I may be told-I rather expect to be told—that I have exaggerated the force of Mr. Chamberlain's language; that what he proposes is the creation of a totally new party, not an avowed coalition between the Conservatives and the Liberal Unionists. In other words, Mr. Chamberlain's desire for a national party may be represented as nothing more than a pious aspiration for the advent of the millennium when the lion and the lamb shall lie down together. It may be so; it may be that the speech in question was only delivered as a sort of ballon d'essai, to learn which way the wind is blowing; and that if the suggestion which this speech was clearly intended to convey does not, in vulgar parlance, 'catch on,' the speech itself may be represented as the mere expression of an abstract wish for an unattainable unity. Be this as it may, the coalition is bound to come sooner or later; and the sooner it comes, the better for the country in general and the Liberal Unionist party in particular. By a curious Nemesis of fate, Mr. Gladstone's acceptance of Home Rule will, I am convinced, have as its ultimate result the formation of a united party, strong enough to check for many a year to come the advance of the new Liberalism with which, in an evil hour for his own fame, our octogenarian Premier elected to identify his political fortunes.

EDWARD DICEY.

WESTERN NATIONS AND EASTERN

MARKETS

THE offensive and defensive alliance between France and Russia, which, according to general belief, was concluded last year, is as serious a menace and danger to our Indian Empire and our markets in the Far East as it is to the peace of Europe. The danger in the East has moreover been accentuated by the recent aggression of France in Indo-China, which has led to her absorption of Luang Prabang and Eastern Siam, and thus enlarged her base for further aggression on Siam and China, and made her frontier conterminous with that of our Indian Empire along the Eastern border of our Shan State of Kiang Hung.

India, having at immense expense put its north-western border in a satisfactory state of defence against the threatened advance of Russia, has now to face the possibility, if not the probability, of a joint attack by France and Russia on her dominions, such as was threatened in 1807, when Napoleon and Alexander the First endeavoured to make a league with Persia to drive us out of India.

China, Japan, and Siam are alive to the designs of these powers upon their territories. It is time that the United Kingdom should fully awake to the dangers threatening its Eastern Empire and its markets in the Far East, and consider the steps required for safeguarding and maintaining them. We should make up our mind as to what interests we have in those regions which are vital to the welfare of our nation, and, having fully considered the subject, should determine, whatever the cost may be, to defend them.

Great Britain is a comparatively small island, containing an enormous population, which has doubled itself in sixty years, and bids fair to repeat the feat by the middle of next century. Our present thirty-two millions are mainly dependent on our home and foreign markets for support. Supply, fostered by the hostile tariffs, cheap labour, and long work-hours of our rivals, has of late years increased faster than demand. Prices have fallen to such an extent that for twenty years the value of the yearly export of our home produce has been practically stationary, and for the last few years

actually decreasing, instead of steadily increasing in the same ratio as our population. Elsewhere in the world the population has been increasing in a like fashion; and, particularly on the Continent, more and more people are every day being forced into manufacturing and distributing pursuits to gain their livelihood. Thus, as Mr. Chamberlain pointed out to the unemployed the other day :

We are pressed out of the old markets-out of the neutral markets which used to be supplied by Great Britain-by foreign competition. At the same time foreign Governments absolutely exclude our goods from their own markets, and unless we can increase the markets which are under our control, or find new ones, this question of want of employment, already a very serious one, will become one of the greatest possible magnitude, and I see the gravest reasons for anxiety as to the complications which may possibly ensue.

Competition has become a fierce fight for existence, and war in the future will be largely waged for the exclusive possession of the great markets of the world. Africa has been peacefully divided among European nations. Our part of that continent is mainly a market of the future, whose inhabitants have to be educated up to civilised wants; their requirements at present seldom going further than muskets, ammunition, spirits, and beads. North America, like Europe, has been developed into a manufacturing and highly protectionist region, where crushing tariffs tend more and more to restrict the profitable sale of our goods.

In South and Central America, where trade is paralysed by constantly recurring rebellions, our commerce is hampered and threatened with exclusion through favour being shown to our protectionist rivals, who have commenced using the weapon of their home tariffs as a bargaining power to enforce entrance on favourable terms to the markets of neutral countries which have merely a fiscal tariff. With many of their former markets closing and closed to their goods, our merchants and manufacturers are impelled to depend more and more on our great Eastern markets for the maintenance and furtherance of their trade. More than eight years ago the Commission on Depression of Trade, in dealing with the question of remedies, gave their opinion that

Various causes contributed to give us a position, far in advance of other countries, which we were well able to hold for many years; but these causes could not have been expected to operate permanently, and our supremacy is now being assailed on all sides. But we see no reason why, with care, intelligence, enterprise, and thoroughness, we should not be able to continue to advance. In order to do so, however, it is obvious that we must display greater activity in the search for new markets.

