interests in China. On May 11 Japan demanded the evacuation of the Japanese Consulate at Nanking, and on June 29 the Japanese Consul and his staff returned. On April 30 a force of 4,000 men from the Japanese garrison of Manchuria was landed at Tsing-tao, and in June it was sent on to Tsi-nan to protect the Japanese, estimated to number 30,000, in the Shantung province. The situation having improved, the troops were withdrawn on September 5.

In June the Foreign Minister summoned the Japanese Minister at Peking and the principal Consuls in China to attend a Conference in Tokio for the purpose of advising on the restoration of trade, the refugee problem, and future policy in China. The Conference sat from June 26 to July 7, and at its close Baron Tanaka stated that, pending the establishment of a central Government in China, Japan had no alternative except to keep in touch with the moderate elements and await developments. In August, Japan protested energetically against the surtaxes on imports imposed by the Nanking Government, and procured their withdrawal. In the same month Japan put forward certain demands in Manchuria, where she had very important interests, but as these gave rise to anti-Japanese demonstrations, they were withdrawn. Japan's "forward" policy in Manchuria received another check in December when, owing to a Chinese outcry, the South Manchurian Railway Company, a Japanese concern, was unable to bring off a loan of $30,000,000 which it was negotiating with the firm of Morgan & Co.

At the beginning of April the Soviet Government granted to certain Japanese companies a six-year concession of 3,000,000 acres of forest on the shores of the Gulf of Tartary in the Maritime Province of Siberia. Japanese relations with Russia continued to be of the most friendly character, and at the beginning of December a Japanese mission under Mr. Kuhara, a prominent business man, visited Moscow with a view to studying the economic conditions in Soviet Russia. On July 20, after about three years of negotiation, a Commercial Treaty was signed with Germany on the basis of the "most-favoured-nation" clause.

Japan willingly acceded to President Coolidge's invitation in February to participate in a Conference for the reduction of naval armaments, only stipulating that the Conference should not take place till June, so as to allow adequate time for preparation. Admiral Viscount Saito (Governor-General of Korea) and Viscount Ishii (Ambassador at Paris) were appointed delegates. On leaving Tokio on April 25, Admiral Saito received an ovation which revealed the existence of an unsuspected fund of enthusiasm for the disarmament idea in Japan. At the Conference the policy of the Japanese delegates was to maintain the existing ratio of naval strength, and to effect economy in future building, and they were ready to accept any plan which would have secured these ends,

whether on the British or the American basis. When disagreements broke out between the British and the American delegates, they tried hard to effect a compromise, but without success. Japanese public opinion was not disturbed by the failure of the Conference. It was able to indulge in a certain display of self-righteousness by contrasting the moderation of the Japanese demands with the British and American grasping at naval supremacy, and it was not displeased to see a rivalry between the two Anglo-Saxon Powers. Admiral Saito, who returned to Japan on September 26, was given an excellent reception, and said he was prepared to recommend the Japanese Government to hold a second tripartite Conference at the earliest practicable date. When the proposed new United States cruiser policy was announced, the Japanese Press was unanimous in condemning it as extravagant and provocative.

The foreign trade of Japan, excluding Chosen and Formosa, in 1927 amounted to 1,992,302,000 yen exports and 2,179,043,000 yen imports, showing a decrease of 52,425,000 yen and 198,441,000 yen respectively on the corresponding figures of the preceding year. Thus the excess of imports over exports in 1927 was no more than 186,741,000 yen, which showed a decrease of 145,016,000 yen as compared with the figure for last year. The decrease in both export and import trades was mainly due to the inactivity of home industries and general decline of purchasing power caused by the financial uneasiness and to the disturbances in China and the depression of foreign markets in general. The foreign exchange on New York rose in the first part of March to the level of 49 dollars, but fell again until in October it reached 45 dollars. This drop in the foreign exchange, in spite of the improved state of the international balance, was attributable to the suspension by the present Government of shipment of gold, and was consequently viewed by the Government as nothing but a seasonal phenomenon, against which the adoption of any artificial measures was declared to be inadvisable.

The year was marked by two natural calamities. A destructive earthquake took place on March 7 in the country district round the Gulf of Wakasa, 100 miles north of Osaka. Over 3,000 persons were killed and nearly 7,000 injured, and the damage was estimated at over 10,000,000l. On September 13 a typhoon with a tidal wave wrecked the towns of Kojima and Nakamura near Nagasaki, causing 719 deaths and 2,313 lesser casualties, and destroying 1,850 houses.

On October 30, for the second time in Japanese history, the entire fleet, consisting now of 172 vessels, was drawn up for review before the Sovereign in Yokohama Bay. Since the previous occasion in 1919, the number of capital ships had declined from 21 to 10, but in every other class there was an increase-of light cruisers from 20 to 33, destroyers 69 to 100, and submarines

15 to 58. There were also now three aircraft carriers, a type of ship not represented in 1919.

In the naval manœuvres at the end of August a collision occurred between two cruisers and two destroyers, causing 120 casualties. Admiral Kato, commanding the fleet, explained that the operation in the course of which the collision occurred formed a regular part of each year's manoeuvres, but owing to the increased speed of squadrons the exercises were becoming more and more dangerous.

At an Imperial review held at Nagoya on November 19, a private belonging to the "Eta," or pariah, class attempted to present a petition to the Emperor on a fixed bayonet for the purpose of calling attention to the grievances of his class. He was court-martialled and sentenced to a year's imprisonment, but meanwhile the Minister for War issued instructions to the troops to refrain from words or actions calculated to offend the Eta.

NETHERLANDS EAST INDIES.

