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Fridny's advance is one of the greatest blows yet struck the Ger- man: in the Picardy offensive. It brings the British southern front on 111 evon line with the French at Burdocourt and puts the British in good position to drive a wedge be- A despatch from Londcn says: General Sir Douglas Haig btruek again at dawn on Friday. The British front has been advanced three miles to the eastward. It rests on a line from Bazentin le Petit to Longueval. Both villages are in British hands. Beyond the latter place the British troops are fighting forward in the wooded section in desperate hand-to- hand engagements with the Germans. The British advance at its deepest point on Friday night approximated three miles. BRITISH ADVANCE TO A A despatch from Berlin says: An official statement issued on Wednes- day night says: “In the month of June sixty-one of the enemy's mer- chantmen, measuring about 101,000 tons, were sunk by German and Aus- trian submarines or by mines." A despatch from London says: The British made a further advance north of the Somme, according to a report received on Thursday from General Haig. With Contalmaison and the en- tire German first line of defence on that and adjoining sectors firmly in their hands the British troops are striking to the eastward against Combles and Bapaume. Longueval, a junction point on the high road sys- tem, and the Heights of Martinpuich, two and a half miles northeast of Con- talmaison, which command the battle- ground for miles around, are the im- mediate objects of their campaign. FOE SANK 101,000 TONS OF SHIPPING DURING JUNE “Now the combined offensive in the east and west has wrenched out of the hands of the enemyâ€"never, I trust, to return to his grasp. We have crossed the watershed, and now vic- tory is beginning to flow in our direc- tion. BRITISH MAKE ‘ " MORE PROGRESS “The overwhelming victories won by the valiant soldiers of Russia have struck terror into the hearts of our foes, and these, coupled with the im- mortal defence of Verdun by our indomitable French comrades, and the brave resistance of the Italians against overwhelming odds in the southern Alps, have changed the whole complexion of the landscape. Appreciably Advance Their Line At Various Points. “Since our last munitions confer- ence,” said Mr. Lloyd George, “there has been a considerable change in the fortunes of the allies. On that date the great Champagne ofllensive in the west had just failed to attain its ob- jective, and the French and British armies had sustained heavy losses without the achievement of any par- ticular success. In the east the enemy had pressed the gallant armies of Russia back some hundreds of miles, and the Balkans had just been over- run by the Central powers. ‘The conference was held at the War Office and was participated in by Albert Thomas, French Minister of Munitions; General Bailiefl’, Assistant Minister of War of Russia; General Adall Olio, member of the Italian Ministry of War, and the new British Minister of Munitions, Edwin E. Montagu. A despatch from London says: David Lloyd George, British Minister of War, presiding- on Thursday at an allied conference on equipment, de- clared that the combined offensive of the allies had wrenched the initiative from the Germans, never, he trusted, to return. “We have crossed the watershed,” he said, “and now victory is beginning to flow in out direction. This change is due to the improvement in. our equipment.” Take Bazentin and Longueval, Also the Whole of Trones Wood Germans Surrendered Freely. ‘f VICTORY FLOWS 1N OUR DIRECTION,” "‘ SAYS DAVID LLOYD GEQRGE Entente Allies Take the Initiative, Never to Be Lost to the ' Again. Russians Terrify Teutons. DEPTH OF THREE MILES A despatch from Zurich says :â€" ‘ Members of the Austrian Imperial l family have been summoned to Scho- venbrunn, owing to the illness of the iEmperor Franz Josef, according to ‘ news despabches from Innsbruck. : Several specialists are attending the 3 aged King-Emperor and the news of lthe war is being withheld from him. A despatch from Reuter’s corre- spondent on the British front says that the German second line was car- ried with small loss, and the Germans surrendered freely. ,__ tween Thiaumont and Peronne, the two main German bases on this front. Longueval was the junction point of several important highroads, which had been of much value to the Teu- tone, while on the north of Friday's front of attack the British are ap- proaching the Pozieres, another strongly defended village on the road to the commanding heights of Martin- puich. They are now Within two miles of this crest line, the capture of which would give them artillery control of the neighborhood and serve as a serious menace to Bapaume. 