The Washington herald., 1922-01-29

some "IlteTS seek 10 nave amer
lea believe that Japan experienced
nothing but benefit from the great
war. that war-business meant
great addition Of wealth and in
crease of prosperity for the island
kingdom. 1t nigh. be well for
Americans to give thought to the
fact that the same charge has been
laid against us. We had our war
profits and our orgy of spending,
but one doesn't hear so much
about orgies now. There are not
50 many appeals for thrift and
saving. Likewise, Japan, during
the war and for some time after,
enjoyed a boom. This boom was
evidenced, among other things,
by a favorable" balance of trade,
that is, by a large excess of ex-
ports over imports-s phenomenon
known to America also. Then came
reaction. The blighting effects of
the war reached Japan also. The
excess exports of 1914, 1915, 1916,
1917 and 1918 changed to excess
imports for 1919 and much greater
excess imports for 1s20-an 'un-
favorable" balance. 1t is to be
noted. to Japan's credit, that her
government was wise enough to
keep the Japanese currency on a
gold basis. The instability and in
justice of diseased money has not
been added to perhaps unacceptable
economic damage and depression
due to the war.
Crisis Described.
Economic conditions in Japan
were the subject of a recent article
in the Deutsche Allgemeine Zeitung,
from which the following is ex-
tracted:
The most serious period of the
economic crisis from which Japan
has been suffering for two years
has passed. Trade figures for the
first six months of 1921. however,
show that the crisis is not yet over.
There was an adverse trade balance
with a deficit of about 100000 yen.
(Then follows a table showing the
trade balances, 'unfavorable" and
favorable" for the past twenty
years.) During the boom of the war
years Japan had a credit trade bal
ance which in 1919, owing to the
economic crisis, was transformed
into a serious debit balance.
That the crisis Is disappearing is
shown by the figures of the note
issue of the Bank of Japan, which
declined by one-sixth between July,
1920, and July, 1921. In 1914 the
note issue of this bank amounted
to 1884 100000 yen, but in 1918 it,
had increased to liza, 900, 900 yen.
1t is, however. true that in the
meantime the banks gold reserve
had increased from 21s,0o0.000 yen
to 712,0O0.OOO. From that year be-
gan a decline in the note issue, as
well as of the money placed an
nually in circulation. TIE Japa-
nese exchange suffered but little
from this imitation. The relation to
the dollar in the middle of Septem-
Der was 1 yen. 1925 cents. the par
being 1 yen. 1884 cents. The main
reason for this Is that the yen cur
rency, like that of the dollar. still
has a. gold basis. and the gold re-
serves of Japan in foreign countries
increased from 200.O00.000 yen in
1918 to 100000 yen in 1920, while
the gold reserves in the country
actually increased during the same
period from 13O,000.00O yen to l.
200, 900, 900 yen. cit would appear
that Japan is situated similarly to
America in being well supplied with
gold.)
Boycott Hurts Japan.
The economic relations between
Japan and China are at the moment
peculiarly interesting. The boycott
proclaimed against Japan, espe-
cially in South China, has weakened
Japan's position in China's total
trade. japanese imports from
China were reduced by one-quarter
between 1914 and 1920, while Eng
lands imports thence in the same
period doubled Whether, however,
China can free herself from Japan's
economic predominance appears
doubtful. China's Indebtedness, in
view of her debit credit trade ball
ance, is already very large. The
economic penetration of China by
Japan is of importance: more than
half Of the ore deposits that can
hands Of Japanese enterprise.
The war has freed Japan eco
nomically from foreign. especially
English, influence. In 1919, so per
cent of Jspan's foreign trade was
in the hands of natives, but in 1893
only II per cent. -. In the wool
trade. the larger Japanese firms,
which refused to accept wool order
from Australia, have paid damages.
but the majority of the firms that
originated during the war have van
ished. The silk export which for
merly made 20 per cent of Japan's
total export. is still at low ebb.
"A deeper cause of the crisis was
mainly the fact that in conse-
quence of the war boom a crazy
hotation fever was observable; be-
tween 1914 and May, 1920. the newly
invested capital amounted to H.
2oo.oo0,00o yen. Nearly all these
newly f1oated companies have dis
appeared. and, now that this burden
has been removed, Japan's economic
recovery is slowly beginning"
Chinese Heard silver Dollars.
Although gold has been flowing
to the United States in q yellow
stream from all over the world, the |
latest addition being the dregs of |
H. Rnuafa0 fsnnarfoI ana