sue, and the recent investigations of the National Monetary Commission bring out the fact that while the modern state is showing an increased respect for the fundamental principle of non-interference with the commercial side of banking, it is insisting more and more firmly that it shall receive full compensation for the franchises which it grants to the banks and that the temptation shall be removed to sacrifice the general interests of the market to the profit of shareholders. These ends are sought by a system of division of the profits of the bank when they exceed a certain point, which has now been applied upon a large scale in France, Germany, Belgium, Austria-Hungary, Italy, the Balkan States and many others. In Belgium the provision that the bank shall pay over to the treasury all profits derived from a rate of discount exceeding 31⁄2 per cent, has perhaps gone too far in discouraging the advance of the discount rate to protect the metallic reserve. At the time that the provision was adopted, however, there was a plethora of capital seeking investment and it was not anticipated apparently that rates for money would again rise to a normal rate of four or five per cent. In providing for a division of profits between the shareholders of the bank and the treasury after the dividend to shareholders reaches 4 per cent per annum, the leading European bank charters set a standard which has been followed in the plan of Senator Aldrich for this country presented to the National Monetary Commission.

The work of M. Lévy is an interesting and important contribution to the discussion of banking problems and has already been cordially welcomed by European reviewers.

CHARLES A. CONANT.

NEW BOOKS.

BABELON, E. Traité des monnaies grecques et romaines. 1re partie, théorie et doctrine. (Paris: E. Leroux. 50 fr.)

BOIES, W. J. The Aldrich currency reform

system analyzed, how the proposed system would work in practice. (New York: Fourth National Bank. 1911. Pp. 24.)

BREIT, J. Bankgesetz. Systematisch erläutert. (Berlin: R. V. Decker. 1911. Pp. xiv, 426. 12 m.)

BUDDE, B. Die Geschichte der Immobelienverkehrsbank und ihre Lehren. (Berlin: Franz Vahlen. 1911. Pp. 94.)

The detailed history of a German real estate company which came to grief through speculation and carried down with it the Pommersche Hypotheken-Aktien-Bank and other institutions. Originally

established by the directors of the Pommeranian mortgage bank as a means of helping this institution out of difficulties, it, together with other institutions established through its agency and for its purposes, served as a speculative tool for its founders. The purpose of the monograph is to suggest needed modifications in the laws of the Empire regarding mortgage banks, and is therefore published as No. III in a series entitled Beiträge zum Reichs-Hypothekenbankgesetze. CANNON, J. G. Clearing house loan certificates and substitutes for money used during the panic of 1907, with suggestions for an emergency currency based upon such loan certificates. (New York: D. Appleton & Co. 1911. Pp. 31, facsimiles. $2.50.)

CONDAMAIN, H. Essai sur la conduite de la Banque de France aux époques de crise. (Rennes: Prost. 1911. Pp. xvii, 319.) DANIEL, T. C. Real money versus banks of issue promises to pay. (Washington: Published by the author. 1911. Pp. 275. $1.50.) Believes that the Aldrich plan will perpetuate a money trust. Quotes freely from writings of economists; and summarizes statements made before the Banking and Currency Committee of the Sixtieth Congress.

DEPRESSEUX, F. La monnaie et le peuple. Etude d'économie sociale. (Paris: Jacques Godenne. 1911. Pp. 172. 2.50 fr.)

FAURE, G. Simples notions sur les changes étrangers. (Paris: H. Dunod et E. Pinat. 1911. Pp. vi, 90. 2.50 fr.)

To be reviewed.

HOWARD, H. F. India and the gold standard. (London: Thacker. 1911. 6 d.)

JOHR, A. Zur Frage der Errichtung einer schweizerischen Hypothegenbank. Schweizer-Zeitfragen, No. 40. (Zurich: Orell Füssli. 1911. Pp. 91. 2 m.)

KIMBALL, E. The public life of Joseph Dudley. A study of the colonial policy of the Stuarts in New England. 1660-1715. (New York: Longmans. 1911. Pp viii, 329.)

Published in the series of Harvard Historical Studies. Chapter viii is devoted to the currency problem which arose during the period under consideration.

MUSSEY, H. R., editor. The reform of the currency. Proceedings of the Academy of Political Science in the City of New York. Vol. I, No. 2. (New York: Academy of Political Science, Columbia University. 1911. Pp. 197-493.)

Contains papers by several of the experts who coöperated in the reports of the National Monetary Commission, in which their conclusions are summarized. Also papers on a central bank by Warburg, Morawetz, Roberts, Frame and Conant.

NAS DE TOURris, V. DE. La réforme monétaire au Siam. (Paris: E. Larose. 1911. 3.50 fr.)

NEYMARCK, A. L'épargne française et les valeurs mobilières 18721910. Finances Contemporaines, Vols. VI & VII. (Paris: Alcan. 1911. Pp. xiv, 437; 569. 15 fr.)

PECK, M. L. Bristol Savings Bank. 1910. Pp. 16.)

An historical sketch.

(Bristol, Conn.: The author.

PHILIPPOVICH, E. Die Bank von England im Dienste der Finanzverwaltung des Staates. Second edition, revised. (Vienna: F. Deuticke.

1911. Pp. viii, 217. 6 m.)

The first edition was published in 1884. In bringing the work up to date especial attention is paid to the changes in the technique. ROSENTHAL, H. S. Building, loan and savings associations, how to organize and successfully conduct them. Third edition, revised and enlarged. (Cincinnati & Chicago: American Building Association News Co. 1911. Pp xv, 425. $3.50.)

