imported, 86 per cent. of the nitrate of soda, 77 per cent. of the hemp, 76 per cent. of the manganese ore, 71 per cent. of the tin ore, 63 per cent. of the rice, and so on through the lists. On any given day the value of British trade afloat (ships and cargoes) in the India, Australia, and China areas may be put at 157,000,000l. Omitting the value of the shipping, British trade in the Indian and Pacific Oceans (in the area bounded by the east coast of Africa and the west coast of America) is worth nearly 900,000,000l. in every year. These figures are colossal. They give one some idea of the issues at stake if we abandon our historic policy, once summed up by Lord Balfour as 'defending all that it is our bounden duty to defend.' Expenditure upon defending floating trade, by reducing the risks, reduces also the cost of insurance during transport, thus cheapening commodities, reducing the cost of production and, indirectly, the cost of living.

Passing to local waters, and to relative interests in trade with the ports of China, The Times again comes to our aid with statistics of British shipping (recent article in Engineering Supplement). Last year, taking the large and growing port of Shanghai as an example, we find that 36 per cent. of the shipping which entered and cleared was British, 26 per cent. Japanese, and II per cent. American. The total figures for Chinese ports of entrances and clearances are given below:

In the East prestige is a potent factor. The fact should not be lost sight of that, even in normal times, the problem of trade with South China is one of combating piracy. Every incident allowed to go unpunished diminishes the respect in which the British flag is held, and naval strength is imperative to the security of our traders and to our position. However hard we may work for ideals of disarmament, it is a fatal mistake to forestall their achievement. Such a course defeats its own object: it increases war possibilities, ruins trade prospects, and postpones the humane purpose indefinitely by casting discredit upon its advocates. It may be of interest in this connection to know that the Chamber of Commerce of Hong Kong, a port where the imports reach a value of 60,000,000l. and nearly fifty million tons of merchant shipping

enter and clear every year, is gravely concerned about the naval situation.

We are compelled to face facts. Our trade in the Far East depends in a great measure upon the ability of the British Government to uphold the rights and interests of British traders, to act always with justice and firmness, and at the same time to impress upon all concerned that our words are based upon something solid, only to be used in emergencies. To give further statistics or examples of British interests in the East-and many could be given-would only overload this article. We have examined the local requirements of a naval base for the British sea (and, I hope, air) forces employed in their defence, not only in wars in which we are ourselves engaged, but at all times. The immediate subject which we set ourselves to investigate was whether Singapore was best situated geographically for the purpose. Even if we are not prepared to accept the Admiralty view on this point, a glance at the map suffices to convert us. Trading vessels are most vulnerable at the points of convergence of their routes. Singapore is close to the gateway between the Pacific and the Indian Oceans. Ceylon is 1600 miles away from it, Australian harbours far too remote. At Singapore lies also the emporium for transhipment from larger to smaller vessels of the trade of the islands of the Malay Archipelago and other territories. The annual value of the local trade of the Malay States themselves exceeds 100,000,000l. Upon the passing trade we have already touched. Singapore is used as a port of call by fifty shipping lines. There is no need to dwell further on these points.

The blessing of Judah and Issachar will never meet; that the same people, or nation, should be both the lion's whelp and the ass between the burdens-neither will it be that a people overlaid with taxes should ever become valiant and martial.

So wrote Francis Bacon over three centuries ago. It is common ground that the burden of taxation bears heavily upon the people, that it sorely handicaps the development of industries, and that it is one of the most potent factors now making for unemployment and for all the ills that it brings in its train. It is also common. ground that recent cuts in the Naval Estimates have swelled appreciably the ranks of the unemployed. We have heard much of late about co-ordinating and correlating the activities of our sea, land, and air forces, and about co-operation between them. That by such means economies can, and should, be effected is acknowledged. In so doing we must cultivate a sense of proportion. It may, for instance, be wise to guard the heart of the Empire against the thrusts of one very improbable opponent,

but such a measure has no support in reason if at the same time we face the risk of bleeding to death by exposing the arteries to severance by all and sundry.

GEORGE ASTON.

