himself strictly neutral'-but also the Republicans, Republican Radicals, and Socialists. They generally sympathise with the Allies. Señor D. Melquiades Alvarez and his followers, the Reformistas, demand the rupture of diplomatic relations with Germany, on account of the seventy Spanish ships which the Germans have torpedoed; and one, only one, important leader of the Left, Don Alejandro Lerroux, has demanded, since August 1914, a declaration of war on Germany. The Army-which has lately played so important a rôle in Spanish politics and is responsible for the two last Cabinet crises-has expressed the gloomy conviction of Spain's unpreparedness for a war, and her incapacity to put on the field an efficient force even for her own defence. The Army believes that it is necessary to reform the Administration and remove for ever the old cankers of political intrigue and corruption. This work, of course, requires a long time.

Meanwhile, many Spaniards recognise the danger for England of handing over 'the key of the Straits,' and so formidable a position as Gibraltar, to a nation which deserves for her glorious past all the admiration and praise of history, but is at present in the melancholy state of military weakness confessed by her most eminent sons. According to General Primo de Rivera, when Señor Moret was in London some years ago as Spanish ambassador, the Foreign Office told him that his country was not sufficiently strong to hold Gibraltar, but if some day the situation changed, England would not object to speak on the matter. In Spain,' the General concludes, 'the possession of Gibraltar by the English is regarded as a permanent national affront. In England it is considered a necessary injustice.' In any case, we may ask what would have happened to Spain itself, if during this war Gibraltar had belonged to the Spaniards.

On Dec. 12, 1917, the Spanish Government issued an official note, stating that the Council of Ministers had resolved to submit to the King for his signature, within a short time, a decree dissolving the present Cortes, and calling for a general election:

'The Government (the note added) declares once more its unshaken decision to assure the electors that their votes shall

be respected, and for this end measures will be taken to insure fairness in the elections and to relieve the liberty of franchise from all official pressure.'

It promised also that the first bill to be presented to the new Cortes should be one for a general amnesty for political causes.

Here, then, was an opportunity, if ever there was one, for some political party or other to include in its platform the demand for a settlement of the Gibraltar question, in favour of Spain, had there been any strong feeling in the country in regard to that question. That no party availed itself of the opportunity may be regarded as significant. It is a striking fact that the question of Gibraltar does not appear in the programme of any political party in Spain, and has been seldom alluded to in public appeals made by political groups during electoral contests. It is true that, in discussing the present war, some Carlists and reactionaries use Gibraltar as an argument against England, and in favour of Germany. The Germans, they say, are fighting heroically— this is a favourite expression of El Correo Españolfor the triumph of principles which will restore to Spain her past greatness, together with the key to the Straits,' her ancient colonies in America, and the dominion over Portugal. But, though such absurdities may do harm in country districts among illiterate crowds, no sane and instructed mind pays the slightest attention to them; and the question of Gibraltar, or of its recovery, is not a burning issue. The leaders, whether they are Conservatives or Liberals, Monarchists or Republicans, allow their followers to think independently on that question; and the opinions I have quoted are those of individuals and are shared alike by izquierdas and derechas.

Prominent men are reluctant to express, even when questioned, a definite opinion, and shrink still more from tracing, in present circumstances, the details of any plan of negotiation with England on the subject. They consider it too delicate' and 'dangerous' at present, and content themselves with saying that negotiation is necessary, speaking either in the vague way of Señor Maura, or in that of Señor Alvarez. While the men of the derecha recognise that the compensations to be offered

for Gibraltar 'ought to be studied carefully beforehand,' those of the izquierda fractions generally approve, at least in private conversation, the project emanating from General Primo de Rivera.

At the same time, it would be dangerous to regard this attitude of reserve on the part of the politicians as a sign of indifference. The Germans, in their propaganda, have derived so much profit from the question of Gibraltar, that the silence of political parties cannot be construed as a proof that Spain has forgotten the matter. The absence of declarations, and the fact that, since General Lopez Dominguez's protests in the Senate prior to 1883, the question has not been taken up again in the Cortes, are rather to be ascribed to the chaotic state of Spanish politics, and to the fact that other issues, of more immediate importance, absorb the Spanish mind.

