On August 2 the Emperor, after attending the funeral service in the death-chamber at Friedrichsruh, addressed the following proclamation to the Imperial Chancellor, which was published in the Imperial Gazette :

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'With my exalted allies and with the whole German people I stand in mourning at the bier of the first Chancellor of the German Empire, Prince Otto von Bismarck, Duke of Lauenburg. We who were witnesses of his splendid activity, we who looked up to him with admiration as the master of statecraft, as the fearless champion in war as in peace, as the most devoted son of his fatherland, and as the most faithful servant of his Emperor and King, are profoundly moved by the death of the man in whom God the Lord created the instrument for the realisation of the immortal idea of Germany's unity and greatness. This is not the time to enumerate all the deeds which the great departed accomplished, all the cares which he carried for the Emperor and the empire, all the successes which he achieved. They are too mighty and manifold, and history alone can and will engrave them all on her brazen tablets. I, however, am constrained to give expression before the world to the unanimous sorrow and to the grateful admiration with which the whole nation is filled to-day, and in the name of the nation to register the vow to maintain and complete the edifice which he, the great Chancellor, constructed under the Emperor William the Great, and, if need be, to defend it with our life and fortune. So help us God the Lord. I enjoin you to make this my edict public.

"WILLIAM, I.R."

The news of the death of the great founder of German unity was received with general mourning throughout Germany, where gratitude for the past was mingled with apprehensions for the future, there being no new Bismarck to consolidate and maintain the fabric which the old Bismarck had erected.

In December it was notified that a large increase of the German Army would be proposed by the Government. A bill for this purpose was submitted to the Reichstag, providing that from October 1, 1899, the peace effective shall be gradually increased in such a way that in the course of the financial year of 1902 a total is reached of 502,506 rank and file. This figure was to remain unchanged until March 31, 1904. At the close of the financial year 1902 there were to be 625 battalions of infantry, 482 squadrons of cavalry, 574 batteries of field artillery, 38 batteries of garrison artillery, 26 battalions of pioneers, 11 battalions for the maintenance of communications, and 23 transport battalions.

The proposed reorganisation of the Army was dealt with in a separate bill amending the military laws of May 2, 1874, and providing that the Army of the German Empire in time of peace shall consist of 23 Army corps. Of these, three were to

be raised by Bavaria, two by Saxony, and one by Würtemberg, while Prussia, with the other States of the empire, was to keep up 17 Army corps. For these purposes the whole German Empire was divided into 22 Army corps districts. This law was to come into force on April 1, 1899. It involved a considerable increase in the number of artillery regiments and brigades in the Prussian Army-in all 37 field artillery regiments and 18 field artillery brigades. This increase, however, was partially explained by the intention to obtain a more serviceable organisation of the artillery by making the regiments smaller. The estimates further contained provision for a unified organisation of the field telegraph service, which would cause an increase of 11,424 men and 2,850 horses in the strength of the Prussian contingent on a peace footing. Under the proposed arrangements the strength of the German Army on a peace footing, in 1899, would be 23,730 officers, 79,873 noncommissioned officers, 2,155 surgeons, 1,039 paymasters, 659 veterinary surgeons, 1,014 armourers, 93 saddlers, and 491,826 rank and file, amounting to an increase in the strength of the German Army of about 40,000 men.

The result of the elections for the Prussian Parliament in November was the strengthening of the Democrats, the Liberal Unionists, and the Centre, at the expense of the Conservatives, the National Liberals, the Poles, and the Danes. The figures were 143 Conservatives, 63 Free Conservatives, 99 Centre, 78 National Liberals, 12 Liberal Unionists, 22 Democrats, 14 Poles and 2 Danes. This secured a small majority to the Liberals of all denominations.

