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Cyclopaedia of Political Science, Political Economy, and of the Political History of the United States by the best American and European Authors, ed. John J. Lalor (New York: Maynard, Merrill, & Co., 1899). Vol 1 Abdication-Duty.

Editor: John Joseph Lalor

Part of: Cyclopaedia of Political Science, Political Economy, and of the Political History of the United States, 3 vols.

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B

BADEN

BADEN, a grand duchy situated in the southwest of Germany along the right bank of the Rhine. It has a superficies of 277 geographical square miles, with a population (December, 1875) of 1,507,179. The population, in 1816, was 1,005,898; in 1839, 1,277,403; in 1861, 1,369,291; in 1871, 1,461,428.

—Before 1866 the grand duchy was a member of the German confederation; from 1866 to 1870 it was an independent state; since January. 1871, it is a part of the German empire. It has 3 votes in the federal council, and sends 14 deputies to parliament.

—In all affairs not controlled by the laws and institutions of the empire, the country is governed by its own constitution, which dates from Aug. 22, 1818, and by its own laws. The constitution lodges the executive power in the grand duke. The legislative power is divided between him and the representatives of the country or the "estates," divided into two chambers. The grand duke attains his majority at 18 years of age. The succession follows in the male line of the house of Zaehring by right of primogeniture.

—The upper chamber is composed of princes of the blood, heads of 10 noble families; the Catholic archbishop, the superintendent of the Protestant church, the proprietors of hereditary landed estates worth 500,000 marks, 2 deputies of universities, and 8 members appointed by the grand duke without regard to rank or birth. The deputies of the universities are elected for 4 years, those of the landed nobility for 8. One-half the seats are vacated every 4 years. The appointments made by the grand duke are for 4 years.

—The second chamber is composed of 63 deputies. Elections are indirect. All citizens 25 years of age are electors of the first degree, and may be chosen electors of the second degree. All citizens 30 years of age are eligible to the office of deputy. Officials can not be elected in the districts where they serve. The term of each deputy is 4 years. One-half of the chamber is renewed every 2 years.

—The grand duke convokes, prorogues and dissolves the diet. In case of dissolution the temporary members of the first chamber must be replaced. The president of the upper chamber is appointed by the grand duke; the second elects its own president.

—The diet assists in the framing of laws, and in the discussion of the budget. Its-consent is necessary to the contracting of a loan, to sell state domains and to levy taxes. The budget is biennial. Every proposition concerning the finances is first presented to the second chamber. The bill which it has voted can be accepted or rejected only as a whole (en bloc) by the upper chamber. In case of rejection, the votes of the two chambers are counted together, the ayes and noes are summed up and the majority makes the law (such a case has not yet occurred).

—The chambers have the right of initiative in legislation. The second chamber may impeach the ministers. The chambers may receive petitions. Liberty of speech is guaranteed. Sessions of the chambers are public. In the interval between sessions a permanent committee represents the chambers. In case of urgency, its consent gives power to contract a loan. Its powers, however, are not extensive.

—At the head of the administration is the ministry of state or the council of ministers. The ministers are responsible.

—There are 4 ministerial departments: 1, of justice and foreign affairs; 2, of the interior; 3, of commerce; 4, of finance.

—For purposes of internal administration the country is divided into 54 bailiwicks (up to 1872 the number was 59). In each bailiwick, a district council (Bezirksrath), elected by the representatives of the circuit, assists the bailiff.

—The country is divided, besides, into 11 circuits, charged with attending to the common affairs of several bailiwicks. The circuit is represented through deputies, chosen by all electors, i.e., by representatives of the important cities, deputies of bailiwicks elected by the representatives of communes, and the principal land owners. This provincial assembly meets once a year, and decides questions relative to roads, schools, hospitals, asylums, orphan establishments and other common interests. It has the right to vote taxes. The administration of common affairs is intrusted to a permanent committee.

—Four commissaries general (Landesommissáire), sitting at Carlsruhe, Mannheim, Freiburg and Constance, supervise the administration of the bailiwicks and circuits.

—The number of communes is 1,584, of which 113 are cities. Communal administration, like that of the circuit, is founded on self-government. The government exercises supervision through the bailiff. Ordinary administration is in the hands of the burgomaster, and the municipal council elected by the inhabitants. The common council (Burgerausschuss), which is also elected by the inhabitants of the commune, has a certain right of control. In important cases all the inhabitants of a commune are called together in a general communal assembly.

—In the administration of justice, there is a supreme court (at Mannheim), six courts of appeal, and in each bailiwick a tribunal of the first resort (Amtsgericht). Crimes are tried with the assistance of a jury. Slight offenses are passed on by the mayors. There is a special administrative court, (Verwaltungsgerichtshof) for questions of public law or disputes relating to the administration.

—The civil code of Baden is based on that of France. In criminal and commercial matters the codes of the German empire are in force. Freedom of worship is recognized. Protestant worship is directed by the superior council of the Protestant church. The archbishop of Freiburg is the head of the Catholic church in Baden. The Protestants have 378 parishes; the Catholics, 660. The superior council of the Israelites is charged with the affairs of the Jewish church. In 1875 there were 517,851 Protestants, 958,907 Catholics, and 26,492 Israelites. The rest of the inhabitants belong to less extensive denominations. Public instruction is under the control of the state. The churches give religious instruction. Primary instruction is obligatory. In 1872 the common schools (Volksschalen) were 1,826 in number, with about 200,000 pupils. There are many higher primary schools. The secondary or middle schools are 19 in number, 17 of them give classical instruction mainly, the 2, under the name of real-gymnasium, pay more attention to the exact sciences. Eight of the first, which are called lyceums, include all the classes, and have the right of giving certificates of fitness (equivalent to the diploma of bachelor) for the university. The universities are at Heidelberg and at Freiburg: each one has 4 faculties. The theological faculty at Heidelberg is Protestant; at Frieburg, Catholic. The other faculties have not a sectarian character. At Carlsruhe there is a polytechnic school and a school of fine arts. Most of the cities of importance have schools of industry (Gerverbschulen), and each circuit has an agricultural school.

—Of the inhabitants (1,461,428) there were, in 1871,712,763 males and 748,665 females, making 295,709 families. The number of strangers was 54,988, of whom 42,003 belonged to other German states and 12,985 to states not German.

—There is an annual excess of births over deaths (in 1870, 58,913 births, against 48,024 deaths). The number of marriages in 1870 was 10,607. Among the births, 52,066 (or 88.4 per cent.) were legitimate, and 6,847 (or 11.6 per cent.) illegitimate. The number of still-born was 1,979.

—Emigration, directed mainly to the United States, was very considerable about 1850. It continues yet, but on a decreased scale, and without the country feeling it. The excess of births more than makes up for the loss.

—The population is undeniably prosperous. Landed property being greatly subdivided in most parts of the country, few great fortunes are met with, but a most general well-being. There are scarcely any beggars. The communes are obliged to maintain the indigent. They are aided by numerous hospitals and almshouses (131) as well as by other endowed institutions.

—About 50 per cent. of the population are engaged in agriculture, 35 per cent. in manufactures, 8 per cent. in commerce, and 7 per cent. is divided among the other professions.

—The German language is the only one spoken in the country. Fragments of three German tribes are met with: in the north, the Franconian tribe; in the centre and south, the Allemans, whose name has been given by the French to all Germans; and the Swabians in the southeast.

—The soil is generally fertile, especially in the valley of the Rhine. It is only the most elevated points of the Black Forest (in the south), and the Odenwald (in the north), which are stubbornly sterile. One-third of the soil is arable, one-third in forests, and one-tenth meadows; vineyards occupy 1.4 per cent. of the country (21,500 hectares); the rest is taken up with pasture, towns, villages, roads, rivers, etc. Besides the ordinary products of agriculture—cereals, vegetables, etc.—tobacco, hemp, chiccory, hops and other plants are cultivated in the lowlands of the Rhine. The vines yield a yearly average of 450,000 hectolitres of wine. There are about 70,000 horses, 600,000 oxen and cows, 170,000 sheep, 350,000 pigs, 60,000 goats, and 90,000 swarms of bees.

—The mineral products are inconsiderable. still the country possesses two great salt works which supply its wants, and a multitude of mineral springs, some of which enjoy a world-wide reputation (Baden-Baden, Rippoldsau, Petersthal).

—Manufactures are in a flourishing condition. The number of great industrial establishments is about 400. Textile fabrics of every kind are produced; also paper, machines, tools, leather, chemical products, jewelry, tobacco, etc.; in the valleys of the Black Forest, pendulums, clocks, music-boxes, straw hats, liqueurs, (Kirschwasser), etc. The clock makers of the Black Forest send the product of their industry abroad. They are found in European countries and even in America.

—Commerce is very active. Railroad traffic is very great. Much timber cut in the Black Forest is floated down the rivers. It descends the Rhine to Holland. Navigation on the Rhine is very important as far as Mannheim; it does not go much higher on account of the rapidity of the stream. Mannheim, thus forming the terminus of Rhine navigation, possessing an excellent harbor, becomes an important entrepôt.

—The country contains several large banking houses of which the principal are at Mannheim.

—The savings banks (to the number of 97) have a capital of 32,000,000 florins. The number of depositors is 107,000.

—The postoffice has delivered annually, from 1869 to 1871, about 19,000,000 letters, 12,000,000 newspapers, 3,000,000 packages, and postal orders to the amount of 5,000,000 florins.

—The number of telegraphic stations is (1872) 220; the number of dispatches sent is about 800,000 a year.

—The greater part of the revenue of the grand duchy of Baden is derived from direct taxes, including in such direct taxes, a land tax, called in the country Grundsteuer, and also from an income tax. About one-fourth of the receipts of the grand duchy of Baden comes from the produce of crown lands, forests and mines, and one-sixth from customs and miscellaneous sources. The following is the total of receipts and expenses of the grand duchy of Baden at different times:

It is proper to remark that the figures for 1850 and 1860 include the special budget of railroads, which amounted in receipts, as well as expenses, to 5,940,000 florins for 1850, and 6,830,000 florins for 1860.

—The budget has undergone profound changes through the entrance of the grand duchy into the German empire. The revenues from customs and indirect taxes (salt, beet-root sugar, stamps and drafts), as well as the post and telegraphs, figure there no longer, but go directly into the coffers of the empire. As an offset, the expense of administering these departments, as well as that of the army and foreign affairs, has disappeared. (See GERMAN EMPIRE.) The ordinary budget voted by the chambers for the year 1872 presents the following figures:

RECEIPTS.
	Florins.
Domains, forests, mines and salt works...	4,260,000
Direct contribution...	5,220,000
Indirect contribution...	2,990,000
Taxes and fines...	1,570,000
Contributions of the empire for administration of customs...	630,000
Different revenues...	1,490,000
Total...	16,160,000
Railroads...	22,720,000
General total...	38,880,000

EXPENSES.
	Florins.
Collection of taxes...	4,730,000
Civil list...	840,000
Justice...	1,940,000
Interior...	2,950,000
(Of which 1,060,000 are for public education.)
Commerce...	2,020,000
(Of which 1,800,000 are for roads and water courses, and specially half a million for the Rhine.)
Finances...	1,850,000
(Of which 990,000 are for the debt of the state.)
Contributions to the empire...	2,880,000
Various expenses...	90,000
Total...	17,300,000
Railroads (of which 16,220,000 are for administration and extension, and 6,000,000 for interest and sinking fund of the railroad debt)...	22,720,000
Grand total...	40,020,000

The result, a deficit of 1,140,000 florins, was covered by disposable funds.

—The extraordinary budget (public works) amounts to 1,400,000 florins a year. For the construction of new railroads and the management of the old, an expense of 24,000,000 florins is estimated for 1872 and 1873. This sum was to be covered by a sinking fund for railroads, and, in case of necessity, by loans.

—The receipts for 1877 were 34,188,865 marks, and the expenses about 34,750,123. The land tax and the income tax constitute the greater part of the revenue of the state. Most of the railways belong to the state. Their total receipts in 1877 amounted to 62,022,162 marks, while the outlay reached the sum of 49,383,404 marks.

—In 1878 the general debt amounted to 50,881,661 marks, and the railway debt to 277,253,122. A loan of 12,000,000 marks was added to this debt in 1878.

—The army of Baden has been united to the Prussian army in consequence of a military convention concluded between the grand duchy and Prussia. Nevertheless, troops recruited in Baden continue to form separate regiments, and are stationed in the grand duchy. They form, together with two Prussian regiments of infantry and one of cavalry, the fourteenth army corps, the commander of which resides in Carlsruhe.

—It is needless to add that all the military institutions are governed by the laws of the empire. According to these laws the grand duchy furnishes, in time of peace, one man per hundred, or 14,350 men; in time of war, 48,000 men, to the army of the empire.

—The management of the post and telegraph has passed also into the hands of the empire. There are in Baden two chief postal bureaus, at Carlsruhe and Constance, and one telegraphic bureau at Carlsruhe.

—Entry duties are collected on account of the imperial treasury; the customs, however, are collected by Baden functionaries for a consideration paid by the empire.

DR. F. HARDECK.

BALANCE OF POWER

BALANCE OF POWER. By this term, in public law, is understood an organization intended to effect among nations forming part of one system, such a distribution and an opposition of forces that no state shall be in a position, either alone or united with others, to impose its own will on any other state or interfere with its independence.

—One power can not extend its territory, increase its strength, or largely add to its resources, without giving umbrage to neighboring powers. If its growth assumes alarming proportions, the spur of interest suffices to induce other nations to unite, in order to oppose its impending domination over them. This very simple fact, which has appeared at all times and in all places, was the first germ of the theory of the balance of power. The idea which sprang from it is that of an association of several states against the aggrandizement, grown dangerous, of a single state; but only of a temporary association during actual danger, and while the danger lasts. If we suppose the association more extended; that instead of being a league of certain states against one state, it unites a system of states in a common understanding—more lasting and firm in this, that instead of being temporary it assumes a permanent character and tends not only to defend each one of the states thus united into a system, against the ambition of a single state, but to establish and guarantee among all, such a balance of forces as will maintain them in peace—we have a second form of the same idea, much more advanced than the first, one in which the theory of equilibrium or the balance of power is clearly perceptible.

—It would not be correct to say, with Sully, (Economies royales, ou Mémoires de Sully, collection Petitot, t. vii. p. 94), that this balance consists in rendering all potentates "nearly equal in power, as to kingdoms, wealth, extent and dominion." That balance tends rather, according to a memoir of count Hauterive, drawn up by the order of the first consul, "to balance the respective rights and duties of a great number of states unequal in power, and in more or less direct relations with each other." (De l'état de la France, à la fin de l'an viii. p. 36.) It is, in fact, in the efficacy of the common guarantee in that arrangement, which, in case of necessity, balances each force in the system, by the resultant of all the others; in one word, in the rights upon which the association rests, that the balancing of the inequality of facts is to be found.

—We may conceive the idea of equilibrium or balance of power applied to different groups of states, united afterward into one great system, in such a way that each partial equilibrium becomes an element in the general equilibrium; thus, the equilibrium between the ancient states of Italy, between the German states, the equilibrium of the north, that of Europe, of America, of the world. This same idea may have as its object the forces of the most varied nature, which constitute the power of states: hence, military equilibrium; commercial, industrial, financial equilibrium; equilibrium of population, of territory, continental or colonial; maritime equilibrium. But it is territory, above all, that is most generally considered in the theories or practical questions of the balance of power. Indeed, territory, one of the principal instruments of the power of nations, is a physical, material element, susceptible of measurement and limitation, while the other forces are more especially connected with moral causes. We have, therefore, to deal with the territorial equilibrium or balance of power here.

—The policy of the balance of power presented itself in its first and most simple form, in the resistance to a power which increased in an alarming manner and threatened other powers with its rule. This happened during three very notable periods in European history: 1, in the period of resistance to the house of Austria which had succeeded by inheritance to the throne of Spain and to the German empire, from Charles V. to Philip IV., in the case of the Spanish branch, and from Charles V. to Ferdinand III., in the case of the German; 2, in the resistance to the house of Bourbon, under Louis XIV.; and 3, in the resistance to Napoleon in the time of the republic and the empire.

—It was the policy of resistance to the immoderate increase and the aspirations to domination of the house of Hapsburg, that caused the wars of Francis I. against Charles V., and those which followed, notably the thirty years' war. This period was terminated by the peace of Westphalia in 1648.

—The antagonism of the house of Bourbon and the house of Austria in Spain and Germany is well known. The duke de Rohan, in his famous work on the interests of princes, dedicated to the duke de Richelieu, and written in 1633, during the species of exile to which the king had sentenced him at Venice, sums up the policy of the time as follows: "We must lay it down as a principle that there are two powers in Christendom which are like the two poles, from which the influences of peace and war come to other states, to wit, the houses of France and Spain. Spain's power having suddenly increased, it has not been able to conceal the design it cherished to rule and to cause the sun of a new monarchy to rise in the west. The house of France forthwith decided to act as a counterweight. The remaining princes joined one or the other side, as their interests dictated." (Preface to the Intérêts des princes. Cologne, 1656). At this period very little was said of the people, and much of princes; men wrote of the interests of princes, of the maxims of princes, and spoke not of rights, but interests. "Princes command the people, and interests command princes," wrote the duke de Rohan, at the head of his book. The policy of the balance of power was then openly a policy of interest; it had not been elevated into a legal theory.

—The second period was in like manner filled up with efforts of resistance, to an ambition for aggrandizement which had become menacing to the neighboring states. The danger now no longer lay in the house of Austria, but in the house of France; not Charles V. and his successors but Louis XIV. it was who alarmed Europe. "Francis I. had struggled with difficulty against the house of Austria," says Mignet; "Henry IV. had triumphed over its attacks; Richelieu and Mazarin had humiliated it; it only remained to dispossess it. This Louis XIV. did" (Négociations relatives à la succession d'Espagne, Introduction, v. 1, p. liii.) And in fact, at this period it was not the house of Austria that occupied simultaneously the throne of Spain and the imperial throne of Germany, but the house of Bourbon which occupied the thrones of France and Spain. The system of the European balance of power was developed despite this, and strengthened as a principle of conventional international law; and the struggle ended in a new and grand practical realization of this system, at the peace of Utrecht (1713). We must pass over a period of nearly 80 years to meet again in European history a coalition of states of the same character, against the danger of a dominant power which was rising up, and advancing, ostensibly, to a general supremacy over all others. It is true that the first coalition against France (that of 1791) was based on the pretense of interfering with the internal forms of the French government. But when the armies of the republic, in retaliation for the aggression, began to take the offensive, the struggle assumed the character of resistance on the part of different powers to a domination threatening to them all.

—Such are the three periods, each epitomized in one of the three names: Charles V., Louis XIV., Napoleon I., during which the policy of the balance of power appeared in its simplest and most energetic form: that of common resistance to threatening domination. It is after these wars, and as a consequence of the treaties of peace which put an end to them, that the second form assumed by the theory of the international balance of power, was produced.

—This second form, whose distinctive characteristic is one of agreement, a species of general association of the powers to constitute and guarantee in common a certain condition of territorial possession, regulated conventionally, received, in the positive international law of Europe, three great practical illustrations—the first in the treaties of Westphalia (1648); the second in the treaty of Utrecht (1713); and the last in the treaty of 1815.

—But, previous to the first of these practical illustrations we meet with the projects of Henry IV., and of Sully, which have sometimes, too lightly perhaps, been styled utopian. The abasement of the Spanish faction, the close of the wars of religion, the promotion of an association among all the states "who feared or had reason to fear the insatiable avarice of the house of Austria," were a continual source of solicitude to Henry IV.

—This solicitude he had entertained ever since 1589. An understanding had been come to at different times by this king with other princes; propositions were agreed upon in 1603, between his delegates and those of the sovereigns of England, Denmark and Sweden; deputies, agents and negotiators, were sent out by him all over Germany from 1608 to 1609, with general instructions. In consequence of steps taken by these agents, a public assembly of 18 or 20 princes, connected by friendship with Henry IV, was convened at Hall, in Swabia. "A confederation of kings, princes and states shall be formed and the confederates agree to call it the most Christian association; the three most numerous creeds in European Christianity shall be chosen and expedients shall be found to enable them to agree and live together in peace; the empire shall be restored to its rights and privileges; the electors shall regain their free suffrage, and two emperors of the same house shall never be elected in immediate succession. Austria shall be restricted, so far as its hereditary dominion in Europe is concerned, to Spain and the neighboring islands; the possessions of which she shall be deprived, shall be distributed according to principles agreed upon, and the limits of the various powers of the Christian association determined by agreement among the confederates." (Economies royales de Sully, collection Petitot, t. viii. et ix.) These were the lofty and magnificent designs of the king, as Sully calls them. It is true that this minister to whom Henry IV. confided his projects and intrusted the care of the details of them, as well as the means of executing them, went further than his sovereign in this organization. The projected confederation was to be established universally and perpetually in Europe, under the name of the Most Christian Republic. It was to comprise 15 dominions, of which 5 were elective royalties: that of the pope, the emperor and the kings of Poland, Hungary and Bohemia; 6 hereditary royalties: those of France, Spain, England, Denmark, Sweden, and Lombardy, a new kingdom to be established for the duke of Savoy; and finally 4 dominions republican in form. Venice, a second, to be composed of the duchies of Genoa, Florence, Mantua, Parma, Modena, several small sovereign states of Italy, Switzerland considerably increased, and the 17 provinces of Holland Between these dominions there were to be placed "limits so sure and well adjusted that none of the 15 could undertake to trespass upon them without bringing on itself an attack from the other 14." Sully saw in this arrangement liberty of individual conscience, understood in the sense of the free and public exercise of three kinds of religions only, the Roman, the Protestant and the Reformed; freedom of trade, freedom of navigation, and freedom of the sea. Finally, independently of a number of particular councils, a general council, "composed of a proportional equality of the 15 dominions," was to be the perpetual sovereign arbiter of common interests and on disputed questions. To the picture of this general republic, the minister of Henry IV. added this last characteristic: "that always at peace with Christians, it should ever be at war with infidels, and maintain a continual struggle against them, in order to recover what they had usurped in Europe, and to go beyond this if fortunate progress should afford the opportunity" (Œconomies royales).

