The Making of Modern Japan / An Account of the Progress of Japan from Pre-feudal Days to Constitutional Government & the Position of a Great Power, With Chapters on Religion, the Complex Family System, Education, &c.

by John Harington Gubbins

The plan adopted, wherever possible, in fixing the value of land in a district was to take a certain village as a specimen, and, having fixed the value of the land in it, to make that value the basis for determining the value of all other land in the district, the guiding principle being to ascertain the actual profit it yielded to the cultivator. With this principle in view, the method employed for determining the value of cultivated land was as follows: Land was first of all divided into two classes, rice land, and land on which other crops were grown. The official assessors having, with the assistance of the cultivator, estimated the annual yield of the holding, this yield was, in the case of rice, wheat and beans, converted into money by taking the average market price per koku (about five bushels) of each of these articles of produce for the five years 1870–4 inclusive. In fixing this average market price it would have been impossible to have taken one price for the whole country, since the prices of all staple articles varied in many districts. The difficulty was, therefore, met by fixing several market values, to be used as the separate bases of valuation wherever local conditions and circumstances required special consideration. Thus in some cases one market price for rice, or for wheat, was made the basis for valuing land in a whole province; whereas in other cases separate market prices had to be determined for particular districts, or even villages. In the case of land on which other produce, such as tea, silk, hemp and indigo, etc., was grown, the method adopted was to estimate what crops of wheat, or beans, land of the same kind in the same place yielded. This yield was then taken as that of the land in question, and converted into money in the usual way. Up to this point the method followed was the same for all land, whether a man cultivated his own holding, or held it on lease from the proprietor. In the former case the next step in the process of fixing land values was to deduct from the total value of the yield of the land 15 per cent, as cost of seed and manure. From the sum that remained the land-tax and local taxes were again deducted, as well as the cost of wages, if these were paid, for labour employed. The balance remaining over was taken to represent the net value of the yield of the land. And, as the Government decided to regard 6 per cent as the average rate of profit accruing to a cultivator, the value of a holding was determined by a simple calculation. This value, so determined, became the assessed or taxable value of the land, and on this the land-tax was levied. The process by which the value was arrived at in the case of a cultivator who held his land on lease was a little more complicated. Stated in other words, the taxable value of cultivated land, as determined by the revision, was in all cases the net value of its yield to the cultivator, whether the latter was owner, or only tenant.

To the question of the periods of payment of the land-tax much attention was given. The three instalments in which it was at first made payable were afterwards reduced to two, the dates of payment varying according to the nature of the crop cultivated. It should be noted, also, that in making the revised land-tax uniform throughout the country an exception was introduced in favour of Yezo, or the Hokkaidō, to give it its administrative name. There, in order to encourage the development of what was then the northernmost island, the rate of tax was fixed at 1 per cent.

Four years after the work of revision had begun the land-tax was, as already stated, reduced to 2½ per cent. In the Decree announcing this reduction allusion was made to the growing needs of the country, which had not yet been able, it was said, to adjust itself to the changed conditions brought about by the Restoration, and to the distress still prevailing amongst the agricultural classes. The apparent slowness with which the work of revision proceeded was brought to the notice of the local authorities by the Government, and the year 1876 was fixed as the date by which the revision must be concluded. Neither that year, however, nor the next saw the end of the undertaking. It lasted five years longer, being eventually completed in 1881.

Marquis Inouyé.
Took an active part in the Government formed after the Restoration, and was an outstanding figure in Foreign as well as Financial affairs.

Marquis Ōkuma.
Was prominent in the formation of the new Government subsequent to the Restoration; was for some time in Opposition, returning to the Ministry later. Conspicuous as an advocate of constitutional government, as an author, and as an educationalist, he was the most versatile of all the statesmen of his day.

By a very rough computation, which is all that the unreliability of statistics in those days will permit, the extent of taxable land occupied, or owned, by the people previous to the revision may be estimated at about ten million acres. As the result of the revision this area was more than quadrupled. On the other hand, the revenue derived from the land showed a falling off of 5 per cent. This result is explained by the fact that some of the land had before been over-taxed, while a large portion of the new taxable area consisted of uncultivated land paying only a nominal tax, and, therefore, contributing little to the revenue.

The total cost of the revision of the land-tax, according to official estimates, was about £7,500,000. Of this sum about £6,000,000 were repaid by the people, the balance being defrayed by the provincial authorities, with the exception of an item of some £100,000 which was charged to the central government. Heavy as this expense was, the gain to Japan would have justified a greater cost. For the first time in her history there was one uniform system of land taxation for the whole country, and, with the exception above mentioned, one uniform rate.

Since the completion of the task of revision the system of land taxation has in its main features remained unchanged. But the heavy expenditure entailed by the Russo-Japanese war in 1904–5 made it necessary for the Government to increase taxation of all kinds. Special war taxes were then imposed. Amongst these was an additional land-tax. When the war came to an end this additional tax was retained, as was the case with our own income-tax, and the Chinese transit tax on commodities (lekin), both of which were also originally war taxes.