China also felt embittered against Japan in this same year because of the latter's course in Manchuria, where she had retained the public buildings at Mukden and the Manchurian gold mines, taken possession of the Manchurian post-offices and telegraph lines, occupied a portion of the province of Kirin, claiming it as Korean territory, although it had long been held as part of China, and forbade the building of a railway to the west of the Liau River, from Hsenmintun to Fakumen, saying that it would compete with the Japanese system. These difficulties were adjusted soon. Japan agreed to the building of the railroad on condition that at no point should it come within a minimum distance from the Japanese line. On October 12 and November 7, agreements were signed at Tokio concerning the telegraph lines. China agreed to place special telegraph wires between the treaty ports, Kwant-cheng-tsze, Tie-ling, Mukden, Liau-yang, Niu-chwang, Antung, and the railroad territory at the exclusive disposal of Japan for a period of fifteen years, the service on the wires to be worked by Japanese clerks in the employ of the Japanese government from the Chinese telegraph buildings, but only to be used for the exchange of telegrams from or to places under the direct control of the Japanese telegraph system. Japan undertook to pass over to China all Japanese telegraph lines in Manchuria outside her railway territory, to construct no telegraph or telephone lines in Manchuria outside the same territory, and to construct no telegraph or telephone lines or erect wireless stations outside her leased territory. She also agreed to pay China a small annual royalty on all messages sent over the Japanese Manchurian telegraph lines. On September 4, 1909, an agreement was signed at Peking regarding the improvement of the Antung-Mukden Railroad and which gave to Japan the advantages in Manchurian trade.

General elections to the House of Representatives were held on May 15, 1908, resulting in a sweeping victory for the Seiyu-kai. For the first time since the formation of the diet, one party had elected a majority of all the members. On July 12, Marquis Katsura was given the imperial command to form a ministry. As this nobleman was connected with the weakest of the political parties, the Daids Club, his appointment as premier was a great disappointment to the Seiyu-kai, who had hoped to have one of their own leaders hold that office.

In July, 1909, twenty-three members of the Imperial Diet were convicted for complicity in a graft scandal. Five directors of the Great Japan Sugar Company were at the same time convicted of bribing the nation's representatives and all twenty-eight received very severe sentences.

In the meantime Japan's influence in Korea had increased to such an extent that by the end of 1907, Korea was for all practical purposes an integral part of the Japanese Empire. Soon after the outbreak of the Russo-Japanese War, Japan and Korea signed an agreement, by which Japan undertook to insure the safety of the imperial household and guaranteed the independence and territorial integrity of the Korean Empire, in return for which Korea agreed to accept the advice of Japan as to improvements in administration. Six months later Korea, in another agreement with Japan, pledged herself to regulate her finances in accordance with the advice of the Japanese financial adviser and a foreign diplomatic adviser, named by Japan, and also to consult the government of Japan before making treaties or conventions with other powers or granting them concessions. Following the Treaty of Portsmouth, another agreement was entered into by Japan and Korea on November 17, 1905, which provided that Japan should control and direct the external relations in the affairs of Korea through the Department of Foreign Affairs at Tokio; and that Japan should be represented at the court of the Emperor of Korea by a Resident-General, residing at Seoul, and should have the right to station representatives at the several open ports and at such other places in Korea as it might deem necessary. In accordance with this agreement, Mr. Durham White Stevens, an American, experienced in diplomatic service, was chosen by Japan to be Diplomatic Adviser at Seoul to the Foreign Office. In spite of these agreements the Korean Emperor sent to The Hague Peace Conference in 1907, a delegation consisting of Prince Yi-Ui-Tjyong, Yi-Tjun, a Korean judge, and Yi-Sang-Sul, former vice-premier of Korea; these men claimed that Japan had committed acts contrary to the agreement of 1884, and had forced the Korean Minister of Foreign Affairs to sign the agreement giving Japan the control of Korea's foreign affairs. The conference could do nothing for the delegation as it was understood that the deliberations of the peace commissioners should not be concerned with relations between nations that had been settled by treaty. As a result of his sending this delegation the Emperor of Korea was forced to abdicate on July 19, 1907, in favor of his son, the Crown Prince. The ministry of Korea opposed this abdication and the Abolitionists broke out into riots; therefore Japan forced the signing of another treaty on July 25. This (1) placed the administration of all Korean affairs in the hands of the Japanese Resident-General; (2) provided that the enactment of all laws and ordinances and the transaction of important state affairs must receive the approval of the Resident-General; (3) decided that a definite line of demarcation is to be drawn between administrative and judicial affairs; (4) stated that Japanese subjects recommended by the Resident-General are eligible to office under the Korean government; (5) provided that foreigners may be employed only with the consent of the Resident-General; (6) agreed that the clause of the agreement of August 22, 1904, providing for the employment of a financial adviser be annulled.

Following this agreement and in order to enforce it, the Korean native army was disbanded on August 1, 1907. The new emperor, Yi-Chök, at the instance of Prince Ito, the Resident-General, ordered the punishment of The Hague envoys and of men of his father's court suspected of fostering resistance. Japanese forces in Korea were increased and the new crown-prince was sent to Japan to be educated. During 1908 the Japanese colonization of Korea continued; new regiments were sent to Korea, the number of Japanese officials were increased, radical reforms were undertaken in the judiciary, and the imperial assets were transferred to the national treasury.

All this was not done without opposition on the part of the Koreans: parties of rebels gathered over the country and there was a continual guerilla warfare; plots were formed against Japanese officials, an attempt being made to derail Prince Ito's train in the latter part of April, 1908; and the native press became so virulent in its denunciation of the Japanese government that the latter promulgated and enforced a law forbidding the sale of any paper containing matter subversive of the public peace under penalty of fine or imprisonment.

On October 26, 1909, Prince Ito was shot and killed at Harbin, Manchuria, by a Korean, who confessed to the police that he had journeyed to Harbin for the express purpose of assassinating the Prince "to avenge my country," blaming Prince Ito for his countrymen's loss of political liberty.

The terrible storms which prevailed all over the world during the latter part of 1909 were especially severe off the coast of Japan, and two Japanese steamers foundered off Korea and Japan, on November 30, the loss of life being very heavy.

Manchuria is a center of disturbance in all eastern questions, and Japan registered her protest on January 8, 1910, against the plan proposed by the United States Secretary of State, Knox, for neutralizing the railroads of Manchuria, the Japanese statesmen being utterly opposed to such a measure.

The history of Japan within recent years has been a record of marvelous expansion in home industries and in foreign trade. Retrenchments in expenditures for army and navy, a general betterment of labor conditions and construction of inland waterways have also materially aided the progress of the nation.