business world. This must
he a rude shock to Japan, from the
emarting effects of which the country
NAV have to suffer for some time to
come. Now that the people have be-
j come cautious, however, we may console
ourselves by the fact that the worst has
already come, and the pains which we
are suffering and will have to suffer fol
J a little time longer are harbingers OF
better DAYS. such being usually the way
| IN recovery. 1t is impossible to say ex,
actlv when the longed-for activity will
/ again come, but should the silk trade
| Of this wear change to be active Japan
} will be. early next year, in the position
of a patient bed-ridden for many days
mast who has so far improved as to be
able to walk in the suburbs.