East Asia, The Modern Transformation notes

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Notes from

East Asia, The Modern Transformation
by John K. Fairbank, Edwin O. Reischauer, and Albert M. Craig

After the imperialist invasion ("Boxer Rebellion") in 1901 it was agreed that an indemnity of 450 million Chinese taels (about $333 million dollars of that era) would be paid with bonds "which bore interest at 4% in gold." The U.S. was to receive 7.3% of the total, the rest going to the other beligerants. [474]

Until the 1890's the United States in China had largely rode on British Empire coat tails by gaining most-favored-nation treatment. "The United States had got the benefits of Britain's free-trade empire without its odium or responsibilities." To further U.S.expansion in Asia in 1890 Congress appropriated money to "build a first class battle fleet," following the seapower doctrine developed by Captain A. T. Mahan. [475]

As an illustration of the bias of this work: "Seeing no alternative, the United States occupied Manila with a force of 11,000 in the summer of 1898." The alternative, of course, was an indpendent, democratic Philippines. [476] but ...

"These American acquisitions in 1898-99, outstripping those of any imperilist power in China, gave the United States potential naval bases at Pearl Harbor, Guam, Pago Pago, and Manila ... It was right in the middle of this period, in September 1899, that Secratary of State John Hay issued his first Open Door notes." [476]

During the 1920s the Diet (parliament) of Japan became increasingly powerful compared to the less democratic branches of government. The shift away from democratic control came with the crises of the 1930s [WPM: as in Germany and the United States] [492]

The Japanese economy grew faster than any Western nation. By the late 1930s "certain industries wtihin the great manufacturing nations of the West had become almost hysterically afraid of Japanese competition." This was not due to the colonial empire: "in purely economic terms, the empire was proably more a drain than an asset." Japan's exports, as a percentage of the economy, were lower than most European countries of the era. Some of the growth was due to population growth, which reached 73 million in 1940. [494]

Japanese economic performance was uneven in the 1920's partly because the military budget was cut sharply. It is the only modern period when the private sector contributed more to capital formation than the government sector. [497]

The Tokyo earthquake of 1923 set off a reconstruction boom. In 1924 Japan went off the gold standard, the Yen depreciated, exports increased, and a boom and inflation followed. A banking crisis in the spring of 1927 induced deflation, but the economy healed quickly. After the American stock market crash in late 1929 the finance minister, Inoue Junnosuke, restored the gold standard. The yen rose in value amidst a deflationary world economy, throwing Japan into the Depression. [498]

A new finance minister, Takahashi Korekiyo, took Japan off the gold standard in December 1931. The yen stabilized and exports resumed. "In the period of the world depression, cheaper Japanese goods were able to capture many of those markets in Asia and Africa that were not sealed up within European empires." Another contributing factor to the recovery was increased military expenditures. By 1936 the Japanese economy was doing well, but the Western nations responded with higher tariffs and outright prohibitions of Japanese goods, despite Japanese imports from America and Europe being greater than exports to those regions. This Western reaction against free trade contributed to a belief in Japan that it needed to expand its empire. [499]

In the late 1930s both major political parties vigorously criticized the Japanese military, but were too busy fighting each other to prevent the growth of military influence in the government. [588]

Continued on East Asia Transformation Page 5

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