A decree was issued in January for the formation of a supreme Military Advisory Council, consisting of four members, viz., the Marquis Yamagata, Inspector-General of the Army; Prince Komatsu, Count Oyama and the Marquis Saigo, Minister of Marine.

The attempt to form a coalition Ministry to carry out a vigorous foreign policy, which would include the Marquis Ito and Count Okuma, failed in January, but the Marquis Ito, with the personal intervention of the Emperor and after much difficulty, succeeded in forming a Ministry independent of political parties, with Baron Nishi as the Minister of Foreign Affairs.

In April the Minister of Commerce resigned and was succeeded by Count Kaneko. Early in May the resignation of the Marquis Saionyi as Minister of Education was accepted, and he was succeeded by Professor Toyama, the president of the Imperial University. In the following month the Marquis Ito himself resigned, and advised the Emperor to accept the principle of party government, recommending Count Okuma and Count Itagaki as the best men to construct a Cabinet. The Ministry was formed with Count Okuma as Premier and Minister of Foreign Affairs, Count Itagaki taking the portfolio of Minister of the Interior. In October Mr. Osaki Yukio, the Minister of Education, made a speech in which he referred to the establishment of a Japanese Republic as possible in the distant future. This brought about his resignation and the whole Cabinet resigned early in November, owing to the inability of the members to agree as to the selection of his successor. Whereupon the Marquis Yamagata was called upon to form a new Cabinet which he constructed with himself as Premier, and which included Mr. Aoki as Minister of Foreign Affairs, the Marquis Saigo as Minister of the Interior, Count Matsukata as Minister of Finance, General Katsura, Minister of War, and Admiral Yamamoto, Minister of Marine. None of the ministers were definitely connected with any political party.

The Japanese elections took place on March 15. It was expected that they would result in a majority for the Government, but the final returns showed that the Government and Opposition parties were about equal in strength, and that there were nearly fifty Independents elected who might hold the balance of power.

The Japanese War Office issued an order early in May providing for the withdrawal of their troops from Wei-hai-wei, and the evacuation was begun on May 17 and completed on May 23, when the barracks and other buildings were handed over to the Chinese authorities.

The last instalment of the war indemnity due to Japan by the terms of the treaty of Shimonoseki was paid to the Japanese representatives in London on May 7 by Sir Halliday Macartney,

on behalf of the Chinese Government. Payment was made by a single cheque for 11,008,8571. The state of Japanese finances did not permit delay in the payment of the war indemnity, although postponement was recommended by Baron Nishi, the Minister of Foreign Affairs, and other Japanese statesmen, as a wise and conciliatory measure. In June the Government decided to advance 180,000l. from the war indemnity to enable a Japanese syndicate to acquire and complete the railway conceded in Korea between Seoul and Chemulpho. A RussoJapanese agreement was made which allowed Japan to carry on industrial and commercial enterprises in Korea, and the two Powers were bound to notify each the other before sending experts into that country.

The state of the finances was not satisfactory. Bills were introduced in the Diet in June imposing fresh taxation, and the defeat of a land tax bill caused new political combinations, and the resignation of the non-party Cabinet. A fusion of the Liberals and Progressives against the Government took place, and a pro-Government party was formed, headed by the Marquis Ito, which included representatives of all the commercial and industrial bodies. The Budget early in the year fixed the expenditure at 229,000,000 yen, and the receipts at 212,000,000 yen. At first the estimates for the next fiscal year showed a deficit of 50,000,000 ven, but after the settlement of the differences of opinion which existed in the Cabinet respecting the Budget, and the Ministers of War and Marine had agreed to the reductions effected by the Finance Department, there was still a deficit of 30,000,000 yen. An increase of taxation was inevitable. It was generally believed in September that the Government had decided to raise a foreign loan of 10,000,000l. sterling, and that a bill authorising such a loan would be introduced at the next session of the Diet, but the Government brought forward a bill for increasing the land tax with the object of providing 14,000,000 yen towards covering the Budget deficit of 30,000,000 yen; the remaining sum of 16,000,000 yen to be raised by other increased taxation. The Cabinet and the Liberals agreed to support the Budget and necessary legislation.

An imperial decree was issued in September fixing January 1, 1899, as the date for the new tariff to come in force. An edict was also issued making the new tariff apply to Formosa from January 1.

At the opening of the Diet, December 3, the Emperor was absent owing to ill-health. The Imperial message spoke in general terms of the necessity of making preparations for the coming into operation of the new treaties with the Powers, and also recommended the adoption of measures for placing the national finances on a sound basis.

The budget published in December showed, on an estimated expenditure of 225,000,000 yen, a deficiency in the revenue of 35,500,000 yen. Military and naval expansion caused nearly

one-third of the ordinary and about five-eighths of the extraordinary expenditure.

The Japanese Government notified the foreign Powers that the new codes so long in course of preparation would soon come into force; the commercial code on July 1, and the civil code on July 16.

The returns of the Japanese Customs, issued in April for the past financial year, showed a further increase in the foreign trade of the country. In round figures the imports and exports last year amounted to $382,500,000, against $289,500,000 in 1896; an increase of more than 32 per cent. In 1888 the total value was $131,000,000, so that Japanese trade may be said to have trebled in the last ten years; between 1880 and 1884 the total was between $62,000,000 and $67,000,000, or about a sixth of its present volume.

