tobacco profits' reported by Carreras, Limited. Ordinary shares received fifty per cent free of income tax for the year, after writing off depreciation and reserves. The net profits of this company, which is not among the largest in the tobacco business, were about five million dollars, and suggest that Great Britain, in spite of strikes and unemployment, is still earning a luxury margin for her people. Railway receipts are slowly recovering from the heavy slump of the coal strike, but the latest returns, at the end of November, make them still two million dollars per week below those for the corresponding period last year. New capital issues for industrial purposes in Great Britain fell off by about five million pounds during the first eleven months of 1926 as compared with the same months in 1925. The Statist congratulates itself that England had returned to the gold standard before the coal strike. 'Had sterling been an independent or managed currency, its exchange value must inevitably have suffered severe depreciation as a result of the many adverse influences to which it has been subjected during the past six months.' That paper attributes the pound's stability, however, to American aid, and alludes to 'a prevalent notion that sterling has been pegged in New York during the past months just as it was pegged during the war.' The English are immensely pleased with the repurchase of the White Star line from its American owners, and the Saturday Review is moved to say: 'One thing, at any rate, is clear, and this is that though the Americans may beat us at film-producing — and at many other things, no doubt they cannot compete with us on anything like level terms in the management of a steamship company.' Meanwhile a British authority estimates that the ships of the world are carrying twenty per cent less cargo compared with their total capacity than before the war. Some skepticism exists abroad as to the reality of France's financial recovery. This is strongest in The French and the Franc the British press, which is angry with M. Poincaré for refusing to stabilize the franc at once. The Nation and Athenæum, which generally speaks with the voice of Mr. Keynes, believes the franc has already been pushed back to a point that is not only 'seriously prejudicial to French industry and trade,' but is ‘almost certainly too high for permanent equilibrium, being supported by speculative influences which will later tell the other way.' French rentiers, who want to delay stabilization, gamble on the hope that the franc can be restored to par, or to something approaching it, and that they will then get back approximately all they loaned the Government. On the other hand, manufacturers and exporters want the value of the franc pegged at once, lest their high costs of production exclude them from foreign markets. M. Poincaré, when questioned in the Chamber last month as to the date of valorization, replied: 'Every time that I have answered any question on these subjects, no matter how discreetly I have done so, speculators have seized upon my words and often distorted them and turned them completely around . . . and have used them, moreover, either to bull or to bear the market. I have no intention of favoring such manœuvres.' The appearance of unemployment in France has started agitation to get rid of the alien labor imported during the recent era of prosperity. Some employers prefer the foreigners, and claim they are bound by contract to retain them. Politicians want diplomatic negotiations begun at once for the return of these people to their homes. The Central Wool Committee of France has addressed a letter to the Premier pointing out the hardships inflicted on the wool manufacture by the continuing currency fluctuations. France imports over nine tenths of the wool her factories employ, and one half of the woolens she makes are sold abroad. French metallurgical works have laid by large reserves, and several important companies have increased their dividends this year by one half or more above the very liberal payments they made to their shareholders in 1925. Post-war recovery has been slower in transportation than in manufacture, but the operating charges of the Chemins de fer du Nord, which rose from less than sixty-two per cent of total revenues before the war to ninety-one per cent at their peak, declined last year to seventynine per cent. Some Shadows in Germany was startled and irritated when Krupps asked the Reich for a government loan of twenty million marks for fifteen years at three and four per cent interest, under a threat to suspend operations at Essen and throw fifteen Germany thousand workers out of employment if it was refused. Two years ago this firm borrowed nine million dollars in America. Papers of such opposite political complexion as Vossiche Zeitung and Deutsche Allgemeine Zeitung considered the threat an empty one, which if carried out would help the Company's rivals, and argued that it would be unfair discrimination for the taxpayers to subsidize a private enterprise to the disadvantage of its presumably more efficient competitors. Nevertheless, according to last reports, the loan will be made, though for a smaller amount than originally demanded. Not only the steel industry, but agriculture, is having its vicissitudes in Germany. During the war farmers received abnormally high prices, and during the subsequent period of inflation their taxes were extraordinarily low compared with their profits. It is estimated that in 1923 seven hundred thou sand peasant holdings in Bavaria paid in the aggregate but the equivalent of two tons of butter. Furthermore, farmers took advantage of the collapse of the mark to pay off their mortgages. Now, like agriculturists the world over, they find that, in spite of protection, prices in the restored currency are low. Simultaneously taxes have mounted to the pre-war level and