yen; public home civil service, 19,236,444 yen; diplomatic and consular service, 500,000 yen. The Civil List, including the appanages of the members of the Imperial family, amounts to only 877,000 yen, or 175,400l.; pensions amount to 1,059,404 yen; administration of the cities and provinces, 3,786,700 yen; buildings and embankments, 1,987,000 yen; industrial undertakings, 1,005,084 yen; temples, 135,000 yen; miscellaneous expenditure, 1,877,814 yen; reserve, 1,500,000. Among the subheads of home civil service we find 300,000 yen set down for the Council of State, 170,000 yen for the Department of Foreign Affairs, 1,314,800 yen for the Administration of Justice, and 1,139,870 yen for the Department of Education. The public debt amounts to 250 millions of yen, or about 50 millions sterling. But very nearly four-fifths of this partake of the character of our terminable annuities. When, some years ago, the Japanese political system was reorganised and the pre-existing feudal arrangements extinguished, the Government took upon itself the obligation of providing for the "Samurai," or feudal retainers of the Daimios, and also for some colleges of priests. But, at the same time, it took over the ownership of various parcels of land scattered over the country which had been previously burdened with those charges. These lands are let at a very moderate rate, and it is the income derived from this source which figures as "land-tax," and is such an important item of State revenue, amounting to about 75 per cent. of the whole. The charges for which this fund is primarily liable will be extinguished in about twenty-five years, while the lands and their income will remain the property of the State. The interest paid on the several portions of the public debt varies from 4 to 9 per cent., the average being 6 per cent. This must be considered satisfactory, since the ordinary rate of domestic interest in Japan is from 12 to 15 per cent., and the Chinese Government has had to pay 8 per cent. on its last loan. The population of Japan is about 34 millions. The peace establishment of the army is fixed at one man for every thousand of the population, exactly one-tenth of the ratio fixed for the German Empire. The military charge amounts to 9 15-17d. per head of the population, and the total amount of taxation, properly so called, is only a minute fraction more than 18. 24d. per head.

CHAPTER VIII.

AFRICA.

I. EGYPT.

AFTER ten years and more of feverish agitation, culminating in the collapse of the arch agitator, Egypt has devoted the past twelve months to the dull monotonous task of paying her debts. Under pressure from without, she has learnt the maxim of the policy of honesty, and strange to say that, whilst her creditors are satisfied, she herself seems in no way impoverished. The amazing fertility of the soil, the patient laboriousness of the fellaheen, and the other resources of the country which had hitherto been used to attract the avarice of speculators, at length began to commend themselves to the confidence of investors. The history of 1880, as far as Egypt is concerned, is the history of the restoration of her credit, and of her fair start on the road to commercial and agricultural wealth. The leading strings in which the Khedive consented to carry on the government may, on various occasions, have galled him not a little, but great praise is due to Tewfik Pasha for his unswerving loyalty to the Powers who placed him on the throne, and for the strict impartiality with which he has listened to the recommendations of the rival Powers. On more than one occasion he supported his own Ministry against their demands; but more frequently his influence was invoked, and not in vain, to prove to his Cabinet and subjects the necessity of submitting without a murmur to the necessities of the political or financial situation. The latter was the more critical. From the very first moment of his advent to power he had been forced to face two inevitable changes-the reduction in the rate of interest on Government bonds, and the abolition of the Moukabalah tax, in reality a double tax on all landowners, and one of the latest devices of the ex-Khedive. Under a promise that all landowners paying for a series of years a double tax should subsequently only pay one-half of the regular land-tax, Ismael Pasha had aroused hopes of permanent relief which he never intended to realise; whilst in like manner his assurance to his creditors and the European Powers that the proceeds of the double tax would be devoted to paying off the public debt was merely intended as a cloak for further extravagance and folly. The result showed that the double payment was practically impossible. When the Moukabalah was regularly paid, the ordinary land-tax fell into arrear, and when the ordinary tax was paid the Moukabalah was neglected. The tax had been useful to the ex-Khedive as a means for obtaining short loans at an exorbitant rate of interest, and had been one of the origins of the floating debt of six millions, contracted within three years, with which the European Controllers had to deal.

more than ordinary caution, and to abstain from overtaxing crops, the natural sources of revenue.

It must not be imagined that the European Controllers were able without friction to carry out all these projected reforms, although they had succeeded in framing a budget which, by lightening the burden on the public, materially added to the popularity of the new Khedive and his Cabinet. The holders of the Unified Debt, in whose favour specific sources of revenue had been set aside; the creditors of the Domain Lands, who looked to the Moukabalah for payment, were amongst the chief opponents of the new plan; and, at one time, it seemed as if the Government was about to give way to the Unified Bondholders. The Controllers and Commissioners of the Public Debt, however, remained firm, and on February 24 the President of the Council of Ministers addressed to the Commissioners a formal surrender of the principal points in dispute. The Customs receipts were to be paid into the public Treasury, though certain other revenues recently diverted from the service of the Funded Debt were necessarily for a time retained. In the President's letter reference was made to the goodwill with which the recommendations of the once famous European Commission of Inquiry had been carried out; the personal tax and many smaller imposts were abolished, the salt-tax was reformed, the Uchowry land-tax increased, and forced labour placed under control. The Khedive, the letter went on to show, had already paid more than a million and a half of his father's debts towards the mortgage creditors; and was ready to come to terms with the holders of the floating debt. "But," said the President of the Council, 66 we are stopped by the international principle which prevents Egypt from making her own laws and decrees without the consent of fourteen Powers. We are further delayed by Messrs. Rothschild, who refuse to pay over the residue of their loan unless their lands are declared free from taxation. The Government is also attacked by holders of the Funded Debt for the arrears of the coupons, amounting to 1,700,000l., which everybody knows the country could not pay. If these claims are admitted, the number of unpaid judgments will be greatly increased. Even if Messrs. Rothschild pay the money which was obtained by the sacrifice of the Viceregal lands, one of the fourteen Powers can stop the Government from freely using it, as was done lately when the arrears of tribute and the pensioners were proposed to be settled, and Greece would not allow it as long as any judgments remain unpaid. In short, Egypt contains all the elements of a durable prosperity. The Government has commenced reforms which will enable that prosperity to develop; the most perfect harmony exists between the Controllers and the Ministers. But all these elements of prosperity are paralysed by the check imposed on our legislative powers by the principle of internationality. A Government cannot live unless it can make laws. Either, therefore, the Egyptian Government must be allowed

