The Guardian And Evening Star, with which is incorporated the West Coast Times. MONDAY, MAY 2, 1927. JAPAN’S FINANCES.

Hokitika Guardian, 2 May 1927, Page 2

The Guardian And Evening Star, with which is incorporated the West Coast Times. MONDAY, MAY 2, 1927. JAPAN’S FINANCES.

The financial collapse which has tor the moment overwhelmed Japan is not alj together unexpected. Ever since the war, Japanese financiers, manufaej tores, and merchants have been mak- | ing strenuous efforts to promote the country’s productivity and extend its I trade; and high authorities have fre--1 Cjuently warned them that they were going too far and too fast. Japan is not endowed with very great natural resources, and its success in the cco- . nomio or industrial sphere has been I duo so far chiefly to the ingenuity and energy of its people and the existence of ail almost unlimited supply of I cheap and well-disciplined labour. But this is in reality a very narrow basis on which to erect the imposing superstructure of finance and trade built up bv tbe Japanese within the past two decades. There can be no doubt, says an exchange in discussing the matter, that one of the fundamental weaknesses of the economic situation in \ Japan has hoen all along the system I of financing mercantile and industrial operations, in which many of the hanks have indulged. Japan. as everyone knows, has deliberately borrowed many of the most valuable features of Western civilisation for her own use, and unfortunately her financiers seem to have lieen unduly impressed bv the temporary success of Germany’s system of industrial finance. The German banks before tbe war made a practice of advancing heavily to manufacturers and merchants on the security of their ventures—often themsedves becoming shareholders in the concerns —and subsequent events have revealed the dangers that such a policy involves. The Japanese, with less knowledge of trade and finance, and far less accumulated wealth than the Germans, are now experiencing the disastrous effects of a financial crisis which paralyses merchants and manufacturers and bankers. The Minister of Finance, with characteristic Japanese fortitude, has set his face against the proposal for Goernment loans and other forms of State aid. The Japanese may be trusted to fight their way through their difficulties, though it is estimated that the process of reconstruction may take from twelve to fifteen years. No doubt if Britain were to proffer financial aid to Japan at his juncture, so opportune a demonstration of sympathy would react most beneficially upon the political and diplomatic relations of the two countries. But, however, this may he. it is quite likely that Japan’s financial difficulties will cause less attention to lie given to foreign affairs.