Yamaguchi Soken, one of Ōkyo's famous pupils, in his two sets of the "Yamato Jimbutsu Gwafu" (3 vols., each 1799 and 1804), produced some very clever work; Nishimura Nantei also; while Aoi Sōkyū, generally known as Kishi Sudo, another follower of the Maruyama School who later lived in Osaka, was guilty of perhaps the most amazing of all the books of caricatures. This excessively rare work, the "Kishi Empu," appeared first in 1803. In the "Gillot Catalogue" the mistake is made of attributing it to Kishi Chikudo. The book is in three volumes and contains grotesque but richly colored double-page plates of the Ōsaka courtesans. In 1815 the book was reprinted, and in 1903 Yamada of Kyōto reproduced twelve of the plates in a gwajo under the title of "Kakuchu Empu." Edward Strange, in his "Japanese Colour Prints," says in the chapter devoted to subjects of illustration, that "comic scenes and caricatures are not common, and rarely well executed." This is true to some extent of the prints, but in the old illustrated books-long before the time of Hokusai there is found an immense amount of comic work done in a dashing style that reminds one of Steinlen's, Forain's, and Abel Faivre's cartoons that were daily features of the Paris papers some years ago.

That these

books have been favorites is proved by their extreme rarity and the soiled and generally poor condition in which they are almost invariably found when they do occasionally turn up in old bookshops and at the Japanese auctions.

Comic work is no less popular in modern Japanese illustration, and the newspapers and magazines are constantly printing extremely clever work done with admirable technic. A number of modern books have also appeared within the last few years containing delightful drawings of this kind. The traveller from the Occident doesn't escape the facile brush of these humorists, and if the foreigners who come to Japan imagine that they impress the Japanese with their superiority, some of these modern books of caricatures depicting their foibles might be distressingly disillusionizing to them. Not having been on the immediate scene and watched the development of our tricks and our manners, the Japanese cartoonist brings, in addition to a perennial sense of fun, a pair of fresh eyes to the latest vagaries of the West in hats, clothes, and manners, and in his exquisitely funny drawings gives us a hint as to the manner in which we appear when "others see us."

But foreigners do not often see these books.

AT

in the

Situation

T the moment when the financial community's sentiment had drifted to belief that nothing was in sight to check the course of reaction and depression, the situation suddenly passed into a new phase. It was not A Change readily recognized by the markets as an altered situation; it was reflected at the start only feebly, if at all, even on the Stock Exchange, and it left plenty of grave financial problems behind it. Nevertheless, it did not require any large experience to see that in very large measure the surrounding and controlling circumstances had changed.

A few months ago it was pointed out in these sketches of the financial situation that the economic world had passed, since the armistice, through two distinct chapters of events, each of which had in turn been definitely ended, and that it had subsequently been groping its way through the third chapter, whose end could not clearly be seen at the time by any one. The first period of after-war reaction and declining prices had lasted from November, 1918, to the ensuing spring. The period which followed-marked by rising prices, by wild speculation, by rapid enhancement of production costs, including labor, and by world-wide currency inflation-had continued from the spring of 1919 to the spring of 1920. It had been followed by the spectacular fall of prices in every market of the world, by the hard times and the effort at economic readjustment, the date and manner of whose completion had been impossible to predict.

These three economic chapters had closely followed the shifting phases of the political situation, which, first, in the few months following the armistice, had been governed by the struggle for subjection of

Central and Western Europe to anarchy of the Bolshevist. sort, whose second period had covered the defeat of that undertaking and the period of political recovery, but which, after entering the third period a year ago, had been continuously confronted with the grim problem of settling the terms of peace, enforcing indemnity payments, and effecting the seemingly impossible restoration of normal relationships between the European states. During at least twelve months this problem, like the problem of bringing into a sound position the markets, the international trade and the relations between producers and consumers, had seemed to be insoluble. Within a month it has apparently been solved, and with its solution economic and political conditions have both entered a new chapter.

P to the month of May, 1921, Ger

When Germany Refused

Payment

many had simply refused to conform to the terms of reparation, set forth by the Allied Commission in accordance with the agreement signed by Germany at the armistice and in the Treaty of Versailles. One of the payments thus imposed had been fixed for May 1. It was not met. The German Government professed inability to pay the total amount assessed against it. It made counter-proposals on a very much smaller scale, rejected the modified proposals of the Allied premiers, and showed plain signs of having found encouragement, first in such sympathetic denunciation of the treaty as that of Mr. Maynard Keynes, and, second, in what seemed to be Germany's inference that the defeat of President Wilson's candidate at the polls last November meant not only a new United States Government which would reject Mr. Wilson's international policies, but an

American State Department which would in substance take its stand with Germany against France and England.

