The daily morning journal and courier., 1907-05-10
JAPAN'S HARTMAN.
KITASHIMAOFHARVARD
They've Got Boomers and Promoters in Tokio, and
 Had Their Own Slump.

ward university Tn 1855, secretary or the Harvard club in Japan, formerly minister of the Unitarian church of Vineland, N. J., and now manager of the Tokio stock exchange house of Flu kushmina & Co,, is in New York to study stock exchange methods, He is going to London next to find out about them, and after that to Paris. Then he is going home, but will go back through this country to pick up his Amgerican wife, who will stay with her parents at Vineland while he is in Europe.
 From what MT. Kitashima said yes- terday at the office of broker in Ex- change place it did not appear that the Japanese had great deal to learn from us or anybody else about stock dealing, They have a system there almost as good as ours, it seems. Any way 1t was able to boost the price of the market leader, Kanegafuchi Cot ton Spinning company, from 150 yen in October, 1906, up to 3S0 in January, 1907, and then knock it down to 125, where it stands now. Then they blam- ed the slump on the administration.
 Another cause, though, was the awakening of the public to the fact that they were being tleeced by pro- motors who were taking advantage of the boom in the early part of the year to float new companies. It isn't bogus copper mines and real estate compan- les over there, but water and electric power plants, and they seem to have an even simpler method of taking the money out of the pockets of guielless investors than we have They don't take the trouble to issue stock eertif- cates, but merely announce that they are going to organize company to utilize the water power in such and such a river.
 Then they issue script represent ing rights to subscribe to the new stock when issued" said Mir. Kitash- ina, "and when these are sold they decamp. The public soon learn that there isn't any water in the river at all and very often there isn't even any river
 However, MT. Kitashima isn't here to muck rake, but to induce American financers to jump into the Japanese market at the present low level. He says that it Is easy to buy gilt edged securities there now that will yield 8 per cent. and over. The opportunity for government bonds is especially good now, he says. After the war the soldiers got pensions in the form of these bonds and are throwing them over in. large quantities to obtain cash. Naturally the price is lower than it should be.
 MT. Kitashima then told little about the operations of sizuki, whom he called the Hartman of Japan.
 "Sizuki was a country banker" he said, "and got into the market shortly after the war and before the boom started. At that time shares of the Tokio Stock exchange, which is incor- porated, were selling at about par, 30 yen. Stocks went flying up with the increased prestige of Japan and pros porous commercial conditions, and Siz- uki found himself with a profit of 20- 000000 yen, or about $10000,000. Then he started on his career of amalgama- tion and in short time reorganized large number of companies and fioated their securities at the flood tide of prices with enormous profits. Whether he got rid of all his holdings before the slump don't know, but If he lost any money in it he could we'll afford it. The break in the market came in January, and was led by the parliamentary par ty, They had, or pretended to have, strong influence on legislation and threatened to revoke the law forbid ding that there should be more than one stock exchange in one city. This sent the shares of the exchange tumb- ling down from 500 yen in January to 250 yen, the present quotation. Other stocks acted in sympathy and there was a disastrous panic. Young Hira- numa, who inherited a large fortune from his father, a big speculator, got caught in 1t, and committed suicide. Stocks are at their lowest now, but offer a number of safe Investments The stock exchange paid 33 per cent dividend last November and will de- clare 50 per cent. in May, if not 70 per cent. Kaneguchi Spinning Is on 20 per cent. basis. The banks throughout have maintained conservative policy and none has failed"
 The Tokio Stock exchange pays div idends on it's shares by taking part of the brokers commissions as fee for acting as a clearing house. A broker who sells turns the stock in to the clearing house, which in turn hands 1t to the buyer immediately or after an interval up to three months, according to the terms of the sale. Tn sales of stock with a par value of 30 yen or un- der for immediate delivery, the ex- change gets 1 sen commission and the brokers get sen commission on each share. A sen is about one-half a cent. On time deliveries the exchange gets considerably more proportionally, in some cases getting more than the brokers The capital of the exchange is $12000,000. A little business guide issued by Fukushima & Co. says:
 A peculiarity of the Japanese bourse constituted as joint stock company is that it guarantees with the whole of the property 1t owns as a limited joint stock company against all losses aris- ing from failure on the part of its brokers to carry out contracts made in the bourse itself. Tn this respect it goes much further than in the case, for instance, of the Caisse de Garantie of Havre or with the Produce Exchange Clearing House company of London.
 At, present the exchange has about seventy-seven members and deals ac- lively in about fifty stocks. A good many others are listed and transactions average several hundred thousand el,oreS o dav Tsbara ic auotbor ax-