The daily morning journal and courier., 1907-09-25
JAPAN SOLVENT AS
 WELL AS SMART Unable Just at Present to Refund the War
 Debt. BUT NOT BANKRUPT Worse Off Than This Coun- try or France at the
 End of the War.
fNew York EYenlng Post.l )

The present condition of the money markets of the world will prevent Japan from realizing her hope of is- suing a refunding loan under favor able conditions in the near future, In the active market for stocks and bonds which followed the flush of Japan's victory in 1905. hope was entertained that ali the war debt could be refunded at four per cent. and at a price near par. The first refunding loan was well taken, but quotations have declined to about s5, and the recent failure to float a smal amount for the Manohurian railways is g warning that in the way of refunding nothing more can be done at present The heavy interest charges imposed by the necessities of war must con- tinue to be borne by the Japanese people for some time to come
 The effect of this burden of debt upon the economic progress of Japan will furnish an interesting problem. The general budget was swelled in 1906 by extraordinary receipts of I54,140,sSS yen t$7T,00O, ,00Ol, de- rived from such sources as increases in the land tax, income tax, excise duty on sugar, and stamp taxes. and tho assumption of the tobacco mon- opoly. From these taxes the people are apparently Co get little relief; for, in spite of the large revenue which they afforded, the outstanding debt grew in the fiscal year ending March si, 1907. by about i15.O00,0O yen
 (S67, ,O00.o00) as tho result of contin- ued outlays for strengthening the military and naval establishment and meeting the expenses growing out of the war with Russia. The issue of new loans in times of peace to meet the demands of great military estab- llshnent is not an encouraging nature of the situation, although by no means unusual among the governments of Western Europe.
 It is interesting to compare the rel- alive burden borne by the people of Japan with that of other countries. The position of Japan is not worse than that of other powerful States. Definite comparison is not easy, however, be- cause of the wide difference between the economic power of the Western and that of the Oriental nations, as well as differences in the organization of the government, The real burden of debt in the United States could be found only by adding the amount of State and municipal obligations to those of the federal government; but these local obligations were small here in 1861, and they are small in Japan at the present time. The national debt of Japan on March 3l, 1907, stood at about 1887, T,72o,00o yen, or nearly $1,OOo,- 100000 This was regarded as q stag gering burden. when 1t was imposed upon France by Germany in 1870, but is was easily thrown off by a people so rich In savings as that of France.
 The United States at the close of the Civil War with a population which was considerably less than Japan to-day, labored under a war debt of s2,221, ,S11, : 9S7. Our productive power per capita
 moreover, was at that time nothing like what has been attained with the
 development of machinery and the ex- tension of railways within the past generation.
 The per capita debt 6f Japan on
 March s1, 1907, was 4b,o12 yen, or about $22.0o The per capita debt of the Unit ed States at the present time Is less than $11, but in, 1865 1t was approxi- mateiy S6S.50. Judging by these figures, the people of Japan are only little more than one-third as heavily bur- dened as were those of the United States at the close of the Civil War If economic power is taken into account, however, it is probable that we. even at that date, were superior in nroduc- Ing capacity to the Japanese at, the present time. How far the economic power of Japan should be reduced in comparison with that of the United
 States in 1865, in order to reach com
 mon basis of comparison. it is prac- tically impossible to deterrpine, but un- doubtedly a considerable reduction should be made,
 There Is no reason to fear the in- ability of Japan to meet her obliga- tions. The interest charge per capiA cannot exceed materially $115, or five per cent. Gpon the outstanding debt. What is more to be feared than in- ability to nneetsinterest charges at the
 present time is tho increase of the debt to meet annual deficits caused by ex- traordlnary expenditures for military and naval purposes, such as have at
 various times nearly en1ptied the treas-
 uries of France, Spain and Italy Ev-
 erything relating to the fiscal situation in Japan teaches the lesson of oonser- vatlsm and the peaceful exploitation of the large territories already won in
 Formosa and on the Asiatic mainland. rather than reaching out for new con- quests at the expenss of binding upon thA hack nf tha TaDSnAsa r,aonIa h,,r