—The plans of Henry IV. anticipated a theory of political equilibrium under the form of an association of states, with a distribution of territory, agreed upon in common, in a system of counterweights and general interests, and sanctioned by the guarantee of all the powers. Carried to its utmost limits this theory verged upon plans of general and perpetual peace, brought forward later by abbe St. Pierre under the title of the Project of perpetual peace, formerly proposed by Henry the Great; afterward by J. J. Rousseau, under the name of a project of perpetual peace by abbe St. Pierre; later still by Bentham, and by other writers. It has assumed at present a more expanded form, in the minds of many.

—The transition from the projects thus prepared by Henry IV. and by Sully, to the treaty of Westphalia, is not without logical connection. What is found in this treaty is, at bottom, a partial realization of those ideas of Henry IV. which were more closely connected with the general necessities of that time; a compromise and guaranty of equality, in Germany, for the exercise of the three religions which had struggled so long against one another; a more certain determination of the rights of the states of the empire, especially in their relations with the emperor; a diminution of the power of Austria, in the Spanish and in the German houses; a recognition by this last power of the republics of Holland and Switzerland, both long since founded and strengthened by being freed from its domination; certain arrangements, and territorial concessions in Italy, principally in favor of the duke of Savoy; even the idea of henceforth preventing wars and putting an end to future differences by means of amicable compromises. But the ruling fact was a preliminary discussion by the plenipotentiaries of the principal European powers, covering a great number of international questions, the first example of a congress or diplomatic council which had the character of an agreement determining, by precise stipulations, certain bonds of existence and common co-ordination among the states and Europe; an engagement which made every private question, touching the maintenance of these stipulations, a question for all, and which, in this way, introduced, for the first time, conditions of political equilibrium by means of a conventional system organized by treaties and founded on the principle of a species of permanent association of the states.

—Consequently the treaty of Westphalia has been justly considered as the foundation of positive international law in Europe, and this treaty has been taken as the point of departure of this law. It is to be remarked that, from the same epoch are dated regular continuous diplomatic relations, and the use of legations or permanent embassies from one power to another.

—Nevertheless this first provision for a certain territorial and political balance had not the extent and character of unity which is essential to such a system. On the one hand, several European powers did not agree to it: Russia had not yet entered the general current of affairs. Prussia was of too little importance at that time to figure in affairs otherwise than in a secondary and passive capacity. England held aloof. The pope protested. The sultan was not included in the Christian group. Besides, the arrangement was not effected by a single and general treaty, but by several separate treaties, the treaty between Spain and Holland entered into Jan. 30, 1648, at Münster, which forms no diplomatic part of what is called the treaty of Westphalia, although it is an important prelude to it; the treaty between Sweden, the emperor, and the states of the empire, Oct. 24, 1648, at Osnabrück, being the first part of the treaty of Westphalia; finally, a treaty between France, the emperor and the states of the empire, Oct. 24, 1648, at Münster, being the second part of the treaty of Westphalia. This peace was not even general. France and Spain continued in a state of war until the peace of the Pyrenees, (Nov. 7, 1659,) which was thus a complement to the treaties of Westphalia. The former brought peace to Germany and the north, the latter to the south.

—The second practical illustration of the system of the conventional balance of power was that of the treaties of Utrecht. The course of political events and especially the question of succession to the Spanish throne, made vacant by the extinction of the Spanish-Austrian dynasty, had deranged the equilibrium created by the treaties of Westphalia and necessitated a new arrangement of power and territory. But the emperor Joseph I., having died, (April 17, 1711), and having left as his successor to the empire, his brother, the archduke Charles, the rival of Philip of Anjou, the fear of seeing the power of Charles V. reappear, by the union of the crown of Spain and the possessions of the house of Austria and the empire of Germany, was of much greater importance to Europe than the elevation of a younger branch of the house of Bourbon, at a time when France had just been so considerably weakened. Between these two dangers the policy of the balance of power had no room for hesitation. It sufficed for it to take precautions to prevent the future union of the crowns of France and Spain, to reduce these two powers, by strengthening, through a distribution of territory taken from them, those states which were especially destined to serve as a counter-poise to them. Such was the meaning of the various provisions contained in the treaties of Utrecht. The dominant idea in men's minds was the establishment of a new balance of the powers. This idea has been developed and consolidated in international practice since the time of the treaties of Westphalia. That this idea was uppermost in the political thought of the time appears clearly from the correspondence of the English minister, lord Bolingbroke, in the preparatory conferences, as well as from the reciprocal acts of renunciation made by the king of Spain and the princes of France, in which they mutually abdicated their eventual rights to the crown of the other country (see Bolingbroke, Letters and Correspondence, and les Renonciations du roi d'Espagne, du duc d'Orléans et du duc de Berry, in Dumont).

—Nevertheless, the peace of Utrecht was not yet presented under the sanction of a general treaty between the powers. It was made up of two series of different treaties: those of Louis XIV. with Great Britain, with the states general of Holland, with Portugal, with Prussia, with Savoy, signed the same day, April 11, 1713, at Utrecht; and those of the king of Spain, Philip V., with the same powers, the conclusion of which only took place later and at different periods. The common bond existed especially in the stipulations of England, who signed the principal treaty of peace with Louis XIV., and with Philip V., and took under her guarantee the particular engagements made with the other powers. The emperor continued the war; he made peace with France by the treaties of Rastadt and Baden, in 1714; and several years later, with the king of Spain. The differences between the treaties of Westphalia and those of Utrecht, both in the personnel of the contracting parties, and in the object of the stipulations, are noteworthy. France and Sweden were at the head of the allied states, at the time of the peace of Westphalia; England stood aloof. At the peace of Utrecht, Sweden figured no longer, it was England that lead in the negotiations, and it was under the preponderant guarantee of this power, now placed on a level with France and Austria in the balance of Europe, that the new equilibrium was established. Louis XIV. recognized in it the hereditary right of the dynasty of Nassau; Frederick, of Prussia, appeared in it with his new title of king; Victor-Amédée, the duke of Savoy, received by it the kingdom of Sicily, which he was obliged 7 years later to exchange for Sardinia, and took the title of king, which Henry IV. had wished to bestow on one of his ancestors. There was no longer a question as to the interests of the three religions (admitted to a footing of equality by law in Germany) and to those of the states of the German empire in their relations with the emperor. But, under the policy of Louis XIV., France had lost the position of protectress of these two interests; this rôle passed over to Prussia, which, in the future, was destined to hold the house of Austria in check in the affairs of Germany. Finally, Great Britain obtained important colonial possessions, and hastened to conclude, under favor of the influence which she had acquired in the negotiations, treaties of commerce and navigation with several powers. Territorial equilibrium was now the object of concern, and maritime and commercial domination, which was soon to appear, was not perceived.

—The last application of equilibrium regulated by common consent between the powers, and at the same time the most absolute, the most general application made of it up to the present day, is that of the treaties of 1814 and 1815. Without entering into an examination of the events which took place from the peace of Utrecht up to that epoch, let us remark, simply, that Russia had had her Peter the Great, as Prussia her Frederick, and that the equilibrium of Europe had to be established between five great powers: France, Great Britain, Austria, Prussia and Russia, with the addition of second rate powers, to which Spain, Sweden and Holland had descended, (Italy at that time was a geographical expression).

—The arrangements of 1814 and 1815 result from three series of principal acts: 1. The treaties of Paris, of the 30th of May, 1814, four identical treaties, a consequence of the victory of the allied powers and the first restoration concluded by separate acts, between the king of France, Louis XVIII., and each one of the four great powers, Austria, Russia, Great Britain and Prussia, stipulating for themselves and for their allies. Article 32, of these treaties, referred the complementary arrangements to a general congress of all the powers, which was to open at Vienna within two months.

—2. The final act of the Congress of Vienna of June 9, 1815, whose last resolutions had been precipitated by the news of the return of Napoleon to France, and by the events of the hundred days, with all the treaties, conventions, declarations, rules and other particular acts, were joined as annexes to this final act.

—3. The treaty of Paris of Nov. 20, 1815, a result of the new victory of the allied powers and of the second restoration, four identical treaties, more rigorous toward France than the preceding, concluded also between king Louis XVIII. and each one of the allied powers—Great Britain, Austria, Prussia and Russia—which stipulated for themselves and their allies.

—Of all these documents that which remains with a leading and constitutive character for the states of Europe is the final act of the congress of Vienna; the treaties of Paris of 1814 had determined its basis; those of Paris of 1815 had modified its dispositions relative to the new reductions of territory imposed on France; but the principal regulation is in the act of the congress. This act is much more complete than those which had already twice settled the great territorial arrangements of Europe: as to the personnel of the contracting parties, with the exception of the Ottoman empire, all the European powers, even those of the second order, were represented. Nevertheless, the deliberations and the general resolutions were intrusted to a committee composed of the five great powers, and three secondary powers—Spain, Portugal and Sweden. As to the form of the contract, the final act of the congress was a general and common act signed by all the powers, and consequently imposing reciprocal obligations on all of them in regard to all of the others, a great difference as compared with the form of distinct, though analogous or identical treaties signed separately by the different powers, as was done at the peace of Westphalia and Utrecht.

—Lastly, as to the extent and nature of its provisions, the final act embraces all Europe: the systems of Westphalia and Utrecht were destroyed. It created a new territorial system, not only for some states, but for all. It is the greatest collection of arrangements relative to the regulation of limits, of boundaries and territories, which has ever been made by treaty. Independently of territorial questions, the final act of the congress of Vienna regulates, for certain countries, questions of organization or internal constitution, the most notable example of which is that of the Germanic confederation; and under the title of general provisions, it brought into conventional public law certain general principles, regulating the free navigation of rivers, the abolition of the slave trade, and even a regulation concerning the rank of diplomatic agents, a delicate question, which more than once had caused serious difficulties.

—But if the treaties of 1814 and 1815 can be justly considered as closing, in these external conflicts, the period of the French revolution, of which they are in this regard the conclusion, they have still left in existence important causes of dissolution in the work of international arrangement which they endeavored to accomplish. More occupied with the equilibrium of material forces and the restoration of dynasties than with the sovereignty of nations, the plenipotentiaries of the congress of Vienna measured the territory of countries and numbered their inhabitants without taking into sufficient account the affinities or the natural repulsions of their peoples; they regulated, even with a view to pacification, internal questions which pertain exclusively to the sovereignty of each people. The triple partition of Poland executed in violation of, and in the name of the principles of the balance of power, though attacked in the congress, was none the less sanctioned in the final distribution of European territory, an injustice which was further increased by the union of the Polish provinces as an integral part of the Russian empire in 1832, and by the absorption of Cracow into the Austrian empire in 1846.

—The effects of these vices of organization were not slow in making themselves felt, and modern diplomacy, approaching nearer to the sound ideas of international law, had to admit several consequences issuing from these manifestations and accustom itself to accord a larger place to the principle of national sovereignty. Thus, the Bourbons no longer reign in France; events that have taken place in Italy from 1859 to 1870 have removed other families restored in 1815, and overturned the temporal power of the pope; Belgium has separated from Holland; Austria has lost her Italian provinces; and Savoy has been reunited to France; the Swiss cantons have increased their cohesion, by giving more power to the central government; Germany has established its unity and has appropriated to itself, by conquest, Alsace and a part of Lorraine. Other changes destined to react on Europe, are developing in the east, which was not comprised, it is true, in the arrangements of 1815. France possesses Algeria; Greece is freed from Turkey; Egypt, but especially Roumania and Servia, have conquered an independent position.

—Still it is not less exact to say that the treaties of Westphalia and Utrecht and the congress of Vienna determine the present territorial condition of Europe. Since the peace of 1648 politics has placed more and more under the protection of the principles of balance of power, its negotiations relative to disputes, the losses and acquisitions of territory; and when, to-day, questions of the same order are raised, they are based on these great international acts; for it is in their stipulations, completed by less important treaties attached to them, that we must look for the principal titles to property or possession of the different powers.

—We have just seen how the theory of balance of power was established de facto in the positive law of nations. What is to be thought of these principles, if they are separated from the motive of political interest, and judged exclusively from the point of view of the just and the unjust?

—In spite of the hesitation and differences on this subject, it may be said that up to the treaties of 1815, juridical writers generally appeared little inclined to erect the theory of balance of power into a law. Grotius, in his treatise on "The Rights of War and Peace," written before the peace of Westphalia, refutes the opinion of those who pretend that, according to the law of nations, it is permitted to take up arms to weaken a prince or a state whose power is increasing day by day, lest if it were allowed to increase too much, it would enable such a state to injure others if an opportunity offered. He admits, however, that this consideration may enter as a determining motive in the resolution to make war, provided there be a just cause for taking up arms. Pufendorf, in his work on "The Law of Nature and of Nations," published before the treaties of Utrecht, also thinks that the fear caused by the aggrandizement of a neighboring state is not a legitimate reason for war, unless there is a moral certainty of evil designs formed against some other power. Le supplément à l' examen de conscience sur les devoire de la royuaté, written by Fénelon for the duke of Bourgoyne, contains a chapter still more explicit, concerning the condition of the balance of power, but whose chief purpose is to illustrate the danger of a universal monarchy. Bynkershoek, in his Quæstionum juris publici, libri duo, which he published in 1747, opposes, energetically, the system by which princes divide among themselves the kingdoms and wealth of other sovereigns, basing themselves on reasons of state, which he defines with the poet, monstrum, horrendum, informe, ingens, cui lumen ademptum. Vattel, who wrote eleven years later (1758), after having examined the question from the same point of view as his predecessors, Grotius and Pufendorf, solves it in the same sense, and devotes several paragraphs to what he calls "this famous idea of political balance, or the balance of power" He condemns the arrangements which would consist in producing this balance by an almost even distribution of force, it being impossible to effect such a distribution without injustice and violence; but, in his opinion, it is proper to have recourse, according to circumstances, to confederations, amicable interventions, or defensive alliances.

—After the treaties of 1814 and 1815, the system of equilibrium having attained the greatest extension it ever had as a practical theory and a conventional right, no publicist of any note could write, after that period, about the whole of international law, without devoting special attention to this system. The most common tendency was to treat the question as one of positive law, and in this regard it is necessary to recognize certain obligatory consequences which the regular clauses of a treaty may produce between the contracting parties. But from the point of view of pure science, most modern writers have maintained the former traditions and refused to see the character of a rational and general right in the political principles of the balance of power. Martens lays down as a principle the right of each state to increase its territory by legitimate means. Nevertheless, he admits that other states have the natural right to watch over the maintenance of an equilibrium among themselves, and to oppose, even by arms, either aggrandizement, or a weakening of power incompatible with this equilibrium. Pinheiro Ferreira, in annotating this passage, attributes the differences of opinion on the question of the balance of power to the circumstance that each writer had in view a different means of aggrandizement. This publicist does not see in the facts which give place to these extensions a question of the balance of power, but a question of justice or of injustice in the means of aggrandizement, a question of the independence and sovereignty of each state.

—Schmalz, while declaring himself a partisan of the system of equilibrium, by no means rests on legal reasons.

—Klüber considers the system of equilibrium as not founded on the law of nations, unless it is established by public convention, and he wished that this equivocal word should be banished from the language as well of politics as of international law.

—Wheaton sees no limit to the right of a state to aggrandize itself by all innocent and legitimate means, except that of the corresponding and equal right of other states, which flows from the right of self-preservation. When the aggrandizement must cause direct injury to the rights of other states, the limit is certain and precise; but if it is merely a question of fear as to eventual danger, it is a question of equilibrium and intervention which Wheaton considers as belonging rather to political science than to public law. Nevertheless, he inclines to the belief that grave and serious fears may, in rare cases, give birth to this right, while he rejects, in the case of America, the theories of European powers in this matter.

—According to Heffter, political equilibrium means that a single nation can not depart from the principles of justice in international law, without exposing itself to the opposition, not only of the threatened states, but also of all the states which form a part of the same political system. From this results a sort of moral equilibrium, engendering a great security in the observance of rules of justice among nations; but a material equilibrium of the relative forces of different nations among themselves, is an impossibility.

—These doubts as to the right of maintaining equilibrium, the differences of opinion on this question among statesmen and publicists also, exist because the question is a pre-eminently complex one. It is connected, on one side, with the material necessities of the organization of nations, and on the other, it involves the questions of the just and unjust.

—The first essential condition of the existence of nations or states, such at least as they have been conceived up to the present, is the right of external sovereignty or independence, that is to say, the right by virtue of which a state, existing of itself, recognizes no power on earth superior to itself The exercise of the right of independence of each power can not, therefore, be maintained except by the voluntary carrying out, on its part, of the precepts of justice But if, in a conflict between two states, they do not put the same estimate on abstract principles, or if they do not fear to sacrifice justice to their interests or their passions, assuming before God all the responsibility of their acts, they are not subject to any other law in the world than that of force, to no other judgment than that resulting from the fate of arms. Such is the inflexible consequence which logic draws from the principle of the independence of states: the abstract sentiment of rational legal right is certainly very much shocked at this, but, to avoid the endless calamities of war, in the absence of any other solution, it must needs be considered as positive law, as a mere procedure, and the result it brings must be given the authority of a judicial settlement.

—Another consequence of the right of independence is the obligation of each state to respect the internal sovereignty of other nations, and, consequently, to admit their internal constitution without dispute. Whatever may be the vices of organization of the public powers in the state, and even if, either by reason of a backward civilization, or for any other cause, these public powers are not really the sincere expression of the internal sovereignty of the state, they must, nevertheless, externally, so long as they are the constituted powers, be considered as representing legitimately the state in its relations with other nations. The sentiment of rational legal right may be wounded by this, but, unless a nation isolates itself from other nations or pretends to exercise over them the right of sovereignty, it is absolutely necessary, in the relations it maintains with these nations, to take them as they are, with their different modes of government. This de facto recognition of established governments, (all questions of privilege being reserved), is one of the proper characteristics, and one of the first obligations of diplomacy. It results from this, that owing to the constitutional vices of states, at different times, and also by virtue of the international principle of the independence of these states, positive law has been obliged to admit, as sufficiently justified externally, means of aggrandizement little conformable to rational legal right, such as successions, reversions, testaments, marriages, sales, personal cessions, unions imposed by conventional arrangements, accessions obtained by fraud, etc., means which are summed up in this: violation of the internal sovereignty of the state by the public powers, which alone can be the expression of external sovereignty.

—It is easy to conceive that in presence of the necessity of having recourse to war to decide questions of legal right, nations attach the greatest importance to maintaining a balance of forces among the different states, lest the strongest should not always be found the most just. It is this organization, intended to produce a balance of power among nations, with a view to guard the independence of each, that constitutes what is called political equilibrium, or the balance of power.

—The interest of all nations that there should be a balance of power, once demonstrated, can a nation be justly restricted in its freedom of extension, in order to reach the realization of this balance? This is the question of right. Let us examine the different cases that may present themselves.

—A state becomes more powerful by the development of its faculties and its internal resources, because it believes in enlightenment, in science, in industry and population. Can it be said that other states have the right to set a limit to this internal increase, and oppose, even by force in the name of a balance of power, the passing of this limit? Certainly not. It is for each people to follow this impulse, to profit by the example given, to endeavor to make like progress. The desire of equilibrium may be a cause here of emulation, but it can never be a legitimate cause of hindrance.

—Do things change, if it is a question not of development of internal power, but of external growth? Let us suppose that this extension has taken place by means entirely legitimate; for example, by appropriation, by the colonization of a territory belonging to no one; by a free and regular cession of territory, the right of individuals and the sovereignty of each people having been respected; by a union of two nations, the consequence of their collective will: by what right do other states oppose it? It is possible that their interest, that their feelings of rivalry or jealousy may be offended; but these feelings no more in this than in the preceding case justify the right of opposition. It is for the people who fear lest these legitimate external advances made by other powers should place them in a condition of comparative inferiority of strength, to draw from their desire of equilibrium an impulsion to a similar progress, that will strengthen them in turn. The desire of equilibrium may be here also a cause of emulation, but can not degenerate into a right of hindrance.

—If, on the contrary, we deal with the question of external aggrandizement effected by means contrary to the idea of justice, as well as the usage of international law, no doubt that all states have the right to oppose such aggrandizements by force, the moment they judge it proper or useful for them to do so, because they have an undeniable right to take part against a violation of law.

—The consideration of equilibrium may furnish them with a determining motive for opposition, while reasons of justice may justify this opposition; the one constitutes the interest, the other legitimacy. Both, instead of being in antagonism, here work to the same end: the repression of international injustice.

—Thus, if the extension results from legitimate means, the reason of the law will not permit opposition even in the interests of equilibrium; and if the aggrandizement is produced by unjust means, the right of setting up an obstacle to it exists in an absolute manner, the maintenance of equilibrium not being in this case the foundation of the right, but simply a plausible reason for its exercise.

