§ The year 1904–5 was one of varying fortunes. It began badly, and in the earlier portion of the year it seemed as if our hopes were once again doomed to disappointment. Fortunately, as time went on the prospects improved. A new and bountiful crop of cotton has effaced the shortage of the previous year and has brought a rush of work and employment in the great Lancashire industry which depends upon the plentiful supply of that staple not merely for its prosperity, but almost for its very existence. Shipbuilding, which had experienced a period of sharp depression, is now showing some signs of recovery. The shipping trade itself, though still continuing depressed, and though freights remain very low, is, I think, also showing some indication of a better state of things, of which we may, perhaps, detect the first effect in the considerable orders for new ships which have lately been placed. The same intelligent anticipation of a better future is to be found in the slight improvement in the iron and steel trade which was noticeable in the closing months of last year and the earlier months of the present year. For these industries, with the shipping trade, provide the instruments of 1047 production and distribution, and are the first to feel the effect of any rise or fall in the commercial barometer. They are, therefore, some indication of the opinion entertained by those most competent to judge with regard to the trade prospects of the immediate future. The reviving prosperity of South Africa is another circumstance in our favour; and the prospect of cheaper money and the moderate recovery which has recently taken place in the price of securities have served to give some elasticity to our revenue from stamps, and have gone some way to make good the fall which took place in the early portion of the year in the revenue derived from the death duties. But, though we may take some comfort from these indications of a better state of things, and though we may hope that we are recovering from the depression which began in 1901, and are on the path of a moderate but steady recovery, it cannot be said that the year 1904–5 was a satisfactory one, either from the point of view of commerce and industry, or from the point of view of finance. In many of our staple trades the depression of the previous year was continued and even accentuated in 1904. I have again to chronicle the absence of any serious labour disputes, which is due in large part to the growing use of boards of conciliation and sliding scales to adjust wages questions. But employment again declined and wages fell in sympathy. Altogether it would appear that 1904 was a worse year both for employment and trade than any of its immediate predecessors, and the accumulated effects of the depression of recent years are visible in the marked increase of pauperism and distress which the past winter has witnessed. It was only in the concluding months of the year that any indications of recovery were visible; and that recovery came too late, and up to the present time has been too slight to produce any marked effect on the revenue.