For a time it certainly looked as if the Allies' case against Germany in the reparations matter would go by default. England was reluctant to move aggressively. No one could yet be sure what attitude the Harding administration would take; Senator Knox was pressing his resolution for a separate peace with Germany -a measure whose significance the German people were certain to interpret as a rebuff by the United States Government to its recent Allies and a practical expression of sympathy with Germany. There were not lacking American voices to express outright denunciation of Germany's antagonists and their programme. The declaration in a public speech at London by our new ambassador to England, of dislike to the League established by the Treaty and of warning that America suspected and distrusted it, had not then been made, but it was possible for Germany to find other evidences of American feeling which it was possible to interpret for her own advantage.

THIS

Our Government's Attitude

HIS was the situation a very few weeks ago. It was entirely changed by two events. The first was the cold refusal of our State Department to give any consideration whatever to the direct appeal by Germany for the United States to help in obtaining remission of sentence; a refusal coupled with the statement that, in the opinion of the American Government, Germany should be made to pay to the full extent of her capacity for what her armies had done in France and Belgium. This answer cut off hope of American intercession. The second event was the advance of Marshal Foch and his troops into Germany, with the plain intimation on the part of France that unless the German Government were to make good its engagements by the end of May a further movement of the army would be made into the busy industrial districts of Germany. In the closing week of May the German Government suddenly announced its acquiescence. Cable despatches reported for a day or two that the Reichstag would repudiate the

new ministry upon whose shoulders that decision had been thrown; but on May 10, by a vote of 221 to 175, the acceptance of the terms was formally approved.

Even then one continued to hear, not only in Germany but in the Allied countries, that the total payment assessed, amounting to 132,000,000,000 gold marks, or $31,400,000,000, could never be met. That this amount, huge as it was, would still not cover the wanton and malicious damage done by the German army was indignantly set forth by France. But the question of capacity remained, even when the sum had been carefully fixed by the Reparations Commission, after considering both what ought to be paid by the defeated invader and what the culprit actually could pay. When the terms were finally accepted, the only party to the negotiations that appeared to have no doubt or misgiving in the matter was the German Government; which, in an entirely practical and businesslike way, began to make its historic payment.

A change of high importance from the atmosphere of international rancor, suspicion, and mistrust was foreshadowed in other ways than by Germany's acquiescence. The French premier, facing a Chamber of Deputies which appeared to be determined not to trust the German pledges, declared that "the new German Government has shown good faith and loyalty," that France "owes it to herself and to the world to give Germany a chance to make good its promises," and that, "if the Chamber chooses another policy it must get another chief to lead." This was distinctly striking a new note and opening a new chapter in after-war history. Nevertheless, it remained to be determined whether Germany could make good.

THE terms of reparation required de

livery by Germany of government bonds for the full amount of the indemnity and an annual cash payment, until redemption of those bonds, of 2,000,000,ooo gold marks, or $476,000,ooo, plus an additional sum amounting to 26 per cent of the value of Germany's exports. It was further provided that before June 1 Germany should pay to the

The

Terms of Reparation

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Reparations Commission, in gold or bills of exchange or three-months drafts on the German treasury endorsed by responsible international bankers, the sum of 1,000,000,000 gold marks. This was the first transaction which had to be physically performed. It was only a fraction of the total liability, but it meant in substance the laying down by Germany of $238,000,000 cash. The question was, how could she do it? It was the first test of the larger question, whether Germany had the physical and financial power to meet the Allied requisitions.

Precisely the same question arose when France in 1871 was called upon to pay the war indemnity of the Franco-Prussian War. Prussian armies were encamped in France, on a scale of occupation never yet practised by the French armies in Germany since the recent war. France had even in those days been invaded and partly devastated by the German armies. The indemnity of 5,000,000,000 francs or $1,000,000,000 was possibly as large, in relation to the capital resources and accumulated wealth of fifty years ago, as the $31,000,000,coo German indemnity is to the world's resources of to-day. Only three years were granted to France in which to pay the whole indemnity in cash, as against the thirty-seven years which the present German reparations bonds are allowed to run.

THE

HE financial world of 1871 was sceptical as to the power of any government to make so prodigious a cash payment. That indemnity was paid, however, and in less than the stipulated time. The manner of payment and the results of it were a complete surprise to the financial community The French Indemnity of the day. Out of the actual net of 1871 cash payment, amounting to 4,961,000,000 francs, only 273,000,000 was paid by actual shipment of gold from Paris to Berlin. Silver was shipped to the extent of 239,000,000 francs, notes of the Bank of France and banknotes of Prussia and Belgium to the extent of 298,000,000. The balance, amounting to 4,151,000,000 francs, or, roughly, $800,000,000, was paid in bills of exchange, partly drawn on the Prussian market itself but largely, also, on half a dozen other European markets.

They represented credit balances on those markets owned by France. It was noticed with astonishment by financial writers of the day, not only that these enormous transfers were made without serious disturbance of the international market, but that money rates, which advanced in Germany in connection with (Financial Situation, continued on page 53)