the abdication of the Republic's rights, and have cast discredit upon arbitration.

Commenting on the good relations subsisting between Venezuela and France, President Castro stated that the obligations incurred under the Paris Protocol of 19th February, 1902, had been fulfilled. A provisional certificate for Bols. 1,000,000, destined to cover the claims of French subjects arising out of the revolution of 1902, had been delivered to the French Legation and would be exchanged for Bonds of the Diplomatic Debt when the French Government should have informed the Legation of the sum allotted to each claimant. Bonds of that Debt had also been handed to the French Legation in respect of the sums due in virtue of the awards of the Franco-Venezuelan Mixed Commission instituted in accordance with the provisions of the above-mentioned Protocol. It was still impossible to state the total sum payable by Venezuela to France, as, cwing to the persons nominated as umpires having declined to act, eight claims, representing in all Bols. 42,988,047.50, remained unadjudicated.

The state of the Treasury and the necessity for meeting urgent and unexpected obligations had rendered it impossible for the Government to resume in full payments on account of diplomatic conventions. Now that everything foreshadowed prosperity for the Republic it would shortly be in a position strictly to fulfil its obligations.

Regarding the financial situation, Bols. 4,000,000 of silver coin had been purchased at a total cost, including coining, of Bols. 1,383,216.06. The National Salines had produced Bols. 1,478,653.92 during the year ending 30th June, 1903, or about 50 per cent. of the return obtained in the previous year.

The decrease was, however, not unnatural in view of the period during which it had occurred. Up to the month of August, 1903, the amortisation of Salt Bonds had been suspended, but since then seventeen drawings had taken place, which had reduced the amount outstanding at the date of the Message to Bois. 3,050,500.* The assignment of 30 per cent. of the Customs Receipts at La Guayra and Puerto Cabello, in accordance with the Washington Protocols, had forced the Government to levy the Extraordinary War Tax. This tax, the institution of which had been necessary to avoid financial disaster, had produced Bols. 9,760,172.50. Moreover, with the receipts thus obtained it had been possible to liquidate certain exceptionally urgent obligations. Owing to the complete disorganisation produced by the war, the payments to the States of the Republic had undergone a temporary suspension; during the latter months of 1903 they had, however, been resumed on a normal footing, and up to the 31st December, 1903, Bols. 1,435,272.16 had been disbursed under this head. At the date of the delivery of the Message the Government's debit balance at the Banco de Venezuela had been reduced to less than Bols. 1,500,000.

Notwithstanding the great difficulties which the Treasury had experienced, public works had not been neglected. A considerable number of repairs to roads, buildings, and bridges had been executed, and the construction of new highways, aqueducts, etc., had been commenced.

A summarised statement† of Revenue and Expenditure given by the President showed that, in 1903, the Revenue

According to recent advices received by the Council, the whole of the outstanding amount of these Bonds has since been redeemed.

Exclusive in both cases of the Extraordinary War Tax (See Report of the Finance Minister below).

had amounted to Bols. 34,494,412.08 and the Expenditure to Bols. 34,329,420.76, leaving a balance of Bols. 164,991.32 to be carried forward to 1904. The President also quoted the amount of the Debt on the 31st December, 1903, the figures being-External Debt: Bols. 151,645,421.08 (Capital, Bols. 125,363,494.86; Arrears of interest, Bols. 26,281,926.22). Internal Debt: Bols. 92,983,088.67 (Capital, Bols. 70,130,422.04; Arrears of interest, Bols. 22,852,666.63). Total Debt, Bols. 244,628,509.75.

THE REPORT OF THE FINANCE MINISTER.

The Report of the Minister of Finance for the year 1903 was presented to Congress on the 27th February, 1904.

REVENUE AND EXPENDITURE.

The figures contained in the Report with regard to Revenue and Expenditure are perplexing and extremely difficult to follow. Three separate statements are given. The first, "General Receipts and Expenditure," excludes all returns relating to the Extraordinary War Tax, and shows the totals of totals of Bols. 34,494,412.08 and Bols. 34,329,420.76, respectively for Revenue and Expenditure, which agrees with the figures in the President's Message; the second relates solely to the receipts obtained from the Extraordinary War Tax and the manner in which such receipts were expended, whilst the third purports to be a statement of the total receipts and disbursements under all heads during 1903. The totals given in this third statement do not entirely agree with the sum of the totals given in the first and second, but owing to differences in the nomenclature of items and to the number of cross entries and transfers from one account to another which appear to

FF

have been made, it is impossible to elucidate the discrepancies. As, however, the Minister observed that the third statement was drawn up with a view to "greater clearness and in order to facilitate for the public which is inexperienced in matters of accountancy, an exact understanding of the movement of the national finances," it is reproduced here in an abridged form :—

With regard to the Customs Revenue, the Report showed that during the earlier months of 1903, the receipts were extremely small, but gradually improved and averaged over Bols. 2,500,000 per month from September to December inclusive.

Owing to the lack of ordinary receipts, consequent upon the blockade, the Government had been obliged to raise the Internal Loan of 1903, which had, however, been paid off in July.

BANCO DE VENEZUELA.

On the 31st December, 1902, the Government's debit balance at this institution amounted to Bols. 10,495,193.89. During 1903 the reimbursements effected had amounted to Bols. 7,279,201.28, leaving a balance of Bols. 3,215,992.61 due on 1st January, 1904.

BONDS OF THE "ONE PER CENT. MONTHLY."

No payments were made during 1903 in respect of these Bonds. The capital and arrears of interest outstanding at the close of 1903 amounted together to Bols. 5,611,377.56.

PUBLIC DEBT.

The following Table is a reproduction, in a slightly summarised form, of the statement given in the Finance Minister's Report with regard to the situation of the Venezuelan Debt on the 31st December, 1903 :