and telegraphs) consume nearly an equal sum and return only about two thirds as much in the form of revenue, the difference being partly due to expansion and partly to a present lack of profits from many enterprises. Naval and military affairs consume a large sum, but the present temper of the Chinese public is strongly contrary to a reduction of the effort to make China self-protecting. Educational expenditures should be increased, rather than curtailed, and it may similarly be said of most of the other items that though the moneys might perhaps be more wisely and efficiently expended they can not very well be decreased if the country is to prosper. China's hope lies, not in decreasing her expenses, but in increasing her income.
To greatly increase the income from the Maritime Customs scarcely seems feasible. The present rate of 5 per cent., imposed equally on imports and exports, is certainly low, but the commercial treaties existing with the principal countries only provide for a moderate increase, and it scarcely seems possible that the banker nations would look with favor upon a proposal to tax foreign trade in order to secure income to meet the interest upon their loans. The likin (internal transit tax) should be abolished; like the ridiculous prohibition of the export of grain from one province to another, it hangs like a vampire on the industrial body of the nation, sucking out its life. The conception that certain parts of the country are best suited to the production of certain commodities, while others can best produce something else, and that the best interests of the whole are secured by offering every facility for the free exchange of products, is so elementary that it is strange that even such pronounced individualists as the Chinese have not earlier perceived it. The salt gabelle, similarly, is a financial anachronism. The income from the government-owned enterprises can be greatly increased by better, more intelligent, more careful, and more honest management. In fairness it should be said that the lack of profits from these is not all to be laid at the door of the Chinese; foreign engineers have built $40,000,000 railroads where the probable trade only justified a $10,000,000 road, and foreign supervision of enterprises has often brought with it fat contracts for the foreign merchant.
The land tax might be increased, but the farming class, the large landowners, are already barely above the margin of subsistence, as a whole. But by development of agriculture, as in the United States, the income of the farming class could be greatly increased, with a corresponding taxable margin. Agriculture is the fundamental industry of any country, and the new government will be stupidly negligent if it does not make provision for its scientific development. Progress has already been made in this regard in Manchuria. The improvement of yield and of product by the judicious selection of seed is an idea which has never occurred to the Chinese; indeed, it may be broadly said that