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of her manufactured products is $150,000,ooo, equal to about $3 per capita, against a net annual manufactured product of the United States amounting to $26,000,000,coo, or about $325 per capita.

It is significant that, in 1876, Japan's exports were $22,000,000, and her imports from the United States, $1,700,000,-that is, for every dollar received by her for her exports, she spent 8 cents in this country,while in 1905 her exports had increased to $160,000,000, and her imports from this country to $38,000,000; so that for every dollar received by her in 1905 for her exports she spent 24 cents in this country. Her increasing purchasing power led to her spending twenty-two times as much with us in 1905 as in 1876, and three times as much in proportion to her exports; nor is there much fear that she will be able to displace many American articles of manufacture by her own industries. Years ago a watch factory was established at Osaka to displace foreign importations, but instead of meeting the home demand the importation of watches into Japan has increased from 485,593 yen, in 1892, to 3,066,329 yen, in 1898, the latest available data, and that of clocks from 202,141 yen, in 1892, to 353,398 yen, in 1898.

In the face of this astonishing industrial and commercial growth, it must be plain to the dullest mind that Japan is going to make herself keenly felt in the productive field, just as she has already made herself felt in military and naval fields. It is true that wages in 1903, compared with those of 1887, have increased in Japan 150 per cent., and yet, taking eleven manual occupations, skilled and unskilled, the average daily wage in 1903 did not exceed 23 cents. How, in the face of such facts, it is asked, can occidental countries hope to compete with Japan in the orient or in the world's open markets?

It must be admitted that Japan is destined, at an early day, to dominate at least the Asiatic markets in cotton yarn, in low grade cotton fabrics, and in porcelain ware, in all of which she is rapidly excelling. As time goes on she will exploit her possibilities in other directions, and materially add to the lines in which she will become a world factor. But despite all this, the white wage-earner in this and in other countries, on the whole, has nothing to fear from Japanese or other oriental competition.

With all of Japan's ambition she is sadly handicapped by the fact that her labor is inefficient and by her lack of raw materials. Though the price of labor in Japan is low, its limited efficiency compared with the efficiency of labor in countries where much higher wages are paid makes it very expensive labor; so that, in many avenues, it is not the cheapest, but among the most costly labor in the world. Men who have made a study of industrial conditions in the island empire say that Japanese labor is often both incompetent and wasteful. The average Japanese workman is not only a rather poor workman, but indifferent to his own incompetence, and destitute of ambition to remedy it, and he has little notion of the value of time. As compared with American skilled workmen, it has been estimated that the ratio of Japanese efficiency in labor is about four to one.

If American industry has any serious future competitor in Asia it is more likely to be China than Japan. China has an immense amount of wealth, her people are "industrious, reliable, law-abiding, good humored, capable and tolerant." Her merchants have the highest integrity, and are among the best and shrewdest in the world. The country itself has almost limitless potentialities for development; so that she has a combination of assets which if properly developed and directed has tremendous possibilities.

American and European labor has little to fear from the growth and development of eastern industry. On the contrary, the more that modern industry can be encouraged in the east the more will the purchasing power and the wants increase, and the standards of the Asiatic rise. The more that these grow the more are the possibilities at hand for the consumption of the white man's increasing surplus of industrial products, and thus will the men of the east be of much advantage to the men of the west.

The present and future need of Asia is undoubtedly not the simple life but more wants. Her aim to follow western methods carries with it consequent greater wants. These greater wants will protect the western wage-earner, and will not only save him from the ill effects of cheap labor competition, but will open out a vast, if not endless and enduring, market for many of the white man's products that, with his superbly skilled labor, he can produce better and cheaper than the Asiatic will be able to produce for many generations.

LEADING ARTICLES OF THE MONTH.

TREASURY CONTROL OF THE MONEY MARKET.

