NEWS OF THE WEEK.

PRESIDENT McKINLEY sent his annual Message to Congress on the 6th inst.,—an exceedingly wordy docu- ment filling more than ten columns of type, and conclusive only on one point, that the writer recommends the annexation of Hawaii. He considers the currency the most pressing question for the United States, but proposes no definite course. He hopes that, although negotiations with Great Britain about silver have failed, negotiations with other Governments may succeed, but holds that "the evil of the present system is found in the great cost to the Government of maintaining on the parity of gold the different forms of money." He therefore recommends that when the receipts suffice to pay the expenses of the Government, " United States notes when redeemed shall only be paid out in exchange for gold," his idea being to prevent the depletion of the stock of that metal. " The Government should be relieved of the burden of providing the gold required for exchanges and export." This is satisfactory to sound financiers, and would, if carried out, make gold the real standard ; but as it is made dependent upon the re-establishment of a Budget equilibrium it has absolutely no meaning unless fresh taxation is imposed, the present deficit amounting to £1,800,000 a month. The present system, under which enormous sums in paper purchased with silver may sud- denly be presented at the Treasury for gold, and the Government compelled to buy the gold with interest- bearing bonds, is, therefore, to continue indefinitely, the Senate refusing to remedy the deficit until silver is restored to its old ratio of fifteen to one. Mr. McKinley, in truth, has not the political nerve to take an initiative either for gold or silver.

The President's Message about Cuba is almost equally vague. He believes, apparently, that heaven has instituted a special code of morality for the United States, and says that " by our code of morality annexation would be a criminal aggression," which is considered in Spain very satisfactory. But he also says that General Weyler's policy was " not civilised warfare but extermination," that his • " brutal orders inflamed the American mind and shocked the civilised world," and that although time must be given to Spain to carry out her new professions, "the sincerity of which I will not impugn," indefinite time cannot be conceded. A recognition of belligerency would do little good now, but " should that step hereafter be deemed wise, as a matter of right and duty the Executive will take it." The President, in fact, throughout treats Spain as an inferior Power, and though the Cabinet of Madrid affects to treat his assurances as sufficient, the people are irritated, and the Carlists found new hopes upon the irritation. It is difficult, indeed, to see in the Message any indication that the Union is under strong guidance, or that its Executive has any 1 olicy except

to wait for manifestations of popular opinion. It is believed that Congress will express a strong opinion in favour of in- terference in Cuba, the Senate in particular being determined that the President shall not be " dictator " on all questions of foreign policy. The Constitution leaves it a veto in such matters, but it is resolved to claim at least a share in the initiative.

The new Premier of Cisleitban Austria, Baron Gantsch, has not as yet achieved any success. He has restored order in Prague and other towns of Bohemia, where disturbances had assumed alarming proportions, by filling them with troops, who are reported to have acted with great severity. Rioters, if not sabred on the spot, are in fact sent before military Tribunals, which condemn them at once either to death or rigorous im- prisonment, and external order has therefore been restored. The Germans in Parliament refuse, however, all compro- mise unless the decree about languages is rescinded, and the time for a renewal of the Ausgleich with Hungary has expired. The Hungarian Parliament has therefore been asked to grant a six months' extension, which will be met, if passed, on the Austrian side by an emergency decree of the Emperor, which is, it is maintained, constitutional. Herr Kossuth's party in Buda Pesth, however, threaten to obstruct any such Bill, and if they succeed in retarding it the two halves of the Monarchy will constitute separate. kingdoms. A modus Tiventli will doubtless be found, as the Army is obedient and the Emperor powerful over opinion ; but it should be noticed that the Slays everywhere are savage with the North Germans, and suspect them of willingness to break up the Empire. The danger is clearly not over, and the policy which Count Goluchowski will press upon his master is not known.

