The new currency law passed by the two houses of the. sepenese Diet, but not yet, so far as is known here, ratified by the Mika—do, provides less for a single gold standard than for a hybrid bimetallism at a ratio.
The currency of Japan has been hitherto bated upon the silver yen, but gold coin have been struck, though never in cire tion to any extent, at the old French ratio of 1 to 15}. The Japanese mints have been open to free coinage, and the Tokio convention of 1866 between the treaty Powers and Japan stipulates that the Japanese Government shall exchange into native coin of the same intrinsic value, less only cost of coinage, ull foreign coin or bullion, in gold or silver, that may at any time be tendered to them by foreigners or natives.
old coins, and to issue new gold coins, to It is now proposed to call in existing valued a5 yon (dollars) but of practically half the weight of the present gold yen. The mints are also to be closed to the free coinage of silver on private account, though it would seem that there might be some difficulty in doing this, until the above treaty stipulations with foreign Powers have run out.
There are discrepancies in the published accounts as to the exact new Japanese ratio between gold and silver, but it is probably 1 to 32.1.3, At the English mint price; for gold, this would make their silver yen worth rather over 29 pence per ounce, which was near the market price when the law was introduced. But the gold price of silver has already fallen over four per cunt since the 24th of February, and is now below the new Japanese' parity. Therefore, supposing the law to be ratified by the Mikado, it will go into operation with silver already over-valued locally.
The chief object of the new Japanese law is evidently to render permanent the present premium on gold, that is, to use the financial power of that Empire to keep silver neat its actual low gold price, which, according to the report of their monera commission,. has been of such great advantage to the country. Their action is somewhat analogous to that of Austria and Russia, with regard to their depreciated paper money. Austria has created a new gold currency by which the premium on gold in her paper money is fixed permanently at sixteen per cent, and Russia, by the late imperial ukase, is to issue gold coins of a weight which cuts down the value of ler paper roubles by one-third. Now Japan goes, still further, as according to the figures of the Economiste Européen of Paris, her new currency would establish a permanent premium on gold of fifty-two per cent, but there isa striking contrast atween her method and that of the two European Powers. In Austria and Russia, holders of paper money may have just causes to complain that their interests have been sacrificed to national purposes, by this permanent establishment of the premium as the holders of gold or silver coins now on gold over paper. But in Japan, as far in circulation are concerned, no one suffers all. The new law is absolutely honest, fair, and above-board, and the only question is as to its economic effect on the future of the country.
The Japanese Finance Minister who has introduced this law, is said by native newspapers to be also introducing the most exfravagent budget which- has ever been known there. "There is reason to believe that he wishes to float new loans in Europe, and probably also to convert Japan's pres. ent home debt on better conditions-abroad, caf he can once establish this new par of gold exchange, However the loan projects may turn out, it is certain that, as long as the present Per enormous exports of raw silk must con-jum on gold can be kept up in Japan,
tinue to dominate the price of all European raw silk, and the prices of many silk piece-goods which she has already proved herself able to export in direct competition with France and Switzerland. e same is true, but in less degree, as regards her tea exports, and many articles of eastern Asiatic consumption which have hitherto been supplied by Europe. the white races of that increasing competi Sagacious men have long been warning ion from the Fast, which the French have called "lo peril jeune, " but it was hardly to be expected that farthest Asia would make such a brilliant assault, as is implied by this law, on the commercial supremacy of Europe and America. On the other hand, the success of Japan must depend on how far she can maintain her own low standard of prices and wages, for it is this which has enabled her to reap the full advantage of the break of gauge between silver and gold values. tal and energies in Japan. The well-defined policy of that country is Japan for the Japanese," who will, however, gladly acquire the foreign machinery for themselves, and employ for a few years enough highly skilled foreign operatives to teach the natives the best methods of mill work. But it is certain that China offers a wide and equally profitable field for foreign investments in woollen manufactures, and it might be rash to predict that, with a development of such Asiatic competition, even the Dingley woollen tariff would be thought to give adequate protection, As to the probable effect of the new Japanese monetary system on the world's absorption of silver, I cannot do better than quote from the London and China Telegraph of the 16th of March, though I must leave to that usually well-informed London paper all responsibility for. the Statistics, which I have not yet had opportanity to verify: "Judging from the way in which silver has fallen in this market on the announcement of a bill authorising a gold standard for Japan, one would imagine that another serious outlet, Tt must be admitted that the Jay ese had been closed to silver.
The outlet are inferior to no nation in intelligence, may be now closed, but it was scarcely industry, or energy, but the enormous de-worth considering. Figures now before velopment of their industrial activity has show that in the period from already raised their general level of prices by about thirty per cent, and nothing in 1872 to 1895 Japan imported silver to
their economic situation presages any halt the value of 172,108,690 yen whilst during the same period she actually exporte in this advance. Speculation is certainly more, the figures being 171,672,767 yen. rampant there to-day. The Government probable that in 1896 she imported seems to be troubled with what is politely more silver than she exported, but, making called "megalomania" but is better known ample allowance for this, it would not to the man in the street as big head." appear that any considerable avenue has The public expenditure for warlike another been closed, and the fall has been of a purposes is increasing by leaps and bounds. sentimental nature." their budget for 1897-8 contemplates gov-In conclusion, I may add that recent ernment loans for nearly sixty million yen, native newspapers are said to indicate besides further receipts of over forty-four strong and active opposition to the new million yen from the Chinese indemnity, currency Jaw from various commercial and an increase of taxation of some twen-classes of Japanese. What effect this may ty-three millions over the previous year. have on the final decision of the Mikado On this matter of taxation I only wish to! remains to be scen.—Francis B. Forbes, say here that many competent observers in the Boston Transcript. believe the limit which the people can stand to be nearly reached, and that, therefore the new budget is approaching the danger point. On the side of expenditure, the Baw Beports. same budget shows, among others, an increase over 1896-97 of about forty' million yen on the navy, and of more than ten
Text read from the printed page and cleaned; old type leaves the occasional error.