Chapter XV: Part 15

_Fisheries._--From ancient times the Japanese have been great
fishermen. The seas that encircle their many-coasted islands teem with
fish and aquatic products, which have always constituted an essential
article of diet. Early in the 18th century, the Tokugawa
administration, in pursuance of a policy of isolation, interdicted the
construction of ocean-going ships, and the people's enterprise in the
matter of deep-sea fishing suffered a severe check. But shortly after
the Restoration in 1867, not only was this veto rescinded, but also
the government, organizing a marine bureau and a marine products
examination office, took vigorous measures to promote pelagic
industry. Then followed the formation of the marine products
association under the presidency of an imperial prince. Fishery
training schools were the next step; then periodical exhibitions of
fishery and marine products; then the introduction and improvement of
fishing implements; and then by rapid strides the area of operations
widened until Japanese fishing boats of improved types came to be seen
in Australasia, in Canada, in the seas of Sakhalin, the Maritime
Province, Korea and China; in the waters of Kamchatka and in the Sea
of Okhotsk. No less than 9000 fishermen with 2000 boats capture yearly
about £300,000 worth of fish in Korean waters; at least 8000 find a
plentiful livelihood off the coasts of Sakhalin and Siberia, and 200
Japanese boats engage in the salmon-fishing of the Fraser River. In
1893, the total value of Japanese marine products and fish captured
did not exceed 1¼ millions sterling, whereas in 1906 the figure had
grown to 5½ millions, to which must be added 3{1/8} millions of
manufactured marine products. Fourteen kinds of fish represent more
than 50% of the whole catch, namely, (in the order of their
importance) bonito (_katsuo_), sardines (_iwashi_), pagrus (_toi_),
cuttle-fish and squid (_tako_ and _ika_), mackerel (_saba_), yellow
tail (_buri_), tunny-fish (_maguro_), prawns (_ebi_), sole (_karei_),
grey mullet (_bora_), eels (_unagi_), salmon (_shake_), sea-ear
(_awabi_) and carp (_koi_). Altogether 700 kinds of aquatic products
are known in Japan, and 400 of them constitute articles of diet. Among
manufactured aquatic products the chief are (in the order of their
importance) dried bonito, fish guano, dried cuttle-fish, dried and
boiled sardines, dried herring and dried prawns. The export of marine
products amounted to £900,000 in 1906 against £400,000 ten years
previously; China is the chief market. As for imports, they were
insignificant at the beginning of the Meiji era, but by degrees a
demand was created for salted fish, dried sardines (for fertilizing),
edible sea-weed, canned fish and turtle-shell, so that whereas the
total imports were only £1600 in 1868, they grew to over £400,000 in
1906.

_Minerals._--Crystalline schists form the axis of Japan. They run in a
general direction from south-west to north-east, with chains starting
east and west from Shikoku. On these schists rocks of every age are
superimposed, and amid these somewhat complicated geological
conditions numerous minerals occur. Precious stones, however, are not
found, though crystals of quartz and antimony as well as good
specimens of topaz and agate are not infrequent.

Gold.

Gold occurs in quartz veins among schists, paleozoic or volcanic rocks
and in placers. The quantity obtained is not large, but it shows
tolerably steady development, and may possibly be much increased by
more generous use of capital and larger recourse to modern methods.

Silver.

The value of the silver mined is approximately equal to that of the
gold. It is found chiefly in volcanic rocks (especially tuff), in the
form of sulphide, and it is usually associated with gold, copper, lead
or zinc.

Copper.

Much more important in Japan's economics than either of the precious
metals is copper. Veins often showing a thickness of from 70 to 80
ft., though of poor quality (2 to 8%), are found bedded in crystalline
schists or paleozoic sedimentary rocks, but the richest (10 to 30%)
occur in tuff and other volcanic rocks.

Iron.

There have not yet been found any evidences that Japan is rich in iron
ores. Her largest known deposit (magnetite) occurs at Kamaishi in
Iwate prefecture, but the quantity of pig-iron produced from the ore
mined there does not exceed 37,000 tons annually, and Japan is obliged
to import from the neighbouring continent the greater part of the iron
needed by her for ship-building and armaments.

Coal.

Considerable deposits of coal exist, both anthracite and bituminous.
The former, found chiefly at Amakusa, is not greatly inferior to the
Cardiff mineral; and the latter--obtained in abundance in Kiuushiu and
Yezo--is a brown coal of good medium quality. Altogether there are 29
coal-fields now actually worked in Japan, and she obtained an
important addition to her sources of supply in the sequel to the war
with Russia, when the Fushun mines near Mukden, Manchuria, were
transferred to her. During the 10 years ending in 1906, the market
value of the coal mined in Japan grew from less than 2 millions
sterling to over 6 millions.

Petroleum.

Petroleum also has of late sprung into prominence on the list of her
mineral products. The oil-bearing strata--which occur mainly in
tertiary rocks--extend from Yezo to Formosa, but the principal are in
Echigo, which yields the greater part of the petroleum now obtained,
the Yezo and Formosa wells being still little exploited, the quantity
of petroleum obtained in Japan in 1897 was 9 million gallons, whereas
the quantity obtained in 1906 was 55 millions.

Japanese mining enterprise was more than trebled during the decade
1897 to 1906, for the value of the minerals taken out in the former
year was only 3½ millions sterling, whereas the corresponding figure
for 1906 was 11 millions. The earliest mention of gold-mining in Japan
takes us back to the year A.D. 696, and by the 16th century the
country had acquired the reputation of being rich in gold. During the
days of her medieval intercourse with the outer world, her stores of
the precious metals were largely reduced, for between the years 1602
and 1766, Holland, Spain, Portugal and China took from her 313,800 lb.
(troy) of gold and 11,230,000 lb. of silver.

