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revenue $5,948,626. The Legislature was dissolved and a new general election held on November 25. There was some agitation and two members of the Local Government resigned; but the Ministry presided over by Hon. Mr. McBride was sustained by a very large majority. Hon. Mr. Dunsmuir, the Lieutenant-Governor, having resigned, his place was filled by Hon. T. W. Patterson.

III. NEWFOUNDLAND.

(The

The most important part of the history of the year concerns the preparations for reference to the Hague Tribunal of the long-standing Fisheries dispute with the United States. (ANNUAL REGISTER, 1905, p. 471; 1906, p. 463; 1907, p. 462; 1908, p. 457.) The terms of reference were embodied in an Agreement presented to the Imperial Parliament in February, and concluded January 27, 1909, under the Anglo-American Arbitration Treaty of 1908. Five questions were submitted to the Tribunal as to the scope and meaning of Article I. of the Treaty of 1818. In substance these were: (1) How far is the liberty of American citizens to take fish on the coasts specified in the treaty subject to reasonable municipal regulation by Great Britain, Canada, or Newfoundland? contention of the United States was that such regulation was admissible only for the protection of the fisheries, and provided that it was fair as between local and American fishermen, and was concurred in by the United States.) (2) Might persons not citizens of the United States be employed as members of American fishing crews? (The Americans had endeavoured to escape from the operation of local legislation by employing Newfoundlanders.) (3) Could the American vessels be required to report at Custom houses or pay harbour or other dues, without the consent of the United States? (4) Could the admission of these vessels be made conditional on such report or payment? (5) From whence must be measured the limit of three marine miles from the coast within which, under the Treaty of 1818, the Americans had no right to fish? (6) Had the United States fishermen the liberty under the Treaty to take fish within the bays, harbours, and creeks on the coast in question? (7) Had they the commercial privileges on the Treaty coasts accorded to other United States trading vessels? (These questions referred to their right to catch or purchase bait.) The procedure was laid down, and the Tribunal was to decide within two months from the close of the arguments, unless the period was extended by agreement of the parties on its request. It was announced later that the Tribunal would be composed of Dr. Lammasch, Austro-Hungarian member of the Permanent Hague Tribunal, as umpire, and Messrs. Drago (Argentina), Savornin Lohman (Netherlands), Judge George Gray (U.S.A.), and Sir Charles Fitzpatrick, Chief Justice of Canada, representing Great Britain.

Politically the year opened with a deadlock. The elections of the previous autumn had divided the House of Assembly of thirty-six members equally between the followers of Sir Robert Bond and Sir Edward Morris. Sir Robert Bond resigned office in February and Sir Edward Morris succeeded him. The new Ministry was composed entirely of native-born Newfoundlanders, a circumstance unprecedented in the history of the Colony. But the depression in the fishing industry made it undesirable again to disturb business, and the expected absence of many voters at the seal fishery in March and April and the cod fishery in the summer caused a difficulty in finding time for a fresh election. However, an attempt to arrange for a Coalition Government proved impracticable. Parliament was dissolved by the Governor, Sir William Macgregor, whose action, though severely criticised by Sir Robert Bond's followers, was endorsed by the Colonial Office, and the new elections were held on May 8. They were fought with great bitterness, Sir Robert Bond charging the Ministry with planning confederation with Canada. The result was a triumph for the Government, who held their fifteen seats and won eight more.

The new Legislature was opened by the Governor on June 1. His speech mentioned the reference of the Fisheries dispute to the Hague Tribunal and of the Labrador boundary dispute to the Privy Council. The Ministerial programme included a vigorous promotion of the economic interests of the island; increased wireless and other telegraphic facilities for the benefit of the fishing fleets; tariff revision, increased grants for education, measures to stop tuberculosis, railway extension, improved steamer services, and the eventual establishment of old-age pensions after full investigation. The Budget was presented on June 8. The year 1907-8 had closed with a surplus of $43,000. For 1908-9, owing to the deadlock following the general election of 1908, there was an estimated deficit of $155,000 on capital account, which it was proposed to add to the debt, applying the surplus from 1907-8 to cover the cost of the general election of 1909. For the year 1909-10 the estimated revenue was $3,000,000, and the estimated surplus $28,000. The whole of the Votes in Supply were passed after two brief sittings, an event unprecedented in the history of the Colony. The legislature was prorogued on June 12. At the end of June the Governor, Sir William Macgregor, left to take up the Governorship of Queensland; Sir Ralph Williams, late Governor of the Windward Islands, succeeding him.

