The resources of the Korean peninsula have never been systematically developed; indeed, until a very recent date no intelligent attempt has ever been made to determine what they actually are. The Korean Government has usually been content with such an adjustment of “squeezes” as seemed best to meet the exigencies of the times—administered according to the temperament and interests of the local magistracy. At intervals, however, the Court officials have carried their more erratic and incalculable method of extortion and of plundering the people rather widely into effect. Then those of their number who chanced to be His Majesty’s favorites of the hour have enjoyed most of the surplus; the people have submitted to, or savagely and desperately revolted against, the inevitable; but the country at large has continued poor at all times, and has frequently been devastated by famine. As to the exploiting of Korea’s resources by foreign capital, the facts have been quite uniformly these: a combination of adventurers from abroad with Koreans who either possessed themselves, or through others could obtain “influence” at Court has been effected; sometimes, but by no means always, the Emperor’s privy purse has profited temporarily; but the main part of the proceeds has been divided among the native and foreign promoters. Of late years, some of the “concessions” have been almost, or quite, given away in the hope of thus obtaining foreign interference or sympathy. In only rare instances has the national wealth been greatly increased in this way, or even the treasury of the Government been made much the richer.

It is plain, then, that if the Japanese Protectorate is to be made really effective for the industrial uplift and development of the Korean people, as well as capable of rewarding Japan for its expenditure in substantial ways, the resources of the country must be intelligently explored and systematically developed. Here is where the work of reform must begin. In intimate relations with this work stands, of course, the establishment of a sound and stable currency. For the financial condition of Korea up to very recent times was as disgraceful as its industrial condition was deplorable. To this important task of developing the resources of Korea and reforming its finances, Marquis Ito, as Resident-General, and Mr. Megata, as Financial Adviser, have devoted themselves with a patience, self-sacrifice, and skill, which ought ultimately to overcome the tremendous difficulties involved.

“Korea,” says the Seoul Press, “is essentially an agricultural country. Eighty per cent. of her population till the soil, and stinted as are the returns which the soil is willing to yield under the present method of cultivation, the produce from land constitutes at least ninety per cent. of the annual income of the country. To improve the lot of the toiling millions on the farms is therefore to improve the lot of virtually the whole nation. It was in recognition of this obvious fact that Marquis Ito, in addressing the leading editors of Tokyo, in February, 1906, previous to his departure for Korea to assume the duties of his newly appointed post as Resident-General, laid particular emphasis on the urgent importance of introducing agricultural improvements in this country. This question was consequently the very first to engage the serious attention of the authorities of the Residency-General.”[58] The statistics for the year ending December 31, 1906, show that out of an amount of taxes estimated at 6,422,744 yen, the sum of 5,208,228 yen was apportioned to the land tax, and 234,096 yen to the house tax. The difficulty of collecting the taxes, either through the corruption of the officials, or by reason of the inability or inexcusable and often violent resistance of the people, can be estimated by the fact that, of the land tax 2,214,823+ yen was still “outstanding,” and of the house tax, 68,794+ yen.[59]

The institution of an Experimental Station and Agricultural School at Suwon has already been described (p. 122 f.). But in order to accomplish the needed development of Korea’s agricultural resources, the peasant farmers must themselves be induced to reform their methods of cultivation. As might be expected, however, the Korean peasant farmer is suspicious of all attempts to improve his wasteful methods, is extremely “conservative” (a much-abused word) in his habits, and slow to learn. Some good work has, however, already been done by way of opening his eyes. The example of the Model Farm, which is limited to one locality, is supplemented by the example of the Japanese farmers who are settling in numerous localities. To take an instance: improved Japanese rice seed was distributed gratis in various parts of the country. But even then it was necessary to guarantee the farmers against loss in order to induce them to try the experiment of cultivating it. The result of the experiment was most encouraging. The yield was in every case greater than that obtained from the native seed; in some cases the gain in the product being as much as from six to ten tō (3-5 bushels) per tan (¼ acre). Similar experiments are now in progress with the seed of barley and wheat, imported from Japan, America, and Europe.

