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Origin. In the 15th century certain communes in the Grisons of the "Landesgemeinde " type appointed delegates to form leagues; these delegates accepted the decisions of the league ad referendum," i.e. subject to the approval of their respective communes. Similarly in 1643 four colonies formed New England, but the Plymouth delegates would not sign the federal articles until they were approved by their constituents. It arose in the federal efforts of directly self-governing townships.

Progress. In the United States two of the eleven original states which framed constitutions after the secession submitted them to

popular vote. In both the township system prevailed. Only one of the thirty-two state constitutions between 1868 and 1893 was not submitted to popular vote. And constitutional law has enlarged its scope so as to include state loans, etc. Again "local option" laws were almost unknown in 1850; since then each state has passed numerous laws to enforce free schools, teetotalism, land registration, etc., which are null and void, except where voters of some locality ratify them. Swiss federal constitutions since 1802 two were not (1803-1815), two were (1848 and 1874) submitted to the referendum. That of 1874, like that of 1848, contains a compulsory referendum in case of amendments to the constitution (art. 121) (compare the French system of 1795, art. 343, 346). It also has a permissive referendum in the case of all other

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laws and non-urgent general resolutions (arrêtés); these being null and void for 90 days, during which 30,000 voters or 8 cantons may demand a referendum (compare the French system of 1793). According to Lowell, between 1874 and 1897 laws, etc., were submitted to permissive, 14 to compulsory, referendum. The people have thus accepted civil marriage plus divorce, bankruptcy, and factory acts, a federal monopoly of bank notes (1891) and spirits, compulsory purchase of railways by the federation (1897), compulsory insurance, a fighting tariff, and capital punishment, and have rejected compulsory vaccination, federal bank notes (1875) and secular education. They also used, in 1893, the "mandate" to obtain an anti-Jewish Slaughter of Animals Act, which their legislature wisely worded so as to make it inoperative; in 1894 a mandate for "le droit au travail" was rejected. As for cantons, the con

federation only guarantees their constitutions, if ratified and alterable by a majority of citizens (art. 6). The referendum, confined to a few cantons in 1830, now figures in the legislation of every canton except those of the Landesgemeinde type and Fribourg; and the compulsory Zurich system of 1868, under which all laws and most general resolutions are null and void until accepted by the people in their meetings twice a year, had in 1895 spread to 9 other cantons. In Belgium a royal referendum has been proposed and rejected (1892-93).

In England adoptive acts have worked by means of a local referendum (1819-94). Guardians could, with the consent of the vestry, buy and let allotments since 1819. Other laws enabled (say) fifty ratepayers to require a poll-this is "the mandate," and a rd, latterly a bare majority of voting ratepayers to adopt for their parish elected vestries (1831-94), lighting and watching (1833), burial places (1852), recreation grounds (1860), baths (1846), and libraries; but in boroughs the town council stood in place of the ratepayers except as to libraries, an exception which disappeared in England and Scotland, 1893-94. The constituents might since 1870 similarly create or, since 1876, destroy a school board subject to governmental discretion; a power which, since 1894, has been transferred to parish meetings or polls in rural districts. Advocates of temperance and a universal eight hours' day often rely on local option. Small groups of ultra-socialists (L. Gromlund, Co-operative Commonwealth, 1892, p. 129) and ultra-individualists (Auberon Herbert, Anti-Force Papers, 1885) advocate the Zurich system. A strike is usually preluded and concluded by a vote of strikers, though there are strike delegates.

In 1893 the House of Lords proposed to allow certain workmen by a majority to exclude the Employers' Liability Bill from their industry (Hansard, 4S. vol. xx. pp. 2 and 3); this proposal has not been revived in the discussions of the act of 1897; had it been passed it would have been the only instance of the popular veto in English legislation.

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loosely used in political discussions, thus the proposal, made perhaps for the first time by Lord

"Mandate" and "referendum " are also

Salisbury twenty-five years ago (see Courtney's speech, Times, 9th Oct. 1884), often made by Conservatives and always rejected by Liberals, that an election should settle differences between the Lords and Commons, is commonly referred to as the "referendum de partage," instead of "the election ad hoc." The referendum can hardly be introduced into constitutional questions, except where the representative is regarded as a delegate, and that is not the case in England.

