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which the necessary funds had to be provided by public loans. The Minister of Finance was of opinion that the economic condition of the country was not favourable for raising public loans, and proposed temporarily to curtail the public undertakings. Other Ministers objected to this proposal at first; but, a compromise having been effected, the expenditure for extraordinary public undertakings was reduced by about 9,000,000 yen, by postponing the execution of some of the projected works. When, however, the general line of policy to be adopted in drawing up the Budget for 1902–03 came to be discussed, an untoward disagreement arose again between the Financial Minister and other Ministers with reference to the execution of the public undertakings, and this led to the resignation of Marquis Ito. The so-called financial question was nothing more than this. Whatever may be the difficulties in connection with the carrying out of the extraordinary undertakings, the normal financial equilibrium is hardly affected by them. In fact, the members of the Ito Cabinet seem not to have been in perfect harmony from the outset, and the financial question was probably not so much the cause as an incident of the political trouble.

If the execution of the public undertakings projected for the purpose of facilitating the economic progress of the country had to be postponed, it would certainly be a cause for regret. But the normal financial equilibrium is not affected by it. Besides, the execution of public undertakings is simply a question of time. With a considerable excess of the ordinary revenue over the ordinary expenditure, the public undertakings may be carried on steadily. The Chinese trouble being over, and the emergency fund replenished, the revenue accruing from the last adopted measure of increased taxation may be employed for carrying on the public works, because in Japan the imposition of taxes is provided not only in annual Budgets, but in statutes, so that a tax, once imposed, remains effective until it is repealed by another statute. As to the burden of the taxation imposed upon the people, there may be some who doubt if it has not become too heavy in consequence of the remarkable increase after the war of 1894–95; but if a broad view is taken of the situation, it will be seen that the national financial burden is by no means out of proportion to the general progress of the country. While the national wealth has steadily grown with remarkable rapidity since the inauguration of the present régime, the increase of taxation did not keep pace with it before the war of 1894–95. As that struggle was an occasion for the manifestation of our accumulated national forces, the changes subsequent to it may appear sudden and abrupt. The increase of taxation is one of the instances. But if comparison