Papers Relating to the Foreign Relations of the United States, Transmitted to Congress, With the Annual Message of the President, December 6, 1880

No. 422.
Mr. Bingham to Mr. Evarts.

United States Legation,
Tokei, Japan, October 24, 1879. (Received November 28.)

No. 999.]

Sir: I have the honor to inclose herewith a copy of the report of the committee of the Tokio general chamber of commerce, upon the revision of the existing treaties between Japan and the treaty powers.

* * * * * * *

This report of the Tokio committee (composed of Japanese) furnishes, in my opinion, very strong reasons for such a revision of the treaties as Japan has asked for, and which it has pleased our government to favor and approve.

The committee declare that the present treaties have worked injuries to the commerce and industries of Japan, and that if the treaty powers refuse to revise the treaties as petitioned for by this government, the treaty powers should be regarded as thereby “breaking moral obligation as well as justice.”

The committee note with truth that the present treaty (1866) was concluded at the close of the late government of the Shiogun, when Japan was without experience in foreign trade; and that the tariff thereby established “was fixed without any consideration of the interests that might be thereby affected.” The committee compare the tariff thus dictated to and imposed upon Japan with the tariffs now in force in European and American States. In this comparison the committee show that of the total revenue of 55,651,379.34 yen for the twelfth fiscal year in Japan, the amount thereof derived from land taxes was 41,376,458 yen, or 74 per cent. of the whole, while the amount from customs duties, import and export, was but 2,181,310 yen, or only 2.7 per cent. of the whole revenue.

By a comparative table appended to the report it is shown that Great Britain collects 25 per cent. of her total revenue from imposts upon imports, Canada 57 per cent., France 10 per cent., and the United States 50 per cent. The committee also show that the exports of Japan being almost exclusively agricultural productions, the export duty falls largely upon the producers, and should be abolished. (Table 2.) They also set out in a table the import and export to and from Japan of gold and silver coin and bullion for six and a half years, showing that from the fifth to the first half of the eleventh year of Meiji the export thereof was in excess of the import thereof 43,398,529,395 yen.

They state that the demand made by Japan is as just as it is necessary to the welfare of this people, and very significantly declare that should the treaty powers refuse the revision so needful and equitable, “then the obligation of Japan toward the treaty powers to maintain friendly relations as heretofore would thereby be absolved. The absolute sovereign right of the government to adjust its tariff is undeniable.”

The report also contains valuable information of the various productions of Japan; of the amount of rice produced to the acre, its value, and the small margin left to the farmer after the payment of the land tax; also of the tonnage of the empire. The committee insist that, in addition to the need of the revision asked for of the tariff provisions of the treaty, Japan should be allowed, as provided in our treaty of last year, to regulate her coast trade, and also to require the payment of her customs duties exclusively in Japanese silver yen.

I have, &c.,

JNO. A. BINGHAM.

[Inclosure in No. 999.]

Report of the committee of the Tokio General Chamber of Commerce in respect to the pro-posed revision of the existing treaties between Japan and the treaty powers.

The question of the treaty revision is so essential and important that the consequences arising or growing out of it most seriously affect the interests of the nation and the safety of the state. The imperial government has been prompt in attempting 1he revision of the treaty, and has complained to the several foreign courts of the necessity of revision, through its ministers accredited to the different governments of Europe and America, and also has made investigation into the commercial requirements and economical conditions of the country. The government has also endeavored to ascertain the opinion held regarding the same among foreigners and natives as well as of official and private individuals. To the Chamber of Commerce has been also referred several questions regarding the foreign and domestic commerce. The chamber has since been diligent in investigating into the questions submitted to it to enable itself to present its views without delay. But before we proceed to give any answers to the questions so submitted, we believe it is the duty and obligation of the Chamber of Commerce to state its own views respecting the whole question. We have, therefore, the honor to make several remarks as hereafter mentioned regarding the same.

After considering what influence has been exerted upon the country by the present treaty, the Chamber of Commerce is led to believe that not only the present treaty has been disadvantageous to Japan, but it has defeated the general principles of commerce which are to promote the interests between this country and foreign nations. The present treaty has, therefore, been injurious to both Japan and foreign countries. We have no hesitation in believing that the imperial government has already perceived the injuries so inflicted, and that the treaty powers also must have regarded the present treaty to be injurious to commercial interests; so, then, they ought undoubtedly to be quite willing to agree to the revision of the treaty, especially to those articles respecting trade. If, however, on the contrary, they should have any occasion to raise objections to our claim for revision of the treaty, we should regard them as thereby breaking the morality as well as justice. We shall now proceed to relate the reasons why they should be so regarded.

The present treaty was concluded at the close of the late government, when Japan had been secluded from foreign intercourse and had had no experience of that nature, and, among others, the tariff attached thereto was fixed, as it is, under unavoidable circumstances then existing in this country, without any consideration of the national vicissitudes or interests that might be thereby affected in future. A comparison of that tariff to that now in force in any of the European or American countries will soon show that such partial and unjust one as that of Japan does not exist in any of those countries.

