and other matters and in the removal of all the restrictions on intermarriage, trading and such like matters which previously marked them as a people distinct from the Chinese. The Manchu garrisons throughout the country were disbanded, and in lieu of the pensions which Manchus have enjoyed since the foundation of the dynasty, lands were allotted them for cultivation, and funds furnished for the provision of houses, stock and tools. Whether it is possible out of the horse-breeding farms and other lands previously held by the Manchus for common purposes to find sufficient to satisfy the claims which will arise remains to be seen. The Manchu population thus affected in China proper is probably not more than 1 per cent. of the whole, but the possible addition of even 4,000,000 persons to the malcontents is very serious. The necessity for taking this step and of merging the Manchu in the Chinese was felt to be so urgent that in the appointment of officers to Manchuria, Chinese only were selected. for the highest posts, and the Manchurian provinces were placed under the same form of administration as has existed in China.

The development of Manchuria continued to make rapid progress. In spite of the constant immigration from China a scarcity of labour was experienced by the earlier immigrants who already have become well-to-do farmers, many of them well advanced in the modern practice of agriculture. At the same time there was a steady influx of Japanese small traders and speculators in land. So considerable was the trade borne by the Chinese Northern Railroad that it was proposed to extend the line farther north, but to this Japan refused to agree, as the line, it was said, would injuriously affect the Southern Manchurian Railway which is in Japanese hands. Probably this plea was in some degree fictitious, and Japan, annoyed at China's reluctance to co-operate with her in measures which in any way implied Japan's permanent or lengthy tenure of her present position in Southern Manchuria, was anxious to show China how much her interests already depend upon a cordial reception of Japanese advances. Japan had shown much interest in the formation of a Chino-Japanese Company to exploit the forests on either bank of the Yalu River. It was proposed that the company should have a capital of 250,000l. equally divided between Chinese and Japanese shareholders, with a Chinese managing director and Japanese business_directors. On China's declining to fall in with this scheme, Japan was provoked to levy a duty on timber descending the Yalu which disorganised the whole trade. Another question occurred with regard to the disputed ownership of China or Korea of a small island lying off the northern frontier of Korea. The island was claimed by Japan on behalf of Korea and troops were despatched by both Chinese and Japanese authorities to occupy it. The incident, which at the end of the year was not yet closed, betokens an absence of the good feeling which might have been expected between the two countries.

This situation is the more unnecessary as China had in April virtually recognised Japan's assumption of rights accruing to her, for the time being at any rate, to the east of the Liao River. Under an agreement with Japan signed that month, China purchased for 166,0001, the extension of the railroad to Mukden which had been constructed by Japan during or after the war, and undertook various engagements which indirectly recognised Japan's prominent position in Southern Manchuria. Among other things, Japanese capital was to be employed in reconstruction and extension of railroads to the exclusion of other foreign capital for terms varying in different parts of the country from eighteen to twenty-five years; such loans were to be secured on the railway's earnings and properties; and by a treaty of earlier date new lines were not to be constructed which would injuriously affect the Japanese-owned Southern Manchurian Railway. Under the last clause Japan now assumes the right to veto China's extension of the railroad from Sin-mingting northwards.

Japan has also of late ignored China in certain postal and telegraphic matters within China and Manchuria. In the latter country she accepts messages at Japanese rates for all parts of the world, despite China's protest, and has given official notice to the International Bureau of her establishment of forty-one telegraphic offices there. In China she uses Chinese railways for carriage of Japanese mails without handing them to the Chinese Post Office for transmission, as is done by other Powers in accordance with China's request. She is also said to have made no answer to the request that she should, similarly with other Powers, consent to the prohibition of the importation of morphia into China, a step the necessity for which has become painfully evident since attention has been paid to the evils arising from opium smoking. The strength of the Japanese Army still in Manchuria was stated by The Times correspondent at Peking in December to consist of a whole division at Liaoyang, in addition to the six battalions which under treaty she is authorised to retain as railway guards. Japan's action with regard to the telegraph question in Southern Manchuria led Russia to inform the Chinese that she must abrogate her Convention with China relating to the telegraphs in Northern Manchuria, unless China's negotiations with Japan were concluded within a reasonable time.

Japan's action towards foreign trade in Manchuria was the subject of frequent criticism in the Press and especially in the United States. But beyond a certain amount of encouragement towards the development of Tairen (Dalny) as the commercial port of Manchuria, at the expense of Newchwang, there seems to have been little ground for charges that the "open door was not maintained. Local conditions naturally favoured Japanese trade, and the fact that the Southern Manchurian railroad was still under military control impeded the free move

ment of merchandise. From this Japan herself suffered to a certain extent, as a considerable amount of Chinese trade was diverted to the Chinese line via Sin-ming-ting.

With the return of spring the famine in the lower Yangtse provinces came to an end. It was estimated that out of 10,000,000 sufferers, 2,000,000 died from hunger or the results. The Foreign Relief Committee fed about 400,000 people, of whom some 30,000 were employed on public works. Its funds amounted to upwards of 72,000l. and the value of its work was eventually acknowledged by the local authorities in generous terms, but at first the occasion for its assistance was minimised and obstacles were opposed to its operations. The Chinese Government and people themselves raised over $4,000,000, but the amount was so insufficient as to occasion official anxiety lest the discontent should lead to a general rising.

The concentration of power over the Army in the hands of the Central Government continued, but army manoeuvres on a large scale were discouraged on account of the expense entailed and the charges of large misappropriation of funds which had arisen out of the earlier manoeuvres. A military spirit seems however to be growing throughout the provinces, where funds are also being raised to provide for the establishment of a Navy and naval docks.

