to borrow in present conditions; and yet capital is indispensable. It is necessary to us for the restoration of the ruined districts, for the rebuilding of towns, for the construction of roads and wharves, for the exploitation of forests and mines, and for industry in general. The remedy is to be found in doubling or trebling our production, in a revision of all concessions and monopolies granted to companies, in the exploitation of mines and forests and the reduction of their dividends to a reasonable figure; possibly in the nationalisation of all such undertakings and the diminution of imports and their confinement to articles, such as cotton goods, the materials of which do not exist in the country.

The Exchange question has been complicated by the existence of many diverse currencies, by the lack of the minting of our own good dinars and a superfluity of bad Austrian kronen; also by the iniquities of financial speculators. The question of values has now been settled at the rate of 1 to 4 (1 dinar = 4 kronen), while the coinage of the whole State has been assimilated and nationalised. We have in circulation about three milliards of dinars, which is an amount relatively less than in any other country; and there is no inflation. The State Bank has been instrumental in regulating this matter, though many attempts have been made both in Vienna and Buda-Pesth to bring foreign money into our industries and thus to prolong the financial confusion.

International commercial relations are still chaotic, on account of conditions in Central Europe, while direct communication with England is impossible except through Salonica or Montenegro, or through Italy. The French, the Italians, and to some extent the Americans, are showing great activity in their efforts to dominate our foreign trade. The English, on the other hand, appear to be slow in getting to work and unwilling to adapt themselves to the conditions, habits, and needs of our country, to such an extent as to give the impression that the British have no desire to open or link-up trade communications with the Tri-une Kingdom. The Germans and Italians are rivalling them in regard to prices and finish, and adapt themselves more easily to the commercial habits of the Balkans. The Italians, in particular, aim apparently at becoming the

great trade intermediaries between East and West; and D'Annunzio is not alone in dreaming of Italian control from Trieste to Constantinople.

The National Revenue is inevitably small, and the Budgets habitually end in a deficit. Among the items old and new which figure in the Budgets of 1920-21 are: annuities for war invalids and interest on pre-war debts (about one milliard of dinars), for administrative purposes at least one and a half milliards, for land and sea forces about 500 millions; the whole expenditure amounting to about four milliards. The deficit at present is about 110,000,000 dinars. Owing to the destruction wrought by the war, Serbia and Montenegro will not be able for many years to produce their pre-war revenues; and for a long time to come the other districts comprising the Tri-une Kingdom will be able to give but little assistance towards the balancing of the revenue and expenditure. They will, however, have to put all they can into the common stock, in order that the ruined districts may be restored and a levelling-up process completed as soon as possible.

To this desirable end there are various obstacles. The population of the districts not damaged by the war do not appreciate the necessity of coming to the assistance of those that require restoration. They think that Serbia and Montenegro should be restored out of the compensation to be paid by our enemies. Had we got the compensation that was foreseen in the Peace Treaty, there would be something to say for this view; but, so far, after two years we have received nothing. Such compensation was to be partly in kind (live stock, machinery, etc.), and partly in bonds which would have enabled us to revive our finances and industries at the enemy's expense. During the Armistice period or since, many countries have received a portion at least of their war compensation; but concrete guarantees, such as were introduced into other treaties, were not included in our treaties with Germany, Austria, and Bulgaria. Consequently we are still without our due; and, in any case, the money compensation, which should have been over five milliard francs, will not be paid for some time, and will certainly be much reduced from that figure. The enemy States, excepting Germany, are not in the

condition to discharge their full obligations, and are doing their best to evade them altogether.

Endeavours have been made both by the Central Government and the local authorities to bring down prices, but so far without much result. Prices still range very high, and not only for imported articles but also for our own productions, e.g. flour, meat, and other articles of food. Our difficulty is that we cannot increase our production without capital, which is wanting, and that the public is slow to learn economy; even the prohibition of the import of articles of luxury and the obstacle of a high tariff have produced little effect.

After all, our economic and financial position is not much worse than that of most other countries; and there are causes of bad conditions in the Tri-une Kingdom which are not to be found elsewhere. We suffer especially from the general disturbance and disorder prevalent in Europe, and from difficulties inherent in the formation of a new State out of various elements, which, though they have a common aim—that of unityhave various ideas and different methods of work. The methods and ideas in vogue at Vienna and Buda-Pesth have had an inevitable influence upon those countries which were subject to them; while the materialistic tendencies of modern Germany had also considerable weight in the countries north of the Danube. competition of foreigners for concessions in the country in regard to mines, forests, and manufactures introduces other elements of confusion, which can only slowly be reduced to uniformity and forced to serve collective national ends; but all these difficulties, material and moral, will, we are confident, be overcome by the natural wealth and resources of the country and the solid ethical qualities of the population. With the new constitution order will be introduced, national aims made paramount, and vigour instilled in every department of public life. We have much still to endure, and many mistakes will doubtless be made; but we can look forward to a great future for these sorely-tried countries.

PAVLE POPOVIĆ.

The

JOVAN M. JOVANOVIĆ.

CORRIGENDA to the Article on 'Lord Chelmsford's Viceroyalty,' in the Quarterly Review' for July 1921.

P. 49. The statement that Ministers in an Indian Province 'will hold office for the same period as the (Legislative) Council' does not exactly reproduce the terms of the Government of India Act, which lays down that a Minister must be (or become within six months) an elected member of the Legislative Council, and that he holds office at the Governor's pleasure. The statement that 'the Council of State has a small official majority' is a slip; as stated two lines lower, not more than 20 of the 60 members may be officials. Of the 60 members 33 are elected, 27 nominated.

P. 50. The statement as to the composition of the Viceroy's Executive Council does not exactly reproduce the Government of India Act, which lays down no racial qualification, but requires that at least three Members are to be public servants with not less than ten years' experience in India, while one Member must have legal qualifications. The appointment of not less than three Indians was recommended by the Joint Committee and has been carried out in practice, but any of these Indians may possess the 'service' or (as one of the present Indian Members does) the 'legal' qualification, while individual British Members need not possess either of those qualifications to be eligible for appointment to the Council.

P. 51. The distribution of revenues between the Government of India and the Provinces was arranged not by Mr Feetham's Committee, but by a special committee under the chairmanship of Lord Meston.

P. 51. Footnote.-It should be understood that the important departures in policy here summarised were not actually laid down in the Government of India Act.

P. 53. While one of the 'Rowlatt Bills' was passed into law, to be in operation for three years, the other was dropped by the Government.

INDEX

TO THE

TWO HUNDRED AND THIRTY-SIXTH VOLUME OF THE

QUARTERLY REVIEW.

[Titles of Articles are printed in heavier type. The names of authors of
articles are printed in italics.]

2 G