—Still a third more delicate hypothesis may be conceived. Let us suppose an aggrandizement resulting from one of those means, which, admitted by the necessities of positive right, are still not conformable to the rational idea of legal right; for instance, if it is a question of war or conquest. The motive of the war may be legitimate or illegitimate. No state and no nation, if it wishes to remain neutral, has the right to judge whether the demands of the belligerent states are well or ill founded, for this would be to arrogate a right of sovereignty over them. And yet does it follow that these states, because they have remained neutral, are obliged to respect the results of the war, whatever may be the consequences which it brings? We do not think so. War is only an imperfect means of settling disputes, a means contrary to rational justice, accepted as positive justice merely in default of another mode of solution. We are then outside of real law, and the opposition of nations, whose interest in equilibrium is injured by aggrandizements of this kind, may offer obstacles to its disturbance. We can not say that these aggrandizements are just, according to rational law, and we can not say that they are unjust according to positive law, but this law does not admit them, except in so far as considerations of equilibrium justify them. It would be the same if it were a question of extension in consequence of inheritance, marriages, sales, personal cessions or other means of reunion, in consequence of which the internal sovereignty of nations would have been disregarded. These modes of addition being illegitimate from the point of view of rational law, the nations which would have to fear the consequences of them have the right to oppose them. And although according to time and place they might be received as positive law, this last law in accepting them nevertheless imposes a limit to them: that of political equilibrium. We shall consider then, in these different cases, the law of equilibrium as constituting customary international law, justified by the imperfect condition of public institutions, and intended to limit the modes of aggrandizement or the development of external power which usage admits, although they are not conformable to the abstract truths of rational law. Positive international law, sanctioning the defective means of aggrandizement or of development, sanctions the corrective also.

—To sum up, from the political point of view, the realization of a balance between the powers is a chief interest in presence of the principle of the independence of nations; from the point of view of justice, we can not find in this motive of utility, the right of maintaining the balance of power by opposing the legitimate, internal or external, progress of other nations. A balance of power may be justly produced: 1, by all the pacific means resulting from internal or external progress; 2, by all the means of constraint employed against the aggrandizement of other nations accomplished by ways contrary to justice and international law; 3, finally, by all means of constraint even against aggrandizements admitted in other cases, by the positive law of nations, if, from the point of view of rational right, they are really unjust.

—It remains for us to say something of the binding force of a formal and general convention, concurred in by the states which form one same system, and establishing between these states a certain arrangement intended to produce equilibrium. Certainly the agreement of powers discussing and treating together amicably to solve difficulties that have arisen between them, and decide, in concert, on a territorial arrangement placed under the common guarantee, is an eminently good and useful thing; most certainly, respect for plighted faith, a fulfillment of contracts regularly made, are among the strictest moral necessities in international relations. But we must not forget that between states, as well as individuals, agreements can not accomplish everything. Without entering here into a complete examination of the validity of an international stipulation, we may remark that one of the consequences of the principle of the inalienable sovereignty of nations, externally as well as internally, is that every engagement attacking the right of sovereignty is radically null and void. It results from this that the convention entered into between a certain number of powers concerning a territorial distribution and a political equilibrium to be established under their common guarantee, can raise no obstacle in rational law, to increase, or additions, to the federative associations, to the union or division of territory or population, to changes of internal government, which may take place later, by the legitimate exercise of the right of national sovereignty, whatever modifications these events may cause in the primitive state of distribution. It is in this way that a certain number of deviations from the arrangements of 1814 and 1815 had to be recognized by the European powers, as we have noted above.

—Those great arrangements, concluded ordinarily at the close of general wars, constitute a compromise of existing difficulties; they determine, relatively to all previous cases comprised in the transaction, the actual rights of parties, which are to form a point of departure and are to be respected as such; they embody in the written law the natural right of opposition to illegitimate extension, and put it under the sanction of the respect due to an international engagement; but they can not control future events, prevent the arising of new causes and bind the future to the statu quo which they have created. The contracting powers which have guaranteed a constitution, a federated system, a certain condition of property and territorial possessions, are authorized by that fact alone, by the law of nations, to defend the state of things which they have guaranteed, against every attack coming from outside, from third powers; but they can not transform external defense into internal oppression, nor draw from conventions any right to commit violence or hamper the sovereignty of any power in affairs which depend upon the free exercise of this sovereignty.

—The principle of the balance of material forces between states necessitated by the circumstance that international conflicts are finally determined by or under the influence of these forces, is a principle useful for maintaining the independence of nations. And it is useful also as a political principle, if it signifies that no state should aspire to dominate others; that all should be moderate in their desire for increase; that they should not make bad use of their good fortune and their victories in war; that the spirit of conciliation, conventional arrangement and peace in common shall be diffused among them. But it may be easily perverted if, by deviating from the limits of right, it serves as a pretext and an instrument of every kind of jealousy and political greed; if it is directed to invasion in common, to partition of foreign territory, agreed upon between several; to the subjection of the weak; to the league of the strong; to opposition to the legitimate acts of the various national sovereignties: and to repression of the essential rights which belong to each nation.

EUGÈNE ORTOLAN.

BALANCE OF TRADE

BALANCE OF TRADE, in commerce, the term commonly used to express the difference between the value of the exports from, and imports into a country: the balance used to be said to be favorable when the value of the exports exceeded that of the imports, and unfavorable when the value of the imports exceeded that of the exports. And in many countries this was long believed to be the case, and to a late period they were annually congratulated by their finance ministers on the excess of exports over the imports.

—The attainment of a favorable balance was formerly regarded as an object of the greatest importance. The precious metals, in consequence of their being used as money, were long considered as the only real wealth that could be possessed either by individuals or nations. And as countries without mines could not obtain supplies of these metals except in exchange for exported products, it was concluded, that if the value of the commodities exported exceeded that of those imported, the balance would have to be paid by the importation of an equivalent amount of the precious metals; and conversely. A very large proportion of the restraints imposed on the freedom of commerce during the last three centuries grew out of this notion. The importance of having a favorable balance being universally admitted, every effort was made to attain it; and nothing seemed so effectual for this purpose as the devising of schemes to facilitate exportation, and to hinder the importation of almost all products, except gold and silver, that were not intended for future exportation. But the gradual though slow growth of sounder opinions with respect to the nature and functions of money, showed the futility of a system of policy having such objects in view. It is now conceded on all hands that gold and silver are nothing but commodities; and that it is in no respect necessary to interfere either to encourage their importation or to prevent their exportation. In Great Britain they may be freely exported and imported, whether in the shape of coin or in that of bullion. The truth is, however, that the theory of the balance of trade was not erroneous merely from the false notions which its advocates entertained with respect to money, but proceeded on radically mistaken views as to the nature of commerce. The mode in which the balance was usually estimated was, indeed, completely fallacious. But had it been correctly ascertained, it would have been found, in opposition to the common opinion, that the imports into commercial countries must, speaking generally, exceed the exports; and that a balance, whether on the one side or the other, is but rarely cancelled by a bullion payment.

—I. The proper business of the wholesale merchant consists in carrying the various products of the different countries of the world from the places where their value is least to those where it is greatest, or, which is the same thing, in distributing them according to the effective demand. It is clear, however, that there could be no motive to export any species of produce, unless that which it was intended to import in its stead were of greater value. When an English merchant commissions a quantity of Polish wheat, he calculates on its selling for so much more than its price in Poland, as will be sufficient to pay the expense of freight, insurance, etc, and to yield, besides, the common and ordinary rate of profit on the capital employed. If the wheat did not sell for this much, its importation would obviously be a loss to the importer. It is plain, then, that no merchant ever did or ever will export, but in the view of importing something more valuable in return. And so far from an excess of exports over imports being any criterion of an advantageous commerce, it is directly the reverse; and the truth is, notwithstanding all that has been said and written to the contrary, that unless the value of the imports exceeded that of the exports, foreign trade could not be carried on. Were this not the case—that is, were the value of the exports always greater than the value of the imports—merchants would lose on every transaction with foreigners, and the trade with them would be speedily abandoned.

—In England the rates at which all articles of export and import are officially valued were fixed so far back as 1696. But the very great alteration that has since taken place, not only in the value of money, but also in the cost of by far the greater number of the commodities of that and other countries, long ago rendered the official valuation of no use whatever, either as a means of learning the values or the quantities of the exports or imports. In so far, however, as respects the former, this defect was unintentionally remedied in 1798, when the "convoy duty," being an ad valorem tax laid on the exports, furnished the means of ascertaining their amount. And the importance of the information so obtained was such, that, whether articles of export have or have not been charged with duties, exporters have since been made to declare, in every case, the real value of the articles which they export.

—It has been alleged, and apparently with some probability, that merchants have not unfrequently been in the habit of exaggerating the value of articles entitled to drawbacks on exportation. But the extension and improvement of the warehousing system, and the diminution of the number of drawbacks, have materially lessened whatever fraud or inaccuracy may have arisen from this source. So long, indeed, as the greater number of articles were charged with an ad valorem duty of 10s. per cent. on exportation, it may be presumed that their value was rather under than overrated. But since the repeal of that duty (5 and 6 Vict. c. 47, s. 40), their declared value is believed to come very near the truth: at least, sufficiently so for all practical purposes.

—But until very recently no authentic information was obtained in regard to the value of the imports In 1848, however, the board of customs having approved a plan suggested by Mr. Messenger, inspector general of imports and exports, for ascertaining the value of the former, it was submitted by them to the treasury. And its advantages having been fully appreciated by Mr. James Wilson, M. P., then secretary to their lordships, it was carried into effect in 1854. It is needless to enter into any minute details with respect to the mode of computing the values of the imports. It is sufficient to state that it is effected by ascertaining the current prices of imported articles from price-currents, mercantile circulars, etc., and from these deducing the aggregate value of each. It would be idle to suppose that results derived from a process of this sort should be altogether exact; but the errors it involves are of no great moment, and for statistical purposes it may be reckoned quite correct and most valuable.

—We venture to say that, though we have no means of comparing the real values of the imports with those of the exports, we have no doubt that the former very considerably exceed the latter. It can hardly, indeed, be otherwise. The value of an exported commodity is estimated at the moment of its being sent abroad, and before its cost is increased by the expense of transporting it to the place of its destination; whereas the value of the commodity imported in its stead is estimated after it has arrived at its destination, and, consequently, after its cost has been enhanced by the expense of freight, insurance, importers' profits, etc.

—To measure, therefore, the advantage of commerce by the excess of the exports over the imports is a proceeding false alike in fact and principle. The value of the imports, in all but anomalous and extremely rare instances, invariably exceeds that of the exports. And it is plain that this excess, whatever it may be, forms the only fund whence the expenses and profits of the merchants can be derived. The larger, consequently, it becomes, the more will it be for their advantage.

—In the United States the value of the imports, as ascertained by the custom-house returns, has usually exceeded the value of the exports. And, although the English politicians were in the habit of considering the excess of the former as a certain proof of a disadvantageous commerce, "it is nevertheless true," says Mr. Pitkin, "that the real gain of the United States has been nearly in proportion as their imports have exceeded their exports." (Commerce of the United States, 2nd edit. p. 280.) The excess of American imports has in part been occasioned by the Americans generally exporting their own surplus produce, and, consequently, receiving from foreigners not only an equivalent for their exports, but also for the cost of conveying them to the foreign market. "In 1811," says the author just quoted, "flour sold in America for nine dollars and a half per barrel, and in Spain for fifteen dollars. The value of the cargo of a vessel carrying 5,000 barrels of flour would, therefore, be estimated at the period of its exportation at $47,500; but as this flour would sell, when carried to Spain, for $75,000, the American merchant would be entitled to draw on his agent in Spain for $27,500 more than the flour cost in America; or than the sum for which he could have drawn had the flour been exported in a vessel belonging to a Spanish merchant. But the transaction would not end here. The $75,000 would be vested in some species of Spanish or other European goods fit for the American market: and the freight, insurance, etc., on account of the return cargo, would probably increase its value to $100,000; so that, in all, the American merchant might have imported goods worth $52,500 more than the flour originally sent to Spain." It is as impossible to deny that such a transaction as this is advantageous, as it is to deny that its advantage consists entirely in the excess of the value of the goods imported over the value of those exported. And it is equally clear that America might have had the real balance of payments in her favor, though such transactions as the above had been multiplied to any conceivable extent.

—II. In the second place, when a balance is due from one country to another, it is but seldom that it is paid by remitting bullion from the debtor to the creditor country. If the sum due by the British merchants to those of Holland be greater than the sum due by the latter to them, the balance of payments will be against Britain; but this balance will not, and indeed can not, be discharged by an exportation of bullion, unless bullion be, at the time, the cheapest exportable commodity; or, which is the same thing, unless it may be more advantageously exported than anything else. To illustrate this principle, let us suppose that the balance of debt, or the excess of the value of the bills drawn by the merchants of Amsterdam on London, over those drawn by the merchants of London on Amsterdam, amounts to £100,000 it is the business of the London merchants to find out the means of discharging this debt with the least expense; and it is plain, that if they find that any less sum, as £96,000, £97,000, or £99,900 will purchase and send to Holland as much cloth, cotton, hardware, colonial produce, or any other commodity, as will sell in Amsterdam for £100,000, no gold or silver will be exported. The laws which regulate the trade in bullion are not in any degree different from those which regulate the trade in other commodities. It is exported only when its exportation is advantageous, or when it is more valuable abroad than at home. It would, in fact, be quite as reasonable to expect that water should flow from a low to a high level, as it is to expect that bullion should leave a country where its value is great, to go to one where it is low! It is never sent abroad to destroy, but always to find its level. The balance of payments might be 10 or 100,000,000, against a particular country, without causing the exportation of a single ounce of bullion. Common sense tells us that no merchant will remit £100 worth of bullion to discharge a debt in a foreign country, if it be possible to invest any smaller sum in any species of merchandise which would sell abroad for £100 exclusive of expenses. The merchant who deals in the precious metals is as much under the influence of self interest as he who deals in coffee or indigo; and what merchant would attempt to extinguish a debt by exporting coffee which cost £100, if he could effect his object by sending abroad indigo which cost only £99?

—The argument about the balance of payments is one of those that contradict and confute themselves. Had the apparent excess of exports over imports, as indicated by the British custom-house books for the hundred years down to 1853, been always paid in bullion, as the supporters of the old theory contend is the case, there should at this moment be some 500,000,000 or 600,000,000 of bullion in the country, instead of 80,000,000 or 100,000,000, which it is supposed at most to amount to! Nor is this all. If the theory of the balance were good for anything—if it had not been a mere idle delusion—it follows, as every country in the world has had its favorable balance, that they must have been paid by an annual importation of bullion from the mines corresponding to their aggregate amount. But it is certain that the entire produce of the mines, great as it is, though it were increased in a fivefold proportion, would be insufficient for this purpose! This reductio ad absurdum is decisive of the degree of credit that should be attached to conclusions respecting the flourishing state of the commerce of any country drawn from the excess of the exports over the imports!

—Not only, therefore, is the theory with respect to the balance of trade erroneous, but the very reverse of that theory is true. In the first place, the value of the commodities imported by every country which carries on an advantageous commerce (and no other will be prosecuted for any considerable period) invariably exceeds the value of those which she exports. Unless such were the case, there would plainly be no fund whence the merchants and others engaged in foreign trade could derive either a profit on their capital, or a return for their outlay and trouble; and in the second place, whether the balance of debt be for or against a country, that balance will neither be paid nor received in bullion, unless it be at the time the commodity by the exportation or importation of which the account may be most profitably settled. Whatever the partisans of the doctrine as to the balance may say about money being a preferable product, or merchandise par excellence, it is certain it will never appear in the list of exports and imports while there is anything else with which to carry on trade, or cancel debts, that will yield a larger profit, or occasion a less expense to the debtors.

—It is difficult to estimate the mischief which the absurd notions relative to the balance of trade have occasioned in almost every commercial country. It is principally to the prevalence of prejudices to which they have given rise, that the restrictions on the trade between Great Britain and France are to be ascribed. The great or rather the only argument insisted upon by those who prevailed on the legislature, in the reign of William and Mary, to declare the trade with France a nuisance, was founded on the statement that the value of the imports from that kingdom considerably exceeded the value of the commodities exported to it. The balance was regarded as a tribute paid by England to France, and it was sagaciously asked, what had England done, that she should be obliged to pay so much money to her natural enemy? It never occurred to those who so loudly abused the French trade, that no merchant would import any commodity from France, unless it brought a higher price in England than the commodity exported to pay it; and that the profit of the merchant, or the national gain, would be in exact proportion to this excess of price. The very reason assigned by these persons for prohibiting the trade affords the best attainable proof of its having been a lucrative one; nor can there be any doubt that an unrestricted freedom of intercourse between the two countries would be of the greatest service to both.

J. R. M'CULLOCH and HUGH G. REID.

BALLOT

BALLOT, from the Greek, to cast or throw, a method of voting designed to secure secrecy, as distinguished from the open or viva voce vote. The ballot is as old as the fifth century, B.C., when it was used in Athens, and we know not how much older. The Greek dicasts, or judges, voted by ballot in giving their verdicts, using either sea-shells, or beans, or balls of metal, or stone, colored black for condemnation, or white for acquittal. In the Athenian assemblies, the common voting was by show of hands, but in all cases of privilege the voting was secret, and this was practiced even in the senate in cases of ostracism.

—In Rome the people in their assemblies (comitia) voted at first by open response, but the custom of voting at elections by tablets, with the names of the candidates written on them, came into vogue B.C. 139, by the lex Gabinia tabellaria. The votes were thrown into a chest, watched by rogatores or inspectors, who collected the tablets and gave them to the diribitores, who classified and counted the votes, and then handed them over to the custodes, who finally checked them off by points marked on a tablet. In the comitia tributa, when the people voted upon laws after discussion, the assembly was called by a plebiscitum, and the vote taken by tribes. In elections, if two candidates had the same number of ballots, the decision was made between them by drawing lots.

—In Great Britain, which has the honor of originating trial by jury, voting by ballot never became established at elections until 1872. It was suggested in political tracts two centuries before, and secret voting was actually employed in the parliament of Scotland in cases of ostracism. In corporate bodies, both private and municipal, election by ballot has long prevailed. In deliberative and legislative bodies, the reason for the ballot is not apparent, as it is in popular elections. The voting should be open in parliamentary bodies, to enforce responsibility, and bring the acts of their representatives before each constituency in the clearest manner. In popular elections, on the other hand, where the voter represents no delegated powers but is supposed to vote his own will, the secret ballot is a guarantee of personal independence.

—The first prominent agitation of the ballot in England came about in the struggle for parliamentary reform, the purification of elections, and the extension of the suffrage, in the first quarter of the present century. O'Connell brought in a bill for secret voting in 1830, and the first draft of Lord John Russell's reform bill provided for the ballot, though it was left out later. This method of voting was supported in parliament by the historians Grote and Macaulay, and made steady progress, in spite of the ridicule of Sydney Smith and other literary wits, likening the ballot-box to a mouse-trap for catching the votes of Englishmen. Finally, a select committee, with Lord Hartington as chairman, reported in 1870 that corruption, treating and intimidation by priests and landlords, prevailed at elections in England and Ireland, and that voting by ballot would tend to promote peaceful and fair elections, and protect voters from undue influence, provided secrecy were made inviolable by the methods adopted. The ballot was introduced first at Manchester in 1869 as a test, and the voting was found more expeditious than the old viva voce system. In 1872 Mr. Foster's ballot act (35 and 36 Vict. c. 33) made the ballot compulsory in all parliamentary and municipal elections, except for the universities. This act requires the names of all the candidates to be printed on white paper, and the voter must fill up with a cross, X, the blank on the right hand opposite the name he votes for. The register of voters shows when an elector has received a ballot from one of the officers of election, and each ballot is marked with a number, corresponding to the counterfoil of the paper, which remains with the officer. This counterfoil is also marked with the voter's number on the register, so that the vote may be identified, if the poll should be scrutinized or challenged. The voter folds the ballot so as to conceal his mark, but to show the stamp to the officer, and it is dropped in a box which is locked and sealed. The elections are held at school-rooms or other public places, and a separate compartment must be provided for every 150 electors. A returning officer counts the ballots, and transmits them, sealed, to the clerk of the crown in chancery; who destroys them at the end of one year. There have been two general parliamentary elections under the ballot act of 1872, and though it has not put an end to bribery or intimidation, they have been diminished, and the steady effect of the secret ballot is observed to be gradually to get rid of undue influence, and the more disreputable methods of canvassing that prevailed under the viva voce system. In Australia, and other British colonies, the ballot generally prevails.

—In France, the secret vote used to be employed in deliberative voting in the chamber of deputies, but its use is now confined to elections by the people. The voting is superintended by a returning officer, four supervisors without salary, and a secretary. Every voter must present a card previously obtained at the registry office, to secure his identity. This the returning officer punches, and the vote is recorded by a "bulletin" printed with a candidate's name. The number of votes given is compared with the register, and ballots are rejected which are illegible, blank, containing the name of the voter, or erroneously filled up.

—In Germany the secret ballot is in use in all elections for the reichstag; registered voters only can vote, and ballots must be on white paper, and folded by the elector, and dropped into a closed box.

—In Italy candidates for the chamber of deputies are elected by ballot in public halls, to which only registered or qualified voters are admitted. A stamped piece of blank paper (the official is blue) is issued, on which the voter writes the name of his candidate and hands the folded paper to the presiding officer, who puts it in the box. The same officer oversees the public counting of the votes. It is stated that the ballot has greatly diminished the influence of the clerical power in Italian politics, and canvassing and bribery seldom occur.

—Spain, Belgium, Switzerland and Austria have the ballot, and in Hungary it is compulsory in the election of municipal councils, while it was abolished in parliamentary elections in 1874.

—In the United States, voting by ballot dates from early colonial times, and was made obligatory by the constitutions of New Jersey, Pennsylvania, North Carolina and other states, adopted in 1776. In New York viva voce voting prevailed until 1778, when provision was made for electing a governor and lieutenant governor by ballot, and in 1787 this was extended to the legislature.

—The system of open voting which long prevailed in some of the southern states, has given place to the ballot throughout the Union, with the single exception of the state of Kentucky. In this state the constitution provides that the people shall vote viva voce, though this is controlled as regards congressional elections by the act of congress (Revised Statutes, section 27), which requires all votes for representatives in congress to be by written or printed ballot.