When the "Law regarding the statute of Government of the Netherlands East Indies " was discussed in the Dutch States General (vide ANNUAL REGISTER, 1925, p. 264), the Government had proposed that the Volksraad (People's Council) should contain, besides the President, to be appointed by the Governor-General, at least 30 non-Hollander Dutch subjects (natives), 25 Dutch Hollander subjects, and not more than 5 nor less than 3 nonHollanders of foreign origin (Chinese, etc.). An amendment was carried by which the proportion between natives and Hollanders was reversed, 30 Hollanders against 25 natives obtaining a seat in the Volksraad. This alteration had been the cause of considerable soreness in educated native circles, whose expectations had been disappointed, and who therefore, smarting under a sense of wrong, were in danger of losing faith in the good intentions of the Government regarding the gradual emancipation of the native population. The Government, therefore, deemed it advisable to introduce their original proposal in the Volksraad once more. Although this body had already in 1923 approved of the scheme, energetic opposition was now offered by the European population against its reintroduction, which, it was thought, showed weakness on the part of the Government in face of the spirit of unrest among the native population. It was considered by them bad policy now to create a native majority in the Volksraad. Against this it was pointed out that the President, being a nominee of the Governor-General, would always secure preponderance to the Dutch element over the native element, which, moreover, would hardly ever be homogeneous, since a part of it was elected, and another part appointed by the

R

Government. In any case, the Government looked upon their original proposal as one to which they were bound in equity.

At its December meeting the Volksraad sided with the Government. A motion inviting the Government to withdraw their proposal was rejected by 37 votes to 17. The Volksraad thereupon passed the Bill by 33 votes to 22, at the same time expressing its wish, by 33 votes to 19, that without alteration in the existing proportion, the number of members of the Volksraad should be increased so that not fewer Hollanders than up to the present should have seats. The Volksraad would then be composed as follows: 36 natives, 30 Hollanders, and 6 non-Hollanders of foreign origin. All the native and 10 European members, including the President, voted for the Bill, 17 European members against. A second proposal, for adding to the Council of India two members, with the intention of appointing duly qualified natives as such, met with little opposition. The alteration of the "Law regarding the Statute of Government of the Netherlands East Indies now requires only the approval of the States General in Holland. From the tone of the discussions on the Netherlands East Indian Budget in the Second Chamber it appears likely that this approval will not be withheld.

While the Government did not allow themselves to be deflected from the course they had followed for many years, of working for the gradual emancipation of the Netherlands East Indies and the education of the native population for self-government under the ultimate supervision of Holland, they at the same time adopted strong measures for combating Communist disorders. For this purpose the police and the army were strengthened. Early in the year there were riots in Sumatra, and in July a plot was discovered among the military in Java. In both cases quick action was taken. On the occasion of the opening of the session of the Volksraad on May 14 the Governor-General had uttered a grave warning against the opinion that all danger of Communist plots was past. The outbreak only demonstrated how necessary the warning had been.

With regard to the defence of the Netherlands East Indies, the Government announced their intention in the Volksraad of proposing a Navy Bill providing for at least 2 cruisers, 8 destroyers, and 12 submarines. The port of Surabaya was to be adapted as a naval base, and its entrance would be protected by batteries of medium calibre guns. The Bill will further provide for floating material for local defence and blockade, a naval air force and naval establishments on shore. Tarakan and Balikpapan, being looked upon as particularly vulnerable points, were to be adequately garrisoned.

During 1927 some successful aeroplane flights strengthened the ties connecting the Netherlands East Indies with the mother country. An aeroplane for passenger traffic completed the round

trip from Amsterdam to Batavia and back in 30 days, comprising 177 hours of flight. A postal aeroplane which left Amsterdam on October 1 reached Batavia in 9 days, returning in 10 days of flight. The Volksraad showed its interest in aviation by voting a credit of 300,000 florins for establishing air-lines in Java. A more intimate connexion was also established in another way with Holland. On June 2 Queen Wilhelmina and the Princess Juliana broadcasted from Philips' station at Eindhoven to the Netherlands East Indies. Since that date successful radiotelephonic conversations between the Netherlands East Indies and Holland have taken place repeatedly.

The proposal to grant to the Netherlands East Indies a representative on the League of Nations was negatived on constitutional grounds. The Volksraad, therefore, contented itself with voting a credit for an observer, provisionally for a term of two years, at Geneva.

The financial situation of the Netherlands East Indies was favourable, as indicated by the following returns: 1925, surplus ordinary service 104.8 millions, surplus entire service, 66.8 millions; 1926, surplus ordinary service, 89.2 millions (estimated deficit, 9.5), surplus entire service, 45-3 (estimated deficit, 57-3) millions. These favourable results were due, as to 66 millions, to the larger yield of taxation, the limited companies tax yielding 18 millions and the import duties 14.8 millions more than in the previous year, which shows a strong economic revival. Government produce yielded 28 millions over the estimates. For 1927 it is anticipated that the ordinary service will show a surplus of some 65 millions. The 1928 Budget, which was adopted by the Volksraad during the summer and in December by the Second Chamber, showed only a small surplus on the ordinary estimates (expenditure 741.5 millions, revenue 742-2 millions). On this account the reduction of the income and company tax desired by the Government was not effected.

CHAPTER IX.

THE UNION OF SOUTH AFRICA-SOUTH-WEST PROTECTORATESOUTHERN RHODESIA-MOZAMBIQUE-MOROCCO-EGYPT.

SOUTH AFRICA.

THE Flag and Nationality Bill controversy, which continued throughout the greater part of 1927, threatened on more than one occasion to precipitate a constitutional crisis. The GovernorGeneral, in his Speech from the Throne at the opening of the January, 1926, session of the House of Assembly, had foreshadowed the introduction of a Bill which was to provide for a flag expressing