It will be observed that the country’s indebtedness grew by 1,700,000,000 yen, in round numbers, owing to the war with Russia. This added obligation the government resolved to discharge within the space of 30 years, for which purpose the diet was asked to approve the establishment of a national debt consolidation fund, which should be kept distinct from the general accounts of revenue and expenditure, and specially applied to payment of interest and redemption of principal. The amount of this fund was never to fall below 110,000,000 yen annually. Immediately after the war, the diet approved a cabinet proposal for the nationalization of 17 private railways, at a cost of 500,000,000 yen, and this brought the state’s debts to 2,776,000,000 yen in all. The people becoming impatient of this large burden, a scheme was finally adopted in 1908 for appropriating a sum of at least 50,000,000 yen annually to the purpose of redemption.
Local Finance.—Between 1878 and 1888 a system of local autonomy in matters of finance was fully established. Under this system the total expenditures of the various corporations in the last year of each quinquennial period commencing from the fiscal year 1889-1890 were as follow:—
| Year. | Total Expenditure (millions of yen). |
| 1889-1890 | 22 |
| 1893-1894 | 52 |
| 1898-1899 | 97 |
| 1903-1904[28] | 158 |
| 1907-1908 | 167 |
In the same years the total indebtedness of the corporations was:—
| Year. | Debts (millions of yen). |
| 1890 | ¾ |
| 1894 | 10 |
| 1899 | 32 |
| 1904 | 65 |
| 1907 | 89[29] |
The chief purposes to which the proceeds of these loans were applied are as follow:—
| Millions of yen. | |
| Education | 5 |
| Sanitation | 12 |
| Industries | 13 |
| Public works | 52 |
Local corporations are not competent to incur unrestricted indebtedness. The endorsement of the local assembly must be secured; redemption must commence within 3 years after the date of issue and be completed within 30 years; and, except in the case of very small loans, the sanction of the minister of home affairs must be obtained.
Wealth of Japan.—With reference to the wealth of Japan, there is no official census. So far as can be estimated from statistics for the year 1904-1905, the wealth of Japan proper, excluding Formosa, Sakhalin and some rights in Manchuria, amounts to about 19,896,000,000 yen, the items of which are as follow:—
| Yen (10 yen = £1). | |
| Lands | 12,301,000,000 |
| Buildings | 2,331,000,000 |
| Furniture and fittings | 1,080,000,000 |
| Live stock | 109,000,000 |
| Railways, telegraphs and telephones | 707,000,000 |
| Shipping | 376,000,000 |
| Merchandise | 873,000,000 |
| Specie and bullion | 310,000,000 |
| Miscellaneous | 1,809,000,000 |
| ——————— | |
| Grand total | 19,896,000,000 |