necessary to preserve the Unionist organisation as a defence against Home Rule; and declined to be "excommunicated by the Duke of Devonshire from the Liberal Unionist Church. It was noted, however, that Mr. Long, a member of the Government, had gone down to Wiltshire to assist a tariff reformer who was to stand at the next general election against Sir John Dickson-Poynder, a Free Food Unionist; and Lord Hugh Cecil at Worcester (Jan. 27) declared that such action justified the formation of Free Food Unionist Associations in every constituency, and contended that the Free Food Unionists were merely adhering to the original creed of the party. He believed that Mr. Balfour would eventually come out nearer the Duke of Devonshire than Mr. Chamberlain; but while he supported the latter, Free Food Unionists must oppose him. Mr. Churchill, who also spoke, went further than his colleague in his condemnation both of Mr. Long and of the Government policy. Mr. Austen Chamberlain, speaking again at King's Norton (Jan. 28), asserted that there was nothing contrary to the principles of the Unionist party in their fiscal programme, that the Government had felt bound to break with the past and arm themselves with power to negotiate, and observed that the meeting of Parliament would make clear both the intentions of the Free Food Unionists and their strength.

The apparent weakening of the position of the Ministry was the more regrettable inasmuch as the problems of Army reform forced upon the nation by the unfortunate experiences of the war in South Africa were even more numerous and complex than those dealt with successfully by Mr. Cardwell thirty years before. Mr. Arnold-Forster was known to be a War Minister of exceptional energy and expert knowledge; and his speech at the Liverpool Conservative Club on January 21 gave indications of his views as to the reconstitution of the forces of the Crown. He said the nation might spend less money on the Army and get the same results as at present, or might spend the same amount and get better results. He recognised defects in the military organisation, but it would be madness to starve it now because another organisation might be created in the future to replace it. We were now in the same position as before the Boer war broke out; we could not send a single battalion at full strength from this country without mobilising the Army. It was essential that that state of things should be promptly altered. The position of the Reservists demanded some relief, and we required a large addition to our supply of commissioned officers. Barracks were very bad, and the method of recruiting was open to improvement, while the Militia was being extinguished. He deemed it a part of his commission to give the Militia the position to which they were entitled. The problems connected with the Volunteer forces might be remedied by the application of sympathy and common sense. There was a way out of the difficulties connected with the Army,

and he believed he saw it, but he pleaded for patience and for a cessation of attacks upon the Army. This statement was generally well received, and was interpreted by Sir Edward Grey (at Morpeth, Jan. 22) as meaning that Mr. Brodrick's Army corps scheme was shelved. But besides Army re-organisation, the whole framework of War Office administration was held to need reconstruction. The War Office Re-organisation Committee a triumvirate consisting of Lord Esher, Admiral Sir John Fisher, and Sir George Sydenham Clarke, late Governor of Victoria-had been appointed in November, 1903. Its first report, dealing with the outlines of its scheme, was published on February 1, with a covering letter to the Prime Minister, emphasising the recommendations made in the first part of the report itself. The three parts of the report may be summarised as follows:

I. The War Office, hitherto adapted only for administration during peace, must be reconstituted with the single aim of preparing the military forces of the Crown for war. An organ must be provided capable of obtaining and collating for the use of the Cabinet all the information and expert advice required for shaping the national policy in war and determining the necessary preparations in peace. Though the British Empire, as a great naval, Indian and Colonial Power, has to deal with problems of defence far more complex than those of any other nation, no such organ exists. To form its nucleus, the Commissioners looked to the Defence Committee of the Cabinet; and, in their letter to the Prime Minister, they suggested that while he and his successors should be left absolute discretion in the choice of its members, yet to secure continuity of policy there should be a permanent element in it consisting of: (1) A permanent secretary who should be appointed for five years, renewable at pleasure. (2) Under this official, two naval officers selected by the Admiralty, two military officers chosen by the War Office, and two Indian officers nominated by the Viceroy, with, if possible, one or more representatives of the Colonies. These officers should not be of high rank, and the duration of their appointment should be limited to two years.

