Navy and arsenals £22,650,000 Army 8,220,000 Fortifications 940,000 Other military expenses 680,000 Railway construction 7,980,000 Increase and improvement of lines 2,650,000 Telephones 1,280,000 Construction of ports 790,000 Defence against floods 1,970,000 Subventions to banks 2,060,000 Creation of a tobacco monopoly 820,000 Subventions to various industries, commerce, agriculture, and other public works 1,460,000 ——————————— Total £51,500,000 Of this amount £32,495,670 was for War Office expenses, and £19,005,406 was intended for the very extensive commercial enterprises. In 1893 a loan was voted to be issued as and when required to entirely cover the expense of the new railway lines. The indemnity was £30,000,000, _plus_ £4,100,000 as compensation for the retrocession of the Liao-Tung Peninsula, imposed upon Japan by the Russian, French, and German Governments. This latter sum, as well as the first instalment, £7,500,000, of the indemnity was duly paid into the Japanese Treasury on November 8, 1895; the remainder was to be paid by regular instalments on May 8 of each year until 1902. China, however, availed herself of a clause allowing her to pay off the debt at once, and thus escape interest charges, which she did on May 8, 1898. Japanese statesmen had anticipated this act of the Chinese Government, and did not count upon more than £34,100,000. Of this sum £8,000,000 had been debited to the war account, leaving a balance of £26,100,000. In addition to these amounts, the Treasury held the accumulated surpluses, which, on April 1, 1896, attained £3,900,000, to which £500,000 must be added as the surplus in the Budget of 1896–97. The difference between the total of these receipts and the anticipated expenses was to be balanced by a loan known as ‘the loan for State enterprises.’ The following table exhibits the assets for this programme of expansion: Chinese indemnity[17] £26,100,000 Surpluses of previous Budgets 4,400,000 Railway loan, £7,980,000 21,480,000 Loan for State enterprises, £13,500,000 〃 ——————————— Total £51,980,000 ===========