Since the first conclusion of our treaty with foreign nations, Japan has made greater progress every year in her government and civilization, and Japan at the present day cannot be looked upon as the Japan in old times, and, therefore, the imperial government, in claiming the revision of the treaty which is necessitated by the change of national circumstances, and which is based upon proper principles, has a right to have sufficient amendments made in the treaty to be proper and just, notwithstanding the absence of a given time in it for the purpose; but when such time is given in the treaty as really is provided, how much more should Japan be justified in claiming the revision.

Should the treaty powers still raise any objections to a revision of the treaty, notwithstanding the principles and circumstances so much necessitating it, they should be looked upon as disregarding them, and then the obligation of Japan towards the treaty powers to maintain friendly relations as heretofore would thereby be absolved. The absolute sovereign right of the government to adjust its tariff is undeniable as a question of principle.

We have already related the reasons why the present treaty should be revised, and we shall now give the same reasons upon the other basis, which is through the unjust adjustment of tariff, greatly affecting the national economy as well as the commercial interests.

It is because of the constitutional principles of Japan by which the national economy has depended upon the land and peasants from the ancient time that the agricultural industry of this country is principally cared for, and the national revenue has been principally raised from the land. This system has existed for twenty-five hundred years. But since the restoration of the imperial government, it perceived the burdens of land taxes involving certain impediments in the promotion of agricultural industry, and has greatly reformed the revenue system, so as to lessen the land taxes. In addition to this, an imperial decree was issued in the 8th year of Meiji to reduce the tax to 2½ per cent. on the value of land, and thus the imperial government has been diligently endeavoring to adjust any partiality in the revenue, although the system so reformed for land taxes does not still prove to be quite equitable in proportion to the other kind of taxes. In the budget issued by the minister of finance for the 12th fiscal year we have observed that out of the total revenue of 55,651,379.034 yen, the amount of 53,470,069 yen is estimated on the domestic revenue, and 2,181,310 yen on the customs duties, and that of that amount of the domestic revenue the land taxation amounts to 41,376,458 yen, which is 74.35 per cent. on the whole revenue, while the customs duties are only 2.7 per cent. on the same, and in comparing such state of the budget with that of any European or American country we find a very great difference existing between them, as shown by the annexed table, No. 1.

From that table it is evident that Japan levies the heaviest domestic taxes and the lightest customs duties. How, then, can we say that our revenue system is founded on an equitable basis! Besides, the principal articles for export are mostly agricultural products.

According to the table of exports and imports for the 11th fiscal year, the total exports amount to 24,614,760 yen, of which the sum of 16,666,730 yen, or about 67 per cent. on the whole export, was paid for the three articles of raw silk, tea, and rice. It is, therefore, just to say that our countrymen principally live upon agricultural products, and any augmentation of the domestic productions of all kind in future should greatly depend on the same resources, and it is now only a mistaken policy of the national economy to levy such heavy taxes on land, which is the important national resource, while imposing extraordinarily light duties on the imports; and with such a state of things existing we can never expect by any chance to promote agricultural industry as well as commercial interests, for the reasons which we shall now proceed to give.

The proceeds from the products yielded by land under the present revenue system are not the same in different localities, but upon an average the value of paddy fields may be estimated at 47 yen per ton (about one-fourth of an acre), and the harvest therefrom may be one koku, 3 to and 3.24 sho (a koku = 5.13 bushels; to = 1’10 of koku, and sho = 1/10 of to), the value of which is estimated by an average of 5 57.74 yen. By deducting from this amount the sum of 1.85.91 yen, or the value of 4 to and .41 sho for the seeds, manure, and other expenses, and the amount of 1.18.5 yen, or the value of 2 to and 8.31 sho, for the land tax of 2½ per cent. on the value; and further the sum of 0.23.77 yen, or the value of 5.66 sho, for the local revenue of 20 per cent. on the land tax, the net income per ton, after cleared of all those charges, will be 5 to and 4.85 sho, the value of which is 2.29.6 yen or 4.8 per cent. on the value of land. The above calculation has been based upon the estimate made by the revenue bureau of the Treasury Department, for the average amount of the proceeds from the paddy fields of the whole empire, when the value of land was fixed by that department including by average, the proceeds from such paddy fields yielding twice a year. But the above calculation excludes local expenses and famine stores, for which the proceeds are also to be deducted.

As to the farms, the proceeds from the mulberry trees and tea are seemingly superfluous, but the average estimate of the proceeds from the different farms, after cleared of land tax and all other charges, shows no great difference from those of the paddy fields. Consequently the subscription to the agricultural fund has been very small from ancient times, and the implements used for the purposes of agriculture have been confined to the spade, hoe, and a few others, and only a few peasants could keep cattle in aid of their human labor in the cultivation of the ground. Therefore, in order to promote agricultural industry, upon which our national interests and economical resources greatly depend, while the proceeds and funds are so limited, it is a matter of vital importance to lessen the land tax so as to make certain allowance for the peasants for their own support. This is indeed the greatest duty of the government and the wisest policy of the state at the present time.

