Feb. 1.
THE memorandum by the Inspector-General of Customs which we publish to-day is one of the most serious statements that a man in his position could well anake. Our readers will not have forgotten the Four Powers' attempt to claim on the Customs' surplus, pledged to the service of internal loans, for payment on certain foreign loans, in respect of which China is in arrears; and the subsequent telegram sent to the Inspector-General by Chinese bankers, alarmed for the security def their bonds. To reply adequately to that telegram necessitated the revelation which we now have before us. Sir Francis Aglen shows in this that, under the most favourable conditions, there must be a deficit towards the service of the National Con+ solidated Loan, while for that of the $96,000,000 Loan there is simply nothing. By the most favourable conditions we mean he is able to rely on the addi-lienal revenue which will accrue from the revised tariff. But he goes on to show that the Government, without the consent of the -bond-holders, has already earmarked that extra revenue (considerably beyond his own estimate of it) for administrative expenses. Thus the deficit on the National Consolidated Loan Service must be expected to total not four and quarter, but seventeen and a quarter, million dollars. The Inspector-General's task in discharging his responsibility to the bond-holders, which he accepted all good faith, becomes impossible.
So far as the deficit goes, the situation, unfortunately, is not unusual. If the worst came to the worst, as it usually does in
Text read from the printed page and cleaned; old type leaves the occasional error.