The German Emperor is evidently quite serious in his designs on China. Not only has he " staked his only brother," a fact of which he is evidently proud, and called for volunteers from the Army to swell the force of Marines in the Far East, but he has made some underground arrangement with Russia. He originally, as we all know, claimed and occu- pied Kiao-chow in the Shantung Peninsula, but this arrange- ment carried him so far north that it displeased the Asiatic Department of the Russian Foreign Office,—which, in practice, is as independent as our India Office. A hint was given, and it is now affirmed that the Emperor is to leave Kiao-chow, but is to receive, besides his indemnities, his cathedral, and the rest of the things he has asked for, the inlet of Samsah in the province of Fuhkien, which is sheltered by islands at its mouth, just fitted for Krupp batteries, and will be an admirable base for dominance over the coast of Central China. It is not quite south enough to interfere with us, but it is a formidable menace to Formosa. The Emperor, therefore, triumphs all along the line, though there is a possible danger ahead of him, and of Europe generally, which we have endeavoured to point out elsewhere, and which is in no way diminished, if the danger proves real, by the change of base.

The German Emperor is really very clever, and knows his people a good deal better than newspaper correspondents do. His adroitness in dictating terms to Hayti and China, both feeble Powers against which he had a case just at the moment when his Naval Bill was under discussion, has developed such a fever of patriotism, that the Bill will probably pass. The Catholics of the Centre, whose vote is indis- pensable to defeat it, are obviously shaky, and the moderate Radicals are afraid of their constituents. The Centre men have been bribed, some say, by a promise of the readmission of the Jesuits; but Catholic Bishops do not love Jesuits, and it is more probable that a hint has been given from Rome, where the Propaganda Fathers are in ecstasy at the prompt

protection accorded to their Mission. The Radicals, like the Conservatives, have a sweet tooth for empire, though they fear taxation; and Herr Richter, though his speech of Taesday against absolutism was a success, talks over the head of the village voter. The Emperor, it seems clear, will have his way, and will probably now think of something new ; perhaps purchase Patagonia, which is fall of minerals and rather far off for Washington to shelter it under the Monroe doctrine. We congratulate France, which gains a fresh respite with every development of her enemy's tratusmarine activity.

The Dreyfus case has been brought forward formally in both the French Chambers, and in both the Government has taken up the same attitude. "There is," the Ministry declares, "no Dreyfus case." In other words, the Ministers, who, of course, know all the withheld facts, declare that the accused officer was guilty, and that they could prove it to all men's satisfaction but for certain patriotic considerations,—a state- ment which we observe with interest was repeated to an agent of the Pall Mall Gazette by M. Goron, who at the time of the trial was at the head of the Detective Department in Paris. General Billot, the Minister of War, who has, of course, made a special examination of all the facts, went the length of saying in the Chamber, "On my soul and conscience as a soldier, and as head of the Army, I consider Dreyfus guilty." The Chamber, deeply impressed, adopted by 484 votes to 18 an Order of the Day declaring that it " respected the authority of a judgment delivered." The declarations were repeated by the Government in the Senate, where, how- ever, debate turned principally on the side - issue of M. Scheurer-Kestner's good faith in regard to some documents which he had shown to a Minister but had not read to him, and the Senate unanimously voted approval. These votes ought to end the scandal, but it will rage again round the trial of Major Esterhazy, whom General Billot evidently thinks guilty of an offence—Use patrie apparently—but not of M. Dreyfus's treason.

The interesting point for foreigners, the reason for the official refusal to publish the document which really secured the verdict against Captain Dreyfus, is not cleared up. No one denies the existence of this document, and it is remark- able that of the many Frenchmen to whom it has been shown no one doubts that its total suppression is indispensable for political reasons. What, then, is the danger foreseen P There is absolutely no evidence, except the unanimity of Frenchmen, to justify such a suggestion, but it is curious that there is one—nearly impossible, but not quite—which would explain all the facts together. Suppose, for a moment, that Dreyfus is guilty, but that he sold his information not to Germany, but to Russia. That Power might very well want to know accurately whether France was really preparing or war; yet to say that her agents bought Dreyfus might cause an explosion of French feeling which would dissolve the Alliance and place France in the greatest danger. The necessity, therefore, of secrecy as to Captain Dreyfus's actual crime would be acknowledged by every Frenchman. The whole story is a curious bit of evidence that diplomacy may still conceal, and conceal successfully, great secrets.

