The actual outlay of both nations for the first year of the war was about $800,000,000. Russian expenses were $500,000,000 and Japan's $350,000,000. To Russia's losses must be added the value of fortifications, property of all kinds, stores and munitions captured by Japan at Port Arthur, Dalny, Niuchwang, Haicheng and Liao-yang. These represent an outlay of approximately $500,000,000, in which is included the value of the ships destroyed in the harbor of Port Arthur. Russia's provisions for war expenses to the end of 1905 comprehended a total expenditure of $850,000,000. Japan's total outlay for two years was estimated to fall $200,000,000 below that figure. Both countries had negotiated foreign loans running from seven to twenty-five years, so that another generation would still feel the financial burden of the war then in progress. [Sidenote: The Cost in Ships] The war had spelled complete disaster for Russia's Asiatic fleet except for two patched ships of problematical effectiveness then at Vladivostock. Russia had lost thirty-five vessels of war of all classes. Of these the chief were: Battleships--_Petropavlovsk_, destroyed by mine at Port Arthur; _Retvisan_, _Pobieda_, _Poltava_, and _Peresviet_, sunk by guns from 203-Metre Hill; _Czarevitch_, disarmed at Shanghai; _Sevastopol_, blown up by the Russians at the fall of Port Arthur. Cruisers--_Boyarin_, _Bayan_, _Pallada_, _Varyag_, _Rurik_, _Rossia_, _Lena_, _Novik_, _Giliak_, _Bogatyr_, sunk, beached or destroyed; _Askold_, _Diana_, _Gromboi_, disarmed in Chinese ports. Gunboats, etc.--_Korietz_ and _Yenesei_ and twelve others including torpedo boats and destroyers, destroyed. Japan's losses in battle were confined to torpedo-boats and torpedo-boat destroyers, sixteen of such craft having been destroyed in attacks on Port Arthur. The battleship _Hatsuse_ was sunk, as were also the cruisers _Usiyako_, _Saiyen_ and _Yoshino_. Three transports were sunk by ships of the Vladivostock squadron. [Sidenote: International Incidents] On the outbreak of the war Mr. Hay, Secretary of State, proposed to the Powers that, jointly, they agree to guarantee the neutrality of China and call upon the belligerents to restrict the war zone accordingly. Counter charges of violations had been made by Russia and Japan. It was conceded that China had earnestly striven to fulfil her obligations under trying circumstances. On July 17 Russian auxiliary cruisers stopped, searched and seized neutral ships in the Red Sea, precipitating a grave crisis in which Great Britain took a conspicuous part. On representations of the British Foreign Office, Russia released captive ships and recalled the ships. The fact that they had traversed the Dardanelles for a warlike purpose was the basis of the protest. On October 22, the Russian Baltic fleet, passing through the North Sea en route to the Indian Ocean, fired on the Hull fishing fleet. Two men were killed, a number were wounded and one trawler was sunk.