The deficiency in the treasury is occasioned partly by arrears of taxes, and partly by incidental expenses, such as bank subvention, appropriations for internal improvements, etc. With the view of enabling the treasury to carry on its operations, the government has, for the past few years, been obliged to effect a local loan of $8,000,000, in the shape of Kayemés, or Treasury notes, bearing interest of 6 per cent per annum. Apart from this, it has also contracted a foreign debt of £5,000,000--these two are the only national debts. The monetary market in every country is governed by its exports and imports. The demand in Turkey for articles of foreign produce, having gradually exceeded its former imports, the balance of trade has been against the country, and a drain of specie has been the natural consequence. Apart from this, the payment of the Russian indemnities, having forced the government to demonetize its currency, the rate of exchange became very fluctuating, and a fit subject to financial operators; so that affairs assumed a frightful aspect. To remedy this evil, the government was advised to establish a Bank, in order to keep the foreign exchange at a more uniform par value; this subvention has cost the government on an average $1,000,000 per annum; jet without any good success, for it only served to enrich a few individuals, who were intrusted with its management, without benefiting the country in general, and involved the national treasury in greater difficulty. CHAPTER XIII. ARMY AND NAVY. The standing army of the Ottoman Empire is in time of peace 120,000 men, and 180,000 during war. It consists of six ordoos or divisions, viz.: Hassa, or Imperial Guards. Der-y-Saadet, or Metropolitan Division. Roumely, or European (Turkey) Division. Anadolou, or Asiatic, Division. Arabistan, or Arabian, Division. Irak, or Messapotamian, Division. Every division comprises, three regiments of foot, two of horse, and one of artillery, with 32 guns, the whole amounting to 30,000 men. The soldiers in active service are called Nizam, and those in reserve, Redif. They are raised by conscription, and formerly used to serve all their lifetime, or as long as they were able, but by a commendable measure recently introduced by Riza Pasha, a military reform has been effected, by which they are now relieved at the end of five years, when they go to their respective homes, subject however, to certain military duties at stated times. By this measure, Turkey has been enabled to raise a reserve of no less than 400,000 Redifs. Both Nizams and Redifs are divided into two bodies, commanded by Feriks (or Lieutenant Generals) and Livas (Brigadier General), and the whole of every division by a Serdar or Field Marshal. The entire army is subject to the orders of the Ser-Asker or the Generalissimo, who is the minister of war.