arrangement under which the foreign relations of Afghanistan were conducted by England might be regarded as permanent. Many schemes for "compensation" were suggested in the Russian press -the one which found most favour being that Persia should occupy Herat, while the Turki provinces of Afghanistan (i.e. those north of the Hindu Kush), on which the Amir of Cabul has always had but a precarious hold, should be formed into a kingdom dependent on Russia. It was announced that, in August, General Abramoff having crossed the Alai Mountains with a large army had occupied Darwaz-from which province he could, of course, command Badakshan. In December, Abdu-r-rahman-who had been Shir Ali's most formidable rival in the struggle for the Amirship of Cabul-and who since his defeat had been a pensioner and dependent of the Russian authorities in Turkistan-was reported to have "fled" across the frontier-to Balkh, it was presumed. He had with him 200,000 roubles-the savings of his pension-and, it was stated on trustworthy authority, a further sum of 400,000 roubles derived from Russian sources.

The position of Persia throughout the year was one of singular difficulty. The Russian advance along the Attrek was on Persian territory, yet no permission had been asked by that Power. There was assumed to be a struggle for influence at Teheran between Russia and England. The latter transferred her Consulate from Resht to Asterabad-a step regarded as of some significance. Russia urged Persia strongly to co-operate in the expedition against the Turkomans, who were in truth nominally subjects of the Shah. Russian officers were entertained at Teheran, and were employed to organise the Shah's troops. On the other hand, the Russians complained of want of cordial co-operation, especially in the matter of supplies. Some of the papers urged that if Persia showed herself ungrateful for Kotour she should be called on to give satisfaction for Kurdish raids into Russian territory, and should be compelled to cede or retrocede the fertile province of Azerbaijan. In the beginning of the year, a Persian army was said to threaten Herat, and at the close, when the fate of that long-disputed and much-coveted fortress was in debate, it was announced that the Shah intended to go on a pilgrimage with 10,000 troops to Meshed.

In speaking of the scientific or political expeditions of the year, we ought not to omit mention of Major Biddulph's exploration of the Chitral Valley, and Major Tanner's excursion to Kafiristan. Colonel Prejevalsky, the Russian explorer, reached Tibet.

The Chinese had hardly recovered Kashgar when Hakim Khan Tura, son of Yakub Beg, prepared to invade and recover his father's kingdom. During the year there have been constant reports of invasions by Kipchaks, and the Chinese, it is clear, have had much difficulty in maintaining their authority. Hitherto, though pressed, they have not been ousted. But their authority has been maintained by a series of barbarous executions. They had from the first difficulties with Russia. They claimed back

Kulja-the most fertile province of Central Asia-of which Russia had undertaken the management (in trust for China), when that Power was losing its hold on Yarkand. A Chinese Embassy came in 1879 to St. Petersburg to press the matter. In the Russian Councils much difference of opinion prevailed. Meanwhile, the Chinese oppressed Russian subjects and violated the frontier. Nevertheless the party of legality prevailed at St. Petersburg. By the Treaty concluded in September, Russia retained the southern portion of Kulja, including the passes of the Thian Shan, leading to Kashgar. She also gained some territory on the Mongolian frontier. The Treaty also elucidated the frontier rights of the Powers. China further agreed to pay 5,000,000 roubles, 1,500,000 as indemnity for the cost of administering the province, and 3,500,000 as indemnity to Russian traders for losses incurred by Mussulman revolts and the oppression of Chinese officials. There can be no doubt that the Mussulman population of the province viewed with horror the prospect of retrocession. They have petitioned against it, and some Russian papers urge the Government to give up the province, at any rate, gradually. But the Czar seems anxious to keep on good terms with Pekin. He undertook, in case of war between China and Japan, to protect the merchantmen of the former Power.

CHAPTER VI.

NORTH AMERICA.

