The Russo-Japanese War 1904-1905 At the conclusion of the Boxer Rebellion, the major powers agreed to remove their expeditionary forces from China, except for those soldiers occupying Beijing. The evacuation was completed in the fall of 1901 by all nations except Russia, which maintained a large presence in Manchuria and northern Korea. The Japanese had undergone rapid westernization at the end of the 19th century and developed a strong commercial position in China. They lacked vital domestic natural resources, iron and coal in particular, but had found those items in abundance in China. They viewed the continuing presence of Russia as a threat to their access to those valuable Chinese resources. Efforts by the great powers to ease tensions between Russia and Japan made little progress. Britain, still the dominant military force, re-deployed its Far Eastern fleet to waters closer to home in response to continuing friction with Germany. Japan quickly filled the vacuum. The Russo-Japanese War was fought on Chinese soil with China a neutral observer. Russia was anxious for the conflict, regarding Japan as militarily weak and hoping to divert attention from domestic turmoil. In February 1904, Japan struck first without a declaration of war, and attacked Port Arthur on the western extremity of the Liaotung peninsula. In the ensuing months, the world was astounded by a string of Japanese successes. The most notable encounter was the destruction of the Russian fleet in May 1905 at Tsushima Strait, the area between the Sea of Japan and the East China Sea. In total, twenty Russian ships were sunk and another five were captured. Only four Russian ships managed to reach safety at Vladivostok. Both sides, however, desired peace. Russia was not only losing militarily, but was also experiencing a revolution at home. Japan found that its success came at the price of near bankruptcy. The American president, Theodore Roosevelt, offered mediation, summoning representatives of the warring parties to Portsmouth, New Hampshire in the summer of 1905. Peace was concluded in September and provided for the following: • Both Japan and Russia pledged to withdraw from Manchuria • Russia turned over a number of valuable port leases in China to Japan • Japan received the southern half of Sakhalin Island in the Sea of Okhotsk north of Japan. One important item was not included in the final peace terms—reparations. Japan, staggering under the cost of the war, had sought $600 million from Russia. Roosevelt refused to accept this provision, a slight the Japanese would long remember. The Russo-Japanese War was a major embarrassment to Russia, which became the first major modern European power to be defeated by an Asian nation. Moreover, this disasterous defeat helped undermine the credibility of the autocracy. For many, economic hardship and autocratic government were tolerable if the tsar was able to pursue a successful foreign policy and lead Russia to victory in war. The loss of Port Arthur, the Russian defeat in the naval battle of Tsushima and the destruction of the Baltic Fleet in February 1905 undermined tsarist prestige. Strikes and demonstrations broke out in St Petersburg, leading to the 1905 Revolution.