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%.
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 Tea and Silk. 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.
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 The Foreign Middleman. 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.
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 Balance of Trade. 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.
The Trade with Various Countries. 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 £ (millions). | Imports from £ (millions). | Total £ (millions). | |
| United States | 131⁄2 | 81⁄2 | 22 |
| China | 83⁄4 | 61⁄4 | 15 |
| Great Britain | 21⁄4 | 113⁄4 | 14 |
| British India | 11⁄3 | 72⁄3 | 9 |
| Germany | 11⁄8 | 47⁄8 | 6 |
| France | 41⁄3 | 2⁄3 | 5 |
| Korea | 31⁄3 | 12⁄3 | 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.