a 'nest' of eels, or of one of those curious litters of rats which are for ever tied together by their entangled tails.

Let us now briefly summarise the facts cited above, and see to what deductions they lead. We have in the first place seen that some inordinately rich gold deposits have been discovered in Western Australia. But the auriferous formations are unreliable for the purposes of ordinary mining, owing to the irregular course and uncertain quality of the auriferous deposits. The depth and course of formation have nowhere been tested to any extent, but numerous disappointments have already been caused by the pinching out of reefs, and there will no doubt be more of them. Crushings are very irregular, and development has not advanced beyond initial stages. In consequence it is foolish to profess unbounded faith in the future of these mines, and still more foolish to 'back' such faith. The most favourable attitude which cautious persons can assume is, as Dr. Schmeisser hints, to wait for a year or two until more extensive developments have taken place;' but the balance of evidence provided by the experience that has hitherto been gained forces us to conclude that scepticism is wiser than even an open mind. There are already thirty mines that have absolutely failed; there are few indeed that may be regarded as permanent successes, as fit media for the safe investment of capital.

There never was inflated, unreasoning speculation yet which did not come to grief, from the tulip mania of 1634 down to the Kaffir boom of 1895; and the Westralian craze of 1896 is not likely to be the first exception to the rule.

S. F. VAN OSS.

1896

COMMERCIAL MORALITY IN JAPAN

WITHIN the last few weeks there has been a renewal of interest in the discussion on commercial morality which, recurring at intervals throughout the last few years, has directed attention to the ethics of commerce. The facts upon which the present discussion is based are by no means new. Mr. Herbert Spencer, writing thirty-five years ago, gave a number of similar instances of corruption in his essay on The Morals of Trade,' where, summing up the general opinion expressed by his mercantile informants, he says: 'On all sides we have found the result of long personal experience to be the conviction that trade is essentially corrupt.' Nevertheless, he demurs to the suggestion that the commercial morality of the time was inferior to that of a hundred or a hundred and fifty years earlier, when, as Defoe showed in his Complete English Tradesman,' a state of things existed which was not only no better than that prevailing to-day, but was in many respects decidedly worse. 'There was scarce a shopkeeper,' says Defoe, who had not a bag of spurious or debased coin, from which he gave change whenever he could.' After dealing with this and other facts which he adduces, Mr. Spencer comes to the conclusion that while the great and direct frauds have been diminishing, the small and indirect frauds have been increasing, alike in variety and number; and against this state of things he suggests that there is no remedy save a 'purified public opinion.' When,' he says, 'that abhorrence which society now shows to direct theft is shown to theft of all degrees of indirectness, then will these mercantile vices disappear. When not only the trader who adulterates or gives short measure, but also the merchant who overtrades, the bank director who countenances an exaggerated report, and the railway director who repudiates his guarantee, come to be regarded as of the same genus as the pickpocket, and are treated with like disdain, then will the morals of trade become what they should be.'

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Such a higher tone of public opinion Mr. Spencer did not regard as likely to be reached in the near future. Throughout the civilised world, especially in England, and above all in America, social activity is almost wholly expended in material development. And as, in times when national defence and conquest were the

chief desiderata, military achievement was honoured above all other things, so now, when the chief desideratum is industrial growth, honour is most conspicuously given to that which generally indicates the aiding of national growth.' These sentences are eminently fitted to preface a consideration of commercial morality in a country which at the present time is exciting much interest by reason of its phenomenal progress. In Japan the military period was supplanted by the industrial period, not, as in other countries, by a process of natural evolution, but as the result of a sudden convulsion, which in less than ten years converted the State from feudalism and autocracy to industrialism and constitutional government. The results have been curious and striking, as well as instructive to the sociologist. The territorial noble or clan leader, of ancient lineage, holding his own court, and possessing with his army almost complete administrative autonomy, suddenly found himself a cipher, unless he chose to embrace politics and maintain a constant struggle for personal supremacy with his fellows. The samurai, accustomed to estimation by the common people as a hero, but with little education save in the art of war, found himself at the same time in a position where the military tactics he had learned were of no value to him, and where he must labour with hands or brain to save himself from starvation. On the other hand, the merchants, hitherto occupying the lowest rung on the social ladder-lower than the labourers who tilled the soil, and but little above the Eta, or pariah class-discovered that trade, erstwhile despised, was now a passport to position, industrial exploitation ranked as a virtue, and wealth conferred honour and power.

