crisis for the first time in many, many years.

Are the reports true? We do not know but conditions are right for them to be true. According to some people in Hamilton, the crisis is four-pronged: First, the bases are departing which is cutting down on Bermuda's military income which had been available since the Second World War. There is, of course, still some income from Kindley Field but that is decreasing and will decrease until the base is returned to Bermuda late in the summer.

Secondly, tourism early in 1995 is slow and has not, so far, produced any new numbers, much less the numbers to compensate for the loss of the bases income.

It was hoped that when the recession ended in the United States the visitors would return to Bermuda and figures would increase. However recession recovery is still uncertain in the United States and there has been publicity about high prices and political uncertainty in Bermuda. Resort competition is increasing and Bermuda does little to improve its promotion and spruce-up its image.

Thirdly, the influx of international companies has slowed during the first quarter of 1995, probably due to the political confusion in Bermuda today, thus decreasing income from that source when we had every reason to expect that income would increase. There once was every indication that with the return of the United Bermuda Party to power after the last election Bermuda's international business sector would boom. Discussion of Independence in the wake of the election stifled any boom and resulted in international business uncertainty.

The fourth factor is the relaxation of currency control, allowing Bermudians to spend and invest more overseas. We do not know if there is any significant overseas investment in this way but we would be surprised if there is not since overseas investment has been restricted since the Second World War.

There is an added factor in the recent decline of the local stock market and the troubled local real estate market which might well encourage overseas investment.

All of these factors have come together at a time when Bermudians are nervous, very nervous. They will be a good deal more nervous if the reports are correct and Bermuda does have a major balance of payments problem. Bermudians, of course, are not used to such things. That a problem of this kind should arise at this time is further indication of just how delicate Bermuda's economy really is.

The truth is that as long as Bermuda is debating Independence there is little hope of sorting out the economy. In fact, if there is now a balance of payments problem, the likelihood is that the problem will grow.