In their evidence before the Commission, witness after witness pointed to our Eastern markets-India, Burmah, Siam, China, and Japan-as the most promising markets for the development of British trade. Cheap carriage annihilates the effect of distance. So far is this the case that cotton and cotton yarn are now carried from Bombay

to Japan, a distance of 5,773 miles, for two rupees, or two shillings and sixpence, a ton. Every manufacturing country is brought into competition with us for the commerce of the free-trade markets of the East. Competition has become so vigorous that we cannot afford to let any advantage we at present possess or can gain slip from us; and we are bound, if we would maintain and increase our trade, to do the utmost in our power to increase our customers by diminishing the cost of carriage to their markets.

The seaboard and navigable rivers give access to only limited. areas for commerce. To fully develop these great markets they must be covered with a network of railways. Lines are now being pushed forward from the coast into the interior, in all of these regions, and every day these countries become more valuable as they are opened up to trade. Unlike the barbarous natives of Africa, their inhabitants are civilised, clothes-wearing, tool-using, trade-loving people, with commerce uncramped at their ports by prohibitive tariffs, who gladly become our customers whenever and wherever we can place our machine-made goods at their doors at a less price than they can obtain local hand-made manufactures. India has become so valuable to us as a market, chiefly through the extension of its railway communication, that a late Viceroy, Lord Dufferin, when addressing the London Chamber of Commerce, shortly after his return from that country, in referring to its great trade, said :—

These figures, I think, should be enough to convince the least receptive understanding what a fatal blow it would be to our commercial prosperity were circumstances ever to close, either completely or partially, the Indian ports to the trade of Great Britain, and how deeply the manufacturing population of Lancashire, and not only of Lancashire, but of every centre of industry in Great Britain and Ireland, is interested in the well-being and expanding prosperity of our Indian fellow-subjects. Indeed, it would not be too much to say that if any serious disaster ever overtook our Indian Empire, or if our political relations in the Peninsula of Hindostan were to be even partially disturbed, there is not a cottage in Great Britain—at all events in the manufacturing districts-which would not be made to feel the disastrous consequences of such an intolerable calamity. But, however satisfactory may be the present condition of our commercial relations with India, I am quite convinced that they will prove capable of indefinite expansion. Were India only covered with a network of railways corresponding with its powers of production, and to the requirements of the population, the present volume both of our import and of our export trade, considerable as it is, would undoubtedly be greatly augmented. And not only is this true of India proper, but I believe that a similar commercial expansion is upon the eve of being developed in Burmah, and before no very distant date I prophesy that our chief means of communication with China will be either through the north or east of Burmah.

China, Japan, and Siam, together with our Asian possessions, contain more than half the population of the world-nine times more inhabitants than are contained in the whole of our non-Asian dominions. They are our largest, richest, and most promising markets. With the population of Great Britain increasing at the rate

of a thousand souls a day, every day the trade of these countries becomes of greater importance to all engaged in, or dependent directly or indirectly on, manufacture and trade in this country. Their maintenance and development as British markets are of vital importance, a bread-and-butter interest, to our industrial and distributing classes, and to shopkeepers and professional men, whose prosperity is bound up with that of their customers and clients. It is a matter that touches every soul in the realm. All would suffer if these markets were lost to us. The loss would be so great that it is difficult to realise the extent of its disastrous effects. It would mean absence of employment for great masses of our population; ruin to our manufacturers and merchants; empty houses and reduction of rents, particularly in the manufacturing and distributing centres; loss of capital to all who have invested their savings in the East; and, owing to the impoverishment of the main body of the people, an enormous increase of taxation to the remainder. If we lose India and our markets in the Far East, the United Kingdom, deprived of its largest areas for commerce, would dwindle, as Spain and Portugal did under similar circumstances, into a second-rate power.

As early as 2698 B.C. there are indications of communication between China and the West, and from time immemorial the trade of the East has been the most lucrative branch of the world's commerce. European merchants have been directly competing for it from the close of the fifteenth century, when the Cape was first rounded. Early in the next century, Portuguese, French, and Dutch vessels visited China, and the Portuguese took possession of Ceylon and the Maldive Islands, and established factories on the Malabar and Malacca coasts. By 1537 the Portuguese had founded factories in China at Amoy, Macao, and in the neighbourhood of Canton, and established a practical monopoly of the Eastern trade.

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The destruction, in 1588, of the Spanish Armada opened the Cape route to our trade. Three years later the first English adventure left this country for India. Quarrels ensued with the Portuguese, and it was not until the defeat of their fleet off Surat, in 1615, that the first English factory in India was established at that place. Four years later the first English East India Company had agents and factories in Burmah, at Syriam, Prome, and Ava-and there is reason to believe at Bhamo, close to the frontier of the Chinese Shan States. British merchants thus approached China on its landlocked side, through Burmah, several years before 1635, when English vessels first visited its coast. About 1677, factories were established by the East India Company at Amoy and Formosa, and seven years later at Canton. In 1834 the Company abandoned the monopoly of our China trade, and from that time to this China has been one of our most valuable markets.

From 1674, when their first factory in India was established at