the task, and his refusal was seized upon by the Socialists as evidence of his indifference. At the annual congress of the party the leaders were able to congratulate the members on the result of the discipline maintained. In Parliament they were represented by thirty-three deputies, the votes cast by the party throughout the country had risen from 13,000 in 1895 to 68,600 in 1900. At the same time the party had not grown so rapidly without developing some rifts. One of its members, an office bearer in the Chamber, had officially taken part in the funeral obsequies of the late King, and for this was censured by a section of the congress, and from this small beginning arose a general cleavage, one party wishing to devote all its strength to gaining seats, the other wishing to place its representatives in Ministerial office. A new managing committee was elected, consisting of Sgri. Costa, Ferri, Rigola, Parpagnoli, Giustini, Lollini, Soldi and Faggi, who were further delegated to represent the Italian proletariat at the international Socialist congress in Paris. It was noteworthy that alone among the statesmen of Europe Sgr. Sonnino sounded a note of alarm, and in an article which appeared in the Nuova Antologia, a monthly review, of the highest merit, he appealed to Liberals of all shades and in every country to agree amongst themselves unless they wished to be overwhelmed by the Socialists, just as the Conservatives would be swallowed up by the Clericals. The examples of France and Belgium were ready to his hand to support his warnings, which, however, for the most part fell on deaf ears.

It was a far easier matter to preach concord than to bring it about. Sgr. Giolitti was quite prepared to consent to a coalition provided that he was to be its centre. He undertook the initiative by forming a group of followers who purchased for 2,500,000 lire La Tribuna, which was to become the organ of the new national party, but beyond this the movement hardly progressed. The Ministry was even less able to decide upon a policy, for the more frequent were its meetings the more evident was the schism between the Ministers of the Treasury and of Finance, on the one side, and those of the War Office, Admiralty and Public Works, on the other. Meanwhile the King in his retirement at Capo di Monte was arranging his father's papers and devising radical economies in the royal household.

Reforms, however, were even more pressingly needed in other quarters. At the Vatican itself peculation was rife, which at length culminated in a flagrant act of robbery. The Roman police and magistracy were placed at the disposal of the Holy Father; but the offer to search out the guilty persons was declined, nominally on the ground that such compliance would seem to recognise the Italian authority. At Naples the deputy, Sgr. Casale, having been accused of peculation by the journal, La Propaganda, was forced to defend himself by an action for

libel. The Public Prosecutor pledged his word for the strictly honourable conduct of his client, Sgr. Casale, and asked for substantial damages, notwithstanding the fact that the most convincing proofs of his dishonesty had been brought out by the trial. The newspaper was acquitted, whereupon the counsel which had appeared for it telegraphed to the Public Prosecutor : "You ought to quit the profession of which you are no longer worthy to be a member." As a result of the trial Sgr. Casale resigned his seat, and proceedings were taken against him. The revelations which were made at the trial showed that the majority of the Municipal Council of Naples were members of the Camorra, and the Government had the courage to summarily dissolve the body. The young King gave expression to a widespead feeling when he declared that "the great evil of Italy is that nobody does his duty."

It was under the shadow of gloom and discouragement that the winter session of Parliament opened (Nov. 22), and the very first sitting was marred by an untoward incident. Admiral Morin, the Minister of Marine, having occasion to congratulate the Italian squadron on its brilliant performances in China, added: "We must also congratulate our soldiers for not having been guilty of acts of violence such as those going on beside them.' At these words, which might easily have been applied to Germany, the Marquis Visconti Venosta, rose and quietly led his colleague away, and care was taken that the words should not be recorded in the official reports.

The Minister of Finance was happily able to throw a little gleam of hope upon the dull outlook. He hoped that the State would be able to lower the stamp duties on the transfer of land, either by sale or inheritance, and, moreover, in cases where the claim was under 25 lire that it was not intended to enforce the law, which enabled the tax collector to sell the goods of taxpayers in arrears. A few days later the Minister of the Treasury, Sgr. Rubini, made his financial statement. The service of the year 1899-1900 (the Italian financial year ending June 30) had closed with an increase of 5,000,000 lire (200,000l.) on the receipts, arising from the improved returns of the railways, Post Office and Customs. On the other hand, the additional expenditure consequent upon the Chinese expedition and the reduction of the duties on sugar and coffee foreshadowed a deficiency of about 19,000,000 lire (760,000l.) on the current year, but this deficit might be converted into a surplus if the 4 per cent. stock was converted into a 4 per cent. security, a very legitimate operation in view of the fact that Italian savings absorbed on an average annually about 150,000,000 lire of the external debt. On the motion of the President of the Council the financial proposals of the Government were referred to a committee of fifteen members, whose report, however, was scarcely favourable to the Government. Before it was presented, Sgr. Sarocco sustained a serious check in his first

encounter with Parliament. An interpellation on the assassination of King Humbert forced him to admit (Nov. 26) that the measures taken to insure the King's safety were inadequate, the police were insufficient and the officials incapable, but he hinted as an extenuating circumstance that the sore of anarchy was not confined to Italy. This way of throwing upon subordinates a responsibility which rested on the Ministry was not only wanting in dignity but a confession of weakness. Sgr. Sciacca della Scala at once seized upon it to move a vote of want of confidence; but the Ministry avoided a debate by appealing to the Chamber to first vote the Budget.

Before arriving at this, a general discussion was raised (Dec. 4) on the programme of the Government. The President of the Council strenuously denied the rumours of dissension in the Cabinet, promised to make reductions in the War Office expenditure, and declared that the Government would neither allow the power of the State to be weakened nor would it fail to carry out his promises, but would steadily defend the institutions of the country by the law and within the law. Sgr. Giolitti replied by pointing out the inconsistencies of the Ministerial policy, but the Chamber allowed the matter to drop without coming to a vote.

