CHAPTER VIII. ECONOMIC CONDITIONS

SO often has the saying, "Man doth not live by bread alone," been repeated, that it has been assigned a place among platitudes. Nevertheless the trend of our age is toward an undue emphasis of our physical wants. As a result, civilisation is measured largely by its success in fulfilling them; hence bread-winning has grown from a material necessity to a social, iron law.

Its rigour is, however, relentless only in the field of daily need, relaxing as the requirements of our living ascend in scale from articles of necessity to those of decency, and from these again to the demands of comfort; and when they reach the domain of luxury, the so-called bread-winning ceases to be a law of life, but becomes in very truth a cause of death.

Oriental teachers have always looked upon material well-being as a matter of subsidiary concern. They have taught more of life than of living. Mr Wrench in his recent work, The Mastery of Life, has called the attention of the West to the fact that it is too much absorbed in the means of life, while the East tastes life itself. You speak of "Oriental luxury"; but is there not more of an Oriental flavour in that part of the Sermon on the Mount where the Master teaches: "Therefore I say unto you, Be not anxious for your life, what ye shall eat, or what ye shall drink; nor yet for your body, what ye shall put on. Is not the life more than food, and the body than raiment?" The pagan Orientals live more the life of "the birds of the heaven, which sow not, neither reap nor gather into barns," or the life of the "lilies of the field," which, without toiling or spinning, grow and array themselves in the glory that Solomon could not surpass. Wealth, as such, has been discarded from all high thinking and high teaching. Privation was even courted among religious and literary men as a condition under which one can best work out one's salvation. Men in public life were expected not to look to filthy lucre for the reward of their service. An ancient saying runs, "When civil servants begin to covet riches and when military men begin to love life, then is the beginning of an end." Superiour men looked upon wealth as illth.

Poverty was not considered a disgrace. We have an inelegant adage, Bushi wa kuwa-ne-do taka-yoji-"As to the samurai, though he eats not, he proudly picks his teeth,"-which is equivalent to saying "How far above creature-comforts soars the soul of the samurai!" There has thus been a general feeling that wealth is something unworthy to be chased after. Food and raiment and shelter, and medicine in sickness,-and beyond these the simplest demands of propriety; more than this cometh of evil.

If human happiness is the result obtained by dividing the good things of this life by our desires, our old masters taught us to increase the quotient not by increasing the numerator, or the supply of things, but by decreasing the denominator, our desires. Infinity can be procured, as Carlyle taught, by reducing our covetousness. 1/0 = ∝.

Economic activity was held ever subservient to human and humane purpose. Japanese thinkers of former days defined Political Economy much as Ruskin did, asserting that its main object is the production of souls of good quality.

To teachings and feelings like these, is to be largely attributed the comparatively backward economic condition of Japan. Much of her dormant wealth was left undisturbed; her virgin lands untilled; her mines unexplored. I do not mean that our economic advancement was checked solely by our ideal view of life. There were other reasons for our slow progress; but above these reasons towers our mental attitude toward wealth. Make plain living honourable and display will take its flight to lodge among the tawdry; there will be less of a scramble for bread and for gold. Modern civilisation, however, does not tolerate old-time simplicity. Bread! Bread!!-sour or sweet-leavened or unleavened-bread has become the first and last cry in this modern age.

Owing to the onslaught of materialism upon Japan, the samurai has put away his sword, the statesman has taken up the abacus, and the new gospel of "a good living" has come in vogue. Callings hitherto despised have suddenly come to be honoured. Merchants have become nobles, shopkeepers have usurped such social positions as knights enjoyed before. With this mental and social transformation, the foremost energies of the nation rush into money-making channels. With a new value placed on the power of wealth, both among the people and in the esteem of one nation towards another, the moral concept of social progress passes through a radical change. As wrote Shakespeare in King John;

"Well, whiles I am a beggar, I will rail, And say-there is no sin, but to be rich; And being rich, my virtue then shall be, To say-there is no vice but begging."
The logic of this sad cynicism leads to the universal adoption of a "gold standard" for all concerns of life. As at the devil's booth, all things come to be sold or bartered for bread. Poverty, despicable in our industrial age, as it was in the religion of Mammonism, is the gravest of sins. Gauged by the physical standard, Japan certainly stands low among the nations.