The year, though comparatively free from missionary outrages, witnessed an outbreak in Kiangsi in which an Italian missionary lost his life. A mission at Wan-hsien in Sze-chuen was wrecked by rioters and some stations in Kwang-tung and Chekiang were threatened. Unfortunately for missionaries, attacks on their stations are now recognised as one of the best methods of bringing pressure to bear upon the Government, whose interest it is to avoid any collisions with foreign Powers.

The revenue of the Chinese Maritime Customs for 1907 was estimated at 33,500,000 taels (5,443,7507.) as compared with 36,068,595 taels (5,936,2887.) in 1906. The year generally was unfavourable to trade, and a depreciation in silver during the last few months led to heavy and widespread losses among those who had been gambling in gold.

Of events other than Chinese the most important was the Protestant Missionary Conference held at Shanghai to mark the hundredth anniversary of the arrival of Robert Morrison, the first Protestant missionary in China. The decision of the conference to aim at the establishment of a National Church in China may prove productive of results the extent and effect of which can only be dimly guessed at, but the fact that a conference composed of the representatives of seventy societies and eight different nations arrived at so harmonious a conclusion bodes well for the outcome of missionary work in the past century. The Peking to Paris motor race was another event which deserves mention.

CC

IV. HONG-KONG.

The revenue for 1906-7, $6,500,855, showed a considerable decrease on that of 1905-6, $7,035,011. The decrease was expected to continue in 1907-8 partly owing to diminished income from opium, partly to the new Postal Convention, and partly to redemption of subsidiary coins. The diminished revenue entailed certain reductions in expenditure in the future; and the construction of a typhoon shelter and also of a section of the Tytam Waterworks was therefore postponed for the present. The ordinary expenditure for 1907-8 was estimated at $5,355,631 and the revenue at about $6,228,000, leaving about $823,000 available for public works.

Work on the Colony's section of the Kowloon-Canton Railway was steadily proceeded with, and a remarkable development of the dock accommodation took place. The new naval dock, 550 feet long, 95 feet wide at the entrance, 30 feet over the sill at low water, and capable of holding the largest battleship afloat, was christened in June. A new dock was completed in Quarry Bay, constructed for Messrs. Butterfield & Swire, with a length of 750 feet and 88 feet in width, and the Hong-Kong and Whampoa Dock Company's largest dock was lengthened from 556 to 680 feet.

In May, Sir M. Nathan, the Governor, left on appointment to Natal, with a reputation for energy and ability such as few Governors have been fortunate enough to carry away from the Colony. His popularity with the Chinese was as great as with the European community. In September he was succeeded by Sir Frederick Lugard, K.C.M.G., late High Commissioner of Northern Nigeria.

V. FRENCH INDO-CHINA.

Owing to the unfavourable condition of the finances, the French Government guaranteed the funds advanced by the Colony towards the construction of the Yunnan Railroad, and the Financial Controller was placed directly under the home Government. An excellent rice crop in Cochin-China and a growing revenue, mainly due to increased export duties and rice, salt and opium duties gave promise of improvement in the finances. This was further seconded by reduction in expenditure. And in order to place the finances on a firmer footing a Commission left France in October to study possible financial reforms and to investigate the control of taxes and the alcohol monopoly.

The movement made in 1906 towards granting Anamites some participation in the Government of the country was continued by a measure for the election of provincial commissions of notables and the creation of a consultative chamber in Tongking. Under the provincial assemblies provision was made for a consultative assembly divided into three sections, the first

elected by the rural population, the second composed of representatives from each province, and the third representative of other than Anamite nations. Each section would deliberate separately, but plenary sittings would be under the presidency of the Resident Superior, who would also preside at the opening sitting of the provincial assemblies.

A movement in Tong-king towards sending children to be educated in France and Japan showed that there was some disposition among the people to accommodate themselves to the times. W. R. CARLES.

CHAPTER VII.

AFRICA (WITH MALTA).

1. SOUTH AFRICA.

THE year in South Africa has been one of continued commercial depression but of much political activity. Responsible government has been brought into operation in the Orange River Colony as well as in the Transvaal, and events have emphasised the need of some system of unification or federation. In the Transvaal the year opened with the general elections under the new Constitution. The most important contest politically was that between Sir Richard Solomon, ex-Attorney-General, and Sir Percy Fitzpatrick. Sir Richard defined the issue of the elections to be whether the people or the mining magnates should rule and advocated repatriation of the Chinese and an antiAsiatic law. Het Volk candidates declared that they were not hostile to the mining interest, but that the Chinese must go, and that agriculture should receive equal consideration with the mining industry. Mr. Smuts advocated racial unity among the whites and a common effort to restore the fortunes of the country, which, while the elections were fought, was in economic distress, especially in Johannesburg. Dr. Krause declared that it was a deliberate lie to say that if Het Volk was returned to power it would tear down the British flag. Mr. Abe Bailey, one of the mining magnates, advocated a law compelling the mines to employ white labourers, of whom there were two thousand unemployed at that time in Johannesburg. Sir Percy Fitzpatrick claimed that the issue whether the people or the mining magnates should rule was a hopelessly false one, but Sir Richard Solomon replied that the Progressive policy was based on distrust of the Dutch and on racial ascendency and could breed nothing but strife, while the opposite policy was one of trust of the Dutch, of reconciliation, co-operation, and no placing of political power in the financial houses. General Botha sent a message to the English people in defence of Het Volk. The questions of the flag and of supremacy had been, he declared, settled for all time. Having got free government, their one