Japan has everything but money to equip her for a bold bid for the mastery of the Pacific before the completion of the Panama Canal. Europe has taught to Japan, in addition to the material arts of warfare, a cynical faith in the moral value, indeed, the necessity, of war to national welfare. She considers that respect is only to be gained by war: that war with a European nation is an enterprise of small risk: that in short her experience with the Russian Fleet was fairly typical of war with any European Power. She believes that she has the most thoroughly efficient army and navy, considering their size, in the world; and has much to justify the belief. This ambition and the warlike confidence of Japan constitute to-day a more important factor in the problem of the Pacific than her actual fighting strength. But the check to prompt decisive action on her part is that of poverty. Japan is very poor. The last war, in spite of great gain of prestige, brought no gain of money. Its cost bled her veins white, and there was no subsequent transfusion in the shape of a Russian indemnity. Nor are the natural resources of Japan such as to hold out much hope of a quick industrial prosperity. She has few minerals. Her soil is in the bulk wretchedly poor. From the territories control of which she has won in battle--Manchuria and Corea--she will reap some advantage by steadily ignoring the "open door" obligation in trade, and by dispossessing the native peasantry. But it cannot be very great. There is no vast natural wealth to be exploited. The native peasantry can be despoiled and evicted, but the booty is trifling and the cost of the process not inconsiderable since even the Corean will shoot from his last ditch. Japan is now seeking desperately a material prosperity by industrial expansion. A tariff and bounty system, the most rigid and scientific the world knows, aims to make the country a great textile-weaving, ship-building, iron-making country. The smallest scrap of an industry is sedulously nurtured, and Japanese matches, Japanese soap, Japanese beer, penetrate to the markets of the outer world as evidence of the ambition of the people to be manufacturers. But when one explores down to bedrock, the only real bases for industrial prosperity in Japan are a supply of rather poor coal and a great volume of cheap labour. The second is of some value in cheap production, but it is yet to be found possible to build up national prosperity on the sole basis of cheap labour. Further, with the growth of modernity in Japan, there is naturally a labour movement. Doctrines of Socialism are finding followers: strikes are heard of occasionally. The Japanese artisan and coolie may not be content to slave unceasingly on wages which deny life all comfort, to help a method of national aggrandisement the purport of which they can hardly understand.