on.

During 1927 no fresh negotiations with Belgium were carried The Government decided to study the question afresh in its entirety. At the end of the year the Minister of Foreign Affairs, in his Memorandum regarding the 1928 estimates, declared that the necessary basis for negotiations had not yet been found. As soon, however, as the inquiry which was on foot should be completed, he was of opinion that there was no reason to expect any hindrance to fresh negotiations with Belgium. The Minister considered it desirable to clear up the position with regard to Belgium as soon as possible.

With various countries provisional commercial treaties were prolonged. Although Holland fully approves of the conclusions of the Economic Conference of the League of Nations regarding Free Trade, the Government considered themselves obliged, for defending the ceramic industry against foreign exchange competition, to demand for the products of that industry, for a term of three years, an increase of the import duty from 8 to 15 per cent., with a minimum duty of fl. 3 per 100 kilos net. From the Speech from the Throne it also appeared that the Government was inclined to introduce double tariffs in order to obtain greater facilities for the conclusion of favourable commercial treaties. This tendency was vigorously opposed by the advocates of Free Trade.

The financial situation of the Netherlands at the end of 1927 was sound. The final figures for 1924 showed, instead of an estimated deficit of 62 millions on the Ordinary Budget, a surplus of 2.6 millions. The financial year 1925, for which a deficit of 19.5 millions had been estimated on the Ordinary Budget, ended with a surplus of 44.2 millions. The provisional results for 1926 pointed to a surplus of 56.5 millions, as against an estimated surplus of only 6.3 millions. The revenue yielded about 40 millions more than had been expected. With regard to the year 1927, a surplus of not more than 2.8 millions was anticipated, but this year also the yield of the ordinary revenue proved to be 30 millions in excess of anticipation, and 13 millions in excess of that of the preceding year.

In consequence of this favourable development, the Government relinquished their intention of introducing a tax on hotels and restaurants, which was already all that remained of the tax on luxuries originally contemplated, and which they had deemed necessary to introduce in place of the reduction of the income tax, the household tax and the death and donation duties. On the contrary, for 1928-29 a further reduction of the income tax by 20 per cent. all along the line was considered possible. An attempt from the Democratic side, to reduce the meat excise in lieu of this, or at all events to lessen the burden of the small incomes more than of the large ones, was opposed by the Government and rejected in December by the Second Chamber. The 1928 estimates were thereupon adopted as follows: ordinary

expenditure 591.8 millions, revenue 595.2 millions, surplus 3.4 millions; extraordinary expenditure 229.6 millions, revenue 56.3 millions, deficit 173.3 millions; the entire Budget providing for 821.4 millions expenditure and 651.5 millions revenue, deficit 169.9 millions.

On April 30, her eighteenth birthday, Princess Juliana attained her political majority, and became a member of the Council of State under Article 74 of the Constitution. She accompanied Queen Wilhelmina for the first time on the occasion of the opening of the ordinary session of the States General in September. For the further continuation of her studies the Princess was matriculated as a Law student at Leyden University.

SWITZERLAND.

In internal affairs the year 1927 was uneventful. The Cantonal and municipal elections brought gains to the Left. The Civil Servants Bill passed by the Nationalrat in 1926 (vide ANNUAL REGISTER, 1926, p. 234) was confirmed by the Ständerat. The career of this Bill incidentally revealed the weakness of the Communists. They desired to submit it to a referendum, but in spite of the most strenuous efforts they were not able to collect the requisite 300,000 votes. The Socialists at first opposed the Bill, but afterwards, under pressure from the trade unions, supported it, and now they combated the Communists with genuinely Fascist methods. The referendum on the Automobile law passed by the Chambers in 1926 (vide ANNUAL REGISTER, 1926, p. 234) resulted on May 15 in its rejection. Immediately afterwards a memorial signed by 52,000 citizens demanded an alteration in Article 37 of the Constitution, for the purpose of establishing a Federal road control, by which a number of main roads would be transferred from the administration of the Cantons to that of the Confederation. The cost is to be defrayed by a tax on petrol. The Chambers adopted the amendment demanded by a popular initiative in the Article of the Constitution which totally prohibits games of chance, so that henceforth the kursaals will again be allowed to provide facilities for games of chance to a limited extent. The final decision will be made by the people in 1928.