In intimate connection with these plans for developing the agricultural resources of Korea stands the project for utilizing the unreclaimed state lands. And surely here, at least, all those who have the slightest honest feeling of regard for the real interests of the country ought to wish that the people, and not the Court, and not the foreign promoter, should be primarily considered and protected. How great are the chances for waste, fraud, and unwise action in the distribution of this form of the nation’s resources, no other country has had better reason to know than has the United States.

For the purpose of “Utilization of Unreclaimed State Lands” a law was prepared under the advice, and by the urgency, of the Japanese Government, and promulgated in March of 1907. This law, including the Supplement, consists of seventeen articles, according to which all uncultivated lands, marshes and dry beaches not constituting private properties, will be included in the category. On application to the Minister of Agriculture, Commerce and Industry, these lands will be leased for a period not exceeding ten years. The Minister of Agriculture, Commerce and Industry is authorized to sell or give gratis the leased lands to lessees who have successfully carried out the prescribed work on them. For the five years following the year in which such a sale or bestowal has taken place, taxation on these lands will be at the rate of one-third of the tax levied on the lowest class lands of the province of which they form a part. The lessees will be unable to sell, transfer or mortgage the leased lands without permission of the Minister above mentioned. Charters for lands on which the prescribed work has not been started within one year of the date of their granting shall be cancelled, also those for lands on which the work, after commencement, does not make sufficient progress—unless proper reason for that can be shown. Any person who utilizes unreclaimed state lands in violation of the present law will be liable to a fine of between five and two hundred yen inclusive. In the case of the utilization of unreclaimed state land less than three cho (some 7 acres) in area, the present law will not be applied for the time being, the old custom in force being adhered to. Possessors of charters for the utilization of unreclaimed state lands which have been obtained before the promulgation of the new law and which are still valid must apply to the Minister of Agriculture, Commerce and Industry for their recognition within three months of the date of enforcement of the present law. When the lessees who have obtained such recognition have succeeded in carrying out the prescribed work on the leased lands, the lands will be presented to them by the Government.

Another important part of the development of the agricultural resources of Korea is the introduction of wholly or largely new products of the land. This is, indeed, a more truly “experimental,” and in some cases highly speculative, procedure. There will doubtless be, as its inevitable accompaniment, a larger percentage of failures; there maybe, if the experiments are not intelligently made and hedged about with educational and legal precautions, financial losses which the poverty of the country can ill afford to bear. There is, perhaps, peculiar danger of this under the dominant Japanese influences; for Japan has herself not as yet, industrially and financially, got her heel firmly on the ground. Experiments of various kinds, of a highly speculative character, are still according to the mind of the nation at large. But the Government of Japan is meantime training its own young men to a more thorough scientific acquaintance with the facts and laws which determine industrial prosperity; and under the administration of the Residency-General in Korea the Japanese Government is committed to the plan of giving to the Koreans also the fullest share in the benefits of this training.

To mention a single instance of the class of projects to which reference has just been made, we quote the following paragraph from an official paper:[60]

Of the same character as the project for raising cotton in Korea, although rather less experimental, are the plans for increasing the product of tobacco. Of this Mr. Megata says in his last report: “Investigations are being made of the various sources of wealth, of which tobacco is regarded as the most promising. Practical examination as to the state of tobacco manufacture in this country was started in the preceding years. Exertion is being made by the Government for the extension of the general demand for Korean tobacco. Better qualities of it were selected and sent to the Tobacco Monopoly Bureau of Japan for trial manufacture. The improvement of its planting and manufacture and of the selection of seed is being studied. For the purpose of investigating the relation between the climate and tobacco-planting, the survey of the climate of the country was commenced; and the result of the investigation is now to be taken into consideration for the safety and progress of that industry in this country. Korean youths to engage in the investigation of the resources of national wealth are being trained for the task.”

