this. Fortunately he happened on the honey-dealer, who was friendly to the foreign Lords for buying all his honey. Besides, he was a Mahomedan and therefore delighted at the chance of vexing a monk. For a week,' he said, 'you need not so greatly fear: but after thatHeaven help you!' Whereupon the monk, with no more words, gathered up his purple skirts and fled precipitately homeward over the hills.

The expedition into Thibet was reported a success. Back came the troops in triumph, making the most strangely anachronistic effect as they marched through the streets. Minor alarums and excursions now succeeded; some went, more came. Nobody knew what was to happen next, and the Military Mandarin was as much in the dark as his meanest coolie, according to that immemorial separatist spirit of Chinese officialism, which preserves the most absolute secrecy between different departments, though matters of state debated in the open Yamen became property of the listening street immediately. So came and went the forces, but no news either went or came. For two months the city sat in utter isolation, as if in the most rigid siege. Not a soul dared venture out upon the roads, and not a soul came in from outside to tell of what was going on in Kansu. The silence, at last, grew terribly ominous; not even the oil-men came down from Minchow with their wattled jars, and not a postman for many a week had been heard upon his tinkling journey over the desolate and empty highways. There was a stillness of death abroad; the Subprefectural City seemed alone to live, a strange suspended life in the void of a dead world. All attempts at re-establishing communications failed; emissaries from either Yamen, despatched to Minchow under pain of heavy beating, either flatly refused to stir, whether beaten or no, or else trotted forth with obedient alacrity, only to spend a few days resting in some village just beyond the walls, and then return with a story of impassable roads.

So weeks went by, and, at last, news began to come. A stray mail, long belated, fluttered in from England, hinting at strange doings, pale and remote, yet, like all mails, telling nothing, and leaving the reader more in the dark than ever. It had gone circling the round of the

sacked cities, and so in the end came safe to hand, according to the unalterable fidelity of the Chinese Post Office. But, even more important, soon came letters from the north, and at last we learned of the Hell that had raged through Kansu in May and June, while we and the Subprefectural City alone lay safe and whole, beyond even the remotest sound of the storm. We learned the looting of Minchow; and hardly had we read of it, than the bloody tale turned white in comparison with the ghastly fate of Taochow. Yet now the coast was clear; the Wolves were gone in disorder; the Thibetans were in a state of comparative calm. Accordingly, not without a sadness in leaving the quiet little town that had been to us so kindly and opportune a harbour through a time of storm and peril unrealised, we obeyed at last the insistent call of the great northern mountains which so long had kept us fluttering on the chain, ungratefully chafing against the tediousness of our enforced sojourn in the Subprefectural City. But the channels were reopening, the air clearing; it was time to be gone, if we wanted to catch the skirts of early summer on the high Alps, whither she had long retreated. So with affectionate farewells to my Lords Jang and Jo, we set forth at last on our way, making northward in the blasted trail of the Wolves. No sure news of the outer world was yet to hand, but there were at least rumours of international troops now coming to take charge of China-dead gossip long ere this at home; lying gossip too, very likely. And then last of all, perhaps as true, perhaps as false, or only premature, the night before we left, Jo Dâ-ren came privately to our room and told us in whispers of an official letter just received from Lanchow, and it was couched in the style and formula of the Emperors of China! Under that silent night in the Yamen yard, the vast and awful shadow of the Dragon Throne seemed to take shape once more and fill the world. Not long had its majesty lingered in the lumberroom of history.

REGINALD FARRER.

Art. 3.-THE ECONOMIC CONDITION OF ENEMY COUNTRIES.

IN surveying the financial and economic position of enemy countries, the wish is apt to become father to the thought. In spite of every desire to be judicial and to avoid the pitfalls of patriotic partiality, it is difficult to escape completely from the temptations of national bias. As 'all is yellow to the jaundiced eye,' so are the figures of German or Austrian or Turkish trade and finance liable to be distorted by their enemies into evidences of imminent disaster. This one-sided view and its attendant exaggeration are much to be deprecated. Nothing is gained by painting the devil blacker than he really is. It is much more serviceable in the long run to look at an opponent's position with an eye to his strength as well as to his weakness. We can adopt this binocular method with the less reluctance because even the fair and moderate view need not cause us the least misgiving.