The new military penal code was adopted by both Houses of Parliament after labours and discussions extending over many years, and is to come into force on January 1, 1928. On December 8, 1926, the people had rejected the new article of the Constitution intended to establish a corn monopoly (vide ANNUAL REGISTER, 1926, p. 233). Efforts were made to secure the indefinite continuance of the existing corn monopoly which had been created during the war by the Bundesrat in virtue of its extraordinary powers. These led to violent disputes, until at

length an urgent resolution of the Federal Council fixed the termination of the existing corn monopoly for June 30, 1928. In the course of the year increases were made in the Federal stamp and coupon taxes, and in the motor and malt and barley duties.

As the Socialists form the only Opposition party (apart from the quite insignificant Communists), they invariably profit by popular discontent. The existence of such discontent was shown by the popular vote on the article of the Constitution for allowing the Federation to grant subventions to Cantons which have to maintain alpine roads. The article was, indeed, adopted, since 344,206 votes were cast in its favour, but no less than 199,305 votes were registered against it. No opposition had been offered from any side against the clause; the 200,000 or so who said "No" had nothing against the clause; they merely wished to give expression to their discontent.

The wave of protest against the execution of Sacco and Vanzetti passed over Switzerland also. In Basle a Socialist demonstration in favour of the two Italians was accompanied by a bomb outrage which caused the loss of one life. The perpetrator (who was probably not a Socialist) was not discovered. In Geneva the mob tried to storm the American shops, and also the League of Nations buildings, in which, however, only a few window-panes were broken.

At the end of the year it was decided to organise a popular initiative for an amendment to the Constitution forbidding every Swiss, under penalty of losing his civic rights, to accept decorations or titles from a foreign Government. At present this prohibition applies under the Constitution only to members of the Federal Departments, to Federal civil and military officials, to members of Parliament, and all officers and private soldiers. During the last fifteen years the French Government has been very lavish in conferring the order of the Legion of Honour upon Swiss, especially those from the French-speaking Cantons, and in the past year also it has taken no notice of representations made inofficially by the Bundesrat. This practice was viewed with growing anxiety as likely to lead to a dangerous increase of foreign influence, and steps were at last taken to organise a popular demand for the total prohibition of the acceptance of such distinctions. Some newspapers in the western districts have vehemently attacked the movement as being directed against French-speaking Switzerland, but precisely in Geneva itself many prominent men have signed the appeal to the people.

In October the Rhine valley in Graubünden and in the Canton of St. Gallen, as well as parts of the Engadine and of the Canton of Ticino, were devastated by floods. The Principality of Liechtenstein, which has a postal and tariff union with Switzerland and is represented diplomatically by that country, was also visited by the catastrophe, the greater part of its tiny territory of 159 square

kilometres, with 11,500 inhabitants, being flooded. Assistance was rendered by Swiss and Austrian soldiers, and in the public collections made in Switzerland on behalf of the victims, the population of Liechtenstein was not forgotten.

