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Industrial Warfare, International Finance, and International Politics in the Russo-Japanese War

  • James Yu (Guest Writer)
  • May 2, 2025
  • 14 min read

-Edited by Peerajit Phasitthanaphak


1914 witnessed the outbreak of the seminal catastrophe of the twentieth century, a global conflict resulting in seismic international consequences that remain felt to the present. However, the years preceding the First World War witnessed several colonial wars fought between major powers. An academic debate exists on whether the Russo-Japanese War of 1904-05 may be considered ‘World War Zero’. Proponents, including John Steinberg and Akira Iriye, contend the conflict is unique among other colonial wars, citing the widespread social, political, and economic mobilization of belligerent nations, substantial international involvement, and the emergence of international nongovernmental organizations—features unique to global wars. [1] Although this debate remains to be settled, the ‘World War Zero’ thesis invites a consideration of the degree to which the Russo-Japanese and First World Wars may be compared. In this essay, I shall refute the claim that colonial wars before 1914 cannot be compared to the First World War, and show the experience of modern warfare and the globalized character of the Russo-Japanese War of 1904-05 are comparable. This will be demonstrated in the emergence of industrial warfare, the emergence of international financial markets in war-making, and postwar impacts on the domestic and global politics of belligerent powers.



This essay understands the Russo-Japanese War as a colonial war as the belligerent powers maintained imperialistic intentions throughout the conflict. Having expanded eastwards for centuries, Russia secured Outer Manchurian lands to China’s loss in the Treaties of Aigun (1858) and Peking (1860) with ambitions for an ice-free port for the Pacific Squadron, a terminus for the Trans-Siberian Railway, and commercial hub for a Far East colonial enterprise. [2] Japan, steadily industrializing post-1868, built up military strength until the Sino-Japanese War of 1894-5. The subsequent victory saw Japan gain economic and political dominance over Korea, war indemnities, Taiwan and—critically—the Liaodong peninsula in Manchuria, including the Russian-coveted warm-water port, Port Arthur. Russian-led diplomatic intervention during treaty negotiations—directly confronting Japanese interests—reduced indemnities and prevented Japan from keeping Liaodong. However, this was shortly followed by Russian demands for railway concessions and a Port Arthur lease, granted by China in 1898. [3]


By the turn of the century, Russia and Japan had demonstrated their imperialist intentions by seizing land, economic rights, and political influence in Manchuria and Korea decades before 1904. Bilateral negotiations before the outbreak of war are similarly revealing: while a debate exists on the war’s preventability, prewar diplomacy between the two empires was primarily concerned with demarcating regional spheres of influence. Japanese diplomacy from the late-1890s coveted a ‘Manchuria-for-Korea’ settlement with Russia, with inconclusive negotiations on the settlement persisting until the conflict’s beginning. Russian unwillingness to accept any Japanese presence in Korea stemmed from the Tsar’s foreign policy influence, seeking to consolidate Russian control of Manchuria and actively encroach upon Korea.[4] The following conflict unfolded on Chinese and Korean soil despite both nations’ official neutrality. The Treaty of Portsmouth, determining Chinese and Korean territorial, economic, and political sovereignty, was similarly signed without Korean and Chinese input.[5] Thus, the Russo-Japanese War—ignited over colonial interests between two empires, fought on foreign soil without indigenous consent, and concluded with a treaty determining the sovereignty of uninvolved nations—fits the character of a colonial war before 1914.




