The Japanese exchequer is at present a long way from depletion, by reason of the $150,000,000 loan secured in America, England and Germany. Probably two thirds of this remained unexpended. Many Tokyo bankers believed the loan unnecessary, inasmuch as there were funds in hand sufficient to finance the war well into 1906, had peace not been agreed upon. But the flotation was deemed wise, not alone because of prevailing ease in the money market, but for the effect that an oversubscribed loan in America and Europe would have upon the Czar's government. The portion of the loan remaining unused for war was employed for giving effect to Japan's industrial propaganda, and presumably has been spent for the endless machinery demanded by the factories and shipyards that are transforming Japan into a vast workshop, for structural metal, and for steel rails, cars and locomotives for railways in Manchuria and Korea; and generally for the hundred and one purposes playing a part in the development of lands hitherto out of step in the march of enterprise, and where strife has until recently stifled the usual manifestations of man's desire to improve his surroundings. The Japanese government in 1906 purchased six railways, which were profit earners, paying for them $125,000,000 in five per cent. bonds that may be redeemed in five years. There is no likelihood of a reduction in Japan's debt for a long time, but its weight upon the people may be reduced by conversions. As the national credit strengthens, the interest on borrowings may be correspondingly decreased. Consequently, there may be frequent funding operations and new issues, until seven and six per cent. bonds have given place to obligations bearing five per cent. interest or less. To provide funds for early railway building, considerable capital was borrowed at as high a rate as ten per cent. When these obligations expire all necessary money can be found in the country at less than half the original rate. Japan is fortunate in having many sound financiers to invite to her official councils, and it is helpful to the country that Tokyo and Yokohama bankers are competent and progressive. These men pronounce Japan's present financial position sound, and claim that the country can easily carry the existing debt.