calculated at the rate prevailing on that day. Dining to the requisition of the 24th of March not being honoured, a sum of about £2,000 had to be paid out of that Department's funds; at a later date this was increased to about £4,000; and although a part of this was paid on the 20th of October, about £2,000 is still due to the War Department on account of money actually disbursed in payment for work done. In consequence also of dishonouring the requisition of the 24th of March, many payments which shortly afterwards became due were held over until the contractors urgently pressed for payment, when the bills had to be, as before mentioned, paid out of Department funds; these bills would have been requisitioned for at a much earlier date, had it not been for the unexpected difficulties which had occurred.
The third point is as to the mode of calculating payments made in sterling to the Crown Agents in England. The accounts of these payments have been received by us in sterling and so shown in our returns. The Major General Commanding thinks that this is the simplest and the most correct method and he would propose its adoption.
The Major General would be glad to have these matters settled as early as possible, as a good deal of inconvenience is caused by the account being left open.
(Signed) St. J. Fforer, Colonel
C.R.E., China.