peace, or would necessitate for its adequate defence such an increase of naval power as even he himself has not dreamed of, and from which the boldest German minister would shrink.

After all, the German Emperor is not the only ruler in history who has dreamed dreams' and has had to be satisfied with a more sober reality. If Germany is shut out from the greatest of all futures, if she has come into the field too late to hope to rank in the first line of world-powers, I am far from denying that a great future awaits her. My point is that the opportunities time has in store for her are not opportunities of empire-making, and that her future career is more likely to be the career of a commercial than of a governing people. If this be so, her true policy is not an ostentatious policy of promiscuous annexation here, there, and everywhere, but a sober policy directed towards the extension of her commerce and the protection of her interests in every part of the world. Such a policy would of course include the gradual and progressive strengthening of her navy to meet the increasing duties laid upon it, and it would not preclude the acquisition of such strategic positions as may still be obtainable, whenever she considers them necessary for. the defence of the vital interests of her trade. This would not satisfy the extreme colonial party, whose idea is that Germany 'must resolutely act upon the fundamental principle that no further distribution of territory among European Powers can be allowed to take place without such compensation to Germany as shall maintain the existing balance of power,' but it would husband and concentrate German energies along a line upon which they have already met with distinguished success. It would be a further and natural development of the policy which has made her one of the most formidable competitors in the struggle for the world's trade.

No one will deny that the great growth of German commerce and shipping during the past twenty-five years warrants, and indeed makes necessary, a new development of policy. When Germany's over-sea trade was comparatively small, and when her mercantile marine could hardly be said to exist, she only required a fleet adequate to the defence of her rivers and coasts against foreign attack. When her interests in distant lands were relatively insignificant, she had no temptation to make her voice continually heard in the settlement of extra-European questions. But time and the enterprise of her people have changed all that.

It has become the practice to speak of the growth of German commerce between 1872 and 1896 as 'phenomenal.' It is undoubtedly very striking, but not so striking as the growth of England's foreign trade during the previous twenty-five years, that is to say, between 1857 and 1872. What is really remarkable, and what merits the admiration of all observers, is the thoroughness with

which Germany has prepared herself for her industrial career, and the boldness and persistence with which she is assaulting every market in the world. This is not a statistical article. If it were, it would be easy to quote exact figures from the memorandum issued by the German Admiralty, showing in detail the progress which has so far been made. Nothing is being left undone to insure success. All that education in its various forms-primary, technical, and even physical-can do for the German workman is being done for him. Weak industries receive bounties. Lines of steamers are heavily subsidised to carry German exports to all parts of the world. The State railways are authorised to make special rates for the over-sea trade. German diplomatic agents abroad exercise pressure in favour of German merchants. German commercial houses are planted in every important foreign port, and even where they represent foreign firms they keep a benevolent eye upon the produce of their own country. In the conduct of private undertakings money is not grudged either for practical experiment or for research. Manufacturers submit to sacrifices in order to force an entry into foreign markets, and recoup themselves with the aid of protective duties at home. The whole commercial policy of the country is directed towards the encouragement and extension of foreign trade.

Such assistance and encouragement, given to a population as laborious and well endowed as the German people, have produced the results which we are beginning to see. Germans are ubiquitous. They have gained a footing in almost every market. I admit that the actual amount of their business is greatly over-estimated in many quarters, and that their rivalry with Great Britain has so far only entered upon its first, and for Germany its easiest, stage. With that question I am not for the present occupied. The point is that they have established commercial ' interests' in all parts of the world, that their lines of steamers have begun to invade almost every sea, that they are accustoming themselves to large affairs, large contracts, and large financial operations.

It is to my mind this sense of commercial success, of expansion, of being on the rising wave, which explains the spirit in which the Emperor's recent utterances have been received, and accounts for the enthusiasm with which the prospect of a new policy has been greeted. It is the conviction that the situation is for them a new situation, that the success which has attended their efforts justifies a new departure, that enlarged interests have made necessary a larger policy and larger views of Germany's role in the world. I believe this feeling will grow stronger and stronger until it completely controls German policy. Old divisions of parties, old conservative ideas, conflicting interests of various kinds, may possibly for a time prevail against it, but I am convinced the ultimate triumph of the forward' policy is assured.

Whether that policy will be directed by unreasoning ambition or by a prudent and enlightened appreciation of the character of the opportunities which time and fate have left to Germany, it would be foolish to hazard a guess.

