January 17.
From the meagre information that is as yet to hand it is difficult to arrive at the inner history of the Ministerial crisis now in progress in Japan, which for the moment has resolved itself into the withdrawal from the Cabinet of the of Finance and Communications. Of the general trend of events; however, that may be considered to have led up to the resent situation it is more easy to form an accurate conception. The supposition entertained, according toa telegram in yesterday's issue, in Washington that the immigration question had been the li mediate cause of Marquis Saionj resignation must be dismissed as entirely wide of the mark. Unless the signs of the times are ver much misread, we believe that the secret of the Premier's troubles may be summed up in the one word "finance." When Marquis Saionji succeeded to the heritage of the famous "War" Cabinet of Marquis (then Count) Katsura, it was understood that the change would be one mainly of personnel and not of policy. The guiding principle that had brought Japan successfully through the war was not to be abandoned when the time came to consolidate the benefits for which the great sacrifices had been made. Consequently the new Premier found himself committed to a formidable programme entailing a rising expenditure and steadily increasing taxation. At first everything seemed favourable to such' a policy. The successes of the war had let loose the world's purse-strings; money flowed into the country; ani unparalleled impetus was given to industries; a big increase in wages followed; and Japan's capacity for ambitious! expenditure was deemed unlimited. Suddenly the supply of foreign capital ceased; the heavy taxation and enhanced cost of living have begun to tell upon the people, and) the inability of the Government to meet all its commitments coincides with popular dissatisfaction with the nation's policy.
The first indications of impending trouble were given during the recent compilation of the Budget. In its original form, based upon what had come to be regarded as Japan's settled policy, it was apparent that it could be carried out only by means of a considerable increase in taxation, already excess sive in relation to the country's circumstances. After repeated meetings of the State Council a compromise was effected, and it was announced that the Budget in its modified form could count upon a safe passage through the Diet. The correctness of this anticipation {has yet to be proved; but, even if liament accepts the inevitable, s clear that there is a growing feeling throughout—the against a policy of high taxes against ambitious naval and military schemes as well. In the meantime there is reason to believe that difficulty is- being experienced in defraying the cost of the nationalization of the railway system. The scheme entails the purchase of sixteen railways and for six of these, to be purchased last October, public loans to the amount of Yen 366,025,000 were required. In the event of the Government being unable to meet: its liabilities in this direction, easy to understand the opi that will be arrayed against policy that provides for considerable expansion in armaments and unproductive works. Yesterday it was understood that the Government would make no issue of public bonds with the exception of those required for railway pul There can be no doubt that the need for retrenchment has been realized, but there is a clash of which it ea be enforced. opinion regarding the extent to
Gradually, however, the weight of the nation's business influence is being thrown into the scale against the Ministry's financial policy and in the conflict of ideas Marquis Saionji has considered it prudent to hand in his resignation.
Owing to the fact that the present Diet has only a very brief life left to it—a general election takes place this summer—a compromise has been effected, and at the cost of jettisoning two Ministers Marquis Saionji agrees to remain as captain of the parliamentary ship until the end of its voyage. "It is generally accepted, however, that his resignation has merely been postponed, not withdrawn, and the consensus of opinion inclines to Marquis Katsura as the Emperor's nominee for the Premiership. Once more a new Cabinet would seem to indicate little more than a change in personnel, although it would emphasize the limitations of the Diet in the matter of impressing its will upon the national policy. Owing to the somewhat retiring attitude of Marquis Saionji, it is difficult to appraise his personal attitude to-taxation, although in view of the fact that the State Council was divided against itself it is possible that he was on the side of moderation. Marquis Katsura has again assumed the role of an adept political manmuvrer; and as in 1901 he stepped into the breach when Marquis Ito's fourth Ministry collapsed, so to-day he appears to be the only man to meet the situation. As the author of the Budget compromise, he is connected with the Government's financial policy, in so far as he does not stand for retrenchment all along the line. Moreover as Premier of the " War" Cabinet and as a soldier and a disciple of Marquis Yamagata he belongs admittedly to the military school of Japanese politicians. To this fact we may attribute the insistence of the Kokumim Shim-tun" upon the pacific nature of any new Cabinet that may be formed by him. There is no rea. son to doubt this statement, for any other policy would be suicidal at this juncture. Japan's economic
Text read from the printed page and cleaned; old type leaves the occasional error.