'has beenâ€"set up. Hundreds of thous- zands of men and Women, hitherto Lm- ‘uccustomed to metal and chemical ‘work, have been trained for muni- tions making. Steadily Increasing Output. “Every month we are turning out hundreds of guns and howitzers, light, medium and heavy. Our heavy guns are rolling in at a great rate and we lare turning out nearly twice as much ammunition in a single weekâ€"and, :what is more, nearly three times as 'much heavy shellâ€"as we fired in the great offensive in September, al- though the ammunition we expended in that battle was the result of many weary weeks’ accumulation. The new factories and workshops we set up have not yet attained one-third their full capacity, but their output is now increasing with great rapidity. Our main difl’iculties in organization, con- struction, equipment, labor supply and readjustment have been solved. If officials, employers and workmen Ikeep at it with the same zeal and as- siduity as they have hitherto em- ployed, our supplies will soon be over- _ whelming. is one of those who refused to make munitions, and it is expected he will have to serve the year’s sentence, which has already been imposed upon him. Steps have been taken to bring it before the authorities, so that it can be investigated, as, according to The Hague tribunal, prisoners of war are not called upon to make munitions. NEWS OF DEFEATS KEPT FROM FRANZ JOSEF JAIL FOR REFUSING “I cannot help thinking that the improvement in the Russian ammuni- tion has been one of the greatest and most unpleasant surprises the enemy has sustained. Still, our task is but half accomplished. Every great battle furnishes additional proof that this is a war of equipment. More ammuni- tion means more victories and fewer casualties." War Prisoner Writes of Ottawa Man’s Plight. A despatch from Ottawa says: Canadian prisoners in Germany were sentenced to a year in jail by the Ger- mans for refusing to make war muni- tions, according to a letter received here from Corporal Ian A. Simons, formerly a prisoner in Germany, and now transferred to the internment camp in Switzerland. He writes that Corporal Harry Hogarth, of Ottawa, “Why have our prospects improv- ed? The answer is: the equipment of our armies has improved enormously and is continuing to improve. “The British navy until recently, has absorbed more than half the metal workers of this country. The task of building new ships and re- pairing the old ones for tho gigantic navy, and fitting and equipping them, occupies the energies of a million men. Most of our new factories are now complete; most of the machinery TO MAKE MUNITIONS. A despatch from Bucharest says: Eighteen Bulgarian regiments are re- ported to have mudnied, killing their German officers. A despatch from London says: The Brifish expedifion in Ldesopotanfia is still at Sannayyat, about fifteen miles below Kut-el-Amara on the Tigris, ac- cording to an official statement issued on Thursday. The statement says that the British forces have been sub- jected to an inefiectual artfllery at- tack. A cable from Paris to anewn agency at New York sayazâ€"“Des- patches from Salonlca report serious rioting at Kavala, when 500 Greek soldiers shunned a train on which they had been refused transportation. The railroads is controlled by the Anglo-French army. Pickete fired upon the Greek soldiers and drove them off." EIGHTEEN BULGAR 560 GREEK SOLDIERS Gen. Lake's Troops Are at Sannayyat, Fifteen Miles Below Kut. A despatch from Bucharest to the Telegraph says: “Public feeling has been deeply stirred by the general offensive of the allies. Owing to an appreciable lack of meat here the Government has prohibited eating of it on three days of the Week." BRITISH HOLDING ON “Members who returned from the difi'erent fronts where they took part in the offensive against Italy, also in the tremendous fighting on the Rus- sian front, all agreed that the losses must exceed 600,000 since the begin- ning of the offensive against Italy. The bitterness against the leaders of the army is very great, and at the next sitting of the House the Inde- pendence party will again demand that those responsible for the situation shall be brought to account, these be- ing the two Archdukes and Gen. Con- rad von Holtztndorf. It