Firstly, the Russo-Japanese War witnessed the emergence of industrial warfare, with two industrialized belligerent powers deploying large, well-equipped conscript armies supplied by modern logistical systems. Industrial warfare increased the scale of destructive power available; modern rifles, wire entanglements, machine guns, and especially artillery were transformative of the nature of combat, resulting in increasingly prolonged periods of fighting more costly in men and materiel.[6] This is exemplified by the evolution of defensive field fortifications through the conflict. The increased firepower and lethality of weapons led to the increased use and development of field fortifications to reduce troop casualties and to secure and defend key positions from enemy attacks, particularly because of the high dispersal of troops in Manchuria.[7] Russian forces—predominantly on the defensive—developed increasingly sophisticated field fortifications to resist Japanese offensives, in particular devoting efforts to improve survivability against artillery. For instance, an American attaché noted that concentrated and prolonged Japanese artillery fire saw few Russian casualties, with the defenders successfully repulsing a later Japanese assault.[8] Headcover and concealment of field fortifications were regularly decisive in survivability: higher casualties generally followed when one or both features were missing, demonstrated in heavy losses sustained by Russian forces in the Battle of Yalu, especially as Japanese artillery was known to be highly accurate, effective in targeting unconcealed, vulnerable Russian fortifications—further highlighting the lethality of industrial warfare.[9] Moreover, in avoiding the destructive power of modern high-explosive artillery shells, Russian fortifications increasingly adopted machine gun-centered designs with lower profiles, more able to evade and resist shelling.[10]


The developments in theory and technical construction of field fortifications throughout the war led to increasing demand for heavy artillery and increased firepower to dislodge such positions. Such lessons were documented in the postwar years, with one Japanese officer noting that—following the Russo-Japanese War—future battles were likely to last multiple days with alternating offensive and defensive actions against heavy fortifications.[11] In patterns that became the ‘Gordian knot of the Great War’, offensives stalled as artillery-supported assaults encountered additional lines of defensive works, requiring the repositioning of heavy guns—often through inadequate transport networks. Major attacks would therefore stall until artillery could be redeployed and resupplied to enable an army to become mobile again.[12] Further tactical and technical lessons on industrial warfare were taken during the conflict, including logistical and communications support for increasingly large armies, employing night attacks to overcome fortified defenders, and increased inter-service cooperation—all of which became relevant by 1914.[13] Therefore, the first appearance of twentieth-century industrial warfare is exemplified in field fortification construction, adapted to the destructive, industrially-produced weaponry of the Russo-Japanese War. The experience of the Russo-Japanese War in terms of armaments, tactics, and combat thus served as early representations of the global conflict to come, with implications for future warring powers.


Secondly, the involvement of foreign financing and international financial markets highlights the novel features of the Russo-Japanese War. Widespread deployment of modern armaments and subsequent transformations in warfare was possible only with substantial economic, industrial, and logistical backing—a feature of industrial warfare. Industrial warfare saw skyrocketing costs which neither Japan nor Russia could support with their respective treasuries; warring nations after 1905 soon discover the need to develop credit lines to finance future wars.[14] Russia’s war costs ballooned to 6.554 billion rubles, with war loan interest payments alone reaching 3.944 billion.[15] For context, Arthur Rafflovich—Russia’s financial liaison in Paris—revealed Russia’s treasury had only 310 million rubles at the war’s onset.[16] Foreign negotiations for wartime financing began shortly after fighting began, with France agreeing in May to loan 800 million francs at a steep 6.5% interest rate; despite higher rates,

Russia gained sufficient funds to conduct the war through the end of 1904. An additional 231.5 million ruble loan at 4.5% was agreed with Germany in December 1904.[17] Conversely, Japan’s war costs over 18 months amounted to US$1 billion, roughly equal to Britain’s Second Boer War expenditures.[18] Japan similarly engaged in efforts to borrow overseas. Blocked from Paris and Berlin, Japanese efforts targeted New York and London. Though Wall Street was reluctant to lend to non-American-aligned nations, Jacob Schiff—a New York financier—was encouraged by numerous factors (including anti-Jewish pogroms in Russia) to facilitate the issuing of four bonds across 15 months in New York and London.[19] Japan successfully bankrolled her war effort using foreign debt, while simultaneously blocking Russia from Anglo-American capital.[20]