Perhaps the most significant event of the year was the opening of the paper mills of the Anglo-Newfoundland Development Company at Grand Falls on October 8. The company, which was closely connected with the Amalgamated Press and other enterprises in Great Britain in which Lord Northcliffe was understood to be largely interested, had built large works and a model town at Grand Falls, 270 miles from the capital.

The celebration occupied two days, and was inaugurated by a speech from the new Governor. Other paper companies were established or projected, and it was hoped that a great impulse would be given to the development of the island in this and other ways. In an interesting statement published in the Times of September 2. the new Premier mentioned that the trade and revenue of the island had doubled in ten years, and drew attention to the development of the tourist traffic and the resources of the island in minerals and mineral oil. He noticed also that Newfoundland had 1,000 trained naval reservists ready to serve in the British fleet, and promised that she would do her part in the naval defence of the Empire.

The fisheries suffered from the fall in the price of cod, and to some extent from the appearance on the Banks of a number of French steam trawlers, which were believed to be likely to injure the breeding-grounds of the fish, and which frequently destroyed the nets of other vessels. One of them, for this reason, was fired on by an American fishing vessel, and a seaman of one, who boasted of the damage done by his craft, was shot by a French owner of sailing trawlers at St. Pierre. It was expected that the question of prohibiting steam trawling would be referred to an international conference. A new fishing bank in the Gulf of St. Lawrence was discovered during the year by an Admiralty steamer. The modus vivendi of 1908 with the United States as to the herring fishery was renewed, pending the arbitration at the Hague. The seal catch was reported as of the value of $458,000, an advance of $56,475 on the catch of 1908.

The total value of the exports for the fiscal year ending June 30, 1909, was $10,848,913, of which $10,705,757 was the produce of Newfoundland. Of this latter account $1,400,204 went to the United Kingdom, $1,469,807 to Canada, $436,674 to the British West Indies, $1,719,082 to Brazil, $1,448,163 to Italy, $1,590,184 to Portugal, $986,641 to Spain, and $810,041 to the United States. The exports to Italy and Portugal mainly, and to Brazil entirely, consisted of dried or salted cod. For the same period the total value of the imports was $11,402,337, of which $2,493,670 represented those from the United Kingdom, $4,232,680 from the United States, and $3,987,009 from Canada. The Customs duties produced a revenue of $2,390,967.

The Commercial Cable Company of the United States, which since 1905 had had connexion with the land lines of the Government via Port-aux-Basques and Canso (ANNUAL REGISTER, 1905, p. 471), connected St. John's directly with Europe, under agreement with the Bond Ministry. The Morris Ministry, however, made difficulties as to ratification, and a settlement had not been announced at the close of the year.

IV. MEXICO AND CENTRAL AMERICA.

[This and the subsequent sections of this Chapter are by H. WHAtes.]

