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Rh of misapplying funds, supposed to be devoted to rendering the fleet efficient. If the new fleet, yet to be purchased, and the army, yet to be formed, are to be of service, the funds set apart for their organisation and maintenance should be administered by Europeans as a guarantee that they will be wholly applied to the purpose for which they are intended. Should this precaution fail to be taken, history will repeat itself, as the next war will prove. What has become of the army of 600,000 fighting men, supposed to have existed before the war with Japan, an army sufficiently organised to require regular rations and payments. In travelling all over the country I saw no evidence of the existence of any great military force. In the official pay-sheets it figures as a very formidable host. Apart from the numerical strength named, a considerable force does exist in the North, brought together and maintained by Li Hung Chang, when Viceroy of Pechili.

The navy, before the war broke out, numbered about one hundred vessels of all sorts, from sea-going ironclads to torpedo boats. This fleet, which does not now exist, will probably be recreated at great cost, and before officers or men can be trained for service. But this is a matter, which does not disturb the Chinese mind. I do not know what the last navy cost the Government, but I do know that neither ships, officers nor crews were ever fit for fighting. The Chinese trusted entirely, after the manner of their renowned Chieftains of ancient history, to the outward show of force, rather than to force itself, to defeat their foes. As for the army, on paper it is a costly machine. In the provinces and capital a considerable part of the revenue is annually expended on this line of defence, and yet in order to make some show of resistance during the war, the force herded to the front was mainly from