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in very rare cases did they develop any of the natural resources of the country. It may be noted that of the expenditure upon railways and upon weaving industries, 40 per cent. and 70 per cent. respectively represented hard cash sent out of the country for the purchase of machinery, etc. Thus, not only did the indemnity drain out of the country itself, but much more money left the country as a result of the victorious war.

I was in London during the Franco-Prussian War, and visited Berlin soon after the declaration of peace. There I found everything most wonderfully prosperous as far as outward signs went. The price of a room which before the war was 5 yen had risen to 25 yen. The enormous indemnity had produced the same effect in Germany as did the Chinese indemnity upon Japan. Four years later there came the depression in Germany, with the failing of numbers of the banks and other concerns which had grown up as a result of the war. Soon most of the indemnity had left Germany, and much returned to France. In the case of Japan, the money went to four or five Powers instead of to one, otherwise the parallel is exact. But there was a great difference between the action of the Germans during the depression and that of the Japanese. This difference explains why it was more easy for Germany to bear the hard times than it was for Japan. Germany had been ground down under the oppression of Napoleon I., and reduced to poverty so severe as to teach the inhabitants the strictest economy of living. The prospect of the length of the war with France and its certain cost also encouraged, if it did not enforce, economy. The German system of education was also very severe. Thus the Germans were able to pull themselves together at the end of their prosperity, and return to their old economical habits. Also during the prosperous times in Germany factories and other productive works which had utilized the resources of the country as well as developed them had been established. Thus in many ways it was easier for Germany to recover from the effects of the fictitious prosperity resulting from the indemnity than it was for Japan.

Germany was, and is, able to protect her industries by tariffs, and thus assure their even growth. Japan has been denied this right for several more years, owing to the action of the foreign nations at the time of the revision of the treaties. This lack of tariff autonomy has prevented the proper and even development of Japan’s resources, and has. tended to the importation of the raw materials from abroad to supply the various manufacturing industries. And this although in many instances the raw materials could be obtained in Japan. This fact reminds us how much the new Japan has been made