the land itself in the form of irrigation works, draining, and clearing of scrub land.

The Bulgarian Budget, which was presented to the Sobranye in March, balanced at a little over 10,300,000l. In presenting it, the Minister of Finance outlined a number of economies which he desired to see effected in the public services. Shortly afterwards the customs duties on silks, perfumes, and other luxuries were greatly increased; the tariff for imported woollens and textiles was increased by from 50 to 70 per cent. There was again a considerable adverse balance of trade.

In April, a British group acquired the monopoly of the export of pork and pork products, by arrangement with the Bulgarian Government.

CHAPTER VI.

LESSER STATES OF WESTERN AND NORTHERN EUROPE: BELGIUMNETHERLANDS-SWITZERLAND-SPAIN-PORTUGAL DENMARK

SWEDEN-NORWAY-FINLAND.

BELGIUM.

THE internal politics of Belgium, as of many other countries during 1926, were dominated by the monetary problem.

Early in the year the Socialists, yielding to necessity, abandoned their policy, which had so largely contributed to their electoral success in 1925, of pressing for relief from direct and indirect taxation for the working classes. They did attempt, however, to bring about some of the military reforms contained in their programme. After giving way to their demands up to a certain point, General Kestens, the Minister of National Defence, refused to make any more concessions and resigned, a step in which he was soon after followed by General Maglinse, the Chief of Staff. This gave rise to a debate in the Chamber which terminated in a vote of confidence in the Poullet Government by 105 votes to 50.

Meanwhile, the economic situation continued to grow worse, and was the cause of widespread apprehension. M. Despret, a senator and a financier of repute, created a League of Public Welfare which called for the appointment of two commissions : one, to draw up a scheme for economies, and with full power to make suggestions to the Government without consideration of party or of private interests; the other, to simplify and improve the fiscal system. Public opinion was roused by a Press campaign, and, in order to restore confidence, the Minister of Finance, M. Janssen, drafted a plan for stabilising the currency, the essential condition of which was the balancing of the Budget. After meeting the bankers, M. Janssen presented his financial projects. to the Chambers, which adopted them. In the Senate the ex

Premier, M. Theunis, laid stress on the extremely serious nature of the proposed operations, and congratulated the Democratic Government on having consented to postpone the execution of its programme of social reforms in order to secure the balancing of the Budget.

Unfortunately, the stabilisation plan, though perfect on paper, soon met with difficulties in practice, the reason being that the negotiations conducted with foreign bankers before the sanctioning of the financial proposals by Parliament had been devoid of any binding character. In the interval these bankers had formulated new demands which, when it came to the point, proved unacceptable. The Belgian financiers also raised difficulties about renewing the 1,800 millions of treasury bonds which fell due on December 31, 1926. This caused a serious fall in the franc, which the Government was unable to arrest. The Janssen plan had evidently broken down, and the Cabinet found itself in a difficult position. The Premier, M. Poullet, thereupon made a statement on financial policy from the tribune of the Chamber, in which he announced that the stabilisation plan had not been dropped, and that negotiations would be continued on a fresh basis. On March 29 the King presided over a meeting which was attended by five Cabinet Ministers, all the ex-Ministers of Finance, and M. Francqui, Minister of State. This meeting confirmed the declaration of the Premier. The stabilisation plan was persisted in, and M. Janssen proceeded to London to confer with the foreign bankers.

The effect of these events was to make the franc fall still more rapidly, and increase the opposition against M. Poullet, who was attacked throughout the country by the manufacturers and financiers, and in Parliament by the Catholic Conservatives and the Liberals. The resignations of the Liberal Minister of the Interior, M. Rolin Jacquemyns, and of the Catholic Minister of the Colonies, M. Carton, widened the breach in the Governmental edifice already opened by General Kestens. On the next day (May 6), M. Janssen also resigned. All the conditions were present for a political crisis without precedent in the history of the country, since the Government which was thus going to pieces was still supported by a considerable majority in Parliament. The resignation of M. Poullet was also expected, but he remained at his post in order to avoid a long interregnum like that of 1925 (vide ANNUAL REGISTER, 1925, p. 211). But his search for colleagues was fruitless, and he at length consulted the King, who thereupon had an interview with M. Vandervelde, Vice-President of the Council. M. Vandervelde recommended to the King M. Brunet, a man universally respected, who had been unanimously elected President of the Chamber in three successive legislatures. Within a few hours the Government had resigned (May 11), and M. Brunet was commissioned to form a Cabinet of National Union.

He failed, however, as the Liberal Party, though it promised him support in Parliament, refused to let one of its members join the Government. This party thought it would be possible to form an extra-Parliamentary Government, but this hope was not realised. Thereupon the Catholic ex-Minister Jaspar undertook to form a Government of Public Safety, and, being favoured by the continued rise of the pound sterling on the Belgian market, he succeeded in rallying the Liberals to his side (May 20). He secured the collaboration of M. Francqui, a financier whom, on account of his abilities and energy, public opinion designated as the man most likely to save the situation. The number of Ministries was reduced from twelve to nine, the Catholics and the Socialists receiving four each and the Liberals one. The Ministry of the Colonies was attached to that of Finance, and assigned to an Under-Secretary. M. Francqui, the most important member of the new team, who was thought to have leanings to Liberalism, was made Minister without portfolio, with a general charge of Exchequer matters. The State finances were entrusted to Baron Houtart, who had shared with M. Francqui Belgian representation on the Dawes Committee. The Socialist syndicates and co-operative societies, the pillars of the Belgian Labour Party, being faced with ruin owing to the financial position, authorised their Parliamentary representatives to make sacrifices of their programme in order to save the franc. The King took the highly unusual step of addressing to the Prime Minister a letter, which was published on May 23, calling upon the country to display in the grave crisis with which it was faced the high qualities of which it had given proof in 1914, and to afford its material and moral support to the Government.

