tration with the United States, signed December 14, attest the friendliness of Italy's relations with other nations.

CHAPTER II.

GERMANY AND AUSTRIA-HUNGARY.

I. GERMANY.

THE history of the year 1904 in Germany does not present any marked features in either home or foreign affairs. Trade was fairly prosperous, and the only black point on the political horizon was the rising in German South-West Africa, which still remained unsubdued, although reinforcements continued to be sent to the German troops there.

The Speech from the Throne at the opening of the Prussian diet on January 17 drew attention to the improvement which had been effected in the finances of the country. The accounts for 1902 had been closed under favourable conditions, the State credits of 70,000,000 marks voted for the financial year 1903 would not be required, as a surplus was anticipated, and in the Estimates for 1904 it had been found possible to balance revenue and expenditure. The State railways, one of the chief sources of Prussian revenue, had apparently recovered from the effects of the recent industrial crisis, and increasing returns were awaited from the continued expansion and development of the system. Prussian agriculture, although it had been visited by destructive floods during the past year, was adapting itself to modern scientific requirements, while as to the canals scheme, it would be partially carried out in the case of the Rhine and the Oder, but the original project of a midland canal would for the present remain unrealised. In regard to this latter point Count Bülow declared, during the debate on the Estimates on January 23, that the Government still believed that the construction of a connected and really serviceable system of canals was in the interests of the general community. They thought, however, that, after the inundations of the previous year, efficient protective measures against the danger of overflowing of the Oder and Spree were most urgently needed.

Turning to the criticisms which had been made by the Radical Opposition upon the Polish policy of the Government, the Chancellor said that an agitation was being got up by the Poles in Upper Silesia to prevent their Germanisation, and that it was the duty of the Government to act against this agitation. Upper Silesia, the land of iron and of black diamonds, was just as essential to Germany's economic development as it was to her national defence in the event of foreign complications. The permeation of Germany's thickly populated frontier land with the idea of a Greater Poland constituted a grave danger. "We

shall be compelled," added Count Bülow, "to adopt just as vigorous, if different, measures for Upper Silesia as for Posen and West Prussia. The leading representatives of Germanism in Upper Silesia must rely upon themselves more than ever. Appeals to the Government are useless. An experienced statesman is at the head of affairs in Silesia, and he has at his command special funds for the maintenance of Germanism. Should these funds not suffice, I will take care that they are increased. If the German element in Upper Silesia puts its hand earnestly to the plough, the German cause will progress." The opposition which had been manifested in certain Conservative circles to the social and commercial policy of the Government was also dealt with by the Chancellor, in a speech which he made shortly after in the Upper House of the Prussian diet, warning them that "the day would come when they would look back with longing eyes to his flesh-pots"-alluding to his concessions to the Agrarians. This speech seemed to have produced some effect in silencing his critics on the Conservative side.

The Prussian Canal Bill was laid before the House on April 12. Instead of the proposal to construct a great central canal between the Rhine and the Elbe, which had been twice rejected by the House (ANNUAL REGISTER, 1899, p. 276, and ANNUAL REGISTER, 1901, p. 266), the Government now contented itself with a project for the construction of a canal from the Rhine to the river Leine, in Hanover. The total cost of the new project, including a branch canal from Datteln to Ham, was estimated at 197,000,000 marks (9,850,000l.). One of the subsidiary projects was a great canal to connect Berlin with Stettin at a cost of 43,000,000 marks (2,150,000l.). The tariffs were so arranged as to favour home produce, and on the western canal system were to be higher than on the eastern. It was urged that the canal from the Rhine to Hanover would also possess great importance from a military point of view.