[J. Berney, L'Initiative populaire et la législation fédérale, 1896.-S. Deploige, Le Referendum en Suisse (1892), translated C. P. Trevelyan, with introduction and bibliography by L. Tomn.Numa Droz, Contemporary Review, vol. lxvii. p. 328.-A. L. Lowell, Government and Parties in Continental Europe (1897).-E. P. Oberholtzer, The Referendum in America (1893). R. de la

REFINING-REGULATED COMPANIES

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three rights, collectively called the régale, were first formulated in the testament drawn up by Louis IX. before his departure on the crusade. In the reign of Louis XIV. it was determined to extend the system of the régale to the provinces recently added to France. This gave rise to a vigorous struggle on the part of the bishops in the annexed provinces, and their cause was supported by the pope. To coerce the papacy, Louis obtained from the national synod of the clergy the four articles of 1682, which declared the practical independence of the Gallican Church. The Pope Alexander VIII. found it necessary to give way on the original ground of quarrel, and the régale was enforced in all the provinces of France as long as the monarchy lasted.

[Gasquet, Précis des Institutions Politiques et Sociales de l'Ancienne France, tome ii. ch. i.]

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REGULATED COMPANIES were mercantile associations holding the exclusive right of trade with certain countries. Each member managed his own business on his own capital, but was obliged to observe the company's regulations.

The Hansards of the Empire (see HANSEATIC LEAGUE) and the merchants of the STAPLE were two of the earliest regulated companies. However they had decayed before the end of the 16th century. Of more importance

to England's budding commerce were the Merchant Adventurers (see ADVENTURERS, MERCHANTS) the TURKEY, LEVANT, RUSSIA, and EASTLAND companies. The Adventurers sprang from the Mercers' Gild in 1407, and still existed at the end of last century; they traded between the River Somme and the Skaw in cloth. The Turkey Company, descended from the Grocer's Gild, was confined to merchants who were freemen of London. The fine on entrance was reduced to £20 by parlia ment in 1752 (26 Geo. II. c. 18), but Adam Smith declares it in his time "a strict and oppressive monopoly." The Levant Company was incorporated in 1581, continued by the Long Parliament in 1644, and suppressed in 1825 (6 Geo. IV. c. 33). The Russia or Muscovy Company's charter dates from Philip and Mary; it was one of the most exclusive associations, but its fees were cut down to £5:10s. by parliament (10 & 11 Will. III. c. 6). The Eastland Company, trading with the Baltic, was incorporated by Elizabeth ; originally oppressive, its fees were reduced to 40s. in 1684 (25 Car. II. c. 7). Besides these, the EAST INDIA COMPANY from 1600 to 1612 was a regulated company, and in 1698 the "General" East India Company was formed on the same basis. The old "London" East India Company joined as one of its members, but ten years later the two combined on a jointstock as the " United Company of Merchants of England trading to the East Indies." The China tea-trade was, however, managed till 1834 by the "Co-hong" under the system of regulation. The African Company (see AFRICAN COMPANIES, EARLY) at first on a joint-stock, became in 1750 a regulated association; it failed through want of funds and the difficulty of management, and was dissolved (1 & 2 Geo. IV. c. 28).

These companies were formed to meet the necessity of combination amongst merchants in foreign parts before the 16th century. They therefore supported consuls to look after their interests, and the Turkey Company contributed towards the expense of the ambassador at Constantinople. Once a company was formed, the regulated system was only a natural extension of the ideal of "well-ordered trade," from municipal to international commerce. No one but a member of the company might trade within its territory. No member might

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REGULATION OF LABOUR-RELATIVITY

sell below the standard price. No member might sell more than a certain quantity in each year. It was these regulations which made the companies so unpopular. The sudden flood of wealth from the New World caused the 17th century to be a time of great enterprise. Apprentices and men of straw rushed into trade on borrowed capital and cut prices down to an alarming extent before they failed. Against these INTERLOPERS the companies sought to guard by high entrance fees, and no doubt the £25 fine of the Levant Company and the £50 and £100 fine of the Adventurers did keep many men out; at any rate it must have prevented a general merchant speculating on an occasional voyage, when he saw a favourable opportunity. However, in the case of the Adventurers, their revival in 1616, after an eight years' suppression, the report of the commission on trade in 1622, and their successful resistance to the complaints of the Merchant Adventurers of Exeter in 1643, 1645, and 1661, show that their contemporaries approved of them. With most of the other companies, parliament had to interfere after the Restoration, but revoked the charter of none.

