The freight or cost of conveyance to the place need not be considered here, as it would be the same in either system.  If we keep a stock of supplies at a place we must incur expenditure to provide for the storage of the articles.  There would be what may be called the capital charges for sites, buildings, residences, jetties, tram lines, &c., for which L20,000 would probably not be enough, but we may put it at that so as to avoid the appearance of exaggeration.  A further charge would be due to the provision of tugs or steam launches, and perhaps lighters.  This would hardly be less than L15,000.  Interest on money sunk, cost of repairs, and maintenance, would not be excessive if they amounted to L3500 a year.  There must be some allowance for the coal used by the tugs and steam launches.  It is doubtful if L500 a year would cover this; but we may put it at that.  Salaries and wages of staff, including persons employed in tugs and steam launches, would reach quite L2500 a year.  It is to be noted that the items which these charges are assumed to cover cannot be dispensed with.  If depots are established at all, they must be so arranged that the stores deposited in them can be securely kept and can be utilised with proper expedition.  The total of the charges just enumerated is L6500 a year.

There are other charges that cannot be escaped.  For example, landing a ton of coal at Wei-hai-wei, putting it into the depot, and taking it off again to the man-of-war requiring it, costs $1 20 cents, or at average official rate of exchange two shillings.  At Hong-Kong the cost is about 2s. 5d. a ton.  The charge at 2s. per ton on 50,600 tons would be L5060.  I am assured by every engineer officer to whom I have spoken on the subject that the deterioration in coal due to the four different handlings which it has to undergo if landed in lighters and taken off again to ships from the coal-store cannot be put at less than 10 per cent.  Note that this is over and above such deterioration as would be due to passing coal direct from the hold of a collier alongside into a ship’s bunkers.  If anyone doubts this deterioration it would be well for him to examine reports on coal and steam trials.  He will be unusually fortunate if he finds so small a deterioration as 10 per cent.  The lowest that I can remember having seen reported is 20 per cent.; reports of 30 and even 40 per cent. are quite common.  Some of it is for deterioration due to climate and length of time in store.  This, of course, is one of the inevitable conditions of the secondary base system, the object of which is to keep in stock a quantity of the article needed.  Putting the purchase price of the coal as low as 15s. a ton, a deterioration due to repeated handling only of 10 per cent. on 50,600 tons would amount to L3795.