Copper occupied a scarcely less important place in Old Japan. From a
period long anterior to historic times this metal was employed to
manufacture mirrors and swords, and the introduction of Buddhism in
the 6th century was quickly followed by the casting of sacred images,
many of which still survive. Finding in the 18th century that her
foreign intercourse not only had largely denuded her of gold and
silver, but also threatened to denude her of copper, Japan set a limit
(3415 tons) to the yearly export of the latter metal. After the
resumption of administrative power by the emperor in 1867, attention
was quickly directed to the question of mineral resources; several
Western experts were employed to conduct surveys and introduce
Occidental mining methods, and ten of the most important mines were
worked under the direct auspices of the state in order to serve as
object lessons. Subsequently these mines were all transferred to
private hands, and the government now retains possession of only a few
iron and coal mines whose products are needed for dockyard and arsenal
purposes. The following table shows the recent progress and present
condition of mining industry in Japan:--

Gold Silver Copper Lead

Quantity. Value. Quantity. Value. Quantity. Value. Quantity Value.
oz. £ oz. £ Tons. £ Tons. £

1897 34,553 136,834 1,809,805 208,200 19,722 869,266 746 10,343
1901 82,517 330,076 1,824,842 211,682 26,495 1,625,244 1,744 24,640
1906 90,842 363,715 2,623,212 243,914 37,254 3,007,992 2,721 49,690

Iron Coal Petroleum Sulphur

Quantity. Value. Quantity. Value. Quantity. Value. Quantity. Value.
Tons. £ Tons. £ Gallons. £ Tons. £

1897 35,178 103,559 5,229,662 1,899,592 9,248,800 44,389 13,138 33,588
1901 46,456 123,701 9,025,325 3,060,931 39,351,960 227,841 16,007 38,612
1906 85,203 268,911 12,980,103 6,314,400 55,135,880 314,550 27,406 61,386

Antimony Manganese Others

Quantity. Value. Quantity. Value. Value. Total Values.
Tons. £ Tons. £ £ £

1897 1,133 27,362 13,175 8,758 3,863 3,345,662
1901 529 13,481 15,738 10,846 3,450 5,670,508
1906 293 22,862 12,322 51,365 41,338 10,839,783

The number of mine employees in 1907 was 190,000, in round numbers;
the number of mining companies, 189; and the aggregate paid-up
capital, 10 millions sterling.

_Industries._--In the beginning of the Meiji era Japan was practically without any manufacturing industries, as the term is understood in the Occident, and she had not so much as one joint-stock company. At the end of 1906, her joint-stock companies and partnerships totalled 9329, their paid up capital exceeded 100 millions sterling, and their reserves totalled 26 millions. It is not to be inferred, however, from the absence of manufacturing organizations 50 years ago that such pursuits were deliberately eschewed or despised in Japan. On the contrary, at the very dawn of the historical epoch we find that sections of the people took their names from the work carried on by them, and that specimens of expert industry were preserved in the sovereign's palace side by side with the imperial insignia. Further, skilled artisans from the neighbouring continent always found a welcome in Japan, and when Korea was successfully invaded in early times, one of the uses which the victors made of their conquest was to import Korean weavers and dyers. Subsequently the advent of Buddhism, with its demand for images, temples, gorgeous vestments and rich paraphernalia, gave a marked impulse to the development of artistic industry, which at the outset took its models from China, India and Greece, but gradually, while assimilating many of the best features of the continental schools, subjected them to such great modifications in accordance with Japanese genius that they ceased to retain more than a trace of their originals. From the 9th century luxurious habits prevailed in Kioto under the sway of the Fujiwara regents, and the imperial city's munificent patronage drew to its precincts a crowd of artisans. But these were not industrials, in the Western sense of the term, and, further, their organization was essentially domestic, each family selecting its own pursuit and following it from generation to generation without co-operation or partnership with any outsider. The establishment of military feudalism in the 12th century brought a reaction from the effeminate luxury of the metropolis, and during nearly 300 years no industry enjoyed large popularity except that of the armourer and the sword-smith. No sooner, however, did the prowess of Oda Nobunaga and, above all, of Hideyoshi, the taiko, bring within sight a cessation of civil war and the unification of the country, than the taste for beautiful objects and artistic utensils recovered vitality. By degrees there grew up among the feudal barons a keen rivalry in art industry, and the shogun's court in Yedo set a standard which the feudatories constantly strove to attain. Ultimately, in the days immediately antecedent to its fall, the shogun's administration sought to induce a more logical system by encouraging local manufacturers to supply local needs only, leaving to Kioto and Yedo the duty of catering to general wants.

But before this reform had approached maturity, the second advent of Western nations introduced to Japan the products of an industrial civilization centuries in advance of her own from the point of view of utility, though nowise superior in the application of art. Immediately the nation became alive to the necessity of correcting its own inferiority in this respect. But the people being entirely without models for organization, without financial machinery and without the idea of joint stock enterprise, the government had to choose between entering the field as an instructor, and leaving the nation to struggle along an arduous and expensive way to tardy development. There could be no question as to which course would conduce more to the general advantage, and thus, in days immediately subsequent to the resumption of administrative power by the emperor, the spectacle was seen of official excursions into the domains of silk-reeling, cement-making, cotton and silk spinning, brick-burning, printing and book-binding, soap-boiling, type-casting and ceramic decoration, to say nothing of their establishing colleges and schools where all branches of applied science were taught. Domestic exhibitions also were organized, and specimens cf the country's products and manufactures were sent under government auspices to exhibitions abroad. On the other hand, the effect of this new departure along Western lines could not but be injurious to the old domestic industries of the country, especially to those which owed their existence to tastes and traditions now regarded as obsolete. Here again the government came to the rescue by establishing a firm whose functions were to familiarize foreign markets with the products of Japanese artisans, and to instruct the latter in adaptations likely to appeal to Occidental taste. Steps were also taken for training women as artisans, and the government printing bureau set the example of employing female labour, an innovation which soon developed large dimensions. In short, the authorities applied themselves to educate an industrial disposition throughout the country, and as soon as success seemed to be in sight, they gradually transferred from official to private direction the various model enterprises, retaining only such as were required to supply the needs of the state.

