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Ministers attempted to put restrictions upon them with a view to preventing them engaging in any enterprise whatever. These steps, however, were vehemently opposed by Mr. de Witte, who insisted that Russia could not develop herself without having recourse to foreign capital. Some time ago a certain Englishman wished to establish a factory in Nagoya for refining sugar-cane from Formosa, but he was deterred from doing so by his inability to acquire land. If this factory had been established Japan would have benefited to the extent of the outlay incurred in connection with it and the employment it afforded to labour. So long as the only means of introducing foreign capital is by obtaining a loan it is hardly possible to strengthen the foundations of the national economy or to secure the systematic development of commerce and industry. The adoption of a more liberal policy is absolutely indispensable.

The war of 1894–95 produced remarkable changes in the financial condition of Japan, the annual State expenditure, which used to be about 80,000,000 yen before the war, suddenly rising to more than 200,000,000 yen in the year subsequent to it. How this novel situation has been met by the Government is stated in detail in the ‘Report on the Post-Bellum Financial Administration’ (published both in Japanese and in English) which I presented to the Minister President of State in March, 1900, when I held the office of Minister of Finance. My letter to the Minister President may be quoted here, because the whole work is summarized in it:

In March of the 28th year of Meiji (1895), when the war with China was not yet brought to its close, and the whole nation was overwhelmed with joy and wonder at the glorious news of victory, His Majesty the Emperor being deeply concerned about the future financial policy of the country, ordered me especially to his presence at his military headquarters in Hiroshima, and conferred on me his gracious words, at the same time entrusting me with the task of administering the national finance with the view to its post-bellum rearrangement. I was most deeply touched with all this, and, at once accepting the Portfolio of Finance, laboured day and night, earnestly hoping that I might prove myself worthy of the great trust imposed on me. On entering upon my duties, I saw immediately that the first thing to do was to fix upon a scheme of financial policy to be pursued, which should be in harmony with