ordinary accounts. Thus, in the event of war, the immediate financial resources of the Government would be ample for the prosecution of one campaign at least.

To speak generally, in the event of no occurrence to disturb the ordinary course of affairs, the national finances of Japan are thoroughly sound. It is true that the results of the flotation of the loan in England might readily convey a very different impression. But these results are not difficult to explain. The shortly preceding or simultaneous issue of Chinese and Russian loans may have had something to do with the matter. But not nearly so much as Japanese financiers assert. In the case of the Chinese loan, security was offered. As security for her obligations, Japan steadfastly refused to pledge anything but the national credit. Now, the average investor, not so very mistakenly, has no high ideas of the credit of the ordinary Japanese, and this, doubtless, made him look somewhat askance at the investment. But the credit of the Japanese Government is a very different thing indeed from the credit of the average Japanese business man. So far, the Government has been most punctilious in the discharge of all its financial obligations, and there are no apparent grounds for believing that there is to be any change in its traditions in this respect. But between the financial record of the Japanese Treasury and that of the merchant, the British investor did not trouble to distinguish. Furthermore, the Japanese authorities were not without blame in the matter. From the finicking finance of the preceding year-parliamentary squabbles over a slight increase of the land tax, the raising of post and telegraph rates, and the imposition of a few petty taxes that brought in no revenue to compensate for the vexation they caused-the impression got abroad that the Government was terribly put to it to make ends meet. How incorrect that impression was may be inferred from recent developments. In 1895 the saké tax brought in $7,800,000; since its augmentation it fully provides the $27,000,000 or $28,000,000 necessary to defray the ordinary annual expenditure on the army and navy. It is quite true that, when the new army divisions are fully established and all the new ships are added to the navy, the expenses of these two services will be quickly increased. But the returns of the saké tax bid fair to increase even more quickly, and it is seriously proposed to raise the rate of the excise. Then, with the recovery of her tariff autonomy, the returns of Japan's

customs are rapidly growing in amount. An indication of the true position is afforded by the Budget estimates for next year. The ordinary revenue is therein set down at $96,500,000; the ordinary expenditure at something over $73,000,000. Of course, it is perfectly true that for more than the $23,000,000 surplus even Japan could readily find profitable employment. For the walls of the national house are still in a most unfinished and most unsatisfactory state. For example, for some years down to 1896, the annual losses from inundation were over $30,000,000; in that year they mounted up to $68,000,000, or $19,000,000 in excess of the total revenue for 1895-96. And most of this loss is preventable. Then, as already remarked, education is in a chaotic state, and communications are still very defective, while if Japanese judicial officials are ever to command that respect and confidence from foreigners that they ought to command, the sum of $2,000,000 annually appropriated to the service of the Ministry of Justice must be very much augmented. And these are only a few of the many matters in the internal economy of the country that urgently need to be taken in hand in real earnest. But perhaps the time for dealing with such affairs in any thorough-going and resolute manner is not just yet. On the mainland of the continent across the water, events are in progress that will continue to claim Japan's keenest attention and probably the exercise of her best energies. For there interests of vital importance to her are gravely involved.

These interests are, of course, more immediately of a political nature. But, besides purely political interests, others of even more serious ultimate importance are at stake. For her economic fabric bids fair to be placed in great jeopardy. It is not, perhaps, very generally recognized that at no very distant date Japan will have to face a population question. In 1872 the population of the islands was officially returned at a little over 33,000,000. It now stands at some 44,000,000 (exclusive of Formosa), or an increase of thirty-three per cent. in twenty-eight years. Possibly, however, it has not been quite so much as the figures indicate, for no census, such as is periodically made in Occidental countries, has hitherto been taken in Japan. The returns are based on the registration system of the country, and that, although yet not quite exhaustive, is now much more complete than it was in 1872. But, granting all that, from the returns of the excess of births over deaths, it ap

pears that some 400,000 fresh mouths have yearly to be provided for. Now, if it be borne in mind that no more than fourteen per cent. of the 112,000 square miles of old Japan are under cultivation, and that this extent can be added to only with the greatest difficulty, it will readily be conceded that 400,000 fresh mouths yearly added to the odd 43,000,000 these 16,000 square miles have to support, afford substantial grounds for apprehension. Yezo has now just about as many inhabitants as Philadelphia had at the last census, and it will never be able to carry as many as New York and Brooklyn contain at present. The addition of Formosa to the Empire affords no appreciable alleviation to the congestion of the population, for the Japanese succumbs to the diseases of a tropical climate even more quickly than the Caucasian. At this date it is doubtful if there be even 5,000 Japanese settlers in the new possession. Nor does emigration tend to solve the difficulty to any remarkable extent. At present there are not 75,000 Japanese in foreign countries, even including the soldiers Lord Charles Beresford imagines to have been smuggled into Korea under the guise of coolies and merchants. Now, Japan has been in the past, still is mainly, and must be for years, an agricultural country. Hitherto, as a rule, she has managed to raise most of her foodstuffs, and even to export rice to the amount of some $3,000,000 annually. But in 1897 she had to import foodstuffs to the value of $23,000,000. It is true that as an offset she exported the usual $3,000,000 worth of cereals in that year; but still she was $20,000,000 to the bad in her food bill. This is small compared with the British deficit of £170,000,000 for the same year; but when it is stated that $20,000,000 represented one-ninth of the total foreign trade of Japan (an agricultural, and not, like Great Britain, a manufacturing country), the circumstance looks somewhat serious. Still more serious would such an incident prove, if Japan had, as she will have a few years hence, a few extra million mouths to feed when her harvest failures occur.