It has been computed by competent statisticians that the entire wealth of Japan amounts to some 24,000,000,000 yen, which will give at ten per cent. an annual income of 2,400,000,000 yen. This in turn gives per capita a yearly income of about forty-six yen (the population being 52,000,000). Out of this sum is to be paid 8.80 yen for taxes of various kinds, leaving to each citizen, irrespective of age or sex, an annual revenue of 37.20 yen or a monthly quota of 3.10. As a family consists on an average of five persons, its income is 15.50 yen per month. With this meagre sum, a household manages not only to sustain and to perpetuate itself but to lead a cheerful life. This absurdly low state of economic development does not preclude the existence of millionaires, nor does it by any means argue the prevalence of indigence. Wealth is comparatively evenly distributed, and the proletariat in the slums of Tokyo fare better than does the "residuum" of New York, London, or Paris. In the most wretched hovels we rarely meet with the herding together of the sexes and of families. The clothing of our poor being cotton, it is oftener and more easily washed than the woollen garments of your paupers. Their food consisting largely of vegetables, putrefying grease does not scent the air. The struggle for life is bad enough, but has not reached the most acute stage, and luxury has not yet made victims of the unsophisticated peasants who form by far the largest proportion of our population. For though the urban population is increasing at a rapid rate (twenty-five per cent. of our population living at present in towns of over ten thousand inhabitants) the bulk of our people are still engaged in rural pursuits, and agriculture is as yet our principal industry.

Whether considered as a food-producing occupation or as man-producing-inasmuch as no other vocation is more conducive to health and character,-agriculture has always been held in high esteem. In former days, the social classes were ranked, according to their callings, as samurai (knights or gentlemen), as tillers of the soil, as artisans, and as tradesmen. This recognition of the status of the peasantry is not to be wondered at when one remembers that Japan was, until forty years ago, what Thuenen calls an "Isolated State," her whole economic life being based on the principle of self-sufficiency and her political philosophy being physiocratic. Let me describe our system of husbandry.

Japan proper, which I single out as beat representing our national life,-i. e., Japan exclusive of her colonial acquisitions in Formosa, Korea, and Saghalien,-embraces an area of about 95,000,000 acres, of which the highest estimate rates some fourteen per cent., or 14,000,000 acres, as arable. The rest, or about eighty-six per cent., lies waste, or, if not strictly waste, waste as far as food-producing is concerned. No civilised country in the world has so small a proportion of agricultural land. If all these cultivated acres were put together into one big farm, and if you were to ride in an automobile at the speed of fifty miles an hour, you would be able to skirt the entire centre perimeter in less than twelve hours.

Yet from this limited area our peasants produce enough to feed and clothe themselves and the nation, and to furnish more than half the silk worn by American ladies.

It is evident that our agricultural method must be very intensive, intensive in the double sense of the liberal use of capital and labour, though, as we shall see, the intensivity is largely that of labour. Regarding the capitalistic side of our farming, it consists almost exclusively of the use of fertilisers and of water for irrigation. Possessed of scarcely any capital in the form of cash, the farmers know how to make the best use of water for irrigation and of the last scrap of refuse for fertilisation.

Poor as the peasants are, they apply yearly 85,000,000 yen worth of fertilisers, of which 20,000,000 yen are expended for imported fertilisers. A great French agriculturist, Monsieur Gasparin, has remarked that agriculture reaches its highest development, which he calls culture hétéositique, when it is forced to depend upon imported fertilisers for its successful operations. Our peasants have long practised rotation of crops and the renovation of soil by the cultivation of leguminous plants-of course empirically, having had no scientific knowledge of their usefulness.

One of the beautiful sights which greets foreign travellers in Japan is that of fields or valleys covered with a little pinkish-purple vetch-often called by them "Japanese clover." It has not been sown to please the eye, but merely to be ploughed under for manure.

Though Dean Swift's fame did not rest upon truth-telling, I believe the reverend gentleman's words may be taken literally, when he says that "he who makes two blades of grass grow where one grew before, is the true benefactor of mankind." In this sense our peasant deserves the highest niche in our shrine of gratitude.

I have at home a small brass image of a peasant in his straw rain-coat, holding in his hands a hat made of rushes. It is one of a number of images which a celebrated prince of Mito had made for the members of his household, and which he instructed them to place upon their trays (individual tables) at every meal, so that they might never forget tile toil of those who provided them with food.

