MR. RITCHIE'S first care, after some reference to the conditions of trade and industry in 1902 which though not equal to the bumper year 1900 had somewhat improved over those obtaining in 1901, was to demonstrate the wisdom of his predecessor in having maintained the financial provision made in the first edition of his budget for the year 1902 on a war basis; for making peace had proved nearly as costly as making war, and the year's revenue, as well as the whole proceeds of the £32,000,000 Consols loan, had been required to meet the various outgoings.
The time had at last arrived for a review of the cost of the late war, and some figures of great interest were accordingly given by the Chancellor of the Exchequer as to the expenditure on account of the operations in South Africa and China during the last four years up to the 31st March, 1903. The total cost was estimated to have amounted to £217,000,000, or more than a quarter as much as the computed cost of the great French War which lasted eight times as long. Of this amount there was defrayed out of revenue £67,500,000, leaving a balance of £149,500,000, which had been met out of capital. In other words, 31 per cent. of the expenditure had been charged to income and 69 per cent. to capital account.