An escape from this menace of a congested population can be found only in one or other or both of two directions. In the first place, Japan may, as she will undoubtedly endeavor to do, borrow a leaf from the economic history of England, and throw her energies into the development of her nascent manufactures. But for any very greatly increased volume of products a foreign market must be found, and there, of course, competition has to be

faced. Even on the fairest of footings, Japanese manufacturers will for long achieve no very brilliant success in such competition, and with a differential tariff against them they would have no chance of success whatsoever. Korea and northern China promise to prove one of their very best future markets; if, however, these districts pass under the rule of the Muscovite, the promise will have but a scanty fulfilment. But, even in the most favorable circumstances, it is extremely questionable whether any possible expansion of her manufactures will ever in itself supply a satisfactory solution of Japan's population question when it becomes really pressing. It seems imperatively necessary that over-sea territories should be found to receive the overflow of her rapidly increasing surplus subjects. And it is only in the Peninsula across the Straits of Tsushima that such territory can be found. How many inhabitants there are in the 80,000 square miles of Korea is not exactly known, the estimates varying from 6,000,000 to 15,000,000, the true figure, perhaps, lying midway between these extremes. Anyhow, the Peninsula may safely be expected to be equal to the support of another 8,000,000 or 10,000,000 souls. Her soil is not infertile, great tracts of it being said to be well suited for sericul[ture, while she is supposed to be rich in mineral resources. Even as things now stand, she annually exports as much rice as Japan does, and beans to the value of $1,000,000; and with good government these exports could be multiplied enormously. But good government Korea never will have, so long as she suffers from what is termed her "independence." The course of events has pretty conclusively shown that the Koreans are not capable of governing themselves, and that the figment of "independence" is soon destined to be swept into the limbo of obsolete expressions. About that there is not very much room to doubt; as to whether her destiny is to be counted as a Russian province, or an appanage of Japan, there will in all likelihood be some very keen debate, in which even the ultima ratio regum may be invoked as the final and conclusive argument.

For if, as has been shown, Japan is vitally concerned about getting seated in the Peninsula, Russia is concerned about keeping the islanders out of all political control of it. Already they hold one side of the Korean Straits-the Island of Tsushima is strongly fortified-and if they were to establish a strong naval base on the southern coast of the Peninsula, at Masampho or else

where, they would have full command of the sea communications between Port Arthur and Vladivostok. And with the whole of Korea in Japanese hands, the overland connections between the two Russian bases would never be safe.

Thus, apart from all questions of national prestige, or of wounded national amour propre, the decision of the ultimate fate of the moribund Empire of Korea can scarcely fail to cause Japan to direct her keenest attention to the actions of her rival for supremacy in the northeastern Pacific. But questions of national prestige and of wounded national pride are also acutely involved. The average Japanese primary school teacher, who has to contrive to make ends meet on three or four dollars per month, is not exactly the sort of man that can be expected to take any very wide view of the national economic necessities. Yet, in 1896-97, several of these at least were making a point of impressing on the minds of their charges of eight or ten years of age the indispensable necessity of their "growing up to be strong enough to chastise Russia." For this, it is fair to say, they were rebuked by their superiors; yet the circumstance is by no means without its significance. The average Japanese is exceedingly anxious to express in a practical form his gratitude for the "good advice" tendered by Russia and her allies in April, 1895, in consequence of which Japan had to withdraw from the Liautung Peninsula. That advice had also the effect of reviving the well-nigh dead recollection of Enomoto's negotiations at St. Petersburg in 1876, when, in exchange for Sagalien, Japan acquired the Kurile Islands. Furthermore, the ill-will against Russia excited by her intervention was not diminished by the subsequent march of events in Korea.

In the summer of 1895 Japanese influence at Seoul was paramount. While he was Minister there, Count Inouye was undoubtedly by far the most powerful man in the Peninsula, and Inouye honestly tried to exercise all the great power he wielded for the best interests of the little kingdom. The administration was fundamentally reformed, codes of law were being drafted with the advice of Japanese experts, the finances were being put upon a sound basis (Japan advancing a loan of yen 3,000,000), and the army organized and trained by Japanese officers. It was just at this time that the following conversation between a member of the Japanese Diet, who had gone to Seoul, and the Russian representative there was reported in the Tokyo press: