Tae new Japanese Ministry has lost little time in grappling' with the most serious of the many problems with which it found itself confronted on assuming office. As soon us diplomatic exigencies would permit, Count Komara quitted his post in London to take up the portfolio of Foreign Affairs in Tokio, and it was at the first Cabinet meeting held alter his return that the Government's financial policy was; ratified. According to the decision of August 28, which, it is understood, has received the sanction of the Throne, drastic measures are to be adopted to place the country's finances on sounder footing than that on which the post-bellum policy of unchecked expansion has left them. Already the budget, which hud not been accepted without misgivings in many quarters, had seemed to represent the limit, in the reduction of national expenditure, and the contemplation of farther retrenchment was certain to he the signal for renewed opposition on the part of the more militant section of the Emperor's advisers. But a solution of the dilemmahas been found in retaining the programme of public works passed by the Diet, while distributing it over eleven years instead of the six _years provided for by the Saionji Cabinet. In the current year this postponement of public works will entail a saving of expenditure amounting to Y 60,000,000, while by the end of the financial year 1919-20 the total amount to be saved is estimated at Y.200,000,000. The details of the scheme have not, yet been made public, but it is known that more than half of the curtailment of expenditure is to he borne by the army and navy. Meanwhile the fiat has gone forth for the most rigid economy in all administrative departments; for, although it is not expected that the annual expenditure will be lessened to any considerable extent by such means, it is felt that the example set will' not ba lost upon the nation at large. It is characteristic of the Japanese that when a situation has to he faced it should be met fully and with determination. In the present instance there is to be no attempt to disguise the seriousness of the financial position, and the efforts of the new Ministry to grapple with the problem will be followed with interest und sympathy.
Tapanese finances have suffered not only from a tendency to extravagance caused by the sudden demands of empire, but also from the makeshift policy that has characterized the nation's attempts to balance revenue and expenditure. In spite of the express understanding that the taxes imposed daring the war were to be remitted at the end of the year following the conclusion of peace, the Japanese Government found itself compelled Both to maintain the burden of taxation and to devise additional methods of raising revenue. When foreign markets showed reluctance to provide further advances, fresh efforts were made to encourage domestic loans; but the system of, redeeming public bonds in the open market proved so unpalatable to the nation at large that not only were the prospects of home loans affected, but political dissatisfaction became formidable enough to prompt " hasty reversion to less questionable methods of meeting the Government's obligations. But the new ('ahmet has realized that) Japan's borrowing power has for! the present been strained to a point beyond which it is not advisable to go. A decision has, therefore, been taken to raise no loans daring the next eleven years, with the exception of the Railway Loan und the Formosan Public Works Loan, and to make ordinary revenue the standard of the nation's expenditare. Further, in view of the general economic situation, estimates are to be framed ona more conservative basis, to the elimination even of such cor venient margins as may be supply by "normal increase of revenue At the same time the debt reduction fund, which of recent years has had little real existence owing to the custom of borrowing annually for "extraordinary expenditure," is to be resuscitated from a nominal Y. 37,000,000 to an actual Y. 50,000,000 a year. Only by sach means can the expressed intention of redeeming within thirty years the public lonns issued in connexion with the war be carried into effect.
To no particular has the necessity for retrenchment entailed a mora serious disappointment to the nation at large than in the postponement of the Tokio Exhibition of 1912.
Neither the curtailment of the naval and military programmes nor the postponement of important harbour works was calculated to touch the people's amour propre so acutely as this personal admission of financial embarrassment. To have played the world's host und to have demonstrated in the most fattraative manner possible hor aptitude for the arts of pence as well as her skill in the science of war naturally appealed—with irresistible force to Japan at thf' stage of her history. Consequontly it will evoke little surprise to learn that no decision taken at the recent meeting of the Cabinet has met with such stoat opposition as the determination to postpone the Exhibition until 1917, the jubilee of the Emperor's accession. The cancellation of all existing arrangements, however, would seem to be final, and while general sympathy will be felt with the people, the consensus of opinion will approve of the, Goverment's action. In the event of the present depression in trade lasting for three yours. more, there could be no more melancholy
Text read from the printed page and cleaned; old type leaves the occasional error.