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 world. And this extension of foreign shipping is certain to go on and even to become more accentuated. The vital importance of sea-power is only now being realized by the great nations of the world; just as last century witnessed the competition of land armaments, so this century will certainly see the rivalry of great navies. Sea-power, to be secure, must rest upon a large mercantile marine, so that, whatever be the cost, the growth of merchant shipping must be fostered by any country which looks forward to a great political and industrial future. France, Germany, and Japan realize this, as is shown by the various forms of subsidies which they grant. Russia and the United States have awakened to it, and in order to encourage shipping have confined their coasting trade to their own ships, even to the point of interpreting a coasting voyage as extending from Riga to Vladivostok, or from Boston to San Francisco or the Philippines.

A further very obvious and very real danger to Imperial trade arises from the similarity of the fiscal systems of the self-governing Colonies to those of foreign countries, and their dissimilarity from that of the Mother Country. The larger States, such as Canada and Australia, are in a position, and will in the future be increasingly tempted, to make reciprocity treaties with foreign countries, which may prove as injurious to inter-Imperial trade as they are certain to prove dangerous to Imperial unity.

What are the means by which these centrifugal tendencies can be neutralized, if not actually annulled?

We have seen that they involve questions of personal or commercial fitness, of geographical position, and of divergence of fiscal policy.

If we are to retain our position in the trade of our own Empire—not to speak of the trade of the world—we must take a leaf out of the book of our most successful competitors. The wonderful industrial progress of Germany during the past twenty-five years is by common consent in great part due to the admirable