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war between Portugal and Austria followed on March 16. The Government-resigned in order to make way for a national minis- try, constituted on March 15 under Dr. Almeida. Capt. Leotte do Rego was appointed commander-in-chief of the naval division. French and British military missions arrived in Lisbon in March, and a British naval mission arrived in April. In June a first divi- sion of 20,000 men was concentrated at Tancos, where training began. Of the Germans in Portugal many had already left and 400 were interned. German submarines were active off the coast of Portugal during the autumn, many ships being sunk in 1917; Ponta Delgada was attacked by one on July 4 1917, and attacks were also made on Funchal and Cabo Verde in December.

On the declaration of war in March 1916 the few Royalist journals still permitted to appear in Portugal made patriotic declarations, and a message from King Manoel in Nov. exhorted his followers to set country above party. In Dec. a revolutionary movement was suppressed at Thomar and its leader, Machado dos Santos, imprisoned. In April 1917 Dr. Costa formed a new ministry. By a decree of Jan. 17 1917 Gen. Fernando Tamagnini de Alorn was given command of the Portuguese Expeditionary Force, and by July there were over 40,000 Portuguese troops on the western front, with 20,000 in Portugal ready to reinforce them. On April 9 1918, on the river Lys, the Portuguese con- tingent were subjected to a formidable attack by the Germans, and they were compelled to fall back, leaving a large number of prisoners. Subsequently Portuguese troops took part in the victorious entry into Lille.

Dr. Egas Moniz (later replaced by Dr. Afonso Costa) was ap- pointed to represent Portugal at the Peace Conference, and in Jan. 1919, at the instance of Great Britain, the number of dele- gates to the Conference was increased to two. Portugal came out of the war with a crushing debt, but her colonies were assured to her, and her economic future was promising. The Peace Treaty was ratified on March 30 1920. At the Spa Conference in July 1920 Portugal secured 0-75% as her share of the indemnity from Germany, and also received Kionga.

Legislation. One of the first decrees of the provisional govern- ment (Oct. 29 1910) ordained that press offences should be tried before a jury, but the liberty of the press under the Republic was more nominal than real and no Royalist or clerical newspaper was left long unmolested. The law of divorce (Nov. 4 1910) allowed, among other grounds for divorce, insanity, a long term of imprison- ment, desertion, inveterate gambling and mutual consent. Gam- bling, at first legalized, was totally prohibited in 1919. Duelling was forbidden in Jan. 1911. On May 30 1911 Greenwich time was officially adopted, all clocks being advanced 37 minutes at mid- night on Dec. 31 1911. In Sept. 1911 the Marconi system of wireless telegraphy was adopted. On June 14 1913 Portugal and Great Britain signed an agreement regulating the opium monopoly in Macao and Hong-Kong. On Aug. 15 1914 administrative and finan- cial autonomy was given to the colonies. The employment of native labour in the Portuguese colonies was regulated by a very elaborate decree of Oct. 14 1914, modifying and developing the law of May 27 1911 and the decree of Oct. I 1913.

Legislation on the subject of education was voluminous, but com- paratively little was achieved to replace the schools of the expelled religious orders. By the decree of March 29 191 1 primary education became neutral, laic and compulsory. Each parish was to have at least one boys' and one girls' school, the cost to be shared between the State and the town councils. In the two following years 991 new schools were decreed, but in March 1913 556 were still non-existent. The sum of 40,000 destined in 1913 for the building of primary schools, was apportioned among 1 80 schools. By a decree of Sept. II 1913, in order to encourage industrial education and relieve the lyceums of Lisbon, Oporto and Coimbra, the number of students admissible to these latter was limited to a total of 4,850. Secondary education was remodelled by decrees of July 14 and Sept. 8 1918. In May 1914 a military school of aeronautics was created. Other decrees dealt with agricultural credit (1914), accidents to workmen (1913 and 1914) and work of minors and women (1915). On March 9 1918 a Ministry of Agriculture was created, but the decrees stimulat- ing production were of a tentative and contradictory character. Uncultivated land has to pay a small tax per acre and becomes the property of the State if still uncultivated in 20 years from 1911. In March 1921 a much-needed bill was introduced providing for the building of new roads and for the repair each year of 312 miles of existing roads during 1922-31.

Defence. On Jan. 19 1911 a commission appointed to reorganize the navy recommended the acquisition from Great Britain of three battleships of the dreadnought type, similar to the " Minas Geraes " of the Brazilian navy. This recommendation was adopted in the new

naval programme submitted by the Minister of Marine in Dec. 1911, which involved the purchase of 3 battleships of 20,000 tons each, 3 scouts of 3,000 tons, 12 torpedo-boats of 820 tons and 6 submarines. On May I 1912 a bill was introduced fixing the naval force at 4,500 men, as compared with 5,687 in 1910. On Jan. 27 1913 a commission was appointed for the creation of a naval arsenal on the S. bank of the Tagus.