But while deprecating trop de zèle on our side, we are bound to add that it needs discountenancing far more in Germany. Germany is remarkably anxious to make it known that there's nothing rotten in the State. But the official attempts to 'make the worse appear the better cause' are almost childishly transparent. It is difficult to decide whether the Imperial Chancellor, the 'Cologne Gazette,' and the Vice-president of the Reichsbank, all of whom have insisted so loudly on the strength of Germany's economic position, are engaged in a pre-arranged game of bluff, or are the victims of a portentous self-delusion. A really impartial view of the situation is entirely at variance with German official optimism, whether real or assumed. It would almost seem as if deceptive boasts, similar to those which have characterised the Berlin Press bureau, were being used in the home campaign in order to hearten the German taxpayer for the heavy pecuniary sacrifices that lie before him. The only alternative theory is, that those who ought to know the real position are in such a state of ignorance that they cannot distinguish favourable from unfavourable factors, and so read into a superficial prosperity the signs of unassailable stability.

On no other assumptions can the boastings of the

Cologne Gazette' be explained. In one number it published fabulous statistics of German national wealth and a panegyric of Germany's fiscal policy. In another number it reported at great length a lecture purporting to show that Germany is much more prosperous than England. In a third number a long semi-official telegram from Berlin insisted upon the wonderful harmony between Germany and Austria, the success of the Austrian loan, the confidence expressed by German personages of all sorts, and the fact that there was a temporary improvement in the statistics of unemployment. At a meeting of the central committee of the Imperial Bank not long ago, the vice-president asserted that not only the German money market but the general economic situation in Germany had shown thoroughly satisfactory development. It is noteworthy, too, that the speakers at several company meetings claimed that the mining industry, as a whole, is producing to the extent of about 50 or 60 per cent. of the normal output.

It may be admitted that Germany escaped the full force of the great financial crisis which broke upon England when war was declared; but one not very creditable reason for this comparative immunity was that she owed us many millions sterling on trade account which she has omitted to pay, and which form part of that 'prosperity' of which she has lately been boasting. It is easy to make a pretence of solvency when you are jingling other people's money in your pockets. The quasi-panic in London was largely the product of German financial intrigue. The dumping of securities on our Stock Exchange, the discounting of German bills at the London banks, and the secret removals of gold before the declaration of war, were all part of the elaborate mechanism by which Germany hoped to smash our credit. She avoided for the moment some of the emergency expedients that had to be adopted here. The German Government, for instance, was not forced to guarantee the payment of foreign acceptances, for the simple reason that the balance of indebtedness was very largely and of malice aforethought on Germany's side. Nor was a moratorium resorted to; and much has been made of the fact. But at the beginning of the war the restrictions covering the issue of notes by the Reichsbank

were suspended-a measure which had much the same effect as the suspension of the Bank Charter Act would have had in England. All banks were relieved of the necessity to pay in gold. Although gold imports were made impossible by the closing of the seas to German shipping, yet for a couple of years previously active preparations had been going on with a view to husbanding and increasing the stock of gold in the country.

It is not, however, by the immediate consequences of a war crisis, but by its effects in the long run, that the strain of endurance must be tested. It is too early yet to look for the more serious results of economic pressure in Germany. The great cities, if far from normal, are at any rate not suffering from any close menace of privation. Six or eight months are, of course, no adequate test of the endurance of a rich and determined nation; and it would be foolish to deny to Germany either of these qualities. To a considerable extent, in Germany as in England, the lack of work caused by the war in many branches of trade has been balanced by increased activity in others, bringing down the percentage of unemployment. The manufacture of guns, ammunition, military equipment, airships, and war vessels is going on at the highest possible speed. Although many of the working classes are protected against the pinch of unemployment and even able to earn good wages, this abnormal production does not dispose of the growing feeling of anxiety with regard to trades which are not benefited by the war. The food question depends very much upon the extent of the supplies obtained from or through neutral countries. Germany, at the beginning of the war, had large stores of foodstuffs; and, although there is evident fear of a shortage of wheat, as shown by the official decree for the Government control of the corn supplies and for the strict regulation of the sale of bread, commodities generally are not yet so much above the ordinary level of prices as to suggest the immediate approach of famine. Every day, however, makes the position worse. The food supplies, with a few exceptions, are not being replenished as fast as they are being used. In another six or eight months the outlook will have become graver, and the problem of feeding the people much more difficult.