—The constitutions of all the states provide that all elections shall be by ballot, with the above exception. In Alabama, Florida, Indiana, Kansas, Kentucky, Louisiana, Nevada, North Carolina, Pennsylvania, Tennessee see and Texas, there is a constitutional provision requiring the legislature to vote viva voce. In other states it is left to the legislature to regulate its own method of suffrage. Arkansas and Colorado have a constitutional requirement that at every election the ballots shall be numbered in the order in which they are received, and the number recorded by the election officers, on the list of voters opposite the name of the voter who presents the ballot. The election officers are to be sworn not to inquire or disclose how any elector shall have voted. Similar safeguards against "repeating," or fraudulent voting, are provided by law in many states where there is no constitutional provision on the subject. Too many of the states, however, are without efficient registration laws, and a neglect to provide proper legal safeguards for free and honest suffrage is one of the most serious evils which threaten the safety and permanence of republican institutions. All kinds of frauds and deceptions are practiced or attempted with the ballot, such as: 1, counterfeiting the real ballot, and substituting some insidious change of name of an important candidate; 2, heading printed ballots with the name and device of one party, and printing under it the names of the candidates of the opposite party; 3, "stuffing" the ballot box, or voting two or more ballot papers folded so as to appear as one; 4, using "tissue ballots," or votes printed on thin tissue paper so as to conceal a large number of surplus or fraudulent votes, smuggled into the boxes without detection; 5, "repeating," or voting by the same man at several different polls; 6, "personation," or another kind of double voting, by the same man using a different name, at the same poll.

—As a safeguard against some of these practices, many ingenious methods have been proposed and experimented upon. A mechanical ballot box, with automatic devices preventing any voter from casting more than one ballot, or at least preventing the count of more than one to each voter, has been invented. This box gives an alarm as each vote is received, secures strict secrecy to the voter, counts and files each ballot on a wire in the box, beyond the reach of any hand, and shows the aggregate vote, with which the official vote must agree. It is claimed to be equally efficient against false counting, tabulating, or returning, as against fraudulent voting.

—Ballot boxes have been used of many different materials, from the primitive hat or cigar box, to the voting urn, glass ballot box, and the elaborate mechanical repositories of votes above referred to. Frauds upon the ballot box should be ranked among the worst of crimes against republican government. The secrecy and the sacredness of the ballot should be maintained at whatever cost. The more free the people, the more carefully will the secret ballot be guarded, as the best guarantee of personal independence.

A. R. SPOFFORD.

BANK CONTROVERSIES

BANK CONTROVERSIES (IN U. S. HISTORY). The constitution (article 1, section 8) enumerates among the powers of congress: "1. To lay and collect taxes, duties, excises and imposts, to pay the debts and provide for the common defense and general welfare of the United States; * * * * * * * *.

—18. To make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this constitution in the government of the United States, or in any department or officer thereof."

—From these two paragraphs broad constructionists have inferred the power of congress to charter a national bank, or any other corporation of national extent, which strict constructionists have denied.

—I. 1781-91. Under the confederation, Robert Morris, superintendent of finance, had drawn up the plan of the first national bank, which was chartered by congress, Dec. 31, 1781, for ten years, under the name of The Bank of North America, with a capital of $400,000, afterward increased to $2,000,000. The general doubt of the power of congress to create a corporation cast a cloud upon the bank's title to existence, and it was chartered by the state of Pennsylvania in 1783. In 1785 a change of parties in the state legislature brought about a repeal of the charter, and in 1787, after another party change, the charter was renewed.

—II. 1791-1811. In January, 1791, a bill to incorporate The Bank of the United States passed the senate without division, and the house, Feb. 8, by a vote of 39 to 20. Its capital was to be $10,000,000, of which $2,000,000 was to be subscribed by the United States; its charter was to continue for twenty years; its bills were made receivable in all payments to the United States; and it had the power to establish branch banks, the headquarters remaining at Philadelphia. Immediately upon the passage of the bill a strong pressure was brought to bear upon president Washington to induce him to veto it, and he therefore called for the written opinions of his cabinet upon the constitutionality of the proposed bank. The opinions submitted by Jefferson and Hamilton are most interesting, as they map out with great exactness the opposite views of the federal government's powers which were to control party conflict for the succeeding three-quarters of a century.

—Jefferson's opinion, which was first given, begins with the following text: "I consider the foundation of the constitution as laid on this ground, that 'all powers not delegated to the United States by the constitution, nor prohibited by it to the states, are reserved to the states or to the people,' (XII amendment). To take a single step beyond the boundaries thus specially drawn around the powers of congress, is to take possession of a boundless field of power, no longer susceptible of any definition."

—After showing that there was no power to establish a national bank under the special powers to lay taxes, to pay the debt of the United States, to borrow money, and to regulate commerce, he proceeds to consider "the general phrases, which are the two following. 1. 'To lay taxes to provide for the general welfare of the United States; that is to say, 'to lay taxes for the purpose of providing for the general welfare.' For the laying of taxes is the power, and the general welfare the purpose for which the power is to be exercised. Congress are not to lay taxes, ad libitum, for any purpose they please; but only to pay the debts, or provide for the welfare of the Union. In like manner, they are not to do anything they please, to provide for the general welfare, but only to lay taxes for that purpose. To consider the latter phrase, not as describing the purpose of the first, but as giving a distinct and independent power to do any act they please which might be for the good of the Union, would render all the preceding and subsequent enumerations of power completely useless. It would reduce the whole instrument to a single phrase; that of instituting a congress with power to do whatever would be for the good of the United States; and as they would be the sole judges of the good or evil, it would be also a power to do whatever evil they pleased. * * * * * * Certainly no such universal power was meant to be given them. It was intended to lace them up straitly within the enumerated powers, and those without which, as means, these powers could not be carried into effect. * * * * * * 2. The second general phrase is 'to make all laws necessary and proper for carrying into execution the enumerated powers.' But they can all be carried into execution without a bank. A bank, therefore, is not necessary, and, consequently, not authorized by this phrase. It has been much urged that a bank will give great facility or convenience in the collection of taxes. Suppose this were true: yet the constitution allows only the means which are 'necessary,' not those which are merely 'convenient' for effecting the enumerated powers. If such a latitude of construction be allowed to this phrase, as to give any nonenumerated power, it will go to every one; for there is no one which ingenuity may not torture into a convenience in some way or other, to some one of so long a list of enumerated powers. It would swallow up all the delegated powers, and reduce the whole to one phrase, as before observed." (Italics as in original.)

—Jefferson's opinion that the paying of debts and providing for the general welfare is not a power but a purpose, is fully argued and accepted by Story as quoted below, and by the supreme court in the Passenger Cases (in 7 Howard, below); but a colon, which the original has not (see CONSTITUTION), is often, but unjustifiably, inserted between the power and the purpose, so as to give the latter the appearance of a separate power. The second part of his opinion has been ruled against by the supreme court in the case of McCulloch vs. Maryland (in 4 Wheaton, below). (See also CONGRESS, POWERS OF, II)

—Hamilton's opinion, though very much longer, may be clearly given in his own summary: "1. That the power of the government, as to the objects intrusted to its management, is, in its nature, sovereign. 2. That the right of erecting corporations is one inherent in, and inseparable from, the idea of sovereign power. 3. That the position that the government of the United States can exercise no power but such as is delegated to it by its constitution, does not militate against this principle. 4. That the word necessary, in the general clause, can have no restrictive operation, derogating from the force of this principle; indeed, that the degree in which a measure is or is not necessary can not be a test of constitutional right, but of expediency only. 5. That the power to erect corporations is not to be considered as an independent and substantive power, but as an incidental and auxiliary one; and was, therefore, more properly left to implication than expressly granted. 6. That the principle in question does not extend the power of the government beyond the prescribed limits, because it only affirms a power to incorporate for purposes within the sphere of the specified powers. And lastly, that the right to exercise such a power, in certain cases, is unequivocally granted in the most positive and comprehensive terms. To all which it only remains to be added that such a power has actually been exercised in two very eminent instances, namely, in the erection of two governments; one northwest of the river Ohio, and the other southwest; the last independent of any antecedent compact," (see ORDINANCE OF 1787, TERRITORIES).

—It will be perceived that the essence of Hamilton's opinion, which is entirely lacking in Jefferson's, but which the courts have since very steadily accepted, is the sovereignty of the federal government within its specified bounds—the principle that, when a people have found it necessary to create a sovereignty even for specified purposes, a further and interior limitation upon the sovereignty within its own sphere must be express to be valid (see UNITED STATES).

—Hamilton's opinion prevailed with the president, and the bill was signed and became law. The bank, thus chartered, went at once into active and successful operation. It had occasion to bring suits in federal and state courts, and was always recognized as a legally incorporated body. March 23, 1804, an act was passed without a division to allow it to establish branches in the territories, and, having been signed by Jefferson himself, now president, became law; and Feb. 24, 1807, an act to punish forgery of the bank's notes was similarly passed. The charter was to expire in 1811. In 1809 the bank applied for a recharter, and its application was warmly indorsed by Gallatin, secretary of the treasury. In 1810 a bill for a recharter was introduced, met with some opposition on the grounds laid down by Jefferson, and went over to the next session. In the next session the bank's application was renewed and finally defeated, Jan. 24, 1811. In the house the vote to postpone the bill indefinitely was 65 to 64; in the senate a motion to strike out the enacting clause of the bill was only carried by the casting vote of the vice-president, Clinton. The bank then, after an unsuccessful effort to obtain a charter from the state of Pennsylvania, wound up its affairs and went out of existence. The government had previously, in 1802, sold out its 2,200 shares of stock to the Barings, of London, at a premium of 57 per cent.

—III. 1816-36. The war of 1812, which almost immediately followed the failure to recharter the bank, was principally supported by loans and the issue of treasury notes. Party spirit was enlisted against the loans, and the federalist newspapers in New England denounced them so warmly that government agents in that section of the country were compelled to advertise that the names of subscribers to the loans would be kept secret. This opposition, together with the downfall of the import trade, the consequent decrease in revenue, the constant drain of specie from the country in payment for smuggled goods, and the want of any convertible currency to take its place, not only increased the public debt from a total of $45,209,737.90 in 1812, to a total of $127,334,933.74 in 1816, but decreased the national credit so far that the treasury negotiated the last loans of the war at a discount of 40 per cent. In January, 1814, upon a petition from New York, a project for a new national bank was introduced in the house, but, as the dominant party still held it unconstitutional, it was dropped without action. In October, 1814, the plan was revived, backed this time by the recommendation of the secretary of the treasury, Dallas, and the influence of the administration. Dallas' plan obliged the bank to lend the government $30,000,000, but gave it power to suspend specie payments. It was met by another plan, introduced by Calhoun, of South Carolina, which neither obliged the bank to loan money to the government, nor allowed it to suspend. The federalists, by favoring Calhoun's plan, defeated Dallas', and then, by combining with the Dallas men, they defeated both plans. The senate, Dec. 9, 1814, then passed a bill for a bank on Dallas' plan, which was defeated in the house by the casting vote of the speaker. A compromise plan then passed both houses, Calhoun's two principles being retained, and was vetoed, Jan. 30, 1815, by the president. The veto message "waived the question of the bill's constitutionality," as having been already passed upon approvingly by the legislative, executive and judiciary, with the general concurrence of the people; but objected to the plan of this bill on the score of convenience, as not being calculated to aid the government or the people in their embarrassments. In February, 1815, after the arrival of the news of peace, the senate again passed a bank bill on Dallas' plan, which was lost in the house by a single vote. April 10, 1816, the act to establish The Bank of the United States became law. It followed Hamilton's plan closely. The charter was to run twenty years; the capital was to be $35,000,000, one-fifth in cash, the rest in United States 6 per cent stocks; the government was to have the appointment of five of the twenty-five directors; and the bank was to have the custody of the public funds (see DEPOSITS, REMOVAL OF). The stock was at once subscribed; the principal office was opened at Philadelphia; and branches were soon established at Boston, New York, Baltimore, Portsmouth, Providence, Washington, Richmond, Charleston, Savannah, New Orleans, Cincinnati, and other cities.

—Within three years, the mismanagement, speculations and frauds of the president and directors of the bank brought the institution to the verge of bankruptcy and helped to derange the whole business of the country. The efforts of a new president were successful in saving the bank, but only by a curtailment and recall of loans to other banks, which aided in bringing on the general stringency of 1818-21, and roused strong feeling against the bank. State legislatures began to arraign it as unconstitutionally chartered. The legislatures of Maryland and Ohio, in 1818, levied taxes upon the branch banks in their states, with the intention of forcing them to close; and, though the supreme court (see McCulloch vs. Maryland, in 4 Wheaton, below) decided in favor of the bank's constitutionality, and against a state's right to tax it, Ohio took the amount of her tax, $100,000. from the vaults of the branch bank at Chillicothe by force, in defiance of an injunction from the federal circuit court. The directors at once brought suit in the federal courts against the agents of the levy for trespass, and the state in 1820 withdrew the use of its jails for the custody of prisoners in such suits, at the same time reducing its tax to $10,000 a year, and refunding the over amount of $90,000. Returning prosperity changed the current of feeling, and Ohio withdrew from her position.

—Until 1829 the bank of the United States seems to have had no connection whatever with national politics. In the presidential elections of 1824 and 1828 we find no allusions to it. It was simply a very successful business enterprise, now numbering twenty-five branches, under the general control of the directors of the parent bank and their president, Nicholas Biddle. In Jackson's letters of March, 1829, there are some traces of an under current of dislike for the bank and its directors, as "minions of Clay." No symptoms appear, however, of any possibility of collision between the bank and the administration until June, 1829, when the Jackson managers of the state of New Hampshire, Isaac Hill and Levi Woodbury, began to urge president Biddle to remove the president of the branch bank at Portsmouth, N. H., and to appoint a Jackson man in his place. Biddle refused on the ground that the incumbent was a man "of first-rate character and abilities," and not appointed for political reasons; and in October he finally, and so emphatically "as to leave no possibility of misconception," declared to the secretary of the treasury that neither the bank nor its branches "acknowledged the slightest responsibility of any description whatsoever to the secretary of the treasury touching the political opinions and conduct of their officers, that being a subject on which they never consult, and have no desire to know, the views of any administration." Here the matter rested until the meeting of congress, when, in his message of Dec. 8, 1829, the president for the first time personally entered the field by making the following reference to the bank. "The charter of the Bank of the United States expires in 1836, and its stock-holders will most probably apply for a renewal of their privileges. In order to avoid the evils resulting from precipitancy in a measure involving such important principles and such deep pecuniary interests, I feel that I can not, in justice to the parties interested, too soon present it to the deliberate consideration of the legislature and the people. Both the constitutionality and the expediency of the law creating this bank are well questioned by a large portion of our fellow-citizens; and it must be admitted by all that it has failed in the great end of establishing a uniform and sound currency."

—The message also suggested the substitution of a bank which should be a part of, and under the direct control of, the treasury. (See INDEPENDENT TREASURY.) In the house this part of the message was referred to the committee of ways and means, which reported strongly in favor of the bank and against the president; and when resolutions against the constitutionality and expediency of the bank, and against rechartering it, were introduced, they were at once laid on the table by a vote of 89 to 66. It was thus evident that the president's party was not ready to support him in assailing the bank, and no further steps were taken against it, with the exception of articles in administration newspapers, until Dec. 7, 1830, when the message with a slight but evident increase of warmth, renewed the suggestions above given. In the senate Benton, of Missouri, in February, 1831, attacked the bank from a point of view outside of its constitutionality, denouncing it as the possessor of needless and expensive privileges for which no return was ever made, and of irresponsible and dangerous power over local banks and the business interests of the country. Even with this attack no open struggle had yet begun, though the bank and its friends everywhere were being rapidly drawn into unofficial newspaper and pamphlet hostilities with the administration. In his message of Dec. 4, 1831, the president hinted broadly that, having several times called the attention of congress to his views about the bank, he now left the matter to the people. The reference was evidently to the presidential election of 1832, for which political arrangements were already making.

—Up to this time Jackson seems to have been willing to avoid open war upon the bank until his other enemies should be disposed of, (see JACKSON, ANDREW); but the suggestion conveyed in the message of 1831 was sufficient alone to drive the bank "into politics." Since the president intended to "appeal to the people." the bank felt compelled to imitate him; and from this time the conflict became flagrant. The national republican convention, Dec. 12, 1831, (see NOMINATING CONVENTIONS), approved the bank as a great and beneficent institution maintaining a sound, ample and healthy state of the currency, summoned the people to defend it in its peril by rejecting Jackson at the ensuing election; and nominated as its own candidates Henry Clay and John Sergeant, both pronounced bank men, and the latter a director in 1834. The legislature of Pennsylvania, a Jackson state, had unanimously resolved in favor of the bank, and the Clay managers seem to have decided to force the fighting, in order, if possible, to deprive Jackson of Pennsylvania's large vote by compelling him to attack Philadelphia's chief institution. Clay's own private correspondence shows his belief that, all the circumstances considered, the bank would "act very unwisely if it did not apply" for a new charter at this session. The application was accordingly made, Jan. 9, 1832, by senator Dallas, of Pennsylvania, on behalf of the bank. The charge was often made that the bank really endeavored to buy its charter; and its loans to congressmen, mostly of the opposition to it, are stated by the report of a senate committee in 1834, as $322,199 to 59 congressmen in 1831, $478,069 to 54 congressmen in 1832, and $374,766 to 58 congressmen in 1833. A majority in both houses was in favor of the charter, but in the house the speaker was against it, and this circumstance controlled the operations of the opposition, guided by Benton. Vague and general charges of corruption were brought against the management of the bank, and the speaker so constituted the committee of investigation that, though the charges were disproved, the majority report brought the bank in guilty. Having thus obtained a basis for an "appeal to the people," the opposition allowed the bill to recharter the bank to come to a vote, and it passed the senate June 11, 1832, 28 to 20, and the house July 3, 109 to 76. July 10, it was vetoed in a message of great ability, which was mainly devoted to proving the bank, as then constituted, to be an unnecessary, useless, expensive, un American monopoly, always hostile to the interests of the people and possibly dangerous to the government as well. An attempt to pass the bill over the veto failed.

—Time has shown that the application for a recharter at this session was a false step, and that the bank's only course was to wait patiently until a two-thirds majority in congress could be obtained, pass the bill for the charter, if necessary, over the veto, and end the battle by one blow. For the bank only one victory was needed; the charter, once obtained, was secure. By impatience it succeeded only in implicating its quarrel with the presidential election, which resulted not only in the president's triumphant re-election, but also in the choice of a house of representatives, to meet in 1833, which was pledged to support the president against all his opponents, even against the bank.

—The president now had the move, and he made it. A premonition of his purpose was given in his message of Dec. 4, 1832, in which he announced a belief, which he had warmly taken up, that the bank was insolvent, and advised an investigation into its affairs and the sale of the government stock in it. This congress, however, the same which had recently passed the bill for a bank charter, was still opposed to the president, and the house voted that the deposits might safely be left in the bank. Before the meeting of the new congress, elected in 1832, the president had removed the deposits of public moneys from the bank (see DEPOSITS, REMOVAL OF), and his action was sustained by the new house. In the senate the bank still had a majority which, standing alone, could only enjoy the poor satisfaction of censuring the president (see CENSURES I.). For want of any other custodian of the public funds (see INDEPENDENT TREASURY) they had been deposited in selected state banks, commonly called "pet banks." April 4, 1834, the house finally voted (1) that the bank ought not to be rechartered, 134 to 82; (2) that the deposits ought not to be restored, 118 to 103; (3) that they should be left in the state banks, 117 to 105; and (4) that the affairs of the bank should be investigated, 175 to 42. The investigation was begun; but the bank objected to its methods as partisan and unfair, and put so many impediments in the way of it that it resulted in nothing. It was very evident, however, that the president was master of the situation, and the bank finally obtained a charter from Pennsylvania. Within two years the senate was opposed to the bank, and thereafter the democratic party was committed against any such institution.

—IV. 1837-45. For over twenty years gold and silver, as a currency, had been practically unknown in the United States. Whatever may have been the evils connected with the free grant of the use of the public funds to a private corporation, the bank of the United States had at least provided a currency acceptable everywhere. What was to take its place? Benton's engrossing desire was to bring his party back to its original devotion to "hard money," gold and silver, but to this there was one insuperable obstacle: the state banks which were now the only available receptacle for the public funds, which had thrown the whole weight of their influence for the government and against the bank, and which it was necessary to support, possessed the power of issuing notes to a more unlimited and dangerous extent than the bank of the United States. If the sub-treasury system (see INDEPENDENT TREASURY) could have been introduced in 1835, when congress reduced the ratio of gold and silver to 16:1, there would have been no further need to lean upon the state banks, and the "hard money" system might have been forced through without the dreadful spasm with which the laws of nature compelled its adoption in 1837-9. But for many months the state banks were allowed to engage in a race for the production of fictitious wealth which deluged the country with paper money, raised the nominal value of all property far beyond the real value, and increased the sales of public lands from $5,000,000 in 1834 to $24,800,000 in 1836. July 11, 1836, the secretary of the treasury, by the president's order, and against the known wish of congress, issued the so-called specie circular, which directed the land offices to reject paper money and receive only specie in payment for public lands. At the following session congress did indeed pass a bill directing the reception of notes of specie-paying banks, but so late in the session that the president was able to dispose of it by a "pocket veto" (see VETO). The swelling tide of paper money was thus turned back from the west upon the east, and early in May a suspension of specie payments, beginning in New York, began the panie of 1837, which, after a year's general suffering, violently substituted reality in business for fiction.