The result of all this effort was that whereas, in the beginning of
the Meiji era, Japan had virtually no industries worthy of the name,
she possessed in 1896--that is to say, after an interval of 25 years
of effort--no less than 4595 industrial and commercial companies,
joint stock or partnership, with a paid-up capital of 40 millions
sterling. Her development during the decade ending in 1906 is shown in
the following table:--

Reserves
Number of Paid-up capital (millions
companies. (millions sterling). sterling).

1897 6,113 53 6
1901 8,602 83 12
1906 9,329 107 26

What effect this development exercised upon the country's over-sea
trade may be inferred from the fact that, whereas the manufactured
goods exported in 1870 were nil, their value in 1901 was 8 millions
sterling, and in 1906 the figure rose to over 20 millions. In the
following table are given some facts relating to the principal
industries in which foreign markets are interested:--

COTTON YARNS

+------+----------+---------------+-------------+-------------------------+
| | | Operatives. | Quantity | |
| | Spindles.+-------+-------+ produced. | Remarks. |
| | | Male. |Female.| | |
+------+----------+-------+-------+-------------+-------------------------+
| | | | | lb. | This is a wholly new |
| 1897 | 768,328 | 9,933 |35,059 | 216,913,196 | had industry in Japan. |
| 1901 |1,181,762 |13,481 |49,540 | 274,861,380 | It no existence before |
| 1906 |1,425,406 |13,032 |59,281 | 383,359,113 | the Meiji era. |
+------+----------+-------+-------+-------------+-------------------------+

WOVEN GOODS

+------+--------+----------------+------------+--------------------------+
| | | Operatives. | Market | |
| | Looms. +----------------+ value of | Remarks. |
| | | Male. |Female. | products. | |
+------+--------+-------+--------+------------+--------------------------+
| | | | | Millions | It is observable that a |
| | | | | sterling. | decrease in the number of|
| 1897 |947,134 |54,119 |987,110 | 19 | operatives is concurrent |
| 1901 |719,550 |43,172 |747,946 | 24 | with an increase of |
| 1906 |736,828 |40,886 |751,605 | 36 | production. |
+------+--------+-------+--------+------------+--------------------------+

MATCHES

+------+--------+---------------+-----------+----------+-----------------------+
| |Families| Operatives. | Quantity | Value. | |
| |engaged.+-------+-------+ produced. | | Remarks. |
| | | Male. |Female.| | | |
+------+--------+-------+-------+-----------+----------+-----------------------+
| | | | | Gross. | £ | This is an altogether |
| 1897 | 269 |21,447 |26,277 |24,038,960 | 654,849 | new industry. Japanese|
| 1901 | 261 | 5,656 |16,504 |32,901,319 | 926,689 | matches now hold the |
| 1906 | 250 | 5,468 |18,721 |54,802,293 |1,551,698 | leading place in all |
| | | | | | | Far-Eastern markets. |
+------+--------+-------+-------+-----------+----------+-----------------------+

FOREIGN PAPER (as distinguished from Japanese)

+------+----------+-------+-------+------------+----------+--------------------+
| | | Operatives. | Quantity | | |
| |Factories.+-------+-------+ produced. | Value. | Remarks. |
| | | Male. |Female.| | | |
+------+----------+-------+-------+------------+----------+--------------------+
| | | | | lb. | £ | Had not Japanese |
| 1897 | 9 | 164 | 109 | 46,256,649 | 300,662 | factories been |
| 1901 | 13 | 2,635 | 1,397 |113,348,340 | 714,094 | established all |
| 1906 | 22 | 3,774 | 1,778 |218,022,434 |1,415,778 | this paper must |
| | | | | | | have been imported.| |
+------+----------+-------+-------+------------+----------+--------------------+

In the field of what may be called minor manufactures--as ceramic
wares, lacquers, straw-plaits, &c.--there has been corresponding
growth, for the value of these productions increased from 1¼ millions
sterling in 1897 to 3½ millions in 1906. But as these manufactures do
not enter into competition with foreign goods in either Eastern or
Western markets, they are interesting only as showing the development
of Japan's producing power. They contribute nothing to the solution of
the problem whether Japanese industries are destined ultimately to
drive their foreign rivals from the markets of Asia, if not to compete
injuriously with them even in Europe and America. Japan seems to have
one great advantage over Occidental countries: she possesses an
abundance of dexterous and exceptionally cheap labour. It has been
said, indeed, that this latter advantage is not likely to be
permanent, since the wages of labour and the cost of living are fast
increasing. The average cost of labour doubled in the interval between
1895 and 1906, but, on the other hand, the number of manufacturing
organizations doubled in the same time, while the amount of their
paid-up capital nearly trebled. As to the necessaries of life, if
those specially affected by government monopolies be excluded, the
rate of appreciation between 1900 and 1906 averaged about 30%, and it
thus appears that the cost of living is not increasing with the same
rapidity as the remuneration earned by labour. The manufacturing
progress of the nation seems, therefore, to have a bright future, the
only serious impediment being deficient capital. There is abundance of
coal, and steps have been taken on a large scale to utilize the many
excellent opportunities which the country offers for developing
electricity by water-power.