Some might suppose that a large proportion of fifteen millions three hundred and twenty thousand of peasants, including decrepit persons, children, and women, or 4.37 per cent. on the whole population of thirty-five millions, is simply an indication of the profitableness of their occupation, because with so small proceeds from their labor they ought to convert to the other employments. But this does not follow, and is only a sign of the utter ignorance of the opponents of the general usages of this country. The occupation of the peasantry in this country has been inherited from their ancestors, and any negligence of occupation has been regarded among them as a violation of family instructions, and with exception of those having lost their estate or occupation through their indolence and prodigality, they strictly observe the family instructions to adhere to the occupation inherited from their ancestors, and do not care for the prosperous and advantageous condition of the other persons of different occupations, and this has become established and unsophisticated custom among the Japanese peasantry in the long continuance of their strict adherence to the family instructions. But owing to the facilities of communication introduced throughout the whole country by opening the postal and telegraphic lines of late years, it is quite natural that they will soon become conversant with the actual state of social phenomena and perceive the bitter circumstances of their condition so that they will finally appeal against the heavy imposition of land taxes. The imperial government is therefore just in the position to adopt some wise policy to make certain allowance for the peasants for their own support, as no oppressive measures would be effectual after the peasantry have so risen.

We have already stated that the agricultural proceeds are greatly reduced by the heavy imposition of land taxes, and have also given the reasons for which agricultural industry could not be encouraged. The imperial government should therefore make every endeavor to lessen the land tax, and construct and open several roads to give all facility for transports and thereby should carry out its general object. But in order to effect improvements of this kind, the financial condition of the country should be first ascertained. Although at present the imperial government is raising an annual revenue of fifty-five millions of yen, we believe that it has no surplus beyond the expenditure, when all things should be improved in this country. But no more mercantile duties can be raised to make up the deficiency that may be found in the expenditure of the government. The imperial government had already attempted to supply the reduction occurred in the revenue under the reformed system of land tax by levying other taxes, duties in the shape of stamp dues, postage dues, and taxes on pensions, liquor, tobacco, &c. Under these circumstances no more mercantile duties can be raised, while it is essential to lessen the rate of land tax, and we would therefore suggest that it is now time for the imperial government to immediately revise the treaty and adjust the tariff, to the end that the duties shall be levied on imports. The adjustment of the import tariff for the increase of customs duties is not only essential for the reasons above given, but also regarding the principles and interests of foreign loans, which should be paid in coins. The coins of this country have been continually exported to pay for the balance of trade every year occurred since the first opening of Japan to the foreign trade, until at present the remains in this country are found so scanty that they will, it is feared, be finally withdrawn from circulation as the regular currency. If the coin currency should be, indeed, at any time withdrawn from circulation, it is doubtful whether the imperial government, who have had so far a full credit of the public regarding the foreign loans, might be able to escape from serious and critical embarrassment.

To avoid any financial crises in future, customs duties are the only resources upon which this nation can depend. The foreign loans are not the only thing requiring coin for their payment. It is not expedient to pay the internal debt with a redeemable currency. It is, therefore, most essential to revise the treaty and impose additional duties on imports, in order to enable us thereby properly to lessen the land tax, increase internal production, promote commercial interests, and redeem foreign loans, so that the credit of the nation will be firmly secured before the public.

Some might suppose, again, that should the imperial government increase the annual revenue upon the customs duties the export duties would be increased as well as the import duties. But this is a grave mistake. As we have already stated, the land tax should be lessened in order to make certain allowance for the agricultural products, which form a greater part of the exports, as before mentioned, and an imposition of export duties is nothing but that of land tax, and will no doubt affect the condition of the peasantry. We deem it, therefore, not only inexpedient to increase export duties, but advisable to abolish them altogether. Our opponent would still insist upon his opinion that an increase of import duties will immediately affect the price of goods, so that the native consumers will not be able to pay for the foreign articles, and that the consequence so occasioned will be a loss to consumers and the ruin of trade, and Japanese an 3 foreigners will be both brought to the unhappy position to sustain certain injuries from it.

But this is only a superficial idea. What are mostly consumed in the life of Japanese producers are beverages and provisions and clothing; furniture and other articles for their household are next in order, and the foreign goods consumed by them are confined Only to cotton yarn, shirtings, kerosene oil, and a few others, all of which are in value only two or three tenths of beverages and provisions they are consuming. Therefore, any rise of those imports in value will not so much affect the household expenditure of Japanese producers to raise the price of exports.

