There are three blast furnaces with a daily capacity of 150 tons each; two acid Bessemer converters of 10 tons each, and 11 basic Siemens-Martin furnaces with a capacity of 25 tons each.

The following list of plants which are all in full working order will show that the foundry is thoroughly well equipped:

The boiler plant consists of 200 boilers, and the horse-power developed by the steam engines in actual use exceeds 100,000.

There are 50 miles of railway in the works, and the number of hands employed at the foundry is from 7,500 to 10,000, including those who work in the collieries.

The following figures show the annual production under existing conditions:

As a business proposition the foundry does not appear to be a thorough success, for it is not entirely self-supporting, and continues to require assistance from the Treasury. It is probable when the new tariff comes into force, with its higher rates on steel products, that profits may be realised, but the officials of the steel works did not consider that the new duties had been raised high enough to afford them sufficient protection.

Muroran steel foundry.-Work has been going on steadily all through

the year at Muroran, in the Hokkaido, where two well-known British firms have combined with a Japanese concern to erect the large steel works known as the Nippon Seikosho, which has been referred to in previous reports. It is hoped that the works will be in full swing by the autumn of this year.

The experimental blast furnace which was erected close by, at Wanishi, and which was to make pig iron from the iron sand collected on the shores of Volcano Bay, has not so far proved a success.

This undertaking was being carried out by the Japanese firm alone and not in conjunction with its British associates.

Of other joint undertakings which have been discussed in earlier reports it is worth noting that the various concerns such as glass, lumber, &c., which were controlled by the Franco-Belgian-Japanese combination, have gone into liquidation.

The lack of success is perhaps more due to faults on the foreign than on the Japanese side.

Shipping. The figures for shipping, steam and sail, entered at Japanese ports during 1909, are slightly less than those for 1908 and

The Japanese flag is the only one to have made a substantial gain, namely, from 6,309 steamers of 8,629,759 tons to 6,559 steamers of 9,497,611 tons.

Two other countries, Sweden and Corea, whose shipping interests are very small, amounting to some 50,000 tons each, have advanced on their previous figures, but with these three exceptions, every country whose flag flies in Japanese waters has suffered a reduction. The British total has declined from 2,264 steamers of 6,400,830 tons in 1908 to 1,906 steam vessels of 5,809,235 tons in 1909.

The year on the whole was not a good one for ship owners, especially as regards outward freights, but the large bean business from Dairen and Vladivostock, and at the close of the year an unexpected development in the export of coal to Australia, helped to make matters better than they might otherwise have been.

The tourist traffic was not particularly good, and as regards the ordinary passenger traffic the large shipping companies are beginning to feel the competition of the Trans-Siberian Railway.

The most important events in shipping circles in Japan during the past year were the alterations in the shipping and shipbuilding subsidies laws which were passed by the Diet in March, 1909, and came into force on January 1 of this year. Put briefly the main points with the regard to these new laws are as follows:

Shipping subsidies.-A subsidy is given to ships running on the four following routes:(1) European, (2) North American, (3) South American, and (4) Australian.

Vessels to be used on these subsidised routes must be home-built

steel steamers of over 3,000 tons (gross), less than 15 years old, and with a speed of over 12 knots. The subsidy is given, according to the conditions of the route, at a rate of not more than 50 sen per ton (gross) for every 1,000 miles traversed at a speed of 12 knots, and for every extra knot the sum given is increased by not more than 10 per cent. The subsidy will be reduced by 5 per cent. annually after five years. For foreign-built vessels under five years old, used with the consent of the authorities, half of the above-mentioned rates are given. For vessels employed on a new route an extra 25 granted.

be

cent. per may These rates compare with 25 sen for every 1,000 miles at a speed of 10 knots, with a pro rata increase for every added knot, under the old law which only stipulated for vessels of 1,000 tons and over.

Shipbuilding subsidies.-The old law allowed a grant of 12 yen per ton for vessels over 700 and under 1,000 tons, and 20 yen a ton for vessels over 1,000 tons.

The new law makes two classes with four grades each

Class A comprises vessels with sleeping accommodation for not less than 50 first or second class passengers, or one first or second class berth for every 100 tons (gross) or fraction thereof.

Class B includes all other types of vessels. The first grade covers ocean going steamers, second grade home water steamers, third grade coasting vessels, fourth grade smooth water vessels.

The rates are as follows:

The encouragement rate for machinery is 5 yen per indicated horse-power.

The amount sanctioned by the Diet for 1910-11 for the subsidised routes above mentioned was as follows:

£ 328,521

£

55,517

...

...

...

