the Defence Act of 1909 involves obligation to undergo miltary service on the part of all males between the ages of fourteen and twenty-one, with voluntary service up to thirty years of age, and this system is now in successful operation.

We come now to the position of our greatest Dependency. British India has an area of 1,773,168 square miles and a population (Census of 1911) of 315,152,000. Between 1901 and 1911 the population increased to the extent of 20,771,000, or 7.1 per cent. At the end of 1910 the debt of India amounted to 290,186,000l., which total comprised railways 186,517,000l., and irrigation works 32,256,000l. The gross revenue for 1909-10 was 74,593,000l. and the gross expenditure 73,986,000l., leaving a surplus of 607,000l. In 1909 there was a deficit of 3,737,0001.; but for the previous eight years there was an average annual surplus of 2,000,000l. Of the revenue 12,445,3781. was derived from railways, and 3,660,1561. from irrigation works. The tax revenue was 1s. 9.2d. per head, or including the Land Revenue, 3s. 5.6d. per head. The expenditure on Defence amounted to 20,249,000l. made up as follows: Army 18,901,000l., marine 461,000l., and military works &c. 887,0001. The Indian Government possesses a magnificent asset in the shape of the State railways. The total mileage in operation at the end of 1910 was 32,099. The capital outlay was 292,698,000l. The gross earnings amounted to 34,095,000l., and the net earnings. to 15,990,000l., equivalent to 5.46 per cent. on the outlay.

During the past fifty years the external trade of India increased from 40,000,000l. per annum to 246,000,000l. per annum. The chief industry of India has always been agriculture, but within the past fifty years there has risen within her borders a great cotton spinning and weaving industry of a highly profitable kind; there has also grown up a great and rapidly increasing production of Indian coal and petroleum oils. Within the past five years the production of coal increased by 50 per cent., and that of petroleum by 400 per cent. At the same time new and valuable staples have been introduced. The production of metals on a large scale has hitherto been checked, but there is now promise of substantial development in this direction also.

The imports for 1910 were valued at 112,318,000l. and the exports at 134,016,000l., leaving an excess of exports of 21,698,000l. The average annual excess of exports for the ten years to 1910 was 15,974,000l. The imports of merchandise were valued at 78,083,000l., to which total the United Kingdom contributed 48,799,000l., or 62 per cent. The exports of merchandise were valued at 122,891,000l., of which total 32,477,000l., or 26 per cent., went to the United Kingdom. The principal exports in 1910 were raw cotton, 20,851,000l. ; rice, 12,161,000l.;

wheat, 8,472,000l.; hides and skins, 9,079,000l.; jute (raw and manufactured), 21,453,000l.; opium, 6,209,000l. ; seeds, 12,484,000l.; tea, 7,804,000l.; and cotton yarn and twist, 6,472,000l. India, as is well known, absorbs a large proportion of the gold production of the world, and during the decade 1900-10 there was an average annual net import of treasure of 14,800,000l. per annum-that is to say, in ten years India absorbed 150,000,0001. gold.

The amount of British capital invested in India exceeds 400,000,000l., and the annual charges for interest cannot be less than 22,000,000l. per annum. Moreover, the pensions payable in England by the Indian Government alone now amount to about 2,000,000l. per annum. It is obvious therefore that India's indebtedness to the United Kingdom is discharged in the main by her exports of produce to Germany, France and the United States, Austria and other foreign countries.

It is very difficult to form an estimate as to the national wealth. and national income of a country like India. In 1904 the late Sir Robert Giffen estimated the national income of the Dependency at 600,000,000l. and the national wealth at 3,000,000,0001. A more recent estimate is that of Mr. P. Banerjea, who places the average national income at about 21. per head, or, say, 630,000,000l., and the national wealth at 101. to 251. per head,

or, say, an average of 3,750,000,000l. As stated above the annual charge for interest payable to British investors, &c., may be estimated to amount to about 22,000,000l. per annum, and this would leave the net income at about 608,000,000l. Six years' purchase of this would not be too extravagant an estimate of the national wealth, which may therefore be assumed to be in the neighbourhood of 3,600,000,000l., or slightly more than 101. per head, after allowing for India's indebtedness to the United Kingdom.

The space available will not admit of a detailed account of the economic position of all the remaining portions of the British Empire, and they must be dealt with as briefly as possible in the table given on the previous page.

