This deficit is imaginary, and is obtained by including in the ordinary current expenses the sum of fifty millions, which was paid for the right of way of the Panama Canal out of the accumulated surplus in the Treasury. Comparing the current or ordinary expenditures for the two years, there was a surplus of nearly eighty millions for the year 1900, and of only a little more than eight millions for the year that has just closed. But this diminution of the annual surplus was brought about designedly by the abolition of the war taxes in the interval between the two dates. The acts of March 2, 1901, and April 12, 1902, cut down the internal revenue taxes to an amount estimated at one hundred and five millions a year. In other words, the reduction of taxation has been considerably greater than the reduction in the annual surplus. Since the close of the war with Spain there has been no substantial change in the rate of annual expenditures. As compared with the fiscal year ending in June, 1901, for example, the fiscal year that has just closed showed a relatively small increase in expenditure (excluding the canal payment already referred to), while the year previous showed a relatively small decrease. The expenditures of the Nation have been managed in a spirit of economy as far removed from waste as from niggardliness; and in the future every effort will be continued to secure an economy as strict as is consistent with efficiency. Once more our opponents have promised what they can not or should not perform. The prime reason why the expenses of the Government have increased of recent years is to be found in the fact that the people, after mature thought, have deemed it wise to have certain new forms of work for the public undertaken by the public. This necessitates such expenditures, for instance, as those for rural free delivery, or for the inspection of meats under the Department of Agriculture, or for irrigation. But these new expenditures are necessary; no one would seriously propose to abandon them; and yet it is idle to declaim against the increased expense of the Government unless it is intended to cut down the very expenditures which cause the increase. The pensions to the veterans of the Civil War are demanded by every sentiment of regard and gratitude. The rural free-delivery is of the greatest use and convenience to the farmers, a body of men who live under conditions which make them ordinarily receive little direct return for what they pay toward the support of the Government. The irrigation policy in the arid and semi-arid regions of the West is one fraught with the most beneficent and far-reaching good to the actual settlers, the homemakers, whose encouragement is a traditional feature in America’s National policy. Do our opponents grudge the fifty millions paid for the Panama Canal? Do they intend to cut down on the pensions to the veterans of the Civil War? Do they intend to put a stop