The duties of the permanent nucleus of the Defence Committee would be: (a) To consider all questions of Imperial defence from the point of view of the Navy, the Military Forces, India, and the Colonies. (b) To obtain and collate information from the Admiralty, War Office, India Office, Colonial Office, and other departments of State. (c) To prepare any documents required by the Prime Minister and the Defence Committee, anticipating their needs as far as possible. (d) To furnish such advice as the Committee may ask for in regard to defence questions involving more than one department of State. (e) To keep adequate records for the use of the Cabinet of the day and of its successors.

The functions now vested in the Joint Naval and Military

Committee for Defence, and in the Colonial Defence Committee, should be transferred to the Defence Committee.

II. There should be an Army Council, modelled on the Board of Admiralty, the War Secretary being placed on precisely the same footing as the First Lord, so that all submissions to the Crown on military matters should be made by him alone; the Council to consist of four military and three civil members, with the Permanent Under-Secretary as Secretary. The division of functions would be as follows: (a) Secretary of State. (b) First Military Member-Military Policy in all its branches War Staff duties, Intelligence, Mobilisation, Plans of Operations, Training, Military History, Higher Education, War Regulations. (c) Second Military Member-Recruiting, Pay, Discipline, Rewards, Peace Regulations. (d) Third Military Member Supply, Clothing, Remounts, Transport. (e) Fourth Military Member-Armaments and Fortifications. (f) Civil Member, the Parliamentary Under-Secretary of State-Civil Business other than Finance. (g) Civil Member, the Financial Secretary-Finance, Audit, Accounting, Estimates.

Or, summarising, the grouping would be: (a) Minister responsible to the Crown and to Parliament; (b) Operations of War; (c) Personnel; (d) Supply; (e) Armament; (f) Civil Business; (g) Finance.

The office of Commander-in-Chief, of which the functions were far too multifarious and the existence had been regarded by the Hartington Commission and the minority of the War Commission as an anomaly, must be abolished. The work of inspection, which he had practically been unable to exercise, must be transferred to an Inspector-General, and the offices of Inspector-General of Fortifications and of Military Secretary must also disappear.

III. There must be extensive decentralisation. Under the Inspector-General, as part of his staff, should be Inspectors of Cavalry, Horse and Field Artillery, Garrison Artillery, Engineers and Mounted Infantry. Inspectors of Infantry were held to be unnecessary. The Inspector-General should attend at all manœuvres or considerable reviews, act as umpire at large manoeuvres and report annually to the War Secretary and Council by November 1, and should also report on the confidential reports of generals, and have power to report on any officer. All promotions above the rank of captain (with the exception of officers of the General Staff) were to be made on the recommendation of a new Board of Selection comprising general officers commanding-in-chief. The General Staff, however, was to be centrally supervised and administered, and presided over by the new Inspector-General.

These proposals for drastic change were well received by the public. The admission of a Colonial element to the Defence Committee, anticipated in the previous autumn by the invitation to its deliberations of the Canadian War Minister, was

especially commended by Mr. Asquith in a speech to the British Empire League on February 1. In the Service, however, much discussion and some dismay were created. It was presently announced that Lord Roberts had retired, in view of the report, from the office of Commander-in-Chief, but the fact that he had consented to give his services to the new Army Council was held to disprove the rumour that he strongly dissented from the proposed changes, a rumour that had been momentarily exaggerated into a report that he had been hustled out of office. The main recommendations of the committee were adopted before the publication of the report, and the Duke of Connaught was shortly afterwards appointed Inspector-General.

The names of the military members of the Army Council were announced on February 8. They were: Lieut.-General the Hon. Sir Neville Lyttelton, K.C.B.; Major-Generals C. W. H. Douglas, H. C. O. Plumer, C.B., and Sir J. Wolfe-Murray, K.C.B. Besides these, the Council was composed of: the Secretary for War (Mr. Arnold-Forster), President; the Under-Secretary (the Earl of Donoughmore); the Financial Secretary (the Right Hon. W. Bromley Davenport, M.P.), and the Permanent Under-Secretary of State for War (Colonel Sir E. W. Ward, K.C.B.), Secretary of the Council.