Next to agriculture in importance stands the development of forestation in Korea. The Koreans have never given any attention to the art of growing trees either for timber or for fuel. The late Tai Won Kun, as one of the ways adopted by him for ruining the country while building a palace for his son, ordered every owner of large, serviceable trees throughout the land to cut them down and transport them to Seoul at his own expense. Day by day, and hour by hour, the Korean populace, to the number of thousands of old men, women, and boys, with hundreds of bullocks and ponies, are engaged in exterminating the future forests in order to provide themselves with fuel, of which they will not be persuaded to make economical use, and which they cannot dispense with so long as their present tastes and contrivances for heating themselves and cooking their food are not changed. Hence, all over the more frequented parts of Korea the hills and mountains, unless in comparatively rare cases they are especially protected, are denuded and barren. This constant deforestation has its customary inevitable results. In dry seasons there are those chronic water famines which discourage the farmer’s cheerful industry, and which encourage him to hatred of the government, to refusal to pay taxes, and to violent and murderous revolt. But when there is abundance of rain, then follow inundations, almost as destructive to the fields as are the droughts. Mining and all other industries suffer from the same source. Thus, as says the Report of the Residency-General, when “seen from the economic, sanitary, or political point of view, one of the greatest needs of Korea at present is the rehabilitation of its forests.” The task involved in this matter of industrial reform and development of resources is, however, of the most difficult order. The rights of the people, not only to use as they please their own trees, but to plunder the hill and mountain sides of their fuel, regardless of ownership, are firmly established by usage. In the bitter weather of winter much suffering would ensue, and its consequent political disturbance, if these customs were suddenly and extensively controlled. Nevertheless, model forests have been established and instruction in forestation is given to Korean youths in a school founded for that purpose. Below are given the names of localities and the sizes of the model forests so far established, with their outlays:[62]

“Koan-ak-san and three other places in the vicinity of Seoul. Total area 2,060 cho. Outlay, about 152,000 yen, distributed over five years, commencing 1907.

“Tai-syong-san and two other places in the vicinity of Pyeng-yang. Total area 610 cho. Outlay, about 63,000 yen, distributed over five years, commencing 1908. [Nursery beds expected to be opened in 1907.]

“Oa-yong-san and one other place in the vicinity of Taiku. Total area 650 cho. Outlay, about 63,000 yen, distributed over six years, commencing 1908. [Nursery beds expected to be started in 1907.]”

The more important resources of this class are, however, the existing forests along the banks of the Yalu and Amur rivers. Indeed, the desire to gain control of this wealth of timber was one of the more immediate causes leading to the Russo-Japanese war; it is still one of the more difficult points for satisfactory adjustment on the part of the three nations chiefly concerned. For the development of these resources an agreement between Japan and Korea was signed on October 19, 1906, by the Marquis Ito and the Korean Prime Minister, the Minister of Finance, and the Minister of Agriculture, Commerce and Industry. The text of this agreement and a brief introduction, stating its importance, is given in Mr. Megata’s last report.[63] “The banks along the Yalu and Amur,” says this report, “are rich in forests which have never been cut. Proper management of those forests would yield a considerable revenue to the treasury; but at the same time it would require not a little expense. In the present condition of the Korean finances it would not be wise to undertake this on the account of Korea alone, although the opening up of such a source of wealth is highly necessary.” An agreement was concluded between the governments of Japan and Korea in October last to carry on the forestry along those banks on their joint account, each government investing 600,000 yen. The agreement newly concluded reads as follows:

For centuries Korea has been reputed to be rich in deposits of gold; and it is a fact that Japan, by trading with Korea, obtained most of this precious metal, which the Dutch, by shrewd management of their relations in trade with Japan, carried off to Holland. Both these Oriental countries in this way contributed to the enrichment of a limited number of Europeans. But the real condition of the mining resources of the peninsula has never been investigated; even the amount of the annual product of gold has never been accurately ascertained; and—worst of all—there have never been any laws or accepted principles to govern the mining industry. The result of all this ignorance, confusion and fraud is not difficult to conjecture. “Some mines,” says the official report, “are under the direct control of the Minister of Agriculture, Commerce and Industry; with others the granting of a concession rests with the Chief of the Mining Bureau; with others again, the subordinate officials on the spot have it in their power to allow or disallow their working; and to make confusion worse confounded, there are even mines operated under patents secretly granted by the Emperor without consulting the Cabinet. This chaotic state of things is bad enough, but it does not stop here. For in some cases the concessions granted are cancelled without compensation; while in other cases, one and the same mining district has been leased to several persons one after another until it has become utterly impossible to tell which is the rightful concessionaire. Then, again, there are cases in which the Departments of Agriculture, Commerce and Industry, of Finance, and of the Imperial Household, severally and independently, have levied mining taxes to suit their own convenience; while in others, the provincial authorities quite arbitrarily collect imposts. In the midst of this indescribable confusion, the cunning and unscrupulous have not been slow to make the most of the situation, by having recourse to bribery, instigation, intimidation, and other unlawful schemes, until vast tracts of mining lands have come under their control.”[64]

To remedy, as far as possible, these evils and to limit their continuance into the future, a General Mining Law was proclaimed on July 12, 1906, and a Placer Mining Law on the 28th of the same month. Both these laws were accompanied by the enactment of detailed rules. The principal features of these laws provided that mines, whose ownership could not be definitely ascertained, should revert to the state; that the limits of mining concessions should be definitely prescribed; that mining rights which could be established as legally gained should be legally protected; that the taxes on mining properties should be unified; and that priority of application, in cases of competing concessions, should, until examination could be made, stop the granting to others of the same concession in an arbitrary way. In the effort to put into effective operation these legal enactments it was necessary to call upon the Korean authorities to promulgate a list of the mines belonging to the Imperial Household, and also a list of such Crown mines as the Household might intend to work for itself. But the Korean authorities, either from ignorance, sloth, or other even less creditable reasons, did not make haste to prepare such a list. Meantime, all mining rights were, legally considered, in abeyance. It was only after repeated and urgent remonstrances from the Resident-General, and as late as November 17, 1906, that the required list was promulgated. It then appeared that the Imperial Household not only laid claim to mines claimed by Japanese, but also by American and European concessionaires.

The falsity of the statement, so repeatedly made abroad, that the Koreans are being robbed by Japanese, to the detriment of the interests of other foreigners, under the protection of the Japanese Government in Korea, is made obvious by the following, among other facts. Had the applicants to these contested claims been only Japanese or Koreans, they would have been required to survey the properties and make out maps at their own expense; but in deference to the interests of the American and European claimants the survey was made by experts at the expense of the state. And while only twenty per cent. of the 200 applications made by Japanese were granted, “virtually all the applications made by Americans and Europeans were granted.”

Besides gold, which is found especially in the form of gold-dust, there are in Korea silver, copper, graphite, and coal. The coal is not good for steaming purposes, nor fitted for export; but when made, by mixing it with earth, into bricks or balls, it is valuable as fuel for those who can afford its use. The total annual value of these mineral products, for reasons already explained, cannot be accurately ascertained. Hitherto much of the gold has been smuggled out of the country in order to escape the export and other taxes. It is calculated, however, by the Residency-General that in the aggregate these products do not fall below 6,000,000 yen.

We shall not attempt to speak in detail of the other natural resources of Korea, of its fisheries, or its sericulture, or its raising of fruit. But all these have been in the past left in a lamentable condition of ignorance and disorder; and all of these are to be made objects of attention, with the purpose of reform, by the Korean Government under the Japanese Protectorate.