Silk-weaving

The fact that Japan's exports of raw silk amount to more than 12
millions sterling, while she sends over-sea only 3½ millions' worth of
silk fabrics, suggests some marked inferiority on the part of her
weavers. But the true explanation seems to be that her distance from
the Occident handicaps her in catering for the changing fashions of
the West. There cannot be any doubt that the skill of Japanese weavers
was at one time eminent. The sun goddess herself, the predominant
figure in the Japanese pantheon, is said to have practised weaving;
the names of four varieties of woven fabrics were known in prehistoric
times; the 3rd century of the Christian era saw the arrival of a
Korean maker of cloth; after him came an influx of Chinese who were
distributed throughout the country to improve the arts of sericulture
and silk-weaving; a sovereign (Yuriaku) of the 5th century employed 92
groups of naturalized Chinese for similar purposes; in 421 the same
emperor issued a decree encouraging the culture of mulberry trees and
calling for taxes on silk and cotton; the manufacture of textiles was
directly supervised by the consort of this sovereign; in 645 a bureau
of weaving was established; many other evidences are conclusive as to
the great antiquity of the art of silk and cotton weaving in Japan.

The coming of Buddhism in the 6th century contributed not a little to
the development of the art, since not only did the priests require for
their own vestments and for the decoration of temples silken fabrics
of more and more gorgeous description, but also these holy men
themselves, careful always to keep touch with the continental
developments of their faith, made frequent voyages to China, whence
they brought back to Japan a knowledge of whatever technical or
artistic improvements the Middle Kingdom could show. When Kioto became
the permanent metropolis of the empire, at the close of the 8th
century, a bureau was established for weaving brocades and rich silk
stuffs to be used in the palace. This preluded an era of some three
centuries of steadily developing luxury in Kioto; an era when an
essential part of every aristocratic mansion's furniture was a
collection of magnificent silk robes for use in the sumptuous _No_.
Then, in the 15th century came the "Tea Ceremonial," when the brocade
mountings of a picture or the wrapper of a tiny tea-jar possessed an
almost incredible value, and such skill was attained by weavers and
dyers that even fragments of the fabrics produced by them command
extravagant prices to-day. Kioto always remained, and still remains,
the chief producing centre, and to such a degree has the science of
colour been developed there that no less than 4000 varieties of tint
are distinguished. The sense of colour, indeed, seems to have been a
special endowment of the Japanese people from the earliest times, and
some of the combinations handed down from medieval times are treasured
as incomparable examples. During the long era of peace under the
Tokugawa administration the costumes of men and women showed an
increasing tendency to richness and beauty. This culminated in the
Genroku epoch (1688-1700), and the aristocracy of the present day
delight in viewing histrionic performances where the costumes of that
age and of its rival, the Momoyama (end of the 16th century) are
reproduced.

It would be possible to draw up a formidable catalogue of the various
kinds of silk fabrics manufactured in Japan before the opening of the
Meiji era, and the signal ability of her weavers has derived a new
impulse from contact with the Occident. Machinery has been largely
introduced, and though the products of hand-looms still enjoy the
reputation of greater durability, there has unquestionably been a
marked development of producing power. Japanese looms now turn out
about 17 millions sterling of silk textiles, of which less than 4
millions go abroad. Nor is increased quantity alone to be noted, for
at the factory of Kawashima in Kioto Gobelins are produced such as
have never been rivalled elsewhere.

_Commerce in Tokugawa Times._--The conditions existing in Japan during the two hundred and fifty years prefatory to the modern opening of the country were unfavourable to the development alike of national and of international trade. As to the former, the system of feudal government exercised a crippling influence, for each feudal chief endeavoured to check the exit of any kind of property from his fief, and free interchange of commodities was thus prevented so effectually that cases are recorded of one feudatory's subjects dying of starvation while those of an adjoining fief enjoyed abundance. International commerce, on the other hand, lay under the veto of the central government, which punished with death anyone attempting to hold intercourse with foreigners. Thus the fiefs practised a policy of mutual seclusion at home, and united to maintain a policy of general seclusion abroad. Yet it was under the feudal system that the most signal development of Japanese trade took place, and since the processes of that development have much historical interest they invite close attention.

As the bulk of a feudal chief's income was paid in rice, arrangements
had to be made for sending the grain to market and transmitting its
proceeds. This was effected originally by establishing in Osaka stores
(_kura-yashiki_), under the charge of samurai, who received the rice,
sold it to merchants in that city and remitted the proceeds by
official carriers. But from the middle of the 17th century these
stores were placed in the charge of tradesmen to whom was given the
name of _kake-ya_ (agent). They disposed of the products entrusted to
them by a fief and held the money, sending it by monthly instalments
to an appointed place, rendering yearly accounts and receiving
commission at the rate of from 2 to 4%. They had no special licence,
but they were honourably regarded and often distinguished by an
official title or an hereditary pension. In fact a kake-ya, of such
standing as the Mitsui and the Konoike families, was, in effect, a
banker charged with the finances of several fiefs. In Osaka the method
of sale was uniform. Tenders were invited, and these having been
opened in the presence of all the store officials and kake-ya, the
successful tenderers had to deposit bargain-money, paying the
remainder within ten days, and thereafter becoming entitled to take
delivery of the rice in whole or by instalments within a certain time,
no fee being charged for storage. A similar system existed in Yedo,
the shogun's capital. Out of the custom of deferred delivery developed
the establishment of exchanges where advances were made against sale
certificates, and purely speculative transactions came into vogue.
There followed an experience common enough in the West at one time:
public opinion rebelled against these transactions in margins on the
ground that they tended to enhance the price of rice. Several of the
brokers were arrested and brought to trial; marginal dealings were
thenceforth forbidden, and a system of licences was inaugurated in
Yedo, the number of licensed dealers[7] being restricted to 108.

