account of its refusal to bring in a Bill for establishing a currant monopoly, it resigned on July 7. The Delyannist party then came into office, with M. Ralli as Premier and Minister for Foreign Affairs, and after voting the Budget and an amendment of the law relating to the command of the Army, with a view to relieving the Crown Prince from the responsibilities laid upon him without lessening his powers, the Chamber adjourned for the summer holidays. The Ralli Ministry was unable, however, to secure the support of the Chamber when it met again in December; on the 29th of that month a new Cabinet was appointed, with M. Delyannis at its head, and preparations were made for a dissolution.

As regards Greek finance, the report of the International Financial Commission for the period from January 14, 1903, to January 13, 1904, showed a decided improvement. The Commission was enabled to increase the interest of the first group of loans (the Monopoly and Funding) by 4 per cent., of the second group (the Five per Cent. loans of 1881, 1884 and 1890) by 6 per cent., and of the third (the Four per Cent. Rentes) by 6 per cent. The amortisation would at the same time be increased by 4 per cent. for the first and third groups and by 6 per cent. for the second. Dealing with the question of the rate of exchange, the report pointed out the considerable reduction which had taken place in the past year, the mean rate being 1564, against 1.625 in 1902. This decline was, in the main, to be attributed to the abundance of the harvest, which during the latter half of the year gave rise to a monetary crisis owing to the temporary insufficiency of the paper circulation. The Commission deemed it indispensable to restrict the fiduciary circulation within its present limits and regarded the crisis of 1903 as a favourable symptom, tending to inspire confidence with regard to the possibility of ultimately suppressing the forced currency. The rate of exchange was a characteristic indication of the economic situation of the country, and its decline, even though prejudicial to certain interests, should be hailed with satisfaction as presaging a return to normal conditions. The exchange was affected not only by good financial management, which assured budgetary equilibrium, but by the amount of forced currency in circulation and the balance of trade. The Commission, as empowered by the Law of Control, had annually withdrawn 2,000,000 drachmæ of paper money, thus limiting the amount now circulating on account of the State to 85,775,974 drachmæ. The banks were allowed to issue 72,000,000 drachmæ. The balance of trade was unfavourable to Greece, the excess of imports over exports amounting to 57,565,891 drachmæ in 1902, but the deficit was compensated by the revenues derived from Greek commercial undertakings and investments abroad, by remittances from emigrants, by the expenditure of tourists and foreign fleets in Greece, and by the increasing prosperity of the Greek mercantile marine, The Piræus Customs receipts amounted to

19,074,101 drachmæ, bringing the total yield of the conceded revenues to 53,829,654 drachmæ, as compared with 51,209,633 drachmæ in 1902. This satisfactory result was, according to the report of the Commission, not due to any improvement in the administration of the revenues, as no serious attempt at amendment had been made, but to the material prosperity of the country, resulting from its commercial and industrial activity and betokening its economic revival.

Following the example of Servia, Greece had a religious demonstration in favour of Russia. On February 14 a litany was sung in the Cathedral at Athens, the Archbishop officiating, for the success of the Russian arms.

In Crete, Prince George's renewed mandate as High Commissioner having nearly expired, large meetings were held in August throughout the island to demonstrate in favour of union with Greece, and delegations were sent to him from all the provinces urging him to petition the Powers with this object. The Prince then proceeded to the principal European Courts, but he found them all unfavourable to the proposed union. His administration of the island had been so unsatisfactory as to call forth increasing discontent among the inhabitants; the Administrative Council had been reduced to a body of obsequious clerks, the Press was gagged, Greeks from Athens had been substituted for Cretans in all influential posts, and the Cretan Parliament had been made absolutely subservient to the High Commissioner by corruption, intimidation, and open interference with the elections. It was apparently in order to put an end to this régime that the Cretan people, who had formerly been so eager for independence, now demanded union with Greece as the solution of the question which would probably be regarded by the Powers as a preferable one.

CHAPTER IV.

LESSER STATES OF WESTERN AND NORTHERN EUROPE.

I. BELGIUM.

In the preceding issue of the ANNUAL REGISTER an allusion was made to certain signs of dissension which were revealed at the very centre of the Catholic party, hitherto so compact, but in which certain elements of democratic tendency were traced in conflict with the strictly Conservative spirit of the rest of the party. Without culminating in an open rupture, these symptoms of disunion and disintegration were still further accentuated during the year 1904. At the same time, the two factions of the Liberal party, disunited for twenty years and often antagonistic, ended by agreement and by intimately close co-operation with each other in the elections which were

to take place during the year. On one side the most influential chiefs of the Catholic party, M. Beernaert, formerly Catholic Prime Minister, and M. Woeste, the Clerical leader, found it necessary to urge in speech and writing closer union among their supporters, recognising the serious situation of the party. On the other side, the Moderate and Radical groups of the Liberal party drew up a treaty of alliance on the basis of a constitutional revision, embracing the maintenance of universal suffrage already included in the Constitution, the suppression of the plural vote, the application of proportional representation to all popular elections, and compulsory education. Besides the fact of this union, finally realised after years of discord and conflict, it is interesting to note the increase in the democratic tone of the programme of the Liberal party. And this democratic tendency was strengthened without any alliance with the Socialists. The latter party, while acknowledging the necessity of the struggle against Clericalism, proclaimed the urgency of that against capitalism, that is to say, against the bourgeoisie. This implies a conflict of classes; and under such conditions alliance between Socialists and Liberals, on whatever other points they might be in accord, became impossible. Thus each of these two parties carried on a separate contest at the elections which took place at the end of May.

