standing claims; but it was denied that it implied a United States Protectorate. The treaty lapses on payment of all foreign debt. From Haiti it was reported in October that ten men had been sentenced to death for conspiring to overthrow the Government. These negro Republics show but slight emergence from the barbarism into which they have relapsed since the Spanish occupation. From the Danish West Indies there is nothing to report. The prosperity of the French Colony of Martinique has been favourably affected by the Brussels Convention. The total value of the trade for 1906 was 1,353,8011. Mont Pelée has been quiescent.

VII. SOUTH AMERICA.

Brazil has had an uneventful year. The King of Portugal (assassinated Feb. 1, 1908) had accepted an invitation from President Penna to visit the country during the celebration in 1908 of the centenary of the decree of King John VI. opening Brazilian ports to the world. A decree has been signed making military service obligatory. The Commission to define the Brazil-Peru boundary was still sitting at the end of 1907. The President's Message at the opening of the Parliament in May reported a surplus of 2,541,0351. gold, and a deficit of 4,808,750l. paper. The President claimed that the Conversion Fund had given stability to exchange and security to foreign capital. Trade in Brazil is improving. The value of the total imports in 1906 was 36,167,4871.-nearly 4,000,0001. higher than in 1905; exports 53,092,2301., as against 44,653,8441. the previous year. The reports from the Provinces are of a more hopeful character than heretofore. A statement of trade for January-October, 1907, shows imports to the value of 32,222,8371. (exclusive of specie and bonds) and exports 46,857,6451. The Foreign Debt at the opening of Congress in May was 69,608,3571. The deficit on the financial year 1906 was estimated at 1,380,2521. The balances at the credit of the Treasury on March 31, 1907, were calculated at 17,127,0831. The estimated value of paper money in circulation (at 15d. exchange) was on that date 41,541,7107., of which 500,000l. is covered by the Guarantee Fund. Prince Louis of Orleans, grandson of the late ex-Emperor Pedro, visited Brazil in May, but was not permitted to land by the authorities, in spite of his claim that he retained Brazilian citizenship. He conferred with leaders of the Monarchist party aboard the steamship.

In Argentina the year opened with labour troubles, which were, however, composed. On February 7 the Provincial Government of San Juan was overthrown and the Federal Government had to intervene to restore order. President Figueroa Alcorta's Message to Parliament in May said the position of the nation realised the most optimistic economic forecasts of the most exacting patriots. The Internal Debt was 7,721,2631. paper and 600,1401. gold. The Consolidated

Internal Debt had been reduced in the year from 65,883,4007. gold to 64,866,6007. The amount in the Conversion Fund was 24,000,000l. gold. An extensive railway strike "in sympathy " with the strikers on one line, the Argentine Great Western, took place at the end of May-an example of a kind which is becoming a conspicuous feature of Latin-American societies on both sides of the Andes. It was denied that the strikes had any connection with politics, but they were followed by Ministerial resignations, which were, however, attributed to private causes. In October a revolution broke out in the province of Corrientes, and President Figueroa Alcorta intervened with Federal troops and appointed a national commissioner, Señor Perez, to compose the local differences. Señor Perez failed, and at a Council of Ministers called to consider the situation national intervention was decided upon, one Minister, Señor Maschwitz, Minister of Public Works, dissenting and resigning office. A decree was published on December 9, taking possession of the provincial executive power, and condemning the acts of certain functionaries who had manipulated the electoral law for party purposes. The death of ex-President Dr. Saenz Peña was reported in December. Immigration from Europe, chiefly from Italy, was well maintained, and 1907 has been noteworthy for commercial activity. Crop prospects towards the end of the year were good, but a serious plague of locusts supervened. Reports minimised the damage and the wheat and linseed estimates were high. Complaints, however, were made in Argentina of a campaign of defamation against the country in Europe. The Budget voted in January showed an estimated expenditure of 18,392,5631. and revenue 18,648,742. At the close of 1907 the outlook became stormy, a "general strike" being organised for Christmas Day as a protest against a law which had led to the deportation of "anarchists and other undesirable agitators; but the Unions declined at the last moment to act, employment being good and wages high.

Uruguay seems to have entered upon a period of internal peace and commercial recovery. President Williman's Administration was marked in 1907 by the inauguration of a new High Court of Justice at Montevideo and by the prosecution of administrative reforms. His Message in February reported a prosperous state of things, and estimated a surplus of 400,000%. The revenue (Customs) for 1906 amounts to 2,744,0981.—a record figure. The estimated expenditure for 1906-7 was 4,080,8377. against a total estimated revenue of 4,082,0901., but the revenue proved to be more elastic. In the opinion of the British Consul the credit of the country at the end of the financial year 1907 stood at the highest point it had ever reached. The public debt at the end of 1906 was 27,079,9851. A general election was fought in November, the Government securing 73 seats and the Nationalist Opposition 14.

Chili has shown much recuperative power since the disastrous

earthquake of 1906 which laid Valparaiso in ruins. In June there was a severe earthquake at Valdivia, accompanied by slight loss of life. The economic effects of the earthquakes were shown in labour troubles culminating in a "general strike," apparently fomented for political purposes and as an aid to the overthrow of President Montt at the time of a Ministerial crisis. The difficulties, however, subsided. President Montt's Message at the opening of Parliament in June spoke of the re-establishment of diplomatic relations with Peru as likely to lead to a settlement of the territorial dispute, and of endeavours to facilitate trade intercourse with Argentina. The revenue for 1907 was estimated at 8,850,000l. and was expected to cover expenditure. The trade figures for 1906 showed exports 21,713,5741. and imports 17,703,0671. A contract was made with the Deutsche Bank in November for the construction of the railway between Arica and La Paz (Bolivia).