The year 1927 brought a settlement of the conflict between Switzerland and the Soviet Republic, after the failure, for reasons which have not yet been sufficiently explained, of the French attempt at conciliation at the beginning of 1926 (vide ANNUAL REGISTER, 1926, p. 232). After the acquittal by the Swiss jury of the murderer of the chief Russian delegate to the second part of the Peace Conference at Lausanne (vide ANNUAL REGISTER, 1926, p. 238), the Soviet Government boycotted Swiss trade, and refused to attend conferences of the League of Nations on Swiss soil. It was principally regard for the League of Nations that induced the Bundesrat once more, on the suggestion of Russia, to enter into negotiations. These were conducted at the beginning of the year by the diplomatic representatives of both sides at Berlin, and ended in the Berlin Protocol of April 16, in which agreement was reached on the formula which the Bundesrat had been prepared to accept a year before (vide ANNUAL REGISTER, 1926, p. 232). The settlement of the dispute does not involve the de jure recognition of the Soviet Government by the Swiss Bundesrat. There is as yet little prospect of this, owing to the fear of intrigues by the Soviet Embassy. The settlement of the dispute was received with satisfaction in all foreign countries and in German Switzerland, but the Press of French Switzerland and its Parliamentary deputies bitterly reproached the Bundesrat with having lowered the dignity of the Federation. The General Assembly of the Bund, in its June session, approved of the policy of the Bundesrat. Soviet delegates were present at the World Economic Conference and at the Preliminary Conference on Disarmament in Geneva.

Friction with Italy diminished during the year. The strictness of the frontier control led, however, to certain excesses on the part of the frontier guards, and the fact that passports for foreign travel are granted to Italians only in exceptional cases injures the Swiss tourist industry. The attempt of some Italian papers to represent the Romance spoken in a part of the Canton of Graubünden as a dialect of Italian, and to base on this fact an Italian claim to this part of Switzerland, was energetically combated by the Swiss Press, and the claim was shown to be historically untenable.

It is noted not without anxiety in Switzerland, that the Italians living in the country (in 1920 there were 135,000) are, partly of their own free will, partly in obedience to a certain compulsion, joining the Fascist organisations in ever-increasing numbers. Every Swiss town of any size possesses its Fascist organisation. At the head of every Fascist organisation stands a delegate appointed from Italy, who in turn appoints the leaders of the

local groups. Although the Fascisti have so far kept within proper bounds, yet the fact remains that the Italian Government controls a network of organisations on Swiss soil-a network which is most compact in the border Canton of Ticino-and has thus created a well-disciplined instrument blindly obedient to its orders.

The dispute with France over the free Customs zones in the neighbourhood of Geneva (Article 435 of the Treaty of Versailles) is in the same position as in the previous year. The French Customs authorities, in contravention, as the Swiss claim, of international law, still keep the customs frontier at the spot to which it had been advanced on the political frontier of the Canton of Geneva (vide ANNUAL REGISTER, 1923, p. 238), and the arbitral award of October 30, 1924, by which the disputed interpretation of Article 435 of the Treaty of Versailles is to be referred to the Hague Court of Arbitration (vide ANNUAL REGISTER, 1924, p. 232) has not yet been ratified by France. The French Chamber of Deputies declared its acceptance of the arbitral award in the autumn of 1926, but in the summer of 1927 the Senate's Commission of Foreign Affairs made its acceptance conditional on Switzerland first ratifying its abandonment of the neutrality of the Haute Savoie and of the right of occupying it in case of war, as laid down in the same article of the Treaty of Versailles. (Since the tension between France and Italy, increased strategic importance attaches to the Haute Savoie.) After some opposition Switzerland consented, and the two Chambers gave the abandonment the force of a resolution of the Bund, but after negotiations with the French Government it was decided that the document of the abandonment should be handed over only simultaneously with and in exchange for the French document of the ratification of the arbitral award. The resolution of the Bund was subject to the optional referendum of the people, but the people allowed the period of the referendum to elapse without exercising their right, so that the abandonment has obtained the force of law. In spite of this concession, and in spite of repeated assurances on the part of the French Foreign Minister, the French Senate had not yet by the end of the year announced its acceptance of the arbitral award. France has for three years declined this practical application of the arbitral principle, and this fact, which would make it appear that she sets little store by the friendship of Switzerland, has created a great antipathy to France throughout the country.

Switzerland had equally to complain of the lack of cordiality shown on the French side in the conduct of the negotiations which were rendered necessary by the highly protective French tariff and the reactions of the Franco-German trade agreement. tween the two, Swiss exports to France were brought almost to a standstill. The turn which the negotiations took caused the Bundesrat in November to think seriously of denouncing the trade agreement and commencing a tariff war. This would have