If the Secretary of the Treasury were given $100,000,000 to be deposited with the banks or withdrawn, as he might deem expedient, and if in addition he were clothed with authority over the reserves of the several banks, with power contract the national bank circulation at

to

pleasure,—

LAST year will go down in the annals of financial legislative effort as the most noteworthy in forty years. In that period a spasmodic and fragmentary agitation for currency reform, productive of little, if any, substantial improvement, from time to time was noticeable. The call, however, lacked Mr. Patton declared "the logical outcome that indorsement by the banking fraternity of the recent practice of the Treasury in which was requisite to make it authoritative coming to the 'relief' of the money market." or unanimous, and Congress naturally gave In 1872, Secretary Boutwell expressed the little heed to the same. For this continuing belief that the Treasury rather than the inelasticity of our currency,-so embarrassing banking institutions of the country should be in crop-moving seasons, the bankers were privileged to regulate the amount of curmore to blame than the Government. The rency needed in business channels; and, by latter insisted on the presentation of a plan increasing the amount of United States notes for currency reform which would in large in circulation as a means of relief to the measure embody the demands of the great monetary situation, the Treasury actually bulk of American bankers. This viewpoint did exercise this regulative power. was accepted by the American Bankers' Association last year, and, as a result, a joint committee from that organization and from the New York Chamber of Commerce submitted to Congress last December a plan for currency improvement and relief. The Solons at Washington, forced to the wall, promptly rejected it, and, at the last moment, passed the Aldrich bill, which will afford some elasticity to our currency, but is still far short of the relief needed and prayed for.

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Joining issue with Mr. Shaw as to the wisdom of vesting in a Treasury official regulative discretion," this writer resorts to a wealth of historical precedent, beginning with the act of February 25, 1862. The acts of July 11, 1862; February 25, 1862; March 3, 1863; June 30, 1864, and February 4, 1868, under which latter act the greenback currency was stopped by Congress, are among the most important. A resolution adopted by the House of Representatives on December 3, 1872, requesting the Secretary of the In the Journal of Political Economy for Treasury to inform the House of his auFebruary Mr. Eugene B. Patton, taking an thority for increasing the issue of legal-tender excerpt from Secretary Shaw's report for notes of October, 1871, is cited. To this last year as a text, discusses at great length Secretary Boutwell replied: "The condition. the precedents for control of the money mar- of affairs then existing in the country seems ket by the United States Treasury or by its to me to have warranted the issue upon Secretary. The article is of primary impor- grounds of public policy." An investigation tance to the banker and capitalist, although by the Senate followed, and the writer dethe force of its conclusions is lessened some- votes considerable space to a discussion of what by the passage of the Aldrich bill. Mr. the majority and minority reports of the inPatton is clearly opposed to any plan that vestigators, the latter favoring and the forwould invest the Secretary of the Treasury mer disapproving the action of Secretary with a discretionary authority over Govern- Boutwell. The matter rested here and no ment deposits and withdrawals in national definite action was taken. This inaction, Secbanks, or likewise, over their reserves. "Such retary Boutwell subsequently maintained, a proposition by a Secretary of the Treasury was equivalent to a virtual assent to his right to make himself the dictator of the financial to issue the notes in question. interests of the country," he asserts, .“ is astonishing." Former Secretary Shaw's statement, in his report,—

Referring to the situation of 1873, he says: "The efforts of the Treasury to afford relief to the money market were comparatively

of her manufactured products is $150,000,ooo, equal to about $3 per capita, against a net annual manufactured product of the United States amounting to $26,000,000,coo, or about $325 per capita.

It is significant that, in 1876, Japan's exports were $22,000,000, and her imports from the United States, $1,700,000,-that is, for every dollar received by her for her exports, she spent 8 cents in this country,while in 1905 her exports had increased to $160,000,000, and her imports from this country to $38,000,000; so that for every dollar received by her in 1905 for her exports she spent 24 cents in this country. Her increasing purchasing power led to her spending twenty-two times as much with us in 1905 as in 1876, and three times as much in proportion to her exports; nor is there much fear that she will be able to displace many American articles of manufacture by her own industries. Years ago a watch factory was established at Osaka to displace foreign importations, but instead of meeting the home demand the importation of watches into Japan has increased from 485,593 yen, in 1892, to 3,066,329 yen, in 1898, the latest available data, and that of clocks from 202,141 yen, in 1892, to 353,398 yen, in 1898.

In the face of this astonishing industrial and commercial growth, it must be plain to the dullest mind that Japan is going to make herself keenly felt in the productive field, just as she has already made herself felt in military and naval fields. It is true that wages in 1903, compared with those of 1887, have increased in Japan 150 per cent., and yet, taking eleven manual occupations, skilled and unskilled, the average daily wage in 1903 did not exceed 23 cents. How, in the face of such facts, it is asked, can occidental countries hope to compete with Japan in the orient or in the world's open markets?