above. Interest on farm loans is exceedingly high, - reported to exceed in many instances twelve per cent, while various conditions make borrowing imperative. According to the Institut für Konjunkturforschung, the long-term agricultural credits obtained during the first semester of 1926 amounted to 3,700,000,000 marks. These heavy borrowings are due partly to the expensive habits acquired by estate owners and the more prosperous peasants during the period of inflation, to nonproductive improvements on their places, and to an excessive number of employees, too many draft animals, and too much machinery. Altogether the debt-oppressed farmer promises to join the unemployed as a drag on Germany's complete economic recovery. Swedish industry shows slow but steady improvement. This is particularly true of the manufacture of pulp and paper, and of the iron and steel. To be sure, lumbering shows a decline, though prices have been well maintained, and the iron and steel improvement is Around attributed to the temporary tonic of the the British coal strike. On the whole, Baltic however, the general tendency is hopeful. In Poland business seems to be looking up, notwithstanding the political uncertainty. Bank reserves are increasing, and the currency situation is growing sounder, but wholesale prices and the cost of living keep rising. The excess of exports over imports, which has been maintained consistently throughout the year, shows some decline. On the other hand, however, the number of unemployed is far less than at the beginning of the year. Although our Government refuses to recognize Russia, we are among the largest sellers to that country, particularly of tractors and agricultural machinery. Czechoslovakia is also doing considerable business in the same direction. One firm is building a refrigerating plant for Odessa running into several thousand dollars. The Skoda works are building turbines for electric power stations in that country, one contract amounting to between three and four hundred thousand dollars, and a group of engineering works have contracted to deliver twenty-five hundred bogie trucks for the Russian railways, to cost between one and two million dollars. Cut from the Bank of England's model, showing the relative heights of European tariff walls THE LIVING ACE VOL. 332-FEBRUARY 1, 1927-NO. 4299 THE LIVING AGE BRINGS THE WORLD TO AMERICA Debts and AROUND THE WORLD EUROPE was reminded of the existence of America during the closing days of 1926 principally by the pronouncement of the Columbia University professors upon the debt and by the cruiser controversy in Congress. Not infrequently the two were associated in public discussion. Naturally every debtor country approves the Columbia pronouncement as at least a step toward its desires, but little faith was expressed in it as a promise of immediate action. English newspapers and weeklies were particularly emphatic upon the latter point. The Economist said that England, having settled with her creditors, could watch economic truth slowly permeate the American brain 'with a certain sense of proud detachment,' but that France, not having ratified her accord with America, might still 'attach immediate political importance to any straw which shows a change of wind.' Most French newspapers, however, were equally chary of optimism. Georges le Chartier contented himself with characterizing the pronouncement as 'one of the most promising indica tions we have yet seen of progress toward a settlement which satisfies both our wishes and abstract justice.' It was equally natural that the move in Congress to strengthen the Navy should be viewed with disfavor across the water. We do not yet have the Japanese reaction, but that of the British press was frankly critical. To be sure, the New Statesman professed to find humor in the picture of a President and his Secretary of the Navy taking opposite sides on a measure of this importance, and considered the situation one that could hardly be described except in terms of high comedy.' But most comment was of a soberer sort. The danger of our enlarged naval programme, in the opinion of the Spectator, lay in the fact that it is based, 'not on definite and accepted strategic requirements, but on the supposed requirements of American prestige, and is thus likely to present greater difficulties at a new limitation conference than the present Japanese and British programmes.' The Saturday Review opined that Congress might be trying to meet Japan's new naval scheme, or to amend American inferiority in cruiser strength to Copyright 1927, by the Living Age Co. with the suggestion that Washington was manoeuvring to hasten European disarmament by frightening foreign governments with the threat of a new armaments competition, in which they would be out of the running when pitted against Uncle Sam's unlimited purse. 'Cruiser building hardly seems a proof of moral superiority, and, if America's plan is to frighten us into disarmament, embarking on a large armament programme is a paradoxical and dangerous method of pursuing it.' Matters Great Britain. It felt less sympathy of convalescence. The Westminster Gazette is indulging in a veritable 'buck up, brother!' campaign. On the other hand, Sir Alfred Mond told the Institution of Fuel Technology last December that the trouble with the English people was an exaggerated 'no' complex. Too many were always ready 'to say no to everything and to find difficulties and objections to any course you want to pursue.' He declared that such persons not only achieve nothing, but that they are a constant drag on progress. Ergo, the salvation of the nation lies in cultivating a 'yes' complex. Nobody takes even a sporting interest in politics just at present, and the Outlook characterized the last session of Parliament as the dullest within living memory. Even the quarrel among the Liberals lacks the interest