But though trade now became an honourable and recognised profession, in which even the ancient territorial aristocracy could engage without losing caste, but little change occurred in the methods which characterised it in the centuries of military supremacy, trader was but another name for trickster, and the pursuit of commerce practically argued lack of integrity. To recognise a low ideal in one class, and to speak and act as if in the circumstances there could be no higher ideal, is to originate and encourage a defective standard which no sudden change of environment can immediately alter. And thus we find it the unanimous opinion of those in a position to judge, that Japanese commercial morality is of a defective type when compared even with the standard prevailing in China, where trade has never been stamped as degrading, or with the standard of those nations which, amid all the trickery immemorially associated with trade, have yet kept before them a certain standard of integrity in business as in other walks of life. It is, indeed, a common belief among those who have investigated the conditions of trade in Japan, that commercial morality there stands almost on the lowest plane possible to a civilised people, and that, with few excep‐

tions, even Japanese who prove estimable and high-minded in every other matter are not to be trusted when business transactions are in question. As a direct outcome of the contempt and degradation visited upon trade in feudal days, all classes now appear to regard commerce simply as a game of besting,' and the man who fails to take advantage of his neighbour when opportunity serves is looked upon rather as a fool than as one whose example should be praised and imitated.

It is well, therefore, at a time when Japanese merchants are endeavouring to enter into direct relations with firms abroad, that the position should be clearly understood; and as a page of illustration is worth more than a volume of comment, I propose to relate some facts of recent occurrence, from which the reader will be able to draw his own conclusions. A case decided by the Japanese courts last year affords a good insight into Japanese methods of carrying on business. It has attracted much attention locally, in view of the fact that by the Revised Treaty with Japan which has now been signed the foreign merchant will come under Japanese law and Japanese administration, and mercantile transactions will consequently be decided by Japanese custom. A firm of British merchants last year imported a hundred bales of yarn to the order of a well-known and wealthy Japanese trader, who at the time was president of the Yokohama Yarn Guild. By the time the goods arrived, however, the market had declined, and the transaction promised to result in a loss to the Japanese importer. He therefore adopted a course which foreign merchants bitterly complain is a common practice with the Japanese trader in similar cases, and refused to take delivery of his goods, his pretext for not fulfilling his engagement being that he had ordered goods with a purple and not a red chop' or mark. Finding that their customer obstinately refused to take delivery of the goods he had ordered, the British firm brought an action against him in the Japanese court, and eventually judgment was given in their favour, the Japanese yarn importer being ordered to pay the full claim of 29,528 dollars, together with insurance, interest, and warehouse rent. This was so far satisfactory, but the sequel was far otherwise. Some days before the judgment was delivered a deputation from the Yarn Guild waited upon the representative of the British firm in Yokohama, and proposed a compromise very favourable to the defendant, and proportionately against the interests of the plaintiffs. The foreign merchants refused to entertain it; whereupon they were told that unless they agreed to the proposal and stopped proceedings, they would be placed under a boycott, and none of the Japanese yarn merchants would have any dealings with them in future. Refusing to be intimidated, the firm allowed the case to proceed to judgment, and instructed their counsel-a Japanese who is a barrister of the Inner Temple-to inform the

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court of this attempt to interfere by threats with the administration of justice. He did so, but without effect, for the judges, while giving a decision for the plaintiffs, refused to take any notice of the gross contempt of court which had been committed by the defendant.

Naturally, the fact of the judges declining to pass any comment on their conduct, or to take any action against them, emboldened the Japanese merchant and his business friends, and the threat of boycotting was renewed in more precise terms than before. The British firm found themselves in a position where there appeared no hope of any protection from the law, while they were aware, from previous cases of this nature, that the boycott would be strictly carried out, and might mean ruin to their business. After anxious consideration, it was at last decided to give way to the pressure of the Guild and accept the so-called compromise, by the terms of which they were losers to the extent of 2,150 dollars. Thus the Japanese business men of Yokohama were able to thrust an unfair and wholly inequitable arrangement upon the firm of foreign merchants, in sheer defiance of the law, and without the shadow of excuse or justification in any code of commercial morality.

The case is only one of many, differing in details, but alike in illustrating the standing complaint among foreign merchants in Japan, that the native trader will not honourably fulfil his engagements if by so doing he is likely to suffer loss. On the one hand, orders given and contracts signed are regarded by Japanese as so much waste paper when the market declines; while, on the other, the foreign merchant is held strictly to his agreement should the prospective loss be his. The serious point is, that we have here an example of a Japanese court giving an equitable decision, but remaining absolutely passive in the face of information as to deliberate measures taken to nullify its judgment. Another very significant feature is that in the discussion which ensued not a single Japanese journal expressed any condemnation of the methods pursued by the defendant and his Yarn Guild; several, indeed, went so far as to justify them, and a correspondent, who appeared to voice the general feeling of the native traders, wrote to a Japanese journal a quaint sentence in English that will be found very instructive. It ran as follows:-The saibansho (court) had its say from a legal point of view of the question, but the trade practices long established at Yokohama [i.e. of holding native traders to their contracts], so often objected to by Japanese merchants, but maintained with dogged obstinacy by some of the foreign merchants, are not such as would justify, in the name of equity, an appeal to court in every case of differences between the parties.' The meaning of which is, that the decisions of the courts are to be ignored and rendered of no effect because they are not approved by the persons supposed to be subject to them!