is more than likely that the House will be dissolv- ed rather than that these high person- ages should be made the subjects of acrimonious criticism.” The London Morning Post has ad‘ vices from Budopest which say that the losses of the Austro-Hungarian army during the last six weeks were the subject of discussion in the lobby of the Hungarian Parliament. The despatch says: HUNGARY IS BITTER OVER GREAT LOSSES Canadian deposits on savings ac- count total over $700,000,000, having increased a little over $100,000;000 during the 20 months of the war. The June revenue increased from $11,433,970 to $17,600,149, the in- crease being found in nearly all branches including $4,000,000 in cus- toms. ' The buoyancy of the Dominion’s fi- nancial situation is shown through- out the statement. The total assets of the Dominion on June 30 were $420,395,783 as against $257,943,948 a year ago. The net debt increased from $460,287,721 to $593,910,637, but the increase for the month was $16,013,946,95, or nearly $2,000,000 less than a year ago. Since Beginning of Ofiensive Against Italy They Exceed 600,000. The credit Canada has extended to the British Governement now totals $160,000,000. Munition orders to bhis amount have been placed in Canada by the Impeflal Government. A despatch from Ottawa says zâ€"- The consolidated revenue of Canada for the three months of the fiscal year ending June 30 was $50,772,903.92, and the expenditure was $87,055,289. The revenue from all sources amount- ed to $56,000,000. Of this expendi- ture only $10,528,045 comes under consolidated fund account while $26,- 527,243 is under capital and $22,173,- 031 of this is war outlay. In the month of June last the war expendi- ture was $12,439,187.93. During t‘n three months’ period the expenditure on both capital and revenue accounts outside of the capital outlay on war has decreased substantially, due to the policy of rigid economy adhered to by the spending departments of the government. CANADA’S SAVINGS GROW DURING WAR During Past Twenty Months Have Increased Over $100,000,000. ATTACK ALLY TRAIN REGIMENTS MUTINY‘ THE TIGRIS RIVER. A special cable to the Chicago Daily News from Oswald F. Schutte, in Ber- lin, says: The French have opened the third week of their ofl’ensive by driv- ing within a mile of Peronne a wedge into the German lines. The Germans have been making desperate counter- attacks, both north of the Somme and on the French flank at Barleux. The Germans realize that a crisis is still ahead. A despatch from London says: British soldiers on the fighting line and those wounded on the Somme say that they found German machine- gunners chained to their guns to pre- vent them from retreating. A FRENCH WEDGE IN FOE LINE, HUNS ADMII CRISIS AHEAD GERMAN GUNNERS A despatch from Ottawa says: Canada will float a second domestic war loan in September, according to an official announcement made here on Thursday by Sir Thomas White, Minister of Finance. The amount, terms, and price, it is stated, will be settled a few days before the issue. SECOND DOMESTIC WAR LOAN IN SEPTEMBER Joffre's Forces Close to Peronne, and Germans are Making Desperate Counter-Attacks. A despatch from London says: Fol- lowing the attack by a German sub- marine on the British port of Seaham Harbor on Tuesday night, a submarine raid on a fishing fleet near the Eng- lish coast was reported by Lloyds on Friday. A German submarine attack- ed a British fishing fleet off the north- eastern coast and sank the trawlers Florence and Dalhousie and several smaller vessels. Terms of War Issue Will Be Settled a Few Days Beforehand. GERMAN SUBMARINE RAIDS ENGLISH FISHING FLEET. A despatch from Ottawa says: Canadian troops at the front are be- ing reâ€"armed with the new British Enfleld rifle, and this rifle, which is now being manufactured both in Great Britain and in the United States by the hundreds of thousands, has been adopted as the uniform service rifle of all the British troops. The Ross rifle, about which there has been so much criticism, will be gradually discarded for all Canadian troops as a service rifle, and the new rifle sub- stituted as it becomes available. The new weapon has a shorter barrel than the Ross rifle, making it more service. ' able for trench work. It is of smaller bore than either the Ross or the pre- sent Lee-Enfield, but the bore on the new rifle can be easily enlarged to A deep: columns I on the ea Suez have cult couni cording t< Sunday b; lsh War I “The Co] Medlterra telegraphi two colun Abu Seen the