We publish elsewhere an account of the present position of Italian politics which will, we believe, give our readers some enlightenment. The keys to the present confusion in that country are, we believe, that the Radical party can hardly govern without reversing foreign policy and quarrelling with the Monarchy; that the Conservative party cannot govern securely while the mass of clerical Conservatives stand sullenly aloof; and that the taxation, partly from waste and partly from corruption in collecting the revenue, is far too heavy. If good finance could be securely established, the interest on the Debt could be lowered by 25 per cent., and Italy made visibly a solvent State. There is a possibility that an entirely new man, Signor Prinetti, whom the Premier has just allowed to resign the portfolio of Public Works, as being too honest to be borne, sees this position, and sees, too, that a modus vivendi between the Clericals and the Con- servatives, though impossible for the moment, may in a not distant future become practicable. The Italian people, as a people, are wanting no party, but to be wisely governed.

The Birmingham. Daily Post of Thursday publishes a startling rumour of Cabinet changes. Lord Elgin is to come home and be replaced in the Indian Viceroyalty by Lord George Hamilton ; while Lord Lansdowne is to go to the India Office. This leaves the War Office want, and that post is to be filled by "a man specially. skilled in business concerns," owing to the need for a thorough reorganisation of both the War Office and Horse Guards on business lines. We wish we could believe that this pointed to the assumption by Mr. Chamberlain of the duties of Secretary of State for War. We do not deny that Mr. Chamberlain has done excellent work at the Colonial Office, and that the presence of his vigilant and vigorous personality there has been most useful. At the same time, we feel that the state of the Army is the vital problem of the day, and we should like to see the matter taken in hand by a Minister of courage and deter- mination, and a Minister who knows how to handle men and can speak with the authority and prestige which alone can overawe the helpless officialism of the War Office. Mr. Chamberlain might really give us a sound Army, not merely patch up an unsound one. We fear, however, the rumour ia too good to be true; nor can we deny Mr. Chamberlain the right to stay in an office the work of which interests him keenly. Still, to give the nation an efficient Army would be a great and patriotic work; and unless either Mr. Balfour or Mr. Chamberlain goes to the War Office we shall have nothing but cobbler's work.

At a meeting of the General Committee of the National Liberal Federation—the Liberal party " machine "—held at Derby on Tuesday, first manhood suffrage and then female suffrage was adopted as the chief plank in the party plat- form. We have dealt elsewhere with the effects that the Derby programme is likely to have on the party—effects, it we mistake not, even more disastrous than those produced by its Newcastle predecessor—and will only point out here that the declaration in favour of universal suffrage—i.e., the vote for all adult men and all adult women—is not one which can be ignored or represented as of no importance. The National Liberal Federation is the official organ of the party. and, what is more, of the rank-and-file of the party, awa not, like the Whips' office, the mere bureau of the leaders, or like the National Liberal Club, a social caucus. As we have said elsewhere, the new departure will not only greatly annoy and embarrass Sir William Harcourt and most of his Front Bench colleagues, but will enrage the Irish. It also drive a large section of the Liberal voters into mutiny. These facts will necessitate its withdrawal. But withdrawal will send the women's suffrage people into a fury. From the party point of view the thing is a terrible mess, and ought never to have happened. Clearly the Home-rale party wants another Schnadhorst.

