sarily claim parity of treatment, under the conventions, throughout the Empire for our trade and our citizens with those of all the other Powers."

"The death of Queen Victoria caused the people of the United States deep and heartfelt sorrow, to which the Government gave full expression. When President McKinley died our nation in turn received from every quarter of the British Empire expressions of grief and sympathy no less sincere. . . . Indeed, from every quarter of the civilised world we received, at the time of the President's death, assurances of such grief and regard as to touch the hearts of our people. In the midst of our affliction we reverently thanked the Almighty that we are at peace with the nations of mankind, and we firmly intend that our policy shall be such as to continue unbroken these international relations of mutual respect and good-will."

The only legislation enacted by Congress up to the time of adjournment for the Christmas holidays was the passage by the House of a bill imposing the same rates of duty on articles imported from the Philippines as on similar articles from foreign countries. The bill is still pending in the Senate.

On November 18 Lord Pauncefote, his Britannic Majesty's Ambassador, and Mr. John Hay, Secretary of State, signed a convention to supersede the Clayton-Bulwer convention and providing for the construction of an Isthmian Canal by the United States to be under its exclusive jurisdiction. This treaty, which took the place of a similar treaty which was signed February 5, 1900, by the same negotiators and ratified by the Senate December 20, 1900, but was rejected by the British Government because of the Senate amendments, was laid before the Senate by President Roosevelt on December 3, and ratified December 16 by a vote of 72 to 6.

The United States, in common with other Great Powers, took an active part in the settlement of questions arising out of the Boxer uprising in China in 1900. Mr. W. W. Rockhill was the United States plenipotentiary, and on behalf of the United States signed the final protocol. The American share of the Chinese indemnity was $25,000,000. An important incident was the pressure brought to bear upon China by the United States to prevent it from signing the Russian Manchurian Convention, by which China practically agreed to make Manchuria a Russian province. The United States informed China that while general peace negotiations were in progress it protested against the negotiation of a secret treaty with any other Power. These representations, which were joined in by Great Britain, were effectual and the treaty was not signed.

On February 19 General Chaffee, the Commander-in-Chief of the American forces in China, was instructed not to join in General Waldersee's proposed expedition, the Washington Government stating that it did not believe further military movements were advisable. On May 5 the American cavalry

and artillery were withdrawn from Pekin, and only a small contingent of infantry left; and on May 18 General Chaffee and his staff embarked for the Philippines. On September 17 the American and Japanese troops handed over the Forbidden City to the Chinese, and the remaining American troops were withdrawn from China.

The event of the year which attracted the most general popular attention and excited the most violent controversy, which has not yet ended, was the Court of Inquiry convened to investigate the conduct of Rear-Admiral Winfield Scott Schley, United States Navy, during the war with Spain. RearAdmiral Schley was the second in command of the squadron that blockaded the port of Santiago, and it is claimed that he was guilty of improper conduct in withdrawing his vessels at one time so as to have made possible the escape of the Spanish Admiral Cervera; in having failed to destroy one of the enemy's ships when he had the opportunity; in having misled the Navy Department as to the condition of his coal supply and his inability to coal from colliers; and in having executed during the battle of Santiago a tactical movement that endangered the safety of a vessel of his command. For more than two years the controversy violently raged through the Press, and reached a culmination when the author of a text-book used at the naval academy reiterated these charges. On Rear-Admiral Schley's request a Court of Inquiry was ordered. The court, which was composed of Admiral Dewey and Rear Admirals Benham and Ramsay, censured Rear-Admiral Schley on every specification, but declared that his conduct during the battle was self-possessed, and that he encouraged by his bearing and manner his subordinate officers and men. Admiral Dewey dissented from some of the findings of the majority, and declared it as his opinion that Rear-Admiral Schley was entitled to the credit of the victory which resulted in the destruction of the Spanish squadron. This verdict satisfied neither the friends nor the opponents of Admiral Schley, and at the end of the year the controversy is being carried on with as much vindictiveness

as ever.

A sequel to this extraordinary affair was a stinging rebuke administered to Lieutenant-General Miles by the Secretary of War, by direction of the President, because of certain criticisms made by General Miles on the action of the court. The Secretary of War, in a letter that was at once made public, informed the commanding general that he had violated military regulations in criticising the sister service, and that he had interfered in a matter in which he had no concern. The severity of the reprimand created a profound sensation throughout the country, and only served to still further intensify prejudice and make the friends of Rear-Admiral Schley believe that there was an administrative cabal determined to ruin him.

The Supreme Court of the United States rendered several

decisions fixing the status of Porto Rico and the Philippines, and making it possible for the United States to hold colonies. In the case of Porto Rico the court held (May 27) that after the Treaty of Peace between the United States and Spain the island ceased to be foreign territory, and became a possession of the United States. The fundamental question involved was whether by the ratification of the Treaty of Peace Porto Rico became an integral part of the United States and as such was entitled to all the rights and privileges guaranteed to the several States of the Union by the Constitution. The Court held that Porto Rico did not become an integral part of the Union by the Treaty of Peace, and that it was within the power of Congress to make such laws and provide such a system of taxation as it might deem advisable, and that goods imported into the United States from Porto Rico could be subject to such tariff as Congress saw fit to impose.

