The San Francisco call., 1904-02-07

with Japan he made the following sig
nificant reply:
"In the event of war / am convinced
that neither party will be able to con-
quer the other-that is Russia will not
be able to penetrate into Japan and
administer a conclusive and lasting
overthrow and Japan will equally be
unable to penetrate into Russia and
give lasting effect to any temporary
triumphs.'
Beaulieu seemed to base his convic-
ton on the fact that after the first
great battle the contestants would find
the geographical obstacles so great as
to make decisive hostilities impossible.
Delcasse in personal conversation
with members of the diplomatic corps
does not conceal the gravity of the sit
uation, but he holds that. even If a
diplomatic rupture occurs, this does
not mean an immediate outbreak of
hostilities. One of the leading diplo-
mats asked Delcasse whether he con-
sideFed war a matter of a few days.
"On the contrary" the Minister re-
piled, Il do not believe 1t likely to oc-
cur for month or two, even should
the Negotiations completely fall
This aceords with the view of other
leading officials and diplomats, who
hold that the failure of the negotiations
would be followed by period Of STRAIT
egic preparations, Of raising large war
funds and of maneuvering for position.
The raising of war funds is considered
here as being one of the most vital
questions should the negotiations fail
Therefore a leading American official
sought to learn whether Russia would
be able to issue loan and raise more
money here. He consulted with one of
the most eminent financiers of France,
connected with the Bank of France, and
this brought out some surprising state
ments concerning the enormous indebt-
edness Russia has already incurred
here.
According to this flnancier Russia's
four loans total the colossal sum of
81, 400 900, 900, most of which came from
France. Russia has now practically
used up these loans in building the
ns-Siberian railroad, the new fleet
and internal improvements in the
waterways. The trans-Siberian line
alone has proved a terrible drain, the
deficit last year reaching $4,000, 900.
Therefore in the event of a conflict
Russia must have some sinews of war,
and it is the conclusion of the financier
from the foregoing facts that she is not
likely to place further loan in Paris,
which heretofore has been her chief
financial reliance. On the other hand,
the diplomat compared this with the
announcement to-day from Toxic that
Japan has succeeded in securing volun-
tary subscriptions Of $1,000,000 toward
her war fund.
THAT would run a war for about one
day." said the diplomat. with Russia
unable to get more money here ana Ja-
pan unable to get it at home, 1t is be-
lieved that if breakdown in the ne
gotiations occur each side will take
long breath before fighting"
One of the officers of a trust company
of New York City who was recently
here reached the same conclusion-that
Russia would be unable to make
loan-after he had personally discussed
the subject with a number of leading
authorities on finance.
A novel view Is taken in a. certain
important diplomatic quarter-that the
most effective means of preserving
peace is for both Russia and Japan to
claim a great diplomatic victory, thus
satisfying home sentiment and subdu-
ing the war spirit. This view finds
rather serious acceptance at the For
eign Office, of which the officials say
that if negotiations happily result in
peace both sides will claim a great
diplomatic triumph as means of sat-
isfying local sentiment. This is given
by the officials as one of the main rea-
sons why accounts vary concerning the
terms of the various notes, as it is
said that each side has adopted con-
struction calculated to satisfy its own
people.
One OF the most prominent of the