The War Office is like a glacier. It does move, though very slowly. Evidence of this fact is to be found in the speech delivered by Lord Lansdowne in Edinburgh on Thursday. With Lord Lansdowne's defence of the status quo we will not deal, for he virtually admitted that it will have to give way to new arrangenients. He is going to consider what force we want for India and the Colonies, and what for home use, and see that,we get it, for we have not got it now. In order to get this, he proposes to do two things,—to alter the organi- sation of the Army, and to change the conditions of service for the soldier. Instead of the battalions being grouped into twos they are to be grouped in fours after the manner of the Rifles and the Rifle Brigade. We refrain from comment on this proposal till we see the plan in detail, though it looks perilously like a fresh assault on regimental esprit de corp. Next a certain number of Reserve men are to have extra pay, and to become liable for active service without a general calling out of the Reserve. They will, in fact, be soldiers on very long leave. Finally, when a battalion which should be at home is ordered abroad a depot battalion is to be formed. As to the terms of service, Lord Lansdowne pro- poses to take boys as boys, and with our eyes open,—that is, to enlist them as boys, return them as boys, and pay them as boys. That is excellent. Next, the stoppages are to be abolished, and the full private is to get his clear shilling a day. Then that curse of the system, deferred pay, is to be abolished, or at any rate greatly reduced; and men are to be allowed, if they like, to enlist for twenty.one years with the

eoloure. Elasticity of terms is, in fact, to be the order of the day, and an experiment is to be made in enlisting for 3 three years' trial of Army life. We cannot say that Lord Lansdowne promises all, or anything like all, that is neces- sary; but it is a great advance, and by next March we should not be surprised if the War Office had adopted all, or nearly all, Mr. Arnold-Forster's proposals.

Mr. Asquith, speaking at Glasgow on Monday, virtually withdrew the charge of breach of faith in regard to Chitral. Lord Balfour of Burleigh, speaking at Glasgow a few nights before—his speech was, practically, not reported in the London papers though it was a very able one—challenged Mr. Asquith to speak out on the accusation of bad faith. Mr. Asquith's reply was that he and his colleagues had not used the phrase to cast any imputation on the honour of Ministers. " It was not in that sense, it was not with, that object that Mr. John Morley and he and others had spoken of a breach of faith." In other words, the charge of breach of faith had been used in a purely Pickwickian sense. We trust that the matter will end here. The Opposition were most unwise to start so ridiculous a bare, and Mr. Asquith was well advised to suggest that the incident should-now close.

At York on Tuesday Lord Rosebery made a lively and amusing speech to the York Gimcracks, a sporting club. His advice to those about to go on the Turf was, " Don't." The apprenticeship is exceedingly expensive, the pursuit is too engrossing for any one with anything else to do, and the rewards, compared with the disappointments, "stand in the relation of, at the most, 1 per cent." Early in life Lord Rosebery determined to win the Derby. He won it after a quarter of a century's striving, with the result that he was attacked with the utmost violence for owning racehorses at all. "I then made the discovery, which came to me too late in life, that what was venial and innocent in the other officers of the Government—in the Secretary of State and the President of the Council — was criminal in the First Lord of the Treasury." After depicting his miseries as a racing Premier, Lord Rosebery gave a very charming quotation from Harriet, Lady Ashbarton's Memoirs :—" If I were to begin life again I should go on the Turf merely to get friends. They seem to me to be the only people who really hold together. I do not know why. It may be that each man knows something that would hang the other, but the effect is delightful and most peculiar." If that was the cause of Turf friendship, the effect, said Lord Rosebery, would be most peculiar ; but he was perfectly certain that this was not the real basis of Turf friendship. "I know nothing that would hang any of those I have known on the Turf, and I am quite sure that if anybody on the Turf, or off, had known anything that would hang me about three years ago, I should not be alive at this moment." Altogether the speech was a most amusing one. The real attraction of the Turf was, he ended, the desire to own "the horse of the eentury,"—the collector's mania, in fact.

