ad valorem duty.  Coffee and other necessaries of life, on being compared, would show a similar difference, and this Government therefore trusts that Her Majesty’s Government will exonerate it when it points out the incorrectness and unreliability of the information supplied to the Secretary of State, on which he bases his conclusion that the cost of living is unusually high in consequence of the taxation levied by the State; that such is not the case will be at once shown by a comparison with the taxation of the neighbouring Colonies.

The character of the financial administration must have been erroneously represented to Her Majesty’s Government if it was simply stated that defalcations to an amount of L18,590 had taken place.  It would ex facie appear from such a statement that the above defalcations had taken place during the past year; as a matter of fact, the Inspection Department, which has only recently been called into existence, reported over financial matters covering the years 1884 to 1896.

It is unfair to characterise all deficiencies as defalcations, for from the nature of the case a deficiency does not always constitute a defalcation.  The report specified the sub-divisions of monies which had yet to be accounted for.  The first item in such deficiencies amounted originally to L12,000, and of this L6,000 was afterwards collected, and the balance was only brought forward; another item of L10,808 11s. was brought forward in its entirety, but L3,000 of this was eventually collected and accounted for, while continual efforts were made to secure the balance.  Many items not brought forward were collected long before and accounted for, while during the inspection of last year it was found that a sum of L800 yet remained to be paid in out of the deficiencies, which balance has been accounted for.

The contention that advances to officials amounting to L2,398,506 16s. 8d. have remained unaccounted for is also absolutely incorrect; and the endeavour to pass this circumstance off as constituting defalcations on the part of officials bears ample witness to the strong desire to mislead which has actuated the informants of Her Majesty’s Government.

Any person who is even superficially acquainted with financial administration will readily admit that this is due to a system of accounting which was followed until recently by Her Majesty’s Government, and which obtains in some British Colonies, in Natal, for instance, at the present moment.

This system may deserve condemnation; it does not, however, necessarily follow that because the advances may not be speedily accounted for they have been embezzled, and it does not appear either from the report of the Inspector of Offices, or from the debates of the Volksraad, that such accusations were made.  But in addition to this a sum of at least L1,968,306 is included in the aforesaid total of L2,398,506 16s. 8d. (but which is not comprised in the customary advances), such as Orphan Chamber L80,000, Indigent Burghers L150,000, Postal Orders L60,000, various loans to School Committees, Sanitary Boards, and for Waterworks, Hospitals, Committees, monies placed at interest in Europe, provisional loans to Railway Companies, purchases of food stuffs and mules in time of famine, and many others.