to act-if it can obtain bases. Yet our Navy must at all cost protect our commerce, food-supply and raw material supply. Two years ago Sir George Clarke pointed out that by the Admiralty plans "no special arrangements would be made to safeguard commerce, at least in the early stages." German food and raw material have now been secured by the Declaration of London, provided this food and raw material are shipped in neutral bottoms and consigned to neutral ports, such as Rotterdam and Antwerp. But our commerce and foodsupply have no such security. The German Admiralty has made all preparations for an attack upon our shipping in the initial stages of war, which will transcend in its severity anything witnessed in the past. Every fast German steamer now carries a few small guns, which will be mounted on the declaration of war, if not before. Then the war flag will be hoisted, and these new privateers will fall to work, destroying and sinking British shipping, which is not armed similarly. The effect will be instantly felt. A huge rise in the cost of freight, in the cost of insurance, in the price of all food-for now we import four-fifths of our wheat-supply-in the price of our cotton and our raw material, will follow remorselessly. Our manufacturing population will no longer be able to compete with neutrals in foreign markets. On no point do Ministers lay such stress as this—that, if the cost of manufacture in this country is ever so slightly raised, our goods will everywhere be driven from the field. Yet by neglecting the Navy, they are bringing on all British industries which work for export the risk of a total stoppage at the very time when bread will have risen, judging by the past, to a shilling a loaf. In the Napoleonic wars we grew our own food, but even then bread rose to terrible figures. Now, if the price rises, we must import food and pay for it in gold or the equivalent. I leave it to trained financiers to tell us how long the insignificant reserve of gold at the Bank of England would stand the strain.

Germany will suffer, no doubt, with ourselves. But she will suffer far less for these reasons: (1) she grows a much larger proportion of her food; (2) she can import by land or via Belgium and Holland; (3) she can export by land or via Belgium and Holland, and retain her Continental trade unless there is war everywhere on the Continent; and (4) she has hopes of

bringing a war with us to a favourable conclusion and obtaining from us an indemnity which will compensate her for all her losses. If we win at sea we cannot bring such pressure to bear upon her as will compel her to pay us an indemnity. The destruction of her entire Fleet would not enable a British Army to march to Berlin. The laws of naval war, so far as they affect our attack upon her commerce, have been changed since Napoleon's day-changed with our consent-but to our disadvantage. Modern wars are no longer-if they ever were— decided at sea, and since Captain Mahan wrote, land-power has gained greatly in importance.

If our Fleets are not successful from the first there are other perils to be confronted. British weakness in the Crimean War speedily brought, as Kaye and Malleson have shown, the Indian Mutiny. News travels faster to-day, and the state of India is more perturbed even now than at any date since the Mutiny. If the British Navy suffered any serious reverses there is danger of an upheaval in India with, as its consequences, the immediate loss of a vast British capital, starvation for Lancashire, and the imperative need of despatching a large military force to the succour of our Indian garrison. Possibly this need might be met from Australia, for the transport of any large force from this country, with a precarious hold of the command of the sea, with Malta, Gibraltar, and Egypt only feebly held, and with a hostile or dubious Austria and Italy on the flanks of our route to India, would be an impossible undertaking.

THE REMEDY.-What is the remedy for this lamentable state of affairs? To place in power a Government that can be trusted to maintain the standard and to strengthen the Navy. We must have a Ministry which will not regard outlay on national defence as "futile," or starve the Fleet to satisfy the Socialists. And the British people must prepare to meet a prodigious financial strain as their ancestors met it. They will want every conceivable source of taxation if only to strengthen the Navy and undo the work of the past four years. But with Fiscal Reform and fair taxation of the foreigner the strain may be met without disaster, though even then it will be necessary for all classes of the community to "pay, pay, pay."

The measures imperatively needed are these:

1. A loan of at least £50,000,000, to be spent, two-thirds in

the construction of "Dreadnoughts," cruisers and destroyers, and one-third in the provision of reserve ammunition and additional docks and naval bases on the East coast. The loan to be liquidated by suspending the sinking fund for a period of ten years. The sinking fund, as a last national reserve, may be used for purposes of national defence, but otherwise it should be most jealously guarded.

