that of Alabama in 1876. Only a part of this act, that which left certain state indorsements unprovided for, can fairly be called repudiation. The author, moreover, omits mention of some acts by which certain of the most flagrant cases of repudiation were mitigated; for example, the consolidation of Louisiana's debt in 1884, at four per cent, - an act which removed a great deal of the odium of the repudiating act of 1879, in accordance with which that rate of interest would not have been reached until 1900.

But

The third part of the book is on the causes of repudiation and the remedies therefor. These chapters are of the most general interest. Dr. Scott does not go back of 1837 in his search for causes. the influences tending toward repudiation were observed at an earlier date than that. Alexander Trotter, writing in England three years before the first case occurred, was able to prophesy that many states would rather repudiate than burden themselves with taxes, and that this would be more likely to occur in the Southern states (as it did) than in the Northern.

Mr. Scott finds five causes of repudiation: (1) Illegality, alleged or real, in the issue of the bonds; (2) the heavy pressure of debts on the repudiating states; (3) the corruption of state officials; (4) the financial crisis of 1837; (5) the Civil War. These, however, are the pretexts or occasions, rather than the causes, in a scientific sense. The fact that the general movement was foreseen should have shown the author that its real causes were more remote than those alleged. These cases of repudiation are cases where the states enjoyed credit based on an erroneous judgment as to their willingness and ability to meet their obligations. To find the causes of this we must ask, first, how that credit came into existence; then, why the creditors' confidence was misplaced. The creditor forms his estimate of the ability of the state to pay chiefly on the supposed value of the existing or the anticipated revenues. An inquiry as to the relation of the debt to the revenues reveals most of the fundamental characteristics of the debt. According to Mr. Scott's own showing in the presentation of the several cases, repudiation followed upon the failure of some specific revenue appropriated to the payment of the debt charges. For the payment of the interest the states generally relied on the returns of the productive investment which they had made of the borrowed money. Some of the states had revenues from the sale of public land; few possessed any adequate system of taxation. Since the states were dependent for future prosperity on the increase of their population, it was wholly contrary to their interests

to introduce taxes which might repel immigration. A failure, therefore, of the enterprises in which their borrowed money was invested, left the states without means. Mr. Scott has stated the reasons for the confidence of creditors, especially of European creditors, in the success of these enterprises, but he fails to grasp the full significance of this fact. Over-confidence of others in the resources of the states led to over-confidence of the states themselves in those resources. The states took their credit as the actual measure of what they might safely borrow. Their debts contained within themselves the power of reproduction. Interest charges were met by new loans. No plan for repayment was undertaken before 1840. In the first period of repudiation, then, an incorrect estimate by the creditors of the resources of the states must be taken in connection with the subordinate influences mentioned by Mr. Scott, to make an adequate explanation of the causes. In the second period, i.e., since 1870, as Mr. Scott correctly points out, repudiation was chiefly due to the misgovernment of the Reconstruction period.

But the chapter on the "Remedies for Repudiation" contains the most matter for criticism. Mr. Scott passes over with a few words the remedy which has been applied by the practical wisdom of the people, namely, constitutional limitation of the debt-making power. Should any purpose like forest-culture, irrigation or control of natural monopolies, make it desirable for the states again to incur large debts, the author proposes to insure the creditor in his right by the old common law remedy for the wrong. Believing that the repeal of the eleventh amendment is impossible, Dr. Scott proposes that each state shall, by constitutional or other enactment, vest in its courts or in some special tribunal the power to execute judgment against the state in one of the two ways now applicable to delinquent municipalities, i.e., either seizure of the property of any individual inhabitant, or compulsory taxation by writ of mandamus. When we recall that in many cases repudiation was effected by constitutional enactment, and that such a method is always open to the people, the value of the proposed remedy shrinks materially. Moreover, the treatment of bankrupt municipalities by the courts has not been such as to inspire much confidence in these measures.

Mr. Scott has failed to grasp the importance and real significance of the constitutional limitations now in force. Nor does he understand the weakness and lack of permanence in state constitutional law. The people do not intend that these constitutional limitations shall prohibit debt-making for objects which meet with general

approval. The whole drift of this constitutional law-making shows that they do intend to establish a healthy relation between the debt and the revenues of the state. They have made these restrictions so sweeping because they believe in lessening the functions of the state governments. They do not intend that these governments shall handle large revenues unless under direct popular supervision, and hence the debts must be correspondingly small.

Without a repeal of the eleventh amendment, the only safeguard against repudiation lies in the sound principle of financiering, which refuses to allow the debt charges to exceed the means of the state, and in a healthy and honorable popular sentiment in regard to the debt. CARL C. PLEHN.

UNIVERSITY OF CALIFORNIA.

Systèmes Généraux d'Impôts.

Par RENÉ STOURM, Ancien Inspecteur des Finances. Paris, Guillaumin et Cie, 1893-415 pp.

