THE FORTUNES OF WAR

Dominion, Volume 11, Issue 90, 9 January 1918, Page 3

THE FORTUNES OF WAR

EXEMPLIFIED PA' JAPAN.

With tho exception of the United States, which did not abandon its neutrality until April of this year, Japan is tlie only one of the belligerents that has succe'ded in reducing its external debt since the war began. Japan's position has been achieved by means ot tho trading profits made through ability to supply to her Allies munitions and to other nations many commodities which they used to draw from tho Teutonic Powers and other combatants. On March 31, 1914, Japan's for(eign debt stood at £153,000,000 approximately, as compared'with £138, : 000,000 at tho corresponding dato m 1917. Tho reduction of £15,000,000, too, has not been a more transfer of debt from the foreign to the domestic creditor, for Japan's internal loans outstanding on March 31 last £5,000,000 larger than they wero three voars earlier. The foreign debt was contracted mainly in connection with tho war with -Russia in 1905-6, and the profits made sinco have been utilis-. Ed ill extinguishing tho moro costly loans floated during that period. The volume of transactions through the clearing-house in 1916-17 shows an expansion of 74 per cent, over the figures of the previous vear, and total £880,876,000 for tho whole country. This indicates the activity of the share market and the rapid creation of new companies under the stimulus of the favourable trade balance. ' A survey of economic conditions of the Japanese Empire in 1916-17 is given in the "Financial and Economic Annual" just to hand. The year's foreign trade reached £115,435,000 in exports, ■as against £77,435,000 in imports, a balance of £38,000,000 in favour of Japan. These figures constitute (( record for tho foreign trade of that country, and show an increase over the preceding year of about 6Q per cent, in exports, and of 41 per cent, in imports. In this expansion the shipping industry has played a most important part, due to the comparative immunity of the Japanese mercantile marine from raids by the enemy. In fact, shipbuilding has not only made good any- losses in Japan's tonnage, but there has been an increase from 1,528,264 tons at the end of 1913 to 1.716,104 tons at the end of 1916, in steamers alone. The earnings of these vessels at the abnormal rates - of freight/ruling since the war commenced are largely responsible for the favourable trado balance.' Figures' are given relating to the operations of Japanese steamship companies with an authorised capital of £30,000 and tipwards, aggregating a paid-up capital in 1916 of £8,947,500, and total reserves of £5,759,022. This 'group possessed 603 vessels of 980,793 tons gross, whose net earnings in 1916 were £6,311,017. "i In the financial year 1916-17 the expenditure relating to the war i cached £14,544,710, making the total since tho outbreak £33,C98X5b. The abundance of capital enabled the ' Government to borrow In Japan for tho conversion of foreign loans, and also to defray expenditure on public works. The 'budget for 1917-18 shows a revenue of £73,187,968, or £11,635,330 more than that for. 1916-17, ot which £16,096,942 is termed extraordinary, as against £7,082,377 in the previous year. The chief cause ot the expansion is the warship building scheme, which will absorb £26,733,586, according to estimates based on prices ruling earlier in the year, which will probably need somo modification. The methods of direct taxation in Japan include an impost on sales of goods, which are divided into two classes — necessaries' and luxuries, both wholesale and retail. The rates on wholesale business are 8 yen and 11 yen per 10,000 yen, while those on retail sales are 20 yen on necessaries and 30 yen on other commodities per 10,000 yen. Presumably the vpndors pay the tax, but, of course, it is passed on to thebuyers, and should serve as a check' on extravagance on the part of the people.