He made his offer at a peculiarly appropriate moment. The military regency which had ruled the country for so many centuries had drawn to a close, and the new Government welcomed the proposal. Foremost among the supporters of the project were the present Count Okuma and the late Prince Ito. Mr. Lay undertook to raise a loan of; £1,000,000, or $5,000,000, and this was accepted, while Mr. Lay was entrusted with the carrying out of the scheme. The promoter of the enterprise secured the services of Mr. E. Morell as engineer-in-chief, and in 1870 the work commenced. But friction arose between the English capitalist and the Government, who did not approve of the financier’s methods. The agreement was nullified, and the Oriental Bank was established to carry out the undertaking, Mr. Morell being retained in his engineering capacity. He set to work in grim earnest. The question of gauge had to be settled first. This vital detail was threshed out in all its bearings, a gauge of 3½ feet was selected, and the building of the first line between Tokio and Yokohama--a distance of 18 miles--commenced. Once the fashioning of the grade began, other schemes were put forward. Among them was a line from Kobe to Osaka, a distance of 20 miles, which was put in hand, while an extension of the latter line to Otsu was surveyed. The first railway in the country was opened on October 14, 1872, amid elaborate festivities, in the presence of the Emperor. Within six years of Mr. Morell’s arrival, no less than 70 miles of line had been laid and opened. This was a highly satisfactory and energetic start for a young country, and the success of the experiment spurred the Government to more ambitious schemes. These, however, were doomed to temporary derangement owing to internal troubles, and the rebellion in South Japan in 1877, which drained the imperial exchequer to such a degree that no funds were available for railway-building operations. Among these early enterprises was a trans-insular railway to connect the Pacific coast of the island with the shores of the Sea of Japan, with ferry-steamers on Lake Biwa to connect the inland break in the railways due to that sheet of water. By this time the Japanese engineers considered themselves competent to build railways, for they had proved apt pupils under Mr. Morell’s training. Native talent found its first opportunity on the Kioto-Otsu undertaking. This was a peculiarly difficult enterprise, but the Japanese engineers rose to the occasion, though English engineers were retained to advise them and to design the bridges. On this line tunnelling had to be carried out, and this was the first occasion on which the Japanese engineers were faced with this work in their own country. Still they succeeded in complying with the original plans to perfect satisfaction, and had the pleasure of learning, when the road was opened in 1880, that the cost of construction was less than the estimates.