On January 26 one of the gravest financial scandals of recent years came to a tragic ending. Mr. Whitaker Wright, managing director of the London and Globe Finance Corporation, had been at last prosecuted by a committee of sufferers, after the Government had declared itself unable to take action, and his escape to New York and subsequent extradition had been one of the sensations of the year 1903 (ANNUAL REGISTER, 1903, p. 25). He was convicted, after twelve days' trial in the Court of King's Bench, of issuing two false and fraudulent balance sheets of the defunct companies, and received the heaviest sentence permitted by statute for that offence-seven years' penal servitude. After receiving sentence he was conducted to an adjoining consultation room. He was conversing with some friends when he rose, walked towards the window, and then sank into a chair, and became almost instantly unconscious. He died in a few minutes. The cause of death was at first attributed vaguely to heart failure, but the inquest showed that he had poisoned himself with cyanide of potassium.

Mr. Chamberlain made a speech of some historical interest on January 30 at the Birmingham Town Hall, previously to the inauguration of a memorial clock erected by a working-class subscription in West Birmingham in commemoration of his services to the Empire in South Africa. After referring with pride to his connection with the city in its municipal work and in Parliament, he went on to say, in reference to his South African tour, that from his first occupancy of the position of Colonial Secretary he had the idea that such a Minister could not better employ his time than in a visit to some of the great

B

Colonies and possessions which it was his duty to administer. He had that idea before there was any thought of the South African war. In that war two irreconcilable ideals of progress and civilisation came into conflict. The issue had to be tried. It was not a selfish interest on one side or the other. We were fighting for principles and ideals on which our whole Empire has been based, and if we had failed the failure would have been fatal to the existence of the Empire. Mr. Chamberlain proceeded to point out that a real union of the races within the Empire must be a voluntary one, and that it could only be brought about by time and patience.

The month of January closed with the news of another Unionist defeat. The Ayr Burghs election took place on Friday, January 29, and the result was declared on the day following. Mr. Dobbie (Liberal) received 3,221 votes; Mr. Younger (Unionist), 3,177. Thus a Liberal majority of 44 replaced a Conservative majority (in 1890) of 580; and the poll was the heaviest on record. Mr. Younger had repudiated the aid of the Tariff Reform League, and limited himself to the support of the Sheffield policy.

CHAPTER II.

Opening of Parliament-King's Speech-Lords' Debate on the Address-Illness of Mr. Balfour-Commons' Debate on the Address; Working of the Irish Land Act; The Macedonian Question; The Conduct of the South African War-Outbreak of War between Russia and Japan-Amendment to the Address, Dealing with British Commerce in the East-Duke of Devonshire in the City-The Fiscal Question; India; Amendment to the Address; Division-Bye-election in Hertfordshire (St. Albans) The Chinese Labour Question; Lords' Debate, and Amendment to the Address in the CommonsAmendments on Irish Land Act and the Unemployed-Address CarriedLords' Debates on Macedonia and on Fiscal Policy-Reports on Tariff Wars -The Venezuela Settlement-Supplementary Estimates for Army and Navy; Discussed-Musical Copyright and Mines (Eight Hours) Bills-Lords' Debates on Arrangement of Business, and Tibet-Navy Estimates; Discussed-Proceedings of the National Liberal Federation and Liberal League -Impending Retirement of Sir William Harcourt Announced-Commons' Debate on Sugar Commission-London County Council Election-London Education Committee-Second Report of Lord Esher's Committee-Army Estimates-Debate on Them-Mr. Pirie's Resolution on the Fiscal Question, and the Prime Minister's "Other Document"; Debates-Lord Rosebery at Newcastle-Education and the "Religious Difficulty"; Debate in the Commons; Proposed Compromise-Signs of Unionist Disintegration-Renewed Debates on the Estimates-Controversy Continued as to Chinese Labour; East Dorset Election; Debates on the Subject in the Lords and Commons; Subject Reopened on Consolidated Fund Bill; Hyde Park Demonstration-Parliament during the Latter Part of March-Private Legislation (Wales) Procedure Bill-Civil Service and Revenue Estimates-Concluding Section of War Office Report-Scottish Education Bill-Aliens Bill -Debate on Easter Adjournment-Conference on Macedonia-Impending Retirement of Sir M. Hicks-Beach.

IN dreary weather, which contrasted strongly with the brilliant scene within the House of Lords, the King and Queen opened Parliament in state on Tuesday, February 2. The King's Speech referred in most cordial terms to the friendly feelings