What has been shown to be true of the natural resources of Korea, in soil, forests, mines, and other products, is true of its manufacturing industries. Early in her history Korea attained a considerable development in the arts of weaving, pottery, paper-making, metal-casting, and the dressing of skins. In several instances Japan borrowed her models from Korea in all these lines of the industrial arts. But to-day there is absolutely nothing that a foreign traveller would covet to take away from Korea except, perhaps, a Korean brass-bound chest or a set of its rude brass utensils for holding food. The founding of an Industrial Training Institute in the spring of 1907, and a statement of what it proposes to try to accomplish for the revival and development of Korean industrial arts, have been referred to in an earlier chapter (p. 128 f.). Its practical results must be awaited with patience; but now that the control of the Resident-General over internal affairs in Korea is increased by the Convention of July, 1907, we may reasonably anticipate favorable results in due time.

The matter of the Customs stands midway between the development of the natural resources and the control of finance; it therefore concerns both the topics which are being briefly treated in this chapter. The following quotation from the last report of the Financial Adviser to the Korean Government gives all the information necessary to our purpose upon this point:

The development of the resources of any country is, of course, intimately dependent upon the soundness and wisdom of its financial policy and administration. This is increasingly so under modern conditions in countries where international relations are of the greatest importance. Nothing could have been worse than the chaotic condition of the Korean finances when Mr. Megata, in conformity with the Convention signed between Japan and Korea on the 22d of August, 1905, was appointed Financial Adviser to the Korean Government by the Imperial Japanese Government.[65] Mr. Hulbert, who afterward became the most unsparing critic of Mr. Megata’s policy, himself wrote in the Korean Review, in 1903: “It is encouraging to note that every part of the Korean Executive has come to the conclusion that something has got to be done to put Korea’s money system on a more secure foundation.” It was, however, largely this same “Korean Executive” which had been chiefly responsible for the deterioration of the currency and for the entire confusion in the financial condition of the country. On this matter of the deterioration of the currency, the Financial Adviser says in one of his Reports:[66] “The currency of Korea, though nominally on a silver basis, has hitherto in reality possessed no standard, and only cash and nickel coins have been in circulation. Before the commencement of the reorganization of the currency, the market rate of the nickel coins fell to 250 won for 100 yen in gold (Japanese currency); while that of the cash fluctuated from 100 per cent. to 60 per cent. premium. All cash pass at a uniform rate in spite of their different sizes and weights. The market rate varies according to the condition of supply and demand. When the market rate is equivalent to one rin (1-1000 yen Japanese currency) it is called par; when it is 2 rin, the cash is at 100 per cent. premium. Cash are preferred in some provinces, nickel coins in other provinces. Since the commencement of the withdrawal of the old nickel coins in June, 1905, the market rate has gradually risen, and at present it is steady at the normal rate of 200 won to 100 yen. (According to the Currency Law, the face value of the old nickel coin is 2.5 sen, its intrinsic value being 2 sen).”[67]

Nor was the chaotic state of the currency the only evil connected with its use. The cash, while having the preference over the nickel coins because its intrinsic value was more nearly equal to its market value, and it was therefore more stable, was intolerably inconvenient for monetary transactions of any considerable size. Its value was so low as to make it not worth the risk of counterfeiting. But even the traveller for a few weeks in the country could pay his expenses only by taking along several mule-loads of these petty coins. The nickels, on the contrary, were exceedingly unstable, and were subject to wholesale debasement and counterfeiting. It is true, as Mr. Hulbert charges, that “counterfeit nickels were made largely by the Japanese in Osaka”; but it is also true that these coins were counterfeited in large quantities by the Chinese, and that the worst offenders were the Koreans themselves. Here, as everywhere during the contemporaneous history of Korean affairs, it was the “Korean Executive” which was chiefly to blame. In some cases the Government loaned its coining machine for a money consideration; in others, the “promoter of the minting industry” was obliged to content himself with a manufacturing outfit obtained on private account. In this connection the author calls to mind an astonishing but authentic story of how a boy, deputed by his father to return to a benevolent association in Seoul a sum of money which had been originally stolen by the trusted agent of this association and loaned to the father, stole the money again and spent it in the purchase of a counterfeiting machine. It should be added that these remarkable transactions were of recent occurrence.

