reorganised and increased the Army. Provision was made for 15 regiments of cavalry, an artillery corps of 30 batteries of field artillery and 126 companies of coast artillery, 30 regiments of infantry, a corps of engineers, a signal corps and the usual Staff departments, Pay, Medical, Subsistence, etc. Provision was also made for the organisation of a native Porto Rican regiment officered by Americans, and the employment of native scouts in the Philippines, at the discretion of the President.

At the close of the year 1901 the United States Navy comprised 225 vessels of all classes in commission, or available for service, and 60 vessels under construction. The vessels in commission or in reserve were: 10 battleships, 2 armoured cruisers, 15 protected cruisers, 6 unprotected cruisers, 9 harbourdefence vessels, 70 gunboats, 27 torpedo boats, 1 submarine boat, and 85 auxiliaries-colliers, supply ships, tugs, etc.

Under construction were 8 battleships, 6 armoured cruisers, 9 protected cruisers, 1 gunboat, 4 coast-defence vessels, 16 torpedo-boat destroyers, 9 torpedo boats and 7 submarine boats. Congress is expected to make the usual appropriations for new construction in accordance with the recommendations of the Secretary of the Navy. These appropriations will not be available until the end of the fiscal year, June 30, 1902.

During the year two battleships, the Illinois and the Wisconsin, were commissioned, sister-ships of 11,525 tons displacement, and engines of 10,000 I.H.P. working twin screws. These vessels are protected by an armour belt of 16 in., and carry two 13-in. guns in turrets fore and aft, fourteen 6-in. R.F. guns, sixteen Q.F. 6 pounders, six 1 pounder R.F., four Colts, and two 3-in. R.F. field. The Kearsarge and the Kentucky, of the same tonnage, but with 11,954 and 12,318 I.H.P. respectively, while carrying the same guns in their main battery and the same armour protection, are distinguished by having superposed turrets on their main turrets, in which are four 8-in. guns, the barbette guns being 5-in. Q.F., instead of 6 in., as in the Illinois, with secondary batteries similar to the Illinois. The Maine, Missouri and Ohio, under construction, with a displacement of 12,500 tons, will carry four 12-in. B.L.R., sixteen 6-in. R.F. guns, six 3-in. R.F., eight 3 pounder R.F., six 1 pounder R.F., two Colts, and two 3-in. R.F. field. They will have 11 in. of armour on their sides, and 12 in. on their turrets, and, with engines capable of developing 16,000 horsepower, will have a speed of 18 knots under natural draft; speed and great coal endurance were the objects aimed at in the construction of these vessels. The Georgia, New Jersey and Nebraska, also under construction, will displace 15,000 tons, and with 18,000 I.H.P. are expected to steam 19 knots. Four 12-in., eight 8-in. and twelve 6-in. quick-firers with the usual number of rapid fire and automatic guns in the secondary battery will constitute the armament. They will carry 11 in. of armour on their sides and turrets. The California class of armoured

cruisers now building includes the Pennsylvania and West Virginia, with a displacement of 14,000 tons and 23,000 I.H.P. These vessels will carry four 8-in., fourteen 6-in. R.F. guns, eighteen 3-in R.F., twelve 3 pounder R.F., eight 1 pounder R.F., two 3-in. R.F. field, two machine and six automatic, and will have a speed of 22 knots, with sides protected by 6 in. of armour. The St. Louis class of protected cruisers will have a displacement of 9,600 tons, with engines of 21,000 I.H.P., capable of developing 22 knots. They will be armed with fourteen 6-in. Q.F. guns and a powerful secondary battery, and will have 3 in. of armour worked over the vitals. Six vessels of the Chattanooga class are building, of 3,100 tons and 4,700 I.H.P., giving them a speed of 16.5 knots. They will be armed with ten 5-in. Q.F., eight 6 pounder R.F., two 1 pounder R.F., and four Colt automatic guns.

The personnel of the Navy consists of 1,439 officers of all ranks, 403 petty and warrant officers, and 19,541 enlisted men. The marine corps consists of 199 officers and 6,000 enlisted men.

There are 997,735 persons on the pension rolls at an annual charge of $139,582,231.98. Pensions are paid not only to those persons who actually took part in any war of the United States, and who incurred any disability while in active service, but also to their widows and minor children.

