Chinese Government and local grants for expenditure on internal reforms and the development of Mongolia.
At present the revenues of Outer China are drawn partly from direct tribute levied on the Mongol princes, and partly from small customs duties levied on Russo-Chinese commerce along the Siberian-Mongolian frontier. The latter revenues are, however, insignificant, and are, moreover, controlled by the Russo-Chinese commercial treaties and cannot be modified without the consent of Russia. The matter, since March 1911, has been under consideration in connexion with the Russo-Chinese commercial treaty of 1881. It is to be hoped that some arrangement may be arrived at, whereby all the customs duties on Russo-Chinese commerce, and a proportion of the direct tribal taxation of the Mongols, may provide all the revenue needed by the Chinese Government for an equitable Imperial contribution from Mongolia, leaving the balance of the direct taxation in the hands of the local Mongol khans to dispose of as they think fit for their purely local needs. An agreement should also be made between the Chinese Government and the Mongol khans whereby the tribute is reassessed, and an equitable system of direct tribal taxation on the basis of the "Kibitka" or poll tax should be instituted by the Chinese in Mongolia. In this respect the Chinese might take a lesson from the Russian administration in Turkestan, and thereby do much to prevent arbitrary exploitation by corrupt Chinese officials. Some such arrangement as that outlined above would solve at once both the problem of Mongolian local autonomy, and the
