Just after the Sino-Japanese War had ended in 1895 the Finance Minister, Matsukata Masayoshi, presented a statement of opinion to Ito, the Prime Minister, entitled ‘Proposal Concerning Future Financial Planning’, which laid down the substance of financial planning for the years following the war:

As a result of the Sino-Japanese encounter Japan has suddenly become one of the Powers. We shall therefore become an object of increasing jealousy from all nations, and we shall require armed forces capable of responding to this. We shall also need armed forces to defend the territory we have newly acquired. We shall need armed forces against Chinese retaliation. To make such military preparations, however, will require from three to five years at least. The European Powers have already begun to alter their foreign policy towards Japan, and are making amendments to the Triple Alliance. [An alliance of France, Germany and Russia, which conspired to deprive Japan of some of her fruits of victory in the Sino-Japanese war. The actions of the Triple Alliance caused great resentment in Japan, and fanned the flames of nationalism.] The situation is such that we must embark upon the construction of armoured battleships to cruise in the Pacific. The completion of the great Siberian railway is expected within five years. We cannot delay a single day in expanding our military preparations. According to advice which the ministers have received from the authorities concerning the amount of expenditure involved, the Navy should have another 200,000 tons, the army should have new gun emplacements and modernized weapons, and the size of the Army should be virtually doubled. I endorse this advice.1