M. Stourm has long been favorably known as the author of an excellent work on the budget, as well as of the classic study on the Finances of the Old Régime and the Revolution. It was natural, therefore, to expect that this new book on General Systems of Taxation would be an important contribution to science. As a matter of fact, the work proves to be quite insignificant.

As in all the writings of M. Stourm, the reader will find, indeed, a simplicity and clearness that leave nothing to be desired. But the simplicity is in this case largely due to superficiality. To the student who knows anything of the complexities of many of the problems, the sang-froid with which whole classes of arguments are either absolutely ignored or coolly brushed aside is almost appalling. That M. Stourm should be a conservative of the conservatives, is perhaps not surprising; but that he should treat the arguments of his opponents so cavalierly, is disheartening. The chief defect of the work, however, is its extreme insularity. Although the book abounds with references to French works, but a single foreign author on finance is mentioned later than John Stuart Mill, and that one, an American, in a wrong connection and with an absurdly mutilated title. Not a word as to the immense contributions to theory made by the German, the Italian, the Dutch and others during the past ten or twenty years.

And even as to the practical discussions, with a few minor exceptions we find little that has not already been printed in other French

works. It may be said in extenuation that the book was meant to explain the French system of taxation. But there is nothing in the title to suggest this; and even in a discussion of the French system some regard should be paid to general theory. Of the errors of fact it is not worth while to speak. One example will suffice: The system of direct taxation in America is mentioned as a warning example of the "mixed system," or combination of the income tax with the property tax (page 195), while the general property tax, or "impôt sur le capital," is said never to have existed alone anywhere (page 64). Each of these statements is absolutely false.

E. R. A. S.

Protezionismo Americano. By Professor UGO RABBENO. Milan, Fratelli Dumolard, 1893.-8vo, 512 pp.

The subject matter of this work is comprised in three parts. In the first of these the policy of Great Britain during the colonial period is discussed at great length, and in a manner which shows that the author has made a comprehensive study of the literature of the subject. Yet his conclusion, "that the American Revolution was directly caused by British industrial policy, rendered incompatible with the changed economic condition of the colonies," seems to me an untenable confusion of occasion and cause. Would it not be a truer statement that the colonies constituted a mature political entity, which was bound to become an independent nation in any case?

The second portion of the book is devoted to the subsequent history of protection in the United States, covering the period from 1789 to 1889. The most notable feature here is a full discussion of the subject of trusts and monopolies, in which the learned author shows an intimate acquaintance with our literature. The conclusion drawn is, that the cause of great industrial consolidation lies not in protection, but in the industrial depression of the last twenty years, which is at the same time the cause of the recrudescence of protection since 1860. What then, it will be asked, is the cause of this industrial depression? And this at once brings us to the key-note of the whole book.

Professor Rabbeno believes that his work "has certainly the merit of being objective and absolutely free from all preconceived ideas." This might be granted from a study of the first portion of the book, but in this second part the conviction is forced upon one that the

unconscious tendency is always toward a justification of the so-called "system" of Professor Loria. This may be due to the fact that Dr. Rabbeno has been so closely identified with Loria's views, and has been the authorized exponent of them in this country. Be that as it may, the present work seems more like an illustration of these theories than like the result of independent research. Moreover, many of the so-called "principles" seem mere truisms to students of historical method and of American history. For instance, the conclusion drawn from a study of the colonial period is "that the British prohibition of manufactures was historically rational and expedient." This "profound truth" accredited to Professor Loria is for us nothing more than a fundamental tenet of the historical school, which finds the justification of social institutions in the mere fact of their persistence through a long series of years. Again, the theory that abundance of free land tends to prevent the growth of manufactures, by maintaining a high rate of wages, was not first enunciated by Professor Loria. It was a favorite idea of our own Dr. Franklin, and is repeated in Gallatin's famous report of 1810. Professor Rabbeno has, however, elaborated the theory, and in fact the whole book is based upon it. It is the absorption of all the free land, he says, which throws capital and energy into manufacturing industry, whereby prices are depressed. As a consequence, goods made under such conditions can compete successfully with those produced in new countries where free land still exists. Free trade accordingly becomes the natural policy of all European states.

The author thus takes his position squarely by the side of Loria and Ricca-Salerno in holding "that protection finds the reason of its being in capitalistic production." Protection becomes, then, an invention of the capitalist class; it is "an effect and not a cause of industrial depression." It naturally comes to the front at two stages of industrial evolution: first, at the period of transition from domestic to capitalistic (agricultural or industrial) methods of production; secondly, when the absorption of free land, the pressure of population and the accumulation of capital begin to reduce profits, and capital seeks to maintain its former favorable position. Such reduction of profits, says the author, is a feature of the permanent depression of the last twenty years; and it has induced the recent outbursts of protective fervor all over the civilized world. These two periods in our history, marked by a dominance of the protective spirit, are found to culminate in 1824-28, and in the two decades since 1873. It was but natural, says Professor