But

to make its own laws, or the Powers must agree to make them with it. Egypt is ready to accept either of these solutions. long negotiations will imperil the vital interests of the creditors as well as the country. If the Government did not know that an international commission was not being discussed by the Powers, a settlement would be at once offered to the creditors."

The next step in the financial regeneration of the country was the appointment of a so-called "Commission of Liquidation " with extensive powers. This international body composed of seven members was, in truth, a High Court of Bankruptcy charged with winding up the embarrassed estate of the Egyptian Government. England and France were represented by two Commissioners each; Germany, Austria, and Italy by one each; the nine other European Powers leaving their interest in their colleagues' hands. The Khedive's Decree appointing the Commission was issued on April 4, and after recapitulating the causes for its nomination, and the promised adhesion of the Powers to its decisions, it defined its duties as follows:

"Art. 1. After having examined the whole financial situation, and having heard the interested parties, this Commission shall prepare, on the basis of the conclusions of the superior Commission of Inquiry, and without any modification of the terms of the Domain Loan, a law regulating the relations of the Government, as well as the Daira Sanieh and the Daira Khassa, with their creditors, and the manner in which the liquidation of the nonconsolidated debt ought to be carried out.

"Art. 2. The Commission shall ascertain the resources which can be placed at the disposal of the Consolidated and non-Consolidated Debt, but it shall, in concert with the Council of Ministers, provide for the free disposal by the Government of such sums as are indispensable to the proper and regular working of the public services. "Art. 3. The Controllers-General shall furnish the Commission on request with all documents and supplementary explanations which may aid in the accomplishment of its task.

"Art. 4. The Commission shall have the right, in conjunction with the Controllers-General, to superintend the execution of the rules it lays down, and its powers may be prolonged for this purpose for a period not exceeding three months after the publication of the decree of liquidation. After this delay the Commission shall in any case cease to exist.

"Art. 5. The law prepared by the Commission shall receive our sanction and be published by us. From the date of its publication this law shall be binding and beyond appeal, notwithstanding the dispositions of the judicial treaties and the codes of the Mixed Tribunals.

"MEHEMET TEWFIK, Khedive.

"RIAZ, President of the Council of Ministers." On July 17 the report of the Committee was presented to the Khedive and received approval. On it a law was founded and forth

more than ordinary caution, and to abstain from overtaxing crops, the natural sources of revenue.

It must not be imagined that the European Controllers were able without friction to carry out all these projected reforms, although they had succeeded in framing a budget which, by lightening the burden on the public, materially added to the popularity of the new Khedive and his Cabinet. The holders of the Unified Debt, in whose favour specific sources of revenue had been set aside; the creditors of the Domain Lands, who looked to the Moukabalah for payment, were amongst the chief opponents of the new plan; and, at one time, it seemed as if the Government was about to give way to the Unified Bondholders. The Controllers and Commissioners of the Public Debt, however, remained firm, and on February 24 the President of the Council of Ministers addressed to the Commissioners a formal surrender of the principal points in dispute. The Customs receipts were to be paid into the public Treasury, though certain other revenues recently diverted from the service of the Funded Debt were necessarily for a time retained. In the President's letter reference was made to the goodwill with which the recommendations of the once famous European Commission of Inquiry had been carried out; the personal tax and many smaller imposts were abolished, the salt-tax was reformed, the Uchowry land-tax increased, and forced labour placed under control. The Khedive, the letter went on to show, had already paid more than a million and a half of his father's debts towards the mortgage creditors; and was ready to come to terms with the holders of the floating debt. "But," said the President of the Council, "we are stopped by the international principle which prevents Egypt from making her own laws and decrees without the consent of fourteen Powers. We are further delayed by Messrs. Rothschild, who refuse to pay over the residue of their loan unless their lands are declared free from taxation. The Government is also attacked by holders of the Funded Debt for the arrears of the coupons, amounting to 1,700,000l., which everybody knows the country could not pay. If these claims are admitted, the number of unpaid judgments will be greatly increased. Even if Messrs. Rothschild pay the money which was obtained by the sacrifice of the Viceregal lands, one of the fourteen Powers can stop the Government from freely using it, as was done lately when the arrears of tribute and the pensioners were proposed to be settled, and Greece would not allow it as long as any judgments remain unpaid. In short, Egypt contains all the elements of a durable prosperity. The Government has commenced reforms which will enable that prosperity to develop; the most perfect harmony exists between the Controllers and the Ministers. But all these elements of prosperity are paralysed by the check imposed on our legislative powers by the principle of internationality. A Government cannot live unless it can make laws. Either, therefore, the Egyptian Government must be allowed