With surprising diligence, combined with intelligence, our peasants make two blades of grass grow where one grew before. From one field they get three and sometimes four successive crops in a year. Hence, like a dime which when used ten times is worth a dollar, one of our acres yields as much as three or four acres in America.

Our population of 52,000,000 (about one-half that of the United States) is thus fed and clothed by the labour of over 30,000,000 people-nearly sixty per cent. of our population being engaged in agriculture. As these 30,000,000 farmers, ineluding women and children (5,500,000 families), cultivate 14,000,000 acres, it is evident that two farmers are occupied in tilling one acre of land, or, what amounts to the same thing, the proportion of arable land to the agricultural population is no more than one-half acre per head.

Seventy per cent. of the agricultural class own and cultivate farms of less than two and a half acres. Twelve acres are considered a very respectable holding. By assiduous labour an owner of such a lot can realise a goodly sure-say three or four hundred yen-after paying a heavy land tax of perhaps fifty yen, the rate of tax on agricultural land being 4.7 per cent. on its assessed value, which is in turn calculated at ten times its annual rental. In a land of petite culture, an area of twenty-five acres entitles its owner to the position of a local magnate.

You can easily understand that when land is so minutely divided, farming is carried on much as gardening, horticulture, and truck-farming are here. People work with their own hands with hoe and spade. Mr. Edwin Markham might well call them "brother to the ox," were he to see them wading through mud in the heat of the day or turning the sod in the winter twilight. Animals are not altogether wanting. From of old, we have had horses, cattle, fowls, dogs, and pigs in limited numbers. The sheep is a new creature to us, and flocks of them are still quite rare. Mutton chops are therefore a luxury! The horse is used for draught, but its flesh is seldom eaten. Here I might state that in recent years, since our wars with China and Russia, astounding improvement has been made in our cavalry mounts, and in horses generally, so that it is difficult nowadays to find a specimen of pure Japanese breed. This disappearance of a native breed is still more conspicuous in the case of the canine family. The kind of dogs that I used to play with in childhood is entirely extinct, except in remote mountain districts. Dog-flesh was never eaten by us; and even pork, which is a favourite food among our neighbours, the Chinese, has not been much relished. Chickens, eggs, and fish-most commonly salted herring, sole, sardine, salmon, or cod- furnish the principal meat supply of our diet.

Now that I have inadvertently taken up the subject of diet, I may proceed with the standard of our living. Though rice is considered the staff of life in Japan, it is not freely indulged in by the peasants who raise it. The proper ration of rice per head is calculated to be one-and-a-half pints of the uncooked grain per day, though hard-working labourers must have over one quart. The poorer people cannot afford to take unmixed rice; therefore they boil with it cheaper barley and millet. In some southern provinces, sweet potatoes form the chief part of daily food.

As rice requires for its cultivation land well irrigated, the prospective increase of paddy-fields in Japan is not likely to be very great. At the present rate of increase in population and of cultivation, we shall reach the margin of rice-culture in some thirty years. Hence it is a grave question how long we as a people can depend on the monoculture of rice. Already the recent enormous rise in the price of this cereal indicates the necessity of a change in our dietary system.

Besides the grains named, a large quantity of beans-the so called soy-bean-is used in various forms. Fermented beans in the form of soup constitute an essential part of the standard breakfast for rich and poor alike. Indeed beans largely supply the protein of our food, and without this nitrogenous element of their diet, our peasants declare they cannot work. Among vegetables, the most important is a huge radish, which we term daikon, and which is often two or three feet long and four inches in diameter. It is served pickled in salt or grated or boiled, and science has recently proved it to be rich in diastase-another example of the empiric use of an unknown principle, as our people long ago found that unless they ate daikon pickles with their rice they could not consume the latter daily without suffering from indigestion. Carrots, burdock, cucumbers, melons, potatoes (sweet and white), yams, taro, lotus-roots, cabbage, squashes, egg-plants, and mushrooms are freely eaten, while many dainty dishes unfamiliar to you are enjoyed,-such as the young fronds of the brake, the tender sprouts of the bamboo (taken just as they appear above the surface of the ground in the spring), and the bulb of the lily-the variety you know as the "tiger lily." Now that we have seeds from England and America there is indeed scarcely a vegetable grown in these countries that we have not made our own. I am thinking now of tomatoes, Indian corn, asparagus, and celery, all of which are welcomed in Japanese cuisine.

