tates would have speedily
dissolved. Unfortunately these Powers were engrossed in other concerns,
and took no action to redress the balance which the self-constituted
champions of political stability were upsetting to their own advantage.

The effects of their action were diverse, and for the most part
unforeseen. In the first place, Japan, far from being discouraged by
this rebuff, set to work to perfect her army and navy, and with a
thoroughness which Roon and Moltke would have envied. Organisation,
weapons, drill, marksmanship (the last a weak point in the war with
China) were improved; heavy ironclads were ordered, chiefly in British
yards, and, when procured, were handled with wonderful efficiency. Few,
if any, of those "disasters" which are so common in the British navy in
time of peace, occurred in the new Japanese navy--a fact which redounds
equally to the credit of the British instructors and to the pupils
themselves.

The surprising developments of the Far Eastern Question were soon to
bring the new armaments to a terrible test. Japan and the whole world
believed that the Liaotung Peninsula was made over to China in
perpetuity. It soon appeared that the Czar and his Ministers had other
views, and that, having used France and Germany for the purpose of
warning off Japan, they were preparing schemes for the subjection of
Manchuria to Russian influence. Or rather, it is probable that Li Hung
Chang had already arranged the following terms with Russia as the price
of her intervention on behalf of China. The needs of the Court of Pekin
and the itching palms of its officials proved to be singularly helpful
in the carrying out of the bargain. China being unequal to the task of
paying the Japanese war indemnity, Russia undertook to raise a four per
cent loan of 400,000,000 francs--of course mainly at Paris--in order to
cover the half of that debt. In return for this favour, the Muscovites
required the establishment of a Russo-Chinese Bank having widespread
powers, comprising the receipt of taxes, the management of local
finances, and the construction of such railway and telegraph lines as
might be conceded by the Chinese authorities.

This in itself was excellent "brokerage" on the French money, of which
China was assumed to stand in need. At one stroke Russia ended the
commercial supremacy of England in China, the result of a generation of
commercial enterprise conducted on the ordinary lines, and substituted
her o