Japanese counterfeiters were arrested, tried and punished, after the passage of a law by the Diet making it an offence to counterfeit foreign money in Japan, with the same penalties as those applied to cases of counterfeiting Japanese money.[68] Even before that, administrative measures were taken by the Japanese to break up the illicit industry. So far as Korean offenders were concerned, nothing was done to punish the chief culprits. In fact, the Korean Government was hardly in a position to do anything, having itself made large over-issues of nickels, and even surreptitiously farmed out the right to private individuals to coin them. This right was exercised, among others, by a relative of the Emperor. Doubtless this official malfeasance is what Mr. Hulbert alludes to when he speaks of the “prime movers in the deterioration of the currency.”

The history of this nickel coinage is another illustration of the opera bouffe methods which characterize Korean public administration. The discovery of the potentialities of fiat currency probably came in the nature of a revelation to Korean officialdom. It opened vistas of profit never before dreamed of; all that was needed was the raw material and a machine. Finally the industry ceased to be as remunerative as at first; and the “Korean Executive,” all branches of it, discovered (in 1903) that, sooner or later, even a nickel coinage will find its true level.

Such, briefly described, was the deplorable state of the financial affairs of Korea when Mr. Megata’s administration began. This was only a brief time ago, or in 1905. What has already been accomplished for the reform of the Korean finances may be summarized as follows.[69] The first step taken was the adoption of the gold standard, followed by the promulgation of a law strictly prohibiting the private minting of nickel coins, and the endeavor to recall this currency already in circulation. Measures were also taken to popularize the circulation of notes issued by the Dai Ichi Ginko (First Bank), and to enlarge the sphere of circulation for the coins newly introduced. “The organ for the circulation of money and the collection of the taxes having been now fairly well provided, efforts will be made to restrict and ultimately prohibit the circulation of the fractional cash now in use in the three southern provinces, by encouraging the employment of notes in accordance with the law regulating currency.” “As regards the bank-notes issued by the General Office of the First Bank in Korea, the Korean Government has officially sanctioned their compulsory circulation. But, it being deemed desirable to have said Government grow firm and content in the idea that the notes are the national currency, a contract was concluded in July, last year (1906), between the Government and the First Bank, providing that the pattern and denomination of the notes shall be subject to the approval of the Resident-General and the Korean Minister of Finance; that the amount of their issue and of the reserve be reported every week to the said Minister; that the Korean Government have the power to institute inquiries and examinations with respect to the issue of notes; and that the bank be placed under reasonable obligations in return for the exclusive privilege of issuing notes.”

The General Office of the First Bank at Seoul has now been made the Central Treasury of the Government of Korea; and therefore receives on deposit and pays out the exchequer funds. It is under the competent management of Mr. Ichihara, who, after several years of study of economics and finance in the United States, became prominent as a banker in Japan, and was subsequently chosen Mayor of Yokohama. Its branches and sub-branches throughout Korea are assisted by the postal organs in handling the exchequer funds. “Notes Associations,” which undertake to popularize the circulation of reliable negotiable bills, and Agricultural and Industrial Banks, established at different centres for the accommodation of long loans, are also in part the results of Mr. Megata’s reform of the Korean finances. The most important, and doubtless most difficult, thing remaining to be done is the purifying and reorganization of the revenue system. For, as has already been repeatedly indicated, nothing can exceed the measure of ignorance, extortion and corruption, which has hitherto characterized the conduct of the provincial administrative organs.