Wherever one is within reach of a city market, a good supply of fruit is obtainable-and here again the importation of foreign varieties is evidenced by the peach, the pear, and the apple, and by strawberries, gooseberries, and grapes, the indigenous stocks being generally inferior. When we add to these our own delicious plums (not the umé) and many kinds of native oranges, our biwa, or loquat, and the luscious persimmon of the autumn, you will see that we do not suffer for lack of refreshing fruit.

The ordinary beverage is tea-what Emerson calls the cordial of nations-of which there are grades ranging in price from five cents to five dollars a pound, so that the poor and the rich can take their choice. Black tea is of comparatively recent introduction and is but little used in Japanese households. When we simply speak of "tea," we mean our green tea, and by this is understood a natural or pure, and not a coloured, tea, as is so often mistakenly thought in this country,- the colour being due to the process of curing.

The intoxicating drink of the country is saké, brewed from rice and quite strong in alcoholic content (fifteen or sixteen per cent.). Beer is imported as well as brewed in Japan. The same is true of wine, though a smaller quantity of this is consumed. I may add that drunkenness is not as apparent with us as it is in America, and that with us, as with you, there is a movement against all social drinking.

A labouring man can get his food for about twenty sen a day, and he can feed his family (wife and a couple of children) on an additional thirty sen. In fact, if he makes eighty sen and his wife thirty sen, a sum total of a yen and ten sen a day, they can keep a little house with a couple of rooms, paying a rent of three yen per month, read newspapers (for the humblest can read), take daily baths (a racial necessity), send their children to school (for education is compulsory), and put in the savings bank two or three yen a month. Does this sound delectably Arcadian ?-and yet of families like these the duties of modern citizenship are demanded-viz., the payment of taxes, service in the army, and attendance at school on the part of the children.

In such a cursory review of Japanese economy as I am giving, there is little space for a discussion of our national finance. Suffice it to say that our taxation and debt have increased heavily since our war with Russia. The latter now amounts to about 2,650,000,000 yen, an increase of 2,100,- 000,000 as compared with the debt prior to the war. This increase is roughly the price we have paid or are still paying for victory. Whereas the per capita debt of our people was less than eleven yen in 1904, it is now about forty yen. Our taxes were 150,000,000 yen before the war; now they are 330,000,000. The chief sources of revenue are the taxes on liquors, land, and income. We get about 50,000,000 yen from the customs. A very important part of our revenue is derived from public undertakings and State property (about 126,000,000 yen), and from postal, telegraphic, and telephone service (about 50,000,000 yen); also from the profits of salt, camphor, and tobacco monopolies (about 50,000,000 yen). The total annual revenue of the Empire has lately been approximating the sum of 560,000,000 yen. How can the people bear such taxation? Are they simply crushed, so that they cannot raise their voice?

Heavy burdens of taxation and military service, without corresponding improvement in economic welfare and morals, may be fruitful of social danger. We are aware of this. Fortunately, thus far, our country has been free from proletariat revolts or labour trouble of any magnitude. Socialistic propaganda is feared, and only last year we had the saddening sight of a band of anarchists arrested and condemned on the charge of high treason. They were called socialists, but not in the sense that our Government itself may be called State-socialistic-neither in the sense in which Professor Hart in his recent book, The Obvious Orient, says: "Never was there such a socialistic community, such an ant-hill of human beings, busy, contented, and all interested in each other's affairs. Socialism," he adds, "is realised in Japan."

This blunder in designating the worst class of destructive anarchists "socialists," has done no little harm. The very term "socialism" has been dragged into ill repute, even when it is used in its noblest and most scientific sense, and has also given a false impression to the outside world regarding the justice of our courts in imposing what was naturally thought to be excessive punishment.

With the increasing concentration of population in cities, with the development of the modern mill system, labour questions will become more and more serious. Whether we can progress from our still prevailing feudalistic and artistic stage of economy to its modern form, without undergoing the throes of democratic upheavals, it is impossible to say.