In May the Prussian Chamber of Deputies passed a resolution on the question of denominational education, which had long been a subject of strife between the Conservatives and the Liberal Opposition. In 1891 a Bill was introduced by the Government (see ANNUAL REGISTER, 1891, p. 221) for restoring to the clergy some of the influence of which they had been deprived at the time of the Kulturkampf, but it had to be withdrawn in consequence of the violent aversion towards it expressed at Liberal and Radical meetings all over the country; and the resolution now passed was a compromise between the views of the Protestants and the Roman Catholics. Under the existing system the schools are for children of all religions (simultanschulen), while under the resolution they would have to be either Protestant or Roman Catholic, according to the faith of the majority of the pupils. The Minister of Education and the Roman Catholic Centre party accepted the resolution, but although the National Liberal members also voted for it, some

of their organs in the Press opposed it, and a conference of the party in Rhenish Prussia condemned it as being a new edition of the Bill of 1891.

Another concession made by the Government to the Roman Catholic Centre party, which is the strongest in the Reichstag, was the repeal of clause 2 of the law against the Jesuits. This clause forbids Jesuits to reside in the country; the other clauses of the law, however, which forbid the establishment of Jesuit communities, remain in force. The repeal was passed in the Federal Council on the initiative of Count Bülow, but the Saxon Minister of Education stated in the Saxon Chamber that Saxony had voted against it, as the Saxon Ministers and the great majority of the Saxon people were all Protestants, and that their action had met with the entire approval of the King, who was a Roman Catholic. The conduct of the Prussian Government in this matter created great indignation among the German Protestants, and the National Liberal leaders in the diet violently attacked Count Bülow on account of his subservience to the Centre party.

The debates in the German Parliament on the Army Estimates for 1904 turned chiefly on the want of non-commissioned officers and the ill-treatment of soldiers. As regards the first point, there was a general agreement, except among the Socialists, who object to all increases of Army expenditure on principle, to the proposal of the Government to add non-commissioned officers to the establishment, but the number proposed by the War Minister was reduced from 748 to 719. The ill-treatment of soldiers, which was shown to have in no degree diminished since the preceding year (see ANNUAL REGISTER, 1903, p. 283), caused a very heated debate, and three motions. for its prevention were proposed, but not accepted by the War Minister. The motion introduced by the Socialists demanded that the verdicts and sentences in current trials by courtmartial should be read out to the troops at the end of each month; that the men should at the same time be reminded of their right to make complaints and to report ill-treatment of themselves or of their comrades; and that all those convicted of ill-treatment should be dismissed the service. The proposal of the Budget Committee, which appeared to find favour with several speakers, was framed chiefly with a view to establishing a greater degree of responsibility in the matter of supervision on the part of company commanders and, if necessary, also on the part of officers of still higher rank.

The Army Estimates for 1905 anticipated an ordinary recurring expenditure of 463,961,397 marks (23,198,0691.), or an increase of 12,845,841 marks (642,2921.) over the figures of the current year, and an ordinary non-recurring expenditure of 25,026,920 marks (1,251,3461.), or 993,369 marks (49,6681.) less than for the current year. The Extraordinary Estimates required a sum of 53,589,400 marks (2,679,4701.), or 32,470,700 marks (1,623,5351.)

more than for the current year. In the Extraordinary Estimates was included a first instalment of 9,000,000 marks (450,000l.) for small arms, and a sum of 13,041,500 marks (652,0751.) as the ninth instalment for creating reserve batteries of field artillery.

The Estimates for the German so-called expeditionary troops in China anticipated an ordinary revenue of 11,024,013 marks (551,2001.), including the sum of 10,943,283 marks (547,1641.) as the fourth payment of the interest on the Chinese indemnity, and an extraordinary revenue of 578,055 marks (28,9021.), including 570,555 marks (28,5271.) as the fourth instalment in payment of the indemnity itself. The Extraordinary Estimates provided for an expenditure of 12,659,605 marks (632,9801.) to the account of the Ministries of War, of the Navy, and of the Interior, as well as of the Post Office and of the Treasury. In justification of increases in the requirements for military and naval purposes, which respectively amounted to 169,064 marks (8,4537.) and 313,000 marks (15,650l.), it was urged that "the political situation during the year 1904 has rendered a reduction of the brigade of occupation impossible." The strength of the brigade stood at 103 officers, sixteen medical officers, fifty-three officials of various grades and 2,342 non-commissioned officers and men, together with 1,086 horses.

