nnual
expenditure has reached 40,000,000 florins.

(2) Since 1875 the construction of railways and of other public works,
notably the harbour works at Tanjong Priok, the port of Batavia, has
been undertaken by Government. Since the cost has been paid out of
current revenue, and not raised by loans, these works have necessitated
a further annual expenditure of 8,000,000 florins. The total sum spent
in public works between the years 1875-1884, amounting to 75,000,000
florins, is almost exactly equivalent to the deficit incurred during the
same period.

(3) In suffering from the competition of France in sugar, and of Brazil
in coffee, Java has not been peculiar. The British West Indian colonies
are at the present time most disastrously affected by the bounty-fed
sugar industry of France, and Ceylon is only just learning how to
compensate itself for the diminution of its coffee export by the
introduction of a new industry--tea.

As for the general progress of the island, it is sufficiently indicated
by the fact that since the date (1831) of the introduction of the
system, the population has increased from six to twenty-three millions,
and the revenue from thirty million florins to one hundred and
thirty-two.

Although the culture system has yielded such satisfactory results, it
has been gradually abandoned since 1871.

The reason for this change of policy is the feeling that the system,
though necessary originally to develop the resources of the island, is
at variance with the best interests of the natives, and hinders the
introduction of private enterprise and capital. Increased commercial
prosperity is expected to compensate for the loss of revenue caused by
the withdrawal of the Government from the work of production. In the
mean time, it has been found necessary to impose various new and direct
taxes. The most important of these is a poll tax on the natives, which
has taken the place of the personal services formerly rendered by them
on the Government plantations. Originally imposed in 1871, it yielded
two and a half million florins in 1886. Another compensating source of
revenue is the growth of the verponding. As already mentioned, this is a
tax of three-fourths per cent, on the capital value of house property
and industrial plant. It is assessed every three years, and therefore is
an accurate test of the growth of private wealth invested in the colony.
In the fifteen years from 1871 to 1886, the amount yielded