In Peru a definitive settlement has been reached by the questions at issue between the Republic and the Corporation of Peruvian Bondholders; a contract, negotiated on behalf of the Corporation by Mr. W. S. Eyre, being signed at Lima on June 21. It provided for a series of new contracts with the Corporation and the payment to it by the Government of thirty annuities each of 80,000l. sterling, in monthly instalments, commencing July, 1907, guaranteed on the sugar duties; and for the completion by the Corporation of the extensions from Oroya to Huancayo, from Sicuani to Cuzco, and from Yonan to Chilete, for provisional traffic by September 24, 1908.

Ecuador trade reports were satisfactory. Imports in 1906 were valued at 1,701,160l. and exports (f.o.b.) at 2,644,404l. The total income of the Ecuadorean Custom House was 827,4481. Exaggerated fears of bubonic plague and excessive fumigation of steamers to the damage of their contents, have badly affected the import trade vid the Straits of Magellan, and the traffic is now mainly diverted to the Isthmus of Panama. The Quito Railway was almost completed at the end of 1907. Other railway projects hang fire. In July eight soldiers were shot and fifteen sentenced for life for complicity in a political plot against the President, General Alfaro, and arrests were made in connection with other reported plots.

Progress is reported from Bolivia. The Budget for 1907 showed an estimated income of 13,583,333 bols and expenditure 14,549,793 bols. The gold industry declines, but the output of other minerals testifies to the wonderful richness of the country. From Paraguay it was reported that Congress had sanctioned a scheme for a State bank to establish a Conversion Fund for fixing the rate of exchange of fifty Paraguayan dollars to the 17. sterling.

Venezuela continued in a more or less disturbed condition, but President Castro still retains power, tempered by sporadic revolution. During the year Venezuela completed the pay

ments of the British, German and Italian claims under the conditions of the Hague award (691,160.). The claims of the subjects of other nations (840,000l.) have now to be met. The Belgian claims were, however, repudiated. They amounted to $400,000l. There were difficulties with regard to United States claims on account of certain asphalt concessions, and Venezuela through the Court at Caracas fined the concessionaire company 1,000,000l. for aiding the Matos rebellion, reserving a claim for "moral" damages. Political unrest retards the country and the financial and commercial statistics are of doubtful completeness (see Consular Reports 3787 and 3772, 1907).

CHAPTER IX.

AUSTRALASIA.

I. THE AUSTRALIAN COMMONWEALTH.

THE Commonwealth of Australia in 1907 reached a level in production and prosperity never before attained. The continent succeeded in exporting, among other things, 25,000,000l. worth of wool, and 50,000,000 bushels of wheat. A contrast between the oversea trade of 1906 and 1907 shows the marked advance in productive and trade activity.

The figures reveal a total trade for 1907 valued at 124,781,611., as compared with 114,467,2697. in 1906. In 1906 and 1907 the imports and exports of gold (specie or bullion) were respectively 1,464,7567. and 10,897,0271. The trade was therefore as under:

These trade figures argue a period of great activity for the State-owned railways, and a consequent elasticity in public finance. Never before have the State Treasurers been able to present such flattering financial statements in their annual budgets, the differences between revenue and expenditure being:

The national finances were also flourishing, the revenue from Customs duties having largely exceeded the estimate.

In national politics the year was monopolised by Tariff Reform. Mr. Deakin's numerous and eloquent speeches in England, both at the Imperial Conference and at public gatherings (pp. 92, 99, 121, 132), advocating a system of preferential trade within the Empire, produced a striking effect wherever he was heard, and his efforts were ably seconded by the blunt and forceful speeches of Sir William Lyne (pp. 123, 132). During Mr. Deakin's absence Sir John Forrest acted as Prime Minister, but resigned from the Cabinet shortly after the return of his chief, owing to the closer union of the Ministerialists with the Labour party. This union was due to a kind of agreement between the two parties on the new Australian tariff, which was then being drawn up by Sir William Lyne. On the resignation of Sir John Forrest the Cabinet was reorganised as follows:

Prime Minister and Minister of External Affairs, Hon. Alfred Deakin; Treasurer, Sir William J. Lyne; AttorneyGeneral, Hon. L. E. Groom; Minister of Trade and Customs, Hon. Austin Chapman; Minister of Home Affairs, Senator J. H. Keating; Minister of Defence, Hon. T. T. Ewing; Postmaster-General, Hon. S. Mauger; Vice-President of the Executive Council, Senator R. W. Best; Honorary Minister, Hon. J. H. Hume Cook.

The Hon. C. Watson also retired from the leadership of the Labour party in the Commonwealth Parliament, and was succeeded by Mr. A. Fisher.

The greater part of the session was devoted to the discussion in the House of Representatives of the new tariff, introduced by Sir William Lyne on August 8. As proposed, it was remarkable for heavy all-round increases in duties, and was described at the time as a 25 per cent. tariff, with a 5 per cent. preference in favour of British goods. When it emerged from the House of Representatives it was, roughly speaking, a 20 per cent. tariff, and the British preference had been slightly accentuated. In the average, where the foreign manufacturer has to face a 20 per cent. duty, only 15 per cent. is exacted from the British manufacturer. The Australian way of putting it is that Great Britain enjoys a 25 per cent. preference as against foreign nations.

The support of the Labour Party was only obtained for such a tariff by the inclusion of provisions designed to protect the worker and the consumer in the same degree as the manufacturer. These provisions make for a sort of triple Protection: the New Protection, as it is called in Australia. Thus each protective duty has as its correlative an excise duty, to be paid by the local manufacturers engaged in that particular industry. A rebate of this excise duty can be claimed, however, by the manufacturer who is able to prove that he pays