Roux, G. Le change espagnol et son amélioration actuelle. (Montpellier: Coulet et fils. Pp. 110. 3.50 fr.)

SCHIMBKE, P. Das deutsche Bankwesen in seinem Grundzügen. (Hanover: Hahn. 1911. Pp. 36.)

SKINNER, T. The London banks and kindred companies and firms, 1911-12. (London: T. S. Skinner. 1911. Pp. 802. 10s.)

SOBRAL, E. M. La reforma monitaria. (City of Mexico: Palacio Nacinal. 1910. Pp. 329.)

An authoritative account of the recent currency reform in Mexico, with a brief historical discussion of Mexico's previous monetary experiences. Author is professor of political economy in the National School of Jurisprudence of Mexico, and chief of the Division of Credit and Commerce in the Treasury Department.

STERN, R. Die Arbitrage in Bank- und Börsenverkehre. (Leipzig: G. J. Göschen. 1911. Pp. 113. 2.50 m.)

WETZEL, F. W. The National Bank Act, and other laws relating to national banks, banking and currency. Indexed and annotated. (Washington: The Economy Publishing Co. 1911. Pp. 140. 35c.)

Public Finance, Taxation, and Tariff

The Income Tax. A Study of the History, Theory, and Practice of Income Taxation at Home and Abroad. By EDWIN R. A. SELIGMAN. (New York: The Macmillan Company. 1911. Pp. xi, 711. $3.00.)

Begun seventeen years ago, laid aside in 1895, because the adverse income tax decision by the Supreme Court of the United States put an end, for the time being, to interest in the subject,

and completed now that the income tax amendment to the federal constitution has revived that interest, Professor Seligman's seven hundred page book, The Income Tax, was published early in this

year.

The book contains a great deal of history, foreign and American, a prophecy, and a "practical programme." "In the first place," says Professor Seligman (p. 672), "the income tax is coming. Sooner or later the constitutional or political difficulties will be surmounted, and the United States will fall in line with every other important country in the world. Economic conditions have everywhere engendered a shifting of the basis of taxable faculty, and democracy has declared that the best criterion, on the whole, is to be found in income. Whether we like it or not, the development is irresistible, and the income tax will come to stay until some new criterion of ability approves itself to the democracy of the future.”

Why shouldn't we like it? Of the essential justice of taxation based upon income, when properly adjusted to incomes of varying amounts and kinds and when well administered and justly enforced, we are almost all of us convinced. Those who have doubted the expediency of an income tax in the United States have done so, not because they did not "like it," but because of a well grounded fear that our democratic government cannot develop and place in the seat of power administrators sufficiently strong to enforce such a tax justly. Democracy is so jealous of power that its executive arm is always weak. This same fear seems to have possessed the author to some extent, and he attempts to allay it in the proposed "practical programme."

The prophecy is of such wide interest that the grounds for it require examination. "The income tax," says the author (p. 642), "is not needed for purposes of revenue in either the state or the nation." He also says: "there is no immediate likelihood of a fundamental change in the tariff." Hence, there is no actual fiscal reason for the income tax. That being the case, it follows that we are going to enjoy the luxury of tax reform simply for reform's sake, which, as Professor Cohn pointed out, was the main motive of the great tax reforms in Prussia after the receipt of the French indemnity fund had made the problem of making ends meet less difficult. Although the income tax is not needed, nevertheless Professor Seligman thinks it is desirable; because it would "tend to redress existing inequalities," and, also, probably render

"the reform of our entire system of state and local taxation more easy of accomplishment" (p. 642). Still desirability is not the real reason for the impending advent of the income tax. The reviewer is inclined to agree with the author that, in spite of the fact that it is not needed, the income tax is coming.

If the prophecy is fulfilled the income tax will be one of the achievements of the recent movement in the direction of pure democracy, as opposed to representative government. It will come as an accompaniment of the direct primary, the initiative, the referendum and the recall, as a part of the spontaneous expression of what the "people" think should be, as a part of the movement to make private wealth more subservient to the public weal. This suggests an interesting circle of speculative thought. We are led to speculate as to how much the income tax decision of 1895 has had to do with the apparent distrust of representative government and of the judiciary, and with the spread of pure democracy, and in turn how much that decision was itself one of the provoking causes of the proposed income tax. Of that momentous decision, Professor Seligman says (p. 586), "the decision is based upon glaring historical errors and undoubted misinterpretations," and he agrees with the minority of the court that the decision is "fraught with the most utmost danger to the perpetuation of the republic."

We shall know more about this prophecy in the future; meanwhile the book will undoubtedly contribute to its fulfillment, for it furnishes ample ammunition for the proponents. "My chief object," says the author in his preface, "has been to set the subject in a somewhat clearer light and to aid the legislator in constructing a workable scheme." Hence, the "practical programme" is presented.

The first item in that programme is that the income tax should be imposed and administered by the federal government. For this the author presents four reasons: first, income cannot be sufficiently localized to be surely reached by the state authorities; second, in no other way can double taxation be avoided (and we might add conflicts of jurisdiction as well); third, the states cannot solve the administrative difficulties which will be greater if the tax is to be administered in each state under a different authority and plan; and fourth, the probable embarrassment of state finances if there were a federal as well as a state income tax. Inasmuch, however, as the federal government does not need