Early in 1898 a general statement had been drawn up by my predecessor’s orders to show our urgent requirements. By this it was clear that, in order to satisfy all our wants, a _supplementary_ allotment of £56,500,000 was absolutely necessary beyond the sum required for the five-year schedule. This amount included expenditure on two items of a very special nature: the re-armament of the field artillery with quick-firing guns (£9,000,000), and the increase of house allowances (£2,000,000). It must be remembered that the measures now put forward by General Vannovski did not even dispose of our many really important needs, for in his supplementary statement were included only those things that could not be postponed, or which had long ago been sanctioned, but not carried out for want of funds. Amongst the most important of these were the following: 1. The improvement of the organization of the army and increases to its establishment, including additions to the troops in the Asiatic districts, especially in Pri-Amur. 2. The betterment of the conditions of service of all ranks, particularly as to an increase to the officers’ pay and house allowance, and the introduction of field kitchens. 3. The augmentation of reserve supplies in the Pri-Amur and Turkestan districts. 4. An increase in the artillery in the Siberian Military District. 5. The formation of extra engineer units and strengthening of fortresses. The Finance Minister, to whom this demand for a further allotment of £45,500,000[45] additional to the schedule for the period of 1898 to 1902 was submitted, replied that the state of the country’s finances would not permit of the money being given. After much discussion he agreed to grant £16,000,000 instead of £45,500,000, and this lesser sum was finally approved. So we actually received for this five-year period about £30,000,000 less than was required, or a deficit of £6,000,000 per annum. Such a policy could have only one result, that of placing us further behind our western neighbours in the military race, as in many directions it compelled the cessation of work necessary for the strengthening of our position both on our European and Asiatic frontiers. Besides this, large sums were required for the general improvement of the status of our troops on the peace establishment. In the first place, in order to obtain greater efficiency among the senior officers, it was essential to treat the whole body of officers in a more liberal spirit, so that zealous and capable men should be content to remain in the Service, and not wish to leave; to modernize and add to the number of our military educational establishments, so that as large a number of officers as possible should receive a general training of a standard equivalent to that given in the middle-class educational establishments. Our private soldiers were decidedly worse off than those of other armies as regards ready-money, food, dress,