—The democratic party had by this time thoroughly learned the folly of the state bank, or "pet bank," system. The pet banks had gladly received the public revenues, but, when called upon to refund them for distribution among the states (see INTERNAL IMPROVEMENTS, UNITED STATES), they had promptly responded by suspending specie payments. Van Buren, the new president, therefore held manfully to the democratic idea of a "divorce of bank and state," refused to countenance any governmental interference with the panic, and throughout his entire administration pressed vigorously the sub-treasury system, which was finally successful, after two failures, by the law of July 4, 1840 (see INDEPENDENT TREASURY). This was considered by the whigs, and by the government's rejected allies, the state banks, as an attack upon all banks. A subsidiary panic in 1839 lent force to their arguments, and when Harrison was chosen president in 1840, a majority of the congress elected to meet in 1841 was also whig, pledged to revive the past glories of a national bank and abolish the sub-treasury. But the majority was delusive; the whigs had again and again during the campaign denied to the voters that the bank question was at issue, and had declared that the only issue to be decided by the election was the curtailment of the executive power (see WHIG PARTY); Harrison himself had at least once pronounced against a national bank; and Tyler, the vice-president elect, had been unmistakably known to the leaders of the convention, which nominated him as a confirmed opponent of such an institution.

—President Harrison called congress together in extra session for May 31, 1841. His early death (see HARRISON, WM. H) raised to the presidency a man who was obnoxious to Clay, the whig leader, not more for his unreliability in the whig faith than for his accidental elevation to a rank above his merits, and for his known desire to compass his election in 1844 to the position which Clay regarded as his own by every law of politics. Tyler, though personally averse to any extra session of congress, decided to follow out Harrison's action, and congress assembled at the appointed time. In his message the president avowed his belief that congress had the power to charter a national bank, but reserved the right to veto any plan which should contain unconstitutional or unwise provisions. The whig leaders, however, and particularly those under Clay's influence, were more disposed to force Tyler to serve in the ranks than to recognize him as commander-in-chief. At the beginning of the session, on Clay's motion, the secretary of the treasury furnished a plan for a national bank, and a bill drawn up on his recommendations, "to incorporate the subscribers to the fiscal bank of the United States," passed both houses, Aug. 6, by a vote of 26 to 23 in the senate, and 123 to 98 in the house. The word "fiscal" was placed in the title by way of implication that there was some difference between this and the former bank of the United States, though it is difficult to see any great difference; Tyler had even wished that it should be called fiscal institute, or fiscal corporation. Aug. 9, the house passed a senate bill to repeal the sub-treasury law, and the repeal was signed by the president, Aug. 13. The passage of this bill just at the time when the president was considering the bank bill, was very significant and unexpectedly momentous. The debates alone seem to show that it was intended to force the president to sign the bank bill by leaving him without a sub-treasury; its actual result was, by leaving the president master of the treasury, unchecked by the limitations of any law, to enable him to dictate terms to his party. Aug. 16, the president vetoed the bill on the ground that the permission given in it to establish branch banks in the different states was dangerous and unjust to the states; but the veto also contained an intimation, which may be construed as a call upon the whigs to surrender with good quarter, that the president would be willing to sign a bank bill which should not be open to constitutional objections. By this time the distinctive Clay portion of the whig members of congress were in a white heat of exasperation against the president. They justly considered him a mediocre man, shifty in belief and practice, and only settled in a determination to make himself head either of the whig party or of a new third party of his own. They were with difficulty persuaded to restrain public exhibitions of their resentment while a new bill, to avoid the objections of the veto, was prepared and hurried through the house with indecent haste, Aug. 23, and the senate, Sept. 3 but their incautious private expressions, and particularly an angry letter of Botts, of Virginia, gave to Tyler an excuse, of which he availed himself Sept. 9, to veto this bill also. It is impossible to read the full details of Tyler's defeat of this last bill, as given in the authorities cited below, and acquit him of double dealing; the only excuse to be made for him is that his mind was too much beclouded by his presidential aspirations to be able to estimate his own conduct impartially. His last veto, however, ended the list of attempts to grant to a private corporation the custody and emoluments of the national revenue. (See INDEPENDENT TREASURY, WHIG PARTY.) The present national banking system, begun by act of Feb. 25, 1863, is without this plainly evil feature of the original national banks, is in general terms only an extension of the excellent New York state banking system of 1838 to the country at large, and therefore has nothing to do with the subject of this article. (See BANKING IN THE U. S.)

—I. See 3 Hildreth's United States, 405; 1 Sparks' Gouverneur Morris, 235, and 3: 437; the ordinance incorporating the bank of North America is in 1 Stat. at Large, (Bioren and Duane's edition), 672. II. See 4 Hildreth's United States, 236 foll, and 6 211, 230, 1 von Holst's United States, 104; 1 Benton's Debates of Congress; 4 Jefferson's Works (edit. 1829). 306, 523; 1 Hamilton's Works, 138 foll, Story's Commentaries, § 903; Tiffany's Constitutional Law, § 337; 4 Wheat. 316; 7 How. 283; The Federalist, xxxviii, xliv (both by Madison), 4 Elliot's Debates, 217, 265; for the Acts of Feb. 25 and March 2, 1791, see 1 Stat. at Large, 191, 196; for the Acts of March 23, 1804, and Feb. 24, 1807, see 2 Stat at Large, 274, 423. III. See 6 Hildreth's United States, 463 foll.; 1 von Holst's United States, 383; 5 Benton's Debates of Congress; 1 Statesman's Manual, 323; A. J. Dallas' Writings, 236 foll.; 2 Calhoun's Works, 155; 3 Parton's Life of Jackson, 187, 272 foll.; Private Correspondence of Henry Clay, 322 foll.; Mackenzie's Life and Times of Van Buren, 133 foll.; Holland's Life of Van Buren, 294; 2 Statesman's Manual, 863; Hunt's Life of Livingston, 370; 2 Sedgwick's Political Writings of Leggett; 3 Webster's Works, 391, 416; 1 Benton's Thirty Years' View; 11 Benton's Debates of Congress; the Act of April 10, 1816, is in 3 Stat. at Large, 266; the Acts to wind up the affairs of the bank are in 5 Stat at Large, 8-297. IV. See Sumner's History of American Currency, 160-163; 2 von Holst's United States, 406; 61 Niles' Weekly Register; 10, 11 Adams' Memoirs of John Quincy Adams; 2 Clay's Speeches; 2 Benton's Thirty Years' View; 14 Benton's Debates of Congress; 2 Statesman's Manual, 1345-1359.

ALEXANDER JOHNSTON.

BANKING

BANKING (IN THE UNITED STATES) Previous to the revolutionary war paper money was issued to a greater or less extent by each one of the thirteen colonies. The first issue was by Massachusetts in 1690, to aid in fitting out the expedition against Canada. Similar issues had been made by New Hampshire, Rhode Island, Connecticut, New York and New Jersey, previous to the year 1711. South Carolina began to emit bills in 1712, Pennsylvania in 1723, Maryland in 1734, Delaware in 1739, Virginia in 1755, and Georgia in 1760. Originally the issues were authorized to meet the necessities of the colonial treasuries. In Massachusetts, in 1715, as a remedy for the prevailing embarrassment of trade, a land bank was proposed with the right to issue circulating notes secured by land. John Colman, a merchant of Boston, urgently advocated its establishment. The land bank was forbidden by the province council, unless authorized by the general assembly. There was a large party, however, in favor of paper money in some form. The plan for the land bank was defeated, but the issue of paper money by the treasury was authorized to the extent of £50,000, to be loaned on good mortgages in sums of not more than £500, nor less than £50, to one person. The rate of interest was 5 per cent., payable with one-fifth of the principal, annually. The bills were in form the same as those previously issued for the benefit of the treasury. This round sum or aggregate of £50,000, to be so loaned, was styled a bank, and was the first of the so-called loan banks, which were afterward authorized by nearly, if not quite, all of the colonies. In 1733 an issue of bills to the amount of £110,000 was made by the merchants of Boston, which were to be redeemed at the end of 10 years, in silver, at the rate of 19 shillings per ounce. In 1739, the commercial and financial embarrassment still continuing, another land bank was started in Massachusetts. John Colman was one of the corporators. The stock of the land bank was to be £150,000. No one was permitted to subscribe more than £2,000, nor less than £100. The subscribers were to pay down lawful money at the rate of 40 shillings for every £1,000 subscribed, and for the remainder were to pledge security in lands to the satisfaction of the directors. They were to pay 3 per cent. interest per annum, either in bills of the bank or in produce and manufactures, at prices regulated by the directors. Circulating notes equal to the capital were to be issued, payable in 20 years in produce or manufactures, and 5 per cent. of the capital was to be paid annually in the notes, produce or articles manufactured. The "manufactures, being the produce of this province," were enumerated as follows:20 "Hemp, flax, cordage, bar iron, cast iron, linens, sheep's wools, copper, tanned leather, flax seed, beeswax, bayberry wax, sail cloth or canvas, nails, tallow, lumber or cord wood, or logwood from New Spain." This scheme was strenuously opposed by Governor Belcher, but in spite of all opposition £49,250 of its notes were struck off, of which the treasurer of the company issued £35,582, and £4,067 were employed by the directors in trade.

—A specie bank was also formed in 1739 by Edward Hutchinson and others, which issued bills to the amount of £120,000, redeemable in 15 years in silver, at 20 shillings per ounce, or gold pro rata. The payment of these notes was guaranteed by wealthy and responsible merchants. These notes and those of a similar issue in 1733 were largely boarded and did not pass generally into circulation.

—In 1740 parliament passed a bill to extend the act of 1720, known as the bubble act, to the American colonies, with the intention of breaking up all companies formed for the purpose of issuing paper money Under this act both the land bank and the specie bank were forced to liquidate their affairs, though not without some resistance on the part of the former. The governors of Massachusetts rendered themselves very obnoxious to the people by their determined opposition to these banks and to paper money generally,21 and governor Belcher was recalled to England on account of misrepresentations of the paper money advocates, but was subsequently appointed governor of New Jersey.

—The paper money of the colonies, whether issued by them or by the loan banks, depreciated almost without exception as the amounts in circulation increased. The bills as originally emitted were intended to be equal to coin, but when depreciation advanced to such an extent as to appal the authorities, a new set of bills would be issued, with new assurances that they would be kept equal to coin. In these new bills the old bills would be redeemable at their depreciated value. Sometimes this second set of bills, having also depreciated, was replaced by a third set in the same way. These various sets were designated tenors; the terms old tenor, middle tenor, new tenor, new tenor 1st, new tenor 2nd, being used to distinguish them. To give all the details of the depreciation of this currency in each of the colonies would require much space, but the best authorities agree that it underwent in all cases a constant diminution in value, inflicting loss and misery upon all classes of citizens. Pelatiah Webster says of this paper and the continental currency: "We have suffered more from this cause than from any other cause or calamity. It has killed more men, pervaded and corrupted the choicest interests of our country more, and done more injustice than even the arms and artifices of our enemies." The following table22 gives the price of £100 in coin in the currencies of the several colonies in the year 1748:

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New England...	£1,100
New York...	£ 190
New Jersey...	£180 to 190
Pennsylvania...	£ 180
Maryland...	£ 200
North Carolina...	£1,000
South Carolina...	£ 750
Virginia...	£120 to 125

—The emission of bills by the colonies and the banks was not regarded with favor by the mother country, and the provincial governors were as a general thing opposed to these issues. They were consequently frequently embroiled with their legislatures. Felt, in his "Massachusetts Currency," gives examples of this controversy. Governor Belcher, in 1740, issued the following proclamation. "Whereas, a scheme for emitting bills or notes by John Colman, Esq, and others, was laid before the general court in their session held the 5th of December, 1739, and by a report of a committee appointed by said court, was represented, if carried on, to have a great tendency to endamage his majesty's good subjects as to their properties: and whereas, application has been very lately made to me and his majesty's council, by a great number of men of the most considerable estates and business, praying that some proper method may be taken to prevent the inhabitants of this province being imposed upon by the said scheme; and it being very apparent that these bills or notes promise nothing of any determinate value, and can not have any general, certain or established credit; wherefore, I have thought fit, by and with the advice of his majesty's council, to issue this proclamation, hereby giving notice and warning to all his majesty's good subjects of the danger they are in, and cautioning them against receiving or passing the said notes, as tending to defraud men of their substance and to disturb the peace and good order of the people, and to give great interruption and bring much confusion into their trade and business."

—Subsequently, on Nov. 6, of the same year, being assured that part of the military corps encouraged the circulation of the land bank paper, he published the following: "I hereby warn all commissioned officers in the militia from signing or giving any countenance to the passing of the said notes of hand, directly or indirectly. And as I apprehend that if these should obtain a currency, it will reflect great dishonor on his majesty's government here, and be very detrimental to the public interests of this province and people, I do hereby declare my firm resolution, that if after this publick notice given, any of the military officers of this province persist in being any way concerned in or giving any encouragement whatsoever to the passing of the said notes of hand, and full proof be made thereof to my satisfaction, I will immediately dismiss them from their said offices" These proclamations had but little effect.

—A gentleman writing to a correspondent in London, under date of Feb. 27, 1741, says: "Whole troops, nay almost whole regiments either resigned or told their colonels, who examined them, that they would resign rather than not encourage the bills." Later in the same year governor Belcher writes to Thomas Hutchinson: "You say it would be much better if some other way than by application to parliament could be found to suppress it (land bank). I assure you, the concerned openly declare they defy any act of parliament to be able to do it. They are grown so brassy and hardy as to be now combining in a body to raise a rebellion, and the day set for their coming to this town is at the election, and their treasurer, I am told, is in the bottom of the design, and I doubt it not. I have this day sent the sheriff and his officers to apprehend some of the heads of the conspirators."

—These continued disputes, which largely curtailed the use of an expedient which the colonists considered necessary to their prosperity, together with the action of parliament in restricting the issue of paper money, embittered the minds of the colonists against England, and had undoubtedly much to do with the final outbreak. The bubble act, which laid an interdict on all banking associations having no legal charter within the dominions of the king, was passed by parliament in 1720. In 1740 another enactment was made, extending the provisions of the act of 1720 to the American colonies, where it had been disregarded. Banking in those days consisted merely in the privilege of issuing circulating notes, and this act restricted all private enterprises of this kind. On June 25, 1751, parliament enacted a law forbidding paper money of the colonies to be passed, except for current expenses of the government each year, or in case of invasion by the enemy. It seems also that these exceptional cases where paper money was permitted, were to be under control of the crown, as Mr. Bollan, the agent in London of the province of Massachusetts, writes that he opposed the bill on the ground that it might open the way for the unconstitutional exercise of the king's authority in the colonies in other matters. Legal tender paper money was prohibited by this act of parliament, and in 1763 such issues were declared void; but subsequently, in 1773, they were allowed to be received as legal tender at the treasuries of the several colonies.

—The second continental congress was convened in 1775, and, in order to raise funds, having no power to institute taxation, naturally turned toward the expedient of an emission of paper money on the credit of the Union, but in the redemption of which each colony was to bear a part.

—The first issue was made in June, 1775. For a year these issues continued equal to gold; in two years they had depreciated to 2 for 1; in three years to 4 for 1; in nine months more their relative value was 10 for 1; in September, 1779, it was 20 for 1. Congress now determined that the total issues should not exceed $200,000,000, and renewed the declaration that this currency should be redeemed in full, and went to some labor to prove that the states had the ability to do so. In March, 1780, these issues had so depreciated that their value as compared with specie was as 40 to 1 Congress now required the whole to be brought in for redemption at its market value in coin, and also authorized the emission of new notes bearing interest at 5 per cent., and payable 6 years from from date in silver and gold. These were to be exchanged in the proportion of 1 dollar of the new for 20 dollars of the old emission. During the year 1780 the notes of the old issue sank first to 75 to 1, then ceased to circulate in the states north of the Potomac. In Virginia and North Carolina they passed for a year longer, and finally depreciated to 1,000 to 1, and then ceased to circulate.

—According to Thomas Jefferson but 200 millions of the first emission was issued, which was the amount authorized by resolution of congress; but other authorities state the amount much higher. Joseph Nourse, register of the treasury in 1828, places it at $241,552,780. The amount as given in the treasury statement of 1843 was $242,100,176. The aggregate loss to the people of the country from this currency was estimated by secretary Woodbury at $196,000,000.

—During the war paper money, distinct from the continental currency, was also issued by several of the states. The amount thus issued has been placed at $209,000,000, which is probably too high. It is, however, difficult to obtain exact information in reference to these emissions.

—At the close of the war the minds of all classes were imbued with a wholesome antipathy to paper money, and as a consequence when the federal constitution was under consideration, the power to emit bills which in the original draft was given to the United States was stricken out. Moreover, the original draft having contained a qualified permission to the states to issue paper money, an amendment was inserted which took away from the states all power to coin money, emit bills of credit, or make anything but gold or silver coin a tender in payment of debts. It has been held that the lack of power on the part of a state to coin money, taken in connection with the prohibition of the emission of bills, prevents the issue of paper money by banks chartered by the state, as well as such issue by the state itself. This view was held by Daniel Webster, in his speech on the bank of the United States, on the 25th and 28th of May, 1832, and his arguments are quoted with commendation by Mr. Justice Story, in his commentaries on the constitution, as follows: "It will be hereafter seen that this (the power to coin money) is an exclusive power in congress, the states being expressly prohibited from coining money. And it has been said by an eminent statesman that it is difficult to maintain, on the face of the constitution itself, and independent of long continued practice, the doctrine that the states, not being at liberty to coin money, can authorize the circulation of bank paper as currency at all. His reasoning deserves grave consideration, and is to the following effect: The states can not coin money. Can they, then, coin that which becomes the actual and almost universal substitute for money? Is not the right of issuing paper intended for circulation in the place and as the representative of metallic currency, derived merely from the power of coining and regulating the metallic currency? Could congress, if it did not possess the power of coining money and regulating the value of foreign coins, create a bank with the power to circulate bills? It would be difficult to make it out. Where, then, do the states, to whom all control over the metallic currency is altogether prohibited, obtain this power? It is true that in other countries private bankers, having no legal authority over the coin, issue notes for circulation. But this they do always with the consent of the government, express or implied; and government restrains and regulates all their operations at its pleasure. It would be a startling proposition in any other part of the world, that the prerogative of coining money held by the government was liable to be defeated, counteracted or impeded by another prerogative, held in other hands, of authorizing a paper circulation. It is further to be observed that the states can not issue bills of credit; not that they can not make them a legal tender, but that they can not issue them at all. This is a clear indication of the intent of the constitution to restrain the states as well from establishing a paper circulation as from interfering with the metallic circulation. Banks have been created by states with no capital whatever, their notes being put in circulation simply on the credit of the state. What are the issues of such banns but bills of credit issued by the state?" Mr. Justice Story says: "This opinion was not peculiar to Mr. Webster; it was maintained also by Hon. Samuel Dexter, one of the ablest statesmen and lawyers who have adorned the annals of the country."

—Nearly 30 years after, chief justice Chase, when secretary of the treasury, in his report to congress of Dec. 9, 1861, said: "It has well been questioned by the most eminent states men, whether a currency of bank notes, issued by local institutions under state laws, is not, in fact, prohibited by the national constitution. Such emissions certainly fall within the spirit, if not within the letter of the constitutional prohibition of the emission of bills of credit by the states, and of the making by them of anything except gold and silver coin, a legal tender in payment of debts."

—BANK OF NORTH AMERICA. The bank of North America, the first organized bank in the United States, had its origin in a meeting of citizens of Philadelphia, on June 17, 1780, the purpose being to devise means for furnishing supplies for the army, then in a state of great destitution. It was then resolved to open a "security subscription to the amount of £300,000, Pennsylvania currency, real money," Thomas Paine subscribing $500 and Robert Morris £200 to the fund. The system of the bank was devised by Robert Morris, then superintendent of finance, early in 1781, and was approved by congress, which, on Dec. 31, following, gave the bank a perpetual charter, with a capital of $10,000,000. Of this amount, however, but $85,000 was paid in by individuals. The government subscribed $250,000, of which but $50,000 was ever paid. The bank opened for business on Jan. 7, 1782, and within a period of six months thereafter had loaned $400,000 to the government.

—The state of Pennsylvania in 1782 also granted it a perpetual charter, which was subsequently repealed and again renewed, the renewal, however, limiting the term to 14 years, and the capital to $2,000,000. After successive renewals, it was converted into a national bank on Dec. 3, 1864, with its original title, and with a capital of $1,000,000.

—The Massachusetts bank in the city of Boston, and the bank of New York in the city of New York, which were the only other banks in operation at the time of the charter of the bank of the United States, were both converted into national banks in 1865, and these 3 banks are now transacting an active and successful business.

—BANK OF THE UNITED STATES. Alexander Hamilton, secretary of the treasury, in his report to congress on Dec. 13, 1790, recommended the establishment of a bank of the United States, and opposed the issue of paper money by the government. The amount of the bank's stock was fixed at 10 millions, one-fourth of ail private and corporate subscriptions to be in coin, and three-fourths in U. S. 6 per cent. stocks. Two millions were to be subscribed by the government, to be returned in 10 annual installments. The board of directors was to consist of 25 persons, all citizens of the United States, who were to serve without compensation; and the circulating notes of the bank were made receivable in payment of all dues to the United States.

—The act of incorporation passed the house of representatives by a vote of 39 to 19, those favoring the bill being mainly from northern, and those opposing it from southern states. Among the friends of the bill were Alexander Hamilton, secretary of the treasury, and Henry Knox, secretary of war; while the list of its opponents included James Madison, Thomas Jefferson, secretary of state, and Edmund Randolph, attorney general. The opposition to the bank was based upon the alleged general inutility of banking systems, and the want of power in congress to grant the charter. The bill, however, became a law on Feb. 25, 1791, and the bank at once went into operation, and was immediately successful. Between the years 1796 and 1802 the government disposed of its $2,000,000 of stock at a profit of $1,137,152.29, equal to 57 per cent. on the original investment.

