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employed, and in the chemical industry water-power is employed (about 400,000 H.P.) almost exclusively. The total installation of the country for electric light and power in 1921 represented over 800,000 water H.P. as against only 40,000 steam H.P.

Industrial Use. For the electro-chemical and electro : metallurgical industries in particular, water-power is of the utmost importance in the utilization of the raw products of the country. Systematic investigation has revealed that raw materials are relatively abun- dant, and especially has it been established that the country is far richer in iron ores than was supposed. This wealth formerly could only be partly utilized, as the ores were low-grade. The steadily increasing need for raw material, together with improved technical methods of production, gives hopes, however, for the utilization of poor or contaminated ores by economical working. The introduction of the electric smelting-oven opened up the possibility for develop- ment of an iron and steel industry in Norway based on the country's own metals. The importance of this appears when it is considered that Norway possesses iron ore roughly calculated to amount to about 1,500,000,000 tons mining to a depth of from 500 to 600 ft. below the surface. By surface-working about 350,000,000 tons of ore can be obtained. The ore in northern Norway is, however, poor containing only 30-37 % of iron. In middle Norway there are about 20,000,000 tons of ore with 55 % iron and in the south about 5,000,000 tons with 45-48 % iron. Norway also possesses a large supply of low-grade zinc ores, which, in the future, will certainly be used. Even now the country has a not unimportant zinc industry based on imported raw material. Norway also has an aluminium industry supplied with imported raw material (bauxite). As, however, Nor- way possesses a vast supply of aluminium silicate and other deposits rich in aluminium, it can be assumed that an important aluminium industry will be developed on the country's own raw material. The most important mining industry of the country before the war was the mining of copper ore and iron pyrites, large deposits of these minerals occurring in middle and northern Norway. These ores were exported as raw material, but the extraction of the metal should form a new industry. A large nickel refinery has been established near Christiansand. Among other ores found which are important in connexion with the development of new branches of industry either independently or in relation to the iron and steel industry are those containing chromium, silicon, nickel, titanium, and others. There was a great increase in the production of molybdenum during 1920.

Already by 1921 the results attained in the chemical industries in the course of a few years were impressive. Particularly in the manufacture of artificial fertilizers such as Norwegian saltpetre, calcium nitrate and cyanamide. The raw materials for the manu- facture of saltpetre are atmospheric nitrogen and limestone. The greatest electro-chemical establishment is Norsk Hydro-elektrisk kvaelstof-aktieselskap at Rjuhan; this factory was using over 200,000 water H.P. in the preparation of Norwegian saltpetre, nitric acid, nitrate of ammonia, nitrate of soda and other products. The new synthetic saltpetre industry which was originated and developed in Norway on the Birkeland-Byde'ske methods also supplies raw material for the explosive and dye-stuff industries. The production of carbide of calcium has also made great strides. The value of the country's products in the electro-chemical and electro- metallurgical industries reached in 1918 to over 180,000,000 kroner.

Finance. Since 1905 the Norwegian State budget has been divided into two chief sections, one embracing the ordinary, the other the extraordinary revenue and expenditure. By a measure adopted by the Storthing in 1907 the financial year was altered from April- March to July-June. In 1911 the Storthing passed an amendment to the constitution by which Norway was under ordinary conditions to have a fixed unassailable reserve of 40,000,000 kr. (at that epoch estimated to have a value of 2,222,222).

The eight budget years July I 1906 to June 30 1914 in all but one period (1909-10) gave a surplus, which altogether amounted to 55,900,000 kr. at the end of this period ; the greater part of this amount being applied to various defensive measures. During these 8 years the national debt increased by only 15,000,000 kr., from 342,400,000 to 357,400,000 kroner. At the end of the budget year 1913-4 the cash reserve of the national exchequer amounted to 50,200,000 kroner. These figures show that the financial position of Norway was sound at the outbreak of the World War. For the budget year 1914-5 the State revenue amounted to 197,000,000 kr., of which 167,800,000 was on the ordinary, and 29,500,000 on the extraordinary budget; expenditure amounted to 186,400,000 (ordinary 156,100,000, extraordinary 30,200,000) and the remaining surplus was therefore 10,600,000 kroner. In this connexion it should be noted that expenditure incurred for the maintenance of neutrality was not included in the budget, but during the whole war was provided for apart from it. The national exchequer cash reserve at the end of this budget year amounted to 35,700,000 kroner. In 1915-6 revenue increased to 240,400,000, and expenditure to 191,- 200,000, showing a surplus of 49,200,000. Under the pressure of the general panic which was prevalent during the first year of the World War at the increase of the budget, measures were taken to reduce the budget expenditure; but the gloom was only of short duration, and was succeeded in 1915 by a period of prosperity, which caused the national revenue to increase far beyond the estimate. Income an^l

