Arizona republican., 1913-10-21
Present Struggle Believed to Be Solidifying Country Rather Than to Act ing Toward Bringing Downfall.
HAS PROBLEM
 OF FINANCING
There Is Also a Question As to Whether Country Should Remain a Repub- lie OF Again Become a Monarchy.
ASSOCIATED PRESS DIsPATCH1


 gles in China are believed to be re- suIting in the consolidation rather than the disintegration of China. The overthrow of the Manchu dynasty by arms left many unsOlved problems, among them the following: Should the new government be a monarchy or a republic? Should the capital be at Peking or at Ranking? Should the ruler be Yuan Shi-kai or Sun Vat Sen? Should the central gov ernment be strengthened or should China remain a loose aggregate or semi-independent provinces?
 These problems were settled not by force but by compromise in which the views of the south were accepted on the first and most important problem as to the form of govern ment. and those of the north on the second and third problems; while the fourth problem, the relative strength of the central government and the provinces, was left unsoIved. These conclusions were reached by the con sent of Yuan Shi-kai to the adop- tion of the republic and by the de- cision of Lii Yuan Hung, who had charge of the revolutionary forces, and of all the more thoughtful lead CTS Of China in favor of Yuan Sh1- kai for the presidency.
 The first problem which confronted Yuan Shi-kai as provisional presi- dent and the new government was the problem of finance. Fortunately. the finances of China in general are in good condition. so far as indebted ness and the annual expenditures of the nation are concerned. The total indebtedness of China for the cen tral government the provinces and the cities. plus the recent loan. is S1,O79,0O0,000 gold, of which $21f,- OOO O0N are on railway and telegraph lines and others industries winch are earning more than interest, leaN- ing some $8OO,000,000 to be met by taxation Considering that Japan's national indebtedness is $1,306, 901 ,499 and that China's population and nat ural resources are some six or seven times as large as Japans, China's indebtedness. speaking in compara- tive terms, is not large. Putting the matter in another form, China's total indebtedness is about two dollars per capitum. whereas Japan's, including the Koreans in her population, ~1s some twenty dollars per capitum.
 Tn regard to current expenses, Yuan Shi-kai is making a favorable show ing The gross expenses of the gov ernment for the first six months of 1913, as recently submitted to par Iiament, were $S4,411,726. gold. This is at the rate of $168,S23,452 year. These expenses are a little less than one-half of the annual expenditures of the Japanese government
 But while the expenditures of tho first six months of 1913 were $S4, 411.726, the receipts for the same time were only 25,66S, 400, thus leay ing a deficit for these six months of over $5S,OO0,O00. This grave problem brings up the still graver unsolved problem of the relation of the central government to the various provinces Tn the history of China down to the present time the central government has received its income through the provincial officials, with the excep- tion of the salt and the customs tax The Chinese know that government rests ultimately with the power of the purse. Hence, in order for the central government to feel assured of it's income the emperor had ap- pointed every provincial official down to the head of the county Whatever else an official might or might not do. the payment of the taxes to the central government was the first condition upon which he could hope to retain his office. But inasmuch as the imperial government frequently has been despotic, the public sentiment of China has been for centuries in favor of local gov ernment as over against the inn perial government.
 Hence, in the revolution, on the flight of the Manchu governors, the provincial assemblies followed the natural inclnations of their leaders and the example of the United States. and elected governors for their prov inces. Thus Yuan Shi-kai found himself face to face with governors who did not owe their position to him. The problem became more acute because seven of the twenty two provinces had not remitted a single dollar of taxes since the revo- lution broke out in November, 1911, and the remaining fifteen had re- mitted far less taxes than usual Therefore despite the small expendi- (Continued on Page Two)