More doubtful was the effect of the regulation limiting a merchant's annual sales. This STINT may be compared with the VEND (q.v.) of the Newcastle coal-owners, by which the probable amount of the year's demand was fixed by a committee, and each owner raised his share, proportionately to the output of his mine, as estimated relatively to the others (cp. Report of the Select Committee on the Coal Trade, 1830, viii. 6). Its supporters urged that by this device no one man could engross all the trade and form a virtual monopoly. Its opponents declared that it limited the supply of goods and raised prices. To this the Adventurers answered that as only one-tenth of the merchants authorised to trade used their privileges, the deficient supply was due to the unprofitableness of the trade, not to the company's action.

Throughout the 16th century, the regulated companies held their ground; in the 17th they

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ruptcy or condemnation for a grave criminal The most frequent demands for rehabili tation are those by a trader, who, since his bankruptcy and discharge, has paid all his former debts with interest and costs, including those from which he may have been released by composition or payment of a dividend. The petition must be addressed to a court of appeal, and if the result of the inquiry instituted is to show that the bankruptcy was not aggravated by any fraudulent acts, the rehabilitation is granted by a decree read in the court by which the demand was received, and is entered on the register. Among the disabilities of bankrupts removed by rehabilitation are incapacity to hold the offices of agent de change (see CHANGE, AGENTS DE) or broker, to enter a public bourse, to become an elector, or a member of a legislative body, or council of PRUD' HOMMES; to act as a juror, arbitrator, or witness to a notarial act, to obtain discount at the bank of France, etc. In England rehabilitation in the above-mentioned sense is obtained by an annulment of the Bankruptcy or by an order of discharge coupled with a certificate showing that the bankruptcy was not caused by misconduct (Bankruptcy Act, 1883, §§ 3 and 6).

T. L.

REI. The rei, or ree, is the unit of account in both Portugal and Brazil. 1000 reis=1 melreis (see MILREIS).

F. E. A. REICHSBANK. See BANK of Germany. REICHSMARK. See MARK (GERMAN). RELATIVITY, PRINCIPLE OF, IN POLITICAL ECONOMY. The principle that the economic doctrines true for any given epoch are relative to the particular circumstances of that epoch, and cannot be regarded as permanent or true for all times, is an essential element in the teaching of the historical school of economists. The idea of the relativity of economic doctrines follows easily from the conception of economic life as exhibiting continuous organic growth and development, and this conception is itself the natural outcome of historical study.

Richard JONES and Friedrich LIST are to be

historical movement rather than as themselves

were out of date. Men cared less for "well-regarded as important forerunners of the ordered trade," and preferred to regulate commerce by CUSTOMS and BOUNTIES rather than by the hated MONOPOLY system. Sir Josiah CHILD (Dis

course of Trade, iii.) and Adam SMITH (bk. v. i.) declare the companies are useless, and this the latter thinks "the highest eulogy." Probably their accusations of oppression and restriction were very much truer after 1650 than before. From the Revolution the companies steadily declined, and by 1800 were of no importance. L. R. H. REGULATION OF LABOUR. See INDUSTRY, ORGANISATION OF.