Although these elections did not exercise any marked influence on the relative position of the different parties in the Chamber of Representatives and in the Senate, yet they showed a change of opinion in favour of the Liberal party. That party did not lose one seat in the Chamber, and won 9; while the Catholic party lost 7 and only gained 4, and the Socialists sustained the greatest defeat, losing 7 seats and gaining only 1. Thus the Catholic majority in the Chamber of Representatives, which formerly numbered 26, fell to 20, and in the Senate fell from 16 to 12. These elections showed further that the actual working of proportional representation ought to be modified; because all the Opposition groups together obtained a far larger number of votes than those secured by the Catholic party; yet the Catholic party retained a decisive majority in the Chamber, as well as in the Senate. The provincial elections, which took place at the beginning of June, further accentuated the growth of Liberalism in the country; the Liberals gained 27 seats in the provincial Councils through the whole country; and where they lost the Socialists profited.

There was very little of interest in the Parliamentary session. It should be mentioned, however, that a new plan for constitutional revision, with regard to article 47 of the Constitution, was brought before the Chamber by several extreme Liberals and Socialists. Its essential point was the suppression of the plural vote, which, according to the backers of the Bill, specially benefited the uneducated electors of the country to the disadvantage of the town electors; whereas, if there was to be

an advantage, it should be given to the more intelligent members of the community rather than to the little territorial proprietors. As was to be expected, this Bill was fought Right against Left. The principal argument of the head of the Government was that the case for revision was the same as that of two years before; that it was therefore unnecessary to consider it; and that there was no movement in the country in favour of the revision of article 47. The Opposition pointed out in reply that the Government had rejected the proposal in 1902, on the ground that there was a movement in its favour, and that they did not wish to yield to popular pressure. In other words, the Government rejected the Bill for revision two years before because there was a disturbance, and rejected it again to-day because there was

none.

The military question continued to engage public opinion, and a great impression was produced at the end of the year when it was known that the Minister for War had tendered his resignation and that the King had refused it. The letter in which the King announced his refusal was couched in the most flattering terms, and deserves to be reproduced in its essential parts, because it removes responsibility from the Minister, whom the whole Army and a large part of the general public held responsible for the disorganisation of the Army, in which the very costly experiment of volunteering had not secured satisfactory results. In face of the excitement raised by the incident and the erroneous versions current, the Government finally authorised the publication of this letter to the Minister of War. The King wrote: "You were aware that a certain number of members of Parliament demanded not only an exaggerated diminution of the length of service, but also the reduction of the actual contingent. The realisation of these ideas would, from the national point of view, have been a disaster. You have helped to prevent this, and I thank you. It is to be hoped that the country will one day understand that its independence must before all be insured by itself. . . . I continue to think that personal service would be useful for national defence. . . . I have never concealed from the country my opinion of what is necessary for its most sacred interests; but it is for the nation to desire it; our institutions do not allow us to impose it on the country. . . . I hope also that you will obtain the patriotic sanction of the Chambers for the removal of the walls and the completion of the fortifications of Antwerp."

There are many important points to be considered in this letter; first, the new affirmation by the King of his faith, already often expressed, in the principle of personal service. It is well known that the Government has never been willing to propose this reform, alleging that the majority was opposed to it; it must, however, be remarked that formerly the Opposition had unanimously declared itself ready to vote for this measure, which was also supported by many members of the Right. The

next point to be noticed in the royal letter is the statement that the country must preserve its own independence. This is addressed to the anti-military members of the Right, who hold that the country need not occupy itself with its defence, because neutrality has been guaranteed by the Powers.

The publication of the King's letter roused much feeling in the country. In the Chamber of Representatives it was made the subject of debate, in the course of which the most responsible leaders of the Liberal party argued that the Government was in opposition to the King, who once again advocated personal service, which his Ministers refused to propose. They insisted on the fact that the King in his letter congratulated the Minister rather on the evil which he had prevented than on the good which he had done; and that he asked him to withdraw his resignation in order to prevent the military policy of the Right from being entirely realised. The head of the Government, and after him M. Woeste, the Catholic leader, expressed the opinion that the King's letter showed full approval of the military policy of the Government.

These two contradictory views were made the subject of two orders of the day, emanating from the Right and Left respectively. That of the Left ran as follows: "The Chamber considers that the Government, by publishing the King's letter to the Minister for War, has accepted full responsibility for it; and considering that the King, the Chief of the Army, declares in this letter that he persists in believing that personal service would be useful for national defence; and considering that nevertheless the Government continues to maintain the system of substitution in opposition to the declarations of which it has assumed the responsibility, and contrary to the most sacred interests of the country, passes to the order of the day." This motion was rejected by 73 against 62.

The order of the day of the Right which was then voted, ran thus: "The Chamber joining in the declarations of the Government on the subject of the King's letter, affirms its sympathy with the Army, confident that the defence of the country has never been more secure, renews the expression of its confidence in the treaties which guarantee its independence, and passes to the order of the day."

As in the previous year, Belgian public opinion continued to be stirred by the vehement attacks made on the Congo Free State by a part of the English Press. The note addressed by the British Government in August, 1903, to the Signatories of the Berlin Treaty having led to no result, it was believed that the matter was at an end. A painful impression, therefore, was created in Belgium by the reappearance of the Congo question in the House of Commons and its treatment by the Government. It was unanimously held in Belgium that the Free State had triumphantly refuted all the accusations contained in the report of Consul Casement. The public learnt