—The bank was required to make weekly reports to the secretary of the treasury, but the following, for Jan. 24, 1811, is one of the only two balanced statements found of record:23

RESOURCES.
Loans and discounts...	$14,578,294
United States six per cent. stock...	2,750,000
Other United States indebtedness...	57,046
Due from other banks...	894,145
Real estate...	500,653
Notes of other banks on hand...	393,341
Specie...	5,009,567
Total...	$24,183,046

LIABILITIES.
Capital stock...	$10,000,000
Undivided surplus...	509,678
Circulating notes outstanding...	5,037,125
Individual deposits...	5,9[digit missing in original—Econlib Ed.]0,423
United States deposits...	1,929,999
Due to other banks...	634,348
Unpaid drafts outstanding...	171,473
Total...	$24,183,046

—The charter of the bank expired March 4, 1811, but, prior to this, efforts were made for its renewal, favored by Albert Gallatin, then secretary of the treasury, and by Crawford and Pickering in the senate, and opposed by Mr. Clay. The bill was defeated in the senate on Feb. 20, 1811, by the casting vote of the vice-president, George Clinton, and subsequently failed in the house by a minority of one vote.

—During the war with Great Britain which soon followed, the state banks, in whose interests the recharter had been opposed, failed to meet the exigencies of the government, and in September, 1814, nearly all of them south of New England suspended specie payments. Following this their issues expanded rapidly, and floods of unchartered currency were also poured out, of all denominations, from 6 cents upward.24 The result was a great depreciation in the value of the currency, ranging from 20 to 25 per cent. at the close of the war, the failure of many of the banks, and corresponding distress among the people. The root of the evil lay in the attempt of the government to carry on a great war through the aid of state corporations, over which it could exercise no control. In 1814 there was nearly 9 millions of dollars of government funds in the suspended banks, and the loans of the government, in 1815, amounted to more than 35 millions; while 6 per cent. stocks issued by the government were sold at rates of discount varying from 5 to 15 per cent.

—The effect of this experience was to revolutionize opinions in congress, and on Jan. 20, 1815, in accordance with a previous recommendation of Mr. Dallas, then secretary of the treasury, a bill was passed reorganizing the bank of the United States. The bill was vetoed by president Madison on Jan. 30, following, on the ground that the proposed bank did not appear calculated to accomplish the purposes for which it was designed.

—SECOND BANK OF THE UNITED STATES. The plan proposed by secretary Dallas was again presented to congress, and, without material change, was approved by president Madison on April 10, 1816. The charter was limited to 20 years, and the capital to 35 millions, 7 millions to be subscribed by the government, payable in coin or in U. S. 5 per cent. stocks. Other subscriptions were payable, one-fourth in coin and the remainder in coin or government stocks. The directors were to be resident citizens of the United States, and to serve without compensation, five of them to be appointed by the president. The bank was to be made a public depository, and to aid the government, free of charge therefor, in negotiating its loans. It was empowered to establish branches, and to issue circulating notes receivable in all payments to the United States. No other bank outside of the District of Columbia was to be established by congress during the continuance of this charter, and in consideration of the grants therein, the bank was to pay to the United States $1,500,000, in three installments.

—The bank commenced doing business on Jan. 7, 1817, at nearly the worst stage of the monetary troubles resulting from the late war, and at the verge of the financial crisis which culminated in 1819-20. It consequently met with many difficulties and embarrassments, and on Feb. 9, 1819, a resolution was moved in the house, looking to a repeal of its charter, but which failed of adoption. At this period of its existence, by its efforts to restore the soundness of the currency through large importations of specie, the bank was on the brink of failure.

—From 1820 to 1835 the country was prosperous, the bank recovered from its embarrassments, and its stock rose steadily in value. Long before 1828 the bank had lived down all opposition; and it was therefore a surprise to all parties when general Jackson, in his first message, in December, 1829, took ground against a renewal of its charter, when it should expire in 1836. The agitation thus awakened grew in intensity, until it culminated, on July 16, 1832, in the veto by president Jackson, of a bill rechartering the bank. The interval of about six years between the commencement of Jackson's warfare upon the bank and the expiration of its charter is memorable for the violence and persistence of the struggle between the administration and its supporters, and the bank and its friends, both in and out of congress.

—The most important event of the struggle was the removal of the government deposits from the bank of the United States to various state banks. The order for this removal was issued in 1833, by Mr. Taney, who was made secretary of the treasury for this purpose, his predecessor, Mr. Duane, having declined to issue it. When congress re-assembled in December, 1833, resolutions on the subject were adopted in both houses; those of the senate censuring the president and secretary of the treasury for usurpation of powers, while in the house it was declared that the bank ought not to be rechartered, that the public deposits ought not to be restored to it, that the state banks should be continued as depositories, and that congress should further regulate the subject by law.

—Among the early results which followed the removal of the deposits was the expansion of their issues by the state depositories, and the wild and general inflation of the currency by a multitude of other banks, old and new; the aggregate of circulating notes, exclusive of those of the bank of the United States, increasing from 61 millions in 1830 to 149 millions in 1837. In 1830 the currency of the country had been characterized by the finance committee of the senate as being more sound and uniform than that possessed by any other country; and yet within seven years after this all the banks then in operation, including the great bank of the United States, which had then been rechartered by the state of Pennsylvania, went into suspension. The bank, when denied a renewal of its charter by congress, did not close up its affairs, but applied for and obtained a charter from the state of Pennsylvania, Feb. 18, 1836, just 13 days before the expiration of its charter from the government. This was substantially a renewal for 30 years of the old charter, and under the old corporate name, but with a change as to the amount and terms of the bonus to be paid for it to the state. This bonus, had the bank remained solvent and in existence long enough, would probably not have fallen short of 5 millions of dollars. Col. Benton characterized the Pennsylvania charter of the bank as indicating, by every circumstance of its enactment, corruption and bribery in the members who passed it, and an attempt to bribe the people through the bonus to be distributed among them.25

—The history of the bank subsequent to the crisis of 1837 was a disastrous one. It suspended payments as frequently as other state banks, and finally succumbed to difficulties which prudent management should have enabled it to overcome. It made three several assignments in 1841, to secure various liabilities, the last and final assignment being on Sept. 4, of that year. The 7 millions of stock held by the United States previous to the institution becoming a state bank was paid back in full, and the government realized a very handsome profit upon its investment, as will appear by the following statement, derived from the treasury records:26

Bonus paid by the bank to the United States.	$ 1,500,000.00
Dividends received from the bank...	7,118,416.29
Proceeds of stock sold, and other moneys received from the bank...	9,424,750.78
Total...	$18,043,167.07
Subscription to capital stock, paid in U. S. 5 per cent. bonds... $7,000,000
Interest paid by United States on same... 4,950,000
	11,950,000.00
Profit on investment...	$ 6,093,167.07

—Nicholas Biddle was president of the bank from January, 1823, to March, 1839. At the time of his resignation the shares were selling at 111, having in 1837 sold at 137; but in 1843, after the failure of the bank, its shares were quoted at 1 7/8; per cent. The circulating notes of the bank, together with the deposits, were paid in full, principal and interest; but the whole capital of 28 millions was lost to the shareholders.

—MASSACHUSETTS. The success of the bank of North America in Pennsylvania, induced the organization of the Massachusetts bank, which received its charter from the state of Massachusetts on Feb. 7, 1784, with a capital of $300,000. It existed 80 years as a state bank and became a national bank in 1864. The Union bank was the next one, chartered in 1792, with a capital of $1,200,000, of which $400,000 was subscribed by the state. In 1795 the Nantucket and Merrimac banks were established. Up to 1799 but one more bank was chartered. In that year a law was enacted prohibiting the establishment of unincorporated associations. In 1803, an act requiring semi-annual returns to be made by the banks to the governor and council was passed, and in 1805 an amendment required these returns to be sworn to. In 1805 16 banks banks were in operation. From 1805 to 1811 but one bank was chartered. Two more were chartered in 1811. In all the charters granted after 1793, provision was made for a state subscription, and in 1812 the state held about $1,000,000 out of the $8,000,000 of stock of the banks of the state. Nearly all the banks were rechartered in 1811. In 1812 the state first imposed a tax on bank capital. In 1813 the system of compelling the redemption at par in Boston of the notes of the New England banks, by assorting and returning the notes to the place of issue, was inaugurated by the New England bank, organized that year. This was the beginning of what was afterward known as the Suffolk bank system, but it was not fully developed until 1825. There was at first some opposition, but the Suffolk system was finally successfully established, and continued down to the establishment of the national system. The Massachusetts banks did not suspend in 1814, owing largely to the fact that a law of the state imposed a penalty of two per cent. a month for non-payment of their notes. The first comprehensive law regulating the banking business was passed in 1829. In 1837 there had been organized 134 chartered banks—of these, 32 failed in the financial panic of that year. The loss was about 30 per cent. of their entire indebtedness. From 1793 to 1836 only 10 banks had failed. A result of the crisis of 1837 was the adoption of a system of official examinations. A free banking act was passed in 1851, similar in its provisions to that of New York state, but only 7 banks were organized under it, the previously existing chartered banks occupying the field. In October, 1865, all but one of the state banks, with the exception of four which discontinued business, had been converted into national banks.

—NEW YORK. The first bank in the state of New York commenced business in 1784, under the name of the bank of New York. Its articles of association were drawn by Alexander Hamilton. It was the first bank chartered by the state legislature, and received its charter on March 21, 1791. It was organized with a capital of $900,000 in shares of $500 each. The state afterward subscribed for 100 shares, making the capital $950,000. In 1832 $50,000 additional was subscribed by the state. May 1, 1852, it was re-organized as a free bank under the general laws of the state, with a capital of $2,000,000. It became a national bank with a capital of $3,000,000 on Jan. 6, 1865. Up to June 11, 1812, the date of the declaration of war with Great Britain, 19 banks were chartered by the legislature—7 of these, the bank of New York, Merchants, Mechanics, Union and City bank, of New York city, the New York State of Albany, and the bank of Utica, are now national banks, and the Manhattan company and bank of America are the leading state banks. Twenty-four more banks were chartered between 1812 and the date of the passage of the safety fund act, in 1829. During27 the period from 1791 to 1812, political feeling between the federalists and the republicans was bitter, and the obtaining of the charters of the banks organized during this time was, in many cases, the occasion of much party strife and intrigue. Governor Tompkins, in the year 1813, who was subsequently twice elected vice-president of the United States, prorogued the legislature, assigning as one reason for his action the attempt to use corrupt means to secure a bank charter.28 These charters were in the nature of special privileges, granted to particular persons, and all others were specially restrained by law from participating in the business of banking. The restraining act of 1804 was passed to prevent private banking institutions from continuing their business, for the purpose of leaving a clear field to the chartered corporations. This act prohibited any person, under a penalty of a thousand dollars, from subscribing to or becoming a member of any association for the purpose of receiving deposits, or from doing any business which incorporated banks by their acts of incorporation were permitted to do. This was followed by the more stringent act of 1818, which provided that no person, association of persons, or body corporate, except such bodies corporate as were expressly authorized by law, should keep any office for the purpose of receiving deposits, or discounting notes or bills, or for issuing any evidence of debt to be loaned or put in circulation as money; which statutes were not repealed until 1837, a year before the passage of the free banking act. The safety fund system was authorized on recommendation of governor Van Buren, by act of April 2, 1829. The main feature of this system was the requirement that each bank operating under it, should pay annually to the treasurer of the state a sum equal to ½ of 1 per cent. of its capital stock, the payments to be continued until each bank had paid in 3 per cent. of its capital. This common fund was to be used to pay the notes and other debts of any bank belonging to the system which might become insolvent. In practice the amount required to be contributed was found to be inadequate. Eleven banks belonging to the system failed, and the whole of the fund at that time was but little more than 5 per cent. of their debts. The whole sum contributed down to 1848 was little more than 75 per cent. of the debts of these insolvent institutions. The deficiency was made up by the issue of 6 per cent. stock by the state, the latter to be reimbursed by future payments of the banks. In 1842 the act was amended so that the common fund became responsible for the payment of the circulating notes only of banks fail thereafter. This system was also a monopoly, as it did not provide for new banks. These, as before, had to be specially chartered. The occasion of it was that the charters of 40 banks previously organized were about to expire, and these 40 banks came in under the new system. Three commissioners were appointed, one by the governor and senate, one by the banks in southern New York, and one by the banks elsewhere in the state, to inspect the banks and report to the legislature. Many abuses consequent on a desire to obtain bank stock arose, and after some changes in the manner of appointing commissioners had been made, the office was abolished in 1843, and the power of examining the banks was conferred on the comptroller of the state.

—The free banking system was authorized April 13, 1838. All restrictions confining the privilege of banking to certain classes were swept away. Any number of persons were authorized to form banking associations, upon the terms and conditions and subject to the liabilities of the act. As originally passed, the law provided for the issue of circulation by the state to these associations, upon the deposit of stocks of the state of New York, of the United States, of other states equal to a 5 per cent. stock, or of bonds and mortgages on improved and productive real estate, worth, exclusive of buildings thereon, double the amount secured by the mortgage, and bearing interest at not less than 6 per cent. The amount of circulation issued was to be equal to the amount of the deposit. From 1838 to 1843, 29 of these banks failed, and the securities deposited were sufficient to pay 74 per cent. only of their outstanding circulation. The losses occurred only in the case of those banks which had the stocks of other states than New York. The act was therefore amended so as to exclude all state stocks except those of New York, and they were required to be kept equal to a 5 per cent stock. An amendment in 1848 required the stocks deposited to bear 6 per cent, and bonds and mortgages 7 per cent., and that the latter should be on productive property, and for an amount not exceeding two-fifths of the value of the land covered by them. In 1849 the law was again amended so as to require one-half of the securities to consist of New York stocks, and not more than half of stocks of the United States, the securities in all instances to be, or to be made, equal to a 6 per cent. stock, to be taken at an amount not above par, and at not more than their market value.

—In 1840 a law was passed requiring the banks of the state to redeem their notes at an agency of the bank, either in New York city, Albany, or Troy, at ½ of 1 per cent. discount. The discount was reduced, in 1851, to ¼ of 1 per cent. The discount was in practice divided between the redemption agent and the bank whose notes were redeemed, and banks which did not provide means to redeem their notes were forced to close. The constitution of the state, of 1846, provided that the legislature should have no power to grant special charters for banking purposes, but that corporations or associations might be formed under general laws. The constitution also provided that, after 1850, the stockholders of banks issuing circulating notes, should be responsible to the amount of their shares for all debts and liabilities of any kind, and in case of insolvency, bill holders should be preferred to all other creditors.

—The banks were under the supervision of a commissioner, appointed under the safety fund act, until 1843. In that year they were required to report to the state comptroller, but in 1851 the present office of bank superintendent was created.

—OHIO. The first institution in the state of Ohio, in the nature of a bank, was chartered under the name of the Miami exporting company, in 1803, 5 months after the admission of the state into the Union. It was chartered for 40 years, with a nominal capital of $500,000, divided into shares of $100 each, the subscription for the same payable 5 dollars in cash, and remainder in produce or merchandise. Although in form a trading company, it issued bills and redeemed them in notes of other banks. It was finally compelled to close its affairs. The first regular bank was chartered in 1808, with a capital of $500,000. It was located at Marietta. During the same year another bank was established at Chillicothe, then the capital of the state, with a capital of $100,000. From 1809 to 1816 4 banks were chartered. In 1816 6 other banks were chartered by one act. This act required, among other provisions, that each new bank and every old bank rechartered should annually set apart out of its profits, for the use of the state, such sum as would, at the expiration of its charter, amount to one twenty-fifth part of its whole capital. In 1825 this provision was amended, so that in lieu thereof the state was to receive 2 per cent. on dividends previously declared, and 4 per cent. on subsequent dividends. The rate of interest to be taken by banks was limited to 6 per cent. Legislation in Ohio relating to banking was evidently shaped with the purpose of enabling the state to participate in whatever profits might accrue from the exercise of the privilege within its borders. From 1816 to 1832 charters were granted to 11 banks, and in 1833 and 1834 2 other banks were chartered. Branches of the bank of the United States, established at Chillicothe and Cincinnati, were subjected to a tax of $50,000 each if they continued business after September, 1819. Upon an attempt being made by the auditor of the state to collect the tax, the United States supreme court again decided that the state had not the right. In 1845 a state bank with branches was authorized, on the safety fund principle. For creating the fund an amount equal to 10 per cent. of the circulation of each of the branches was to be paid to a board of control, to be invested in stocks of the state or United States, or in bonds and mortgages on unincumbered real estate of at least twice the value of the amount secured thereby. Each branch was entitled to receive the interest on the stocks and bonds in which its portion of the safety fund was invested. In case of failure of any branch, its own stocks and bonds were first to be used to redeem its circulation before any portion of the safety fund could be so applied. The state was divided into 12 districts, and a portion of the capital of the state bank was allotted to each. Sixty-three branches in all were authorized, with charters continuing to 1866, and 5 other banks, previously chartered, were authorized on certain conditions to avail themselves of the privileges of this act. The issue of circulation was under the supervision of a board of control, consisting of one member from each branch. The act of Feb. 24, 1845, creating the state bank and branches, also authorized an independent bank system, requiring United States or state stocks equal to the full amount of the issues to be deposited with the state treasurer.

—In March, 1851, the legislature passed an act authorizing free banking, the circulation to be secured by a pledge of bonds of the United States and state of Ohio. A new constitution was adopted in June, 1851, prohibiting the organization of additional banks, without the approval of the people at the general election succeeding the passage of the law chartering the same. In 1852 a tax law was passed, which, through a forced construction, levied upon banks twice, and in some instances three times, the rate imposed on any other property. Most of the banks organized under the act of 1851 were ultimately forced to go into liquidation by the oppressive taxation. In April, 1856, an act similar in its provisions to that of 1845 was passed, incorporating the state bank of Ohio and other banks, the charters to continue until May, 1877. The act contained a personal liability clause, and prohibited the general assembly from imposing any greater tax on capital employed in banking than is or may be imposed upon the property of individuals. In 1856, 36 of the banks which had been organized in the state had failed, their notes being entirely worthless, while 18 others were in process of liquidation, their notes being quoted at 50 to 75 cents on the dollar. In 1863 there were 56 banks organized upon three different plans, viz., 7 independent banks with a capital of $350,000, 13 free banks with an aggregate capital of $1,270,000, and the state bank of Ohio with 36 branches, with an aggregate capital of $4,054,000 and $7,246,000 circulation. The total capital of all the banks in the state in that year was $5,674,000; circulation, $9,057,837; specie, $3,023,285.

—INDIANA. The state of Indiana was admitted into the Union in 1816, and in 1820 2 banks had been established. In 1834 the state bank of Indiana was incorporated, with 10 branches, the branches being mutually liable for each other's debts. Each share was to be liable to an annual tax of 12½ cents, and when any general system of taxation should be authorized by the state, the shares were to be liable as other capital. The tax on them was, however, in no event to exceed 1 per cent. The capital was mostly borrowed from abroad, through the credit of the state, which took $1,000,000 of the stock, and also loaned its credit to individual stockholders to the extent of one-half of their subscriptions, taking real estate at one-half its improved value as security. Although this bank commenced business during the very critical condition of financial affairs which culminated in the panic of 1837, it was the only enterprise started by the state which was successful. The bank paid dividends averaging from 12 to 14 per cent. annually, and in 1854, on the expiration of its charter, when it went into final liquidation, it returned to its stockholders nearly double their original investment. The state realized fully 3½ millions in profits from the 1 million invested. In 1841 the branches were authorized, on payment of 1 per cent., to issue not more than $5,000,000 in notes of denominations of less than five dollars. The banks of Indiana suspended specie payments in 1838, and resumed in 1841. In November, 1851, a new constitution went into effect in the state, which prohibited the organization of banks except under a general law. In 1852 such general law was passed, providing for the deposit of United States and state stocks with the auditor as security for circulation. In October, 1854, there were 84 of these banks. The oppressive tax laws of Ohio drove much banking capital to Indiana. In 1856, of 94 of the free banks 51 had suspended, and their notes were selling in Cincinnati at from 25 to 75 per cent. discount.

—When the charter of the state bank expired in 1854, a new bank with a capital of $6,000,000 was authorized by the legislature. This bank was carefully and skillfully managed, and did not suspend in the crisis of 1857.

—ILLINOIS. The first bank in the state of Illinois was established under its territorial government, in 1813, at Shawneetown, and three years thereafter was incorporated, with a capital of $300,000, for a term of 20 years. In 1835 its charter was extended to January, 1857, and its capital increased to $1,400,000, the additional capital being subscribed by the state, which issued its bonds for that purpose. It subsequently failed, having $46,909 of unavailable funds on deposit belonging to the government. The state bank of Illinois was chartered in 1821, with a capital of $500,000, the state constitution of 1818 having prohibited any other new organizations. This bank was owned by the state, and its circulating notes were receivable for taxes and for all debts due to the state or the bank, and $300,000 of circulation was directed to be issued and loaned on mortgages, in sums not exceeding $1,000 to any one individual, upon notes for one year at 6 per cent. interest. The notes of the bank were soon thereafter quoted at 75 cents on the dollar, then at 50 cents, finally at 25 cents, when they ceased to circulate altogether. In February, 1835, a new bank was incorporated with a capital of $500,000, which was subsequently increased to $2,000,000, owned and controlled by the state. It was soon after compelled to suspend specie payments, and in 1843 acts were passed, placing the state bank and the bank at Shawneetown in liquidation. The stock of these banks subscribed for by individuals was lost, as well as $900,000 belonging to depositors and bill holders. The state took possession of its bonds amounting to $3,050,000, and they were canceled and burned in the presence of the legislature in the capital square at Springfield.

