scuffle on board between Russian and Japanese officers and men. The Chinese Government was also powerless to prevent the establishment in the Russian Consulate at Chifu of a wireless telegraph station by which communication was maintained with Port Arthur. It did, however, seize a considerable quantity of ammunition concealed in bales of wool and en route by rail to the coast, and refuse to release it when the plea was put forward that the ammunition was intended for the use of the Russian Legation and not for Port Arthur.

With regard to her domestic affairs, China's chief difficulty was in Kwangsi, where several towns fell into the hands of the rebels and some of the troops sent to oppose them joined their forces. In July the Viceroy left Canton to superintend the operations in person, but his presence seems to have produced little effect. In other Provinces, e.g., Honan, Chihli and Shantung, China showed herself quite able to suppress effectually any recrudescence of the Boxer movement.

An increase of 360,000l. in the revenue received from the Maritime Customs testifies to the prosperity of the trade in 1904. Of the portion taken in this by Great Britain the most marked feature is the large export of her cotton manufactured goods, 549,073,900 yards, with a value of 7,650,8331., an advance of 2,000,000l. on 1903. A large portion of this export took place in December, and therefore does not appear in the Chinese Customs Returns. As to Chinese exports, the amount of tea received in Great Britain alone was 10,000,000 lb. in excess of 1902; silk also made a considerable advance. The financial position of China was greatly improved by an advance in the value of silver, which also enabled her to assent to the payment of the 1901 indemnity on a gold basis. Of the railroads under construction, that from Pekin to Hankow was completed with the exception of the bridge over the Yellow River; the German line from Kiao-chou to Tsi-nan Fu was finished and opened to traffic; and the Pekin Syndicate's short line connecting their coal-fields with the head of water communication to Tien-tsin was also completed in 1904. Work was begun on the ShanghaiNanking line, and the line from Canton to Hankow was opened as far as Samshui. With regard to the latter, much ill-feeling was excited by the transfer of the concession without Chinese sanction from American to Belgian hands, and the Government was urged from Hunan and Canton to cancel the concession and take the work into its own hands.

Communication with Burmah is being greatly improved by the continuation of a mule road from the frontier to Yungchang. The work is being done under foreign supervision at China's expense.

The celebration of the Empress Dowager's seventieth birthday and the painting of her portrait by Miss Carl were the most notable events of the year in the Palace. In the Provinces Manchu officials suffered a heavy blow by the abolition of

several rich posts which had been confined to them, of which the best known to foreigners was that of Hoppo at Canton. The step was taken with the expressed intention of promoting economy in the public service. With a view to improving the military strength of the Empire a Council consisting of three members was appointed to consider the re-organisation of the Army, and Tieh-liang, one of the members, was sent on a mission to the south to study the question and discover funds for the scheme. The mission of the Prince Pu-lun to the St. Louis Exhibition gave that prince an opportunity of becoming acquainted with the outside world which may prove invaluable, as he is himself a possible successor to the Throne. A memorial was presented by Sir Robert Hart urging the adoption of a greatly increased land-tax in order to create a revenue sufficient for the proper payment of the Civil Service, and for the provision of funds with which to place the Army and Navy on a footing which would secure respect for China at the conclusion of the present war. Following on this an inquiry was ordered by the Throne into the present mode of levying the land-tax with a view to seeing how far the revenue can be increased from this source.

The ports of Kong-moon in Kwangtung, Chang-sha in Hunan, and Tsi-nan Fu in Shantung, were formally opened to foreign trade. The continuation of hostilities in Manchuria prevented the Consuls appointed by the United States to Mukden and An-tung in Manchuria from taking up their posts.

The measures required under the treaty of 1901 for the better conservancy of the Shanghai River, the removal of the barrier in the Canton River, the registration of trade marks, and the revision of the currency have not yet been carried into effect, but have all been advanced a step. The Tien-tsin Government, which desired to set up a Mint of its own, was so unfortunate as to have the plant seized, when on its way to China, by a Russian cruiser and carried off to Vladivostok as contraband of war.

In the official world the chief events were the return of Chang Chih-tung to his old post of Viceroy at Wu-ch'ang and the appointment of Chou Fu as Acting-Viceroy at Nanking. From the latter much good is hoped for.

The murder of Bishop Verhaegen and two other Belgian priests near Ichang was promptly followed by punishment of the murderers and payment of an indemnity. With the exception of this outrage the missionaries in China generally were able to point to a constant improvement in their relations with the officials and people, and to an advance in their work, especially in that of education.

Emigration of coolies to South Africa under Government supervision began in the spring and continued with but slight interruption throughout the year. As the ordinary emigration of labour to Manchuria in the spring from Shantung was inter

fered with by the war operations a particularly useful class of men was available, numbers of whom were shipped from Tsingwan-tao direct, while a considerable supply was also obtainable in Kwangtung.

Vice-Admiral Sir Gerald U. Noel assumed command of the British Squadron in the Far East in March.

V. HONG-KONG.

The revenue for 1903 (including land sales of $350,000) amounted to $5,240,000 and the expenditure to $5,900,000. An increase in the opium revenue was expected to raise the total revenue for 1904 to $6,736,400. The land revenue from the new territories in 1903 was $22,127, and for 1904 was estimated at $44,250. The Hong-Kong public debt was 341,7997.

The total shipping entered and cleared in 1903 was 24,039,862 tons, an increase of over 2,500,000 tons on 1903. The percentage of British shipping was 468 per cent.

Population in 1903 was 325,631, of whom 18,581 were British and foreign. The increase in the latter in the last ten years had been 72 per cent., and of Chinese 30 per cent.

By an Ordinance passed in 1904 the district on the peak above the 700 feet contour line was set aside as a European reservation.