I. THE UNITED STATES.

ON January 1, 1879, the day fixed by Act of Congress, the currency of the United States was restored to a specie basis. Seventeen years had then elapsed since paper money in that country was on a par with gold. It was feared that the change would disturb not the money market only, but all dealings between men of business. Instead of the anticipated confusion and inconvenience, the Act took effect in perfect quietude; indeed, the purpose which it was intended to subserve had actually been accomplished a fortnight beforehand. On December 16, 1878, the equilibrium between greenbacks and gold coin was established by the operation of natural causes, so that, when the banks were legally obliged to pay gold on demand, they were seldom asked to do so. At the close of the first day on which the Act was in operation, it was found that the gold paid in at the New York Sub-Treasury exceeded the amount paid out.

Not only did the return to specie payments prove to be easy and successful beyond all expectation, but the consequence was to

inflate rather than to reduce the currency. Mr. John Sherman, the Secretary of the Treasury, who had accumulated a store of gold amounting to 224,865,477 dols., gradually put it into circulation and thereby rendered money unusually plentiful. The result was a revival of speculation as in the days when a paper currency was first established. The Democratic party, which opposed the resumption of specie payments on the ground that money would thereby become scarce, had to endure ridicule for raising a false alarm. Contemporaneously with the restoration of payments in specie, the Secretary of the Treasury was able to effect a vast saving in the interest on the public debt. He arranged for converting all the debt redeemable last year into a 4 per Cent. Stock. This operation has been entirely successful, the 4 per Cent. Bonds being rapidly absorbed and being quoted at par; the annual saving from July 21, as regards the sum payable for interest, was 14,297,177 dols.

Though the new year began full of promise for the financial prosperity of the United States, yet other indications were less favourable. The severity of the weather was unprecedented. A wave of cold swept over the country, extending to the far south. In Florida, where ice had never been seen within living memory, it appeared to the amazement of the inhabitants and inflicted much damage. While the weather was at its worst an Indian outbreak occurred at Fort Robinson, in Nebraska. A party of Cheyennes was imprisoned there for having taken the war-path in the preceding October. They had attacked the settlers and caused general consternation. They were imprisoned, preparatory to being transported to the Indian Territory. To avert this fate they broke out of the fort. Ultimately they were surrounded by the United States troops, and rigorously punished both for the damage which they had done in the first instance under the stimulus of hunger, and for having rebelled against the order condemning them to imprisonment till they could be escorted to the Indian Territory. This was the first of three occasions during the year when the Indians caused apprehension in the United States. The second happened in March, when Alaska was the theatre of a threatening demonstration. The white settlers in that remote and inhospitable possession of the United States numbered sixty-eight, and they were threatened with attack from thousands of exasperated Indians. On the news of the danger reaching Vancouver Island, the authorities there despatched the British gunboat "Osprey" to the relief of the settlers, this prompt and friendly act having the result of saving their lives and pacifying the settlement. The nation at large, through the medium of the newspapers, expressed gratitude for the timely aid of the British authorities. The third Indian outbreak took place in September. Then the Utes in Northern Colorado rose and killed Mr. Meeking, the agent at the reservation there. They were incited to this by the encroachment of miners on their land. No heed was given to their protests, and they tried

to hinder by force what they had failed to prevent in a pacific manner. For a time the rising excited apprehension. A small detachment of regular troops, under the command of Major Thorburgh, which was sent against them, had been worsted and the leader shot. Reinforcements followed, under General Merritt, and the Indians were in turn obliged to flee for their lives, many being killed, and the remainder eventually submitting to the victors.