By a decision of the Supreme Court rendered December 2, and following the line of argument in the Porto Rican cases, the status of the Philippines was determined and the right of the United States to hold foreign possessions reaffirmed. The court held that under the terms of the Treaty of Peace with Spain and the cession of the Philippines to the United States, the Philippines ceased to be a foreign country and became territory appurtenant" to the United States, and that Congress, as in the case of Porto Rico, could make such laws as it deemed wise. The significance of these decisions is that Porto Rico, the Philippines and all other possessions of the United States do not become States of the Union until admitted into the Union by specific acts of Congress; they have no voice in the affairs of the Union, and no voice in their own affairs except such as Congress may see fit to give them. In other words, they are perpetual wards solely dependent on the goodwill and favour of their guardians.

The last speech made by President McKinley was delivered at the Pan-American Exhibition on September 5, the day before his assassination, and was perhaps his most important speech, as it clearly foreshadowed his belief that the time had arrived for the United States to enlarge its foreign commerce by more liberal legislation, while at the same time adhering to the principle of the traditional Republican policy of protection. Mr. McKinley said in part :

"The period of exclusiveness is past. The expansion of our trade and commerce is the pressing problem. Commercial wars are unprofitable. A policy of good-will and friendly trade relations will prevent reprisals. Reciprocity treaties are in harmony with the spirit of the times; measures of retaliation

are not.

"If perchance some of our tariffs are no longer needed for revenue or to encourage and protect our industries at home, why should they not be employed to extend and promote our

markets abroad? Then, too, we have inadequate steamship service. New lines of steamers have already been put in commission between the Pacific coast ports of the United States and those on the western coast of Mexico and Central and South America. These should be followed up with direct steamship lines between the eastern coast of the United States and South American ports. One of the needs of the times is direct commercial lines from our vast fields of production to the fields of consumption that we have but barely touched.

"Next in advantage in having the thing to sell is to have the convenience to carry it to the buyer. We must encourage our merchant marine. We must have more ships. They must be under the American flag, built and manned and owned by Americans. These will not only be profitable in a commercial sense, they will be messengers of peace and amity wherever they go. We must build the Isthmian Canal, which will unite the two great oceans and give a straight line of water communication with the western coasts of Central and South America and Mexico. The construction of the Pacific cable cannot be longer postponed. . . .

Gentlemen, let us remember that our interest is in concord, not in conflict; and that our real eminence rests in the victories of peace, not those of war. We hope that all who are represented here may be moved to higher and nobler effort for their own and the world's good, and that out of this city may come, not only greater commerce and trade for us all, but, more essential than these, relations of mutual respect, confidence and friendship which will deepen and endure."

On March 13 ex-President Harrison died, aged sixty-seven. President McKinley and his Cabinet attended the funeral, and national honours were paid the memory of the former President.

The most important step towards the settlement of differences between labour and capital took place in December, when a conference of the representatives of both elements was held in New York. It was attended by some of the most prominent men in commercial and labour circles, and as a result of their deliberations a committee was appointed to devise a plan to settle labour disputes without strikes, Senator Hanna being chairman, and a national board of arbitration was authorised. Ex-President Grover Cleveland was appointed a member of the commission.

A strike of the Amalgamated Association of Iron, Steel and Tin Workers against some of the constituent companies of the Steel Trust threw 50,000 men out of work and caused 50,000 more to be idle. The strike was caused by an effort on the part of the Amalgamated Association to compel the Steel Trust to "unionise" all of their mills, and, after lasting about a month, the men returned to work at the Trust's terms. Other strikes of the year were not important.

Sir Thomas Lipton for the second time attempted to capture the America Cup, but Shamrock II. was beaten by Columbia in three straight races off Sandy Hook, the victor taking the last race on her time allowance of forty-three seconds.

The great prosperity and the constantly expanding trade of the United States made the time peculiarly appropriate for consolidating great industries in the form of trusts, and millions of new capital were added to the nominal wealth of the nation, but the exact amount of the capitalisation cannot be told, for the reason that companies were organised in every State of the Union and no consolidated returns are made. The largest and most important consolidation of the year was the United States Corporation, popularly known as the "Billion Dollar Steel Trust," an amalgamation of the leading iron and steel interests with a capitalisation of $1,300,000,000, which has since been increased to purchase additional properties. Not less far-reaching and involving enormous interests was the consolidation of the Union, Central and Southern Pacific Railroads and other smaller lines, by which 17,000 miles of railroad were brought under one management. A desperate fight for the control of the Northern Pacific Railway led to a wild panic in May, when the shares of that road rose to $1,000 and many operators were ruined. The result of this desperate fighting was a consolidation of the rival interests by which 35,000 miles of railroad were brought into substantial agreement.

The usual revolutionary troubles in Central America attracted attention in the United States because of the obligation of the United States under the treaty stipulations with Colombia to maintain free and uninterrupted transit across the Isthmus of Panama. The attempt of the Colombian Liberals to overthrow the Government placed them at one time in possession of Colon and threatened Panama. Bluejackets and marines were thereupon landed from American warships, who guarded the railroad across the isthmus and kept open transit. Colon was surrendered by the revolutionists to the American forces, who turned the city over to the Colombian Army, when the American troops were withdrawn. They were simply required to preserve order and did not fire a shot.

Germany having been unable to induce Venezuela to pay a long-standing debt, in December the German Ambassador notified the American Government that his Government might be compelled to use force to collect this money, and asked whether the employment of force would be regarded by the United States as an unfriendly act or in violation of the Monroe Doctrine, at the same time specifically stating that Germany had no intention of obtaining territory or permanently occupying Venezuelan ports. The Ambassador was informed that the acquisition of territory would be regarded as an unfriendly act, but so long as Germany merely confined her efforts to the collection of the debt the United States would not consider the