The system of organized trading companies had its origin in the 12th
century, when, the number of merchants admitted within the confines of
Yedo being restricted, it became necessary for those not obtaining
that privilege to establish some mode of co-operation, and there
resulted the formation of companies with representatives stationed in
the feudal capital and share-holding members in the provinces. The
Ashikaga shoguns developed this restriction by selling to the highest
bidder the exclusive right of engaging in a particular trade, and the
Tokugawa administration had recourse to the same practice. But whereas
the monopolies instituted by the Ashikaga had for sole object the
enrichment of the exchequer, the Tokugawa regarded it chiefly as a
means of obtaining worthy representatives in each branch of trade. The
first licences were issued in Yedo to keepers of bath-houses in the
middle of the 17th century. As the city grew in dimensions these
licences increased in value, so that pawnbrokers willingly accepted
them in pledge for loans. Subsequently almanack-sellers were obliged
to take out licences, and the system was afterwards extended to
money-changers.

It was to the fishmongers, however, that the advantages of commercial
organization first presented themselves vividly. The greatest
fish-market in Japan is at Nihon-bashi in Tokyo (formerly Yedo). It
had its origin in the needs of the Tokugawa court. When Iyeyasu
(founder of the Tokugawa dynasty) entered Yedo in 1590, his train was
followed by some fishermen of Settsu, to whom he granted the privilege
of plying their trade in the adjacent seas, on condition that they
furnished a supply of their best fish for the use of the garrison. The
remainder they offered for sale at Nihon-bashi. Early in the 17th
century one Sukegoro of Yamato province (hence called Yamato-ya) went
to Yedo and organized the fishmongers into a great gild. Nothing is
recorded about this man's antecedents, though his mercantile genius
entitles him to historical notice. He contracted for the sale of all
the fish obtained in the neighbouring seas, advanced money to the
fishermen on the security of their catch, constructed preserves for
keeping the fish alive until they were exposed in the market, and
enrolled all the dealers in a confederation which ultimately consisted
of 391 wholesale merchants and 246 brokers. The main purpose of
Sukegoro's system was to prevent the consumer from dealing direct with
the producer. Thus in return for the pecuniary accommodation granted
to fishermen to buy boats and nets they were required to give every
fish they caught to the wholesale merchant from whom they had received
the advance; and the latter, on his side, had to sell in the open
market at prices fixed by the confederation. A somewhat similar system
applied to vegetables, though in this case the monopoly was never so
close.

It will be observed that this federation of fishmongers approximated
closely to a trust, as the term is now understood; that is to say, an
association of merchants engaged in the same branch of trade and
pledged to observe certain rules in the conduct of their business as
well as to adhere to fixed rates. The idea was extended to nearly
every trade, 10 monster confederations being organized in Yedo and 24
in Osaka. These received official recognition, and contributed a sum
to the exchequer under the euphonious name of "benefit money,"
amounting to nearly £20,000 annually. They attained a high state of
prosperity, the whole of the cities' supplies passing through their
hands.[8] No member of a confederation was permitted to dispose of his
licence except to a near relative, and if anyone not on the roll of a
confederation engaged in the same business he became liable to
punishment at the hands of the officials. In spite of the limits thus
imposed on the transfer of licences, one of these documents commanded
from £80 to £6,400, and in the beginning of the 19th century the
confederations, or gilds, had increased to 68 in Yedo, comprising 1195
merchants. The gild system extended to maritime enterprise also. In
the beginning of the 17th century a merchant of Sakai (near Osaka)
established a junk service between Osaka and Yedo, but this kind of
business did not attain any considerable development until the close
of that century, when 10 gilds of Yedo and 24 of Osaka combined to
organize a marine-transport company for the purpose of conveying their
own merchandise. Here also the principle of monopoly was strictly
observed, no goods being shipped for unaffiliated merchants. This
carrying trade rapidly assumed large dimensions. The number of junks
entering Yedo rose to over 1500 yearly. They raced from port to port,
just as tea-clippers from China to Europe used to race in recent
times, and troubles incidental to their rivalry became so serious that
it was found necessary to enact stringent rules. Each junk-master had
to subscribe a written oath that he would comply strictly with the
regulations and observe the sequence of sailing as determined by lot.
The junks had to call _en route_ at Uraga for the purpose of
undergoing official examination. The order of their arrival there was
duly registered, and the master making the best record throughout the
year received a present in money as well as a complimentary garment,
and became the shippers' favourite next season.

Operations relating to the currency also were brought under the
control of gilds. The business of money-changing seems to have been
taken up as a profession from the beginning of the 15th century, but
it was then in the hands of pedlars who carried strings of copper cash
which they exchanged for gold or silver coins, then in rare
circulation, or for parcels of gold dust. From the early part of the
17th century exchanges were opened in Yedo, and in 1718 the men
engaged in this business formed a gild after the fashion of the time.
Six hundred of these received licences, and no unlicensed person was
permitted to purchase the avocation. Four representatives of the chief
exchange met daily and fixed the ratio between gold and silver, the
figure being then communicated to the various exchanges and to the
shogun's officials. As for the prices of gold or silver in terms of
copper or bank-notes, 24 representatives of the exchanges met every
evening, and, in the presence of an official censor, settled the
figure for the following day and recorded the amount of transactions
during the past 24 hours, full information on these points being at
once sent to the city governors and the street elders.