A salient feature of international financing in the Russo-Japanese War was that financial markets gained influence in dictating the course of a conflict. Now possible only with foreign capital, wartime funding relied on investor instincts—often determined by battlefield conditions. For instance, a 600 million ruble loan was pulled by French bankers in March 1905 upon hearing of Russia’s defeat at Mukden.21 Later Russian efforts were unsuccessful, with the Battle of Tsushima spelling an end to foreign loan negotiations until peace was signed.[22] Japan, meanwhile, secured two loans of US$150 million each following the Mukden and Tsushima victories, each with improved subscription and favourable terms.[23] International financial interests thus responded to evolving battlefield conditions, affecting the war’s conclusion: in August 1905, Schiff threatened to halt further loans if Japan continued fighting, pressing Japan to negotiate. The US additionally pressured Japan to relinquish indemnity demands during negotiations, using their influence over Japan’s war economy. Warfare, therefore, saw creditors’

rising influence on belligerent war economies.[24] The war thus illustrates rising dependence on international financial markets, as both belligerents relied heavily on foreign loans with investor confidence and financial diplomacy shaping a war’s trajectory and conclusion. This set precedents for future global conflicts—including American war loans to the Entente—highlighting the extent of the globalisation of warfare through international finance. Finance and war thus became intertwined in the era of industrial warfare, a practice that would continue its development through the First World War and into the 20th Century. 



Thirdly, the settlements following the Russo-Japanese War affected the domestic political arrangements of Russia and Japan, with international repercussions. Domestic political developments affected how each nation aimed to change the world stage, with direct impacts globally. Japan emerged from the War as a major regional—and potentially global—power.

Having defeated two regional powers, Japan overcame previous attempts to constrain expansion, and secured recognition as an equal partner in maintaining the imperialist status quo in East Asia—while simultaneously consolidating control over mainland East Asia.[25] Domestic political environments influenced such changes: in particular, post-1905 Japanese politics and society were subjected to the growing influence of the military, with civil-military conflicts becoming an ‘endemic feature of domestic politics’.[26] One such example was the influence of navy officers

over the Seiyukai political party, with Navy ministers pressing for naval industrial expansion in areas that would boost support in critical electoral districts, creating a mutually beneficial Navy-Seiyukai entente that persevered through to 1914 and—in other ways—beyond.[27] Japanese entry into the First World War also witnessed accelerating military expenditures that persisted beyond the First World War: military spending rose from 26% of national expenditure in 1914, to 36% in 1918, and 49% in 1921—with Parliamentarians cooperating with unelected military

officers to further their political power.[28] Rising military influence over politics—alongside existing imperialist and expansionist tendencies that ignited the Sino- and Russo-Japanese Wars—were compounded by growing calls for Pan-Asian unity post-1905. This had the effect of generating increasing suspicion of the United States—another Asia-Pacific Power—that increasingly obstructed Japan’s imperialist intentions in the region.[29] In the post-1905 world, Japan emerged as a major regional power whose imperialist ambitions had thus far gone unanswered—and for which she sought a solution.



Conversely, Russia in 1905 was embroiled in revolution, with demoralized, disloyal, and manifestly mutinous troops widely involved, and mutinous units returning from the Far East exacerbated the situation in European Russia.[30] Subsequent political reforms saw the Tsar mired in political conflict amid unclear boundaries of parliamentary and imperial authority and power, ultimately resulting in a ‘state of affairs that nourished factional strife and critically undermined the consistency of Russian decision-making’.[31] Despite retaining powerful influence over the government, Nicholas II was barred from solely determining foreign policy agenda following the 1904-05 fiasco, with decision-making relying on a balance of power between cabinet ministers, the Tsar, successive Prime Ministers, and cooperative ambassadors. However, Nicholas II’s repeated attempts to re-establish autocratic control egregiously undercut consistency and long-term vision in foreign policy.[32] Simultaneously, struggles to control foreign policy approaches broke out between ministers, with direction repeatedly changing between liberal nationalists and pan-Slavs—favouring aggressive Balkan policies—and non-interventionist conservatives.[33] Increasingly running on an ad-hoc basis, foreign policy erraticism extended to military strategy vis-à-vis the Russo-German border. Worse was Balkan policy, as paralysis in St.