In the meantime the population is growing rapidly. In 1907 it was 49,000,000. At present (1912) it is about 52,000,000. Fifty years hence it should reach the dignity of nine ciphers. Can the land support so many? Certainly more intensive agriculture will yield more food. With the rise of prices, the margin of cultivation will extend to land as yet entirely neglected. A rough estimate points to the possibility of doubling our present arable area. Another source of relief will come from emigration into our new dominions- Formosa, Saghalien, and Korea, and the leased territory of Manchuria. The success we have realised in the administration of Formosa will be recounted elsewhere. I will simply say that in eight years, under the guidance of the late Viscount Kodama as Governor-General and his colleague Baron Goto as Civil Governor, that island was brought from a state of wide-spread disturbance created by the bandits and of economic inefficiency, to a condition of stable government and self- supporting finance. Korea, despite some mistakes which every colonial power makes at first in dealing with a subjugated people, any impartial critic will admit, is now better governed than it ever was. We are bent upon making our rule there, economically as well as politically, successful and praiseworthy. Since 1906 the Imperial treasury has spent nearly 200,000,000 yen in the tranquilisation of that peninsula, but it will not be long before the land will be made self-supporting financially, and it will also afford homes for our overflowing population. Both Korea and Formosa can raise enough rice to feed the whole Japanese nation. They are both possessed of mineral resources- coal, oil, iron, gold-which await further development. Still another source of relief is destined to come from industries. We are driven into manufacturing channels by force of circumstances. The time-honoured respect for agriculture must give way to the adoption of twentieth-century industries. In the abundance of water, we are assured a cheap source of power; in the growth of population, an ample supply of labour. Some nations are looking askance upon the industrialisation of Japan-slow as it is (how slow!)-and condemn it as another instance of "accursed Japanese competition in the East." On the whole, however, the present commercial treaties do not lay any serious hindrance in the way of our progress, and if we cannot accelerate its speed, we must not blame others. How smoothly we can effect, in a few years, a transition which it has taken Europe several decades to accomplish, is just now a very grave social problem.

While, by means of education in agriculture, of co-operative popular banks, of young men's associations, of the consolidation of small, scattered plots into larger farms, of the construction of irrigation canals and roads, we are solving, in part, the vexed problems of country-life, at the same time by old-age pensions, compensation for injuries in factories, universal insurance, and labour laws, we will try to mitigate the suffering of the transition.

It is too early to predict with any approach to accuracy how far our new legislation and our effort to maintain the old moral relations between employer and the employé, between landlord and tenant, will avert the evil that has worked havoc in other lands. I am afraid, however, that our endeavour will not accomplish much, unless we take the question more seriously, and the reason why it is not more seriously discussed is because modern industry is still a new thing with us, whereas the older industries are largely of the nature of art-crafts, and labour as such plays but a subordinate part.

A bare enumeration of our well-known industries-such as pottery, cloisonné, embroidery, lacquer, ivory and wood-carving, inlaying and hammer-work-will be sufficient to show you that they are handwork executed by individuals.

The arts and crafts are pursued not by mere artisans but by artists, and usually on a small scale, i. e., under the direct control of the masters. You have heard of the porcelain-maker, Seifu. His workshop is his private house, where he and his family live and share with his half-dozen pupils food and lodging. You look in vain for large kilns; but see only two or three small ones under which the master himself may be building the fire. His products are not turned out en masse. Every imperfect article is discarded, and those that pass inspection bear his name and the impress of his personality. The same is true of the productions of other master workmen. Labour-specially mechanical labour and drudgery-forms only a small fraction of their exertion, and even in the execution of inferior artisans, labour is not degraded into a mechanical process. It is for this artistic element of our manual work that Japanese manufacture is most admired by the West, and I assure you it will not be lost; but will be kept up as a sacred inheritance of the race, in spite of commercial production on a large scale. Yet, of the rank and file of our handicraftsmen, it is not fair to demand, in this age of search for gold and struggle for bread, that they alone remain uncontaminated. We cannot ask martyrdom of others for our own enjoyment.

As for manufacturing and other industrial enterprises, I am glad to say these are growing steadily and on the whole sanely. Near the close of the war with China and of that with Russia, there were those usual indications of industrial expansion which always work disaster in the social economy of a victorious nation. The Government, well aware that this danger was imminent, took every pains to prevent it by cautioning the public through the press, educating them in the general principles of post-bellum finance by pointing to the experiences of other countries. Had it not been for this precaution, calamity might have ensued in our business circles. As it was, we came out better, perhaps, than most of those nations who have passed through a similar experience. Naturally there was a sudden rise in industrial activity after each war, amounting to a boom, in 1907, but followed by two-and-a-half years of depression, after which normal conditions again prevailed.