Finance. The average annual revenue from 1907-8 till the revo- lution (1910) was 14,456,000, and the average deficit 500,000. After the revolution special attention was given to finance. A com- mittee appointed to examine into various loans made by the State to the House of Braganza assessed the total to June 18 1912 at nearly 800,000, of which 720,000 had been advanced to King Carlos, 24,500 to the Duke of Oporto and 16,400 to Queen Amelia. The Government decided to reimburse itself from King Manoel's property in Portugal.

The budget for 1911-2 showed a deficit reduced to 435,000, but an increased expenditure of 1,026,800. The deficit for 1912-3, estimated at 710,000, was converted into a surplus of 33,400 in August. The 1913-4 budget showed a total revenue of 15,178,843 and a surplus of 195,778, of which 111,800 was destined for the new naval programme. These figures were obtained by adding to the debt. On Aug. 31 1913 the debt stood at 145,917,500, an increase of 1,596,000 over its amount on Dec. 31 1912. In presenting the 1915-6 budget, with an estimated deficit of 2,120,400, it was decided to separate ordinary and war expenditure, but in practice, although two budgets were presented, the expenditure was not kept strictly sep- arate. The double budget of 1916-7 provided for an ordinary expen- diture of 17,220,000, with 403,400 deficit, and a war expenditure of 15,000,000. The war added an average of 20,000,000 yearly to the debt, which reached 22 7, 000,000 on July I 1918. Portugal was further indebted to Great Britain to the extent of 16,000,000 advanced for expenses at the front and 2,000,000 for war expenses in Portugal. The 1920-1 budget, presented in Feb. 1920, before that of the pre- vious year had been voted, showed a revenue of 26,581,000 and a deficit of 25,555,000, an increase of 7,333,000 over the deficitof the previous year. It was proposed to extinguish the deficit by a reduc- tion in the cost of the civil service and a war-profits tax, calculated to yield 22,222,000, but the Government fell before the proposals could be carried into effect. In Dec. 1920 heavy property and indus- trial taxes were imposed. By the 1921-2 estimates, presented in Jan. 1921, the deficit was increased to 58,888,000 on a total ex- penditure of 106,610,000. At the end of 1920 the debt was unoffi- cially estimated as follows: external 53,777,000, floating 123,- 939,000, internal 325,333,000 total 503,049,000. The paper currency, which at the end of 1910 stood at 16,000,000 (at par of exchange, namely, 4,500 reis = l), had risen to 82,361,000 in Dec. 1919, and to 118,361,000 in Sept. 1920. A further increase of 44,444,000 was voted by Parliament in Dec. 1920. In that month the 3 % external debt was quoted at 22. The agio on gold, which was 5 in Oct. 1910 and 16 in Aug. 1914, exceeded 1,100 % in Feb. 1921, but fell to half that amount a few months later. The floating debt, which immediately before the war was 19,555,000 (at par of ex- change), stood at 119,555,000 on Dec. 31 1919. The heavy depreci- ation in the exchange, however, must be allowed for.

In Feb. 1921 the Banco Nacional Ultramarino became the sole agent of the Royal Bank of Scotland and of some English banks.

Commerce. Portugal's foreign trade, which in 1913 had reached 22,094,500 in imports and 11,355,000 in exports, further expanded during the World War, and in 1917 amounted (at par of exchange) to 37,391,700 imports and 19,121,500 exports. The trade between Portugal and her African colonies almost doubled between 1911 and 1917. In 1917 5,860 ships of 4,906,599 tonnage entered Portuguese ports, as compared with 10,638 of 24,368,120 tonnage in 1913. The total tonnage of German ships seized in 1916 was 242,441, of which 157,333 were handed over to the Allies. Portugal lost 28,637 tons of shipping by enemy action, and her merchant shipping at the end of 1918 stood at 100,000 tons.

A treaty of arbitration for five years, between Portugal and Great Britain, was signed at London on Nov. 16 1914. The commercial treaty between the two countries, signed at Lisbon on Aug. 12 1914, became effective on Sept. 23 1916.

Foreign Exchange. After the war serious efforts were made to grapple with the problem of the exchange, which was aggravated by the decree of May 31 1919 placing the financial agency at Rio de Janeiro in private hands. A decree of April 27 1918 provided that when the exchange was at 29!, 50% of the customs duties should be paid in gold at that rate and 50% at par, until the exchange reached 38 3 /22, when the whole of the duties was to be paid in gold at par. A decree of Feb. 4 1920 totally prohibited a large number of imports, thus depriving the exchequer of an important source of revenue. Neither the Banking Consortium (Jan. lO-May 26 1920) nor the attempt to fix the rate of exchange officially, was effective in preventing a further rapid depreciation in Portuguese money, owing to the almost complete absence of gold (the reserve having fallen to under 2 % in 1920) and to decreased production. As a result of the cost of labour and the fixed price of bread, cultivation of wheat dim- inished steadily from 1918, its best year. In 1918 the 248 million kgm. produced fell short of requirements by 56 million kilograms. The most important export trade wine suffered during the war from trans-