In the first place, Catalonia, that ever-discontented and disturbed province, is claiming home-rule more energetically than ever since the restoration of the Monarchy. . The Cabinet of Señor Garcia Prieto, in which Señor Rodes, a Catalonian Republican, and Señor Ventosa, a staunch Catalonian home-ruler, held the portfolios of Public Instruction and Finance, was but a temporary compromise, designed to appease the Catalonians, and especially their leader Señor Cambó, who talks without ceasing of the rightful claims of Catalonia. Next, there is the doubtful attitude of the Army, and the fear of indiscipline in its ranks. Lastly, the war has led, as elsewhere, to an immense rise of prices, and thrown the country into grievous straits. The cost of living is beyond the resources of the great majority; and the poverty-stricken population is on the verge of famine. The Government, owing to lack of coal, is unable to ensure an efficient railway communication between the provinces; the output of the Spanish coal-mines, scanty and poor in quality as it is, cannot be conveyed and distributed throughout the country; and the German submarines wage a pitiless war on the seaborne commerce of Spain.

Thus, when, in accordance with the decision of the Government quoted above, the General Election took place, early this year, there was room for anxiety, especially in the Conservative party. Nevertheless, the

critical occasion passed without disturbance. The elections were, on the whole, favourable to the Monarchy. but not to the Cabinet of Señor Garcia Prieto. The Germanophiles triumphed in many districts. Señor Lerroux was defeated in Madrid and Barcelona, while Señor Alvarez and other prominent friends of the Allies were beaten in their own provinces. In spite of these rebuffs, the Cortes are-what Spain in general isneutral; for Señor Dato, a neutral with romantic feelings for France and England, is followed by over one hundred deputies, and, with the aid of other groups of similar tendencies, is in a position to control the House.

The Cabinet crisis of last March threw everything for a time into confusion. It had, however, nothing to do with the international question, but arose from a personal quarrel between two political enemies in the Ministry. No political party having a majority in the Cortes, the King formed a mixed Cabinet, presided over by Señor Maura, in which all important sections are represented. It contains such influential men as Señor Dato, the Conde de Romanones, Señor Garcia Prieto, Señor Cambó and others. So long as it holds together, internal tranquillity appears to be ensured; and meanwhile the international attitude of Spain is unchanged. There are no signs that her determined adhesion to neutrality in the world-conflict will be abandoned for a more active policy. In these circumstances, the question of Gibraltar sleeps.

JOSÉ DE ARMAS.

Art. 12.-BRITISH FINANCE DURING AND AFTER THE

WAR.

In order to obtain a correct view of our War Finance it is necessary to review briefly the economic history of the past four years. In the first place it should be borne in mind that during the forty-four years of intensive economic development which preceded the outbreak of war, Great Britain, in common with the other leading industrial States of the world, had been accumulating immense reserves of economic strength. Our merchant fleet amounted to over 20 million tons gross, only about one-half of that tonnage being employed in the carrying trade of the United Kingdom. The national wealth of the United Kingdom was about 16,500l. millions, and the annual national income 21401. millions.* The national wealth of the Overseas Dominions and Possessions was about 9500l. millions and the national income approximately 13507. millions,† making the total wealth of the Empire 26,000l. millions and the total income 34907. millions. The United Kingdom's share of the international trade of the world was 15.9 per cent., and the share of the Overseas Dominions and Possessions was 12.7 per cent., so that the British Empire transacted 28.6 per cent., or nearly three-tenths of the trade of the whole world. The steam-power equipment of our industries amounted to over 10,755,000 horse-power, and our output of coal was 280 million tons per annum. Our investments abroad were valued at 40007. millions, and brought us an annual income of 2001. millions.

The Empire, therefore, entered upon the war with almost immeasurable reserves of economic power; but, owing to our neglect of the problem of financial preparation for war and the contempt of our people and politicians for statistics, these vast resources were utterly unorganised. The task before our Government and the nation was, first, to survey and organise the national resources; secondly, to enrol and equip an army on the Continental standard; thirdly, to transform the entire

* Economic Relations of the British and German Empires,' Journal of the Royal Statistical Society, July 1914.

Imperial Defence and Finance,' 'Nineteenth Century,' August 1913.