In the favourable atmosphere thus created, M. Jaspar set to work in earnest. He first of all decided on the immediate application of a vast programme of economies, and then proceeded to elaborate measures for financial restoration. After an eloquent statement by M. Franequi and a stirring appeal by the Government, 1,500 millions of new taxes were voted by Parliament in a burst of patriotism. In the Senate the tax resolutions were passed unanimously, and in the Chamber, even the one which encountered the most opposition was passed by 107 votes to 4, with 7 abstentions. An amortisation fund for the public debt to be fed mainly from these taxes was created to absorb the excess currency issued by the previous Government and to liquidate subsequently the floating debt. A commission was also appointed to simplify fiscal procedure. It was also decided to form a National Company of Belgian Railways for the autonomous exploitation of the Belgian railways on the lines of an industrial and commercial scheme. To avoid the delays which the normal Parliamentary procedure would involve, the Government sought from the Chamber special emergency powers. These were granted

by the law of July 16, which conferred on the King for a period of six months the right to issue royal edicts on matters specified by the law after consulting with the Council of Ministers. The Government immediately made use of this power, principally to effect a forcible consolidation of the floating debt.

These measures, along with others of less importance, rendered possible, in October, the stabilisation of the Belgian franc. A new denomination, the "belga," worth 5 francs, was created; it was intended to be at first only book-keeping money, on which all contracts could henceforth be based. The Minister of Finance was authorised to raise abroad a loan of 100,000,000 dollars, to be used for purposes of stabilisation. The charter of the National Bank was modified, monometallism was introduced-silver being reckoned at its gold value-and the State took over a debt of 600 millions contracted by the National Bank. When the Government, at the end of November, made its Budget statement before the Chamber, it was generally agreed that there had been a remarkable improvement in the financial position. There was a surplus of more than a milliard and a half, which was devoted almost in its entirety to the fund for the amortisation of the public debt. The Budget for 1927 provides for a reduction of 2,066 millions in the public debt, in spite of the new charges due to the stabilisation loan and the transference to the ordinary Budget of the whole charge of war pensions. These results, however, have been attained only at the cost of heavy sacrifices, which cannot be endured indefinitely, as the cost of living has risen sharply and there is much hardship.

On November 15 M. Francqui, considering that his task had been accomplished, left the Ministry. On the eve of his departure he addressed to his colleagues a letter published in the newspapers on November 17, which contained certain recommendations, and insisting especially on the necessity of improving the trade balance. The Government were fully alive to this necessity, and created a National Committee of Foreign Commerce for the purpose of developing Belgium's export trade. Towards the end of the year, on November 15, the Ministry of Colonies, which had been made an Under-Secretaryship attached to the Ministry of Finances, again became a separate department, and was assigned to a Liberal deputy from Antwerp, M. Pécher, who, however, died a few weeks later.

In January, the Treaty of Locarno was ratified by Parliament. In moving the ratification in the Chamber, M. Van Cauwelaert remarked that the Treaty would not in any way impair the good relations of Belgium with Holland, which was morally of accord with her on the subject of her new status.

In the course of the year Parliament sanctioned a Bill declaring obligatory the decisions of the Permanent Court of International Justice; the agreement made at Washington on August 18,

1925, for the repayment of Belgian debts to the United States; a Treaty of commerce and navigation between the BelgiumLuxemburg Economic Union and Latvia; and the Washington Eight-Hours Day Convention. It also approved of the trade agreement concluded in 1925 with Czechoslovakia and of the Treaty with Holland revising the Treaty signed in London on April 9, 1839.

Taking advantage of the financial difficulties of Belgium, Germany this year, for the third time, made official proposals for buying back the cantons of Eupen and Malmédy which had been joined to Belgium after the war. The offer was significant as being a direct attack on the fixation of the German frontiers made by the Treaty of Versailles. M. Schacht, the director of the Reichsbank, offered a milliard and a half of gold francs. The suggestion was considered at two meetings of the Cabinet in the month of August, and was forthwith rejected. It was stated in the papers that the question of Eupen and Malmédy had been discussed by M. Briand and Herr Stresemann at Thoiry, but this was expressly denied by M. Vandervelde at a banquet of the Foreign Press Union at Brussels.

In foreign affairs the most notable event of the year was the conflict with China, which derived an international significance from the fact that it was to Belgium in the first instance that China sought to apply principles which she afterwards tried to use in her relations with other countries. On April 16 the Chinese Minister in Brussels informed the Belgian Foreign Office that his Government desired to revise, at the earliest appropriate occasion, the Treaty of 1865 regulating the questions of customs, extra-territoriality, and the settlement of Belgians in China which would terminate in October, 1926. Article 46 of this Treaty stipulates that every ten years the Belgian Government may express the desire to modify this agreement. This right, as laid down in the Treaty, seems to be unilateral, but the Chinese Government maintains that it was only so during the first decade, and that since then the two Governments have been on the same footing. The Belgian Government considers this interpretation contrary to the text of the Treaty. With this reservation it declared itself ready to discuss those Articles of the Treaty which seemed to stand in need of revision, adding, however, that it was necessary to wait first till the two international commissions organised by the Washington Conference for investigating Chinese affairs should have presented their reports. The Government of Peking replied that as far as it was concerned the Treaty would terminate automatically on October 27, 1926. Belgium thereupon suggested the conclusion of a modus vivendi until a new agreement should have been made. In reply to this proposal, the Chinese Minister at Brussels transmitted to the Minister of Foreign Affairs, M. Vandervelde, a draft of a modus vivendi