The North-German Gazette published on November 28 the text of a Bill for gradually increasing the annual strength of the German Army on a peace footing until it reaches the number of 505,839 men during the course of the financial year 1909, at which figure it was to be maintained up to March 31, 1910. The main object of the Bill was to place upon a constitutional basis the two years' term of military service, first provisionally introduced in 1893 (see ANNUAL REGISTER, 1893, p. 350) and since continued from year to year, for all arms, with the exception of the cavalry and of the horse artillery, who were to continue to serve for three years. The several German States would, under the Bill, contribute by the year 1909 to the proposed strength of the peace footing of the German Army in the following proportions: Prussia, 392,979 men; Bavaria, 55,424 men; Saxony, 37,711 men, and Wurtemberg, 19,725 men. the case of the last-mentioned kingdom, any deficiency in the strength of its peace footing would be supplemented out of the Prussian contingent of recruits. The so-called "Volunteers," who only serve for one year with the Colours, were not included in the strength of the peace establishment.

In

By the increase in the strength of the peace establishment it was calculated that at the end of the financial year 1909 the number of battalions of infantry would have been raised to 633, the number of squadrons of cavalry to 510, the number of batteries of field artillery to 574, the number of battalions of garrison artillery to forty, of pioneers to twenty-nine, of transport troops to twelve, and of the Army service corps to twentythree. The strength of the peace establishment had been fixed

by the Legislature in 1899 at 495,500 men, and this number would remain in force until March 31, 1905. A memorandum attached to the Bill pointed out that at the close of the current financial year adjustment of the military organisation was inevitable, but that "the German Empire will continue to pursue the policy of peace which has commended itself for more than thirty years. To this end a strong and efficient Army ready for instant action is now as much as ever necessary." The German Empire did not desire to create an Army exceeding in numbers, or even equal to, the military forces of all possible adversaries, but only to keep pace with neighbouring Powers. France, with a population of nearly 20,000,000 less than Germany, surpassed her in the number of men trained to arms, and it was feared that this discrepancy might become still greater after the introduction of the two years' service system. Germany must therefore utilise the advantage of her more numerous population to the full, since the best guarantee of peace was that the Army should represent the nation in arms. Considerations of frontier policy and of rapid action had in many cases reacted upon the effective and uniform composition and organisation of military units, with the result that some Army corps had more batteries than battalions, while there were divisions composed solely of infantry and artillery without any cavalry attached to them. It was therefore proposed to organise the various units on the basis upon which they would have to take the field. The cavalry, too, was to be materially increased and the existing squadrons of mounted chasseurs, a force recently instituted, would form the nucleus of this increase. These squadrons were to be raised from seventeen to forty-five, which is equivalent to nine regiments of cavalry, and of these nine regiments six would be Prussian, two Saxon, and one Bavarian. In view of the great increase in the population the effect of the Bill would be to make the strength of the peace establishment of the German Army equivalent to 9 per cent. of the population of the Empire, instead of to 95 per cent., as was provided by the Act of March 25, 1899.

General Einem, the Minister for War, stated in the Reichstag, in further explanation of the Bill, that to put the question of the two years' service system in a nutshell one must ask whether victory was more probable with a standing army of 300,000 men serving two years or with a standing army of 200,000 men serving three years. The decision had been in favour of the former alternative, but its adoption involved increased expenditure in order to secure the best possible quality of non-commissioned officers, capable of training the men more rapidly and more effectively. General von Einem added that the 98 rifle was not a new rifle, but one which they had begun to issue a few years ago and which had proved very satisfactory during the present campaign in South-West Africa. He also referred to the vote for the introduction of a tube-recoil gun, and