Under the statesmanlike rule of President Porfirio Diaz and the financial ability of Señor Limantour, Mexico continues to enjoy peace and security. Señor Limantour's estimate of the revenue from July, 1909, to June 30, 1910, was 9,726,1007. and expenditure 9,693,540l.—a surplus of 32,5601. The figures were passed on the expectation that the recovery from the effects of the Mexican financial crisis of 1907 might not be complete. The burden of the Finance Minister's observations under this head was that though the crisis had brought a partial paralysis of business the country had well withstood the strain; and he contrasted the sudden and, to many, ruinous effects of the crash in the United States with the absence of panic and commotion in Mexico, an absence which proved the business stability of the Republic. No new taxes were proposed in the Budget, and various economies in the departments were outlined. The Budget statement is exhaustively summarised in a Report by Mr. Ronald Macleay, the First Secretary to H.M. Legation. The total public debt on June 30, 1908, was 44,156,4721.-gold debt 30,736,2631.; silver 13,373,6891.; unfunded 46,5221. June 30, 1907, the total was 44,453,6791. (The figure given in last year's review was a clerical error.) The total value of the imports for 1907-8 was 23,222,9571. and exports 24,274,0201. The gold production for 1907-8 was of the value of 3,809,6651. and silver 8,544,6891. There was a heavy fall in the value of silver owing to the large stocks in the European and American markets and the fact that events in India and China, such as bad harvests, floods and epidemics, had compelled Asia to make heavy sales of the metal.

On

For the first time for many years there were signs of opposition to the autocratic rule of President Diaz. Don Ramon Corral, the official candidate for the Vice-Presidency, was unpopular with certain classes. as being "an Americanised Mexican"; and, at the end of July, a demonstration in his favour at Guadalajara, the capital of Jalisco, led to a counterdemonstration, which ended in a riot, in favour of General Bernardo Reyes, Governor of Nuevo Leon. General Reyes himself, however, professed thorough loyalty to President Diaz, who, in his message of September 16, welcomed the political awakening of the country, but stated that energetic measures would be taken to ensure order. Ultimately, General Reyes accepted a special mission to study the various military systems of Europe, and President Diaz and Don Ramon Corral were respectively elected President and Vice-President for the period 1910-1916. President Diaz's age-seventy-nine-gave special significance to the selection of Vice-President. The official view was that General Reyes was put forward, rather against his own

will, as a protest against the virtual dictatorship of President Diaz. The latter met President Taft on October 16 (p. 436).

An earthquake occurred in Mexico City and other places on the morning of July 30, and the shocks were renewed at intervals. In the capital the loss of life was slight and the damage inconsiderable, but at Acapulco few houses withstood the disturbance and the deaths were said to be numerous. In August disastrous floods occurred in the north, part of the town of Monterey being swept away, with a loss of life officially estimated at 3,800. The population of Monterey was 70,000, and the inhabitants on the south bank of the Santa Caterina were swept from the roofs of their adobe dwellings in such numbers that 800 bodies were recovered when the flood subsided. Twenty thousand people were rendered homeless, and the loss of property was put at 6,000,000l.

President Estrada Cabrera's Message to the Congress of Guatemala in April gave the revenue for 1908 as $37,335,957, the surplus being nearly $10,000,000. Agriculture was flourishing and much progress had been made in means of communication. He foreshadowed a reduction on military charges, the saving to be applied to economic development. In August it was announced that New York financiers were arranging to refund the State debt. The Los Altos Railway, opening up the western and central parts of the Republic, and eventually destined to connect them by extensions with Salvador and Puerto Barrios, had been begun in November, 1908. A new immigration law was promulgated, with a liberal provision of land to intending settlers.

An agreement was arranged in July by which in return for a loan of 3,000,000l. the finances of Costa Rica are to be con

trolled by a New York group of financiers. The proposed settlement of the debt, however, was negatived by Congress. This body in May ratified the Arbitration Convention with the United States. The value of the trade of 1908 was 2,754,93871. The country owes its comparative progress to the banana trade with the United States. The population is now 360,000. The production of cocoa was increasing, and was being encouraged by the Government.

Salvador was to be brought within seventeen days of London by a service of steamers started by the Salvador Railway Company between Acajutla and Salina Cruz, the Pacific terminals of the Tehuantepec Railway, which was inaugurated in November. The Budget for 1909-10 showed an estimated revenue of $4,127,600, and an expenditure of $4,148,000, leaving a deficit of $21,200. More than half the revenue was furnished by Customs duties. The deficit was due mainly to a decline in the coffee crop for 1908.

On January 20, in accordance with the Convention of Washington of December 20, 1907, a conference of delegates from the five Central American Republics met at Tegucigalpa,

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