been able to defend Southern Manchuria and Korea.  If the war went on, I thought it, on the whole, likely that Russia would be driven west of Lake Baikal.  But it was very far from certain.  There is no certainty in such a war.  Japan might have met defeat, and defeat to her would have spelt overwhelming disaster; and even if she had continued to win, what she thus won would have been of no value to her, and the cost in blood and money would have left her drained white.  I believed, therefore, that the time had come when it was greatly to the interest of both combatants to have peace, and when therefore it was possible to get both to agree to peace.

I first satisfied myself that each side wished me to act, but that, naturally and properly, each side was exceedingly anxious that the other should not believe that the action was taken on its initiative.  I then sent an identical note to the two powers proposing that they should meet, through their representatives, to see if peace could not be made directly between them, and offered to act as an intermediary in bringing about such a meeting, but not for any other purpose.  Each assented to my proposal in principle.  There was difficulty in getting them to agree on a common meeting place; but each finally abandoned its original contention in the matter, and the representatives of the two nations finally met at Portsmouth, in New Hampshire.  I previously received the two delegations at Oyster Bay on the U. S. S. Mayflower, which, together with another naval vessel, I put at their disposal, on behalf of the United States Government, to take them from Oyster Bay to Portsmouth.

As is customary—­but both unwise and undesirable—­in such cases, each side advanced claims which the other could not grant.  The chief difficulty came because of Japan’s demand for a money indemnity.  I felt that it would be better for Russia to pay some indemnity than to go on with the war, for there was little chance, in my judgment, of the war turning out favorably for Russia, and the revolutionary movement already under way bade fair to overthrow the negotiations entirely.  I advised the Russian Government to this effect, at the same time urging them to abandon their pretensions on certain other points, notably concerning the southern half of Saghalien, which the Japanese had taken.  I also, however, and equally strongly, advised the Japanese that in my judgment it would be the gravest mistake on their part to insist on continuing the war for the sake of a money indemnity; for Russia was absolutely firm in refusing to give them an indemnity, and the longer the war continued the less able she would be to pay.  I pointed out that there was no possible analogy between their case and that of Germany in the war with France, which they were fond of quoting.  The Germans held Paris and half of France, and gave up much territory in lieu of the indemnity, whereas the Japanese were still many thousand miles from Moscow, and had no territory