It must be admitted that Japan is destined, at an early day, to dominate at least the Asiatic markets in cotton yarn, in low grade cotton fabrics, and in porcelain ware, in all of which she is rapidly excelling. As time goes on she will exploit her possibilities in other directions, and materially add to the lines in which she will become a world factor. But despite all this, the white wage-earner in this and in other countries, on the whole, has nothing to fear from Japanese or other oriental competition.

With all of Japan's ambition she is sadly handicapped by the fact that her labor is inefficient and by her lack of raw materials. Though the price of labor in Japan is low, its limited efficiency compared with the efficiency of labor in countries where much higher wages are paid makes it very expensive labor; so that, in many avenues, it is not the cheapest, but among the most costly labor in the world. Men who have made a study of industrial conditions in the island empire say that Japanese labor is often both incompetent and wasteful. The average Japanese workman is not only a rather poor workman, but indifferent to his own incompetence, and destitute of ambition to remedy it, and he has little notion of the value of time. As compared with American skilled workmen, it has been estimated that the ratio of Japanese efficiency in labor is about four to one.

If American industry has any serious future competitor in Asia it is more likely to be China than Japan. China has an immense amount of wealth, her people are "industrious, reliable, law-abiding, good humored, capable and tolerant." Her merchants have the highest integrity, and are among the best and shrewdest in the world. The country itself has almost limitless potentialities for development; so that she has a combination. of assets which if properly developed and directed has tremendous possibilities.

American and European labor has little to fear from the growth and development of eastern industry. On the contrary, the more that modern industry can be encouraged in the east the more will the purchasing power and the wants increase, and the standards of the Asiatic rise. The more that these grow the more are the possibilities at hand for the consumption of the white man's increasing surplus of industrial products, and thus will the men of the east be of much advantage to the men of the west.

The present and future need of Asia is undoubtedly not the simple life but more wants. Her aim to follow western methods carries with it consequent greater wants. These greater wants will protect the western wage-earner, and will not only save him from the ill effects of cheap labor competition, but will open out a vast, if not endless and enduring, market for many of the white man's products that, with his superbly skilled labor, he can produce better and cheaper than the Asiatic will be able to produce for many generations.

LEADING ARTICLES OF THE MONTH.

TREASURY CONTROL OF THE MONEY MARKET.

LAST year will go down in the annals of If the Secretary of the Treasury were given financial legislative effort as the most $100,000,000 to be deposited with the banks or noteworthy in forty years. In that period a in addition he were clothed with authority over withdrawn, as he might deem expedient, and if spasmodic and fragmentary agitation for cur- the reserves of the several banks, with power rency reform, productive of little, if any, to contract the national bank circulation at substantial improvement, from time to time pleasure,

rency needed in business channels; and, by increasing the amount of United States notes in circulation as a means of relief to the monetary situation, the Treasury actually did exercise this regulative power.

was noticeable. The call, however, lacked Mr. Patton declared "the logical outcome that indorsement by the banking fraternity of the recent practice of the Treasury in which was requisite to make it authoritative coming to the 'relief' of the money market." or unanimous, and Congress naturally gave In 1872, Secretary Boutwell expressed the little heed to the same. For this continuing belief that the Treasury rather than the inelasticity of our currency, so embarrassing banking institutions of the country should be in crop-moving seasons, the bankers were privileged to regulate the amount of curmore to blame than the Government. The latter insisted on the presentation of a plan for currency reform which would in large measure embody the demands of the great bulk of American bankers. This viewpoint was accepted by the American Bankers' Association last year, and, as a result, a joint committee from that organization and from the New York Chamber of Commerce submitted to Congress last December a plan for currency improvement and relief. The Solons at Washington, forced to the wall, promptly rejected it, and, at the last moment, passed the Aldrich bill, which will afford some elasticity to our currency, but is still far short of the relief needed and prayed for.