The exports and imports for the fiscal year ending June 30, 1901, were:-Exports, $1,487,764,991; imports, $823,172,165, as compared with $1,394,483,083 exports, and $849,941,184 imports for the previous year, or leaving an apparent balance of trade in favour of the United States for the current fiscal year of $664,592,826. The balance of trade, however, is more apparent than real, and is a problem that has long puzzled the greatest authorities on the subject of foreign commerce. While, on the surface, Europe is heavily indebted to the United States, it is admitted that much of this indebtedness has been cancelled by the money paid for ocean freights and insurance, money spent in Europe by American tourists, and American loans negotiated in London and other great monetary centres; invisible balances which do not appear in the returns, and which cannot be taken up in statistical statements. A large share of the apparent balance of trade is also doubtless explained by the undervaluation of imports and the overvaluation of American exports, the statement having been frequently made, and it is believed on reliable authority, that many articles of American manufacture are sold at lower prices abroad than at home, but in the trade statistics the domestic value is the basis of calculation.

The principal articles of import were:-Sugar, $90,487,800; hides and skins, $48,220,013; chemicals, $53,508,157; coffee, $62,861,399; unmanufactured silk, $30,051,365; manufactures of cotton, $40,246,935; manufactures of silk, $26,842,138; iron and steel, $17,874,789; unmanufactured wool, $12,529,881 ;

manufactures of wool, $14,585,306; jewelry and precious stones, $24,216,407; tin (bars, blocks or pig), $19,805,551; tobacco, $16,290,387; wines, $8,219,236; tea, $11,017,876; fruits and nuts, $19,586,703; leather and manufactures of, $11,887,012.

The countries from which these imports originated, with their values, were:-Great Britain, $143,388,501; British North America and all other British possessions, $120,964,120; Germany, $100,445,902; France, $75,458,739; Italy, $24,618,384; Switzerland, $15,799,400; Russia, $7,030,892; Central and South America and Mexico, $143,925,496; China, $18,303,706 ; Japan, $29,229,543; the Netherlands, $20,598,799.

The principal exports and their values were :-Breadstuffs, $248,759,022; animals, $52,058,876; cotton, raw and manufactured, $333,945,861; manufactures of iron and steel, $117,319,320; leather and manufactures of, $27,923,653; oils, $91,166,905; provisions and dairy products, $196,959,637 ; tobacco, $32,749,078; wood and manufactures of, $52,445,585. The chief purchasers of American goods were:-Great Britain, $631,177,157; British North America and all other British possessions, $189,478,367; Germany, $191,780,427; France, $78,714,927; Italy, $34,473,189; Denmark, $16,175,235; Spain, $15,480,288; Central and South America and Mexico, $85,037,612; China, $10,405,834; Japan, $19,000,640; Belgium, $49,389,259; the Netherlands, $84,356,318; Sweden and Norway, $11,844,152; Russia, $8,084,228.

Great Britain is the best customer of the United States. Practically one-third (33.52 per cent.) of the entire foreign trade of the United States is with Great Britain, and 42:42 per cent. of America's exports are taken by Great Britain, no other nation approaching this, the nearest being Germany with 12.89 per cent. of exports. If to the English figures are added the trade of Canada and the other British possessions, it will be seen that in round numbers one-half of the entire foreign trade of the United States is with England and her colonies, and that almost 60 per cent. of all the exports are absorbed by the British Empire.

The report of the Secretary of the Treasury for the fiscal year 1901 showed that the total receipts of the Government from all sources were $699,316,530.92 and expenditures, $621,598,546.54, leaving a surplus of $77,717,984.38. The principal receipts during the year were:-Customs, $238,585,455 ; inland revenue, $307,180,663; postal service, $111,631,193 ; profit on coinage, bullion deposits, etc., $12,731,256; consular fees and letters patent, $3,414,933; tax on national banks, $1,681,473; sales of public lands, $2,965,119. The principal expenditures were:-Civil establishments, including foreign intercourse, $117,327,240; military establishment, $144,615,697; naval establishment, $60,506,978; postal service, including deficiency, $116,585,955; pensions, $139,323,621; interest on public debt, $32,342,979; redemption of public debt, on account

of sinking fund, $56,484,690. The expenditure per capita for the year was $6.56.

