these amounted to, in all, L140,045,030, of which sum L38,187,369 has from time to time been paid off, leaving a balance of L101,857,661 owing by the nation. When we consider that for this large, but not unduly large, sum Japan has waged two considerable wars, and raised herself to the position of a great naval and military Power, that she has developed and organised a magnificent Army, provided herself with a strong, efficient, and thoroughly up-to-date Navy, has constructed railways and public works, and generally has placed herself in a capital position to work out her own destiny free from the fear of foreign interference, I altogether fail to see how she can be accused of financial extravagance. There is certainly no extravagance in the administration of her finances. London might, I suggest, learn much from Tokio in this matter. The system of financial check and thorough and rapid audit of public accounts is in Japan as near perfection as anything of the kind can be. Though the late war did produce, as I suppose all wars do, peculation, most of it was discovered and the punishment of the culprits was sharp and decisive. There was no opportunity for financial scandals in the campaign with Russia such as occurred during the South African War. Every country, of course, produces rogues, and war seems, _inter alia_, to breed roguery on a large scale, but in the Japanese methods of finance the checks are so effective that roguery in the public services has a bad time of it in war as well as in peace. As I have already remarked, I am of opinion the debt of Japan is by no means excessive, especially in view of the fact that a large part of it has been devoted to purposes which are profitable. The debt works out, as I have shown, at something under L2 per head of the population, and that population is steadily increasing. That Japan is well able to pay the interest on her debt there can be no question whatever, and that when the present debt becomes due for redemption she will be able to raise the necessary funds for that purpose on terms even more favourable than those at which she has hitherto placed her loans I am confident. I must emphasise the fact, since so many persons seem to be oblivious of it, that this is no mushroom South American Republic borrowing money merely for the purpose of spending it on very unproductive and occasionally very doubtful objects, but a Great World Power sensible of its obligations, sensible likewise of the policy and necessity of maintaining the national credit, and confident that the national resources and the patriotism of its people will enable it not only to bear the present financial burdens but even greater, should these be found necessary for the defence of the country or for its development.