§ I turn now to the expenditure. The Budget estimate of expenditure in 1903–4 was £143,951,000. Since that-time supplementary grants have been made to the extent of £4,488,000, bringing up the total expenditure to £143,442,000. Against this we have to set the realised savings of previous years and the estimated savings of last year. The net result is that the Exchequer issues were £146,961,000, an excess over the Budget estimate of £3,007,000. The Committee may ask why, with the knowledge I obtained shortly after assuming ray present office that the revenue of the year was falling below the receipts which were anticipated from it, I sanctioned any fresh expenditure. The answer is short and simple. I had practically no choice in this matter. I came into office in October last. By 550 that time, for good or for evil, the fortunes of the past year were fixed. The prolongation of the military operations in Somaliland and the inadequacy of the amounts provided in the original Navy Estimates for shipbuilding and repairs had already caused the expenditure to exceed the Estimates, and there was practically only one item of any consequence over which I had any control. That one item was the sum of about £700,000, included in the expenditure of last year, for the purchase of the Chilian ships. If I had refused my sanction to that expenditure I might indeed have reduced the deficit by a little over £700.000: but at what cost to the taxpayer in the future, let the Committee judge. For, had these two ships been allowed to pass into a foreign fleet, we should have had to spend a much larger sum in building to restore the balance of naval strength, and for the time during which our ships were under construction. our relative position amongst the Navies of the world would have been seriously impaired. I need not labour my defence on that point. The subject has already been under discussion in the House and I do not think that in any quarter the decision of the Government to purchase these ships has been seriously questioned. That was my responsibility. I assume it gladly. I think I should have been lacking in my duty if I had failed to respond to the demand made upon me. I now conclude my review of the past year's expenditure. In addition to the £146,961,000 chargeable to the income account of the Exchequer, it collected and assigned in the course of the past twelve months in relief of local rates £9,795,000, and provided for an expenditure of £7,305,000 on capital account, on behalf of certain services for which the spending departments are authorised to borrow. I have been asked to give the figures, and they are made up as follows: For Naval Works, £3,318,000; Military Works, £2,950,000; Telephones, £780,000; Uganda Railway, £67,000; Land Registry buildings, £16,000; new-general buildings, £162,000; and public offices, Dublin, £12,000. Thus the total outlay of the State, on income and capital account combined, amounted during last year to £164,061.000.