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

192 ECONOMIC EFFECTS OF THE RUSSO-JAPANESE WAR

motion or extension of enterprises which had been thwarted
by the war greatly added to the import of raw materials.
Thus, the foreign trade after the war continued to grow in
volume, but the balance of trade was still very unfavorable to
Japan. The root of the whole evil was in the war itself. It
is true that in I906 the exports exceeded the imports by some
5,000,000 yen, but this proved wholly exceptional. The
unfavorable balance of trade amounted to some 62,000,000
yen in I907 and to some 58,000,000 yen in I908. This state of
things continued until the outbreak of the World War, the
excess of imports over exports totaling a little short of
Ioo,ooo,ooo yen in I913. The exceptional conditions prevailing in I906 may be roughly analyzed as follows: The
increase in exports was primarily due to the world-wide commercial boom, as can be proved by the phenomenal demand
for raw silk in that year. The cessation of the importation of
war supplies had much to do with the decided decrease in
imports, but the slight falling off of prices from the restoration
of peace until the first half of I906 also made the importers
careful of new orders in anticipation of bad times. Again,
during the war and until the first half of I906, new enterprises
were stopped and such items as iron, machinery, rails, rolling
stock, and the like were imported much less. Thus, the
excess of exports was limited to I906, and after that year
the currency continued to be inflated and prices continued to
soar. The excess of imports for several years led to the heavy
exodus of specie, which, combined with the annual payments
of huge sums of interest on foreign bonds, threatened to shake
the foundation of Japan's conversion systems. The RussoJapanese War was solely responsible for these conditions.
From the general observations above outlined, we now
turn to examine our foreign trade according to merchandise
and countries.
Observations according to merchandise
The changes in our export and import trade outlined in the
preceding pages may be made clearer by a glance at the