—In the year 1843 a general banking law, similar in its provisions to the free banking law of Indiana, was passed.

—In 1861 the circulation was $12,300,000, secured largely by bonds of the state of Missouri, and the bonds of the southern states, which subsequently became much depreciated.

—The constitution of 1870 prohibits the creation of a state bank, and requires all acts authorizing corporations with banking powers to be submitted to the people. It also requires that banks in operation shall make under oath, and publish, full and accurate quarterly reports of their affairs, but no law was ever passed carrying into effect this constitutional provision.

—Secretary Crawford, Albert Gallatin and others made estimates of the capital, circulation and specie held by the banks in the United States,29 from 1784 to 1830, and from these estimates the following table has been compiled, showing the amounts of these items at various dates within that period:

—Banking associations, especially in the southern and western portions of the country, were established under charters granted by state legislatures, the shares of which were held wholly or in part by the states themselves, and in character similar to those in the states already referred to. The banks operating under special charter were in high favor, the amount of currency issued greatly exceeding, in some cases in the proportion of 3 to 1, the amount of their nominal capital. Charters of this class were naturally regarded as of great value, and the parties seeking such concessions from the legislatures were exceedingly numerous.

—In 1813 a bill authorizing the establishment of some 25 banks, with a proposed capital amounting in all to 9 millions, passed the legislature of Pennsylvania, but was annulled by the veto of governor Snyder. The following year, however, a bill of similar character was successfully passed over the repeated veto of the governor of that state, authorizing 41 banks to commence business, with an aggregate nominal capital of 17 millions, while it required only one-fifth of such capital to be paid in. Thirty-seven of these went into operation. The capital of a large number of them was merely nominal, being represented by stockholders' notes for the amount of their respective shares. As might have been expected, the lifetime of such institutions was exceedingly brief; 15 of those in Pennsylvania became insolvent within four years after their establishment. In other cases the banks whose charters had been authorized by the New England and southern states were disposed of to non-residents, who organized such associations with but little real capital, and the currency of these banks was almost certain not to be circulated at home, but among the citizens of remote states, who suffered great loss from such issues. As late as 1854 the circulation of the northwestern states consisted largely of the notes of two or three Georgia banks, which circulated upon the personal credit of western shareholders, and without any regard to the management of the issuing banks.

—Observing the results in the state of New York, which had followed the passage of the free banking law, a number of other states, chiefly in the east and west, after the year 1850, adopted similar systems of banking.

—The free banking acts of the states of Massachusetts and Louisiana required an ample reserve to be kept on hand, and contained other restrictions, which were subsequently incorporated in the national bank act.

—Charters for banks were still granted in most of the states which adopted the free banking system, and the former were more profitable and generally preferred, so that but few organizations comparatively were perfected under the latter system. The free banking acts which were passed by the legislatures of the western and southern states, almost without exception, omitted the most important provisions contained in the laws of the three states already referred to. No provision was made for the redemption of the circulation at any common centre; the security required was not sufficient; the notes were issued in excess of the cash capital, the shareholders were not made personally liable, and a majority of both directors and shareholders were often non-residents. These organizations were frequently associations without capital, located at places not easily accessible, and owned by non-residents who, taking advantage of such laws, converted state bonds into currency and drew the interest on the bonds without transacting much if any business at the place of issue. The governor of Indiana, in his message for 1853, says. "The speculator comes to Indianapolis with a bundle of bank notes in one hand and the stock in the other, in 24 hours he is on his way to some distant point of the Union to circulate what he denominates a legal currency, authorized by the legislature of Indiana. He has nominally located his bank in some remote part of the state, difficult of access, where he knows no banking facilities are required, and intends that his notes shall go into the hands of persons who will have no means of demanding their redemption."

—The governor of Michigan, in his message for the same year, says: "At present we are giving charters to the issues of banks about which we actually know nothing, in whose management we have no participation, and are thus literally paying a large tribute for what generally in the end proves to be a great curse." Governor Ford, in a message to the legislature of New Jersey, in referring to the same subject, says: "In many cases our banks, although ostensibly located in New Jersey, have their whole business operations conducted by brokers in other states. The facility with which they may be organized and located, without reference to the wants of the community or the business of the place, is destructive to all the legitimate ends of banking."

—The adoption of the free banking system under such laws was not favorable to its extension in other states, and only a small portion of the circulation outstanding was issued upon bonds deposited with state officers for the purpose of securing the same. Specie payments were suspended in 1814, in 1837 and in 1857. The notes of the banks, with the exception of those located in the large commercial cities, were during the whole period at a discount for coin. The notes of the New England states, which were redeemed at the Suffolk bank, were worth 1/8 per cent. less than coin in New York, and many New York state notes, issued previous to the passage of the free bank act, were at a discount of ½ to ¾ of 1 per cent., while the notes of the banks in other states which were only redeemed at the counters of the issuing banks, were all at rates of discount varying from 8/4; to 5 per cent, and at times at much higher rates. The losses to billholders were estimated to be not less than 5 per cent., annually, upon the whole amount of circulation outstanding. The losses upon exchange, between different portions of the country, were still greater than the losses arising from the insolvency of the banks, and the number of counterfeit and worthless bank notes in circulation is estimated to have been more than 6,500.

—The sketches given of the banks organized in the states of New York and Massachusetts, and in three of the older western states, exhibit the general outlines of the bank legislation of the country previous to 1863. They present in a favorable light the operations of the charter system, the safety fund, and the free banking system in two of the most prosperous states of the union, while they expose many, but by no means the worst, imperfections of those systems as they existed in some of the other states during the period when circulation was issued by state authorities.

—Congress, by a resolution in 1832, directed the secretary of the treasury to procure and publish as full returns as possible of the resources and liabilities of the state banks. In many states no reports were required for banks chartered under their laws; in others, infrequent ones only were required; and in those which made reports there was an entire absence of uniformity as to the dates upon which their condition was stated. No reliable information could, therefore, be given at any given date of the circulation, the specie, the deposits, or of their resources and liabilities generally; and the returns were in many instances based upon statistics which were made from reports that in themselves were unsatisfactory. From these returns the following table has been prepared, giving the principal items contained in the returns of the state banks at the dates named:

All banks organized under state laws, and all private bankers, have been required, for some years past, to make returns to the treasury department of their capital and deposits, for purposes of taxation, and from these returns the following table has been compiled, showing the number of the state banks and trust companies, of the savings banks with and without capital, and of the private bankers of the whole country, together with their average capital and deposits for the six months ending May 31, 1880:

—NATIONAL BANKS. A financial writer in the Analectic Magazine, Philadelphia, for 1815, at which time the bank currency was in its worst state proposed that the public funds should serve, in the absence of specie, as the basis, support and limit of a paper currency.30

—Albert Gallatin also, in his celebrated essay in 1831, suggested the issue of circulating notes secured by government bonds. At that date the debt of the government was in process of rapid reduction, and was entirely paid within the next four years. He proposed that existing bank notes be taxed out of existence, and suggested a resort to mortgages on real estate for want of public stock, which plan, however, he found liable to the objection that the accommodations which the banks could, in that case, afford to individuals might be too much curtailed; and he concludes that "if these objections can be removed, the plan proposed would give to the banking system of the United States a solidity, and inspire a confidence, which it can not otherwise possess."

—The bank of England was organized in the year 1694, upon a capital of £1,200,000 which had been loaned to the government, and the capital of that bank since that date has not differed materially from the permanent advance to the government; and three-fourths of the stock of the bank of the United States, in 1790, was authorized to be paid in United States stock, bearing 6 per cent interest. In 1844 notes of the value of 14,000,000 pounds sterling were authorized to be issued by the bank of England, on government securities; additional issues to vary with the amount of coin or bullion on deposit.

—The free banking system of the state of New York, as has been seen, was authorized six years previous, in 1838, and was the first system of banking which required securities to be deposited for bank issues. Secretary Chase, in his report for December, 1861, recommended the gradual issue of national bank notes, secured by the pledge of United States bonds, similar to the system then in operation in New York, in preference to the issue of United States notes, 50 millions of which had already been issued.

—The advantages claimed by the establishment of the banking system were. "A currency of uniform security and value, protection from losses in discounts and exchanges, increased facilities to the government in obtaining loans, a diminution in the rate of interest or a participation by the people in the profits of circulation, an avoidance of the perils of a great money monopoly, and a distribution of the bonds of the nation to the leading monetary associations of the country, thus identifying their interests with those of the government."

—A bill was prepared in accordance with his views during that month, and printed for the use of the committee of ways and means, but it was not reported, and a notice to print extra copies in July was laid on the table; and on the 8th of July following, Mr. Stevens, the chairman of the committee of ways and means, submitted the bill with an adverse report. The immediate necessities of the government compelled the issue of legal tender notes instead of the issue of national bank notes as recommended by the secretary, and the consideration of the bank act was deferred.

—A general suspension of specie payments took place on Dec. 28, 1861, and two months thereafter the act of Feb. 25, 1862, was passed, authorizing the issue of 150 millions of legal tender notes, which amount was afterward increased 150 millions by the acts of July 11, 1862, and March 3, 1863, the latter date being but a few days subsequent to the passage of the first national bank act.

—On Jan. 30, 1864, when the whole amount of national bank notes outstanding was but $3,700,000, nearly the whole amount of legal tender notes authorized, $449,338,902, had been issued, which was the highest amount outstanding at any one time.

—In his report for 1862 secretary Chase again earnestly advocated the passage of the national bank bill. He presented at considerable length the arguments for and against the system, and urgently renewed his previous recommendation for its passage. One of the advantages which he said would arise from its passage was "that the United States bonds would be required for banking purposes, a steady market would be established, and their negotiation greatly facilitated, a uniformity of price for the bonds would be maintained at a rate above funds of equal credit, but not available to banking associations. It is not easy to appreciate the full benefits of such conditions to a government obliged to borrow;" it will "reconcile as far as practicable the interests of existing institutions with those of the whole people, and will supply a firm anchorage age to the union of the states." The bill is said to have had the sanction of every member of the administration. President Lincoln earnestly advocated its passage in his annual message in 1862, and in 1863 he said: "The enactment by congress of a national banking law has proved a valuable support of the public credit, and the general legislation in relation to loans has fully answered the expectations of its favorers. Some amendments may be required to perfect existing laws, but no change in their principles or general scope is believed to be needed."

—About 14 months after, the national bank bill was printed for the use of the committee of ways and means; it was introduced into the senate by senator Sherman and referred to the finance committee, from which it was reported by him on Feb. 2, 1863, with amendments. Ten days later it passed that body by a vote of 23 to 21, and on the 20th of the same month it also passed the house of representatives by a vote of 78 to 64.

—The bill encountered earnest opposition, and the secretary, in a letter to a friend at about that date, said that "a majority of both the house and senate finance committees were incredulous or hostile."

—Senator Collamer, in his speech in the senate, Feb. 11, 1863, said: "It will be found that the people will not break up their present system of banking, interwoven as it is with all their transactions, bound up as their business life is with it, to establish banks under this bill, and they will never buy United States stocks for this purpose." One of his reasons for opposing the bill was that the schools of some of the New England states were supported by the tax fund collected from the existing state banks. Senator Harris of New York, who afterward voted for the bill, proposed an amendment, authorizing the state banks to receive circulation under state charters, and said: "The banks in the state of New York can. I believe, be induced, without surrendering their charters as state banking associations, to take out circulation under the provisions of this bill, but I do not suppose that a single banking institution in the state of New York would ever be induced to surrender the privileges it derives under the state law, and become an association organized under the provisions of this act." Three senators only from the middle states voted in its favor. The two senators from Vermont, one from Connecticut, and seven from the middle states, voted against it. In the passage of the act in the house, some of the most eminent of the representatives from New England and New York, now distinguished members of the senate, voted against it.

—The bill was thoroughly revised, discussed, and repassed a little more than a year afterward, June 3, 1864; all of the senators from New England then voting in its favor, and all of the senators from the middle states who were present, except those from Pennsylvania and Delaware, and all but three from the western states. The vote was 30 in favor and 9 against the bill. In the house it received the votes generally of the republican members. The vote was 78 to 63. The bill was afterward passed, upon a report of a conference committee of both houses in reference to certain amendments upon which there had been a disagreement.

—The constitution of the United States provides that no state shall emit bills of credit, but it was decided by the supreme court in 1836, in Briscoe vs. The Bank, when there were 713 state banks in operation, with 281 millions of capital and 140 millions of circulation, 36 of which banks held 41 millions of public deposits and only 16 millions of other deposits, that a private corporation authorized by the state, which was the principal stockholder, could issue circulating notes which the state itself could not issue, and make them receivable for public dues. In 1861 the number of state banks had increased to 1,601, with a capital of 429 millions, and more than 10,000 different kinds of notes were in circulation, issued by the authority of 34 different states, under more than 40 different statutes. The right to issue such notes had obtained a firm foothold, and nothing but a great war could have brought about a revolution in this respect. The circulation of the banks was 202 millions, distributed as follows:31

In 6 eastern states...	$45,000,000
In 5 middle states...	53,000,000
In 11 southern states...	74,000,000
In 8 western states...	30,000,000

There was, as has been seen, determined opposition to the interference with the right of state banks to issue circulating notes. But circumstances favored the substitution of the new issues in place of the old, which had become largely discredited, and which might have been classified as follows:

Stock secured banks...	$36,000,000
Chartered...	90,000,000
Western banks discredited...	22,000,000
Southern banks discredited...	54,000,000
Total...	$202,000,000

The charters of the state banks of Ohio and Indiana, and of other banks, were about to expire, so that fully one-half of the bank issues of the country were either discredited or depended upon legislation for continuance.

—The act of Feb 25, 1863, and the subsequent act of June 3, 1864, which superseded the former, provided for the establishment of a national bank bureau in the treasury department, the chief officer of which is the comptroller of the currency, and authorized the issue of 300 millions of national bank notes to associations organized in compliance with law, and composed of any number of persons, not less than five. Circulation was authorized to be issued at a rate equal to 90 per cent. of the current market value, but not exceeding 90 per cent. upon the par value of United States bonds deposited. The notes are guaranteed by the government, and if the avails of the bonds deposited as security for circulation are not sufficient for the reimbursement of the government, it is entitled to the first lien upon all the assets of the bank. The law provides that they shall be received by the government in payment of all taxes and other dues, except duties on imports, and payable for all debts or demands owing by the government, except interest on the public debt and in the redemption of national bank notes; and that each bank shall "take and receive at part for any debt or liability to it, any and all notes or bills issued by any lawfully organized national banking association."

—The effect of the passage of the act was to create a demand for the 6 per cent. bonds, which soon thereafter advanced from a discount of 7 per cent to a premium in the market. There was a delay in printing the notes, and no issues were made until Dec. 21, 1863. The act authorized the conversion of state banks; but the new system was not favored by them, and such conversions were not numerous until the passage of the act of March 3, 1865, which provided that every banking association shall pay a tax of 10 per cent. on the notes of any person or state bank used for circulation or paid out by them. The constitutionality of this act was subsequently affirmed by the supreme court. The comptroller, in his report for December, 1865, says that there were 731 conversions during that year, and that of the 1.601 national banks then organized, 922 were conversions from state banks. Nearly all banks in the New England states, and many in other states, became national associations, and during the following year nearly the whole 300 millions of circulation authorized ($298,588,419) had been issued.

—There was at this time more than 1,275 millions of temporary obligations of the government outstanding, 830 millions of which were in treasury notes, bearing interest at 7 30 per cent.32 The banks soon thereafter held 440 millions of government securities, and the system was of immense service in funding this floating debt during the three years which followed the close of the war. The act of July 12, 1870, increased the authorized issue of national bank notes to 354 millions, and the largest amount outstanding at any one time was on Dec. 1, 1874, when it reached $352,394,346. The act of June 20, 1874, authorized any national bank desiring to increase its circulation, to deposit lawful money with the treasurer in sums of not less than $9,000, and to withdraw a proportionate amount of bonds held as security for its circulating notes, and under this act the circulation decreased in volume more than 30 millions during the next three years. The act of Jan. 14, 1875, repealed all previous laws restricting the aggregate amount of circulation, and since that date all banks have had the right to increase and decrease their circulation at their pleasure, subject to the restrictions of the act. The same act required the secretary of the treasury to retire legal tender notes to an amount equal to 80 per cent. of the national bank notes thereafter issued. This provision was repealed on May 31, 1878, but not until $35,318,984 of legal tender notes had been cancelled, which reduced the amount of legal tender notes from 382 millions to $346,681,016, which is the amount now outstanding. The effect of the passage of the act was to reduce the volume, both of the legal tender and bank notes, and until May 20, 1881, the amount outstanding of the latter at any one time, was not equal to the 354 millions authorized by the act of 1870.

—One of the most important requirements of the act is that the capital stock of every association shall be fully paid in. The organization of banks without capital, or with stock notes, was one of the great abuses of previous banking systems. At least one-half of the authorized capital stock must be paid in before a national bank can commence business, and the remainder in installments of not less than one-fifth monthly thereafter. The minimum capital of any bank is $50,000, and such bank may be organized only in places having less than 6,000 inhabitants. In larger places the capital must not be less than $100,000, and in cities whose population is 50,000, the capital must not be less than $200,000. The proportion of capital to liabilities is much greater in this country than elsewhere, which is undoubtedly owing to the fact that the national bank act requires that the full amount of authorized capital shall be actually paid in. In England, as a rule, only a part of the capital is paid in; but in the limited banks the stockholders are individually liable for the full amount of their subscriptions, the stockholders of other corporations, not limited, being each liable for all the debts of the corporation.

—Tables of the comptroller in his report for 1878, compiled from the London Economist, give the capital, surplus and liabilities of 3,417 banks in the United Kingdom, including the bank of England. The ratio of capital to liabilities of the 3,417 banks in the United Kingdom was 16.78 per cent., and the ratio of capital and surplus to liabilities was 23.07 per cent.; while the corresponding ratios of the national banks were 40.88 and 54.73, the ratios of the latter banks being in each instance more than double those of the United Kingdom.

—The whole number of shares of national bank stock in 1876 was 6,505,930, and of shareholders 208,486.

—It is not probable that the capital stock of any other class of corporations is so widely distributed among people of moderate means. The average amount of stock then held by each shareholder was about $2,400. In the eastern states it was about $2,100, and in the western states about $4,800, and more than half the whole number of shareholders held each but $1,000 or less of such stock, while 767 persons only held as much as $50,000 each. It was distributed among residents in every state of the Union, in 11 countries or provinces of this continent, and in 25 countries of Europe, Asia and Africa.

—The banks are prohibited from loaning money upon real estate or upon the security of the shares of their own capital stock, or on the security of their own circulating notes or of legal tender notes, and from making accommodation loans to any person, company, corporation or firm, to an amount exceeding one-tenth part of their capital. They are also prohibited from borrowing money upon their own circulating notes, or becoming in any way liable to an amount exceeding their capital stock actually paid in, except on account of their circulating notes, their deposits and bills of exchange drawn against money actually on deposit, and liabilities to stockholders for reserve profits. Thus they are required to be lenders and not borrowers of money. They are restricted in the rate of interest which they may take to the rate allowed by the laws of the state in which they are located, and the penalty for charging a usurious rate of interest, as determined by the supreme court, is a forfeiture of the interest agreed to be paid, or, if actually paid, twice the amount may be recovered back by the person paying it.

—The total amount of loans of national banks on Oct. 2, 1879, was $875,013.107. The number of pieces of paper discounted was 808,269. The number of notes and bills of $100 each, or less, was 251,345, or nearly one-third of the whole; the number of less than $500 each was 547,385, or considerably more than two-thirds of the whole, while the number of bills of less than $1,000 each was 642,765, more than three-fourths of the whole number. The amount of discounts in the New England states was considerably more than those of the western and southern states; but the number of loans in New England was only about one-half the number in the south and west. The banks in New York city held 2,970 pieces of paper, in Boston 2,258, in Philadelphia 809, and in Chicago 322, of $10,000 each and over; and the number of loans of this class held by these four cities was more than half of the total number held by all the national banks in the United States. The average amount of each discount was $1,082.59. The average amount in New York city was $3,962.13; in Boston, $3,083; for the 228 banks of the principal cities it was $2,930.90, and the average for the remaining banks, 1,820 in number, was $685.85.

—If the average time of all the discounted notes was 60 days, and the banks held continuously the same amount, the number of discounts made during the year would be nearly 5 millions, and the total discounts more than 5,000 millions, which would be equal to a discount of $700 annually for each voter, or $500 for each family in the country.

—The comptroller is authorized to cause an examination of the banks at any time, and such examinations are to be made at least as often as once a year. Reports showing the detailed condition of the banks may also be called for, for any past date, and must be returned not less than five times during each year.

—In Jan., 1864, there were 139 banks in operation, with a capital of 14 millions; in 1865, 638 banks, with a capital of 135 millions; in 1867, 1,648 banks, with a capital of 420 millions.

—The following table exhibits the number, resources and liabilities of the national banks for eleven years at nearly corresponding dates, and upon May 6, 1881:

—Banks are required to pay 1 per cent. tax upon their circulation annually, and ½ of 1 per cent. upon their average deposits and upon capital not invested in United States bonds. The total amount of this tax collected to July 1, 1880, was, on circulation, $45,941,161; on deposits $47,703,404; on capital, $6,716,903; making an aggregate of $100,361.469. Taxes are also imposed by authority of the state within which the association is located. The table below gives the national and state taxation for the years specified therein:

—The average amount of taxes paid during the past twelve years has been 16 millions, or considerably more than 4 per cent. upon the amount of circulation issued. The ratio of taxation, state and national, in the New England states, in 1879, was 2.7 per cent.; in the middle states, 3.6; southern states, 2.7; western states, 3.6. The rate of taxation in New York was 5 5; in Boston, 2.6; Philadelphia, 2 8; Baltimore, 2.5; Cincinnati, 4.3, Chicago, 5 8.