210,388

351,472
61,452

San Francisco

South American Line

The grant for the Australian route is given under the old contract. It was uncertain for some time whether the Nippon Yusen Kaisha, the most important Japanese steamship company, would elect to accept the new proposals or would prefer to abide by the old arrangement, which helped nearly all their steamers and which was therefore more advantageous to them for the present, though it only lasted till 1914. Finally the directors agreed to come under the new law.

The Osaka Shosen Kaisha, who had previously confined themselves to operations near home, commenced their fortnightly service to Tacoma which they will maintain with six fine new vessels of over 6,000 tons each and a speed of about 14 knots.

The Toyo Kisen Kaisha, who had experimented with a line to South America which had not been very successful, have now obtained the subsidy for this route and have commenced a two-monthly service.

The vessels go as far as Hong-Kong on the westward run, and as far as Coronel on the eastward run, calling at Honolulu, Salina Cruz, Callao, Iquique and Valparaiso.

In the spring considerable excitement was caused by a change in the customs regulations which was introduced at very short notice.

This was to the effect that instead of being allowed about 72 hours free storage on the Hatoba, importers would have to pay charges ranging from 1 to 2 sen per 500 kin or 10 cubic feet per day on any period over 48 hours.

There was much discussion as to the person on whom the extra charges would fall, whether it should be the buyer or the importer, the point not having been provided for in existing contracts. The change, on the whole, has been beneficial because it has served to check the congestion at the customs, of which, in busy times, there have often been complaints.

Index number of commodities and wages at Yokohama.-The Yokohama Chamber of Commerce (Japanese) has prepared a table showing the index number of commodities and wages during the last eight years, which is worth quoting as showing how high prices still remain in spite of the considerable fall last year.

The greatest reduction was in the index number for rice which declined from 129 to 104.

Population. The population of Japan at the close of 1909 was estimated at 49,769,704, being 25,143,385 males and 24,626,319 females.

In Formosa the population was estimated at 3,132,100, being 1,642,670 males, and 1,489,430 females, and in Karafuto (Japanese Sagalien) the total population was put at about 25,000.

Public works. Railways.-During 1909 a good deal of extension work was done on the Japanese Government Railways.

The Kagoshima line (Yatsushiro-Kagoshima) was opened to traffic

on November 20. This completed the last link in the chain of railways from Hokkaido in the north to Kagoshima in the extreme south of Japan.

Work was also carried on on (1) the Chuo (Central) line, (2) the San-In line (Fukuchiyama-Imaichi), (3) the Oita line, connecting Wusa and Oita in the north of Kiushiu, (4) the Toyama line, which will link up Toyama and Naoyetsu, (5) the Uno line, running between Uno and Okayama, (6) the Ganyetsu line connecting Niigata with the Nippon Railway at Koriyama, (7) various lines in the Hokkaido, (8) the Maizuru line from Sonobe to Ayabe and (9) the Toba line from Yamada to Toba.

The suburban railways round Tokio were also electrified.

Several important projects are also being considered by the Railway Board such as the quadrupling of the Tokio-Yokohama line, the construction of a temporary ferry between Shimonoseki and Moji, the electrifying of the Usui section, and the construction of new and large central stations at Tokio and Yokohama.

Harbour works. Work has been going on rapidly in connection with the harbour improvement schemes at Yokohama and Kobe.

The celebrations to commemorate the semi-centennial of the opening of Yokohama to foreign trade were held in July in the new customs reclamation.

Since then the work has progressed so much that the ships of the Canadian Pacific and North German Lloyd Companies have been able to berth regularly alongside the new wharves.

At Kobe the progress made has been slower but the difficulties have been greater, as the bottom of the harbour lacked strata of uniform solidity and the foundations of the quay wall are not easy to construct.

It was decided to adopt a series of ferro-concrete caissons for the wall, and for this purpose a depositing dock on the Clark and Standfield system has been built at the Kawasaki Dockyard, Kobe.

There is no really good harbour between Yokohama and Kobe, and for some time past the authorities have been discussing the merits of the various ports which might, with a little expenditure, be developed sufficiently to enable them to share in part of the trade from Central Japan.

It has finally been decided to select Yokkaichi, which already enjoys a certain amount of import and export business and is a port of call for most of the liners crossing the Pacific as well as for the Austrian Lloyd boats.

At present ships have to lie a very long way out and the facilities for handling cargo are poor.

Some 250,000l. are to be spent in dredging part of the harbour and in constructing a retaining wall and a small pier of 420 feet in length. The anchorage will consist of a basin having an area of about 100 acres, half of which will have a depth of 28 feet and the other half 22 feet. The approach to the basin will be by a channel 120 yards wide and 28 feet deep.

Yokkaichi is a thriving town, having good railway communications and being the outlet for the Nagoya district.

It possesses several large mills; the Miye Cotton Spinning and