property taxes that year realized 24,600,000 more than had been estimated, customs 7,700,000 more, etc. The exchequer surplus on June 30 1916 amounted to 57,100,000 kroner. This progress con- tinued the following year, 1916-7, when the national revenue rose to 394,700,000 while the expenditure was only 268,700,000, and a clear surplus remained of 126,000,000 kr., treble the amount of the national budget a few years earlier. Income and property tax for that year together yielded 86,300,000 more than estimated, customs 13,800,000, and a war-period tax added to the revenue on the extraordinary budget realized 36,600,000 kroner. The treasury had at the expiration of the budget year a reserve of 80,800,000 kroner. The budget for the financial year 1917-8 was balanced at an amount of 446,400,000 kroner, 250,300,000 on the ordinary, 196,- 400,000 on the extraordinary. But the ordinary revenue attained 406,200,000 and the extraordinary 2 13,600,000, a total of 619,800,000 kroner. At the same time the expenditure increased to a total of 501,800,000 kr. (ordinary 296,100,000, extraordinary 205,600,- ooo), and a surplus remained of 118,000,000 kroner. Among the assets on the ordinary budget income and property taxes showed an amount of 150,700,000 (against an estimated 58,600,000), stamp duties (principally from stock transactions) 40,100,000 (against an estimated 12,000,000). On the extraordinary budget, war tax showed 160,300,000 (against 114,200,000 estimated), and among the expenditures on this part of the budget appeared 31,300,000 kr. for increased cost-of-living bonuses to State officials, with 106,600- ooo for other expenditures in connexion with increased costs; the extraordinary expenditure on defence was 26,000,000 kr., which was entirely met by the war tax and tonnage duty. The Treasury reserve at the end of the budget year amounted to 187,100,000 kroner. The budget for 1918-9 was balanced at 625,000,000, 333,300,000 on the ordinary and 291,700,000 on the extraordinary. The ordinary revenue however reached 463,000,000 and the ex- traordinary 324,600,000, together amounting to 787,600,000 kr. ; the expenditure rose to 672,200,000, a surplus therefore accruing of 115,400,000 kr. Among the expenditures on the extraordinary budget the cost-of-living bonuses increased to 89,500,000, and other measures in connexion with increased costs 139,300,000 kr. The Treasury reserve was 260,200,000 kroner. For the financial year 1919-20 the budget was balanced at 726,500,000 (392,400,000 on the ordinary and 334,100,000 on the extraordinary). On the extraordinary budget credit-side that year were presented loans (for railway, telegraph and telephone construction, also purchase and development of waterfalls) 60,300,000, war tax 236,300,000 and tonnage duty 17,400,000 kroner. Among the expenditures on the extraordinary budget were: cost-of-living bonuses, 100,700,- ooo; other State expenditure caused by increased costs, 88,000,000; losses by emergency measures affecting industries, 25,000,000; and measures against unemployment, 8,000,000 kr., a surplus of 42,300,- ooo remained. The ordinary budget for 1920-1 was balanced at 492,400,000 and the extraordinary at 267,400,000 kroner. The preceding figures are gross totals derived from national accounts and budgets, while the surplus stated is estimated and does not quite correspond with the actual reserve. The net figures, i.e. the figures which show the difference between the revenue and expenditure relating to the various State purposes, present a somewhat different picture. The extraordinary budget was in 1921 swollen more than the ordinary; before the war this part of the budget included especi- ally expenditure on railway construction, carried out by means of loans. During the war this budget included expenditure on extra defensive measures, and the greater part of the expenditure caused by the increased costs. The expenditure incurred in the maintenance of neutrality, on the other hand, was not included in the budgets. Taking this expenditure into account also, the following were the amounts used extraordinarily: 1914-5 61,000,000; 1915-6 59,300,000; 1916-7 139,800,000; 1917-8 272,500,000; 1918-9 351,200,000; 1919-20 334,000,000. For the six budget years dealt with above 1,218,000,000 kr. were therefore devoted partly to ex- penses normally raised on the extraordinary budget, and partly to emergency expenditure, for example, shortage on herrings, fish and fats which the State took over, shortage on corn and shortage caused by the assumption of war risks for fishing and whaling vessels. The surplus for 1914-9, totalling 385,900,000 kr., was used for meeting current State expenditure.

The Norwegian Government had the following " war income " at command: (i) the afore-named surplus on the ordinary budget, 385,900,000 kr. ; (2) war-period tax, total 653,200,000 kr. ; (3) ton- nage duty, a special tax on shipping, 75,200,000 kr. ; (4) other extra revenue, 12,000,000 kr. : altogether, 1,126,300,000 kr. The total amount of the tax revenue in 1914-5 was 178,600,000 kr., and in 1917-8 it was 639,400,000 kr. In order to increase the rev- enue, the Government took refuge during the war in a series of new taxes and, in part, greatly increased those already in existence. Thus in 1915-6 a material increase in income and property tax was decreed, with heavier incidence on larger incomes and property, stamp duty was also increased, and, as new taxes, a stamp duty OH tobacco and a match tax. All these taxes were later increased and remained in 1921, except the match tax which was abolished in 1917. In its place a transient luxury tax was imposed, which how- ever proved to be disappointing. In 1915 a war-time tax was in- troduced which produced 236,300,000 kr. in 1919-20. In 1916