It was announced on Saturday last that the Conference in the engineering dispute had come to an end. The Employers' Federation made s. series of final proposals to the repre- sentatives of the men, and these last, though opposed to the proposals, decided to submit them to a ballot of the members of the Union, which is to take place on Monday next. -rl'Ini proposals of the masters are said -by the men to deny the tright of collective bargaining, but we cannot say that this seems to us to be so. The masters declare that they must be free (1) to employ Union or non-Union men; (2) to arrange for piecework with Union or non-Union men, and at a price agreed with the worker; (3) to pay the worker accord- ing to his ability,—i.e., to keep on old or partially invalided men at lower rates than those of able-bodied workmen ; and (4) to determine the conditions under which machine-tools shall be worked. In :addition, the Federation employers propose to settle disputes in the first place by a conference between the employer and a deputation of the workmen. " Only the local Associations of employers will negotiate with the Trade-Union officials." The ultimate appeal is to be a conference between the Central Union and the Central Federation of masters. These proposals are, of course, drastic, and we fear they may have been urged by the employers without sufficient tact and without that courtesy and kindliness of tone which prevent friction in all human dealings. In essentials, however, they are reasonable, and we can hardly understand men caring to put money into industrial concerns unless they can be secured in principle.

As to how the vote will go we cannot attempt to prophesy, but we note that Mr. John Burns, who in spite of his love of rhetoric is a hard-headed man, has warned the men that there are only two courses open to them :—(1) To summon a. national Convention of Trade-Unions, and raise not less than £15,000 a week for another six months. (2) To accept the masters' proposals, and get back to work as quickly as possible. Mr. Burns's comment on his alternatives show clearly to which of them he himself leans. "If," he says, " the latter course be decided upon, I will undertake to visit the engineering centres and explain to the men the necessity of giving effect to it." To talk of raising R15,000 a week for six months is a reductio ad absurdum of the arguments in favour of going on with the strike. We trust, then, that the engineers will take Mr. Barns's view. They can now give in without a serious loss of prestige. If they reject the masters' proposals, and are then obliged to yield, as it is practically certain they will be, they will have inflicted the greatest blow ever received by Trade-Unionism.

The railway strike, or rather preparatory agitation, has collapsed, and there is now no chance of the Christmas traffic being delayed. To put the matter in a nutshell, the executive of the Amalgamated Society of Railway Servants threatened to call out its members unless the companies yielded to certain proposals. The companies refused, and the Society thereupon had to admit that it did not mean busi- ness, but only to bluff. A curious and very creditable part in the transaction was played by Mr. Maddison, M.P., the editor of the Railway Review, who practically killed the agitation by an article pointing out that the Society had not the means of striking. As a result, he has resigned his office; but in all probability the men will have the sense to recognise that he saved them from taking a step which would have plunged them into misery. The threatened crisis in the cotton trade has also been averted. The masters have abandoned the attempt to enforce a 5 per cent, reduction, and work will continue as before.

The Paris correspondent of the Times, who personally represents two dead nationalities, and is, therefore, pre- sumably impartial, publishes on Thursday some curious facts as to the feeling of France about Alsace-Lorraine. The editor of the ifercure de France has asked all his acquaint- ance, male and female, for their opinion as to the French desire for "la revanche," and ten of them, all persons of literary standing, reply. Five, including one lady, Madame Bovet, are clearly at heart against a war for Alsace-Lorraine, though only one, the lady, has the courage to say that in every war the loser pays and should put up with his losses. The other five all think that to abandon the idea of revenge would be to sign the death-warrant of patriotism in France. This result of the canvass is very interesting, though if we wanted political guidance as to the feeling of France we would rather ask ten peasants, ten conscripts, and ten priests. Literary men read too much into ordinary men's thoughts. In the end, the actual decision to fight or not will probably depend upon the opinion of some single Staff officer trusted by the Ministry of the day; and he will fight not for Alsace- Lorraine, but for the " glory " of his profession.

On Thursday Mr. Morley began his speech at Bristol by assuring his audience that he had been cultivating " the graces of affability and accessibility,"—a rather stilted joke, and one which, curiously enough, no Peer would have dared to make for fear of being called patronising. Mr. Morley, after the conventional salute to the Home-rule flag, and a guarded reference to Local Veto, dealt with the House of Lords very sagaciously, from the party point of view. He wants to see the Peers allowed, if they can, to find seats in the House of Commons, but they must not have " two shots," —i.e., return, if beaten, to their own House.

Bank Rate, 3 per cent.

New ConSols @ID were on Friday, 112k.