Note. The subject of this article was debated in both Houses of Parliament on March 18th. The arguments used therein were proved to be unanswerable, excepting on the assumption that it is no longer desirable to defend the vital interests of the United Kingdom and Empire by armaments. The Cabinet has decided not to take action, at present, upon the advice of the Admiralty. The reasons given are that confidence in our policy can best be established by allaying foreign suspicions and anxieties, and that the improvement of Singapore base is a new development that could only be justified on assumptions that would definitely admit that we had doubts of the success of this policy ourselves.' In other parts of the Empire, this view is supported by General Smuts in South Africa, but it meets with no direct support elsewhere. There will be a further debate on the Report stage, and the verdict will rest with the House of Commons, who will be furnished with papers containing fuller information for use on that occasion.

G. A.

UNEMPLOYMENT is the problem of the day. How are the 1,100,000 men and women that are out of work in the country to be put into work?—that is the burning question to which, in our foreign and domestic policies, we have to find an answer. Everyone agrees that while out of work they must not starve; everyone agrees also that it is better to provide work than maintenance, and that work in normal occupations is better than relief work provided by the State. The only radical cure for unemployment is an increase in the activity of industry, which will increase the demand for labour; and the political moral of that is, that the first care of the State should be to stimulate the activity of industry.

It is easy to say that, but it is a great deal easier said than done. The State ought to do something about it, no doubt. But what, for example, ought the State to do? Protect the home markets,' says (or said) the Conservative Party; but the country will not have it. 'Nationalise industries,' says the Socialist Party; but neither will the country have that. What remains for the State to do, in order that it may stimulate industry and increase the demand for labour? It may have been observed that whenever any Government or any party has made formal reference to this matter of late, after generalities about the restoration of settled conditions, the principal direct method which it has suggested for stimulating trade has been the development and enlargement of a scheme called the Trade Facilities' scheme. It was so with the late Conservative Government; it was so with the Liberal manifesto at the General Election; and it is so now with the Labour Government. The Trade Facilities' Act is the principal, if not the only, method of direct intervention by the State, upon which each in its turn has relied to give practical effect to its aspirations for an increased demand for labour in its normal occupations.

Since the 'Trade Facilities' Act occupies so prominent a place in the programme of all parties alike, it may be of interest to give some account of its nature and purpose; and that can best be done by

narrating its history, and telling something about the hopes and fears of its progenitors.

The scheme was born in the autumn of 1921. That was the time at which the gravity of the matter of unemployment first became clear. The post-war boom was over. The slump was upon us. Unemployment had been increasing by leaps and bounds. The winter was at hand. The first necessity was immediate palliatives to prevent actual starvation; and these were being found in the extension of unemployment insurance, in aid for relief administered by guardians, and in the financing of relief works. But it was already clear that more than temporary palliatives was needed, if more could be done. The trouble was not going to pass with the winter; it had come to stay. It was necessary to look far ahead, and to plan a campaign against unemployment to cover a period of years. The State must not content itself with alleviating the worst hardships of the unemployed by maintenance; it must consider whether there was anything it could do to promote a radical cure. It was but too sure that it would have plenty of time in which to apply whatever remedies it could devise.

The writer was at the time Financial Secretary to the Treasury, and under instructions from the Prime Minister, Mr. Lloyd George, and the Chancellor of the Exchequer, Sir Robert Horne, it became his duty to consider the question. The problem to be solved might be expressed thus: Was there anything, and if so what, that could usefully be done, by the direct action of the Government at home, to decrease unemployment by increasing the demand for labour in its normal occupations?

To help in solving this problem, there were two things: a measure which was already in force, and still is, and a proposal which was not in force, and which it is to be hoped never will be. The measure was the export credit scheme; the proposal was that which found favour in some unofficial quarters for a deliberate inflation of credit and currency.

The proposal to inflate as a remedy for unemployment had more supporters in 1921 than it has in 1924. The example of Germany then had much attraction. It has less now. In 1921 Germany was still enjoying the stimulus which inflation may give to industry at the first dose. Since then we have had the advantage of seeing her pass through all the melancholy stages of reaction, which succeed the stimulus as the dose is repeated. The proposal never took any very precise shape. Credit, it was said, is the raw material of industry. Let the State increase the supply of that raw material by manufacturing a lot of credit. That will cheapen it, and so encourage industry. There were no definite suggestions how the credit was to be manufactured, or what was