The English acquired the Cape of Good Hope (called Cape Colony) from the Dutch in 1806. North of this colony were the independent states of the Transvaal Republic and the Orange Free State, still occupied by Dutch Boers. These settlers, who kept up a close intercourse with Holland, were engaged principally in the rearing of sheep and the production of wool, which latter was their chief export. Natal, a newer British deEastern

Possessions pendency than Cape Colony, was of growing importance and produced arrowroot and sugar in considerable quantities. England exported to her South African possessions apparel, furniture, cloths, iron, hardware, leather and machinery, and in turn received from them diamonds, gold, ivory, feathers and wool. The extensive diamond fields proved a great attraction, as the supply of the precious stones was said to be inexhaustible, and the Boers were gradually pressed back. In order to secure more Boer territory, a mock contest was gotten up between a native chief and the Boers, and by misrepresentation to the Boers a British referee was actually appointed to decide the dispute. The decision was adverse to the Boers and the territory was immediately ceded to the English. Friction between the English and Dutch continued, until finally in 1899 open warfare was begun, resulting in a conflict lasting nearly three years. At fearful cost of men and supplies, England subdued her antagonist and annexed the territory of the Boer republics to the British Crown, the one under the name of the Transvaal Colony and the other as the Orange River Colony.

The heavy draft upon the English treasury occasioned by the South African war; the decline in the shipping interests of the United Kingdom and the sale of several large steamship lines to American capitalists; the severe decline in the acreage of wheat in the United Kingdom (from 3,750,000 acres in 1872 to 2,000,000 in 1902), with similar decline in the acreage of corn, together with the fact that Germany, France and the United States have entered the field of manufacture as severe competitors of England, and have even secured important English contracts in steel construction, have given rise to serious doubts whether the United Kingdom will continue to lead the commerce of the world. The overwhelming balance of trade between England and the United States is now against England, and if this should continue for a series of years, America, instead of being a debtor, would then become a creditor nation, our dividends and interest would remain at home instead of going to England, and the financial center of the world, now in London, would again move to the westward.