Of the total sum of 362,000,000 yen received from China, 289,000,000 yen had been already appropriated by the Diet, leaving 73,000,000; the greater part of which remainder was invested in various domestic bonds. Yet the Diet at the opening of the winter session unanimously adopted the following unique resolution: "Whereas, during the war of the twentyseventh and twenty-eighth years of Meji, his Imperial Majesty, our illustrious sovereign, this empire's great civil and military ruler, advanced the imperial standard to Hiroshima, and in his Imperial person directed the affairs of the war, so that abroad the soldiers of the country offered up their lives for the public cause, and, at home, a united people, one and all animated by a warlike spirit, offered up their resources for the conduct of belligerent operations, with the result that peace was finally restored to the East and the glory of the country made to shine throughout the world; and whereas we, his Majesty's subjects, are profoundly sensible that these issues were mainly due to the Imperial virtues, we desire to express the sincerity of our respectful gratitude by including in the Imperial estates, as a memento of the signal successes achieved in the war, a sum of 20,000,000 yen from the indemnity obtained in consequence of the country's victories."

Japan represented to China in June that she required settlements for the exclusive use of Japanese at Fuchau, Wusung, Sha-shi, Funing, Yo-chau and Ching-wan-tao. To this China replied that ports voluntarily opened were on a different footing from ports opened under a treaty. In the former there could be no separate settlement, but only one common settlement for all foreigners, and under direct Chinese control. Japan agreed to the distinction, and also agreed to postpone her claim for a settlement at Fuchau. An indemnity, however, was allowed Japan for the destruction of the Japanese consulate on May 9, in a riot at Sha-shi, in Hu-pei, China. The Japanese in April demanded and obtained from China the nonalienation of the province of Fo-kien, opposite the island of Formosa.

Public opinion in Japan was generally in favour of a good understanding with Great Britain. No general opposition was raised against the cession of Wei-hai-wei, but the presence of Russia and Germany in China was distasteful, especially to the military party. The subject of an Anglo-Japanese alliance was much discussed in the press. An article written by Prince Konoye, the president of the Upper House of Parliament, on the necessity of an alliance between Japan and China to resist the aggression of Western nations, excited much interest.

VI. SIAM.

A treaty between Siam and Japan was signed on February 25. Extra-territorial rights were only to be granted to Japanese subjects in Sian until the new Siamese codes came into force.

On August 14, at Bangkok, ten policemen, when pursuing a Chinaman, entered an annexe of the French Legation, where he had taken refuge. The French Minister Resident imprisoned five of the policemen, and addressed a protest to the Siamese Government. The Siamese Minister of Foreign Affairs at once sent a letter expressing his regret, and the offending policemen were punished.

At the end of the year the King of Siam was about to send an envoy to India to receive the relics of Buddha discovered in January at the village of Pipra-hwa on the Nepaul frontier. These consisted of a large stone coffer, crystal and steatite vases, bone and ash relics, fragments of lime, plaster and wooden vessels, and a great quantity of jewels and ornaments placed in two vases in honour of the relics. The inscription on one of the urns proved that the builders of the stupa containing them believed the relics to be those of Gautama Buddha.

The actual relics, being a matter of such intense interest to the Buddhist world, were offered by the Indian Government to the King of Siam, who is the only existing Buddhist monarch, with a proviso that he would not object to offer a portion of the relics to the Buddhists of Burmah and Ceylon, and it was suggested that his Majesty should send a deputation to receive the sacred relics with due ceremonial.

The financial condition of Siam was improving under the enlightened direction of the King and his British advisers. A great reformation had been effected, and the revenue accounts showed an increase in two and a half years from 1,260,000l. to 2,030,000. Expenditure increased from 889,000l. to 1,820,000l., due to the payment of arrears, to improved police service and outlay on public works. There was a surplus of 210,000l. for the current year. A statement of accounts would henceforth be published annually. Inland duties in Siam were being lessened and taxation simplified. The teak revenues had been trebled. A leading reform related to the land tax collection,

and a large increase was anticipated. A railway to Chieng-mai was imperatively needed for the development of the resources of the country.

CHAPTER VI.

AFRICA.

I. EGYPT.

THE year 1898 will long be a famous year in the records of Egypt. Internally the history of the country was marked by no very striking or significant event, but the brilliant military operations in the Soudan gave ample food for interest and excitement. In domestic affairs there was once again a tale of steady if unambitious progress; and there was also a lessening of friction among Government officials, and an inclination to recognise our authority, and to discard the harassing and petty policy of obstruction, which has so long found favour among our opponents in Egypt, very satisfactory to English minds. The Ministry showed themselves honestly determined to co-operate with their British advisers. The statistics relating to public order and to the administration of justice again showed evidence of progress, though the Egyptian Government called attention to the desirability of modifying in some particulars the constitution of the Mixed Tribunals. The necessity for an increase of expenditure in the Prison Department was emphasised by the increase in the number of prisoners, produced by a more vigilant administration of the law, and by the growing inadequacy of the arrangements for housing and feeding offenders. In sanitation some slight improvement was made, and the Government hospitals reported a considerable increase in their patients, due to an increased appreciation of the services they render. There were also encouraging signs among the natives of a growing interest in education. In the matter of railways-notably in the case of the admirably managed extension of the line in the Soudan-and in such matters as roads and telegraphs, steamers and postal arrangements, there was again satisfactory progress to record. The prosperity of trade again showed itself in the returns of the revenue, and in the reports of the commercial capabilities of the great province of Dongola, where there are 79,000 acres of land capable of cultivation, and where, with the increase of population and with the gradual recovery of the country from the desolating effects of Dervish misgovernment, it is hoped that the production of dates and cereals may sensibly add to the riches of Egypt.

Meanwhile an important step forward was taken in the conclusion of a contract between the Egyptian Government and