which reached 2,512 tons, worth 617,1001., surpassed even the record totals of 1906, which were 2,440 tons, worth 614,600.

Detailed particulars will be found in Table 1 (C) (page 64), but it may be mentioned here that the bulk of the tops (nearly 80 per cent.) were of English combing and that the French share was once more reduced.

Perhaps the most interesting feature of the year was the arrival of Australian tops to the value of 27,000l. This was quite a new departure the Australian product has the advantage in cheaper freight, but dealers in English tops declare that they do not fear the competition.

Imports of woollen and worsted yarns.-The imports of woollen and worsted yarns during the past two years were as follows:

Imports of woollen and worsted goods.-On the whole woollen and worsted tissues have done better than in 1908, the figures being 926,8001. for 1909 and 874,200 for 1908. This advance is solely due to the increase in cloths and serges of pure wool and of wool and cotton. The principal gain is in woollen cloths and serges, cotton mixtures (exceeding 250 grammes per square yard).

Both the United Kingdom and Germany have shared in this increase. The following figures will show the position with regard to the four leading countries:

WOOLLEN Cloths and Serges of Wool.
THICK (Exceeding 250 Grammes).

WOOLLEN Cloths and Serges of Wool-continued.

THIN (not Exceeding 250 Grammes).

WOOLLEN Cloths and Serges of Wool and Cotton. (Both Thick and

There was a moderate and regular demand throughout the year for union cloth, army cloth, coatings, tweeds, suitings, &c., and arrivals met with fairly prompt clearance. Towards the end of the year large business was booked for goods to arrive in 1910.

In mousselines there was a trifling increase in yardage but a fallingoff in value. There are now altogether five mousseline factories in Japan, and besides these there are also six woollen mills in addition to a large one owned by the Japanese Government.

There are roughly 120,000 woollen and worsted spindles in Japan and some 3,800 power looms.

The production of mousseline is gradually increasing and the quality improving, and exports of this fabric last year amounted to no less than 528,155 yards, worth 17,300l.

The consumption tax on woollen textiles is to be reduced from April 1 of this year (1910), from 15 per cent. ad valorem to the 10 per cent. rate which is in force for all other textiles. It is as true to-day as it has been in the past that this consumption tax, being ad valorem instead of specific, induces the falsification of invoices and thus constitutes a very severe burden to honest traders.

Although the question is one that does not affect the year 1909, it may be as well to remark that according to the tariff proposals which have passed the Diet the duties on all textiles will be much increased from July, 1911.

It should be pointed out, also, that the duties will be nearly all specific and that the classification is arranged on a system entirely new to this country, although it has been adopted elsewhere.

Of course all parties who are directly interested in the matter will already have carefully studied the tariff, which requires a great deal of consideration and calculation before its full effect can be estimated.

It will be interesting to see whether there will be large importations during the next 12 months in anticipation of the increased duties. Much will naturally depend on the course of prices in Manchester and Yorkshire. It is hardly to be expected that importers will lay in large stocks of high priced goods before July, 1911, if there is a probability of values falling very considerably after that date.

Imports of rice. In view of the excellent crops of rice that Japan enjoyed in 1907 and 1908, besides the prospects of a record crop in 1909, prospects which were fully realised, it is not surprising to find that the importations of rice were on a very small scale, the total being only 197,000 tons as compared with 289,000 and 403,000 tons in 1908 and 1907 respectively. India was the chief sufferer, sending only 23,000 tons, a poor showing as contrasted with the 165,000 tons which she sold to Japan in 1907.

Imports of machinery.-Nothing in 1909 was more disappointing than the business in machinery, which totalled 1,426,100l. (or 40 per cent.) less than the amount for the preceding year.

A detailed table is given below from which it will be seen that not only was the decrease common to nearly all the items, but that the shares of one and all of the participating countries were reduced, the United Kingdom as a matter of fact suffering less than her nearest competitors, the reduction in her share being 661,400l., or 31 per cent., while in the case of America and Germany it was 533,7001., or 58 per cent., and 200,600l., or 44 per cent., respectively.

The reasons for this decline are not far to seek. The Government's policy of cutting down expenditure wherever possible had a serious effect on business in this line, but a still more potent factor was the stagnation in the industrial world. During the boom years of 1906 and 1907 many orders for machinery were placed which were only executed in 1908, but after the slump very little new business was put through, and the results are now seen in the lamentably small total for the year, a total which would have been even smaller had it not been for the extensive importations of machinery by the Japan steel foundry at Muroran, which amounted to nearly 380,000l., or 18 per cent. of the purchases of machinery by the whole country. It should, however, be remembered that sugar machinery, the orders for which have been very large from Formosa, do not come into the Japan customs returns and are therefore not within the scope of this report.

It was mentioned in last year's report that a large American concern was going to combine with an already established Japanese engineering works for the purpose of manufacturing electric machinery on a big scale. It was at first intended that the Americans should hold 51 per cent. of the shares and have the controlling voice. Difficulties, however, arose with regard to the shares of the China market to be apportioned to the parent concern in America and to the branch here, and it was finally decided that the Americans should only have a quarter interest in the combine.

A shorter table will show the shares enjoyed by the principal countries during the past three years :—

Imports of metals.-The dearth of orders for ships reduced the purchases of plates and sheets by the shipbuilding companies, and there was similarly a big falling-off in bar iron, unfortunately both of them items in which the United Kingdom has a leading position. However tin plates, in which we practically enjoy a monopoly, made a large advance, and galvanised sheets, pig iron and iron pipes and tubes also helped to some extent to make good the loss in other lines.

Stocks of metal have been considerably reduced and the prospects for 1910 are rather less gloomy than they have been during the two preceding years.

Imports of materials for bridges and building.-As was only to be expected, the dulness in the industrial world and the reduction of Government expenditure have had a most marked effect on the imports of building and bridging materials.

The following figures will show how serious the decline has proved to be:

Imports of sugar.-It would certainly be no exaggeration to say that by a large number of people 1909 will be remembered as the sugar year, for throughout the greater part of the twelve months the Press has been full of articles dealing with the Japan Sugar Refinery scandal, a scandal which resulted in the suicide of the President of the company, the imprisonment of several of the directors, and the punishment by imprisonment or fining of some members of Parliament who were implicated in the matter.

This disclosure of commercial immorality, moreover, had a great effect on most shares quoted on the Stock Exchange, the company in question having been looked upon as one of the soundest in Japan, and for some time a general distrust, in many cases quite misplaced, was felt with regard to nearly all industrial concerns.

The plea of the directors of the company who were found guilty of illegalities was that they had to do the best they could for their shareholders, and as the preferential treatment accorded to Formosan sugars made it impossible for a refinery in Japan proper to pay dividends by fair means, they were compelled to adopt other

methods.

A table giving the quantity and value of sugar imported in 1907, 1908 and 1909, as well as the shares of the various participating countries will be found in Table 1 (C), page 69.