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by Lord Goschen. By the end of the year they had recovered to 941. The great fall which has taken place in the value of this important security during the past three years is due partly to the suspension of the sinking fund and partly to the Government's borrowings for war purposes. India was also a borrower in London, and an unsuccessful one. The fault was less with the advisers of the Indian Government than with fortune. An issue of 3,000,0001. in India 3 per cent. Stock was made on July 11, and that day happened to witness a collapse in the American Railroad market as well as a heavy fall in Consols. The result was failure. An amount of 709,5001. was allotted and the remainder was withdrawn.

In contrast with the accidental failure of India has been the marked success of Colonial loans. Indeed, Colonial loans

—whatever may be said against them from the point of view of the true interests of the Colonies have been one of the features of the year. In December, 1900, the British Treasury published the conditions under which the various Colonial securities might become available to trustees under the Colonial Stock Act. By the end of 1901 Canada, Natal, New Zealand, and all the Australian States except South Australia had complied with the conditions, and their inscribed stocks consequently were added to the Trustee List. Most of them also appeared as borrowers on 3 per cent. Stock at prices which varied from 91 to 94. These issues were popular with investors, who saw in them a means of getting substantially more than 3 per cent. per annum, together with good security.

British Railways have not been, by any means, in a flourishing condition. Coal and other materials were very high in price during the last half of 1900 and the first half of 1901, and it was hoped that there would have been a material improvement during the second half of 1901. But although coal was cheaper, yet traffic receipts were in many cases less and other expenses were higher. Altogether, 1901 has been hardly a better railway year than 1900, which was one of the worst of recent years. The only really successful lines have been the underground electric railways in London-or “tubes " as they are popularly called. One line in particular—the Central London -has taken so much traffic from the Metropolitan and Metropolitan District Companies that it has been decided to equip these railways for electric traction as soon as possible. There is, unfortunately, a good deal of friction between the boards of the old Underground Railways, which, it is feared, will seriously delay their electrical equipment. The capital for the Metropolitan District Company is being found by an American syndicate, of which Mr. Yerkes is the head.

On January 1, 1901, a new Companies Act came into force. Although this act has many stringent clauses, it does not appear likely to have much effect on the character of company promotions. The proverbial “coach and four” has been driven through it in one or two directions already, and, no doubt, enterprising persons will in time discover further means of nullifying its provisions. It may be doubted if there is any legislative means of protecting the ignorant or careless investor. The affairs of the London and Globe Finance Corporation attracted much attention all through the year. Its collapse occurred at the end of December, 1900, and as many as twenty firms on the Stock Exchange were obliged to default in consequence. The company engaged in a highly speculative business in connection with the mining markets, and no one knew anything of its affairs except the managing director, Mr. Whitaker Wright. The chairman of the corporation was Lord Dufferin, and its failure was a severe blow to that distinguished public servant. Much sympathy was felt for him in this misfortune at the end of his honoured career, while it was greatly regretted that he allowed his name to be associated with a speculative business which he had not sufficient special knowledge to enable him to control. The allied companies—the Standard Exploration Company and the British America Corporation have also failed, and the three concerns are being wound up compulsorily.

The South African mines resumed crushing on a small scale in May, and the number of stamps has since been considerably increased. It was expected that by the middle of February, 1902, a quarter of the whole number of stamps would be at work. No mine was allowed to drop more than fifty. For May the gold output was 7,478 ounces, and for December as much as 52,897 ounces.

Turning from finance to the foreign trade of the country we find that 1901 was on the whole a good year. There was some falling off as compared with 1900, but then the latter year showed a larger volume of trade than in any previous year in the national history, and it was a year of high prices. The total imports during 1901 were valued at 523,075,0001., a decrease of 836,0001., or 0:15 per cent., compared with 1900, which latter year showed an increase of no less than 38,598,0001., or 7.9 per cent., over the figures for 1899. It must be remembered that 1899 was itself considered a good year. If we take the exports we find that the total values for 1901 were 291,192,0001., a decrease of 10,693,0001., or 3:6 per cent., as compared with the figures for 1900, which in their turn showed an increase of 26,959,0001., or 10:1 per cent., over the by no means inconsiderable exports of 1899. The total trade of the year 1901, inclusive of the re-exports of foreign and colonial merchandise, amounted to 877,449,0001., a decrease of 0.7 per cent. in comparison with the total trade of 1900, which, however, showed an advance of 7.8 per cent. over the trade of the previous year. From these figures it will be seen that, even taking the rough test of total declared values of imports and exports, the year 1901 makes no bad appearance when placed alongside the record year of 1900, while 1899 is left as a very poor third. Total declared values

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are, however, but an unsatisfactory test, unless we at the same time have regard to the relative prices of the principal commodities. The remarkable feature of 1900 was that although the prices of some commodities, such as coal and iron and steel, reached very high points, yet prices as a whole were only 10 per cent. above those for 1899 and 25 per cent. below the average for the years 1867-1877. The very large figures for 1900 were thus not solely due to an increase in prices, but in some departments of trade represented a genuine expansion. During 1901 there was in some departments a falling off, but this decline is to a considerable extent directly traceable to the lower prices which have ruled in many markets. The average fall in the prices of commodities between the end of 1900 and the end of 1901 has been 6.7 per cent., to which materials have contributed a decline of 7 per cent. and food a decline of 5 per cent. The actual decline in the volume of trade, both of imports and exports, was therefore considerably less than the corresponding decline in the prices of commodities. Though it must not be concluded from this that 1901 was really a better trade year than 1900—the statistics are too imperfect for such a rigid deduction —yet they, at least, do not disclose any serious falling off.