The field for financial investments during those years lay, and still largely lies, in banking, cotton mills, electric works, mines, fisheries, manufactures, and shipping, and also in smaller trades.

Roughly, one may say some 400,000,000 yen represent the annual capital invested in the country-equivalent perhaps to about one-eighth of the amount invested by the United States, a fourth or fifth of that of Great Britain, France, or Germany. Small as is our gross investment, if we compare it with the estimated wealth of the country- 24,000,000,000 yen in round numbers-it forms over one and six-tenths per cent. as against one and four-tenths per cent. in the United States.

Of our large industries, conducted in mills, I shall give three features which may strike you as different from yours: (1) the unfortunate absence of iron, (2) lack of skilled labour, (3) predominance of female labour.

As an indication of the insignificance of our iron industry, there is only one steel foundry in the whole country, and that managed at a loss by the Government. Of some 450,000 tons of pig-iron used in the country, two-thirds are imported.

Regarding skilled labour, factory-work being new to the people, we have not yet had time to train first-rate operatives. Compared with the output, experience in shipyards, arsenals, and steel foundries shows that it takes two or three Japanese to do the work of one European in a European factory. Careful experiments in cotton mills have shown that three hundred Japanese operatives are required where two hundred English are sufficient, and where one hundred Americans do the same work. As yet, there seems to be no immediate fear of an industrial Yellow Peril!

As respects female labour, its efficiency as compared with that of Western countries is very much in our favour. Especially is this true in the case of silk-culture, silk-reeling, weaving, tea-picking, straw-braiding, etc. Among some 10,500 factories employing not less than ten operatives each, thirty-eight per cent. of the employés are males, the remaining sixty-two per cent. are women. These operatives constitute an industrial army of eight hundred thousand, of which five hundred thousand are of the weaker sex.

Child labour is disproportionately large. In some mills twenty per cent. of the labour is done by children under fourteen years of age, but this is an extreme case, though the proportion of five per cent. is not unusual. In some kinds of work, infants under ten years of age are employed. Though as many as ninety-eight per cent. of the children of school age (six to fourteen years) are actually attending schools, a considerable portion of these do so just long enough to follow the letter of the compulsory education law, coming to school the minimum number of hours.

The conditions of labour in the factories are far from satisfactory-in many of them they are positively disgraceful. Here, again, the Government has made quite a careful study of the question and has repeatedly submitted to the Parliament a draft of factory legislation. Only last winter (1911) a law was enacted, with emendations, however, which waive some vital provisions. It was thought by the legislators that a rigid enforcement of a stringent factory law might kill our infant industries; for, be it remembered, our industrial system is about a century behind that of England. The spirit of the said law is gradually to prepare our industries during the coming fifteen years for the complete adoption of all the requirements of hygiene and education. Any seed of reform, however, is better than no seed, and this enactment will lead to closer inspection and encourage further improvement in our mills. As the new law forbids the employment of children under nine in factories, and the working of women at night, a starting point is provided for a better condition of things.

Industrial progress is so intimately connected with foreign trade that, without understanding the state of the one, it is impossible to comprehend that of the other. A generation ago (1876), our total foreign trade (exports and imports together) was slightly over 50,000,000 yen, or one and one-half yen per head of population, and by 1910 it had risen to over 922,000,000 or over eighteen yen per capita. Of late the amount of imports has been steadily exceeding that of exports, owing to large purchases made abroad during the war. The excess of imports, necessitating the payment of the balance in gold, together with the need of sending about seventy-eight millions as interest on our foreign loans-public, municipal, and company- has been draining the country of gold specie, and one of the most serious questions with which we must cope is how to make good its possible deficiency in the near future.

When the country was opened to foreign trade, sixty years ago, it was naturally carried on entirely by foreigners. That tradition lasted long enough, and so of late years, in the natural course of development, the Japanese have been gradually taking the export and import trade into their own hands,-much to the chagrin of those who were accustomed to look upon it as their prerogative. Whereas, in 1906, forty-six per cent. of the foreign trade was transacted by the Japanese themselves, in 1910 the proportion rose to fifty-four per cent., and every year will and must see its progression. We think it only proper to designate this progress, but in the English language, which is in current use among foreign merchants in Japan, it is described as "the Japs stealing our business,"-a curious use of the verb unknown to Johnson or even Webster when they wrote their dictionaries.

