§ We must make a substantial addition to the provision for debt redemption; and for this purpose I propose first to draw on my own surplus, the estimated surplus of 1906–7, to the extent of £500,000, and to take another £500,000—;which will bring the additional contribution for the year towards the redemption of the Debt up to £1,000,000—;from a different source. What is that source? By the protocol of September 7th, 1901, China agreed to pay to the aggrieved Powers, of whom we were one, an indemnity of 450,000,000 Haikwan taels, by annual payments, with interest at 4 per cent., for thirty-nine years from 1902. The British share of this was 50,620,545 taels, or £7,593,081, being 11¼ per cent of the total. Of this, £1,500,000 goes in settlement of private and railway claims, and the free balance due to the British Government, payable in annual instalments, may be put approximately at £6,000,000. There is a balance now at the bank, which has never yet reached the Exchequer, on this account of £359,000; and with the further instalments to come in we may reckon on a total of £500,000 from this source for 1906–7. Having regard to the origin of this indemnity and to its history, I see no purpose to which this and the succeeding instalments can be better put than the repayment of Debt. The result will be that the total provision made during the year for the reduction of the dead-weight debt will be about £13,500,000, and that the reduction in the gross capital liabilities of the State ought to amount for the year to nearly £9,000,000, a large, but, in the circumstances, by no means an excessive sum. I must add that the modest demand I have made on the surplus must have been considerably 297 greater but for the largely fortuitous and wholly unforeseen dimensions of the old Sinking Fund of 1905–6.