In 1903 the number of cases of plague was 1,363, with 1,206 deaths, of which 1,161 were Chinese. In 1904 plague was still present in the Colony almost throughout the year.

Sir Matthew Nathan, G.C.M.G., arrived in July and entered on his duties as Governor.

The number of Russian sailors interned at Hong-Kong, on arrival from Chemulpo and Wei-hai-wei, made it necessary to provide a large camp on the Kowloon Promontory for their reception.

VI. KIAO-CHOU (GERMAN).

The completion of the German railway to Tsi-nan Fu in 1904 and the opening of the new harbour have both tended to increase the importance of Kiao-chou. The rapidity with which its trade developed as progress was made with the construction of the railroad was, however, a surprise to many. Already a considerable portion of the trade which previously flowed to Chifu has been diverted to Kiao-chou. The output of coal from the Wei-hsien and Po-shan districts has not yet attained to large dimensions, but the fields give good promise.

The proximity of Kiao-chou to Port Arthur led to four Russian vessels seeking its shelter, where they were still interned at the end of the year.

The strength of the German guards on the railroad was increased during the year, and events in Manchuria have by no means tended to Germany's abating her pretensions in the Province of Shan-tung.

VII. WEI-HAI-WEI (BRITISH).

In consequence of the Custom House at Shanghai refusing to grant drawbacks on goods in transit to Wei-hai-wei, attention was called to its peculiar status, and the Chinese Government, after some correspondence had been exchanged, definitely recognised it as a foreign port on the same footing with Hong-Kong. As its lease to the British Government is co-terminous with that of Port Arthur to the Russian Government, there are questions still open to discussion regarding its future. The withdrawal of the British Fleet from the port in August, 1904, when the naval battle between the Russian and Japanese Fleets was in immediate prospect caused some anxiety as to its possible abandonment. After the battle the officers and crew of a shipwrecked Russian destroyer made their way to the port and were interned there before being shipped off to Hong-Kong.

The administration of the Colony was still conducted on the most modest scale: the Foreign Staff consisting of fourteen persons, whose salaries amounted to about 3,8001., a sum which even the existing revenue sufficed to meet; and the grant in aid of the expenses of the Colony had been reduced from 12,000l. to 6,000l.

VIII. FRENCH INDO-CHINA.

The railroad from Saigon to Bien-Hoa-Anloo was opened in January. The construction of the Red River line to Lao-kai and thence to Meng-tzu and Yun-nan Fu was actively hurried on, several hundred Europeans-French, Greek and Italianbeing employed in the works on the line.

The coal mines at Hongay give employment to about 2,500 men, and the output of coal from Mongson is about 100 tons per day.

A short crop in rice interfered with the continuance of the steady progress of the Colony, which had enabled it in the previous five years to pay 40,000,000 frs. as a military contribution. W. R. CARLES.

CHAPTER VII.

AFRICA (WITH MALTA).

I. SOUTH AFRICA.

IN importance and in interest the affairs of the Transvaal and Orange Colony overshadowed those of the other Colonies in South Africa, and in the space here at command must receive priority and fuller treatment in order to do any justice to the perspective of the subject as a whole. The year opened gloomily the darkness, however, relieved by a ray of hope founded on the

prospects of Chinese immigration for the mines, to the principle of which the Legislative Council had committed itself at the close of 1903. Lord Milner was then extremely anxious about the financial position of the Colony, owing chiefly to the slow recovery of the mining industry and agriculture after the wara slowness which the mine-owners attributed to the shortage of native labour for underground purposes. The High Commissioner informed the Colonial Office that the immediate

prospect was very bad. There was complete stagnation in commerce and enterprise and the railway revenue had fallen heavily. The result was that there would be a deficit of 680,2731. in the Transvaal and Orange River Colony Budget. Lord Milner advised a reduction in the strength of the South African Constabulary and a postponement by the Imperial Government of the plan to call up an instalment (of 10,000,0001.) of the 30,000,000l. which the Transvaal had agreed to pay as a contribution to the cost of the war. If the loan of 10,000,000l. which had been guaranteed by the mining magnates, under the agreement made with Mr. Chamberlain, were then floated the Colony would be unable to pay the interest. Lord Milner was convinced that the Transvaal desired to discharge the obligation to provide the 30,000,000l.; but if the Imperial Government insisted upon the compact being carried out at present a crisis would arise which "while putting a most formidable weapon into the hands of the disaffected," would permanently injure the strong attachment of the loyal population to the Mother Country. But if the Government took the initiative of postponing the issue it would strengthen the wish of the well-affected to discharge the debt as soon as means were available," and would increase the likelihood of its ultimate discharge without a quarrel."

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The remarkable significance of Lord Milner's language, as indicating the tone and temper of the Rand population, was promptly appreciated by Mr. Lyttelton. Having regard to local feeling and the heavy deficit he saw no alternative to postponing the issue. This, telegraphed Lord Milner, "relieves me greatly." As for 1904-5, a deficit can and must be avoided." He was totally averse to further demands on the British taxpayer, and for the avoidance of further deficits looked to the all-round reduction of expenditure. The Constabulary, at any rate, could be reduced to 5,000 men without loss of efficiency. It would be futile to emphasise the disillusionment created by this revelation of unalterable facts; but disappointment at the non-realisation of Lord Milner's sanguine expectations of prosperity at the conclusion of peace speedily disappeared in the concentration of activity upon the desperate remedy of Asiatic labour. Lord Milner asked for permission to introduce an Ordinance for its importation. He had "no shadow of doubt" as to the wisdom of the decision to which the Council had come on the Farrar resolution of December, 1903. The remedy was