Not only was Russia humiliated by its defeat at the hands of an oriental power, but there was massive unrest at home, typified by the Revolution of 1905. The response in international affairs came with two treaties in 1907 with Japan and Great Britain. The arrangement with Japan allowed southern Manchuria to be reserved as the sphere of Japanese interest, and Korea was completely under Japanese control – it was formally annexed in 1910. In exchange, Russia gained control of northern Manchuria. The city of Harbin became a major railroad and administrative center. Russian settlers were moved in, trade was built up, and mining properties were developed. The treaty with Japan also gave Russia a free hand in Outer Mongolia, although it nominally remained under Chinese ownership.
