Los Angeles herald., 1908-04-08
los ANGEIEs HERALD: wEDNEsDAY MoRNINC APRIL 19Os

TOXIC. April 6.--When Japan took
unto itself ahe blessings of western
civilization Il was inevitable that the
curses must be included. Today 1t Is
suffering from having taken q flyer at
frenzied finance. After the war with
Russia, the Japanese rushed headiong
into a boom. The collapse has come
and the nation is gasping but the sins
of America are also visited upon Nip
non. For every American girl who Is
nouting because that horrid Wall street
has deprived her of a new silk gown,
there is a sorrowful almond-eyed maid
in beautiful Japan who mourns the loss
of the cents a day which she earns by
feeding silk worms Among the most
marked effects of the recent panic in
the United States was the falling off in
demand for silks. Consequently the
godowns of Yokohama contain $50, ,0O0,-
900 worth of raw silk at time when In
g. normal year they would be empty.
This silk Is unstable at q profit and
every time a bale changes hands now
1t means loss.
The silk grower in the country did
not foresee the financial crash, neither
did his country banker. Tho grower
needed ready money and the banker ad-
vanced 1t on the security of the silk.
Now the price has fallen and the silk
is practically unstable. The silk grow
ers cannot pay the banker. The bank
er must pay his 6epositors. From these
things come bank runs, from bank runs
come failures, from failures comes loss
of employment, and from loss of em-
ployment comes starvation. And this
In a country where 20 cents day is
high wages for an able bodied man.
If there had been money in the coun-
try the Temporary cessation of Ameri-
can nurchases here would not cause
such serious embarrassment. But Japan
has never had much money, and what
little 1t did have has gone into the
great industrial companies organised
during the boom which started few
months after the close of the war with
Russia, and Which tumbled into moth
ingness with the crash of last year. The
Japanese government tried in many
ways TO restrain the fever for speeula-
ton, knowing that the resources OF the
nation were not sufficient to sustain a
half billion dollars worth of new indus
tries at this time. But the advice was
not needed ano speculation stopped only
when the bubble burst Now the gov
ernment seems to forget its role OF
| friend to commercial interests ana re-
fuses to take any steps to relieve con-
ditions On the other hand, the bur-
the lew of new taxes, although the
war tax has not been lessened after
/ three years of peace. And OF this tax
monAv collected from these poverty
stricken people, the government spent
last year
On the army and navy. ....'s slie'svs'oo1,,
On education ............... 4.ils.4''
The war with Russia brought te
| Us pan so many hallelujahs and banzais
| from all parts of the worla tnst Wy
| .Je panese were almost convinced tna'
| there was nothing which they could MOI
do. 1t was natural that they should
| turn to industrial fields and seek te
astonish the world there as they nae
done in war Companies were organ
lied to exploit the meager mineral re-
sources of the islands. others 10 man
ufacture raw materials to be brougn,
| from China, others to take advantage
| o,f growing internal business and still
others to push commerce into foreign
/ lands. Millions were subscribed ant
before the ink was dry on the papers
or incorporation q dividend would Dt
declared. This artful dodge deceived
| the innocent lamb OF Nippon ana ns
rushed to his little Wall street WIZ
his savings. The prices of shares
| scared to the skies.
Then came the Notwithstanding finan-
cial troubles. Copper. Japan's greates
mineral product, dropped to the bot.
tom. Then came the silk disaster ant
Japan's greatest domestic Industry
was paralyzed. The balance of trade II
1906 had run in Japan's favor and It's
people boasted that theirs was an ex-
porting nation. Within a few months
the exports dropped almost half. The
Bank of Japan pays a IL per cent dlvi'
dend and Is considered Thoroughly
.sound Institution. The par value OF its
hshares is 200 yen.l "a yen is eqpiva'
lent to SO cents III American money!
In a. few months the market value
dropped from $50 to 56S yen. The
Toxic Electric railway stock. par value
&c yen, dropped from 106 to SO, anC
now municipalization of the property
is in sight. The Osaka Spinning com.
pany has never missed a dividend ant
It pays 20 per cent annually. Its shares
par so yen, fell from 1875 to 70, in the
| face of the one-fifth dividend
How foolish the payment of sucf
| dividends is has been proved in the
very case Of this spinning company
| The Japanese cotton spinning mills, o.
course, use foreign raw material. They
have excellent mills and they have
good labor at next to nothing compared
| to the cost in American cotton mills
| AT one time they had built up a gooc
| trade in China, the greatest consumer
of cotton among the nations But tht
boom caused an effort to establish
weaving on larger scale In Japan ane
the small weavers were greatly en-
/