Chapter VI: Development of Japanese Commerce

Progress of Japanese commerce in the last fifteen years—Remarkable
increase of exports and of the importation of raw
material—Importation of capital in the form of machinery for
native manufactories—Countries interested in Japanese
commerce—Japanese merchants accused of occasionally producing
inferior articles and not fulfilling their contracts—The reasons
for the excess of imports over exports in the years 1894–98.

Nothing can better illustrate the rapid progress made in Japanese commerce during the last thirty years than the development of her import and export trade, which is regularly recorded in a pamphlet published by the Japanese Minister of Finance, both in Japanese and English, entitled the ‘Monthly Return of the Foreign Trade of the Empire of Japan,’ which gives the fullest particulars respecting the commercial operations of the month, as well as a résumé of what has recently transpired. Each spring a complete volume is issued which supplies further details, and gives a table showing the commercial status throughout the preceding year. According to the figures given in this document, which are extremely accurate, the exports in 1898 attained the unusually high figure of £16,570,000, and the imports £27,700,000, making a total of £44,270,000. The following table displays very clearly the prodigious advance made in Japanese commerce during the thirty years included between 1868 and 1898.

The figures in the original document are, of course, given in Japanese currency, but, for the convenience of English readers, they are here rendered by their equivalent in English money, taking the yen at two shillings, the rate it has held for a considerable time past.

JAPANESE FOREIGN COMMERCE.

───────────────────────┬───────────────────────┬───────────────────────
│ Imports. │ Exports.
───────────────────────┼───────────────────────┼───────────────────────
1868│ £1,070,000│ £1,550,000
1879│ 3,300,000│ 2,820,000
1884│ 3,220,000│ 3,400,000
1889│ 6,620,000│ 7,020,000
1894│ 12,170,000│ 11,330,000
1895│ 13,870,000│ 13,620,000
1896│ 17,170,000│ 11,780,000
1897│ 21,930,000│ 16,310,000
1898│ 27,700,000│ 16,570,000
───────────────────────┴───────────────────────┴───────────────────────

By studying the statistics published in this official pamphlet, we find that out of £3,581,200 of indigenous articles exported from Japan in 1883, £2,713,900 were of a purely agricultural character, and only £242,200 represented articles manufactured in the country. This last class consisted only of the various articles included among the ancient art industries of Japan: £54,400 worth of ceramics and pottery, £54,300 of lacquer, £26,100 of paper fans, umbrellas, and fancy goods generally, etc. The silk industries did not even attain the comparatively low figure of £9,000. Five years later, in 1888, the situation was entirely changed. The export of indigenous merchandise exceeded £6,489,100, of which only 68·6 per cent. instead of 76·4 per cent. represented agricultural produce, 3 per cent. instead of 3·4 per cent. forestries, 5·2 per cent. instead of 6·7 per cent. of the total amount fisheries; on the other hand, the various minerals had risen from 6·7 per cent. to 11·2 per cent., and manufactured goods rose from 6·8 per cent. to 11·8 per cent. Japan also exported £350,000 worth of copper and £300,000 worth of coal. The silk manufactories exported silk goods to the extent of £168,000, and all the art industries, with the sole exception of the lacquer, which remained stationary, rose very considerably in value. To these figures must be added the returns of certain other commercial products of a kind totally unknown in Japan a quarter of a century ago—matches, for instance, of which £74,000 worth were exported.

A glance at the following figures will show of what the Japanese export trade during the last three years was composed, and the nature of the goods.

PRINCIPAL EXPORTS FROM JAPAN IN 1895, 1896, 1897 AND 1898.

───────────────┬────────────┬────────────┬────────────┬────────────
│ 1895. │ 1896. │ 1897. │ 1898.
───────────────┼────────────┼────────────┼────────────┼────────────
Raw silk and │ │ │ │
cocoons │ £4,800,000│ £2,880,000│ £5,560,000│ £4,200,000
Silk ‘ravel’ │ 290,000│ 280,000│ 300,000│ 270,000
Tea │ 820,000│ 640,000│ 780,000│ 820,000
Rice │ 720,000│ 790,000│ 610,000│ 590,000
Camphor │ 150,000│ 110,000│ 130,000│ 120,000
Cuttle-fish │ 100,000│ 110,000│ 140,000│ ?
Coal │ 760,000│ 890,000│ 1,150,000│ 1,520,000
Copper │ 520,000│ 550,000│ 580,000│ 730,000
Tissues and │ │ │ │
silk │ │ │ │
handkerchiefs│ 1,530,000│ 1,200,000│ 1,320,000│ 1,600,000
Sewing cotton │ 100,000│ 400,000│ 1,350,000│ 2,010,000
Spun cotton │ 240,000│ 230,000│ 260,000│ 260,000
Matches │ 470,000│ 500,000│ 560,000│ 630,000
Mats and straw │ │ │ │
goods │ 480,000│ 530,000│ 640,000│ 630,000
Fans and │ │ │ │
screens │ 80,000│ 100,000│ 120,000│ ?
Pottery │ 200,000│ 200,000│ 180,000│ 200,000
───────────────┴────────────┴────────────┴────────────┴────────────

Altogether the chief manufactured articles exported in the year 1895 were valued at £4,000,000; three years later they rose in value to £6,300,000.