The exchanges in their ultimate form approximated very closely to the
Occidental idea of banks. They not only bought gold, silver and copper
coins, but they also received money on deposit, made loans and issued
vouchers which played a very important part in commercial
transactions. The voucher seems to have come into existence in Japan
in the 14th century. It originated in the Yoshino market of Yamato
province, where the hilly nature of the district rendered the carriage
of copper money so arduous that rich merchants began to substitute
written receipts and engagements which quickly became current. Among
these documents there was a "joint voucher" (_kumiai-fuda_), signed by
several persons, any one of whom might be held responsible for its
redemption. This had large vogue, but it did not obtain official
recognition until 1636, when the third Tokugawa shogun selected 30
substantial merchants and divided them into 3 gilds, each authorized
to issue vouchers, provided that a certain sum was deposited by way of
security. Such vouchers were obviously a form of bank-note. Their
circulation by the exchange came about in a similar manner. During
many years the treasure of the shogun and of the feudal chiefs was
carried to Yedo by pack-horses and coolies of the regular postal
service. But the costliness of such a method led to the selection in
1691 of 10 exchange agents who were appointed bankers to the Tokugawa
government and were required to furnish money within 30 days of the
date of an order drawn on them. These agents went by the name of the
"ten-men gild." Subsequently the firm of Mitsui was added, but it
enjoyed the special privilege of being allowed 150 days to collect a
specified amount. The gild received moneys on account of the Tokugawa
or the feudal chiefs at provincial centres, and then made its own
arrangements for cashing the cheques drawn upon it by the shogun or
the daimyo in Yedo. If coin happened to be immediately available, it
was employed to cash the cheques; otherwise the vouchers of the gild
served instead. It was in Osaka, however, that the functions of the
exchanges acquired fullest development. That city has exhibited, in
all eras, a remarkable aptitude for trade. Its merchants, as already
shown, were not only entrusted with the duty of selling the rice and
other products of the surrounding fiefs, but also they became
depositories of the proceeds, which they paid out on account of the
owners in whatever sums the latter desired. Such an evidence of
official confidence greatly strengthened their credit, and they
received further encouragement from the second Tokugawa shogun
(1605-1623)and from Ishimaru Sadatsugu, governor of the city in 1661.
He fostered wholesale transactions, sought to introduce a large
element of credit into commerce by instituting a system of credit
sales; took measures to promote the circulation of cheques;
inaugurated market sales of gold and silver and appointed ten chiefs
of exchange who were empowered to oversee the business of
money-exchanging in general. These ten received exemption from
municipal taxation and were permitted to wear swords. Under them were
22 exchanges forming a gild, whose members agreed to honour one
another's vouchers and mutually to facilitate business. Gradually they
elaborated a regular system of banking, so that, in the middle of the
18th century, they issued various descriptions of paper-orders for
fixed sums payable at certain places within fixed periods; deposit
notes redeemable on the demand of an indicated person or his order;
bills of exchange drawn by _A_ upon _B_ in favour of _C_ (a common
form for use in monthly or annual settlements); promissory notes to be
paid at a future time, or cheques payable at sight, for goods
purchased; and storage orders engaging to deliver goods on account of
which earnest money had been paid. These last, much employed in
transactions relating to rice and sugar, were generally valid for a
period of 3 years and 3 months, were signed by a confederation of
exchanges or merchants on joint responsibility, and guaranteed the
delivery of the indicated merchandise independently of all accidents.
They passed current as readily as coin, and advances could always be
obtained against them from pawnbrokers.

All these documents, indicating a well-developed system of credit,
were duly protected by law, severe penalties being inflicted for any
failure to implement the pledges they embodied. The merchants of Yedo
and Osaka, working on the system of trusts here described, gradually
acquired great wealth and fell into habits of marked luxury. It is
recorded that they did not hesitate to pay £5 for the first bonito of
the season and £11 for the first egg-fruit. Naturally the spectacle of
such extravagance excited popular discontent. Men began to grumble
against the so-called "official merchants" who, under government
auspices, monopolized every branch of trade; and this feeling grew
almost uncontrollable in 1836, when rice rose to an unprecedented
price owing to crop failure. Men loudly ascribed that state of affairs
to regrating on the part of the wholesale companies, and murmurs
similar to those raised at the close of the 19th century in America
against the trust system began to reach the ears of the authorities
perpetually. The celebrated Fujita Toko of Mito took up the question.
He argued that the monopoly system, since it included Osaka, exposed
the Yedo market to all the vicissitudes of the former city, which had
then lost much of its old prosperity.

Finally, in 1841, the shogun's chief minister, Mizuno Echizen-no-Kami,
withdrew all trading licences, dissolved the gilds and proclaimed that
every person should thenceforth be free to engage in any commerce
without let or hindrance. This recklessly drastic measure, vividly
illustrating the arbitrariness of feudal officialdom, not only
included the commercial gilds, the shipping gilds, the exchange gilds
and the land transport gilds, but was also carried to the length of
forbidding any company to confine itself to wholesale dealings. The
authorities further declared that in times of scarcity wholesale
transactions must be abandoned altogether and retail business alone
carried on, their purpose being to bring retail and wholesale prices
to the same level. The custom of advancing money to fishermen or to
producers in the provincial districts was interdicted; even the
fuda-sashi might no longer ply their calling, and neither bath-house
keepers nor hairdressers were allowed to combine for the purpose of
adopting uniform rates of charges. But this ill-judged interference
produced evils greater than those it was intended to remedy. The gilds
had not really been exacting. Their organization had reduced the cost
of distribution, and they had provided facilities of transport which
brought produce within quick and cheap reach of central markets.

Ten years' experience showed that a modified form of the old system
would conduce to public interests. The gilds were re-established,
licence fees, however, being abolished, and no limit set to the
number of firms in a gild. Things remained thus until the beginning of
the Meiji era (1867), when the gilds shared the cataclysm that
overtook all the country's old institutions.

Japanese commercial and industrial life presents another feature which
seems to suggest special aptitude for combination. In mercantile or
manufacturing families, while the eldest son always succeeded to his
father's business, not only the younger sons but also the apprentices
and employees, after they had served faithfully for a number of years,
expected to be set up as branch houses under the auspices of the
principal family, receiving a place of business, a certain amount of
capital and the privilege of using the original house-name. Many an
old-established firm thus came to have a plexus of branches all
serving to extend its business and strengthen its credit, so that the
group held a commanding position in the business world. It will be
apparent from the above that commercial transactions on a large scale
in pre-Meiji days were practically limited to the two great cities of
Yedo and Osaka, the people in the provincial fiefs having no direct
association with the gild system, confining themselves, for the most
part, to domestic industries on a small scale, and not being allowed
to extend their business beyond the boundaries of the fief to which
they belonged.