Petersburg led to the Pan-Slavic Russian ambassador in Belgrade taking a free hand in decision-making up to the First Balkan War.[34] Commitments to support Pan-Slavic nationalism by 1914—in attempts to regain Balkan prestige lost in the defeat by Japan—turned against Russia’s fortunes as St. Petersburg discovered such nationalisms had unintended consequences.[35] By 1914 the extreme-right minister Petr Durnovo cautioned against inconsistent Russian foreign policy and alliance-building: erratic diplomacy which he contended was a direct consequence of the 1905 defeat.[36] Collapsing prestige and growing paranoia in foreign relations encouraged the Anglo-Russian alliance, dubbed ‘an artificial combination, not founded on genuine interests’ and one that fundamentally undercut any possibility of a lasting European peace—especially with Germany.[37] With near-clairvoyant vision, Durnovo outlined the impending war’s consequences, including Russia shouldering heavy military and financial burdens, growing domestic minority nationalist and socialist resistance, the undermining of monarchism as a principle, and an ultimate ‘mortal wound’ dealt to the Russian and German Empires.[38] Despite Durnovo’s

foresight, the recklessness of Russian foreign policy—exacerbated by the 1905 defeat—encouraged Russian mobilisation during the July Crisis, culminating in European war and ending in Tsarist Russia’s dissolution. Fundamentally, the Russo-Japanese War’s fallout impacted the Russian political system to the extent that Russia became blind to long-term

strategic vision; the defeat of 1905 inflamed a chain of events in domestic and international politics that—in part—ended autocratic absolutism, ignited the Balkan Wars, exacerbated European and domestic political tensions, and saw the Tsarist regime’s destruction and Bolshevism’s ascendance. The Russo-Japanese War therefore fundamentally reshaped the two belligerent powers’ domestic political systems, affecting and reorienting their respective geopolitical outlooks. To this end, the Russo-Japanese War contributed to an era of changing political dynamics for both nations, substantially impacting the course of international relations and human history.



In this essay, I have illustrated three key features of the Russo-Japanese War of 1904-1905 in which the experience and impact of war paralleled the First World War. I have sought to demonstrate that this conflict—in the experience of modern industrial warfare, the emergence of international finance in war-making, and seismic postwar repercussions on

domestic and international politics in the postwar era—refutes the claim that ‘colonial wars before 1914 are not comparable to the First World War’. The features of the Russo-Japanese War demonstrate that the nature of war and war-making by 1914 was not unprecedented; this is not to say that the Russo-Japanese War is identical in scale or impact to the First World War, nor is it to claim the Russo-Japanese War constitutes ‘World War Zero’. Rather, I have shown that competing imperial interests, leading to war in 1904, led to fundamental developments in the nature of warfare that would re-emerge in 1914, showing that the Russo-Japanese War and the First World War are indeed comparable.


Footnotes:


1 John Steinberg, “Was the Russo-Japanese War World War Zero?,” The Russian Review 67, no. 1 (January 2008): 1–7, https://www.jstor.org/stable/20620667; Akira Iriye, “Introduction - the

Russo-Japanese War in Transnational History,” in The Russo-Japanese War in Global Perspective, ed. David Wolff et al. (Brill, 2007), https://doi.org/10.1163/ej.9789004154162.i-583.6.

2 Ian Nish, The History of Manchuria, 1840-1948, Vol. I & II: A Sino-Russo-Japanese Triangle, vol. 2 (Amsterdam UP, 2016), https://doi.org/10.2307/j.ctt1s17nxp., 7-9

3 Ibid., 22-28

4 Yōko Katō, “What Caused the Russo-Japanese War: Korea or Manchuria?”, Social Science Japan Journal 10, no. 1 (April 2007): 95–103.; David Schimmelpenninck van der Oye, “The Immediate Origins of the War,” in The Russo-Japanese War in Global Perspective: World War Zero, ed. John Steinberg et al. (Brill, 2005), https://brill.com/edcollbook/title/8556., “Immediate Origins”, 39-43

5 Kato, “Korea or Manchuria?”, 97-8; “Text of the Treaty of Portsmouth,” The Advocate of Peace 67, no. 9 (1905): 208–9, https://doi.org/10.2307/25752586.