A conflict between President Hayes and Mr. Senator Conkling, which had caused much remark and uneasiness in the Republican party the preceding year, was closed in February to the advantage of the former. The cause of disagreement was the removal from the New York Custom House of those officers who owed their appointments to the patronage of Mr. Conkling, and who were confident of retaining them so long as he preserved his influence in the Senate. They had been removed by order of the President, but Mr. Conkling's influence had sufficed to hinder the confirmation of the appointments of their successors. Again the President sent to the Senate for confirmation the names of Mr. E. A. Merritt, as Collector, and Mr. S. W. Burt, as Surveyor, and, despite the vigorous resistance of Mr. Conkling, the Senate confirmed the nominations. This was popularly regarded as a great blow to Mr. Conkling, and an indication that his power had passed away. However, when the Convention of the New York Republican party met at Saratoga early in the autumn, Mr. Conkling displayed an amount of power which surprised his friends, and he did this not only in spite of the check just referred to, but also in defiance of the injury which an alleged scandal was supposed to have inflicted upon his reputation. His victory in nominating Mr. Cornell as a Republican candidate for the Governorship of the State of New York, was thought to betoken a likelihood that he might secure his own nomination next year as Republican candidate for President.

When Congress assembled for an extra Session on March 18, both Houses were under the control of the Democrats. This was the first time, since the Civil War, that the Democrats had a majority both in the Senate and House of Representatives. Mr. Randall was re-elected by the Democratic majority Speaker of the House of Representatives. He obtained 144 votes; Mr. Garfield, his Republican rival, obtained 125; while Mr. Wright, the candidate of the Greenback party, had 13, and Mr. Kelly, 1. The changes made in the Senate were many. In accordance with political usage, the officers of the Senate who professed Republican politics, and had been elected by the Republican party, were removed, and their places were filled by Democrats. The new appointments numbered nearly 250; the candidates numbered many thousands. It was noted, to the disadvantage of the Democratic party, that many of the successful candidates had been soldiers in the Confederate army. Moreover, it was a subject of angry comment and complaint that many Senators had been general officers

in that army. The contention of the adverse critics was that, while service in the Union army was a recommendation, service in the opposing body was a disqualification, and fault was found with the conciliatory policy of President Hayes on the ground that it had permitted Southern Brigadiers to be duly elected and take their seats in Congress.

The debates in Congress were characterised by great asperity and mutual recrimination. It seemed to be the aim of the Democratic majority to undo some of the restrictive legislation which had been passed by their opponents, and which they considered unjust. The main question in dispute was whether the army should be allowed to be present and to act at elections. This was vigorously debated in the Congress which came to an end on March 4, the result being that the bill on the subject, passed by the Democratic House of Representatives, was rejected by the Republican Senate. Now, however, the majority in both Houses favoured the passage of a bill to the same effect. Some, indeed, desired to go still farther and to reduce the army to a point in numbers at which it would be utterly inefficient. An amendment to the effect that the army should be diminished from 25,000 men to 15,000 was made in the House of Representatives, and lost by a large majority, 58 members voting in favour of the amendment and 125 against it. The Democratic majority was large enough to ensure the passage of the Army Bill through both Houses of Congress, yet the Republican opposition was by no means feeble. The question which excited the most acrimony and adverse criticism was embodied in the clause forbidding the employment of soldiers to supervise elections. It was held by the Democrats that this power had been exercised so as to interfere with freedom of election in the Southern States, while the Republicans contended that the coloured electors could not vote as they pleased unless they were under the protection of Federal bayonets. The protracted debates in Congress, though nominally directed to this point, really dealt with the difference which marked North and South, and kept the party which upheld State sovereignty from concurring with the party which was uncompromising in preferring the supremacy of the Union. Several indications showed how greatly embittered the rival parties bad become. While the Army Bill was under discussion in the House of Representatives, a resolution was introduced into the Senate by Mr. Senator Hoar denouncing the projected legislation of the Democrats as unprecedented and subversive of Constitutional forms. This motion was warmly supported by Mr. Senator Blaine, and threats were held out by him and others that strong measures would be necessary in the event of the Southern Brigadiers continuing to menace the country. When the Bill had passed the House of Representatives and was laid before the Senate, the Republicans there gave vent to forebodings as to the consequences to the country if the troops could no longer be summoned to support one of the political