Germany's new colony of Kiao-Chau was ceded to her in January for a term of ninety-nine years, and the Chinese Government agreed to the building of churches and mission houses there at its expense and also to the payment of compensation to the relatives of the murdered missionaries. The Secretary of State, Herr von Bülow, made the following statement in the Reichstag in explanation of the cession:

"The despatch of a squadron to Kiao-Chau was not an improvisation, but the expression of a well-considered, calm, and clearly defined policy. It is indisputable that without a territorial point d'appui in Eastern Asia we would be simply floating in the air, from an economical, maritime, and political point of view. We required an economical entrance-gate to the Chinese market, as France has in Tong-King, England in Hong-Kong, and Russia in the North. The 400,000,000 inhabitants of China provide one of the richest markets for imports in the world. Our imports there have trebled themselves in the last ten years. We were, therefore, obliged to endeavour to obtain similar concessions to those enjoyed by other Powers. Without a territorial point d'appui, Germany's intelligence and the country's technical and commercial power would have been wasted, and merely serve as manure for foreign fields without fructifying

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our own garden. A station for the fleet was consequently an absolute necessity, in order to make us independent of the goodwill of foreign Governments in the matter of repairing and provisioning the ships we might require in those waters. the other Powers, including even Spain, Portugal, and the Netherlands, have territorial possessions of their own there, and we had to acquire similar rights if we did not wish to be a Power of the second or third rank in Eastern Asia. In addition to this there is the necessity of protecting the missions, whose head, Bishop Anzer, declared the occupation of Kiao-Chau to be a matter of life and death. I think the moment chosen for its acquisition marked the right mean between the Scylla of overhaste and the Charybdis of omission. Our relations with other Powers have in no wise been disturbed thereby. We are in harmony with Russia, whose interests do not cross ours anywhere in Europe, and run parallel to ours in Asia, and whose natural development we, as sincere friends, observe with unenvious sympathy. We regard the endeavours of France to open fresh outlets for trade in Tong-King as quite natural, and it is far from us to oppose England's just interests in any way, or in any direction. The contrary view expressed in English organs of the press is in conflict with the actual state of affairs. Happily, no doubt exists in authoritative quarters in London that it is only in the interests of the advancement of culture and the peace of the world that we should also cultivate relations of harmonious co-operation with Great Britain. Our modest demands did not call for any justifiable objections on the part of China, nor do they menace the integrity of China."

The Secretary of State added that the territory leased to the German Government consists, on the basis of the English chart of Kiao-Chau Bay of 1863

"1. Of the spit of land to the north of the entrance to the bay, bounded on the north-east by a straight line drawn from the north-eastern point of Potato Island to the sea coast in the direction of Loshan.

"2. Of the spit of land to the south of the entrance to the bay, bounded on the south-west by a straight line drawn from the southernmost point of the bay, situated to the south-southwest of Tchiporan to the sea coast in the direction of the Tolosan-losan Islands (Waeber's chart).

"3. Of the Island of Techiposan and of Potato Island, together with all the islands situated before the entrance to the bay, including Tolosan and Seslientau.

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'Besides this the Chinese Government undertakes not to adopt any measures, nor make any regulations, within a zone of fifty kilomètres circumference around the bay, without the assent of the German Government; and in particular not to place any hindrances in the way of any regulation or watercourses that may become necessary.

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The Chinese Government further grants German troops the right of marching through the zone in question.

"In order to avert every possibility of conflicts, the Chinese Government, for the duration of the lease, will not exercise any sovereign rights in the leased territory, but transfers them, together with the sovereign rights over the whole of the waters of Kiao-Chau Bay, to the German Government.

"The German Government will place beacons, buoys, etc., on the islands and shoals near the entrance to the bay.

"In the event of the territory leased on Kiao-Chau Bay proving unfitted for the objects of the German Government, the Chinese Government will grant the German Government a more suitable spot, and will take back Kiao-Chau Bay, at the same time giving compensation for all the expenses incurred there by the German Government.

