in them.

His Majesty's Government have consented to give a further grant of £15,000 towards the cost of erecting a hostel, together with contributions not exceeding £10,000 spread over four years towards revenue expenses.

The West Indian Colonies, with Bermuda, British Guiana, and British Honduras, concluded last year a new trade and steamship. agreement with Canada providing for increased preferences and improved steamship services. A further important development in West Indian affairs has been the holding of a Conference in London of representatives of all the West Indian Colonies, British Guiana, and British Honduras, the primary object of which was to consider and arrange for the holding of periodical conferences to deal with matters of common interest. It is intended that a permanent secretariat should be established to facilitate the work.

In British Guiana a Forestry Department has been created, and came into operation last year, and a survey of the forest resources of the Colony has begun. It should be mentioned also that an agreement has been reached with the Government of India under which the re-opening of Indian immigration to British Guiana will be effected on a limited scale.

In the other mainland territory of British Honduras the most notable recent event has been the bequest by the late Baron Bliss of the bulk of his estate, estimated to amount to approximately £500,000, to trustees to be used for the benefit and development of the Colony.

4. Eastern Dependencies.

The staple agricultural industries (tea, rubber and coconuts) in Ceylon are in a flourishing condition, as are tin and rubber, on which prosperity is dependent, in Malaya. In Mauritius efforts are being made to develop the hemp industry in the Colony to counter-balance the declining prosperity of sugar, and an advance of Rs.100,000 has been made to a Syndicate for the construction of a brushing and baling factory in Port Louis.

The disturbed relations between Hongkong and the neighbouring Chinese Territory have checked the growing prosperity of the Colony, but it would be unreasonable to anticipate that any permanent injury to its trade will result.

At

Road and railway progress has been marked in Malaya and Ceylon. In the former, progress is going forward in connexion with the completion of the East Coast Railway, which will make an alternative through route between Singapore and Siam. the end of 1925 the two railway heads of the North and South Sections were 81 miles apart. Work has been commenced on improvements to Port Louis Harbour, Mauritius, including the construction of deep-water quays, which will enable ocean-going vessels to load direct from the quay without the necessity for lighterage between ship and shore.

5. Other Dependencies.

(a) FIJI.

In Fiji effort is being made to establish new industries, while the sugar and copra production is being satisfactorily maintained. Considerable progress has lately been made in connexion with the scheme for the establishment in Fiji of a pineapple growing and canning industry. Cotton, too, is receiving attention, while the comparatively new rice-growing and dairy industries are being extended. The appointment of a Commission to review generally the educational arrangements in Fiji has been decided upon and will begin its work shortly.

(b) FALKLAND ISLANDS.

In connexion with one other Dependency, which it is not convenient to include in any of the larger groups of British Oversea Territories, an event of some importance has recently taken place, namely the sailing of the Royal Research Ship Discovery for Antarctic waters in the autumn of last year. The expedition of which she forms a part is being financed from the revenue of the Falkland Islands and Dependencies, and it is not too much to hope that very important information will be collected as a result of this expedition bearing on the prospects of the whaling industry of which this Colony and its Dependencies are the most productive centre.

For Middle Eastern Territories see overleaf.]

Middle Eastern Territories.

(a) PALESTINE.

The history of Palestine since the establishment of a civil administration under a British High Commissioner in July, 1920. has been one of steady progress and development. Political difficulties of a somewhat acute nature were encountered in the earlier stages, and actual disturbances occurred both at Jaffa and Jerusalem in the course of 1921. Since then there has been no serious breach of the peace. It would be too much to say that all elements of discontent have been removed, but it may at least be claimed that the general political situation has sensibly improved. Jewish immigration, in accordance with the terms of the Mandate* (which has been in effective operation since September, 1923), has proceeded steadily. It has done much to bring prosperity to the country and to produce a financial situation in which the Palestine Government is able not only to balance its budget but to show a substantial surplus of revenue over expenditure.

Palestine is primarily an agricultural country, and agricultural development during the past few years has been marked. Oranges and tobacco are grown on a considerable scale. There has been a large extension of fruit and vegetable production, and the introduction of new staple crops such as ground-nuts, linseed, soya beans, cotton, &c., is being organised. A large power station for the generation of electric light and energy was opened at Jaffa in June, 1923, and has since been enlarged. Smaller

stations were established at Haifa and Tiberias during 1925. Two scholarships, tenable at Oxford or Cambridge, have been offered by the Palestine Government for competition by l'alestinian students.

It is noteworthy that the prolonged disturbances in the neighbouring territory of Syria have so far produced no serious repercussion in Palestine.

(b) IRAQ.

The political regime in 'Iraq differs in toto from that of Palestine. There is no "Mandate" for 'Iraq. An independent Arab Government, under King Feisal, has administered the country since 1921. British relations with this Government are regulated by the Treaties concluded in 1922 and 1926, and by the various agreements and protocols subsidiary to the former. Great Britain and Iraq are in effect bound together by a Treaty of Alliance, the terms of which provide on the one hand that Great Britain shall furnish Iraq with support and assistance, while 'Iraq on the other hand undertakes to be guided by British advice on important questions. The regime set up by the "Treaty of Alliance "was accepted by the Council of the League of Nations. in September, 1924, § as giving effect to the provisions of the Mandatory Clauses (Article 22) of the Covenant of the League. Several important developments have occurred during the past. year. Firstly, the northern frontier of 'Iraq was definitely fixed

*Cmd. 1785.

†Cmd. 2370.

Cmd. 2662

$Cmd. 2317.

by the Council of the League of Nations, after examination on the spot by an independent Boundary Commission, in December, 1925. The Council made their award* contingent on the conclusion of a fresh Treaty between Great Britain and 'Iraq continuing the regime of the "Treaty of Alliance" for a maximum period of 25 years. A Treaty giving effect to this condition was duly signed at Baghdad in January, 1926. In June, 1926, a Treaty‡ was concluded at Angora between Great Britain, Turkey and 'Iraq, by which Turkey accepted, subject to one unimportant modification, the frontier laid down by the Council of the League. Another outstanding event of the year 1925 was the opening at Baghdad, on the 16th July, of the first 'Iraq Parliament.

Economic development in 'Iraq, as elsewhere, is hampered by lack of capital. Irrigation is the crying need of the country; until it is further developed, agricultural progress must necessarily be slow. Exploitation of the 'Iraq oilfields has been retarded by political and other causes; but with the grant of a concession to the Turkish Petroleum Company in March, 1925, and the settlement of the northern frontier, it has been possible to proceed with the necessary preliminary surveys, and progress should be more rapid in future. A start has been made with cotton-growing. The improvement communications is receiving close attention. Among the events of the year 1925 were the construction of a railway extension to Kirkuk (opened at the end of August) and the dredging of the Shat-el-Arab bar at Fao, the effect of which is to facilitate visits to the port of Basra by ships of heavy draught.

*Cmd. 2562. + Cmd. 2662. + 2679.

(116) Wt. 7889/1678 1625 7/26 S.E.R., Ltd. Gp. 56.