Whether the articles of import are purchased by the agricultural producers or not, most of them are already accustomed in daily consumption, and ought to increase in importation according to demand, notwithstanding the rise in value, and when the price of imports was raised during late years by the rise of legal-tender, we observed, on the contrary, that foreign articles were more demanded than when they were low in price. This is an evident proof that the quantity of imports greatly depends upon the demands instead of the value, and therefore the reduction of land tax to make certain allowance for the benefit of agricultural products, and the improvement of roads for reducing the expenses of transportation, are not only essential in order to increase the internal products of this country, but are highly important for the increase of demands for the articles of import.

The Japanese products for exportation are mostly agricultural and marine products, such as raw silk, tea, rice, wheat, camphor, vegetable wax, sea-weed, dried awabi, &c. We think, therefore, it is not out of place to refer to the annexed table No. 2, which shows the quantity of products exported during six years from the 7th year of Meiji, as follows:

According to the statistics above referred to, it is apparent that raw and unmanufactured articles must comprise the greater part of the exports, and that they are altogether agricultural products. Under these circumstances, Japan has now by all means to make every endeavor to increase agricultural products, and at the same time to facilitate the demands for foreign articles, so that exports will be gradually augmented, together with imports—the only reliable policy for the promotion of commercial interests. If, however, on the contrary, the thing is conducted without regard to the original cause of the financial condition of the country, we shall have no expectation for the increasing of prod acts, and shall be obliged to make pecuniary payment for imports. This theory has been practically acted on in Japan, by exporting an enormous amount of yen, 43,398,529.31.5 in gold and silver, to pay for the balance of trade, from the 5th year of Meiji to the 6th month of the 12th year, and if this state of things is not changed, it is most probable that the result will be the ruin of the commercial interest of Japan, and reduce the country to the most miserable condition, so that she will he finally obliged to discontinue all export and import trades, as the limited amount of treasure in this country will not answer to pay for the boundless quantity of import from several foreign countries.

It is needless to say that there can be no country or nation in the world which pays all her treasure for the purchase of foreign articles to supply only her own demands without exporting her products in exchange.

It is the true principle of commerce to establish a reciprocity between the buyer and the seller. The necessity to purchase certain articles makes it necessary to sell certain other articles, and so the sale of certain articles is rendered necessary by the purchase of certain other articles. Japan of this day is only purchasing, not selling, and is sure to be brought to the most miserable condition, as before mentioned, and we have no hesitation to foresee Japan so destined, according to the true principle of commerce. Our inconsiderate opponent (who is afraid of the rise of imports in value by an increase of duties, and does not care for making certain allowance for agricultural producers, who must be good mediators to increase demands for foreign articles) may be compared with a botanist who is seeking for the luxuriance of branches and leaves of a tree without nourishing the root. Should the opponent still insist on his erroneous view and object to an increase of import duties, he is only a promoter of selfish interests, and is committing violent action “to make his own good by defrauding another of his dues,” as told in a proverb, and should he regard as guilty of violating the rule of reciprocity, which is the true principle of commerce.

For the reasons repeatedly given in the foregoing articles, it is the most sincere prayer of the Chamber of Commerce that the imperial government shall immediately decide upon revision of the treaty, and make certain allowance for domestic producers, thus encouraging an increase of productions and promotion of commercial interests.

As regards the other demands which we have, regarding the treaty revision, we shall hereafter furnish our views in separate articles.

right of coasting trade.

On the occasion of revising the present treaties, it is one of the most important points, and which the chamber is very desirous of securing, viz, that the right of controlling the coasting trade should be reserved by Japan. Japan is a country surrounded by sea, and the greatest attention should be paid to the carrying trade by sea, of which a mere theoretical study would not answer, but which requires experience and practice.

With this object in view, the government has not failed to cause the carrying trade to be undertaken in the country, and to give it the necessary protection. If now, however, foreign vessels be allowed to carry on this trade in Japan, that of the Japanese vessels must naturally be depressed thereby, in consequence of inferiority in point of experience, and it would result in discouraging our ship-building and the education of mariners. This is the real cause why the right of coasting trade should be reserved by Japan under the present state of things.

It may be supposed that our carrying trade is not still in an advanced state; there is now only the Mitsu Bishi Company, which carries on this trade in Japan, but it, subsisting under government protection, and being of the nature of a monopoly, is not to be relied upon, and as any one will find it impossible to undertake a competition with such a subsidized company, it is necessary to grant foreign vessels the liberty of carrying on the coasting trade, and thereby to increase the means of conveyance in this country.

