The Washington times., 1920-04-29

had sprung up. This meant tremeh-
dous expansion OF bank credit.
| A natural sfrect OF the large Jap,
lanese exports and comparatively small
Imports was that a fiow Of gold
started into Japan. This event, par
ticularly on top OF expanded hank
Icredit, always means currency inna-
tion. The boom demand for credit
with plenty OF gold on which TO base
currency Issues. resulted In vast
inn alton,
Coincidently, the cost OF living In
Japan began to rise. The Japanese
laboring classes. having learned much
from organized labor In this and
European countries and having heard
many speeches concerning the era OF
Liberation for the working people, de-
manded greatly increased wages.
This was the Industrial situation
in which Japan found herself at the
signing OF the Rrmistice. At the very
top OF the biggest imaginable boom
the rrst Industrial boom she had ever
enjoyed,
Britain Begins Competition.
with the end OF hostiiities came
rapid readjustment in trade. Eng
land began rushing goods TO the
Orient to compete with the Japanese
exports, The United states came into
the market, and other countries made
the attempt 10 sell there. Overnight
Icompetition loofned before the Jap
Ianese industries, just At a time when
the Japanese cost of living and the
labor wage increases had greatly In.
lcreased cost OF production.
Then came the Chinese boycott
the most extraordinary economic phe-
pomenon the world has ever seen; the
only completely successful and abso.
lutte boycott in the history OF man
kind. Incensed at the terms OF the
peace treaty according shantuns to
Japan. and dislilSing the military
methods Japan had used In Man
churia and Chosen. the Chinese stu
dents and trade guilds banded to-
gether and declared an outright boy
cott on Japanese goods. They natly
refused to buy anything imported di.
rectly or indirectly from Japan. Fur
fer. she refused to buy or trade in
any article brought to China from
any place In Japanese ship,
At one stroke the great. new, boom
foreign trade of Japan was cut down
by 20 per cent. Nearly three -fourths
Of her whole exports stopped.
Labor stayed Res4ve.
In the face of this catastrophe, her
awakened business men sought to
sustain the industrial boom. They
interested other sections OF the world,
as far as possible and tried to create
new markets. They continued their
industrial expansion. building sp' n
ming rnills. electrolytic copper plants.
electrical works and other enter
prises.
Labor continued restive, SO much
SO indeed that at times something
akin to revolution threatened. The
rice riots occurred in Tokyo. Trade
unionism and woman suffrage were
agitated firecely. as were many 9TH
er reforms. Japan had not escaped
the war profiteer. He was presen;
in the most aggravated form and be-
haved in manner calculated to in
furiate the poorer workmen against
| whom the increased cost OF living
pressed. Fifty dollar tips were tossed
on restaurant tables. private cars
| were operated on the railroads for
the rich men. all manner OF the most
extraordinary eXcesses Of luxury were
committed by the newly r.,h war
profiteers who had been on top OF the
boom.
The situation became so acute that
not long ago II became necessary for
the Government to issue edicts for
bidding various displays of luxury.
The ceremonials of the imperial
court were abandoned and many ex-
pensive habits OF the rich were ban
ned. These measures doubtless went
far to appease the restive labor ele-
ment, for in addition, many reforms
were vouchsafed. But economic laws
could not be appeased by anything
| excepting economic action.
Fortunes Wiped Ont.
When, about April ], the old silk
crop had heen sold and the new one
had not yet come on and the banks
were loaded up with silk paper on
which the growers had borrowed in
addition to the billions of yen in
other paper rising from the industrial
boom, something happened. No one
tknows here definitely exactly what
.t was.
The Masuda Billbrokers Bank at
Osaka, one of the industrial centers,
closed its doors. Immediately Japan
took alarm. With the topheavy
credit structure ready to fall, the
stock exchanges could be closed,
stocks came down as much as 200
to 300 points. Whole fortunes were
wined out in an hour
This was on April Z. A few days
later II was thought that the situa-
tion was in check. Some other banks
are rumored to have failed but accu-
rate information is not at hand, except
Ing as to the Masuda Bank, and also
the Ito Bank, one Of the textile in
dustry's institutions. The situation
was believed to be in hand SO tho
stock exchanges were reopened. I'M
mediately the stocks began cascadine
down again, so once more the ex-
changes were closed with more for
tunes gone. The last information
at hand was to the effect that the
exchanges still were closed.
The Bank OF japan, In company
with a few OF the other old line and
very strong institutions have formed
a sort OF vigilance committee. In CO.
operation with the government this
committee is granting emergency as
sistancc to business interests and
banks in danger.
When a bank is on the verge Of
: collapse as the result of runs on It's
. deposits or the failure OF companies