ignorant as it necessarily is of the true facts of the Indian political and social life, may mistake the clamour of the agitators for the real voice of the people of India, and press on the Government a wholly unsuitable system of administration. Moreover, the demand for Home Rule and the consequent opposition to the rule of British officials is rapidly becoming a race hatred of Englishmen in general, and it will be far more difficult to cure this than to suppress political sedition.

The so-called "crowning of Surendra Nath Banerjee as King of Bengal," on September 5, was nothing of the kind. An umbrella was held over him, he was clothed in a dress of honour, garlands were put round his neck and Sanskrit verses were recited in his honour, but these marks of distinction are often bestowed on men who stand high in popular favour for the time being. In the present case the popular favour was by no means universal, and the leading native newspapers generally denounced the proceedings of September 5, either as calculated to throw ridicule on the whole movement or as an act of presumption on the part of Surendra Nath Banerjee, whose claim to be the true leader of the party was hotly denied.

(6) THE MILITARY SECRETARY.

The controversy between the Civil and Military authorities in India was finally settled early in the year by Mr. Morley's despatch which laid down that the Military Secretary should hold the same position as the other secretaries of the Government of India, and that he should be a member of the Mobilisation Committee; that the Military member of Council should serve on the Defence Committee; and that the Viceroy should have power to make appointments to these committees, and to the Advisory Council.

VI. TIBET.

The Convention between Great Britain and China regarding Tibet was signed at Pekin on April 27, by Sir Ernest Satow and Tang-Shao-Yi, the British and Chinese plenipotentiaries, and was ratified by their respective Governments a little later in the year. It consists of six articles, the effect of which is to confirm the Lhasa Treaty of September 7, 1904, as mollified by the subsequent declaration of the Government of India. Great Britain undertakes not to annex Tibetan territory or to interfere in the administration of the country, whilst China undertakes to prevent any other foreign Power from doing so. China also agreed to be responsible for the indemnity of 25 lakhs, and to pay it in three annual instalments of 8 lakhs each. first of these was paid in Calcutta on May 29. It was chiefly to arrange for the payment of the indemnity that a Shapé or Member of the Council of Lamas came to Calcutta in March.

The

The Tashi Lama visited the Viceroy in December, 1905, and

stayed for some time in Calcutta. He and his followers appeared to be highly gratified with the attention paid them, and they were well received by the Lamas on their return to Lhasa.

The Dalai Lama has so far made no attempt to recover his position or to return to Lhasa, the relations between the British and Tibetan officials and people have been most friendly throughout the year, and the returns of the trade between the two countries show that in 1905 it had increased from 25 to 43 lakhs. The Government of India has decided to complete the Hindustan-Tibet road from Simla to Gartok, the new trade mart in Western Tibet.

VII. SIAM.

Good progress has been made in opening up roads through the Federated Malay States, and on an average twenty-two miles of railway have been constructed annually entirely from revenue. It is now proposed to continue the railway to Bangkok, and this proposal gave rise to an entirely unfounded suspicion of German interference, apparently due solely to the fact that the head of the Railway Department under the Siamese Government happens at present to be a German. The line will be constructed and maintained at the expense and under the control of the British and Siamese Governments without any assistance or interference from outside. In Siam arrangements have been made for the establishment of a gold standard, and for the coinage of gold pieces of 10 and 20 ticals in value, but silver will still remain legal tender to any amount.

CHARLES A. ROE.

CHAPTER VI.

THE FAR EAST.

I. JAPAN.

OWING to the desire of the nation, as expressed by Marquis Ito, to avoid any appearance of a change in foreign policy, M. Katsura's Ministry had remained in power during the negotiations with Russia which preceded the war, and also during the war itself. But as its continuance in office after the conclusion of peace was no longer necessary, and the Government owed its prolonged existence to the forbearance of the Opposition, the Premier resigned at the end of 1905, and a new Ministry was formed with Marquis Saionji, the leader of the Constitutionalists, as its head.

The year 1906 opened inauspiciously. In the Northern Provinces distress, consequent on a bad harvest, was prevalent and soon developed into a famine, which elicited assistance from

Great Britain and other foreign countries. But undeterred by the unfavourable outlook at home, the Ministry embarked on a policy which not only maintained all existing taxation untouched and increased the Customs tariff, but contemplated an expenditure of some 50,000,000/. on the acquisition by the State of nearly 1,500 miles of railroad, and demanded the strengthening of the Navy, the increase of the Army, and the extension of railroads in Korea and Manchuria.

The Budget was severely criticised, not so much for the continuance of the war taxes as for the large amount assigned to redemption of loans while further loans were still in immediate contemplation, and for the inclusion of permanent items in extraordinary expenditure. The nationalisation of the railroads excited especially strong opposition. M. Kato, the Minister for Foreign Affairs, resigned, holding that both the measure and the time chosen for it were objectionable. The House of Peers introduced amendments cutting down the total amount to 47,000,000l. and extending the period of purchase from five to ten years, and amid scenes of considerable excitement these amendments were accepted.

The increase of the Army was effected by adopting a two years' instead of three years' system of service. This change strengthened the Army by some twenty divisions, while according to the Government's estimate the additional outlay involved would be only 300,000.

So sanguine was the Government as to the resources of the country that its programme contemplated paying off the whole of the foreign war debts, amounting to 182,000,000l., by 1939, and the domestic debts of 57,000,000l. in 1942.

