NOTES AND COMMENTS.

New Zealand Herald, Volume XLII, Issue 12968, 11 September 1905, Page 4

NOTES AND COMMENTS.

KCON'OMIO EFFECTS OP WAR UPON" JAPAN. Japan* lias so far raised and provided for the war £168,891,734. In this sum the lieu- loan of £30.000,000 is included. How enormous such an amount is for a comparatively poor country like Japan will readily be seen if .we remember that Britain's expenses for 2} years of the South African war (£228.000,000) were only £60,000.000 higher. J he relative value of a given sum of money in different countries varies in accordance with the difference in the level of national wages; and as British wages are, on an average, about live times higher than are wages in Japan, one may say that Japan's war expenditure is a burden equivalent to a British expenditure of £850.000,000. As the national debt of Japan has more than trebled in consequence of the war, it is only natural that, many of Japan's most fervent well-wishers should doubt whether she will lie able to bear her heavy burden. Japan is financially much stronger than was generally believed before the war came to test that strength. Cut; of £168,891,734 provided for the war only £82,000,000 have been raised abroad, while about £40,000,000 were raised in Japan by means of domestic loans, ami almost the whole balance was provided by appropriations, war taxes, economies on the last two Budgets, etc. Taxation, which produced 146,163,363 yen in 1903-4, was raised to 194,041,011 '* yen in 1904-5, and to 196,101,843 yen in 1905-6. The State properties and monopolies, which brought only 55,702,067 yen in 1903-4, yielded 62,192,023 yen in the Budget for 1904-5, and 74,112,893 yen in the Budget for 1905-6. It therefore appears that the increased yield of the taxes and of the Stale properties and monopolies combined would suffice to pay 4Ji per cent, interest on about £170,000.000. As Japan lias, so far, floated loans fur only £120.000,000, and as she should easily be able to convert her short war loans at high rates of interest into 4£ per cent, loans, these two sources of permanent revenue alone should amply suffice for interest and redemption in respect of the Japanese war debt. While Japan's total exports have more than trebled during the last; twelve'years, her exports to Asia have grown more than sixfold, and her expoits to China more than tenfold. By her geographical position she is capable of becoming the chief provider of many manufactured goods in China, which offers an unlimited market. She will, besides, have Corea as an excellent customer. Of course the pinch will come when the waste of national resources has to be made good by the slow processes of peaceful rebuilding. However much we may admire the manner in which Japan lias withstood the military and financial strain of war, it is impossible to conceal from ourselves the fact that present knowledge is insufficient to predict how she will bear the future—the first

weary five years of peace. After the comparatively small China war, Japan's adverse trade balance gave her rulers much anxiety and provoked a severe commercial crisis through the drain upon her gold resources. A very careful adjustment of trade conditions will be necessary if we are not to. see a. much worse crisis in the cominn- years, more especially as the interest on the foreign, debt of £82,000,000 will tend to accentuate the adverse balance.

EUROPE AND the Netherlands. In an article on "Europe and the Netherlands" the Saturday Review, of July 22, refers to the celebration t? a 75th anniversary of Belgium',s'independence, and goes on to state:—Within the last month we have seen a general election in Holland, the result of which is 'to eject from power Mr. Kuyper and to substitute a small majority of more or less Radical factions for a compact religious party of Catholics and Protestants. These occurrences, combined with the Franco-German difficulty, not yet extinct, cannot' but arouse some speculation as to the international position of the Netherlands in the face of the reshifting of European power. If Holland should decide finally oil entering the German postal convention, • a very important step towards economic federation will have been taken. It cannot be denied that many economic advantages would accrue to Holland if she also entered the German Zollverein. Such a step would not involve even the apparent loss of independence and would make Rotterdam the most important port on the continent of Europe. To refuse Germany the use of Dutch harbours in war would be impossible in the case of economic union. It is true that the desire for a peaceful life would militate strongly against Dutch acquiescence in German supremacy, but tfie fiscal argument in favour of both a Belgian and Dutch economic arrangement with tiermany is undoubtedly strong. Both those countries have become in great measure dependent on Germany, and their particular trade with her now reaches nearly £120,000,000 per annum. Germany pays enormous amounts for the transit of goods through those countries it is obviously unnecessary to emphasise their interest in her welfare. We do not believe therefore that in the event of a struggle between France and Germany or even of one in which we were concerned on the side of France that either Belgium or Holland would be found friendly to France; religious and economic interests would draw them towards her adversary. As for ourselves, seeing that we are considered to-.day less as the possible protector of their neutrality than as the probable aggressor upon their colonial possessions, our position is suspect; and in States where patriotism tends to give place to love of ease and wealth economic considerations weigh more heavily every year and the loss of complete independence is dreaded less. The preservation by small States of their independence in the face of external pressure presents graver difficulties as the greater States grow greater both in wealth and power. How far we ourselves should be disposed to prevent the absorption of the Netherlands by either of their neighbours, even if they wished it, may be a moot point; how far we could interfere without an adequate land force is more than doubtful. Clearly we have no right to prevent them making any economic alliances they like, and an economic alliance is never far from political association. We do not say that either is near at hand, but they are certainly among the possibilities of the not remote future.