This the chamber must say is an opinion arising out of an insufficient knowledge of the facts. According to the table showing the number of vessels belonging to Japanese, prepared by the general post-office on the first month of the present year, the number of merchant vessels has been annually increased since the 3d year Meiji, as follows:

In the 3d Meiji	48
In the 4th Meiji	72
In the 5th Meiji	30
In the 6th Meiji	31
In the 7th Meiji	20
In the 8th Meiji	41
In the 9th Meiji	32
In the 10th Meiji	52
In the 11th Meiji	89

The number of steamers and sailing vessels on the 1st mouth of the 12th year Meiji:

Description.	Ships.	Tons.
Steamers	168	40,669
Sailing vessels	146	23,966
Store vessels (property of M. B. Co.)	8	8,416
Total	322	73,051

Of the above ships:

Description.	Ships.	Tons.
Steamers over 100 tons	59	36,228
Steamers under 100 tons	109	3,441
Sailing vessels over 100 tons	70	20,110
Sailing vessels under 100 tons	76	3,856

From this rapid increase of vessels Japan appears to have made considerable advance in its marine trade, and although it is true that the Mitsu Bishi Company receives the protection of the government, it can never be satisfied with that, and it appears endeavoring to further extend their trade. The said company has now in its possession thirty-three steamers and seven sailing vessels, and its vessels run between all important ports on our coasts, viz, Kobe, Osaka, Yotsukaichi, Shimidzu, Shimonoseki, Kochi, Nagasaki, Kagoshima, Oshima, Riu-Kiu, Fushigi, Sakai, Hachinobe, Samuaawa, and Fanakawa, and also abroad it has already commenced regular navigation between Shanghai, Hong-Kong, and Korea. Within only a few years past it has made conspicuous advances in its business, and is rapidly more and more progressing. Thus, although that company appears to hold a monopoly, in reality it is not the case. Now to demonstrate this it would be expedient to show to what numbers vessels upon foreign models have increased in Japan and how many persons are the owners of them.

There are now 180 steamers, of which 37 are the property of the Mitsu Bishi Company, while the remaining 143 belong to other owners; and 146 sailing vessels, of which seven are the property of the said company, while the remaining 139 are owned by other companies, or individuals consisting in number of 130 persons.

The sea-carrying trade in Japan is in such progressive state, and as the people have understood the profitableness of this trade, there can be no doubt that they would be willing to offer their capital and undertake the building of new vessels, so as to further promote this carrying trade.

As to the mistaken supposition above alluded to, that the Mitsu Bishi Company enjoys a monopoly, it needs no refutation, because if it should be understood that the government protection given to the said company is not for the company itself, but for the enterprise in which it is engaged, such a misapprehension would not have arisen.

It is not only the Government of Japan which gives protection to its mail vessels; in Great Britain, France, and the United States the same is the case. It must be especially expedient to do so for Japan, when considering the state of affairs under which she is at present placed. But there can be no doubt that if that company would conduct itself wrong and do any injuries to the public, the government should not fail to condemn it, and also the people should never yield to such injuries. Besides, if the foreign merchants be informed of the fact that foreign vessels have not much to interfere with our coasting trade, they would find it inadvisable on their part to give any inconvenience thereto. As is shown in the report of the Kobe foreign chamber of commerce, presented to the British minister at Tokio, the foreign vessels which arrived at and departed from that port with cargoes of Japanese products during the period of seventeen months from the 1st. of January, 1878, to the 1st of May, 1879, were only eighteen, and the amount of freight they realized was only $13,375½, whereas the vessels of the Mitsu Bishi Company made 279 runs between Tokio and Kobe during the period of one year from the 1st of January, 1878, to the 31st of December, 1878, and the freight received amounted to 1,640.26.5 yen. If in comparison with only a portion of trade carried on by one company the foreign vessels were so greatly surpassed in their freight and quantity of cargoes, there will, therefore, be far more difference when compared with many other Japanese steamers, sailing vessels, and junks, as well as those of the Mitsu Bishi Company.

It may be supposed that it cannot be proper to make such a comparison between the native and foreign vessels in the quantity of cargoes they have carried, because there are some very troublesome formalities to be observed in case of loading Japanese products in foreign vessels which make them unfavorable to the public.

Taking this supposition for granted, the chamber is still of opinion that if the Japanese vessels were found insufficient to the public needs, so as to necessitate the service of foreign vessels, the quantity of cargoes carried by the latter must have been greater. But the fact that the case was not so proves that the Japanese vessels are able to meet the need for transportation of our products without requiring the service of foreign vessels.

It may further be supposed that should the right of coasting trade be granted to foreign vessels the rate of freight would be lowered to the great advantage of merchants in consequence of competition taking place between the native and foreign vessels.

This is also an unsustainable view; although as long as they can they could support themselves with low freights in competition, but when one of the rivals should fail it is quite possible that the others would immediately raise again their rates, because the low rate during the competition cannot be a reasonable one.

We admit that Japan is still incomplete in her ship-building facilities, but we have already many docks; they are at Kobe, Nagasaki, Yokosuga, Osaka, Tokio, and Hakodate, of which the first three belong to the government and the others belong to private individuals, and they are all constantly working busily.

The ships constructed at these docks, it is admitted, are not all of a proper method of construction, but there is no doubt that they are by far superior to the old junks in their construction. And besides, as the marine insurance company has been established in this country, and as the ships being insured by that company are to be surveyed by a committee who is sent from the general post-office, those who engage in carrying trade will gradually know that they ought not to construct their ships roughly, but to construct in a proper method; and also there is no doubt that as the transportation of goods can be secured by the establishment of this company, it should be greatly increased in future. Since the establishment of this company, 58 ships, exceeding in all 31,877 tons, have been already insured by them.

