So far, I have dealt with the question of the reform of currency and banking, purely from the point of view of local interests. I adopted this course more from the point of view of convenience, than with any desire to ignore the importance of foreign exchange. Moreover, the regulation of foreign exchange is impossible unless the uniformity of internal exchange is a settled fact. The steps that I have detailed so far are with a view to bringing about such uniformity. It should not, however, be understood that foreign exchange should be attended to, only after all the various currencies within the country are unified. At the present stage of development, such a course, however desirable, is out of the range of practical politics, because each year China has to pay out about Tls. 55,000,000 on account of interest and amortization on the existing debts; and with the progress of years the totals on this account would gradually increase -even supposing for the moment that there is no likelihood of further borrowings on the part of China, for whatever purpose. Except for a very small portion of this total, China has only silver to pay with, while foreign creditor nations demand sums due to them, in gold. Apart from this, there is still the more serious question of deficit, on account of the lop-sidedness of the nature of the trade of this country. Although during recent years, the proportion of advance in exports in this country has been greater than that of the imports, there is no getting away from the fact that each year a particularly large addition is made to the sums due by China to foreign powers. Leaving out the exceptional years of 1906 and 1907, when there was an abnormal difference between the two trades, the average annual deficit during recent years may be roughly put at about Tls. 100,000,000. If the trade situation is to continue in this manner, and even allowing for a larger increase in exports, the payment due from China each year, both on trade and loan accounts, is not likely to be below Tls. 180,000,000 per year. As the value of the gold that China is able to export each year has rarely exceeded £3,000,000, this means that, roughly, she has to pay out about £17,000,000 a year. The position is that China has no choice of the shape in which this amount would have to be paid ultimately, whatever may be the nature of the intermediate processes. As the lenders, or those to whom sums are due, are entitled to demand gold, this large settlement year after year naturally enhances the value of gold. The result is that this country is placed at a disadvantage, in connection with all questions connected with foreign exchange. Consequently, no currency reform could be thorough or acceptable, until China's position in this respect is made better than it stands at to-day. At present she seems to have no control whatever over the regulation of foreign exchange, except such as is possible through economic causes operating within her boundaries. Therefore, means must be contrived by which the Chinese Government may be enabled to regulate international exchange as it affects China, and make it as favourable to her as possible.