The display shows the severe hardship of life on the island over this period. 1869 was a critical year for both social and economic development, and the social structure of the territory for the next forty years. A decree from the Tsar turned Sakhalin into a place of penal servitude and exile, and the island became one of the gloomiest parts of Russia. Everything during the next decades was devoted to the principle of convict colonization. The whole island became a prison and the prison administration had limitless power over both the convicts and the few free Sakhalin people.

The display begins with an assortment of documents and maps, showing landmarks in Russian-Japan relations of that period, particularly concerning the Kurile Islands. The maps show the frontiers of Russia and Japan according to the terms of the Simodsky (1855) and St.Petersburg (1875) agreements.

Near it is a set of material about Sakhalin penal servitude. The routes of convicts' transportation under guard to Sakhalin are marked on a large-scale map: by land across almost the whole of Russia, or by sea from Odessa via the Suez Canal. A model of the vessel "Nizhnii Novgorod", and photos of convicts taken during the sea voyage, demonstrate convict transportation in detail.

The photos of Sakhalin gaols, and artifacts of the penal servitude period invariably attract visitors' attention. Handcuffs and leg chains, and a lock and key from a punishment cell of Aleksandrovsk gaol (one of the biggest in the island), are symbols of Sakhalin at the end of the last century, and bring the suffering alive. A sackcloth shirt for a new-born child is shown, of the kind issued at the gaol's hospital as a first garment for prisoners' children.

The display gives a picture of the economy of the island of that period. It was a very important stage in the formation of the coal, oil, fishing, forest and agriculture industries, still basic in Sakhalin. At that time the foundations of the modern economy of the region were laid down. Materials on the search for natural resources, the first industrial enterprises, and a set of agricultural implements are all displayed.

Sakhalin, being the largest Russian penal colony, was also a place of political exile. Members of the most significant Russian political parties and organizations, such as "Proletariat" and "Narodnaya Volya" (People's Will), like B.O.Pilsudskri, L.Y.Stcrnberg, L.A.Volkenshtein, I.P.Yuvachev, and B.P.EIIinskii. served their sentence on the island. Working in schools, libraries, hospitals, workshops, and the island's administration office, they gave practical help in making the life of convicts and their families easier, and greatly contributed to the spiritual and cultural life of the island. The contributions of Stemberg and Pilsudskii to research into the traditional Ainu, Nivkh and Orok cultures are difficult to over-estimate. The results of their scientific researches are shown in the display. The next display is on the journey to Sakhalin in 1890 of the well-known Russian writer, Anton Chekhov. His book, "The Island of Sakhalin", is like an encyclopaedia of Sakhalin life, and was the result of the author's stay of more than three months. Visitors to the Museum can see the results of the census of Sakhalin population which Chekhov organized, and observe the process of his work on the book.

Household equipment of the island population at the turn of the century is shown - tools, domestic utensils, and contemporary house decorations.

The display is completed with the military operations in Sakhalin during the Russian-Japan war in 1904-1905. The war took place mainly in China, but in 1904 it reached Sakhalin. The display has two guns of 47-mm from the Russian cruiser "Novik" and a model of the cruiser that is a reminder of a heroic page in the history of the Russian fleet. On August 21, Russian sailors trying to break through the beleaguered Port Arthur to Vladivostok were involved in an unequal fight with two Japanese cruisers near the port of Korsakov. The enemy retreated, but "Novik" had to be sunk in order not to give the enemy a chance to get it. The photos on display show the half-sunk cruiser and a coastal gun battery. Next we see the military operations on the island itself. In 1905, after Russia had suffered heavy defeats, Japan decided to seize Sakhalin. The armed forces of the island were mainly made up of partisan detachments and former convicts. On June 24 Japanese troops landed near Korsakov. The poorly armed and trained Russian detachments stood up to the enemy for more than seven weeks. The display has a scheme showing the military operations of all the five partisan detachments. Near it are original personal items and arms from the detachment of Staff-Captain B.V.Grotto-Slepikovskii, which resisted the enemy for thirty-five days.

On July 24 the Japanese landed in the north of the island as well. After some stubborn fighting the Russians had to surrender. The materials that complete the display show how the 50th parallel divided Sakhalin into two parts. According to the terms of the Portsmouth agreement of 1905, South Sakhalin was given to Japan and North Sakhalin was kept by Russia.