Joining issue with Mr. Shaw as to the wisdom of vesting in a Treasury official "a regulative discretion," this writer resorts to a wealth of historical precedent, beginning with the act of February 25, 1862. The acts of July 11, 1862; February 25, 1862; March 3, 1863; June 30, 1864, and February 4, 1868, under which latter act the greenback currency was stopped by Congress, are among the most important. A resolution adopted by the House of Representatives on December 3, 1872, requesting the Secretary of the In the Journal of Political Economy for Treasury to inform the House of his auFebruary Mr. Eugene B. Patton, taking an thority for increasing the issue of legal-tender excerpt from Secretary Shaw's report for notes of October, 1871, is cited. To this last year as a text, discusses at great length Secretary Boutwell replied: "The condition the precedents for control of the money mar- of affairs then existing in the country seems ket by the United States Treasury or by its to me to have warranted the issue upon Secretary. The article is of primary impor- grounds of public policy." An investigation tance to the banker and capitalist, although by the Senate followed, and the writer dethe force of its conclusions is lessened some- votes considerable space to a discussion of what by the passage of the Aldrich bill. Mr. the majority and minority reports of the inPatton is clearly opposed to any plan that vestigators, the latter favoring and the forwould invest the Secretary of the Treasury mer disapproving the action of Secretary with a discretionary authority over Govern- Boutwell. The matter rested here and no ment deposits and withdrawals in national definite action was taken. This inaction, Secbanks, or likewise, over their reserves. "Such retary Boutwell subsequently maintained, a proposition by a Secretary of the Treasury was equivalent to a virtual assent to his right to make himself the dictator of the financial to issue the notes in question. interests of the country," he asserts, "is astonishing." Former Secretary Shaw's statement, in his report,

Referring to the situation of 1873, he says: "The efforts of the Treasury to afford relief to the money market were comparatively

futile, if not indeed positively harmless." Shaw's opinion. He contends that, ex natura, This, because most of the greenbacks issued went into the savings banks, and had little effect in allaying the panic. Reporting on this later, the Secretary of the Treasury said: "The disturbance of business could not be avoided by any amount of currency which might be added to the circulation." Mr. Patton believes that this concludes the question of Treasury regulation, and refutes Mr.

the Secretary is not conversant with the business and banking needs of the country, and, accordingly, would leave the matter of note issues to the national banks, under a system which, for a most critical quarter-century, has proved successful. The enlarged discretionary power of the Secretary of the Treasury under the Aldrich bill is something Mr. Patton evidently did not anticipate.

STEAMSHIP LINES FROM RUSSIA TO THE
UNITED STATES.

Na series of articles in the semi-official tions on the Russian steamer Smolensk and daily Torgovo-Promyshlenaya Gazetta the Hamburg-American steamer Blücher, (Commercial and Industrial Gazette), of the writer comes to the conclusion that the St. Petersburg, much valuable information is steerage passengers of the former are better given concerning passenger traffic between provided for as regards space, light, and Europe and the United States. Particular ventilation. It is only the highest-paid cabattention is paid to the movement of emi- ins of the Blücher that are superior in point grants, and an attempt is made by the writer of comfort. Evidently, therefore, the firstto prove that direct passenger traffic from cabin passengers of the Blücher receive betRussia should prove profitable. The so- ter accommodations at the expense of the called "Volunteer Fleet" has a number of steerage passengers. He admits, however, steamships plying between Libau and New York, and direct communication exists also between Odessa and New York.

The editor of the journal referred to points out, in his comments on the articles in question, that the transportation of Russian emigrants on Russian ships should be continued, since this must be followed by a growing commercial intercourse between Russia and North America. The emigration movement, he claims, is abnormal from the standpoint of Russian business enterprise, while in Germany an enormous and well-regulated passenger traffic has been established, thanks to the Russian emigrants. The Russian steamship lines are annually losing the profits that would accrue from the carrying of hundreds of thousands of pas

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that the steamers of the Hamburg-American fleet possess certain features, like the wireless telegraph, a daily newspaper, music, dancing, etc., which are not found on the ships of the "Volunteer Fleet." Because of these facts, the author believes the steamers of the Volunteer Fleet" are not capable of competing with vessels of other lines for cabin passengers. In order to encourage a greater number of cabin passengers to travel on the Russian steamers the author suggests the organization of special tours for American travelers who would be interested to see Russia. Later on, he thinks, other classes of Americans. would also patronize the Russian steamers.

The author points out, likewise, that on the second voyage of the Smolensk the steamer had 1380 steerage passengers, a regrettable fact, according to him, since the normal number of steerage passengers on this vessel should not exceed 1000. Overcrowding is, in the long run, bound to bring its retribution, and the author would, therefore, discourage it as far as possible. Of the European emigrants to America, Russia furnishes the third largest number, as is evident from the following table:

Year.

1903
1904

In comparing the passenger accommoda- 1905

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