Gulf their base the enem} “Sixty mi traversed, live stock and consi take the present size ammunition un- ties were til new stocks are ready. columns." Berlin officially admitted that Gen- eral Sir Douglas Haig’s forces had gained some ground and that they had occupied Trones Wood. The Ger- man resistance has been stubborn, but the British were able, thus far, to re- tain the positions won. NEW GUN REPLACES NGTED R033 RIFLE A despatch from London says: Ex- hausted by the desperate fighting of the days the German and British troops on the Somme'are resting On their arms on Sunday. In the lull which has followed what correspond- ents at the front describe as the fiercest fighting of the war, the Brit- ish are consolidating their new posiâ€" tions north of the Bazentin-Longue- val line and are bringing up their heavy artillery preparatory to resum- ing the great drive towardiPeronne. The British ofl’ensive was resumed Saturday and the advance of their thrust reached the third line of the German defences north of the Somme. Canadian Troops at the Front Are Being Re-armed. 7‘ V.,_.' BRITISH REACH IIIIRI)" LINE " I HOLD ALL GROUND GAINEIR The-third week promises even more Gen. Haig’s Forces in Pushing Foe Back to Third Line Advance Four Miles Beyond Original Teuton Trenches. CHAIN ED T0 GUNS. [bloodshed than last week, for reports :h-om the front are far from revealing ‘all the horror of this fearful slaughter. tThe German press are still forced to frely upon the British eyewitnessea’, Lreports for real stories 0? the battle.‘ German authorities make nothing pub-_‘ lic except dry statements of the gem‘ era] staff, and reports of German cor-. res ondents at German headquarters. ad little. Neither German nor neu-. tral correspondents are now allowed anywhere at any of the fronts. A despatch from London says: TWO‘- columns of British troops operating< on the eastern shore of the Gulf of!) Suez have raided sixty miles of difl’i-’ cult country held by the Turks, ac-) cording to an announcement made on Sunday by the Secretary of the Brit-l ish War Office. The statement any“, “The Commander-in-Chief of the, Mediterranean expeditionary force; telegraphing on Friday, reports thai two columns operating from Tor an ' Abu Seeneima, on the Sinai shore ofl the Gulf of Suez, have returned tq‘ their bases after successful raids of ‘the enemy posts in the peninsula.’ “Sixty miles of diflicult country Were: ’traversed, prisoners were taken and. It's the easiest thing in the world to be brave when there is no danger. A despatch from Paris says: The following official statement was issued on Friday night: “In reprisal for the bombardment by the enemy of the open town of Lunev‘llle on the night of June 24, one of our aviators, fly- ing at an altitude of about 1,500 feet, dropped several shells of large calibre on the town of Mulheim, on the right bank of the River Rhone." People who know the least are ap‘ to assume the moat. Good Templars of Germany} Oppose Using Barley to ‘ Make Beverage. A despatch from Amsterdam says: A protest against the consumption of barley for the making of beer is made in a. letter sent to Chancellor von Bethmann-Hollweg signed by eight thousand members of Good Templar lodges in Germany. The letter points out the “gigantic waste of bread ma« terial” in the use of large quantities of barley for the production of been It urges that hereafter beer be only supplied on bread tickets. BREAD TICKETS TO GET BEER?! live stock sécured. Despite opposition and considerable sniping, no casual- ties were sustainea by either of the In the course of the operations, the correspondent adds, detachments of the Dragoon Guards and the Deccan Horse (a crack Indian cavalry com- mand) went into action. They charged an enemy position, killing sixteen and capturing thirty-four. The oper- ation was small, but it was the first time that cavalry was employed as such since the early stages of the war. BRITISH SWEEP A sum REGION; The force of the renewed British drive is shown not only in the ground gained but in the number of prisoners captured. London reports the taking on Saturday of more than 2,000 Gera mans, the total since the start of the offensive now being in excess of 10900: General Haig’s men, in ushing the Germs back to their th rd line of defence, advanced four miles‘beyond the original German lines as they ex- isted at the beginning of the offensive on July 1 in the Fricourt-Mametz sec- tor. Troops Do Great Work on East-'3 ern Shore of Suez Gulf. Airmen Shell Rhone Town.