At the present moment goods which were absolutely unknown in Japan in 1850 are exported from that country all over the East from Korea to Singapore; and Japanese cotton goods, the raw material for which has to be imported from India, compete with Chinese materials of the same class, the raw material for which is obtained from the same country. Needless to say, Japanese silks and mats can be procured in every part of the world, and their coal, though inferior to the Welsh, being greasy, emitting great quantities of smoke and burning away quickly, is very cheap, and is supplied to all the steamers touching at the ports of the Far East from Korea to the Straits of Malacca. In the meantime, those industries for which Japan has always been noted have not diminished in importance. It must, however, be confessed that this branch of industry has decreased both in quality and beauty, the result, doubtless, of hasty and purely commercial production. If, however, very fine work is not produced so much as it was formerly, cheap Japanese artistic goods, ceramic and otherwise, flood the markets of the civilized world. A curious fact connected with the actual condition of Japanese export trade is the remarkable extension and increase in value of what might be called the new industries, of which by far the most important are those connected with cotton.

Meanwhile, the import trade has lately been considerably altered. Fifteen years ago Japan imported sugar and petroleum only. In 1897 raw cotton was introduced to the value of £4,300,000. If we add to this £100,000 worth of wool, £93,400 of pig-iron, £47,700 of steel, and one or two other minor items, we have a return of £5,900,000, or 23 per cent. of the entire imports; the food imports during the same year were also 23 per cent. The increase in the value of these latter in 1897, which stood at £5,900,000 as against £3,400,000 in the previous year, is due to the failure of the rice crop, which necessitated the importation of 3,800,000 cwt. of rice, valued at £2,180,000. A certain quantity of rice, between £400,000 and £800,000 worth, has to be imported annually from Korea and Indo-China, in order to counterbalance the amount of Japanese rice of the first quality exported to Europe and the United States. Besides rice, the import of sugar has reached the high figure of £1,980,000, and petroleum, of which 61,000,000 gallons were imported in 1897, £766,700.

Imported manufactured goods may be divided into two distinct classes, the first including articles of domestic use or consumption, and the second those which tend to extend the various industries of the country, and which in a sense constitute a certain proportion of capital. In the first category may be placed spun goods, both cotton and woollen, and watches; in the second, machinery, wrought iron and steel, rolling-stock and other materials for the railways.

Woollen industries did not exist in Japan until recently, for the simple reason that sheep were not introduced until after the opening of the ports to Europeans. In 1897, woollen goods were imported to the value of £133,700, and textile fabrics to £1,020,000; while watches, which were never seen in Japan until 1850, are now in general use, and in 1897, 305,894 of these necessary articles were imported and retailed at an average of about 12s. each.

The second class of manufactured articles imported into the Empire in 1897 includes £830,000 worth of wrought iron, £1,360,000 of machinery and boilers, £510,000 of locomotives and railway carriages and trucks, £330,000 of rails, and £200,000 of other railway stock, _i.e._, 15 per cent. of the total imports. This rapid development, which compares very favourably with the two preceding years, 1896 and 1895, is mainly due to increased activity in railway construction since the Chinese War, and also to the rapid commercial expansion throughout the Empire.

The following table shows the manner in which Japanese foreign trade was shared among the various nations in 1896:

─────────────────┬─────────────────┬─────────────────┬───────────────── │Exportation from │Importation into │ Total. │ Japan. │ Japan. │ ─────────────────┼─────────────────┼─────────────────┼───────────────── Great Britain │ £900,000│ £5,920,000│ £6,820,000 United States │ 3,150,000│ 1,640,000│ 4,780,000 China │ 1,380,000│ 2,130,000│ 3,510,000 Hong-Kong │ 2,000,000│ 910,000│ 2,970,000 British India │ 450,000│ 2,250,000│ 2,700,000 France │ 1,900,000│ 770,000│ 2,670,000 Germany │ 300,000│ 1,720,000│ 2,020,000 Korea │ 340,000│ 510,000│ 850,000 ─────────────────┴─────────────────┴─────────────────┴─────────────────

