at yen 13.14 per "koku" in 1909, was at yen 15'09 on October 1st, 1910; being a rise of 14 76 per cent. Since the beginning of 1911 the price has continued to rise further, being yen 15 36 at the end of January, yen 16:29 at the end of March, and yen 17:10 on the 26th of April. This last figure, when compared with that of the average for 1909, shows an increase of about 30 per cent. Consequently, the agricultural class profited much, and the importation of oil-cakes and other fertilisers in the six months ending March, 1911, increased by more than 30 per cent. compared with the corresponding period of the preceding year. Such agricultural prosperity, as was stated in a previous letter, is sure to react favourably on other branches of industry and trade.

2. Money Market.-On account of the triple redemptions of national loan bonds in the first half of 1910, more ease was given to the money market, and the rate of interest continued to become lower and lower. The Bank of Japan discount rate, which was 7.3 per cent. in January, 1909, and 5 84 per cent. in August of the same year, was lowered to 5'11 per cent. in January, 1910, and 475 per cent. in March.

As for the market rate of interest, the decline was more remarkable. The average of the discount rate at Tokyo, which was 8.95 per cent. in January, 1909, and 7:33 per cent. in June, 1909, was 6'11 per cent. in January, 1910, 5'87 per cent. in June, 1910, and 5 45 per cent. in September, 1910. However, in the last quarter of 1910 and the first quarter of the present year, the market rate rose a little, being about 5'6 per cent.

Among other things, the most striking was the increase of deposits. The Post Office deposits, the annual average increase of which was yen 15,000,000, increased by yen 36,000,000 in 1910, giving a total of yen 160,000,000 at the end of that year. The bank deposits of six great cities was also remarkable. The total deposits of all these banks, which was yen 544,079,118 at the end of January, 1909, and yen 594,896,551 at the end of June of the same year, was yen 648,600,350 at the end of January, 1910, yen 700,073,190 at the end of June of the same year, and yen 729,191,876 at the end of September of that year. In the last quarter of 1910 these deposits showed a slight decrease, being, at the end of December, yen 691,835,312. In the present year, however, it began to increase again, being yen 721,924,140 at the end of March.

The loans of these banks also steadily increased throughout the year 1910. The total of loans in 1909, which was yen

522,871,373 at the end of January, yen 558,131,937 at the end of June, and yen 588,511,455 at the end of December, was, in 1910, yen 588,442,769 at the end of January, yen 638,825,126 at the end of June, yen 682,580,433 at the end of December, and in 1911 it was yen 694,255,426 at the end of March.

During the first quarter of 1911 an increase is observable in the deposits as well as in loans, but the discrepancy between the two was not so great as in previous years, proving the decrease of money lying idle in bank coffers. According to the calculation of the Bank of Japan, the amount of funds for new enterprises was, in 1908, yen 135,232,120, in 1909 yen 128,257,535, and in 1910 yen 487,000,650.

The succession of debenture issues by various companies was also one of the striking features of 1910 and of the first quarter of 1911. According to the calculation of the Industrial Bank of Japan, the total amount of those issues in 1910 was yen 95,973,000. Compared with the figures of the previous year, which were yen 25,763,000, the increase is enormous. The total amount of debentures outstanding, which was yen 137,765,670 at the end of December, 1909, rose to yen 203,152,925 at the end of 1910. Even in the first four months of 1911, issues amounted to yen 37,140,000. Besides, other bond-issues by public corporations took place in the latter half of 1910, and in the first five months of 1911; the Municipal Loan Bonds of Osaka of yen 10,000,000 that of Nagasaki of yen 4,287,000, and that of Chinese Government Railway Loan Bonds of yen 10,000,000, being most conspicuous.

3. Budget. The increase in the expenditure by the annexation of Korea for the present fiscal year was far less than was generally expected. But the flood of last autumn, which affected almost all districts of the north-eastern half of the Hon-shu, mainland, including Tokyo, necessitated a big disbursement. At the same time, the naval extension, though insignificant when compared with those of the United States and of some of the European powers, had to swell the budget. Thus the figures for 1911-12, compared with those of the preceding fiscal year, stand as follow:

To meet the increase, however, no special measure was taken; about one-half of the balance being met by the natural increase of the revenue, and the other half being supplied by the Deposit Bureau.

