Expenditures of the Russo-Japanese war / by Gotaro Ogawa.

EFFECTS ON COMMERCE

I89

MOVEMENTS OF GOLD AND SILVER, 1903-7
Gold and Gold and Excess of Excess of
Year silver exports silver imports imports exports
Yen Yen Yen Yen
903................ 19,00I,198 27,807,469 8,806,270....
1904............... 107,795,858 33,946,655.... 73,849,202
1905......... 6,354,756 31,506,972 15,152,216....
906............... 25,784,436 47,211,197 21,426,76....
1907. 18,759,285 8,256,503.... IO,502,782
-I

The war acted upon the export trade in two obvious ways.
In some respects it tended to hinder the growth of our foreign
commerce, while in others it contributed to its development.
The shortage of capital and labor must first be pointed out as
among the effects under the first category. The capital in
the country was largely absorbed by the government or else
transferred to the manufacture of war supplies, thus dealing
a more or less severe blow to the production of ordinary goods
through paucity of capital. The labor market was in no
better condition, some one million men being called to the
colors and huge numbers of workmen being employed by
munition factories. In the second place, it should not be
overlooked that the war itself directly impeded the export
trade by the ceaseless consumption of munitions. The last
but not the least important factor was the rise in prices of
various commodities through the war. High prices were
brought about (I) by the increased issue of notes attendant
upon the domestic loan policy, which enabled an increased
issue of convertible notes, and the inflow of specie resulting
from the flotation of foreign loans; (2) by the imposition of
special war-time taxation; (3) by the commandeering of
capital and labor for military purposes; (4) by the shortage
of transportation facilities due to the military use of the
means of communication; and (5) by other war demands.
Consequently prices rose steadily, especially those of foodstuffs.
These circumstances obstructed the growth of the export
trade, it is true, but it must be remembered that there were
three important neutralizing factors. In the first place, the