It is encouraging to note that the economic development which has taken place in recent years in the self-governing Dominions has had its counterpart in the Crown Colonies and Possessions. In 1906 the Crown Colonies and Possessions cost the Imperial Treasury 1,200,000l.; this year they are estimated to cost 800,000l. only. The reduction is entirely due to the improvement that has taken place in their economic condition. Legislative Councils have been established in Nyassaland and the East African Protectorate. In Ceylon, where there is a great and increasing prosperity, the Constitution has been remodelled by the substitution of the principle of election for that of nomination. The finance of nearly all the West Indian Colonies has shown a marked improvement in the last six years; and in 1909 there was a lowering of the franchise in British Guiana. In the Malay Peninsula, Siam has transferred to the British Crown her Protectorate over an area of 15,000 square miles, and in 1909 an important step was taken in the consolidation of the Federated Malay States by the creation of a Federal Council. In Nigeria, which is now one of the greatest tropical possessions of the British Crown, an important step has been taken in the amalgamation of the two Nigerias, and the united Colony has an area equal in size to France, Italy and Switzerland, with a native population of 16,000,000. Throughout the Crown Colonies, with the exception perhaps of Malta, there is a most gratifying record of progress and development, and in West and East Africa in particular invaluable railway and harbour works have been constructed; while equally invaluable work is being done by the Liverpool and London Schools of Tropical Medicine in the study and pursuit of tropical medicine.

The national wealth of the Crown Colonies, Possessions and Protectorates is extremely difficult to calculate, but upon the basis of their external trade, population and area, products, &c., their aggregate income may be safely estimated at 170,000,0001.

per annum, and their aggregate national wealth at 1,200,000,0001. The amount of British capital invested in these Colonies is approximately 100,000,000l.; and their united expenditure on Defence is in the neighbourhood of 1,000,000l. per annum.

The economic ties which unite the Motherland and the Colonies and Possessions are already of vast magnitude, and it would be difficult to conceive a condition of affairs which would afford a more certain prospect of their vast development in the immediate future than that which at present obtains. The United Kingdom possesses in the Colonies an admirable outlet for its surplus population. During the past ten years the excess of departures over arrivals of persons of British nationality who left or arrived at ports of the United Kingdom was no less than 1,779,000, and, notwithstanding this vast amount of emigration, the population increased during the decade by 3,757,944, or nearly 10 per cent. During 1911 no fewer than 270,000 persons emigrated from Great Britain and Ireland, and it is satisfactory to note that the bulk of this great number found their way to countries within the Empire-no fewer than 135,000 went to Canada, 58,700 to Australia, and 24,000 to other parts of the British Empire.

Again, the Overseas Dominions are in urgent need of capital for the development of their resources. On the other hand, the Motherland has vast accumulations of capital available for investment each year, which cannot possibly be profitably employed within the limits of Great Britain and Ireland. The natural result is that the Motherland is pouring capital as well as people into Canada, Australia, and other portions of the Empire.

It must be borne in mind that there is a fundamental difference between the economic position of Great Britain and the other nations and communities comprised in the Empire. Great Britain is the principal creditor nation of the world. The capital value of her investments abroad now exceeds 3,800,000,000l.; and the annual income which she receives from these investments cannot be estimated at less than 180,000,000l. per annum. In addition, Great Britain receives an annual income of at least 100,000,000l. per annum from the gross earnings of her mercantile marine; and there is a further large source of income in respect of the gross earnings of British banking, mercantile, insurance and commission houses carrying on business abroad, which may be estimated at not less than 57,000,000l. per annum. The total income from these invisible exports is therefore about 337,000,000l. per annum; but not more than one-half of this aggregate is brought home in the shape of foodstuff and raw materials, the balance being re-invested each year.

About one-half of the total amount of capital invested abroad

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has been placed in the British Dominions beyond the Seas, the geographical distribution being approximately as follows:

This aggregate it must be remembered includes only the public investments. The private investments, as to which there are no satisfactory data available, must amount to a very considerable sum, and it would probably be a conservative estimate to assume the total amount of British capital invested in the Overseas Dominions and Possessions at 1,900,000,0001.

Then it must be remembered that Great Britain offers the best market in the world for the foodstuffs and raw materials which are produced in the overseas Dominions. During the fifteen years 1896-1910 the trade of the United Kingdom with other parts of the British Empire increased from 208,614,000l. to 394,220,000l., an expansion of 185,606,000l., or 89 per cent.

The following table shows the approximate amount of the production of staple articles within the British Empire in the years 1896 and 1910:

* Production for 1898, the earliest year for which figures are available.

Of course, the production of foodstuffs and certain other staple articles such as cotton, rubber, jute, &c., is liable to violent fluctuation according to the nature of the harvests, crops, &c.; but the figures given in the foregoing table will convey