During the discussion of these measures festivities were taking place in honour of the Japanese generals and troops returning from Manchuria and of Prince Arthur of Connaught, who had been commissioned to invest the Emperor with the Order of the Garter. The reception given to the Prince's mission by the Imperial Family, the Army, the Navy and the nation, was probably without precedent on account of the universality of the welcome accorded and the absence of any discordant element. The Prince was also charged to confer the Order of Merit on Admiral Togo and Field-Marshals Yamagata and Oyama, a duty which further heightened his popularity. Fétes were given not only to the Mission but also to the officers and crews of the British Fleet, and many courtesies were exchanged. The Prince himself received the Order of the Chrysanthemum from the Emperor, and many decorations were bestowed upon his suite, which included Lord Redesdale and Admiral Sir E. H. Seymour, both of whom, and especially the latter, were already well known in Japan.

A terrible earthquake in Formosa in March, when over 6,000 persons were injured; an explosion in the Takashima Mine, when 256 lives were lost; the loss of the transport Toyotomi Maru, which

struck a mine off the coast of Korea, and sank immediately with some fifty of the crew; floods at Nikko, Kofu and elsewhere in July, and the destruction of a fleet of over 200 coral fishery boats in a hurricane off the south-west coast of Japan in October, were sad incidents in the year which attracted attention abroad, and to some extent disguised the amazing vigour with which both the Government and the people were pushing forward their projects for expansion.

The launch of the first battleship built in Japan, a vessel of 20,000 tons, equal, if not superior, to any vessel afloat, was in character with the year's work. The floating of Admiral Togo's flagship the Mikasa, of the Russian cruiser Novik and the Russian vessels which had been sunk in the harbour of Port Arthur, were among the year's successes. But most startling of all was the commercial enterprise which raised the foreign trade of the country to a figure (84,000,000l.) far surpassing all previous records, and remarkable for the fact that for the first time in ten years the value of exports exceeded that of imports. The prompt taking up of an internal issue of 20,000,000l. 5 per cent. Exchequer Bonds testified to the strength of the country's resources, while the amalgamation and formation of Steamship Companies, with capitals of 1,500,000l. and 2,000,000l. for developing Japanese trade on the Yangtse and with Europe showed an intention to extend the field of their energies. The new commercial and industrial enterprises embarked upon between June, 1905, and October, 1906, represented a capital of 55,000,000l. At the same time the improvement of harbours, the construction of docks and other public works were being advanced with a confidence which was the more surprising since the burden imposed upon the country by interest on war loans was over 7,000,000l. per annum, and the taxation per head had grown from 8.79 yen in 1896 to 39:16 yen in 1906. Further, though the rice harvest was good, some 10 per cent. above the average, the silk crop, which largely affects the figures of exports, was poor.

The national revenue for the year was no less satisfactory, showing a surplus of 3,000,000l., and economies in the military expenditure of 10,000,000l., partly due to the expenses of removal from Manchuria being less than was estimated. Both in Korea and Manchuria the Japanese Government had been active in extending railroads and improving communications. The evacuation of Manchuria by Japanese troops steadily proceeded, and on December 1 the administration of Newchwang was handed over to China, together with the Russian telegraph lines in the neighbourhood. Baron Goto was summoned from Formosa to take charge of the railroads in Manchuria, and to act as chief adviser to the military authorities. This combination of posts is said to have caused divisions in the Cabinet which nearly led to the resignation of Viscount Hayashi, who had succeeded M. Kato at the Foreign Office. In Formosa

Japan found it necessary to undertake operations against the savages on an extended scale. These were successful, and the condition of the country on the whole showed an improvement. The production of gold rose to 70,000 oz. The mining regulations in the island were assimilated to those of Japan, in order to permit of the investment of foreign capital.

The Treaty of Portsmouth of 1905 had left various matters to be settled by the contracting Powers later on. Among these the most important were the conclusion of a commercial treaty, the payment of the cost of the maintenance of prisoners of war, a convention as to the exercise of the fishing rights granted to Japan on Russia's Pacific coast and the construction of railway connections in Manchuria.

With regard to the commercial treaty-a treaty intended to hold good only until 1911 when other treaties with Japan lapse -the main difficulty lay in Japan's claim to a right for vessels engaged in trade on the Sungari River in Manchuria to pass by the Amur River on their way to and from Japan, without which Japanese trade by sea with the Sungari River would be impossible. Russia, while recognising the principle of the "open door" to trade in Manchuria, resisted its application to the Amur, where she considered her exclusive right prevailed. Apparently China, whose rights as the possessor of the south bank of the Amur are more intimately concerned than Japan's, made no move to assert them, but left Japan to fight this diplomatic battle singlehanded, as she had fought with the sword for Manchuria's freedom.

In addition, Japan asked for special tariff privileges on the Manchurian frontier, the establishment of new Consulates and greater passport facilities. Russia, on the other hand, was content with the privileges granted by treaties before the war, supplemented with such additions as have since been conceded by her or Japan to other Powers.

The main difficulty with regard to the fishery Convention appears to lie in the interpretation of "rivers and inlets" (Heuves et anses), which, under the Treaty of Portsmouth, are excluded from its operation. The establishment of fishcuring houses at points on the coast and some other facilities are stated to have been conceded.

At the close of the year arrangements for the connection of railway communications at Chang-chun were said to be in progress, and M. Motono, the Japanese Ambassador at St. Petersburg, spoke hopefully of the general outcome of the negotiations.

How far the slow progress in negotiations with Russia may have been due to Japan's difficulties elsewhere is uncertain. But during the last half of the year a number of incidents had occurred which impaired the friendly relations existing between Japan and the United States almost from the date of the opening of Japan to modern intercourse with foreign countries.

BB