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from railways and tramways. It is estimated that the total revenues of 

 the Commonwealth and of the separate States will exceed those of the 

 previous year (£ 56 million) by about £ 6 million, or say 11 p. c. 



Both,^the increased imports and the increased railway-receipts, reflect 

 the progress which Australia enjoys as the result of a series of favourable 

 years. All the signs, however, point to a cessation of this prosperity. 

 The menacing drought which has prevailed since the end of last year 

 has already wrought considerable damage and must reduce the purchasing 

 power of the country. Hence a fall in the imports and a corresponding 

 decline in the Commonwealth revenues are expected next year. 



The political and economic conditions of Spain have unfortunately-shows 

 no brightening since our April Report; on the contrary, they have grown 

 worse. The position of the Liberal party is growing more uncertain from 

 day to day, because Sr. Canalejas has up to the present only carried into 

 execution by far the smallest and least important part of his whole 

 broadly-mapped programme. A decisive crisis would probably have occur- 

 red long ago, were it not that the Conservative party decided to bide its 

 time until Sr. Canalejas had at least settled the main problems of the 

 religious question and had concluded the negotiations with France in 

 respect of Morocco, the object of the Conservatives being to avoid having 

 to grapple with these difficulties and bearing the responsibility of their 

 solution at the very beginning of their accession to power. The eyes of 

 the entire country are fixed upon the Hispano-French negotiations, and 

 it would in fact appear as if Spain were unwilling to renounce, without 

 more ado, the rights she has acquired at the cost of so much blood, and 

 as though she were backed up by one of the other Great Powers in her 

 resistance to the French demands. But as a result of the sacrifices made 

 in Morocco the Spanish Government is financially exhausted, and if for 

 no other reason than this, an agreement must be concluded within the 

 immediate future. In the meantime all important new undertakings in the 

 country are completely paralysed, for upon the conclusion of such an 

 agreement the immediate and perhaps also the more distant future of 

 Spain will depend. A slight countervailing advantage to the financial 

 sacrifices of the war is the circumstance that the harvest in Spain promises 

 to be exceptionally abundant this season, if the hopes are not destroyed 

 at the eleventh hour by unfavourable climatic influences. ^ 



The other European markets give no rise for comment on the present 

 occasion. 



Our New York branch again reports very favourably on the con- 

 dition of business in the United States. In the past it has generally been 

 held that the year of a Presidential Election must always be attended by 

 a certain degree of stagnation in commerce, caused by political agitation 

 and by the feeling of uncertainty regarding the future of the Tariff which 

 always accompanies the elections. But this year, in contradistinction to 