2. A fixed naval programme, spread over precisely the same term of years as the German one, and providing two keels to one in every class. class. A part of this programme would be provided from the loan: the rest would fall on the annual estimates. The Admiralty would be given power to accelerate the commencement of ships, but not to delay naval construction, unless Germany was delaying her units.

3. An addition of at least 25,000 men to the enlisted strength by annual increments of 5000, to provide for existing deficiencies in men and to meet the need of the increased programme.

4. The immediate organisation of a Naval War Staff.

5. The armament with a few light guns of fast British merchant ships in time of peace.

6. A National Service Army must follow-when we have regained our position at sea.

These are great demands. We cannot expect them to be met by a Party, whose journals openly exult that the expenditure on old age pensions has rendered difficult the provision of “Dreadnoughts." But unless they are met old age pensions will be worth a very few months' purchase. If they are met courageously and cool-headedly, the German Government may abandon the game, and if it does not abandon the game, war will be indefinitely postponed. "Battleships are cheaper than battles"; in the end expenditure on the Navy means vast economy. All attempts at disarmament have failed; indeed Liberal overtures have actually encouraged and stimulated Germany. She is "arming in silence" while Ministers are talking of what they are about to do, and doing little. The time has come for England to take a course which will put new strength and confidence into her friends and allies throughout the world and which will allay the unrest in India. But it is her last opportunity. If this month a Radical administration is returned to power, then in a truer sense than ever Napoleon's words of 1805 possessed, "it is the end of England." Her people will

have been guilty of tragic trifling with their destiny; they will have sold their birthright for less than a mess of pottage; and they will find no place of repentance, though they seek it hereafter with tears.

(1) GERMAN, BRITISH, AND UNITED STATES NAVAL EXPENDITURE in millions sterling since 1904 (loan expenditure is included in the British figures) : Expenditure on New Ships and Guns.

Total Naval Expenditure.

Britain.

Germany. U.S.A.

Britain,

Germany. U.S.A.

(2) PROGRAMMES in (1) "Dreadnoughts"; (2) Large armoured ships; (3) Small cruisers; (4) Destroyers of England, Germany, and U.S.A., 1906–10:

(3) PROBABLE POSITION in "Dreadnoughts" of Britain, Germany, Italy, Austria, and U.S.A. at various dates:

⚫ Amount actually expended-generally below what was voted. + Includes the 4 supplementary ships voted in 1909. laid down 4 " Dreadnoughts" and the United States 2.

Of which three on distant service.

Prior to 1906 Britain

§ Figures in brackets assume German programme to be accelerated. Some good judges in this country hold that Germany may have 20 or 21 "Dreadnoughts" in April 1912.

THE RELATIONS OF CANADA AND

GERMANY

A CURIOUS international and inter- Imperial situation is developing in Canada, partly as a result of the country's growth in general importance and partly as a consequence of its retaliatory tariff policy towards Germany. On the surface the situation is simply one of a surtax, or 33 per cent. increased tariff, which was imposed by Canada upon German products when Germany refused to recognise our Preferential tariff as a purely family and inter-British affair, and placed the Dominion under the maximum clause of its own tariff. The additional imposts have resulted in German imports from Canada declining from $2,141,552 in 1901 to $1,476,552 in 1909, and German exports to Canada from $9,162,957 to $7,536,917. This decrease is more important when the rapidly increasing general trade of Canada is considered—an increase during these years of $182,000,000 in total imports and of $65,000,000 in total exports. Upon the whole, however, this trade, actual or potential, is not of sufficient extent to quite warrant the efforts now being put forward by Germany to effect a re-adjustment and the creation of better relations generally.

The German press is teeming with references to Canada's growth and industrial possibilities; the Berlin Lokalanzeiger has despatched a special correspondent to make an exhaustive study of the Dominion from shore to shore; the GermanCanadian Economic League was organised in 1908 to promote trade and better fiscal relationship between the two countries; special articles are beginning to be rather frequently seen in the Canadian press praising German trade methods and indicating its successful rivalry in many directions with Great Britain; cable despatches are increasingly numerous which describe Germany as

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