JAPAN
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conditionally upon their loyalty to the Shogun; but their rank and power disappeared with the Shogunate. On the 7th July, 1884, however, His Majesty issued an Imperial Notification and Rescript rehabilitating the nobility, and admitting to its ranks the most distinguished civil and military officials who took part in the work of the Restoration. The old titles were abolished, and have been replaced by those of Prince (Ko), Marquis (Ko), Count (Haku), Viscount (Shi), and Baron (Dan).
REVENUE AND EXPENDITURE
The annual State revenue pertaining to the general account was estimated at 433,708,755 yen for the year 1905-08, and 494,704,707 yen for 1906-07, while the expendi- ture was estimated to slightly exceed the revenue in 1905-07 and to balance it in the current year. The enormous increase in expenditure in recent years is a consequence of the war with Russia, for of the total expenditure of about 494,000,000 yen the normal expenditure unconnected with the war amounts to but little more than 241,000,000 yen.. The total of the national debts to the 31st March, 1906, amounted to 1,872,3×1,121 yen (roughly £187,000,000), but this figure has been since increased by further loans to meet expenditures connected with the war. The total of the public loans raised for this pur- pose exceed 1,700,000,000 yen (£174,180,327), which is three times the total amount of the loans prior to the outbreak of the war. The greater part of this huge sum was raised in Europe and America, and to effect the redemption of these loans the government has provided a sinking fund by annually transferring a sum of 110,000,000 yen (£11,270,491) from the general account.
The grand total of the extraordinary expenses connected with the war with Russia. was 1,982,000,000 yen (£203,073,770), yet, despite the imposition of extraordinary special taxes and the other circumstances peculiar to times of war, economic activity was well maintained, and the Finance Department in its last annual report was able to state that during the progress of the war "a marked rise was noted in the amount of advances made by banks, and of bills cleared, and our foreign trade has advanced since the outbreak of the war.'
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The first public loan raised in the financial history of Japan was raised in London in order to supply the funds required for constructing the first line of railway in the country. The sum raised was £4,880,000 and interest was paid at the rate of 9 per cent. The Sterling foreign loans raised in 1904 and 1905 bear interest at the rate of 6, 43 and 4 per cent. Two six per cent. loans were raised in 1904 in London and New York, the first for £10,000,000 and the second for £12,000,000. The issue price of the first was £93 10s., and of the second £90. 10s. Both are redeemable in seven years and the Customs duties are pledged as security. A Sterling loan of £30,000,000 at 4 per cent. interest was raised in London and New York in March, 1905, the issue price being £90, the period of redemption 20 years, and the security the net profits of the tobacco monopoly. Another Sterling loan of £30,000,000 at 43 per cent. was raised in July, 1905, in London, New York and Germany, the terms and security being the same as in the preceding loan. These four loans were raised for the express purpose of meeting the extraordinary expenses of the war. In November, 1905, a 4 per cent. Sterling loan of £50,000,000 for the purpose of consolidating the national debt was decided upon. Half of this was raised immediately in London, Paris, New York and Germany, the issue price being £90, and the period of redemption 25 years. The remaining £25,000,000 when issued is to he applied to the conversion or the redemption of the 6 per cent. Sterling loan.
ARMY AND NAVY
Until the war with China the Army consisted of six divisions and the Imperial Guards, with a peace footing strength of 70,000 in round numbers, and a war footing of 268,000, exclusive of the Gendarmerie and the Yezo Militia; but on the conclusion of the war a large scheme of expansion was adopted, under which the number of divisions. was raised to twelve, exclusive of the Guards. The peace footing is now 160,100, and the normal war footing 633,600.
At the conclusion of the war with China, Japan found herself in possession of a fighting fleet of forty-three serviceable vessels-independent of twenty-six torpedo- boats-their aggregate displacement being 78,774 tons. Of these, ten, with an aggregate displacement of 15.055 tons, had been captured from China, namely, an armour-clad turret-ship of 7,335 tons, two steel cruisers, six steel gunboats, and one- wooden gunboat. (Prior to the capture of the Chen-yuen, now called the Chin-yen, Japan did not possess a line-of-battle ship. Her fleet consisted entirely of compara- tively small vessels). There were also on the stocks two steel cruisers and a steel despatch vessel. An expansion scheme, extending from 1st April, 1896, to 31st March,. 1906, was then adopted and orders were subsequently placed for ships in Great Britain, the United States, France, and Germany, as well as in the home yards. The
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