The great margin which exists between the values of imports and exports continues to trouble many minds. Many theories are put forward to account for the discrepancy. The most reasonable explanation is that the difference is made up by interest on British capital invested abroad and by the receipts for work done by British ships in carrying the commodities of three-quarters of the whole world. Foreign trade, though of very high importance in the case of a country like the United Kingdom, is not a perfect test of national wealth. It may even become a source of weakness, as has been shown recently in the case of Germany. The Germans, in their zeal to become world-wide traders, have forced their business into channels which have been not only unremunerative, but even a source of loss. The result is serious depression in trade. The United States, on the other hand, has shown a tendency to expand in directions which seriously threaten some of our best markets.

One of the most noticeable features of the year, from a British point of view, has been the great expansion of the trade of the United States. The over-sea trade of the States has hitherto been comparatively small, but the efforts of Americans to extend it have met with a considerable measure of success. Our own trade has been the principal object of attack. In February, 1901, was formed the United States Steel Corporation. This vast trust has a capital of more than 1,000,000,000 dollars, and was due to the organising genius of Mr. J. Pierpont Morgan. The foundation of the new combination was the Carnegie Steel Company, and with it were grouped the Federal Steel Company, the American Steel and Wire Company, the National Tube Company, the American Bridge Company, and others. A good deal of apprehension was caused in this country by the formation of the trust, but as its operations were hampered for some months by a strike among the steel workers it is impossible to say how far those fears were justified. It seems probable that the competition of the “ Billion Dollar Trust,” as it is called, will stimulate British manufacturers, and will do ultimately more good to us than harm. The United States are also endeavouring to extend their scanty carrying trade. A controlling interest in the shipping line of Frederick Leyland & Co. was acquired by Mr. Morgan and his associates in May. Although the vessels remain at present under the British flag Mr. Morgan has acquired them in order to carry his own exports of steel to Europe. Other smaller lines have also been purchased. Shipping firms do not trouble themselves much about these American purchases, since they can always build more ships for themselves, and in the meantime they get high prices for old ones. The American Tobacco Company has made a bid for British trade by purchasing Ogden's (Limited), a cigarette firm, and by equipping factories in this country. The great British manufacturers have retorted by forming the Imperial Tobacco Company, which has a capital of 15,000,0001. sterling, and comprises thirteen of the best-known firms and companies. On the whole, this American competition, though it has caused much uninstructed alarm, is by no means an unmixed evil. The success of the United Kingdom in its foreign trade has bred a feeling of security which might do much mischicf if it were not now and then rudely disturbed. The competition of Germany was not very serious, but that of America is enough to make British traders really “wake up."

[graphic]

F. HARCOURT KITCHIN.

FOREIGN AND COLONIAL HISTORY.

CHAPTER I.

FRANCE AND ITALY.

I. FRANCE.

SOME skirmishes but no battle, peace in the street, popularity returning to the chief of the State, and exceptional stability allowing the Ministry to undertake work which required time, splendid festivities offered to the Tsar, and a naval demonstration successfully carried out without a blow struck—such are, at the first glance, the achievements of the year 1901. These happy symptoms were, it is true, in part offset by the sudden increase of the deficit, the breaking of the religious truce, the anxiety imbibed by capitalists from the threatenings of strikes, and some disillusion as to the Russian alliance which spread to the mass of the people. As a result there was a general impression of vague uneasiness, which the Opposition did their best to maintain in view of the general election of 1902. The year opened with a veritable leap in the dark from the financial point of view. The law regulating drinks had resulted in the suppression of the duties paid on entering a town by the drinks called hygienic: wine, cider, beer. Paris found itself by this fact in presence of a deficit of about 50,000,000 francs ; the State shared in the abatement by an almost equally great sacrifice. All the large and middle-sized towns of France found themselves face to face with the same problem, that of substituting new taxes with doubtful returns for a more than time-honoured duty. The wisdom of financial specialists, both municipal and national, was severely exercised to discover taxes to substitute; it could not be hoped that the new charges would be well received by those who would have to pay them, and, in fact, as they were announced they evoked energetic and useless protests. But it was hoped that they would counterbalance the loss, and unfortunately they failed to do so.

The session of the Chambers opened on January 8. M. H. Brisson's Radical and Socialist friends resolved once more to present him as candidate for the Presidency of the

act, as they, it was hoped failed to do so. on January 8

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