REHABILITATION (Fr.). An act of procedure to restore to the person rehabilitated the possession of the civil or political rights, the loss of which has been incurred by bank

typical representatives of the movement itself. What is most characteristic, however, in their teaching is the insistence upon relativity in two particular spheres; and a brief reference to their views will serve to illustrate what is meant by the principle of relativity in general. Jones specially insisted on the limited applicability of the Ricardian theory of rent as regards both place and time. A theory based on the assumptions of individual ownership and freedom of competition could not, he pointed out, apply to oriental states of society in which JOINT OWNERSHIP is the rule and rents are regulated by custom, nor even to those

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instances nearer home in which land is held cal development; that it grows and develops, on a customary tenure, as in the métayer in living connection with the whole social system (see MÉTAYAGE). Similarly, as regards organism, out of conditions of time, space, and limitation in time, he showed that the Ricard- nationality; that it has the source of its arguian law could not hold good in a condition of ments in historical life, and ought to give to affairs such as existed in medieval economy, its results the character of historical solutions; when land was to a great extent held in that the laws of political economy should not common, and the relations between the owners be set forth otherwise than as historical exand the tillers of the soil were not controlled planations and progressive manifestations of by free competition. Turning to List, we find the truth; that they represent at each stage that his defence of protective duties is based the generalisations of truths known up to a on the recognition of relativity in the condi- certain point of development, and neither in tions of economic productivity in a community. substance nor in form can be declared unconThe foundation of the argument is the position ditionally complete; and that the absolutism that all civilised communities of the temperate of theory-even when it gains recognition at a zone pass through successive economic stages, certain period of historical development-itself of which the last three are the stage of agri- exists only as the offspring of the time, and culture pure and simple, the stage of agricul- marks but a stage in the historical developture combined with manufactures in a nascent ment of political economy" (Die politische and slowly developing condition, and then the Oekonomie vom geschichtlichen Standpunkte, pp. stage in which agriculture, manufactures, and 24, 25). This extract may be regarded as commerce have all reached a high and well-expressing the general view as to the relativity balanced development. In the purely agricultural stage free trade with richer and more developed countries is, in List's view, a necessary condition of advance, and in the last stage of all free trade is also advantageous. On the other hand, the training and development required for passing from the second stage to the third can be acquired only by means of a carefully arranged protective system; and in the second stage such a system is, therefore, necessary for progress. The solution of the problem of protection versus free trade is thus regarded as relative to each particular people, and the stage of development which they have reached.

The principle of relativity in the sphere of economics was expressed in a more general form by Wilhelm ROSCHER. Applying to economic phenomena ideas which writers on jurisprudence had already applied to legal institutions and conceptions, he insisted on the necessity of always taking into consideration the varying character of economic habits and conditions; and, in particular, he pointed out the fallacy of criticising economic institutions, regardless of a people's history, and the stage of social and industrial development to which they had attained. Karl KNIES affirmed still more definitely the relativity of economic doctrines in opposition to what he termed the absolutism of theory, that is, the claim-explicitly put forward by some of the older writers, and tacitly assumed by others- to offer something that is true unconditionally and in the same way for all times, lands, and nationalities. "In opposition to the absolut ism of theory, the historical conception of political economy rests," says Knies, "upon the fundamental principle that the theory of political economy, in whatever form we find it, is, like economic life itself, a product of histori

of economic doctrines taken by the historical school distinctively so-called.

The relativity of current political economy is affirmed no less definitely, but from quite a different point of view, by Walter BAGEHOT, who regards it of importance expressly to limit the science to one particular kind of society, namely, "a society of grown-up competitive commerce," such as we find in the most highly civilized modern communities. Political economy is, in other words, limited to "the theory of commerce, as commerce tends more and more to be when capital increases and competition grows." It will be observed that whilst the object of the historical school is to concentrate attention on economic history and on the study of economic development as opposed to the study of economic relations in a given society, Bagehot's object is just the reverse. He wishes to concentrate attention on current economic phenomena, and to avoid the distraction that must result from turning aside to the superficially corresponding but yet essentially different phenomena of earlier epochs.

In endeavouring to form an estimate of the importance to be attached to the relativity of economic doctrines we shall do well to have regard (1) to the distinction between economic theorems and economic precepts, and (2) as regards economic theorems, to the distinction between abstract and concrete economics.