Perhaps the most difficult problem with which the newly appointed Financial Adviser to the Korean Government had to cope was the retirement of the nickel currency. The solution of this problem was indeed difficult, but it was absolutely indispensable to the very beginning of any systematic reform. The distinction between spurious and genuine coins was scarcely possible; the distinction between those counterfeited without, and those counterfeited with, the sanction of the “Korean Executive” was impossible. The amount of both kinds was hard to determine. According to Mr. Megata’s calculation, the old nickel coins minted by the Government amounted in value to 17,000,000 won; while the spurious, but not debased, coins in circulation may have amounted to some 4,000,000 won.[70] His plan involved both the exchange of the old nickel coins for new coins of a standard value and issued under proper safeguards and restrictions, in accordance with the newly inaugurated gold basis; and also the reduction of the cash by re-minting such coins as were deficient and returning the balance to circulation. From October, 1905, the coinage of silver ten-sen pieces and of bronze one-sen and one-half-sen pieces was begun. By these it was intended to displace the circulation of the old nickel coins. The coins tendered for exchange were classified into three classes: Class A—coins exchanged at the rate of 2 old for 1 new coin; Class B—coins exchanged at the rate of 5 old for 1 new coin; and Class C—counterfeit and debased coins, defaced and returned to the applicants. By these means there was withdrawn from circulation of old coins, between July 1 and October 15, 1905, in Korean dollars to the amount of 10,722,162, of which, however, 1,411,184 were received in payment of taxes.

So radical a change in the currency of the country could not be accomplished without working hardship in certain directions. But those who have carefully examined the existing condition of Korean finances and the working in detail of the plans for reform find reason for praising the prudence and skill of Mr. Megata’s way of accomplishing a most difficult task. The details are to be found, carefully worked out and tabulated, in the official reports. It is enough for us to recognize the enormous change for the better which has taken place during the past two years in the financial condition of the peninsula, and in all the foreign financial relations to Korean business affairs; and, at the same time, to reply with a brief, categorical denial to certain criticisms from unfriendly and prejudiced sources. As to the latter point, “it is untrue,” says a trustworthy informant, “that any Korean capitalists came forward with a bona fide offer of a loan at a lower rate of interest than that procured by the Japanese Government for the retirement of the old nickel coinage. The only plan of the kind which was ever mooted had in view the borrowing of foreign capital, not Japanese. A great deal was said, after the fact, about the readiness of these capitalists to intervene; but Mr. Megata was never given an opportunity to avail himself of their alleged willingness to advance the funds until it was too late. Mr. Megata’s first object was, of course, to obtain the money as cheaply as possible. It was not until he had looked the situation over very carefully, and had made enquiries concerning the possibility of making better arrangements with foreign capitalists that he finally concluded the arrangement with the Dai Ichi Ginko.”

Another example of the same species of criticism is shown in connection with the story that the Korean Emperor desired to advance to the merchants of Seoul 300,000 yen to relieve the distress over the increased stringency in the money market, which was, of course, one of the first results of the conversion of the nickel-coin currency. “For this offer,” the authority just quoted says, “the underlying motive was undoubtedly political. There was distress among the merchants of Seoul, but there was no necessity for the Emperor’s direct intervention. If, indeed, the distress had been as great as was represented at the time, the sum offered, 300,000 yen, was not sufficient to afford permanent relief. The offer of the money was merely another instance of Korean methods. The process of reasoning was simple: Financial distress existed, due to the action of the Japanese Financial Adviser; His Majesty generously came to the assistance of his embarrassed subjects; hence gratitude to His Majesty and humiliation for the discredited Japanese Adviser. Mr. Megata did no more than to treat the matter as its childish nature warranted. It should be added that, in addition to the genuine distress caused by the stringency of the money market, there was a patent attempt to heighten the resultant agitation for political effect. This was met by offers, due to Mr. Megata’s initiative, to advance money on easy terms in deserving cases. The native capitalists made no move to relieve the situation at this supposedly critical juncture.”

