years. Since 1890 the annual value of
Japan's exports has risen from L5,000,000 to L35,000,000, the imports
from L8,000,000 to L44,000,000. That the imports will continue in
similar progression, or indeed to anything like the same amount, I do
not believe. Japan of recent years has imported machinery, largely
from Europe and America, and used it as patterns to be copied or
improved upon by her own workmen. Out of 25 cotton-mills, for example,
in Osaka, the machinery for one had been imported from the United
States. The rest the Japanese have made themselves from the imported
pattern. There were also in Osaka recently 30 flour-mills ready for
shipment to the wheat regions of Manchuria. One of these mills had
been imported from America, while the remaining 29 have been
constructed in Osaka at a cost for each of not more than one-fifth
that paid for the imported mill.

Shortly after peace had been declared between Russia and Japan, the
Marquis Ito is reported to have said to Mr. McKinley: "You need not be
afraid that we will allow Japanese labourers to come to the United
States. We need them at home. In a couple of months we will bring home
a million men from Manchuria. We are going to teach them all how to
manufacture everything in the world with the best labour-saving
machinery to be found. Instead of sending you cheap labour we will
sell you American goods cheaper than you can manufacture them
yourselves." The Japanese Government seems to some extent to be going
in for a policy of State Socialism. The tobacco trade in the Empire is
now entirely controlled by the Government. The Tobacco Law
extinguished private tobacco dealers and makers, the Government took
over whatever factories it deemed suitable for the purpose, built
others, and now makes a profit of about L3,000,000 sterling annually,
while the tobacco is said to be of a superior quality and the workmen
better paid than was the case under private enterprise. How far Japan
intends to go in the direction of State Socialism I am not in a
position to say. Many modern Japanese statesmen are quite convinced of
the fact that the private exploitation of industry is a great evil and
one that ought to be put a stop to. On the other hand, there are
Japanese statesmen who are firmly convinced that the State control of
industries can only result in the destruction of individual initiative
and genius, with the inevitable result of reducing everybody to a dead
level of incompe