they had obtained a strong hold, but at Royton, near Manchester, a considerable amount of damage was done. On the night of February 19 fire gangs were again at work in Lancashire and Cheshire. The attacks in this case were not aimed at industrial works, as they had been at Manchester, but at farms, and a large quantity of produce was destroyed. In all there were ten outbreaks, and the total damage was estimated at between 15,000l. and 20,000l. In one case a farmer disturbed two men who were about to set fire to his barn, and they fired six shots at him without effect.

In view of the trade depression it was natural that questions of finance and taxation should occupy much public attention, and universal satisfaction was expressed when Mr. Austen Chamberlain, the Chancellor of the Exchequer, speaking at Birmingham on February 3, stated that he saw his way not only to abolish the Excess Profits Duty but also to dispense with any new taxes for the coming financial year. He said that the Government had no intention of promoting a "rush election," for they had no reason to suppose that they had forfeited the confidence of their countrymen. The Excess Profits Duty was a war tax, but he admitted that conditions had changed and that it was hitting new businesses struggling to pay their way. He said that it had a tendency to encourage extravagance and restrict enterprise. Nothing could justify a renewal of the tax unless it were an absolute financial necessity, and the Government had come to the conclusion that they could afford not to renew the tax, and they did not intend to exact it after it had run its normal course. All businesses except those begun since the war would pay the tax for a period of seven years dating from their first accountancy period: for all new businesses the tax would cease as from December 31, 1920. The leaders of industry would thus know how they stood, and would be able to make their plans accordingly. Mr. Chamberlain said that he did not think that a Budget of 950,000,000l. was extravagant. To carry out pre-war services on a pre-war scale would require 500,000,000l. Allowing for interest on debt and payment of pensions a Budget was reached of nearly 950,000,000l. without allowing for redemption of debt.

The decision of the Government to abolish Excess Profits Duty was welcomed by the whole business world. A deputation consisting of the President of the Birmingham Chamber of Commerce and other business men congratulated Mr. Chamberlain on his announcement, and were informed by him that the Government had decided to remove all the controls on trade at the earliest practicable moment. Mr. Chamberlain spoke again at Birmingham on February 4 referring to the Paris Conference. He stated that at the close of the war the British Government had been ready to consider any proposal for total or partial remission of debt between the Allied Governments and Associated Powers. Such a proposal had in fact

been actually made, but it had not been accepted by the United States. This announcement caused a considerable sensation in New York, since the American public had never heard of the proposal referred to by Mr. Chamberlain. In point of fact the debt to the United States Government due within five years as at January 1, 1920, was 867,000,000l. Outstanding loans to Allies including Russia, France, Italy, Belgium, Serbia, Portugal, Rumania, Greece, and others amounted to 1,731,000,000l. Of this total Russia was responsible for 568,000,000l.

On February 5 the Prime Minister delivered three important speeches at Birmingham, the first in the Town Hall after receiving the Freedom of the City, the second at the University where the Honorary Degree of LL.D. was conferred on him, and the third at a dinner in the evening. At the Town Hall meeting Mr. Lloyd George dealt chiefly with the Paris Conference and the question of reparation from Germany. He said that the first condition of real peace, of real neighbourliness among nations, was that peace treaties should be respected. A challenged treaty was war in suspense; there could be no real peace without disarmament. The German military machine. must be broken up beyond repair. The fairest provinces in France had been invaded and ravished and she could not take any further risk of that happening again. Germany must not be allowed to pay the indemnity in a way that would inflict greater damage upon the country which received it than if it were paid nothing at all. If Germany were allowed to pay in cheap goods hundreds of thousands of workmen would be thrown out of employment in every country which received the indemnity. Mr. Lloyd George said that Germany could pay the bill presented to her if she had a mind to, but she had not yet taxed herself to the level of Great Britain and France. It was intolerable that she should escape with a lighter burden of taxation than the two countries which were the victims of her wanton attack. The whole German people were behind the war, and had they won they would have gladly shared the booty. The Allies were never more united than they were at present; their claim was a righteous one and must be enforced.

Later in the day the Prime Minister spoke more particularly of trade depression. He said that the country was going through the inevitable difficulties that follow a great war. What was the good of blaming the Government? Facts would not change by changing the Government. In Russia there was no Government at all; it was not Governments but facts which had to be dealt with. He admitted that the heavy burdens of the war were depressing industry, but he emphasised the fact that this was the only country absolutely paying its way at the present time. He called on the people to stand together. It was unity that brought about victory, and if capital and labour stood

together and men of all parties worked together the country would win through.

Sir Robert Horne at Sheffield on February 7 further emphasised the statements of the Prime Minister as regards German. reparations. He said that these reparations must not be in finished goods, but could take the form of raw materials. He believed that there were signs that trade would revive, but it was necessary first to liquidate the stocks which were held.

Mr. Lloyd George made another important speech on February 8 addressed to a meeting of the Executive Council of the Welsh National Liberal Association at Westminster. He took the opportunity to make a general reply to criticisms of the Government in the Press and on the platform. Under normal political conditions, he said, he would have been addressing meetings in the country stating his own case and answering his critics, but things were not normal and he was obliged to let criticism go on. All he could do was to trust to the loyalty, good faith, and good sense of his fellow-countrymen. For Welsh Liberalism there were two courses open: it could stand by national unity or it could revive old party factions. The world, he said, was reeling under the most terrible blow that it had ever been dealt; how could it recover in two years? Could anyone say that the danger was past? He wished to God some one could say so because it worried him and sometimes filled him with dread. If some one in authority could tell him the danger was over he would resign forthwith, but the danger was not over. He was told in the Press that there was going to be a General Election; the Press told him not merely what he had done, but what he was going to do for the next six months. If there were a General Election would any Independent Liberal dare to predict that Mr. Asquith would have a hundred followers? If the Government were turned out by a combination of the friends of Mr. Asquith, Lord Northcliffe, Colonel Page Croft, and Lord Robert Cecil, what issue was there where Liberalism and he were at variance? The denunciation of the Government by the Independent Liberals meant that while the nation was in great difficulties they would not help but would only criticise. It was the surest way to annihilate Liberalism, to damn Liberalism for ever. Forty millions of people in Britain would see that any party which did not do its best to help when the old country was in trouble had no future.

