§ As regards the future, the principle has been laid down that new naval and military works are not to be commenced with borrowed money. Future borrowings under the still unexhausted powers of the existing Acts are, as a rule, to be confined to the continuation and completion of works already in hand. The proposals both of the Army and the Navy for the year have been carefully scrutinised from this point of view. In the case of the Army, which still has a balance of borrowing-power of nearly £6,000,000 the loans for the year will be limited to £1,500,000, which will be applied to continuation works, with the possible exception of works of an urgent and unforeseen character, the necessity for which may become apparent in the course of the year. That £1,500,000, once borrowed, will, so far as this service is concerned, close the book. The naval works in actual progress are on so large a scale that their estimated requirements for 1906–7 are about £3,200,000. This will bring the Navy within £1,000,000 of its unexhausted funds. There are a number of similar sums which fall to be borrowed under other Acts, the most important of which are telegraphs and the Cunard Agreement. I cannot at this moment give the precise figures, but the total for all purposes may be taken as £6,500,000. I deduct from that the sum of £1,900,000, the amount charged in the Votes for this year for the repayment of principal, and there will be, therefore, a net addition for the year under this head of capital liabilities of £4,600,000.