Treasury bills from 1.7 to 1 sen. There was, as usual, a slight rise in rates as the end of the year approached.

6

The fixed deposit rate of the leading banks had been as high as per cent. in 1908, but it was reduced on two or three occasions till it is now only 4 per cent., and at one time the foreign banks were actually advertising higher fixed deposit rates than the Japanese banks, a thing which appears to be quite unparalleled.

The summer of 1909 will long be remembered for two serious disasters. The great fire at Osaka on July 31 destroyed some 12,000 buildings occupied by a population of over 40,000. Fortunately the loss of life was trifling, and as the district affected was the poorest in the city the damage from a financial point of view was not overwhelming, more especially as contributions in kind and money poured in from all parts of the country for the relief of the sufferers. In a way the fire has proved a blessing, because the part of the town which was destroyed is now being reconstructed with wider streets and better buildings.

The second disaster was a severe earthquake shock in August, which did considerable damage in the pottery district around Nagoya.

Before concluding these general remarks, which may perhaps read rather pessimistic, it is only fair to quote the words of the Governor of the Bank of Japan, who is of course in an exceptional position to judge of the results of a year's trading. In the closing part of his address to the shareholders at the annual general meeting he said, “As I have already pointed out, the stagnation of trade was continuous throughout last year, but the fact is attributable to depression produced by reaction from the post bellum boom and to a general curtailment of consumption. It is not for a moment to be regarded in the same light as a diminution of the national strength. Thus while complaints were loud about paralysis of enterprise, undertakings of a hopeful character seem to have been prosecuted in a fair degree all the while.

"Statistics show that the money subscribed to establish banks and companies or to increase their capital aggregated 164,000,000 yen, and the amount actually paid up amounted to 124,000,000 yen.

"A certain proportion of this was doubtless the outcome of consolidation of debts or adjustment of assets, but at all events some degree of development of enterprises may be inferred.

Moreover, as I have already said, the balance of our foreign trade has become favourable, and the people seem to be still in a conservative mood and bent upon economising their consumption. All this constitutes the basis of replenishing resources and will assist the development of future activity.

"Therefore the present season of dulness should be patiently endured as an era of accumulating economic strength and need not be regarded with any pessimism.

"The only thing to be desired is that when the certainly coming season of recovered activity arrives, our financiers should employ scrupulous care in selecting ways for the use of capital and should exercise such discernment in their manipulation of affairs as shall ensure the consummation of this development on sound foundations."

Share market. The share market throughout the period under review was comparatively quiet.

The disclosures in connection with the sugar affair and other scandals caused some depression in the first half of the year, but the good rice crop and the settlement of outstanding troubles with China were looked upon as bull points and in the autumn there was some animation, causing most shares to jump a few yen; the improvement, however, was not maintained for long. On the whole values were slightly higher than during the preceding year, and Tokio Stock Exchange shares 50 yen fully paid, which may be said to act as a barometer, were quoted at 160 yen at the close of 1909 compared with 147 yen at the same time in 1908.

Gold reserve and note issue of the Bank of Japan.-The subjoined table shows the gold reserve and note issue of the Bank of Japan at the close of each of the last five years:

It will be noticed that there has been a large increase in the proportion of gold to notes, which stood higher at the end of 1909 than it has ever been since the introduction of the gold standard.

Movements of specie and bullion.-The following table shows the movements of specie and bullion during 1909 :

The next table gives the balances for the five years ending 1909 :

Imports. A glance at the following figures will show how badly the majority of imports fared last year.

The year 1908 was not a particularly good one, but 1909 was worse. In 1908 machinery headed the list of increases while raw cotton was at the top of the table in which the decreases were enumerated; in 1909 the position was reversed, and raw cotton was the only item amongst imports that made a good showing, although paper and wool were also in a better position than in the preceding 12 months. The two following tables show the principal articles in which there was (a) an increase and (b) a decrease last year

Imports of raw cotton.-The improvement in the export of cotton yarns caused the mills to buy larger quantities of raw cotton, and fortunately for many of the mills their purchases were mostly made before the advance in price owing to the rise in values of American cotton. India benefited to the greatest extent, her share of the total of 11,000,000l. exceeding 6,200,000l. The Egyptian contribution also continued to advance and is now over 550,000l. It is interesting to note that although Corea's share is still very small, not even one-half per cent., it is gradually increasing, having grown from 11,000l. in 1907 to 35,000l. in 1909. Moreover, in the first month of 1910, Corea sent the proportionately large amount of 1,227 tons, worth 23,000l., so that her progress is worth watching.