6 Nicholas Murray, The Rocky Road to the Great War: The Evolution of Trench Warfare to 1914

(University of Nebraska Press, 2013), https://www.jstor.org/stable/j.ctt1ddr7hs., 123

7 Ibid.

8 Ibid., 139-141

9 Ibid., 160-161; also see Revue militaire des armées étrangères, “Infantry Combat in the Russo-Japanese War,” Royal United Services Institution Journal 50, no.342 (August 1906): 1048–53, https://doi.org/10.1080/03071840609418456.

10 Murray, Trench Warfare, 152-6

11 Lt.Col. Yoda, “Modern Tendencies in Strategy and Tactics as Shown in Campaigns in the Far East,”

RUSI Journal 51, no. 353 (July 1907): 854–71, https://doi.org/10.1080/03071840709418758., 863-5.

12 Murray, Trench Warfare, 168-9

13 Yoda, “Modern Tendencies”, 855-6, 868-71.

(attaché reports listed 279-282)

14 Steinberg, “Russo-Japanese War”, 4

15 Boris Ananich, “Russian Military Expenditures in the Russo-Japanese War, 1904–5,” in The Russo-Japanese War in Global Perspective: World War Zero, ed. John Steinberg et al. (Brill, 2005), https://doi.org/10.1163/9789047407041_028., 450

16 Arthur Raffalovich, “The Financial Situation in Russia,” The Economic Journal 14, no. 56 (December 1904): 625, https://doi.org/10.2307/2221268., 626

17 Ananich, “Russian Military Expenditures”, 453-4

18 Edward S. Miller, “Japan’s Other Victory: Overseas Financing of the Russo-Japanese War,” in The Russo-Japanese War in Global Perspective: World War Zero, ed. John Steinberg et al. (Brill, 2005), 465–83, https://brill.com/edcollbook/title/8556., 470

19 Ibid., 470-4

20 Ananich, “Russian Military Expenditures”, 451

21 Ibid., 455ff16

22 Ibid., 458

23 Miller, “Overseas Financing”, 476-8

24 Ibid., 479-81; Steinberg “Russo-Japanese War”, 5

25 Peter Duus, “If Japan Had Lost the War...,” in The Impact of the Russo-Japanese War, ed. Rotem Kowner (Routledge, 2007), 47–53., 48-51

26 Ibid. 51

27 J. Charles Schencking, “Interservice Rivalry and Politics in Post-War Japan,” in The Russo-Japanese War in Global Perspective: World War Zero, ed. John Steinberg et al. (Brill, 2005), https://brill.com/edcollbook/title/8556., 573-76, 580

28 Ibid., 587-90

29 Steinberg, “Russo-Japanese War”, 5-6; Iriye, “Introduction”, 3-5

30 John Bushnell, “The Revolution of 1905-06 in the Army: The Incidence and Impact of Mutiny,” Russian History 12, no. 1 (1985): 71–94, https://doi.org/10.1163/187633185x00044.

31 Christopher Clark, The Sleepwalkers: How Europe Went to War in 1914 (Penguin, 2012), 178

32 Ibid., 184-6

33 Ibid., 189-90

34 Johnathan Frankel, “The War and the Fate of the Tsarist Autocracy,” in The Impact of the Russo-Japanese War, ed. Rotem Kowner (Routledge, 2007), 54–77. 71-2

35 Richard C. Hall, The Balkan Wars 1912-1913 (Routledge, 2002)., 6-12

36 Petr Durnovo, “Durnovo’s Advice to the Tsar in February 1914,” in A Source Book for Russian History from Early Times to 1917, Volume 3: Alexander II to the February Revolution, ed. George Vernadsky et al. (Yale UP, 1972), 793–98., 793-4

37 Ibid., 798

38 Ibid., 794-7


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