Power any arrangement contrary to principles of the present Protocol.

Article VI. Details in connection with the present Protocol shall be arranged as the circumstances may require between the Representative of Japan and the Minister of State for Foreign Affairs of Korea.

The 23rd day of February of the 37th year of Meiji (1904).

(Signed) HAYASHI GONSUKE,

Envoy Extraordinary and Minister Plenipotentiary of his Majesty the Emperor of Japan.

The 23rd day of February of the 8th year of Kwang-Mu.

(Signed) MAJOR-GENERAL YE TCHE YONG, Minister of State for Foreign Affairs ad interim.

K. TRANSLATION OF THE AGREEMENT OF AUGUST 22ND, 1904, SIGNED AND SEALED BY MR. HAYASHI GONSUKE

Envoy Extraordinary and Minister Plenipotentiary of his Majesty the Emperor of Japan, and Mr. Yun Chi-Ho, Korean Minister of State for Foreign Affairs ad interim.

1. The Korean Government shall engage a Japanese subject recommended by the Japanese Government as financial adviser to the Korean Government, and all matters concerning finance shall be dealt with only after his advice is taken.

2. The Korean Government shall engage a foreigner recommended by the Japanese Government as diplomatic adviser to the Foreign Office, and all important matters concerning foreign relations shall be dealt with only after his advice is taken.

3. The Korean Government shall first consult the Japanese Government before concluding treaties and conventions with foreign Powers, and in dealing with other important diplomatic affairs such as the grant of concessions to, or the making of contracts with foreigners, the same procedure shall be followed.

L.-RECOMMENDATION OF SIR ROBERT HART TO THE CHINESE GOVERNMENT

Part One.

How

War has now broken out between Japan and Russia, in which each of the two Powers is fighting for the maintenance of its own desires, which are at variance with its opponent's policy; and this has arisen for no other reason than because China is herself fundamentally weak. and when the war between these two Powers is to end, whether after two or three years' time or five or six years', is a question which it is difficult to answer under the present circumstances. One thing, however, may be certain; and that is, that when the war is ended, serious troubles will fall to the lot of China, if she remains as she is. If, however, we do not wish to be at the beck and call of others, but on the contrary, desire to make others listen to our wishes, there is no alternative before us but to take advantage of the opportunity now presented to us and to use our best energies to strengthen ourselves. The first step to take in order to make China powerful is that of organising and drilling our armies, and to effect this we must first set about to find the ways and means of raising funds.

Now the present revenues of China from Customs duties, salt, land, and poll taxes only amount to eighty odd million taels per annum. Out of this sum the greater half is consumed in repaying loans and meeting the war indemnity [Boxer]. Hence it is incumbent on us to find

ways and means of raising extra funds to meet the exigencies of the case. Of late there have been not a few persons who have been discussing the question of raising funds, and there have not been wanting suggestions as to how to procure such funds. In my humble opinion, however, the most tangible and feasible of all measures, which is comparatively speaking at hand, is that of reorganising the land and poll taxes. I find upon examination that the dimensions of China, not counting Chinese Turkestan, Mongolia, or the three Manchurian provinces, are 4,000 li long and as many in breadth; in other words, China Proper contains an area of no less than 16,000,000 square li. To each square li there should be 540 mow of land. Taking it, say, at 500 mow to the square li, then there should be 8,000,000,000 mow in an area of 16,000,000 square li. If then, a land tax of 200 cash be assessed on one mow, with a fixed rate of exchange of 2,000 cash to the tael of silver, then from every ten mow of land there can be collected a tax of one tael of silver. Eight thousand million mow of land would therefore yield 800,000,000 taels in taxes. We cannot, however, expect to collect regularly each year the above sum of 800,000,000 taels, owing to the fact that there are fat and lean years, while some land may be rich and other poor. Furthermore, account must be taken of mountains and streams.

I recall a remark made at one time during his lifetime by the late Marquis Li Hung Chang in regard to the taxable portions of the Empire. His late Excellency declared that of the land in the eighteen provinces of China Proper there are no less than two-thirds which can be made to pay taxes. Taking then the taxable area as one-half, we can yet practically collect 400,000,000 taels. For every day that the Government owns this area of land, so long does the above noted amount lie ready to the hand for collection. Therefore, this manner of raising funds is, comparatively speaking, much more feasible and practical, and capable of more steady and lasting advantages, than any other suggestions for raising money yet brought forward. If the

Government will put into practice this manner of raising funds, it will have at hand a bountiful income for the accomplishment of all national measures of importance, and there need be no fear of shortness of funds, while the inhabitants of the Empire will not be made to suffer the least iota of oppression and trouble. Should my recommendation as presented above meet the favourable consent of the Imperial Government, I shall have the honour of presenting for acceptance another paper setting forth the manner as to how to accomplish the ends in view.

Part Two.

With regard to the large amount of 400,000,000 taels revenue which was estimated in the foregoing recommendation as collectable from the land and poll taxes (payable in rice or money) of the Empire, it is evident that the question is in need of energetic reorganisation.

The manner of collecting the above taxes hitherto in vogue has been of the greatest injury to the people, who have to pay disproportionately large sums, while only a small portion of these amounts actually goes to the Government. As time passes the people suffer more and more, while the frauds practised upon them by the tax-collectors increase in number each day. If, however, we intend to use our best energies to reorganise the system of raising funds from these land taxes, it stands to reason that the practice of collecting now in vogue must unhesitatingly be abolished. Taking into consideration the fact that this matter is one in which the inhabitants of China are to pay taxes to the Chinese Government, it is evident that Chinese officials are better acquainted with the actual state of things than an outsider would be, and can recommend remedies superior to those that may be suggested by one of the latter. It is, however, the opinion, after due consideration, of the Inspector-General of Customs, presenting this paper, that if the following suggestions are put into practice, there need be no doubts as to the ultimate accomplishment of the ends in view. I am, moreover, of the opinion that the

more the details are entered into as to the manner of doing things, so much the slower will be the inauguration of the reorganisation in view. Hence it would be far better to take up the most important points and start the matter right away, and then go along step by step, allowing things to unfold themselves as we proceed, instead of going into long and tedious details which will give much trouble and take up important time.

I will therefore present an outline of my scheme under the following numbers :

(1) Should an Imperial decree be issued to the high authorities of the various provinces commanding them to begin the reorganisation of the land taxes together, the chances will be that each provincial official will inaugurate an independent scheme of his own and so cause considerable differences of opinion, thereby preventing that unanimity of action so much to be desired in bringing about solid results. It is therefore suggested that the scheme in view to be started in a certain district (hsiễn) belonging to a certain prefecture (fu) in a certain province (shếng). After the said hsien shall have accomplished the object of the scheme in question, it shall be taken up in the same way by its neighbouring hsien or district, and so on gradually to the next district, and thus in natural sequence gradually until the whole province is operating under the new system of tax collection.

(2) As soon as a certain district has been selected to start the new system, it is recommended that ten able and intelligent expectant officials of the province, in which is situated the hsien in question, be chosen and sent to join the district magistrate, or chih-hsien concerned, inaugurating and putting into effect the scheme. With the knowledge and experience thus obtained by these ten expectant officials, they may then be used to start the same in other districts.

(3) The chih-hsien of the selected district shall begin by dividing his hsien into four principal portions, namely, Northern, Southern, Eastern, and Western por

VOL. II

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