One thing may safely be said, Germany's new policy will necessarily bring about serious readjustments in the policies of other European Powers, and especially of England. It is an easy prediction that, just as the last fifty years have been an era of rivalry in military armaments, the next fifty years will witness the competition of the fleets.

HENRY BIRCHENOUGH.

GERMAN VERSUS BRITISH TRADE

IN THE EAST

AT a time when the patriotic British mind is agitated and alarmed by the apparent ease with which German wares are ousting those of our own country, not only in neutral markets but also in those which have hitherto been regarded as peculiarly our own, the personal experiences of one whose long residence in Sumatra has afforded exceptional opportunities of studying the condition of commerce in that prosperous island, and the neighbouring British possessions across the Straits of Malacca, may not be without public interest. That the German flag has, within the last decade, been more in evidence on the Eastern seas, and that German-made goods have partially or entirely taken possession of markets which were but recently innocent of their existence, are facts admitting of no denial. There are, however, two kinds of trade the one vigorous, self-supporting, yielding a fair profit to capital, a decent wage to labour, and satisfaction to the consumer; the other, spurious, bounty-fed, and existing only by subsidies and the sweat of mankind. The one has the qualities of endurance; the other, the symptoms of decay. I shall endeavour to classify the rival trades of England and Germany.

Twelve years ago the whole of the import and export trade of Sumatra's east coast was conducted under the English flag. Even the Dutch flag was banished from the harbours of this Dutch possession, except in the case of ships in the Government service. In 1886 this British monopoly was disputed by the North German Lloyd Company, whose subsidy from the German Government enabled them to cut rates to an extent which speedily attracted a considerable portion of the goods and passenger traffic to their ships. Freights on tobacco, the staple product of the east coast, were reduced by one half, and passengers were, and still are, conveyed to and back from Europe at a charge only slightly exceeding what the P. and O. Company demand for the single journey. The North German Lloyd, being under contract with the Imperial Government to run ships to and from the Far East at stated intervals, appear to have adopted the principle that it is better to fill their vessels with unremunerative

cargo and passengers than to run them empty. The imperial subsidy covers the loss. Notwithstanding this novel form of competition, English ships continue to trade profitably with the East, though all the reports of their German competitors point to the fact that, without their subsidy, they could not compete for twelve months. The net result of trading on such unsound principles is that various English ports at which these German subsidised boats must call on their way to China are enriched at the expense of the German taxpayer. Individual shipowners may suffer, but the commerce of Colombo, Singapore, Hong Kong, and Dutch Sumatra continues to flourish, partly at Germany's expense. Need the veriest alarmist have any fear for the appearance of the German flag in Eastern waters, considering the means by which it has got there? And how must we classify a trade established on such principles?

The internal trade of the east coast of Sumatra is mostly in German hands; the Dutch themselves only take a second place, and the English are nowhere. There is no British Consul or British firm in the Residency; the imports of hardware are entirely German ; British textile manufactures are gradually being replaced by those of Germany; tobacco fertilisers, imported in enormous quantities, come entirely from the Continent. Such, briefly, are the conditions of trade.

It is just a question whether it would be to a British manufacturer's advantage to compete for the hardware trade of Deli (the east coast province). The principal items of import are implements of agriculture, such as spades, hoes, rakes, axes, &c., but, owing to the peculiar system of cultivation in vogue there, a cheap and nasty implement will be more appreciated than one of more sterling quality. The Chinese labourer in Deli has to purchase his own tools, and as it is a fad of his to discard the old for new ones at the end of each year, though the old ones might still be serviceable, it is evident that he gives the preference to a low-priced article, whatever its quality. I myself have made more than one effort to introduce British-made tools into Deli, but, paradoxical as it may seem, I have always found their chief fault to be that they were too good.' Germany makes tools to last one year; Birmingham makes tools to last several years. I have repeatedly told the British manufacturers that an inferior article was wanted, but they seemed quite incapable of making it. Now the question arises, Is it good policy for the British manufacturer to compete for an inferior class of business, or to maintain the uniform excellence of his wares? To-day, if you want a really high-class article, you are prepared to pay a good price for it, but you insist upon its being of British origin. Would it not cast a slur upon the reputation of British goods if they were made of two qualities? Those most interested and best qualified to judge