It was in the economic field, perhaps, that Japan reaped her greatest
gains from the World War. For her shops and factories were kept busy
supplying the belligerent countries, their colonial populations, and
the American market. Her allies controlled the seas, and Japanese ships
sailed all of them. This freedom of the seas was an important factor
for Japan, who had become increasingly dependent on international trade.
Japan’s war boom was, in many respects, very similar to that enjoyed
by the United States. The relative increase in trade was even greater.
Between 1914 and 1920 Japan’s total foreign trade increased from 1,187
million yen to 4,285 million, or by nearly four times (see chart,
page 61). Through 1918, moreover, exports increased much faster than
imports. For Japan this meant a chance to stock up on her reserves
of gold and foreign currencies, which had always been low. In the
1914-18 period, exports outran imports by 1,460 million yen. This
figure contrasted with an import excess of 1,158 million yen during the
preceding 20 years.
What we have said so far applies only to trade in goods. But returns
on invisible trade items, such as shipping services, were also
high--totaling more than 1,500 million yen for the 1914-18 period.
The wartime balances for both types of trade came to more than 3,000
million yen--on the right side of the ledger. As a result, Japan’s
financial reserves greatly increased. Extensive loans and investments
were made in foreign countries, and large holdings in gold and foreign
exchange were piled up.
Japan emerged from the war stronger financially and economically than
she had ever been before. Nevertheless, she was to suffer a series of
economic setbacks in the post-war period.