prices of food and materials were slightly lower last year than in 1901 and about 7 per cent. lower than in 1900, so that the actual quantities imported and exported in 1902 compare very favourably with both the two preceding years.

The continued expansion in the oversea trade of the country is the more remarkable when one remembers that the special war demand had fallen off during the last half of the year, and that untold millions of money had been withdrawn from ordinary trade channels to support our South African operations. This is not a controversial article, but it is difficult to look back over the last three years without expressing satisfaction at the working of our free trade system. The ordinary articles of consumption were forced up in price during 1900 owing to the war demand, but they fell again to the pre-war level during 1901 and 1902, and the material pinch of war has not been very seriously felt by the poorer classes. Even the tax on corn and meal which was imposed in April was so small that the natural fall in prices counteracted it. What would have happened during the past three years had the necessaries of life been highly taxed is not pleasant to contemplate.

The most depressed industry during 1902 was that of shipping, owing to the excess of tonnage over the cargoes to be carried; but this depression has only been partially felt in the shipbuilding yards. The decline in shipping freights, except to South Africa, which has been so notable a feature of the year, has benefited the oversea trade by reducing the cost of carriage, but it has led to much distress in the principal ports. The depression is the natural result of the war, which, by taking up large numbers of steamers for transport work, induced a considerable amount of new construction. Now that the transports have been nearly all released from service and put into trade. competition, there are more vessels than the country's trade, large as it is, really requires. The exception to the general rule has been in the South African shipping industry, which is controlled by a "Conference" of lines. This conference is a working agreement in regard to freights, and the members of it-the Union-Castle, Clan, Bucknall, and other companies-run vessels from the United Kingdom and from the United States. A competitive service was started in July to South Africa, both from America and from this country, and a "war" has been going on ever since between the "Conference" and the intruders. A curious feature of the fight was the different methods adopted on the two sides of the Atlantic. The freight rates from New York were cut to about 10s. a ton, but freights were maintained here, and shippers were kept tied to the "Conference" by a penal system of deferred rebates on freight charges. The result has been that American manufacturers have had an advantage of from 10s. to 25s. a ton in competition with British manufacturers on exports to South Africa, and this handicap has caused the gravest dissatisfaction. There are indications that

the pressure of private shippers and of the British Government will lead to a fairer state of things.

The feature of the year in the shipping world was the formation by Mr. J. P. Morgan of the Atlantic Shipping Combination, by means of which control was obtained over a large amount of British shipping. The International Mercantile Marine Company, as it was called, was registered in New Jersey with a capital of $120,000,000 divided into $60,000,000 cumulative 6 per cent. preferred shares, and $60,000,000 ordinary shares. There were besides $50,000,000 in 4 per cent. gold bonds redeemable between 1907 and 1922. This company acquired the White Star, American, Leyland, Atlantic Transport and Dominion Lines at greatly inflated values and the purchase was completed on December 1 last. The total tonnage purchased was 1,034,884. The British vessels in the Combination remain under our flag, but the control is American. As several of the vessels were in receipt of Admiralty subsidies an agreement was arrived at under which the British nationality of the subsidised vessels was preserved, and the British Government arranged with the Cunard Company for the building of two subsidised steamers of 30,000 tons each. These vessels will steam at twenty-five knots and the Government will grant an annual subvention of 150,000l. in addition to a loan of the necessary capital at 2 per cent. interest. It is difficult to see how the Atlantic Shipping Combination can ever control the Atlantic trade or pay on its present capitalisation. The bulk of the carrying trade of the world is done, not by liners, but by tramps, and tramps, any advance in Atlantic freights would see a swarm of steam tramps withdrawn from less remunerative trades and thrust into the Atlantic. The formation of the Combination caused

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scare at first, even in cool-headed quarters, but it is now seen to be innocuous. The net result is that a certain number of British shipowners have sold their vessels to Americans at extravagant prices.

American enterprise, which has bulked so largely in late years, is getting rather discredited, and in one case an American invader has been most handsomely beaten by the British defenders. The Imperial Tobacco Company, which was formed to repel the American Tobacco Trust, won, after a few months' fighting, and took over the British business of the Trust. The rivals have formed an Anglo-American alliance for operations outside the United Kingdom. The tobacco war and the subsequent alliance has its objectionable side, as it gives too much control to one gigantic combination. A "trust" in the American sense does not flourish on British soil because there is no ring fence of tariff which enables it to keep up the price at home, but in the tobacco trade the conditions more nearly approximate to those in America than in almost any other industry. The duty on tobacco is so high and the amount of capital invested in

bonded stores is so great that a huge company enjoys exceptional powers of starving out its smaller competitors.