To return from etymology to commerce, the chief articles of import are cotton and wool, iron and steel, sugar, grain, machinery, chemicals, and oils. The United States supply us with nearly all of our imported flour (wheat), sole leather, kerosene oil, and a large amount of raw cotton, as well as iron and steel.

Among the items of our export, the principal are silk, cotton goods, copper, coal, tea, marine products, grain, drugs, chemicals, and matches. The United States is by far our largest customer. Nearly all our tea finds its way thither, and I can testify that the Government enforces stringent laws against artificially colouring or adulterating it. Then, yearly, about three million dollars' worth of porcelain is brought to the United States, together with a similar amount of straw aids. But beyond comparison the greatest product of our land exported to America is silk, of which nearly a hundred million dollars' worth is annually bought by your country, supplying over sixty per cent. of all your silken demands.

Among the countries from which we make our purchases, British India holds the first place with its supply of raw cotton, then follow Great Britain and China; the United States stands as fourth in the list, with Germany steadily catching up. It has been said the Kaiser's subjects will prove the keenest competitors of America, in the Far East.

As for the countries which buy of us, by far the most important is the United States, she being the only customer whose purchases have regularly been above one hundred and twenty million yen, whereas China comes next with eighty or ninety millions, followed by France, which trails far behind.

Unfortunately and often unjustly, but alas sometimes justly!-our commercial morality, especially in dealings with foreigners, has been assailed. The articles sent out by our merchants have often fallen short of the standard of the sample, their weight has proved lighter than stated in the invoice, or their length less; then, too, they have lacked uniformity in workmanship. I believe there may too frequently have been intentional dishonesty; but it has far oftener been true that uniformity of standard was impracticable, since many of our goods are products of hand- labour and therefore inevitably subject to variation-a fact well understood and allowed for in the transactions of our home-trade, but not sufficiently considered by foreign importers accustomed to machine-made goods.

To avert further discredit of our commercial morality, and to prevent dishonest practices, guilds have been formed in all parts of the country and in all trades. Their main function is to examine manufactured goods destined for export, and to condemn such as are found lacking in quality, weight, or length. Such goods are even publicly burned. Of these industrial guilds there are at present about six thousand. There is a special conditioning house in Yokohama, where all silk intended for export must be examined before being shipped abroad.

Commercial dishonesty, so often branded by foreign merchants as peculiarly Japanese, is but a passing phase. Experience teaches that "Honesty is the best policy," and this kind of morality is a virtue easily learned. As a burnt child has a wholesome fear of fire, so does a tradesman find that it does not pay to cheat. Moreover, what nation can throw the first stone at another for breach of honesty? In a recent issue of the Century Magazine (April, 1912), a well-known American writer gives his countrymen's disregard of the observance of the terms of contract as a reason why the United States does not make greater advance in its trade with Italy. The impotence of American insurance companies to meet their obligations after the earthquake and fire in San Francisco, is a notorious illustration of business immorality. Examples like these may be multiplied, but they do not convince us that Americans as a nation are deficient in moral sense -neither does the immoral practice of some individual Japanese merchants prove that honesty is foreign to our soil. The truth is that all are alike sinners, but we all find comfort in believing that we are rising upward, making stepping-stones of our own dead selves.

Commerce, apparently sordid and selfish, is evidently the handmaid of a higher principle. The time has passed of which Goldsmith sang that "honour sinks when commerce long prevails." On the contrary, it is raising the international standard of morality, teaching fair play and a square deal, uniting nations and peoples, and bridging space. As, with the growth of a nation's commerce, its monetary system comes to be changed and expanded, so will its concept of moral values and its media of mental exchange be modified and enlarged and brought into unity with world standards. The empire of trade encompasses the globe, and men through gainful effort are learning that by argosies of merchandise, and not by Dreadnoughts, will be decided the final victory on the race-course of nations. As all roads, primarily military, led to Rome, so all trade routes now lead to Peace. The economic interests of our people are in themselves a strong argument for the maintenance of peace in the Far East, and notably with our large creditor and chief customer, the United States.