The problem of economy was dealt with by Mr. Winston Churchill in the Army Council Chamber on February 14, when he met the principal officers of the War Office and bade them a formal farewell on his appointment as Secretary of State for the Colonies. Mr. Churchill took the opportunity to review the work of the War Office during the preceding two years, and pointed out that the main cause of the extra expense to the British Army was the extra commitments which had been placed on this country by the Supreme Council of the Allies.

He said that he had been entrusted with the formation of the new Middle Eastern department, and that he proposed in a few months to come to the House of Commons and by a vote, for which he would take responsibility, to relieve the Army Votes of the vague and formidable charges with which they were now burdened in consequence of these commitments. He hoped also to reduce the burdens of the taxpayer by bringing these regions into a less extravagant condition. He congratulated his audience on the successful demobilisation of the old Army and the recreation by voluntary enlistment in the nick of time of a force which, though still inferior in physique, in training, and in interior economy to the pre-war Army, had filled the gap.

Mr. Churchill went on to observe that if they had stopped to make new model armies, they could not have had the troops on the spot when and where they were needed. They had carried through the greatest accretion of pay that the British Army had ever received. Owing largely to the work of General Harington the Army education scheme had been established, and sport in the Army stood very high at the present time. The Territorial Army would probably number very nearly 100,000 men by the end of the financial year, and the corner was turned. He had hoped during the coming year to have every establishment reviewed and to make strong efforts to get back to the high standard of economy of the old Army. They had not yet been able to form any of the reserves which were vital to the mobilisation of the Army. Economies and reductions in the number of men serving with the Colours, which were to be hoped for in the future, could not be carried out fully until the reserve system had been more thoroughly advanced.

The new session of Parliament was opened on February 15 by the King who was accompanied by the Queen. The King's speech referred to the Conferences which were to be held in London attended by our Allies in the late war, and also by representatives of Germany and Turkey, and expressed the hope that by this means further progress would be made in giving effect to the treaties of peace and re-establishing concord in Europe. Referring to Ireland the speech condemned that misguided section of the Irish people which persisted in resorting to methods of criminal violence with the object of establishing an independent republic. Neither Irish unity nor Irish selfgovernment could be attained by this means. In view of the onerous programme of legislation entered upon the previous year it was the intention of Ministers to lighten as far as possible the business of the coming session. The most pressing problem before the country was that of unemployment, consequent upon a world-wide restriction of trade, and this might be alleviated-though it could not be cured-by legislative means. A Bill was to be introduced extending the provision made for the unemployed under the Unemployment Insurance Act.

Another measure would deal with the safeguarding of essential key industries of the country, and with certain aspects of unfair and abnormal industrial competition.

Reference was made in the King's speech to the forthcoming removal of control over the home price and export quantities of coal, which was to be followed at the earliest possible moment by the complete restoration of the industry to its normal condition of freedom. A Bill was to be introduced for the reorganisation of the railways of Great Britain, and another for completion of land purchase in Ireland and also for facilitating Church Union in Scotland. The sale of alcoholic liquor was to be dealt with in the light of the experience gained during the war. Finally, the King's speech expressed the hope that the work of the Committee then examining the question of the reform of the Second Chamber would be finished in time to permit of proposals being submitted to Parliament during the course of the session.

In the debate on the address in the House of Commons Mr. Lloyd George spoke of the recent Allied Conference held in Paris, and of the coming revision of the Sèvres Treaty, and described the very satisfactory progress made in Ireland towards the restoration of law and order. An amendment moved by Major-General Sir J. H. Davidson expressed regret that the King's speech contained no reference to the very urgent need for co-ordinating the problems and tasks of the Navy, Army, and Air Force for purposes of defence of the Empire as a whole and for the establishment of machinery to give effect to it. This amendment, however, was withdrawn, and on the following day Mr. Clynes moved an amendment regretting that, in view of the serious distress consequent on unemployment, and the lack of preparedness on the part of the Government to deal with the situation, there was no mention of legislation recognising the right of the genuine unemployed to work for adequate maintenance. Dr. Macnamara in reply pointed out that the Ministry of Transport had already found road-making work for 35,000 additional men, and the Ministry of Health had expedited sewerage schemes involving 5,000,000l. Moreover, where possible alternative work had been provided in Government factories. Mr. Barnes also spoke on the causes of unemployment.

The debate was carried forward to February 17 when Sir Donald Maclean declared that a maintenance grant of 18s. a week was not enough to keep the unemployed as assets of the State which would at the earliest opportunity become once again productive assets. Sir M. Barlow considered that the Unemployment Insurance Act which the Government had introduced in the spring of 1920 had proved a sheet anchor in these troubles. Later on, Mr. Lloyd George pointed out that thirteen years before, when the last great wave of unemployment came over the country, there had been no provision for the unemployed. To-day 12,000,000 people would be insured for 18s. a