Finally, as regards railway and mining concessions, the following points have been agreed upon: The Chinese Government has promised to entrust to a German-Chinese railway company, which has yet to be formed, the construction of a railway from Kiao-Chau, to proceed first in a northerly direction and then westward until it eventually connects with the great Chinese railway system which is projected. The line is to be so laid that it shall, in particular, touch the coal-fields of WeihSien and Poshan, situated to the north of Kiao-Chau. The working of the coal deposits is to be granted to German contractors. The Chinese Government further undertakes to accord the proposed railway company at least as favourable conditions as are received by any other European-Chinese railway company in China. Further negotiations, partly for an extension of these concessions in a certain direction, and partly for the more definite settlement of their details, are still pending, and the position of those negotiations is by no means unfavourable."

The treaty between Germany and China as to the Bay of Kiao-Chau was signed at Pekin on March 6, and the ratifications were exchanged on May 19. Prince Henry of Prussia was received in the same month by the Emperor of China in the Summer Palace at Pekin.

A report issued in September by the British Embassy at Berlin gives some interesting information as to the German colonies. It states that the number of resident Europeans in German Africa in January, 1897, was 3,913, of whom 2,182 were Germans. The military force consisted of 962 German officers and men, and about 2,050 coloured soldiers, besides the police force. The area of the German possessions in Africa is given as 820,648 square miles. The expense for the home Government was estimated for 1898-9 at 461,000l., and 17,000l. deficit carried over from 1895-6. This is an increase of 59,000l. over the State subsidy granted last year. East Africa receives 26,000l. less, and South-west Africa 80,000l. more, than in the last Colonial Budget. A comparison of the area and the European population shows

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that as yet the colonies are, like those of all other nations in the same latitudes, plantation and not settlement colonies. In this respect the year 1897 is of good augury for the future of the colonies. From every quarter comes evidence of the remarkable progress of the plantations in Togoland, the Cameroons and East Africa. In East Africa there are at present twenty-nine plantations, with a capital of 70,000l. In the Cameroons there are ten and in Togoland six plantations. The success of these undertakings, which appears to be assured, is due chiefly to the Government experimental gardens, which are conducted by trained officials under instructions from the central botanical station at Berlin. From these stations seedlings are supplied to European planters and to native chiefs. There is every reason to suppose that the products of the colonies, especially coffee, cocoanuts, and cacao, and also possibly indiarubber, will rapidly increase. As to another and more important side of the colonial question-the possibility of establishing settlements of German farmers the answer is not as yet so decisively in the affirmative. It appears proved that in one district of East Africa-West Usambara-some 300 or 400 European families could support themselves by farming, in a healthy and temperate climate, and under conditions not unlike those existing in Germany. addition to this district there is a large territory, Uhehe, in East Africa, north-east of Lake Nyassa, where, in the opinion of the governor, it will be possible to establish large agricultural settlements of European farmers. The statistics of trade in the African colonies are as follows: Total imports, 1,111,000l.; total exports, 547,7181. Of this, 42 per cent. is with Germany. Great Britain and her possessions have a large share in the trade of the German colonies. Almost all the exports of South-west Africa went to England, and a quarter of the imports came from British territory. Nearly half the goods imported into East Africa came from India, and the greater part of the exports went to Zanzibar for trans-shipment. The figures show that the German colonies are still in the condition of an investment which is not yet paying full interest. This is due to the large sums now being expended on the plantations, in which the trees have not yet begun to bear. It will be necessary to wait some years before a final judgment is possible as to the success of the experiment. The European population of Togoland in 1896-7 consisted of 102 Germans, 3 Frenchmen and 2 Englishmen. Of these, 30 were officials, 28 merchants, 7 planters and explorers, and 42 missionaries. There were 8 deaths, of which 5 were of residents in the protectorate, the others being of invalids brought from the neighbouring possessions or landed from ships. The total white population of the Cameroons for the same period is put at 253, against 236 in the previous year. Of these 28 were officials, 9 constabulary, 81 merchants, 54 missionaries, 24 planters and 14 women. There were 181 Germans, 31 English, 12 Swedes and 19 Americans. The number of deaths was 15.