GENERAL REMARKS.

The Minister stated that the fundamental causes of the crisis which had afflicted the country still existed. Nevertheless, during 1902-3, the volume of commercial transactions had been greater, an improvement had taken place in the conditions relating to credit, and public confidence had increased, all of which circumstances demonstrated that, from an economic point of view, the country was entering upon a period of favourable reaction. Although the coffee crop had been smaller than any other during the past five years, its value had been greater than in the preceding year owing to the rise in prices.

The national finances had felt the effect of the improved situation, and though the Treasury was not free from embarrassments, some progress had been made.

REVENUE AND EXPENDITURE 1902-3.

The details of Revenue and Expenditure for 1902-3 given in the Finance Minister's Report were as follows:

EXPENDITURE, 1902-3.

The Minister pointed out that the return from the Customs in 1902-3 had exceeded the receipts from the same source in 1901-2 by 403,708 colones, which was most satisfactory. The Liquor Revenue had, however, on the contrary, decreased by 105,776 colones. The situation with regard to this Revenue was far from good, and a steady falling off in the consumption had taken place for some years past, the contraband trade being mainly responsible for the decline.

EXTERNAL Debt.

With regard to the External Debt, the Minister's Report contained a passage of which the following is a translation :

It has still not been possible for the Government to restore its credit abroad by means of the service of the interest to which the

country is pledged. Nor will it be able to do so as soon as is to be desired in view of the present state of the Treasury, unless it could obtain abroad new funds with which to foster the natural production. In order to give activity and life to the agricultural undertakings capital is required, and it is necessary to find it outside the country on reasonable terms. The Government has such a combination in view and it is possible that it may be realised.

INTERNAL DEBT.

According to the Minister's Report, the Internal Debt comprised the following items on the 31st March last:

It will be seen that, for the first time, gold items are included under the head of Internal Debt. This, and the fact that the Statement is drawn up somewhat differently from that given in the Report for the preceding year, makes

it impossible to effect a comparison between these figures and those given on page 94 of the Council's last Report.

The Minister stated that on the 8th May, 1902, the Currency liabilities amounted to 5,182,108.73 colones, and the Gold liabilities to $1,726,082.29, making a total in Currency of 8,893,185.66 colones. The Internal Debt had therefore decreased between the former date and the 31st March last by 357,622 colones.

ECUADOR.

(a) Six per Cent. First Mortgage Bonds of the Guayaquil and Quito Railway Company, guaranteed by the Government of Ecuador, Authorised Issue

Of the above Issue there were outstanding on 31st July, 1903 :

(6) Bonds of the Special Series ... (6) Bonds of the General Issue

Total

...

$12,282,000

$580,000 $7,954,560

$8,534,560

Capital, Quito. Population (estimated) 80,000.

(c) External Debt per head

...

(See Note below).

General Leonidas Plaza.

(a) The Bonds of the External Debt of Ecuador (£693,160) have been exchanged for Bonds of the Guayaquil and Quito Railway Company (Special Series) at the rate of $175 of the latter for each too of the former: The total amount of Bonds earned by the Railway Company to 31st July, 1903, was $9,233,560.

(6) Of the Bonds of the Special Series $59,000 have been redeemed and cancelled. Of the Bonds of the general issue $661,000 are understood to have been purchased and to be held by the Sinking Fund Trustees, making the total amount redeemed $720,000. These figures have been revised, and must be taken as superseding those given in last year's Report.

(c) Assuming that the indebtedness of Ecuador is represented by the total authorised issue of Railway Bonds, less the Bonds of the Special Series cancelled by the_Sinking Fund, and the Bonds of the General Issue held by the Sinking Fund Trustees, the Debt per head of the population would be about £1. 16s. 6d.