Japan also carries on a very extensive trade with other countries besides those above mentioned, among them Switzerland, Asiatic Russia, Italy, Australia, the Philippines, Cochin China, Canada, etc., but in no case does it exceed £400,000 annually. The relative high figures of the business transacted between Japan and Hong-Kong is due to that port being a centre whence goods are distributed to other countries. One striking feature of the above table is the preponderance of the trade between Japan and England, from which country she derives all her cotton and linen goods, as well as nine-tenths of her machinery and wrought iron (nails excepted), and more than half of her woollens—in a word, the immense majority of all the manufactured commodities imported into the country. Germany sends machinery, cloth, almost all the iron nails, alcohol, sugar and paper; Belgium and Russia export manufactured articles into, but take almost nothing from, Japan. The principal French import is mousseline de laine, valued at £570,000, which is almost a French monopoly. About a fifth of the goods imported from America consists of machinery and wrought metals; the rest includes petroleum, raw cotton, flour and leather. The United States, France, and lastly Italy, are Japan’s principal customers for raw silk, as well as for her light spun silks. Five-sixths of the tea grown in Japan goes to America and the rest to England. China, Korea and India take almost all the Japanese matches, while the coal will be found distributed along the whole of the Asiatic Coast of the Pacific. Copper goes to Hong-Kong, Germany and England, and rice, camphor, matting, straw and art goods are distributed all over Europe and the United States.

This brilliant picture of Japanese commercial prosperity has, unfortunately, its shady side. Many complain that the articles manufactured in Japan are not up to the mark in point of excellence and finish. As is generally the case with Orientals, they start well and make their first batch of goods admirably, but the quality soon falls off, probably the result, not so much of negligence, as of over-hasty production, due to competition. There can be no question that these and other complaints are not unfounded, and many intelligent Japanese are the first to acknowledge and deplore them. As an instance in point, matches are not nearly so well made as they used to be. Many complaints have also been made as to the increasing inferiority of a certain class of silk goods known as _haboutaye_ and of the silk pocket-handkerchiefs, of which an enormous quantity are exported, with the result that the exportation of these last-mentioned necessary articles fell from 1,855,000 dozens in 1895, to 1,157,000 in 1897. On the other hand, there is a distinct increase in the export of _haboutaye_. Nevertheless many thoughtful people have watched this deterioration in the excellence of the new Japanese industries with some alarm, and not a few manufacturers who have had their attention drawn to the matter have already mended their ways. The same complaint might be made of goods manufactured in certain parts of Europe, notably in Germany, where cheap and showy articles are fabricated in superabundance, but Japan would do well to maintain her reputation as high as possible as a producer of all that is best in the market.

Still graver is the charge brought against Japanese merchants of occasional lapses from a high standard of honour, and of availing themselves of the slightest possible pretext to avoid fulfilling the letter of their contracts, in which they contrast unfavourably with the higher class of Chinese merchants, whose reputation for integrity and for a strict adherence not only to their written, but also to their verbal promises, is well known, with some degree, possibly, of exaggeration. It is as well to recall in this connection that the Japanese were until quite recently a feudal and military people, who despised trade in all its branches, and those who were engaged in its pursuit were not considered any the better for being honest. In China, on the other hand, it has ever been otherwise, the merchants, after the literati, being looked upon as the most honourable class in the Empire, whereas the military were invariably despised, being recruited from the lowest ranks of society. Ideas have certainly been considerably modified in Japan in the last thirty years; still, the majority of the merchants are of the same class as their predecessors when they are not their immediate descendants; therefore, we should not be surprised if they retain some of their traditions it were better they were without. In a word, since the Restoration of 1868 the Japanese have done their best to get rid of the prejudices of feudal times, but although these are fast disappearing, some of their after-effects still remain.

It has always been extremely difficult to induce Orientals to understand the value of time, and in this particular the Japanese are still on a par with their neighbours. Foreign merchants have the greatest difficulty in persuading their Japanese correspondents that a few days’; nay, a few hours’ delay in the transaction of business and in the despatch of goods often leads not only to much inconvenience, but to absolute loss.

One of the chief desires of the Japanese at the present time is to see their export commerce pass from the hands of foreigners, who hold it, into their own; but they may rest assured that until they improve their business habits they will not succeed in carrying out their object in this direction.

It has been noticed that during the three years 1896, 1897 and 1898 the Japanese imports have been immensely in excess of their exports. This is probably due to the necessity of obtaining plant in great quantities for the immediate increase of the many new industries that have sprung up all over the country in so short a time. This financially has undoubtedly resulted in a distinct loss to the nation. The Chinese War indemnity brought a good deal of gold into the country, but the greater part of it has been expended in augmenting the navy and in the purchase of war materials. Fortunately, trade throughout Japan in 1899 was distinctly flourishing, thanks mainly to the abundance of the crops in the preceding year, and also to a curb having been put on exaggerated industrial activity, whereby, as already intimated, the imports were in excess of the exports, and the danger of a crisis in this direction was averted. This extraordinary commercial development in so remarkably short a period reflects the greatest credit upon the Japanese people, but we must not expect that it will continue progressing without encountering occasional checks, and there are not a few thoughtful people who foresee that the Japanese factories will soon have to compete very seriously with those which have been recently erected in the free ports of China. In this respect it may be remarked that salaries have risen at Shanghai, as well as at Osaka and Tokio. The acquisition of the island of Formosa will probably before long enable the Japanese to cultivate cotton and other tropical produce on their own territory, which will, of course, be a great gain to them.