The total amount of scrip of the new Unified Bonds issued in respect of the Series Bonds up to the 30th June was £T.30,589,240.

The exchange of scrip and old Bonds for Definitive Bonds began on the 16th July last, and will continue, until the 14th March, 1905, to be effected by the various establishments charged with the conversion, after which date the exchange will only take place at the Imperial Ottoman Bank at Constantinople.

The following information is taken from the Preliminary Reports published by the Debt Council, supplemented by later information supplied by Mr. Block.

REVENUES.

Owing to the Unification of the Debt having been carried out, the year 1903-4 formed a period of transition, the old régime being in force until the 1/14 September, 1903, and the new from that date onward. The Debt Council have, therefore, issued separate Preliminary Reports dealing with each of the half-years. The definitive Report for the year, which will be published by the Debt Council, will embrace both periods; it will not appear before next September.

During the first half of the financial year the gross receipts from the assigned Revenues amounted to £T.1,508,453, and the nett amount applicable to the service of the Debt to £T.1,411,890. After effecting the Debt service in accordance with the Decree of Mouharrem

(including the payment of the September, 1903, coupon of the Series Bonds at instead of per cent.) there remained

a balance of £T.161,756. Of this sum £T.22,103 was credited to the Special Account of the Lottery Bonds, leaving £T.139,653 to be added to the Reserve Fund.

The gross receipts for the second half-year reached a total of £T.1,136,055, the nett amount available for the Debt service being £T.1,079,205. The total annuity fixed by the Décret-Annexe for the service of the Priority Bonds, the Unified Converted Debt, and the Lottery Bonds is £T.2,157,375, and after providing a moiety of this sum there remained a small surplus of £T.517, which remains to be divided, in accordance with the new arrangement, between the Government and the Debt in the respective proportions of 75 and 25 per cent.

The increase in the receipts from the "Five Revenues" for the whole year amounted to £T.110,803, whilst the returns from the Tobacco Tithe and the Tobacco Régie increased respectively by £T.80,934 and £T.47,627. The total increase in the Receipts under the head of "Revenues" was £T.238,999, but this was almost entirely counterbalanced by the decrease of £T.228,039 in the amount received from the Bulgarian Government on account of the Eastern Roumelian Annuity,* the actual result being an increase of £T. 10,960 in the gross Receipts and of £T.31,657 in the nett amount applicable to the Debt Service as compared with 1902-3.

TOBACCO RÉGIE AND TOBACCO TITHE.

The receipts of the Régie showed a considerable increase for the year 1903-4, but the outlook for the present year

In 1902-3 the Bulgarian Government paid two years' arrears in addition to the usual instalments for the year.

is not so promising. It may be estimated that for the reasons advanced below there will be a shrinkage in the receipts from the Tobacco Régie and the Tobacco Tithe of as much as £T.100,000 in the current year, but this source of revenue has always been a fluctuating one, and in the natural course of things has its alternate good and bad periods. The Tobacco Tithe in 1903-4 attained the unprecedented figure of £T.246,600, and the share of the Debt Administration in the profits of the Régie showed a substantial plus-value as compared with the preceding period. The high prices paid for tobacco last year have encouraged the cultivators to sow on a far wider scale, and if more tobacco is grown than the Régie can consume, prices must necessarily again fall. Contraband promises to be rife, and the Turkish Government seems unwilling or unable to cope seriously with the smugglers. In certain outlying districts, the Provincial Authorities lend the Régie no assistance. The Council of the Debt has called the attention of the Government to the laxity of the local Governors, but under any circumstances the receipts for the present year will doubtless fall short of those of 1903-4.

EASTERN ROUMELIAN ANNUITY.

The instalments due by the Bulgarian Government have been punctually paid.

STAMP REVENUE.

Under the old Law the receipts from Stamps were nearly stationary, although in districts recently opened up by

railways a slight increase was visible, and the only hope of increasing the receipts under this head was to obtain the active co-operation of the Government and of the Foreign Embassies, and to extend the action of the Law. These were the objects which the Council had in view when the new Law was made an essential condition of their acceptance of the Unification.

The delays in its promulgation were inevitable, but it is satisfactory to know that the Law has been most carefully drafted in order to overcome both the susceptibilities of foreign financial, commercial and industrial establishments, and the natural prejudices of the local populations whose contributions to the Fisc under this head have hitherto been comparatively light.

The Council of the Debt was fortunate in obtaining, in addition to its own experts, the assistance of an official of the Control Department of Financial Administrations at the French Ministry of Finance. The Turkish Commission appointed ad hoc at the Porte has shown commendable assiduity and good will, and the Law as drafted may be expected to produce a considerable improvement in the receipts. The Turkish Government fully understand their interest in affording their cooperation. The increase in the receipts may be gradual at first, but the Bondholders may congratulate themselves that this matter, which has been a just cause of complaint for many years, has now been satisfactorily settled. A new source of revenue has been created which will not press too heavily on the population, since it should not be forgotten that the revenue in Turkey from Stamps has been quite insignificant as compared with that of other countries.

RESERVE FUND.

At the date of the Unification, 1/14 September, 1903, the Reserve Fund amounted to £T.1,113,865, as compared with T.814,084 on the 1/14 March, 1903. The increase was mainly due to the transfer to this account of the sum of £T.146,351 belonging to the "Suspense Fund," created at the close of the preceding financial year in connection with the arbitration regarding the increase in the interest on the Series Bonds, and to the Reserve Fund's share of the surplus receipts for the half-year ending September, 1903, which amounted to T.139,653.

On the 1/14 March, 1904, the Reserve Fund amounted to £T.1,443,743, which included the £T.300,000 added in virtue of Article 8 of the Décret-Annexe and the interest on the following securities in which part of the Fund had been invested :

Of the Unified Bonds held, £T.492,800 represented the new capital issued in respect of the Series C and D Bouds belonging to the Reserve Fund previous to the Unification, and £T.497,574 were purchased in the course of the second half-year at an average price of 78.46 per cent.

The interest earned by the Reserve Fund during the financial year amounted to T.43,658.

It is to be noticed with regret that the Turkish Government has not yet paid the annuity of £T.15,000 due for last year, according to the stipulations of the "Décret