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the changed status of the country, and with the particular state of affairs at home and abroad. Such a scheme was accordingly drawn up, and presented not long after to the Cabinet Council. I felt indeed the gravity of my attempt. For it was evident that, in view of the greatness of the war expenditures, as well as of the immense expensiveness of the unavoidable post-bellum undertakings, such a scheme would have to be drawn up with the greatest care; otherwise, through some piece of mistaken policy, not only the whole result of our victorious war might have been destroyed, but the roots of future calamities might have been left to the country for centuries to come. Such, no doubt, were the ideas in the mind of the Emperor, which led him to take so much concern, and I felt that I was acting in union with these feelings of our august master in putting forth my best efforts to perform my duties at this important stage in the nation’s history. The main points in the financial policy now adopted, at my humble suggestion, were to increase the national revenue so far as necessary, and practise economy in expenditure as much as possible. With regard to the sources of revenue for meeting the increased expenditures on account of the post-bellum undertakings, it was decided to depend on increased taxation for the ordinary class of expenditures, and for the extraordinary class of expenditures to look to the Chinese indemnity and the public loan. At the same time measures were taken with the object of developing the resources of the country, so that the growth of the country’s wealth might keep pace with its increased expenditures. For it was clear from the very start that the true post-bellum financial measures should consist, not only of the rearrangement of the national finance, but also of the measures taken for the economical development of the country; thus only would the measures now adopted by the Government prove to be no temporary makeshift, but something lastingly beneficial to the nation. These two lines of policy—the rearrangement of finance and the development of resources—were therefore both equally emphasized in the new scheme adopted by the Government. The main items of the programme presented to the Cabinet Council were as follows:

Part I.: A scheme for meeting the increased expenditures of the Government, beginning with 1896–97.

1. To meet the ordinary class of the increased expenditures, on account of the post-bellum undertakings, by the increased revenue from the saké tax, business tax, registration duties, and the leaf-tobacco monopoly.
2. To pay for the expenses of the military and expansion, and of establishing the iron-foundry, from the Chinese Indemnity Fund.