It may be expected that when the foreign insurance companies are informed themselves of the above circumstances, they should also be willing to give insurances to the goods to be carried by the Japanese vessels which have once been insured by the Japanese insurance company at Tokio, and which have been surveyed by a committee of the general post-office, so that both the foreign and native merchants shall have no complaint of any inconvenience for the transportation of their goods between the ports in this country. If, however, the right of coasting trade be granted to foreign vessels, it will not only hinder the progress of the carrying trade of our people, but also cause it to be depressed. The chamber consequently urges that on this occasion of the treaty revision the right of coasting trade should be reserved by Japan.

opening of new ports.

In this country we now have only five ports and two cities open to foreign trade, and therefore the products of the interior must be brought to either of these open ports or cities to meet the demand of foreign merchants.

It may be supposed that the trade of our products is accustomed to be carried on at the old open ports and that the products being naturally concentrated at the thriving places, as silk is brought exclusively to Yokohama and tea to Yokohama and Kobe, the opening of any new ports, even in the vicinity of the productive districts, would not do much to induce the foreign merchants to remove there for trade.

In the opinion of the chamber, the opening of new ports is very desirable, the reasons for which are as follows:

Coal of Japan is gradually getting a good demand in the East, and it is chiefly exported to China. During the eleventh fiscal year of Meiji, the amount of 123,382 tons was exported, and it seems to increase year after year, while the consumption of foreign coal is gradually decreasing.

The working of coal mines in Japan is greatly improving by purchasing the necessary machinery and providing steamers for the purpose of transportation, and it will not be long before the people in the East can buy coal at a cheap rate. However, under the present circumstances, to export Japanese coal it would be brought from the interior to some of its nearest open ports, causing thereby much labor and expense; for instance, coal produced at Takashima, Karatsu, and Taku would be sent to Nagasaki for exportation; so, also, coal to be shortly produced from the mines at Horonai and Iwanai, in the Hokkaido, would have to be sent over to the port of Hakodate.

In this state of things, those who engage in coal mining would find it difficult to obtain any profit therefrom; while it would be also disadvantageous to those who consume such coal, and such would not be the way to promote the coal mining in Japan.

Rice of Japan is also of late greatly esteemed in Europe, and is demanded there at much higher prices than that of Indian rice. It was not a fixed goods of export, and only what was stored in the government warehouse has been exported; but the chamber has no doubt that in future it will be made one of the general goods of export. When China or Australia happen to feel the scarcity of provisions, our rice or wheat will be sent to them, and at times of scarcity in Japan it would be necessary to obtain Chinese rice. But rice as well as coal is a very bulky article, inconvenient to be transported. If such bulky article should be sent to the open ports before it can be exported from or imported into the interior of the country, the price of it would thereby more or less be raised. Such would be inconsonant with the principle of developing our national products, and also it would be unfit to save the people at the time of unfruitfulness in this country.

During the 8th and the 9th years Meiji a great quantity of rice was exported from Nügata. This could be done in consequence of that port being an open port. At that port the price of rice was always higher than at any non-open port of that vicinity, and it gave great gain to the peasants of that port, while foreign merchants gained also great profit in that trade, because the goods could be exported directly from that port.

From the actual state of things above set forth, the chamber feels it most desirable that rice and coal being such important products of Japan, certain new ports should be opened for coal trade at the coasts near where that article is produced, and for rice at certain central places, such as Simonoseki, Fushiki, and I’shinomaki, so that unnecessary labor and expense arising out of a circuitous way of transportation may be avoided.

remedying an inequity in the rate of specific duty.

Specific is the better system. Therefore ad valorem duties should be changed to specific duties as much as possible. Some of the specific duties under the present tariff, however, are inequitable, and this must be an injury to trade. For instance, there are different widths and qualities of woollen cloths and cotton cloths, so that it must be inequitable to impose the same duty on all of them.

The chamber therefore feels it desirable that distinction should be made in the duties to be imposed on these goods according to their widths and weight, &c. It would be in the discretion of the government to regulate this matter. But the chamber has also some opinions concerning this subject, and, if desired, will be happy to submit them.

erecting more bonded warehouses for the customs.

It has been desired that there should be erected more bonded warehouses for the customs, to meet the demands of merchants in general at cheaper storage, which, in the opinion of this chamber, would not fail to be of great advantage in the encouragement of our commerce. Hitherto there was not much inducement to the merchants to store their goods in the warehouses, in consequence of the high rate of storage and an insufficient number of them. And it has been the practice that the imported articles were placed in the godowns of foreigners after landing, and when Japanese purchased their articles they were again brought to the landing-place for shipment. As to exports, the process was the same troublesome one, but vice versa, causing thereby unnecessary additional expense.

