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power of this market, where at present the consumption of articles of 

 our branch of industry is very moderate. 



Japan has once more been favoured by excellent rice- and silk-crops, 

 and experience shows that a satisfactory consequence of such a result 

 is an increased demand for articles of luxury by all classes of the popu- 

 lation. Business in our branch, which, owing to the necesisty of the 

 people to practise economy, as explained in our last October Report, had 

 been quiet throughout the first half of the year, was just beginning to 

 revive in the autumn when suddenly the outbreak of the revolution in 

 China put an end to all hopes. As a large proportion of our goods is 

 worked up in Japan for subsequent export to China, it is not surprising 

 that the state of insecurity of the latter country, which is such an im- 

 portant selling-market for Japanese products, at once brought about a 

 restriction of business with the former. The demand for the Japanese 

 home-trade has been satisfactory. High expectations are entertained in 

 Japan of the Sayonji-Ministry, which has now been in power for some 

 months and is apparently imbued with an earnest desire to place the 

 finances of the country upon a more healthy footing. Similar endeavours 

 by the Katsura Government were failures. The Marquis Katsura himself, 

 as an old soldier, was unable or unwilling to place some curb upon his 

 eagerness for a further increase in the Navy and the Army, and his 

 financial reform-schemes were therefore doomed to failure. In the Budget 

 recently brought in by the Minister of Finance, Yamamoto, the new credits 

 for the fighting services have been restricted to a minimum. If the new 

 Government should be long-lived, there is ground for hoping that there 

 will be a thoroughgoing improvement in the national finances, with a con- 

 sequent increase in the purchasing power of the people. 



Of the foreign trade of Japan in the year 1911 the Deutsche Export- 

 Revue gives the following particulars: "The total value of the external 

 trade of Japan in the past year exceeded 1018 million yen, being made 

 up as follows (in 1000 yen): Exports 488602 (against 472552 in 1910), 

 imports 529222 (against 472347 in 1910); to which must be added bullion 

 exports 29349 (25521) and imports 24385 (22659). Although the figures 

 for 1911 constitute a record, the Japanese export returns were neverthe- 

 less not quite satisfactory, as the great expectations that were entertained 

 at the beginning of the year did not come to fruition. This was due in 

 the first place to the outbreak of the Chinese revolution, which lamed 

 trade with that country for the time being. The imports showed a cor£ 

 siderable increase, partly the result of the coming into force of the new 

 Customs Tariff in July of last year, and partly owing to the considerable 

 importation of rice consequent upon the failure of the previous year's 

 (1910) rice-crop in Japan," 



As regards China, we have but little to report, and that little is un- 

 satisfactory. The heavy wounds inflicted upon all parts of the country 



