What I am prepared to maintain, and what the experts know to be the truth, is that the Japanese people are the poorer, not the richer for their war, and that the Russian people will gain more from defeat than they could possibly have gained by victory, since defeat will constitute a check on the economically sterile policy of military and territorial aggrandizement and turn Russian energies to social and economic development; and it is because of this fact that Russia is at the present moment, despite her desperate internal troubles, showing a capacity for economic regeneration as great as, if not greater than, that of Japan. This latter country is breaking all modern records, civilized or uncivilized, in the burdensomeness of her taxation. On the average, the Japanese people pay 30 per cent.--nearly one-third--of their net income in taxation in one form or another, and so far have they been compelled to push the progressive principle that a Japanese lucky enough to possess an income of ten thousand a year has to surrender over six thousand of it in taxation, a condition of things which would, of course, create a revolution in any European country in twenty-four hours. And this is quoted as a result so brilliant that those who question it cannot be doing so seriously![16] On the other side, for the first time in twenty years the Russian Budget shows a surplus. This recovery of the defeated nation after wars is not even peculiar to our generation. Ten years after the Franco-Prussian War France was in a better financial position than Germany, as she is in a better financial position to-day, and though her foreign trade does not show as great expansion as that of Germany--because her population remains absolutely stationary, while that of Germany increases by leaps and bounds--the French people as a whole are more prosperous, more comfortable, more economically secure, with a greater reserve of savings, and all the moral and social advantages that go therewith, than are the Germans. In the same way the social and industrial renaissance of modern Spain dates from the day that she was defeated and lost her colonies, and it is since her defeat that Spanish securities have just doubled in value.[17] It is since England added the "gold-fields of the world" to her "possessions" that British Consols have dropped twenty points. Such is the outcome in terms of social well-being of military success and political prestige! CHAPTER VI THE INDEMNITY FUTILITY