— 15 — 



capitalists should show more confidence in the many thoroughly promising 

 industries which have sprung up in Japan of late years. But the blow 

 dealt to commercial confidence by the recent crisis has been even more 

 serious than was originally feared. The Japanese capitalist can only be 

 induced to embark in specially privileged ventures, or in the extensions 

 of proved successful industrial undertakings; generally speaking he prefers 

 to content himself with a low rate of bank interest. As a result, the 

 deposits in the hands of the banks are accumulating so heavily that the 

 bank-rate has fallen almost to European parity without, however, enticing 

 the capitalists out of their attitude of reserve. It is of course impossible 

 as yet to forecast the effect of the new Customs Tariff, which will come 

 into operation on 17 th July 1911. The numerous increases which it is 

 intended to establish are naturally chiefly based upon the idea of pro- 

 tecting Japanese industries, but at present it still seems to be very doubtful 

 whether Japan will be successful in inducing the Powers to agree to the 

 whole of the proposed scale of duties, which in many respects has been 

 fixed exceedingly high. Essential oils figure on the free list of the draft- 

 tariff, in order to enable the native soap- and perfume-industries which 

 are growing up to lay in these important materials on the most advantageous 

 terms. Our informants in Japan are of opinion that in order to bring 

 about an industrial and commercial revival the most pressing need is a 

 further reduction of direct taxation on the part of the Government, and 

 a refusal to listen overmuch to the claims of the military party, which 

 aims at considerable extensions of the Army and Navy. Fresh expenditure 

 in this direction would of course enhance the burden of taxation instead 

 of lightening it, the purchasing power of the nation would be correspondingly 

 lowered, and it would become impossible for trade and traffic to develop 

 to the extent which is desirable. Unfortunately it appears that in governing 

 circles these important considerations still fail to attract the attention they 

 deserve. In spite of the terrible floods and the injury inflicted thereby, 

 it is expected that the rice-crop, which is the leading factor influencing 

 the economic condition of Japan, will this year be an average one. This 

 at any rate furnishes a solid prospect for the normal development of 

 business within the next few months; but the financial tendency alluded 

 to above makes it impossible for the present to look for a hearty and 

 cheerful revival. The relations between Germany and Japan continue to 

 be marked by mutual confidence and goodwill, and are doubtless destined 

 to be drawn still closer by the prospective visit to Japan of the German 

 Crown Prince. 



A report from the British Commercial attache to the Embassy at 

 Tokyo gives fairly detailed information on the imports of foreign toilet 

 soaps into Japan in 1909. Special prominence is given to the statement 

 that British soaps are steadily gaining in popularity at the expense of 

 French and German articles. The value of the imports of British toilet 



