§ 2. WARS, CALAMITIES, AND THE AMERICAN CRISIS--Yet there is another side to this picture of progress and well-being. During the same period the various quarters of the world were visited by a long series of calamities, both natural and artificial, from which our own dominions were not exempt. The Spanish-American War of 1898, the Russo-Japanese War of 1904–05, and the disastrous earthquakes at San Francisco (1906), Jamaica (1907), and Messina (1908) all caused not only loss of life and great physical suffering, but widespread destruction of capital, the effects of which were felt in all industrial countries. {225} In the earlier years of the period plague and famine in India and a succession of serious droughts in Australia also checked the productive capacity and purchasing power of these great dependencies, and consequently affected our industries at home. But the closest and most malign influence was that of the South African War (1899–1903), which, after at first giving an apparent impetus to the trades supplying munitions of war, left behind it a legacy of debt, increased military and naval expenditure, and widespread depression in trade, with consequent unemployment during the “lean years” that followed. The National Debt in 1898–99, before the outbreak of war, stood at £638,000,000, but had risen by 1903–04 to £798,000,000, or to the level of 1870, thus wiping out in four years the laborious debt reductions of more than thirty years. After some years of depression trade again revived, and throughout the world 1907 was a year of abnormally high prices and widespread speculation, which culminated during the autumn in an acute financial crisis in the United States. There practically all the banks suspended cash payments for some months. The effects of this shock to credit were felt far and wide. Vast quantities of gold were shipped to the United States, and although London at the time stood the strain much better than any other financial centre, the Bank of England was forced to raise its rate of discount to seven per cent. In the following year the United States and Japan still suffered from commercial depression, and in India the harvest proved a failure. Hence, as the consuming power of these great areas was checked, their demand for British goods fell off. Thus the volume of our foreign trade was greatly reduced and the average of the monthly unemployment returns by the Trade Unions {226} for 1908 was far the highest for many years past, being 9·1 per cent., as against 4·3 in the preceding year.