mineral resources, having good coal mines. at Kiushiu and Hokkukaido. The climate. of Japan varies in different localities, but on the whole is exceedingly healthy. Consisting as the country does of numerous islands she has many good harbours and trading ports. Wages are low though they might rise if a corresponding increase of labour is required. The credit system is fairly well carried out and is growing day by day. There are about four hundred banks, including the Bank of Japan; and the medium of exchange has a regular standard. The principal exports are silk, tea, coal, and rice. Japan is not the producer of raw goods for manufacturing purposes, but simply works them up. Her area is not in comparison

Sir H. Parkes, late Minister of England in Japan, said: "The statement of the national liabilities this year (1878), shows that Japan has kept faith with her foreign creditors, the interest on her foreign debt and the sum requisite for the payment of the amount of capital redeemed during the year having been duly provided. There is no reason to doubt that care will be taken to ensure punctual payment in future on this account until the entire extinction of this debt in 1895." Japan has never failed to pay her foreign debts.

with the commercial greatness which she will attain in the future. She may import raw goods from America, Australia, and the Asiatic countries, in the same way that England does. Her position enables her

also to obtain wool from Australia and California, also cotton from China, Manchooria, India, and Queensland. All these imports are worked up into different manufacturing goods. She has an advantage here over England, for she has not so far to send her manufactured goods, and does not need, like England, to send them all round the world.

Thus we see Japan has ample scope from a commercial point of view, and has plenty of friendly countries close at home for the production of her raw material, and has great advantages in sea routes to America and Australia.

The Japanese are born sailors, being islanders.

There are

several large steamship companies whose ships are continually

I

There is also a Maritime Insurance Company.

plying along her own shores and also to the mainland of China, and one company contemplates shortly opening communication with North and South America. It has often puzzled me why Japan does not hold closer relations with Australia, especially as Australia is becoming one of her most important neighbours in commerce. I can certainly predict that if this suggestion comes to pass, that together they will in the future hold the key of the Pacific trade.

Australia and her near colonies have already begun to play an important part in the affairs of the Pacific; and why should she not, considering their natural wealth and general progress? European Powers have begun to take great interest, both commer cially and diplomatically, in these colonies. England, France, Spain, and Holland long ago saw the advantage of having secured coaling stations in the Pacific, and England and France have always taken great care in selecting posts in the immediate vicinity of

I Light-houses-fifty-seven in number and some of them are very powerful.

the sea route between America and Australia; and since the working of the Canadian Pacific Railway and the Panama Canal, they have begun to annex those islands which lie near the route from Panama to the Australian colonies, and from the latter to Vancouver. The French occupation of Tahiti and the Rapa (both containing good harbours) in 1880 was with the distinct object of controlling the sea the sea route from Panama to Sydney, Brisbane, and Auckland. England also began to fortify Jamaica in 1887, and she is now casting her eyes on Raratonga. The dispute regarding the New Hebrides and the Samoan Conference 1 were simply for the protection of the Vancouvan-AustralianSan-Franciscan sea-ways. England has lately annexed the Ellice Islands and undoubtedly will shortly occupy the Gilbert and Charlotte Islands.

The Samoan Convention declared the Samoan Islands to be neutral territory. The citizens and subjects of the signatory powers will enjoy equal rights and the independence of the islands is recognized with Malietou as king: Jan., 1890.

Germany also has been considering the Asiatic-Australian routes, foreseeing that the whole Pacific question rests on that basis. In 1884 she annexed New Guinea, and the Bismarckian policy proved a severe blow to the British power in the North and West Pacific. There are three great sea routes from New South Wales to Hong Kong and other parts of the North Pacific; one travels eastward of the Solomon Islands and New Caledonia (6,000 miles) and the other two westward of the above-mentioned islands (5,500 and 5,000 miles).

The German occupation of New Guinea actually resulted in her having the entire control of these three important sea routes. The English possession of the Treasury Islands, the depôt made there, and of the Louisiade Archipelago is certainly not strong enough to protect these routes, though they are very important for the defence of the Australian colonies. Even the trade route from Vancouver's Island to Brisbane has to a certain extent been endangered. It would be policy on England's part to annex the