The outstanding debt on June 30, 1901, amounted to $2,143,326,933, but of this debt only $987,141,040 was interestbearing, the balance being debt bearing no interest,-as United States notes (greenbacks), gold and silver certificates, for which the Treasury holds an equivalent amount of metallic money, Treasury notes covered by coin, trust funds and $1,341,310 on which the interest has ceased. The Treasury held (November 15, 1901) $1,215,968,083 in cash, made up as follows:

The

leaving an available cash balance of $171,017,610. Treasury estimated that the stock of money in the country on November 1 amounted to $2,543,597,491, of which $1,174,883,624 was gold and gold bullion. The per capita circulation was $28.72.

On September 30, 1901, by the latest report of the Comptroller of the Currency, there were 4,221 national banks in active operation, having a paid-up capital of $655,341,880; carrying deposits subject to cheque of $2,937,753,233; loans and discounts, $3,018,615,918; surplus fund, $430,562,108; total resources, $5,625,347,295. State banks, loan and trust companies and private banks, 6,234 in all, had combined resources of $3,925,061,231, and held individual deposits amounting to $3,000,205,323. There were 1,027 savings banks, with deposits amounting to $2,597,094,580 and resources of $2,756,505,103, with 6,358,723 depositors; the average due each depositor was. $408.30; the average deposit per capita of population was $33.45.

There were no important political contests waged during the year, 1901 being a season of quiet following the political activity of the national elections of the year before. There were the usual State elections, which had no special significance, and indicated no lessening of public confidence in the Republican party. The most important municipal election of the year, which attracted the attention of the entire country because of the issues involved and the fight made by the forces of decency to overthrow the corrupt and despotic power of Tammany Hall, took place on November 5, when Seth Low was elected mayor of the city of New York. Mr. Low is a Republican, but he was elected on the "Fusionist " ticket, a union of Republicans and Democrats who were determined to rebuke the corrupt, dishonest and inefficient administration of the city under Mayor Van Wyck, the Tammany mayor, who was that organisation's candidate for re-election. Mr. Low and the other Fusionist candidates on the ticket, some of whom were Democrats, were

triumphantly elected, and the power of Tammany Hall destroyed for at least the next two years.

The second session of the fifty-sixth Congress, which began its work in December, 1900, and expired by constitutional limitation on March 4, 1901, enacted some noteworthy legislation. One of the most important measures was that defining the relations between Cuba and the United States. It provides that when the Cubans have set up a republican form of government and entered into certain stipulations with the United States, the United States shall withdraw its troops from Cuba and leave the control of Cuban affairs to the Cubans. Under this agreement Cuba pledges herself not to enter into any treaty or compact with any foreign Power which will impair the independence of Cuba, or to permit any foreign Power to obtain by colonisation or treaty for military or naval purposes lodgment in or control over any part of the island. The Government of the United States exercises supervisory control over the foreign relations of Cuba, and is given power to intervene if necessary to maintain the independence of Cuba, and to preserve order and protect life and property. Cuba was also required to sell or lease to the United States sites necessary for coaling or naval stations. In accordance with the provisions of this law, a Constitutional Convention met in the city of Havana and determined that elections for President should be held on December 31, which resulted in the choice of Thomas Estrada Palma, who will be inaugurated in the year 1902, and after his inauguration and the meeting of the Cuban Congress the United States will withdraw its military forces from the island and turn over the control of affairs to the Cubans.

Of not less importance was the provision made for the government of the Philippines, which will be dealt with more fully under the heading, "Foreign Possessions of the United States."

Other important laws passed by Congress were:

An Act reapportioning the Representatives in Congress under the twelfth census, which fixed the number of Representatives at 386 after March 3, 1903, subject to such extra Members as might be necessary owing to the admission of new States to the Union; an Act to repeal a portion of the inland revenue taxes imposed to raise money to carry on the war against Spain; an Act requiring all railroads to make monthly reports of all accidents; an Act to adjudicate claims of citizens of the United States arising out of the war against Spain; an Act regulating the jurisdiction of the Porto Rican courts; the purchase from Spain for 20,000l. of the Islands of Cagayan and Cibutu, outlying islands of the Philippine group, not included in the original treaty of peace with Spain.

The appropriations made by Congress for the fiscal year ending June 30, 1902, amounted to $710,150,862, divided as follows:-Agriculture, $4,023,500; Army, $114,220,095; Diplo