The first serious blow to the Ministry was delivered by the Budget Committee which negatived by a majority of three the Government proposal relating to the mercantile marine. But this check was alleviated by the defeat (Dec. 11), by 196 to 37 votes, of the motion by the Socialist, Sgr. Bovio, to recal the Italian troops from China. A far more serious struggle arose on the proposal of the Government to prolong the circulation of bank notes. On this point the Budget Commission, acting under the influence of the great banking firms, were at variance with the Minister of the Treasury. After an entire day given to the discussion (Dec. 18) the Budget Committee urged that there was not time to properly examine the question, and suggested its postponement until after the New Year, meanwhile approving those clauses which prolonged for a year the circulation of the notes. Sgr. Rubini, however, would not consent to this, and thereupon tendered his resignation (Dec. 20), and his colleague, Sgr. Cimini temporarily took over his portfolio, but it was felt that the Ministry was in a critical condition. A serious strike at Genoa among the dock labourers, aggravated by the incapacity of the prefect, forced the Government to supersede him, but this step failed to produce immediate tranquillity, and the year closed as it had opened with a general feeling of uneasiness and disquiet.

CHAPTER II.

GERMANY AND AUSTRIA-HUNGARY.

L GERMANY,

THE year 1900 was a busy one for Germany, both at home and abroad. There were many interesting debates in Parliament on questions of internal policy, and during the second half of the year public attention was almost entirely absorbed by the war in China. The Emperor, as usual, was the most prominent figure in the country, and he took the occasion of the rededication of the flags and standards of the Guards to make a speech in which he compared the present condition of Germany with that of Prussia at the beginning of the century, and laid stress on the necessity of her having a stronger Navy. At the beginning of the nineteenth century, he said, their country had suffered a great disaster. The glorious army of Frederick the Great was slumbering on its laurels. Its generals had become old and inefficient, its officers incapable. Self-indulgence and self-glorification prevailed, and the real duties of an army were forgotten. The punishment which followed was crushing; but in its seven years of servitude under the heel of the oppressor the nation had learned its lesson, and had itself evolved from its own consciousness the sublime conception that the greatest honour to which men could aspire was to bear arms in the service of their country. The great revival and reorganisation of the Army was begun by Frederick William III., but the work as it had ultimately been achieved was due to the assiduous labours of the great Emperor William I., who had not allowed himself to be distracted from his great task by unintelligent opposition. Reorganised in accordance with his ideas the Army had achieved a series of victories which had surpassed all expectation. By means of the Army William I. had united the German races, and had vindicated for his country its rightful place in the council of the nations. It was now for the officers of the Army to maintain its efficiency by zealous work, by simplicity of living, and by absolute devotion to the interests of the service. For his own part, the Emperor continued, he was determined to see that the Navy should likewise be reorganised and strengthened, so that it might one day take its place by the side of the Army, and might secure for Germany abroad that position which had not yet been attained. In this endeavour he would allow nothing to disconcert or distract him.

In February, at a banquet given on the return from China of his brother, Prince Henry, he further declared that "the German people, with its princes and its Emperor, was preparing to forge itself an arm with which the black, white and red flag would to all eternity at home and abroad maintain the dignity of the Empire.'

This speech was followed by the issue of the new Navy Bill, which had been promised at the end of the previous year (ANNUAL REGISTER, 1899, p. 279), together with an exposé des motifs which dealt with eventualities which might arise if Germany were involved in a war with a more powerful naval adversary. German ports could, it stated, be more easily blockaded than those of any other country. In a war with a superior naval adversary the fleet contemplated in the last Navy Act could render a blockade difficult, but could never prevent it. German mercantile shipping on all seas would be at the mercy of a superior adversary. The enemy's cruisers on the chief trade routes from the Skager Rak to the Suez Canal and the Cape of Good Hope could make German navigation almost impossible. It was not absolutely necessary that the German Navy should be as strong as that of the greatest naval Power, for a great naval Power would in general not be able to concentrate its whole strength against them. But even if such a Power succeeded in meeting Germany in very superior strength it would be so seriously weakened by having had to beat a strong German fleet that, in spite of its victory, that Power's own position would not in the immediate sequel be secured by the possession of an adequate fleet.

To this exposé was attached an appendix on the foreign trade of Germany, showing that it had increased in value between 1896 and 1898 by 16 per cent., and had attained the sum of ten milliards of marks. Seventy per cent. of the whole foreign trade was carried by sea, as against 66 per cent. in 1894. The number of ships that visited German ports had increased, and there had been a great development in the coasting trade since the opening of the Baltic Canal.

The bill was introduced in the German Parliament on February 8 by Admiral Tirpitz, the Secretary for the Imperial Marine. He urged that it was absolutely necessary for the protection of German harbours and German commerce that Germany should possess two double squadrons of battleships, with their complements of cruisers and torpedo boats. The difference between the naval strength of Germany and that of other Powers was such that the Government regarded their inferiority at sea as a danger, which was increased by the prospect of intensified commercial rivalry among the nations. The uncertainty of the development of German foreign relations must also be taken into account. "We do not know what adversary we may have to face. We shall, therefore, have to arm with a view to facing the most dangerous naval conflict possible." Dealing with the dangers of a blockade, Admiral Tirpitz maintained that, even if the blockade could be broken, "we could not man the prizes we might take without denuding our own vessels of their necessary crews, and the prizes would probably never reach German ports. Moreover, while we were coaling, the enemy would resume the blockade of our coasts. If,