Goods imported are generally held as security by the banks for money which has been advanced on them, and, therefore, until the advance-money has been refunded the banks do not allow the owners to take the goods from their godowns. Consequently, when Japanese purchase their goods, they first pay the money and then examine the goods and take delivery thereof. As to goods to be sold to foreigners, they are sent to the godowns of foreigners, and after being kept there for some days the foreigners settle the transaction. All this causes great inconvenience to Japanese merchants, and must be remedied.

This chamber desires, therefore, that more bonded warehouses may be erected in the vicinity of the landing-places at the open ports to meet the demand for imports and exports at cheap storage, and that certificates will be issued by the custom-house for goods deposited, and that sales of goods may be made by samples, and that delivery thereof shall be made at the warehouses. Such an arrangement would avoid the labor and expense of frequent conveyance. As to the rate of storage for such new bonded warehouses, the chamber has some opinions, and, if desired, will be happy to submit them.

establishing a system of drawbacks.

There is no doubt that a system of drawbacks is highly advantageous to merchants, and right in principle. The chamber, consequently, supporting the public opinion desires earnestly the establishment of this system.

A system of drawbacks is that by which the custom-house will repay the duty levied on imported goods at the time of their import, when these goods are re-exported to foreign countries. This is a system which is adopted at present in countries of Europe, America, and China. There are systems both strict and loose, but what the chamber demands is a strict one. In other words, we desire to apply the system not only in cases where the goods are exported in the same form, but also in cases where their forms have undergone changes; for instance, when drawn sugar imported from Formosa has been refined at home and changed into white sugar, or white sugar into loaf sugar, or when cloth is woven with English and Japanese cotton threads used in the length and breadth respectively, and it can be shown to the satisfaction of the custom-house that the articles have been manufactured in the way mentioned above, in all such cases we desire to apply a system of drawbacks. It will require a certain amount of trouble, yet the amount of duty to be repaid will not be great; and it will assist greatly in the development of the prosperity of the open ports, and also will stimulate home manufactures.

With respect to the mode and rules, the chamber has its opinions, but a few words of explanation being insufficient to exhaust the subject, they will be submitted in future.

reforming the rules of appraisement of imported goods.

It is the present practice that whenever the custom-house considers the declared value of imported goods unreasonable, it causes the appraisers to determine their value, and the duty is levied according to the value appraised, but when the owners of these goods are unwilling to pay the duty according to the value thus appraised, the custom-house purchases the goods.

It appears that this rule is not without some advantages, but it is liable to make an opening whereby we may be made the victim of cunning merchants; because they, knowing the fact that the custom-house must purchase goods on the appraised value, import spurious goods and intentionally report them at low prices, and contrive to sell them as soon as their value is fixed by appraisement. Since the appraisement is made simply by looking at the trade-marks, if they happen to be false, it becomes nothing more than a means of falling into their contrivance. If it be desired to do away with this bad practice, the existing rule of appraisement must be abolished and the appraisers must be selected from competent merchants, both of Japan and foreign countries. When it happens that the custom-house thinks that the price of imported goods fixed by the owner of these goods is improper, let these appraisers fix their price and levy the duty according to the appraised value. The practice of purchasing imported goods on the part of the custom-house must also be done away with. If the matter be carried on in this way, then the cunning merchants can make no contrivance, and proper duties can be levied. This is the reason why the chamber desires a reform to be made in the rule of appraisement.

reforming the system of imposing duties on imported goods.

In accordance with the existing tariff regulations, it is the practice to impose an ad valorem duty on imported goods according to the value mentioned in the invoice. This is indeed simple in the system and easy in the proceeding. But on careful consideration, it appears to be unsatisfactory and not in accordance with any right principle, for the following reason:

In imposing duties on all goods imported from other countries, it is necessary to make their rates equal. Our present tariff regulations, however, cannot be satisfactory on this point, because the value of goods set forth in the invoice is the value paid at the places of manufacturing, and is not the market value at the port whence they are shipped, and it is quite evident that the value at the manufacturing places is much cheaper than at such port. For instance, if we compare the value mentioned in the invoice of shirting bought at the manufactory at Manchester with that bought in London, we will find the latter higher, because there are added the transportation expenses from Manchester to London. But the duty is levied at our custom-house on such shirting in accordance with the value set forth in the invoice.

There is more inequality of duty on goods brought from different countries. Cotton thread is chiefly imported into Japan from England and India; England being further from Japan than from India. But both countries equally import that article, so that it is supposed that the value of it in the former must be as much lower than that in the latter as the added expenses for transportation. But on the arrival of these goods in Japan from both countries they must pay the duties equally, according to the declared value. It is a heavy duty for India, while for England light; in a word, the nearer country has to pay a heavier duty, and the further country a lighter one.