of a whole-hearted fight. The leaders of that Party got together around dinner tables at the Hotel Cecil last December in an effort to restore unity in their ranks, but they failed to achieve even a surface reconciliation between Lloyd George and Lord Grey, who now, by tacit consent, heads the Asquithian group. The nominal bone of contention is the large Liberal Party fund which Lloyd George keeps securely 'buttoned in his jeans,' but we suspect that it really is the little Welshman's personality and character. In fact, Lord Grey intimated the latter in his talk at the dinner mentioned. The New Statesman considered that this speech 'made the split in the Liberal Party quite definite and unhealable,' but it added as an afterthought: 'Perhaps, however, "chip" is rather the word than "split,' for so far as all the available evidence goes the Liberal Party throughout the country is solidly enough in favor of making use both of Mr. Lloyd George's energy and of his money.' Conservatives are watching jealously fancied Free State Ireland evidently intends to extend the protectionist policy she adopted experimentally in 1924, for additional duties are said to be in prospect. Already about six million dollars per annum are raised from the customs. Employment in protected manufactures is said to have nearly doubled during the last two years, but statistics of imports do not indicate a marked decline in foreign purchases. In fact, more boots and shoes are imported today than ever before; but this may point to increased consumption, rather than to a decline in the local manufacture. The Sinn Fein Party is hard up financially. In a recent appeal for funds it announces that its treasury contains only about two hundred dollars. Commenting upon this, the Irish Statesman, which favors the Free State Government, observes, 'Politics are one of the few things for which the Irish people are always willing to pay, provided that the politics are to their liking,' and leaves the reader to draw his own conclusions. In North Ireland the Presbyterian Church has bluntly refused the Premier's plea to drop its campaign for local option, which is recognized as preliminary to an agitation for Prohibition. The new issue thus created threatens to split the Unionist Party. Great Britain alternates between gloomy self-diagnosis and rosy dreams signs of a rapprochement between Ramsay MacDonald and Lloyd George. Both have been saying nice things about industrial trusts, and, since nationalization is a question of first importance dividing the Liberals from the Laborists, some common meetingground might be found in a programme of great industrial amalgamations under the wing and surveillance of the Government. The Labor Party has launched a new campaign in the rural districts, where it still lacks voting strength, with a policy which it hopes will appeal to the farmers. This involves State ownership of the land, to be sure, but with secured tenure to present tenants as long as they keep their holdings cultivated. Another feature is a controlled system of marketing, such as our own Western farmers want, to stabilize agricultural prices at a profitable level. The most exciting political episode of the closing weeks of the year was the bitter electoral battle in the Smethwick district between Oswald Mosley, the Labor candidate, a wealthy aristocrat with a blue-blooded wife, and Mr. Marshall Pike, the Conservative candidate, who is a humble workingman. Mr. Mosley not only held the seat as he was expected to do, but in a threecornered contest increased the Labor majority over the Conservatives from 1203 to 6582. After the returns were in Mr. Pike consoled himself that the main lesson of Labor's victory was that the conquest of the Socialist Party by the capitalists has begun.' Tory newspapers heaped ridicule upon Mr. Mosley and his wife, Lady Cynthia, and the non-Tory press was almost unanimously against them, which gave point to the winner's characterization of his victory as 'the Waterloo of the press lords.' After Mr. Krassin's death a deputation of Tory members of Parliament called upon the Prime Minister to present a petition, signed by some two hundred of their colleagues, asking the Government not to accept a successor and to restrict the facilities now given to so-called trade delegations of the Soviet Government. To quote the Tory Morning Post, England and Soviet Russia are in 'a state of war, none the less deadly because it is not conducted with guns and bayonets, but by propaganda and conspiracy.' Mr. Baldwin intimated to the delegation that the Soviet authorities do not intend to appoint a new representative in London immediately, but would leave Mr. Krassin's work to be carried on by his staff. Naturally it would be difficult to withdraw from Moscow the recognition already granted, and little support was given to the suggestion in the press. Among the obsolete Acts repealed by the Roman Catholic Relief Bill, which has just become a law in Great Britain, are statutes dating back to 1549, forbidding books of Roman Catholic ritual 'ever to be kept in this realm." Catholic burial is legalized for the first time in four centuries, monastic organizations may legally receive gifts and bequests, and a priest who performs Mass or wears the habit of his order elsewhere than in the usual place of worship is no longer subject to a fine of fifty pounds. Naturally these ancient laws have not been enforced for a considerable period, and their removal from the statute books is mainly a matter of form. When the Nobel jury awarded peace prizes to Messrs. Dawes, Chamberlain, Briand, and Stresemann, they probably anticipated considerable joking about the matter. Since M. Briand has been honored with the order of the olive branch by both the Vatican and the Nobel committee, the irreverent Paris press professes to regard him as the next candidate for canonization after |