The sun., 1908-05-10
TO RAISE MONEY FOR JAPAN
RItL PURPOSE or the VISIT
or HER FINiNCIERS.

par1n GoShlrO Sakatani, eX-Minister
n Finance Of Japan and since his retire
mont from the Cabinet one Of the small
circle II leading hnanciers who have been
making desperate efforts to repair the
domoralized finances OF the empire and
the commercial activities of the land will
arrive in New York to-day with a party
Of rankers representing tho Government
bank and large private banking institu-
tons in Japan.
Although Baron Sakatani announced
upon his departure from Yokohama that
bis visit was purely for pleasure the Japa.
pese papers including the Government
organ In Toxic, are unanimous In declaring
that the object Of the Baron's visit ~
America and European capitals is the rails
inc of further national loans for tho Japa.
nese Government,
Tho Baron and his party represent the
great financial interests Of the. nation,
with him thcre are reported 10 he two
cour,oIlors Of the department Of finance,
the president Of the Dai lchi Ginko Great
Tir.' Bank, the director Of tho colonial
finance bureau in Formosa and the manager
n 'na First Bank Of Formosa. Baron
Sakarani arrived In Victoria on Nippon
ypseu Kaisha boat week ago. From
New York he and his party will 90 TO Europe
and after an extended stay in London.
Par. and Berlin they will return TO Japan
via the Siberian Railroad.
The financial situation at present exist
inE in Japan is Of suoh a character as to be
almost national menace and the opposition
10 the present Saionji Ministry has hastened
10 make political capital out Of the chaotic
conditions in national and private finance.
The fate Of the present Ministry seems TO
deIerd largely upon measure Of redemp-
non uf war bonds for the furtheranoe Of
which Baron Sakatani and his party are
cicyed by the Japanese press TO be on
their present mission.
In July the first Of the war loans raised
by the Government at the outbreak Of the
struggle with Russia will fall due. This
.oan. the first domestic loan Of the war,
which amounts TO lOO,OOO,OOO yen, was
written in eNchequer bonds bearing interest
At per cent. The loan was subscribed to
entirely within Japan. banks, manufacture
ing firms and private individuals being the
purchasers, A remarkable feature Of the
loan issue was that IL was subscribed 10 by
thousands Of small capitalists throughout
the provinces OF Japan, actuated as much
hy patriotic sense Of duty as by business
acumen.
4 month or 30 ago reports began to cir
oh in .Ia hat
the Government, despite its assurances,
would be unable to meet the payment Of
these FIRST war loan bonds in cash. II was
brought out before the Diet that the Govern
ment deficit for the year would be 120. .OOO, 900
yen, and the new extraordinary tax assess
ment for the new year was rated at 10 yen
por capita, crushing burden for the aver
age Japanese peasant. whose monthly in
come rarely exceeds yen 0D.
Upon Interpolation by the Diet the Saionji
Ministry announced that instead Of redeem
ing all OF the eXchequer bonds Of the first
domestic loan in cash option would he
given all holders to rewrite their bonds in
new bonds Of a proposed Government loan
hearing interest at per cent. The tempting
Government offer Of 81, $50 face value bonds
in exchange for $500 worth Of the old ex-
chequer bonds was designed to ward OF
the unanimous demand Of all holders Of the
original paper for cash.
This announcement Of the Ministry raised
an immediate and general outcry Of protest
on the part Of the bondholdeTs. II was
freely stated IN the opposition press that
the Government actually had no more than
5000, 900 yen in hand with which to meet
The demand for the full 10000, 600 yen Of
the first loan and that the rewriting scheme
vas merely a rlIse to cover the deficit In
the refunding sum, which had been spent,
so the general impression seemed 10 be,
in the various Government ventures into
the field Of private monopoly. .
In answer to this protest the financial
department Of the Government announced
through an inspired journal that there
vas actually in hand 10000 900 yen Of the
bond conversion fund and that before all
demands should be In there would be
sufficient money accHling from a surplus
on the Governments appropriation for
public works 10 complete the 10000 900,
The Government also admitted tnat because
of the stringency in the money market,
which has been growing more and more
acute since the beginning OF the year,
II lid not believe that more than 10000 900
u The total OF 100 900 900 would be rewritten
in the new per cent. bonds, The Govern.
meut called attention TO its act Of good
faith in Offering 20 rcdeem the eXchequer
bonds in July when its period Of grace
would allow it TO refuse payment until
December.
Those who held the e=ohequer bonds
found little comfort in the Government 5
attempt 10 sugarcoat its financial pill.
RT some Of the important bankers and
leaders Of manufacturing interests in Japan
II VAS pointed out that by paying or re-
writing it's bonds before the end OF the
fiscal year the Government was dodging
ils obligation to settle the annual per
cent interest. II il were definitely stated.
said one authority. that such and such
sum would be repaid In ready money and
alch and such offered for rewriting az the
advanced terms Of interest the people
would know definitely that the Government
vas In a position 10 make a definite hard
money payment and there would he no
assembling. By it's offer OF rewriting at
tempting terms the Government had vr-
uRNy proclaimed that IL was willing TO
rewrlte the entire first loan.
This readiness indicated TO those who
found fault with the Government 3 seeming
inability 70 fulfil its obligations that in
stead Of being In a position 70 reduce the
enormous national debt OF 2,2l7. 900 900 yen
the Government by its policy Of rewriting
portions Of this debt as bonds fall due at
q higher rate Of interest is involving itself
only deeper. II Is urged at the present time
that with the first Of the foreign war loans
falling due In 1910 the Governments quib-
bling in the matter Of repaying the first
~ i's domestic loans will utterly destroy
all foreign credit and make negative any
attempt TO raise further loans abroad.
Coincidentally with the Governments
announcement that II would rewrite the
bonds Of the first war loan all the banks
in Japan raised their daily interest rate TO 20