_Foreign Commerce during the Meiji Era._--If Japan's industrial development in modern times has been remarkable, the same may be said even more emphatically about the development of her over-sea commerce. This was checked at first not only by the unpopularity attaching to all intercourse with outside nations, but also by embarrassments resulting from the difference between the silver price of gold in Japan and its silver price in Europe, the precious metals being connected in Japan by a ratio of 1 to 8, and in Europe by a ratio of 1 to 15. This latter fact was the cause of a sudden and violent appreciation of values; for the government, seeing the country threatened with loss of all its gold, tried to avert the catastrophe by altering and reducing the weights of the silver coins without altering their denominations, and a corresponding difference exhibited itself, as a matter of course, in the silver quotations of commodities. Another difficulty was the attitude of officialdom. During several centuries Japan's over-sea trade had been under the control of officialdom, to whose coffers it contributed a substantial revenue. But when the foreign exporter entered the field under the conditions created by the new system, he diverted to his own pocket the handsome profit previously accruing to the government; and since the latter could not easily become reconciled to this loss of revenue, or wean itself from its traditional habit of interference in affairs of foreign commerce, and since the foreigner, on his side, not only desired secrecy in order to prevent competition, but was also tormented by inveterate suspicions of Oriental espionage, not a little friction occurred from time to time. Thus the scanty records of that early epoch suggest that trade was beset with great difficulties, and that the foreigner had to contend against most adverse circumstances, though in truth his gains amounted to 40 or 50%.

Tea and Silk.

The chief staples of the early trade were tea and silk. It happened that just before Japan's raw silk became available for export, the production of that article in France and Tea and Italy had been largely curtailed owing to a novel disease of the silkworm. Thus, when the first bales of Japanese silk appeared in London, and when it was found to possess qualities entitling it to the highest rank, a keen demand sprang up. Japanese green tea also, differing radically in flavour and bouquet from the black tea of China, appealed quickly to American taste, so that by the year 1907 Japan found herself selling to foreign countries tea to the extent of 1¼ millions sterling, and raw silk to the extent of 12¼ millions. This remarkable development is typical of the general history of Japan's foreign trade in modern times. Omitting the first decade and a half, the statistics for which are imperfect, the volume of the trade grew from 5 millions sterling in 1873--3 shillings per head of the population--to 93 millions in 1907--or 38 shillings per head. It was not a uniform growth. The period of 35 years divides itself conspicuously into two eras: the first, of 15 years (1873-1887), during which the development was from 5 millions to 9.7 millions, a ratio of 1 to 2, approximately; the second, of 20 years (1887-1907), during which the development was from 9.7 millions to 93 millions, a ratio of 1 to 10.

That a commerce which scarcely doubled itself in the first fifteen years should have grown nearly tenfold in the next twenty is a fact inviting attention. There are two principal causes: one general, the other special. The general cause was that several years necessarily elapsed before the nation's material condition began to respond perceptibly to the improvements effected by the Meiji government in matters of administration, taxation and transport facilities. Fiscal burdens had been reduced and security of life and property obtained, but railway building and road-making, harbour construction, the growth of posts, telegraphs, exchanges and banks, and the development of a mercantile marine did not exercise a sensible influence on the nation's prosperity until 1884 or 1885. From that time the country entered a period of steadily growing prosperity, and from that time private enterprise may be said to have finally started upon a career of independent activity. The special cause which, from 1885, contributed to a marked growth of trade was the resumption of specie payments. Up to that time the treasury's fiat notes had suffered such marked fluctuations of specie value that sound or successful commerce became very difficult. Against the importing merchant the currency trouble worked with double potency. Not only did the gold with which he purchased goods appreciate constantly in terms of the silver for which he sold them, but the silver itself appreciated sharply and rapidly in terms of the fiat notes paid by Japanese consumers. Cursory reflection may suggest that these factors should have stimulated exports as much as they depressed imports. But such was not altogether the case in practice. For the exporter's transactions were hampered by the possibility that a delay of a week or even a day might increase the purchasing power of his silver in Japanese markets by bringing about a further depreciation of paper, so that he worked timidly and hesitatingly, dividing his operations as minutely as possible in order to take advantage of the downward tendency of the fiat notes. Not till this element of pernicious disturbance was removed did the trade recover a healthy tone and grow so lustily as to tread closely on the heels of the foreign commerce of China, with her 300 million inhabitants and long-established international relations.

The Foreign Middleman.

Japan's trade with the outer world was built up chiefly by the energy and enterprise of the foreign middleman. He acted the part of an almost ideal agent. As an exporter, his command of cheap capital, his experience, his knowledge of foreign markets, and his connexions enabled him to secure sales such as must have been beyond reach of the Japanese working independently. Moreover, he paid to native consumers ready cash for their staples, taking upon his own shoulders all the risks of finding markets abroad. As an importer, he enjoyed, in centres of supply, credit which the Japanese lacked, and he offered to native consumers foreign produce brought to their doors with a minimum of responsibility on their part. Finally, whether as exporters or importers, foreign middlemen always competed with each other so keenly that their Japanese clients obtained the best possible terms from them. Yet the ambition of the Japanese to oust them cannot be regarded as unnatural. Every nation must desire to carry on its own commerce independently of alien assistance; and moreover, the foreign middleman's residence during many years within Japanese territory, but without the pale of Japanese sovereignty, invested him with an aggressive character which the anti-Oriental exclusiveness of certain Occidental nations helped to accentuate. Thus from the point of view of the average Japanese there are several reasons for wishing to dispense with alien middlemen, and it is plain that these reasons are operative; for whereas, in 1888, native merchants carried on only 12% of the country's over-sea trade without the intervention of the foreign middlemen, their share rose to 35% in 1899 and has since been slowly increasing.