There must be some differences in the rate of duties according to distance from Japan; therefore the present system cannot he an equitable one. The present system of ad valorem duty being thus inequitable, the chamber desires that, instead of imposing duties according to the value set forth in the invoice, the duty should be imposed on the value, with all the added expenses incurred for transportation of goods from the manufacturing place to port and from port to Japan, so that there may be inequality of duties according to the distances of countries.

limiting payment of customs duties to our standard currency.

When the existing treaty was concluded with foreign powers it was agreed that payment of all duties should be made in silver ichiboos, for this was then the sole currency of Japan, used as a standard of trade. However, in making payment, foreigners often found it difficult to obtain the silver ichiboo; it was accordingly permitted to use Mexican dollars for such payment as well as the ichiboo, at the rate of $100 for 311 boos. But from this improper proportion of exchange our government lost much of its revenue. We have now, however, a standard currency in Japan, and therefore it is necessary for us to receive duties in the standard currency, and it would be right to exclude the Mexican dollars, which have been hitherto the medium of trade in our open ports for the payment of customs duties, because our coin is gradually increasing in credit in China, Singapore, and in many other places, and foreign merchants in Japan also appear to be willing to receive it. We have also a mint, where imported bullion can be easily coined, so that we can help ourselves well without foreign coin. For the above reasons the chamber hopes that in the present treaty revision payment of the customs duties may be limited to trade-dollars of Japan instead of the Mexican dollars.

Table I.

Names of countries.	Inland tax.	Custom duties.	Various incoming.	Total.	Proportion of customs duties to revenue.
	Yen.	Yen.	Yen.	Yen.
Japan	43,884.362	1,379.824	4,460.171	49,724.357	2,774 to 100
England	137,320.000	99,845.000	161,051.495	398,816.495	25 to 100
Canada	4,941.897	12,546.987	4,570.390	22,059.274	57 to 100
France	271,699.360	56,604.000	230,332.201	558,635.561	10.13 to 100
United States	110,581.924	130,170.680	17,011.474	257,764.078	50.5 to 100

Table II.

Total value of raw materials and manufactured articles exported, respectively, during the five years from the 1th year to the 11th year of Meiji.

Description.		7th year.	8th year.	9th year.	10th year.	11th year.
		Yen.	Yen.	Yen.	Yen.	Yen.
Raw materials:
	Dutiable	17,236,846.017	16,357,593.230	24,992,473.201	18,938.340.711	17,994,414.288
	Free of duty	828,109.387	815,678.240	1,406,930.824	2,870.704.219	6,127,486.435
	Total	18,064,955.404	17,173,271.470	26,399,404.025	21,809.044.930	24,121,900.723
Manufactured articles:
	Dutiable	619,848.479	562,827.172	452,594.273	612,843.560	656,580.028
	Free of duty		3,770.727	35,460.241	76,080.061	113,256.438
	Total	619,848.479	566,597.899	488,054.514	688,923.621	769,836.466
Miscellaeneous:
	Dutiable	97,472.116	228,117.570	336,860.699	461,244.970	671,966.665
	Free of duty	45.000	19.190	959.370	18,897.160	2,363.795
	Total	97,517.116	228,136.760	337,820.069	480,142.130	674,330.460
Grand total of export		18,782,320.999	17,968,006.129	27,225,278.608	22,978,110.681	25,566,067.649

Table II—Supplement.

Manufactured articles of export dutiable.

• Bamboo ware.
• Bronze ware.
• Copper ware.
• Cotton manufactures.
• Earthenware and porcelain.
• Fans.
• Furniture.
• Fire hand-engine.
• Lacquered ware.
• Mattings.
• Medicine.
• Rape-seed oil.
• Paper, writing.
• Paper, inferior.
• Provisions.
• Sake.
• Screens.
• Silk manufactures.
• Silk embroideries.
• Silk clothes.
• Soy.
• Tea-packing paper.
• Tooth-powder.
• Umbrella.
• Vermicelli.

Free of duty.

Sulphuric acid.	Matches.
Foreign paper, Japanese made.	Cotton singlet and drawers.
Cotton flannel (Mompa).	Flannel.

Miscellaneous.

Articles not herein mentioned are included within a class of raw materials.

Table of gold and silver coins and bullion imported and exported.

Period.	Export.	Import.	Excess.	Import and export compared.
	Yen.	Yen.		Yen.
5th year Meiji	4,524,170.600	3.691.509.600	Export.	832,661.000
6th year Meiji	5,126.227.937	3,080,542.381	do.	2,045,685.556
7th year Meiji	13,995,202.023	1,071,731.220	do.	12,923,470.803
8th year Meiji	12,524,024.519	1,634,289.278	do.	10,889,734.241
9th year Meiji	7,395,304.316	7,977,598.025	Import.	582,293.709
10th year Meiji	10,940,760.983	1,912,640.822	Export.	9,028,120.161
11th year Meiji	11,052,556.735	2,791,405.472	do.	8,261,151.263
Excess of export of gold and silver coin				43,398,529.315