siderably
increased. In 1906 direct taxation amounted to 9 fr. 92 c., indirect to 8
fr. 58 c., per head of the population. The financial difficulties in which
the country was involved at the close of the 19th century were attributable
not to excessive indebtedness but to heavy outlay on public works, the
army, and education, and to the maintenance of an unnecessary number of
officials, the economic situation being aggravated by a succession of bad
harvests. The war budget during ten years (1888-1897) absorbed the large
sum of 275,822,017 leva (L11,033,300) or 35.77% of the whole national
income within that period. In subsequent years military expenditure
continued to increase; the total during the period since the union with
Eastern Rumelia amounting to 599,520,698 leva (L23,980,800).

_Communications._--In 1878 the only railway in Bulgaria was the
Rustchuk-Varna line (137 m.), constructed by an English company in 1867. In
Eastern Rumelia the line from Sarambey to Philippopolis and the Turkish
frontier (122 m.), with a branch to Yamboli (66 m.), had been built by
Baron Hirsch in 1873, and leased by the Turkish government to the Oriental
Railways Company until 1958. It was taken over by the Bulgarian government
in 1908 (see _History_, below). The construction of a railway from the
Servian frontier at Tzaribrod to the Eastern Rumelian frontier at Vakarel
was imposed on the principality by the Berlin Treaty, but political
difficulties intervened, and the line, which touches Sofia, was not
completed till 1888. In that year the Bulgarian government seized the short
connecting line Belovo-Sarambey belonging to Turkey, and railway
communication between Constantinople and the western capitals was
established. Since that time great progress has been made in railway
construction. In 1888, 240 m. of state railways were open to traffic; in
1899, 777 m.; in 1902, 880 m. Up to October 1908 all these lines were
worked by the state, and, with the exception of the Belovo-Sarambey line
(29 m.), which was worked under a convention with Turkey, were its
property. The completion of the important line Radomir-Sofia-Shumen
(November 1899) opened up the rich agricultural district between the
Balkans and the Danube and connected Varna with the capital. Branches to
Samovit and Rustchuk establish connexion with the Rumanian railway system
on the opposite side of the river. It was hoped, with the consent of the
Turkish government, to extend the lin