points of public law and proprietary rights of the possessors from points of private law had not been brought into a very distinct light, and the vague notion had still remained that the possessors held the lands only by favour of the sovereign. As a matter of fact, in most parts of the country no rights of sale of lands were legally recognised, though the matter was widely affected by some fictitious means, such as long mortgages or long leases. This state of things was entirely changed by the reform made when the nature of the land tax was changed, as I have just described, because by that reform the full proprietary rights from the point of private law were completely recognised. I said that industrial and commercial people contributed almost nothing to the public expenses, and yet the denominations under which they had to pay something were various. Add to this numerous other miscellaneous contributions; there were several hundred different kinds of contributions, but each of these separately amounted to a very small sum, and was not worth the trouble it involved. These, therefore, were altogether abolished. Of course the government had, as time went on, to introduce some new taxes, such as the business tax, the income tax, etc., but these are the results of the progress made in our economical and financial conditions, and based on broader and more universal lines, so as to fit the altered state of the country. The annual budget, which amounted to seventy or eighty million yen before the Sino-Japanese war, amounted to some five or six hundred million yen before the Russo-Japanese war: that will perhaps show the expansion of the financial system of the country.' --'It is very interesting,' said one; 'but let us have a cup of tea, and then continue the discussion.' VIII Commerce and industry--Old methods of communication--Roads and ships--How they have been improved--Railways, post, telegraphs, and telephones--Progress of the financial system--The Satsuma war--The Bank of Japan--The National banks--The monetary system one of the causes of Japan's success--Further remarks on the military reforms--Evolution of the mode of fighting--All reforms at much cost of blood and money--The cause of the Satsuma war--Saigo the Elder--Social condition of Japan to-day--Evolution of legislation--Chinese jurisprudence--The Japanese are not good correspondents--My future--An operatic singer--Japanese stages--Danjiuro and Irving--The old school and the new one--Kawakami and Sada Yakko--The opera _Maritana_--The end of the dream I was still in the same incongruous group of people, and carrying on a conversation on the same lines. Though the subjects were rather technical, they seemed to have interested the people who took part in the discussion, because they relate to the important part of our history, wherein the foundation-stone, so to say, of Modern Japan was laid.