Roscher in his affirmation of relativity is thinking mainly of economic institutions and economic policy, and in this sphere the principle of relativity may be laid down with less qualification than when we are dealing with economic laws in the more strictly scientific sense, that is, with statements of uniformities as distinguished from recommendations as to what ought or ought not to be done in practice. It is only

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by the aid of abstraction that any claim to universality can be made good, and in formulating an economic policy, we cannot profitably carry abstraction very far. In theoretical investigations hypothesis and abstraction are often indispensable; but when we apply our theory with the object of laying down rules of practice, it is desirable to have recourse to hypothesis but sparingly. It is indeed doubtful how far, in the examination and criticism of economic institutions and policies, we can advantageously carry our abstraction even to the stage of neglecting social considerations of a purely non-economic character. Both the social and the economic bearings of a given line of action will, however, vary with the circumstances of different nations and different ages. Hence a given economic policy can in general be recommended only for nations having particular social and economic surroundings, and having reached a certain stage of economic development. It may be possible to formulate as having universal validity certain negative precepts, namely, that certain lines of action cannot under any circumstances be advisable; but on the whole the principle of relativity may be broadly accepted so far as economic precepts are concerned.

Passing from economic precepts to the body of positive doctrine which constitutes more distinctively the science of political economy, attention must be paid to the fact that economic doctrines vary in the degree of abstraction which they involve. Without professing to be able to draw any hard and fast line, we may adopt the suggestion made by W. S. JEVONS, and distinguish broadly between two stages of economic doctrine, which may be called the abstract and the concrete stage respectively (see article ABSTRACT POLITICAL ECONOMY). Concrete economics is not content with merely hypothetical results, but avowedly takes into account special conditions of time, place, and circumstance; and it follows immediately that the conclusions already arrived at with regard to the relativity of economic precepts apply equally to concrete economic theorems. For

the more fully we have regard to special conditions of time, place, and circumstance, the more limited must be the applicability of our results. Many of the circumstances which exert an important influence on economic phenomena vary widely with the legal form of society and with national character and institutions; and even when the same forces are in operation there may be variation to an almost indefinite extent in the relative influence which they exert. The contrasts presented by medieval and modern societies, and by contemporary oriental and European societies, considered in their economic aspects, are such as cannot possibly be overlooked. Many of the chief economic phenomena, such as RENT,

PROFIT, EXCHANGE, have their counterparts on each side of the comparison, but are singu. larly unlike in many of their characteristics; and over and above this, as societies progress, new economic phenomena, practically novel in character, spring into existence. Consider, for example, modern problems of CREDIT and of INTERNATIONAL TRADE; or again, the relations between the modern factory operative and the modern capitalist employer. Less striking contrasts, but contrasts that ought not to be neglected, are observable when we consider different modern communities of the European type in respect of particular economic phenomena, such as the tenure of land, the mobility of labour, and so forth. In every case the extent of the divergence can be ascertained only by direct observation and comparison; and it may be remarked in passing that, as regards medieval and modern societies, whilst there was formerly danger of the differences being insufficiently emphasised, there is perhaps at the present time more danger of their being exaggerated. The notion, for example, that during the middle ages the forces of competition were entirely inoperative, is far from being borne out by the facts.

They

The relativity of concrete economic doctrines having been admitted, a claim for universality may still be put forward so far as the more abstract principles of the science are concerned. These principles do not profess to set forth the full empirical reality. They are admittedly based on hypothesis and abstraction. require therefore to be constantly qualified and limited, sometimes in one direction, sometimes in another, before they can serve for the interpretation and explanation of actual economic phenomena. At the same time, some at least of them are universal in the sense that they pervade all economic reasoning. The law of the variation of utility with quantity of commodity, and the principle that every man so far as he is free to choose will choose the greater apparent good, may be given as examples of fundamental economic principles, which, in the words of Jevons, "are so widely true and applicable that they may be considered universally true as regards human nature." There are many other principles, which, with due modifications, are applicable to economic phenomena under widely different conditions. Take, for instance, the LAW OF SUBSTITUTION (q.v.) in the form that where different methods of production are available for obtaining a given result, the one that can do the work the most cheaply will in time supersede the others, or the doctrine that facilities of transport tend to level values in different places, while facilities of preservation tend to level values at different times. Compare, again, the Ricardian law of rent as ordinarily stated, with the principle of economic rent in its most abstract and general

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