Balance of Trade.

Analysis of Japan's foreign trade during the Meiji era shows that
during the 35-year period ending in 1907, imports exceeded exports in
21 years and exports exceeded imports in 14 years. This does not
suggest a very badly balanced trade. But closer examination
accentuates the difference, for when the figures are added, it is
found that the excesses of exports aggregated only 11 millions
sterling, whereas the excesses of imports totalled 71 millions, there
being thus a so-called "unfavourable balance" of 60 millions over all.
The movements of specie do not throw much light upon this subject, for
they are complicated by large imports of gold resulting from war
indemnities and foreign loans. Undoubtedly the balance is materially
redressed by the expenditures of the foreign communities in the former
settlements, of foreign tourists visiting Japan and of foreign vessels
engaged in the carrying trade, as well as by the earnings of Japanese
vessels and the interest on investments made by foreigners.
Nevertheless there remains an appreciable margin against Japan, and it
is probably to be accounted for by the consideration that she is still
engaged equipping herself for the industrial career evidently lying
before her.

Trade with Various Countries.

The manner in which Japan's over-sea trade was divided in 1907 among
the seven foreign countries principally engaged in it may be seen from
the following table:--

Exports to Imports from Total
£ (millions). £ (millions). £ (millions).

United States 13½ 8½ 22
China 8¾ 6¼ 15
Great Britain 2¼ 11¾ 14
British India 1{1/3} 7(2/3) 9
Germany 1{1/8} 4(7/8) 6
France 4{1/3} (2/3) 5
Korea 3{1/3} 1(2/3) 5

Among the 33 open ports of Japan, the first place belongs to Yokohama
in the matter of foreign trade, and Kobe ranks second. The former far
outstrips the latter in exports, but the case is reversed when imports
are considered. As to the percentages of the whole trade standing to
the credit of the five principal ports, the following figures may be
consulted:--Yokohama, 40%; Kobe, 35.6; Osaka, 10; Moji, 5; and
Nagasaki, 2.

VI.--GOVERNMENT, ADMINISTRATION, &C.

_Emperor and Princes._--At the head of the Japanese State stands the emperor, generally spoken of by foreigners as the _mikado_ (honourable gate[9]), a title comparable with sublime porte and by his own subjects as _tenshi_ (son of heaven) or _tenno_ (heavenly king). The emperor Mutou Hito (q.v.) was the 121st of his line, according to Japanese history, which reckons from 660 B.C., when Jimmu ascended the throne. But as written records do not carry us back farther than A.D. 712, the reigns and periods of the very early monarchs are more or less apocryphal. Still the fact remains that Japan has been ruled by an unbroken dynasty ever since the dawn of her history, in which respect she is unique among all the nations in the world. There are four families of princes of the blood, from any one of which a successor to the throne may be taken in default of a direct heir: Princes Arisugawa, Fushimi, Kanin and Higashi Fushimi. These families are all direct descendants of emperors, and their heads have the title of _shinno_ (prince of the blood), whereas the other imperial princes, of whom there are ten, have only the second syllable of _shinno_ (pronounced _wo_ when separated from _shin_). Second and younger sons of a _shinno_ are all _wo_, and eldest sons lose the title _shin_ and become _wo_ from the fifth generation.

_The Peerage._--In former times there were no Japanese titles of nobility, as the term is understood in the Occident. Nobles there were, however, namely, _kuge_, or court nobles, descendants of younger sons of emperors, and _daimyo_ (great name), some of whom could trace their lineage to mikados; but all owed their exalted position as feudal chiefs to military prowess. The Meiji restoration of 1867 led to the abolition of the _daimyos_ as feudal chiefs, and they, together with the kuge, were merged into one class called _kwazoku_ (flower families), a term corresponding to aristocracy, all inferior persons being _heimin_ (ordinary folk). In 1884, however, the five Chinese titles of _ki_ (prince), _ko_ (marquis), _haku_ (count), _shi_ (viscount) and _dan_ (baron) were introduced, and patents were not only granted to the ancient nobility but also conferred on men who had rendered conspicuous public service. The titles are all hereditary, but they descend to the firstborn only, younger children having no distinguishing appellation. The first list in 1884 showed 11 princes, 24 marquises, 76 counts, 324 viscounts and 74 barons. After the war with China (1894-95) the total grew to 716, and the war with Russia (1904-5) increased the number to 912, namely, 15 princes, 39 marquises, 100 counts, 376 viscounts and 382 barons.

_Household Department._--The Imperial household department is
completely differentiated from the administration of state affairs. It
includes bureaux of treasury, forests, peerage and hunting, as well as
boards of ceremonies and chamberlains, officials of the empress's
household and officials of the crown prince's household. The annual
allowance made to the throne is £300,000, and the Imperial estate
comprises some 12,000 acres of building land, 3,850,000 acres of
forests, and 300,000 acres of miscellaneous lands, the whole valued at
some 19 millions sterling, but probably not yielding an income of more
than £200,000 yearly. Further, the household owns about 3 millions
sterling (face value) of bonds and shares, from which a revenue of
some £250,000 is derived, so that the whole income amounts to
three-quarters of a million sterling, approximately. Out of this the
households of the crown prince and all the Imperial princes are
supported; allowances are granted at the time of conferring titles of
nobility; a long list of charities receive liberal contributions, and
considerable sums are paid to encourage art and education. The emperor
himself is probably one of the most frugal sovereigns that ever
occupied a throne.