No review of 1902 would be complete without reference to the great fall in the price of silver. On January 1, 1902, the price was 25 d. per ounce, and during the next few days the quotation rose to 26 d., but since then there has been an almost continuous decline. There were heavy shipments from China to India, and China was not only not able to buy silver but had to sell large quantities in order to meet the indemnity for the recent outrages on foreigners. The price at the beginning of November had reached 234d. per ounce, or considerably lower than the record low level of 23 d. in 1897. During November there was a great "slump" owing to the arrival of large quantities of Mexican dollars and to the reports that Mexico and the Straits Settlements were about to adopt a gold standard. The lowest point touched was 211d. on November 26-7. The fall in silver is of great importance, since a large number of investments, such as Mexican railways, receive their earnings in silver and have to remit their dividends home in sterling. Fortunately for us the Indian currency is now practically on a gold basis at an exchange of 1s. 4d. per rupee. But for this the fall in silver would have caused great confusion in the Indian finances. The effect of the fall will, no doubt, be to stimulate the desire of the few silver countries which remain to adopt a gold standard.

F. HARCOURT KITCHIN.

FOREIGN AND COLONIAL HISTORY.

CHAPTER I.

FRANCE AND ITALY.

I. FRANCE.

THE great work of the reconstitution of parties in France, which affected so deeply the alliances and programmes of political men, was greatly accelerated by the attitude taken up by the Government with regard to the congregations. The seriousness of the struggle became more and more evident, and inevitably other questions were given a secondary place. No problem of all those which the now imminent elections presented to the electorate was so imperative, and for the first time since the decisive triumph of the Republic in 1877, the consolidation of two hostile camps was clearly seen under severe discipline.

The session opened on the day appointed by the Constitution, the second Tuesday in January. M. Fallières in the Senate and M. Deschanel in the Chamber were re-elected Presidents without competitors; and on the 17th the contest began on the Quai d'Orsay by a question put by the Bonapartist Deputy, Cuneo d'Ornano, to General André, on the modifications which had been made in the regulations recently in force for the promotion of officers. For some years the generals commanding army corps had had the sole right of making out the list of officers to be promoted. The Minister had been by degrees dispossessed of this prerogative. Thus the French Army had come under an oligarchic system of rule, the Minister having only responsibility without power. This abdication was the work of civilian Ministers, M. de Freycinet among others. General Gallifet initiated reform; General André took a further step, and caused a decree to be signed, which gave the prerogative of nomination into the hands of the real head of the Army. Moreover, he immediately used his right to repair some crying injustices. These measures raised incredible protests. But the Chamber voted an ordre du jour of confidence in the Government, and, at the instance of MM. Berteaux and Dubief, added

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to this a motion requesting the Minister to bring in a bill for the regulation of promotion.

Meanwhile the Budget remained neglected, and in consequence of the delay in its consideration the Chamber was forced to hasten its work and multiply its sittings, all the more because the Opposition refused to forego its right of questioning the Cabinet on its action in home and foreign policy. On January 20, M. Georges Berry attacked the Minister of Finance on the subject of the Concentration Camps in South Africa, and reproached him vehemently for not having imposed the arbitration of the Court of the Hague on the belligerents. M. Léon Bourgeois intervened in the discussion, to show that such action would have been entirely useless, and after a statement from M. Delcassé, the Chamber voted the pure and simple ordre du jour. The chief of French diplomacy followed up this success the next day (Jan. 21) by securing a vote for the maintenance of the embassy at the Vatican almost without debate; and the day after, with no more difficulty, obtained a vote for French schools in the East.

The examination of the Estimates for Public Works gave rise to very interesting discussions on the system of railways and on work in the mines. In spite of the efforts of the Government and of the Commission on the Budget, the Chamber, led by the Socialist deputy Bourrat, voted (Jan. 23) the purchase of the railways of the West and the South by a majority of twelve. This decision, however, constituted, in truth, merely a declaration of principle, for the Senate did not adopt it. Some days later the Northern Socialist deputies sustained a reverse in their attempt to obtain a vote from the Chamber to the effect that the miners should not work more than eight hours a day, from the arrival of the labourer at the mouth of the pit till his return. This measure, it was felt, would have been too much a leap in the dark, and the Chamber held back from it. This legislative check was all the more felt, because it followed closely on a notable defeat inflicted on the Collectivist party by a town which was reputed to be consecrated to that ideal. On January 19 municipal elections took place at Roubaix to replace twenty-three councillors who had resigned in consequence of the refusal of the Chamber to authorise the new taxes proposed in the place of the octroi. The inhabitants of Roubaix, having adequately estimated the advantages of municipal Socialism, gave the majority of votes to the candidates belonging to the Union Sociale, under the patronage of M. Motte, the Republican deputy of Roubaix who had defeated M. Jules Guesde himself at the preceding elections. Roubaix thus followed the example set by Saint-Denis a little while before, and this vote was interpreted as a defeat inflicted on M. Millerand.

On the other hand, the purely Radical element in the Ministry obtained some signal advantages. M. Baudin,

R