With regard to the contention that the mining industry is more heavily taxed than in any other country, and that the cost of the necessaries of life is higher, this Government desires to remark that this contention is entirely contradicted by facts and statistics. The value of goods imported into the South African Republic during 1898 amounted to L9,996,575, and the custom duties levied thereon to L1,058,224, or 10.6 per cent. Under the Customs Union of the adjacent British Colonies the import duties amounted to 15 per cent, of the value of the goods, a comparison which yields a difference of nearly 50 per cent. in favour of the Republic. When the matter is examined in detail the case is even stronger. In the Colonies certain articles, such as bread stuffs, are subject to a special duty of 2s., say about 30 per cent, of the value, in corn, and 40 per cent. in meal. In this Republic the duty on both the foregoing articles is 7-1/2 per cent.; butter is especially taxed at 3d. per pound, or 30 per cent., under the Customs Union, while in the Republic it is subject only to the 7-1/2 _ad valorem_ duty. Coffee and other necessaries of life, on being compared, would show a similar difference, and this Government therefore trusts that Her Majesty's Government will exonerate it when it points out the incorrectness and unreliability of the information supplied to the Secretary of State, on which he bases his conclusion that the cost of living is unusually high in consequence of the taxation levied by the State; that such is not the case will be at once shown by a comparison with the taxation of the neighbouring Colonies. The character of the financial administration must have been erroneously represented to Her Majesty's Government if it was simply stated that defalcations to an amount of L18,590 had taken place. It would _ex facie_ appear from such a statement that the above defalcations had taken place during the past year; as a matter of fact, the Inspection Department, which has only recently been called into existence, reported over financial matters covering the years 1884 to 1896. It is unfair to characterise all deficiencies as defalcations, for from the nature of the case a deficiency does not always constitute a defalcation. The report specified the sub-divisions of monies which had yet to be accounted for. The first item in such deficiencies amounted originally to L12,000, and of this L6,000 was afterwards collected, and the balance was only brought forward; another item of _L10,808 11s._ was brought forward in its entirety, but L3,000 of this was eventually collected and accounted for, while continual efforts were made to secure the balance. Many items not brought forward were collected long before and accounted for, while during the inspection of last year it was found that a sum of L800 yet remained to be paid in out of the deficiencies, which balance has been accounted for.