In framing the budget for the present fiscal year, the Government devoted yen 145,923,840 for debt services, out of which yen 50,000,000 was to be used to redeem the principals of the national loan bonds. As the amount of the redemption funds, brought forward from the previous year, was yen 72,000,000 in total, yen 122,000,000 is applicable for the redemption of the principals of the national loans in the present year. The redemption of the exchequer bonds, amounting to yen 65,898,375 were announced on 10th April, 1911, to be redeemed or converted with 4 per cent. bonds.

4. Annexation of Korea.-The long unsolved question of Korea was settled at last in August, 1910. It was considered urgent and important to place the finance of the peninsular on a sound and independent basis. The finance of Chosen was made a special account, and the budget of Chosen for the present fiscal year gives a sum of yen 48,740,000. Of this, yen 20,850,345 is for the extraordinary expenditure, and to be used for landsurveying, highways, railways, telegraph, telephone, customhouses, etc., etc.

For the development of the new territory the Government has decided to raise the public work loan bonds of yen 56,000,000. Out of these funds, yen 10,000,000 will be used in improving the main public roads throughout the peninsula, while yen 37,000,000 is to be devoted to the construction of the Tai-työn-Mok-po line and Seoul-Gensan line, as well as for the improvement of the Seoul-Fusan line and the Seoul-Wiju line, so as to complete the connection with the South Manchurian Railway line. With the rest of the funds, yen 8,270,000, the harbours of Fusan, Chemulpo, Chinnampo, and Phyngyang are to be improved. All these above-mentioned works are to be completed in the course of about six years.

As the central monetary organ of Chosen, the further activity

of the Bank of Chosen was necessary, and the specie reserve was increased from yen 20,000,000 to yen 30,000,000. At the same time the sphere of action of the Oriental Colonisation Company was extended.

The once oppressed Koreans are now placed under an enlightened system of Government and enjoying benefits hitherto quite unknown to them.

In 1910, the excess of exports over imports again disappeared. But this is to be attributed to the great increase of imports of raw cotton, and by no means to any decrease of exports. Compared with the previous year, almost all the export commodities, raw silk, silk tissue, "habutae," waste silk, cotton yarns, straw plaits, tea, etc., show a great increase. The increase of imports is principally due to the increase of the importation of raw cotton, the increase being over yen 50,000,000. Next comes the increase in the importation of iron, machines, and woollen goods.

The following table gives figures for the first quarter of 1911 and of the previous year :

Although the present year's export to Europe and America, especially of raw silk, silk tissue, and "habutae" continues to be active, yet, owing to the fall of silver, the exports to China and other Oriental countries declined considerably. And, moreover, on account of the bad rice crop of last year, the importation of rice greatly increased. The expected increase of tariff rates is also causing a large increase of iron, machines, wools, and cotton tissues. Before the new tariff comes into effect in July, the increase of imports in the first half of the year is inevitable.

6. Prices and Wages.--The general level of prices, which had begun to rise since the spring of 1909, again began to fall in the autumn of the same year, owing chiefly to a good crop of rice. A general outcry of depression was again heard. However, throughout the year 1910 and the first quarter of 1911, a steady rise of prices can be noticed.

The wages had steadily and almost incessantly risen until the year 1908. 1908. But in 1909, when the influence of the depression of 1907 was most severely felt in this country, and when the expected good crop of rice of that autumn caused the fall of prices, the wages fell a little, as shown in the following table :

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Though the figures for 1910 and 1911 are not yet obtainable, the revival of business and the higher prices of commodities in general must have led to further rise of wages.

7. Factory Law now Passed.-I reported in my last letter that the Factory Act was presented to the Diet in the session before the last, and that it was withdrawn by the Government, some revisions being found necessary. Since the withdrawal, further investigations were made by the Government, and last autumn the Government sought the views of the prefectural governors, the Commercial Chambers, the Central Sanitary Association, the Industrial Associations, and the Productive Resources Research Committee, etc. This latter made the most diligent and thorough investigation, and the views of this Committee were taken into consideration in revising the Bill.

When the newly revised Factory Act was brought forward in the last session of the Diet, it was much discussed. With few amendments, however, it was at last passed by both Houses, and was ultimately promulgated on March 29th, 1911, enactments of importance being :

Art. 1. This Act is applicable to factories which come under either one of the following parts:-1. Factories which