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to date. But, as I retired from office in October, 1900, I can state only my private views with regard to what has taken place since then.

The Boxer disturbances and the consequent despatch of our forces to China necessitated an unexpected expenditure on the part of the Japanese Government. The estimated outlay on this account for the fiscal year ended March, 1901, amounted to 28,600,000 yen, and no inconsiderable expenditure continued to be made in the following fiscal year. The financial equilibrium was not affected by this unexpected expenditure, because, out of the Chinese indemnity, a sum of 50,000,000 yen had been set apart, on which the Government could draw to pay the expenses connected with the Boxer disturbances. But in view of the prolongation of the Chinese complication, and of the necessity of replenishing the emergency fund, a measure for increased taxation was adopted once again in the session of the Diet, March, 1901. An increase of 21,000,000 yen in the annual revenue was expected to accrue from the said measure, which consisted of increasing the saké tax and the Customs duties on certain articles, imposing a new tax on sugar and on beer, and raising the price of leaf tobacco monopolized by the Government. Thus, in spite of the troubles connected with the Chinese disturbance, the financial equilibrium was maintained in the Budget for 1901–02 in the same satisfactory manner as in the Budget for 1900–01. The figures for the fiscal year 1901–02 were as follows:

Both in 1900–01 and in 1901–02 the excess of the ordinary revenue over the ordinary expenditure amounted to about 40,000,000 yen, and I venture to say that this state of national finances is not to be stamped as unsound. Now, the impression generally entertained, that the political troubles which led to the resignation of the Ito Cabinet on the 2nd of May, 1901, and the formation of the Katsura Cabinet just a month later, were caused by a financial question, is very misleading, if not entirely mistaken. If a Cabinet fell in consequence of financial troubles, and another was formed only after almost unexampled delay and difficulty, it would seem that the basis of our national finances was dangerously insecure. But such is far from being the case. It seems at first sight that the Ito Cabinet was embarrassed by a financial question; but the question only related to the extraordinary public undertakings, such as the extension of railways and other means of communication, for