The recent condition of the resources and finance of Korea can be discovered in the most trustworthy way possible under existing circumstances, only by a critical study of the detailed reports to which reference has already been made in this chapter. The following more important items are taken from the Report of March, 1907. In this report the total estimated revenue for 1907 is given at 13,189,336 yen, which is an increase of 5,704,592 yen over that of 1906. Of this total, however, 3,624,233 yen is extraordinary. The total estimated expenditure for the same year is 13,963,035 yen, which is in excess of that of the year of 1906, by the sum of 5,995,647 yen. The increase in expenditure is partly to provide for increase in salaries—a necessary measure if the amount of “squeezes” is to be reduced and a sufficient number of competent and honest officials secured; but more largely for the reform of the educational organization, for the founding and support of technical schools, for the extension of engineering works, the building of roads, of law courts, and other public buildings, the founding of hospitals; and for the extension of the police and judicial systems. As to individual items it is noticeable that the military estimates have been reduced from 2,426,087 yen, in 1905, when they were 26 per cent. of the total expenditure, to 1,522,209 yen, or 11 per cent. of the total expenditure for the year 1907. This sum has now further been much reduced by the disbanding of the Korean army, with the exception of a body of palace guards, as a consequence of the new Convention of July, 1907.

One-tenth of the entire estimated expenditure—or, more precisely, 1,309,000 yen—is attributed to the Imperial Household. But even this by no means represents the cost to the nation of the Emperor and his Court under the former occupant of the throne. For all manner of irregular, illicit, and scandalous ways of obtaining money for his privy purse were resorted to by the ruler, whose character and habits in the obtaining and use of money have already been sufficiently described.[71] The trials which have come upon the Financial Adviser of the Korean Government since his appointment, through the behavior of the so-called “Korean Executive,” can scarcely be exaggerated. One of the questions pending when Mr. Megata first assumed office concerned the size of the allowance for the expenses of the Crown Princess’ funeral. The Emperor’s private funds were at a low ebb (they always are); the national treasury was impoverished (it always had been). Yet the Imperial Treasurer, an official of the old-time stamp, insisted that one million yen was absolutely indispensable for the proper carrying out of the burial ceremony(!). This way of plundering the treasury of the country, which was considered especially legitimate by the Korean Court and its parasites, Mr. Megata dealt with in that spirit of “philosophical humor” which is characteristic of him. He patiently pointed out that the estimated prices of many of the items called for were greatly in excess of their market value. In this manner he finally reduced the wily claims of the Korean official to the modest sum of a half-million yen. Two full-dress rehearsals, which differed from the actual ceremony only in the circumstance that the coffin was empty and no official invitations to attend were issued, preceded the final pageant. On each of these occasions the long procession marched pompously through the streets, which were crowded with wrangling lantern-bearers, chair coolies, and the innumerable other horde of a low-lived Korean populace, to the dissipation of all the solemnity of a death-ceremonial, but to the delectation of the spectators as well as the participants.

The public debt of Korea in March, 1907, is here exhibited in tabular form:

TABLE OF NATIONAL DEBT

This debt, while insignificant as compared with that of civilized nations generally, is by no means so when compared with the poverty of Korea. And it will doubtless be largely increased in the near future by the necessity of putting into operation many imperative reforms and improvements of the existing material condition of the country. The possibility, however, of a rapid development of the resources and increase of revenue is also great. To take a single item: while the amount estimated from Port Duties for the year ending December 31, 1906, was only 850,000 yen, the actual income was 2,434,118 yen. Some reduction in the items allowed for expenditure is also possible—for example, that of the Imperial Household, and for the Military (a reduction already accomplished). Under a just administration, with a revision of the system of taxation, the resources and the revenue can probably be doubled in a few years, and at the same time the material welfare of the people improved. With the policy of the present Resident-General continued in force, the prospect is therefore by no means without dominant elements of hope for Korea’s future.