The fluctuations in price during the year were very great, rising from 30 yen per picul for American middling at the beginning of the year to 33 yen in May and June, and later on to 48 and 50 yen, when the poor crop conditions in America became known.

Import of cotton yarns.-The import of these fell off very considerably and only totalled 1,281,971 lbs., worth 88,7007., compared with 142,6007. in 1908, which in its turn was far below the figures for 1907 and 1906, but as has frequently been pointed out, this is not to be wondered at, for Japan can now supply nearly all her own requirements, with the exception of gassed yarns of the finest counts.

Import of cotton textiles.-The business in these, on the whole, was most disappointing. It had been confidently hoped that 1909 would show an appreciable improvement over the disastrous year of 1908, but these expectations were not fulfilled.

As will be seen further on, there were a few bright spots, and it is some consolation to know that stocks have been very largely reduced, but in most cases prices are still a long way below replacing cost.

Had Manchester prices not risen so high it is possible that much better business might have resulted, but Japanese buyers were deterred by the prohibitive cost of goods at home, more especially as these seemed so disproportionately dear in comparison with the prices of domestic goods, which had fallen low owing to the crisis through which many of the weavers passed in the autumn.

The dealers in imported cottons contented themselves, therefore, with doing a hand-to-mouth business.

Taking the various lines, item by item, it will be found that as regards :

Grey shirtings, the imports were considerably less in both quantity and value, and up to the close of the year there were no signs of improvement, prices being roughly from 1s. 6d. to 2s. under replacing cost.

It must be remembered that several of the larger Japanese cotton spinning companies have started weaving, and are now producing gradually increasing quantities of grey shirtings, which are also, as time goes on, improving in quality.

White shirtings.-There seems to have been some demand for wellknown cloths, and business ruled fairly steady for the greater part of the year, but a decrease in the last quarter brought the total figures to considerably less than those for 1908.

Cotton prints. The business in these was bad in Yokohama, but Osaka required larger quantities and the total figures show a fair increase. 11,853,951 square yards, worth 174,400l., as compared with 7,962,345 square yards, worth 136,6007., in 1908.

Cotton satins and cotton Italians.-In these there was a very big falling-off both in quantities and values.

It is said that some cotton venetians made by one of the leading Japanese companies were put on the market at a cheap price, but as the quantity was quite small the effect cannot have been great.

Cotton velvets and plushes.-There was but little change here, an increase in quantity being off-set by a decrease in value, as will be seen from the figures below:

Victoria lawns. These are the most surprising item in the cotton textiles class. They increased in quantity from 2,911,772 to 5,416,007 square yards and in value from 24,500l. to 39,2001.

There is no particular reason why they should seem to have come into favour again unless it is that the Japanese dealers found them cheap compared with other cottons and bought in anticipation of a rise. It is said that this material is largely used for putting up medicines, for the backing of straw braids and in making children's hats.

Cotton umbrella cloths.-In Yokohama these appear to have been neglected for the greater part of the year. Some business was done in them for Osaka, which is the seat of manufacture of the cheap umbrellas which are sent to China, but on the whole results were poor compared with those of preceding years.

Cotton flannels. The import of these, which in 1906 totalled over 100,000l., fell off last year to 18,000l., so that the trade seems to be almost dead.

Large quantities of cotton flannels of good quality are now produced by Japanese weavers.

Other cottons.-There appears to be a steady increase in imports of handkerchiefs in the piece.

The figures are:—

1907

1908

1909

Against which, however, must be put down a small decrease in single handkerchiefs. The handkerchiefs in the piece are cut up here, hemmed and put on the market in fancy boxes.

The favour into which they are coming is yet another sign of the advance that foreign fashions are making in Japan.

Imports of wool and wool tops.-There was a considerable increase in both wool and wool tops over the figures for 1908, and wool tops,