—The law requires that each association shall, before the declaration of any dividend, carry to its surplus fund one-tenth part of its semi-annual net profits, until the same shall amount to 20 per cent. of its capital stock. It also prohibits associations from withdrawing, either in the form of dividends or otherwise, any portion of their capital, and requires that losses and bad debts shall be deducted from net profits before any dividend shall be declared. If a bank suffers a loss greater than its accumulated earnings, there are but two courses open to it, so far as dividends are concerned The first is to pass the dividend, and the other to pay an illegal dividend from the capital stock, which latter course would subject the bank to being declared insolvent and placed in the hands of a receiver. The capital and surplus together form the working fund of the bank, and the banks which make the largest dividends in proportion to their capital are those which have accumulated a large surplus. The amount of the surplus in 1865 was 17 millions; in 1870, 90 millions; in 1875, 131 millions; and on March 11, 1881, it was 122 millions of dollars. The ratio of dividends to capital, and to capital and surplus, for each of the last six years, has been as follows:

During the past five years the average number of banks semi-annually passing dividends on account of losses was 279. The average amount of capital of these banks was $42,266,244, or nearly one-tenth of the total capital of all the banks. The aggregate losses which were charged off by the national banks in operation during the past five years, before declaring dividends, was more than 100 millions of dollars, about 20 per cent. of which it is estimated has been since recovered.

—There are no means of definitely ascertaining the losses sustained through the failures of banks operating under the systems of the several states, prior to the establishment of the national banks. The losses under those systems, both to note holders, to whom there can be no loss from national banks, and to the general creditors and shareholders, is known to be large.

—In "Elliot's Funding System" it is stated that in 1841, the total capital of the state banks being then $317,642,692, and the circulation outstanding $121,665,198, 55 banks failed, with an aggregate capital of $67,036,265, and a circulation of $23,577,752; and in nearly every instance the entire capital of the banks which, failed was lost. The comptroller of the currency, in his report for 1879, gives a table by states, showing losses amounting to $32,616,661 sustained by creditors of 210 state and savings banks and private bankers, during the three years ending Jan. 1, 1879.

—Since the establishment of the national banking system, 86 national banks have become insolvent and have been placed in the hands of receivers, who are appointed by the comptroller, and are required to report to him their transactions. The total amount of claims proved by the creditors of these banks is $25,966,602, of dividends paid thereon, $18,100,818. The estimated losses to creditors from the failures of national banks, during the 18 years since the passage of the original national banking act of 1863, have not exceeded $6,240,000, and the average annual loss has therefore been about $346,000.

—Of the 86 failures of national banks, 6 were those of banks located in New York city, having a capital of $2,700,000. The amount of claims proved by the creditors of these banks was $5,583,049. Four of them paid dividends amounting to 100 per cent., and the average dividends of the 6 were 98 per cent. of the claims proved against them. Twenty-one of these insolvent banks have paid their creditors in full, and 40 have paid more than 75 per cent. The average expense of settling the affairs of the banks in the hands of receivers has been about 7 per cent. of the total amount of cash collected.

—The individual liability of shareholders of insolvent banks has been enforced in 53 instances, and about $2,700,000 has been collected from this source. The law provides that the shareholders of every national bank shall be held individually responsible, equally and ratably, and not one for another, for all contracts, debts and engagements of the association, to the extent of the amount of their stock therein, at the par value thereof, in addition to the amount invested in such shares.

—The supreme court of the United States has decided "that in the process to be pursued to fix the amount of the separate liability of each of the shareholders, it is necessary to ascertain (1) the whole amount of the par value of all the stock held by the shareholders; (2) the amount of the deficit to be paid after exhausting all the assets of the bank; (3) then to apply the rule that each shareholder shall contribute such sum as will bear the same proportion to the whole amount of the deficit as his stock bears to the whole amount of the capital stock of the bank at its par value." The limit of the shareholder's liability is, however, the par value of his stock, and the insolvency of one stockholder does not in any way affect the liability of another.

—The percentage of circulating notes unredeemed of 15 national banks which failed previous to 1870 is 0.75 per cent. of the amount issued. The total circulation issued to 23 national banks, which include the 15 banks already mentioned, that failed previous to 1870, was $3,196,693, and the proportion of notes remaining unredeemed is 1.43 per cent. of the amount issued.

—It is estimated that the ultimate loss to the people from the destruction of these notes, or from failure to present them for redemption, will be from 1 to 1½ per cent. This amount of loss will be a gain to the government, and not to the banks, and will, if this estimate is correct, amount to from 3½ millions to about 5 millions during each period of 20 years.

—No notes of a less denomination than five dollars have been issued to the banks since the date of resumption of specie payments, as provided by law, and the amount of ones and twos since that date has been reduced $5,033,185. The increase of legal tender notes of these denominations since that date has been $3,518,060. The following table gives the amount of each denomination of these notes that were outstanding on April 1, 1881:

—The laws governing the national banks, as has been seen, contain numerous restrictions. They also prescribe many and severe penalties for their violation. The only privilege they have over other banks is the right to issue circulating notes.

—The profits of a well conducted bank are not derived mainly from circulation, but from the use of deposits; and national banks at the present time are not organized so much on account of the profits upon circulation, as for the reason that these institutions have established a character which is of value to them in the accumulation of deposits.

—The amount of interest received by the national banks from the United States bonds held as security for their circulation, and on which circulation has been actually issued, is much less than is generally supposed. On 10 per cent. of the bonds on deposit with the United States treasurer to secure circulation the banks receive interest, without other privileges, in the same manner as any other holder of United States bonds. Thus while the bonds held to secure circulation by the banks in operation on Aug. 1, 1881, amounted to 358 millions of dollars, the total amount of bank notes issued on these bonds was 321 millions only. On the difference of 37 millions of dollars the banks have no special privilege over any other bondholder.

—There are national bank notes outstanding in excess of the 321 millions mentioned, but such notes are those of insolvent banks and of those retiring circulation, and are not secured by bonds, but are provided for by a deposit of an equal amount of legal tender notes, in the United States treasury, where they are redeemed and canceled when presented.

—Of the bonds securing the notes of the banks in operation, 92 millions consist of 4 per cents., 32 millions of 4½ per cents., 229 millions of 3½ per cents, converted from 5 and 6 per cents, 3½ millions of Pacific railroad 6s., and the remainder, amounting to 5½ millions of called 5 per cent. bonds, upon which interest will cease; on the 1st day of October, 1881. The 4 per cent. bonds are now selling at a premium of about 16 per cent., and at this rate do not net the holders 3½ per cent. It is therefore fair to say that for future years the national banks will not as a rule receive as much as 3½ per cent. in interest upon the United States bonds held as security for their circulating notes outstanding.

—The banks are required to pay a tax of 1 per cent. on circulation, to keep on hand with the treasurer an amount of lawful money equal to 5 per cent. of such circulation, and to pay the expense of redeeming the same as it is presented.

—The following table shows the profit on an investment in bonds to secure circulation, when the bonds bear interest at 4, 3½ and 3 per cent., and the rates for bank loans are as specified:

—The profit is greatest when the bank rate of interest is least, for the reason that the bank receives 10 per cent. less in circulation than it deposits in bonds. If a bank has a capital of $100,000, it receives $90,000 only in circulating notes. If the bonds are 3½ per cents and the commercial rate of interest 10 per cent., there is a loss of 6½ per cent. on the margin. If the commercial rate is 6 per cent., then the loss is 2½ per cent., instead of 6½ as in the previous case.

—In the computation on which the foregoing table of profits is based, the amount of the 5 per cent. reserve which banks are required to keep on their circulation has been deducted from the loanable circulation. But this reserve on circulation is also allowed to form part of the reserve on deposits. If it is not deducted from the loanable circulation, the profits of the bank from this source are somewhat increased.

—The premium on the bonds will disappear if they are held until paid by the United States. The bank holding such bonds until maturity will consequently lose the premium. In the case of the 4 per cent. bonds, the loss of 16 per cent. will be distributed over 26 years, making a loss of a little over ½ of 1 per cent. per annum, to be deducted from the profits in the table. The 3½ per cent. bonds, continued in the place of the 6s, being redeemable at the option of the government, the banks holding them are liable to lose the 1 per cent premium at any time. If a 3 per cent. bond be issued, a bank taking it at par and holding it till maturity would experience no loss; but if at any time prior to maturity the bank should desire to liquidate its affairs, a loss would arise if the 3 per cents. should then be worth less than par.

—The national banks in 16 of the principal cities are required to keep a reserve of 25 per cent upon deposits, half of which, except in the case of New York city banks, which are required to hold all their reserve in lawful money, may be on deposit with other national banks in the city of New York.

—The banks outside of these cities are required to hold a reserve of 15 per cent upon deposits, three fifths of which may consist of balances with their correspondents in the reserve cities. The following table exhibits the amount of net deposits, together with the amount and classification of reserve, held by the national banks at the dates mentioned:

From this table it will be seen that the amount of reserve held largely exceeded the amount required.

—It is estimated by the best authorities that the joint stock banks in England and Scotland do not hold exceeding five per cent. of their liabilities in ready money; the remainder of their reserves being largely invested in English consols, or deposited in the bank of England.

—The amount of cash reserves held by the national banks in this country is usually more than 12 per cent. of their liabilities. The banks held on Oct. 1, 1875, more than 133 millions of lawful money, of which only about 8 millions was in specie, the remaining 117 millions being in legal tender notes; and on Jan. 1, 1879, the date of the resumption of specie payments, the banks held nearly 100 millions of legal tender notes. The average value of the legal tender paper dollar on July 1 of each year from 1864 to 1878, and on Jan. 1, 1879, which was the date of the resumption of specie payments, will be seen in the following table:

On Oct 1, 1880, the amount of specie, consisting of $102,851,032 of gold coin and $6,495,477 of silver coin, was more than 109 millions, and the amount of legal tender notes 64 millions. The amount of specie held on May 6, 1881, was 122 millions, and of legal tender notes 70 millions. This large increase of specie is owing to the gold production of the mines, which, since the date of resumption, is estimated to have been $72,000,000, and to the excess of imports of gold over exports, which, in the same period, has been $150,241,747. The following table exhibits the total amount of paper currency, and the estimated amounts of gold and silver coin in the country on Nov. 1, 1880, together with the amount of each then in the treasury of the United States, in the national banks, in the state banks, and in the hands of the people at that date:

—From the date of resumption to that of the table, the gold in the treasury had increased $20,976,007, in the banks $73,976,149, while the paper currency has decreased $50,768,829, and in the banks $37,008,585. The increase of gold in the hands of the people had been more than 80 millions, and of paper currency more than 108 millions, since that date.

—The amount of silver coin was but 6 millions, which would be largely increased if the number of standard silver dollars to be issued were limited in amount, and the number of small legal tender notes outstanding diminished.

—During the next two years the legal limit of the existence of a considerable number of the national banks will expire, and congress will be asked to extend their existence for a second period of 20 years. In the absence of prohibitory legislation by congress, many of these banks will probably go into liquidation, and reorganize again under the same system.

—If at any time the national bank system should be discontinued, it is probable that the provision imposing a tax of 10 per cent. upon state bank notes would be repealed. These notes would then again be issued under laws now existing, or under new laws enacted for that purpose. These various state issues would not all be secured or redeemed at any one point, and the loss and exchange upon such notes would again be a burden to the business interests of the country: the cost of exchange between the various commercial points of the country, at the rate of ½ of 1 per cent., being estimated at not less than 20 millions annually. If the government, as has been proposed, should issue the entire paper currency, now amounting to nearly 700 millions, it should maintain a coin reserve equal to that of the bank of England or the bank of France, which is not less in either case than one-third of its issue. Interest upon this reserve at 3½ per cent. would exceed 8 millions, and if to this is added the expense of the issue and redemption of the notes, the total amount would considerably exceed the profit upon the circulation of the national banks now outstanding. The preference of the people for paper money instead of coin is exhibited in the last table, and there is danger that if the government, under authority of future legislation, should assume the right to the exclusive issue of the circulating notes, it might extend such issues beyond the bounds of prudence, and again involve the country in a new suspension of specie payments.

—The above table exhibits for corresponding dates in each of the last five years, the aggregate amount of capital and deposits of national banks, state banks and savings banks of the United States.

—Included among the state banks in the total for 1880 there are 2,802 private bankers, employing a capital of $26,120,000, and having deposits amounting to $182,670,000.

JOHN JAY KNOX.

BANK NOTES.

BANK NOTES. We do not propose here to examine the part which bank notes play in the circulation of wealth, nor to inquire how far and in what cases they deserve the name of paper money which is sometimes given to them. We purpose only to show what constitutes a bank note, and how it may be recognized.

—A bank note is made payable to the bearer, whoever he may be; it is also payable at sight or on presentation, no time being set when it shall fall due.

—Such are the two requisites of a bank note which essentially distinguish it from all other classes of commercial paper. All other paper falls due at a fixed date stated on its face, and can be transferred only by indorsement, so that the actual bearer is always required to show the signature of the transferer. A bank note may pass from one hand to another without indorsement, and is made payable any day.

—It has been contended, however, that a bank note should bear on its face something more. Emile Vincans, a distinguished French lawyer, says that a note made payable to the bearer and at sight, requires something else to make it a bank note. It would not, he says, be entitled to this designation, if it were issued by a private house or a simple merchant. There is some truth in this statement.

—It is certain that the bank note, viewed in its material conditions, has no other distinctive character than that which we have described; but it is none the less true that the bank note derives part of its power, and consequently part of its virtue, as a circulating medium, from the character of the establishment whence it is issued. If it were issued by a private citizen, it would hardly be accepted by the public; it could not be made to pass for ready money, and it would always be returned to the office whence it was issued, to be converted into specie. It would then but poorly answer the purpose intended by it. The attempt has been made in some countries, especially in Scotland, where the issuance of so-called bank notes is optional with everybody; and it has proved that an operation of this nature is not safe for individuals or private business firms, however wealthy they may be. It is not safe even for corporations organized on a small scale. In England, by virtue of a clause introduced in the charter of the bank of London, in 1708, the issue of bank notes was forbidden to companies composed of more than six partners. The consequence was that small companies which engaged in these operations were exposed to frequent disasters. But this does not affect the character of a bank note the essential requisites of which, that it be payable to the bearer and at sight, always remain the same.

—We may inquire whether it is a great advantage to a banking house to possess the exclusive power to issue notes of this kind, and whether this exclusive right is an important privilege of the bank. There can be no doubt about this. No other form of obligation presents the same advantages to the company which issues it. Notes made payable to the bearer and at sight, are the only ones which can circulate everywhere without any drawback or disadvantage, and which, therefore, can remain in circulation for an indefinite time, answering the same purpose as specie. The exclusive right to issue notes payable to the bearer and at sight, is therefore equivalent to the exclusive right to raise a public loan, by substituting notes for coin in the circulation.

CHARLES COQUELIN.

BANKRUPTCY.

BANKRUPTCY. The constitution of the United States gives power to congress to establish uniform laws on the subject of bankruptcies throughout the United States. When the constitution was adopted, the English law divided the general subject into two parts, insolvency and bankruptcy; which were administered by different courts, and to some extent upon different principles. The insolvent law was applied to persons who were imprisoned for debt, and who asked for a discharge from prison upon a surrender of all their property; the bankrupt law was applied only to traders, and always upon the suit of their creditors against them—never upon the application of the debtors. Not only the person but the debt was discharged. In respect to surrender of property and its division among the creditors, the two systems were alike. It was strenuously insisted in congress, in 1840, that the word "bankruptcies" in the constitution was to be under stood in a technical sense, and that the legislature had no power to provide a system of bankruptcy for persons who were not traders, nor to permit debtors to begin the proceedings by their own voluntary petition. This opinion has not prevailed, either in congress or in the courts. It is now fully established that the grant of power is broad enough to permit congress to provide for the settlement of the affairs of all insolvent debtors. At the same time a statute of bankruptcy practically is part of the commercial law, and is hardly needed in purely agricultural communities.

—The power of congress over this subject has been exercised but three times, in 1802, 1840 and 1867. The two former acts were short lived, the last was in operation eleven years, and since its repeal many of the merchants of the country have discovered that it was highly useful and they are trying to procure the enactment of a new one.

—If we may judge by the practice of commercial nations, a bankrupt law is almost a necessity for them.

—The great leading ideas of all such laws are two: to divide the property of an insolvent debtor equally among his creditors, and to discharge the insolvent from his debts. The former of these provisions is universally admitted to be both just and expedient, but there is not a very obvious justice in the latter, and it rests upon expediency alone. To take from a creditor a part of a debt which is his property, without full remuneration, can only be defended upon grounds of a public nature, and upon the theory that if an insolvent debtor is to remain under the load of his obligations, his creditors are likely to obtain little or nothing from him, while, if he is freed, the community will have the benefit of his renewed industry and enterprise. To reconcile, as far as may be, these conflicting interests, it is usually provided that a fraudulent debtor shall not receive his discharge, the renewed industry of such a person not being considered valuable; and also. that the creditors should be consulted, and that a considerable part of them should consent to his discharge. In France the law adds, by way of discouragement to bankruptcy and the reckless trading which causes it, and of inducement to a subsequent payment when possible, that a discharged bankrupt, however honest he may have been, and however nearly unanimous may have been the consent of his creditors to his release, shall be under certain civil disabilities, implying a sort of disgrace, until he shall have paid all his old debts, with interest. His creditors have no legal claim against him, but the public authorities institute this moral sanction. Something of this kind is now proposed in England in a modified form, and limited to magistrates and members of parliament becoming bankrupt.

—If it be granted that a careful and judicious bankrupt law is useful in commercial countries, such a law can be provided only by congress. The courts of the several states give precedence to their own citizens who, as creditors, attach or seize the property of an insolvent debtor, over an assignee or trustee for all creditors equally, including their own citizens, who claim under a decree in bankruptcy made in another state, and this whether the seizure is made before or after the date of the decree. So long as this selfish policy prevails, and there is no reason to expect its speedy disappearance, no state law can effect an equal division to creditors of the property of a bankrupt, if any part of it happens to be found out of the limits of that state.

—Again, no state has power, under the constitution of the United States, to discharge a debt due to the citizen of another state or country, unless the creditor chooses to come in and prove his debt in the bankrupt court. For these reasons the states can not pass effectual laws upon the subject of bankruptcies.

—That congress will be urged, and at some time persuaded to pass another bankrupt law, is as certain as that the number of undischarged debtors in the several commercial states will increase with the lapse of time. The pressure of this class, many of whom are worthy and estimable persons, broken by misfortune, induced the passage of the statutes which have been passed. But it will be much wiser in congress to frame such a law carefully and deliberately with a view to permanence, before the pressure becomes extreme. Such action has lately been advocated by large and influential bodies of merchants, and a committee of the senate has been appointed to consider the subject. What should be the provisions of such a law?

—It has been found that the creditors of a bankrupt can not afford to follow up the proceedings in court, or, at any rate, that they will not. They do not wish, as they say, "to throw good money after bad." If they do not, there is great danger that the assets will be wasted in litigation, in fees, and in various ways. In the latest English law a mode of settlement called liquidation can be used by the creditors, and the estate is supposed to be wound up as they may wish; but it is found that the debtor can obtain proxies and votes with great ease, and virtually control his own winding up. This has led to vast abuses, and will, probably, be very much modified. So under our late statutes, as amended in 1874, the creditors could vote for a composition, and here it was found that the debtor could contrive to obtain votes for almost any composition. A bankrupt law, therefore, should be provided with some machinery which will act without being put in motion by the creditors. In a scheme for a statute lately presented to congress, it is proposed that a salaried officer, like a bank, or insurance commissioner, should be appointed in each circuit, whose sole duty it shall be to provide the supervision over the speedy and economical settlement of bankrupt estates, which the creditors can not be relied upon to furnish.

—Another practical difficulty in the working of these laws arises from the selfishness of creditors. In every important bankruptcy, there are some creditors who are determined to attain an advantage over the others, and they will resort to threats and promises and all other means to attain their object. Thus, if the question is of consenting to a composition or to a discharge, these men will insist on being paid for doing what the other creditors are willing to do. In the scheme of a law, above mentioned, a creditor who takes such an advantage is held criminally responsible. This is new; and it is supposed that one or two convictions of creditors, under such a law, would have quite an influence in discouraging this disgraceful practice. The waste and dissipation of assets which was complained of in some quarters, and not without justice, when the act of 1867 was in operation, could best be checked by paying all officers, such as registers in bankruptcy, by salary instead of by fees. The expenses could be reimbursed to the United States by definite payments, as for instance, a fee upon beginning a proceeding and by a specific tax upon the assets.

—In the United States the federal courts are not familiar to the great body of lawyers and of clients. Their jurisdiction is limited, and their ways are not fully understood. It is highly important that their administration in bankruptcy should be rendered familiar and easy, and to this end it is proposed that the registers in bankruptcy should have considerable judicial powers, subject to appeal, and should be required to hold frequent sessions, at convenient times and places, for the accommodation of suitors.

—The vexed question of the discharge of debtors remains to be considered. Most laws, as I have said, provide for a control of this matter by the creditors. It has, however, been found that certain creditors, the most avaricious and the least scrupulous, will take advantage of any power which may be given them over the debtor's discharge by exacting terms from him, either of present payment or of promises for the future. The English statutes, of late years, have declared all such promises to be void, and it is seriously doubted whether it is expedient to give creditors any arbitrary power in the matter. The latest proposition to congress contained the suggestion that every bankrupt who can not be proved to have committed a fraud or wrong upon his creditors, should have a free discharge, but the creditors might vote that the assignee, as their representative, rather than the creditors individually, should undertake the duty of opposing the discharge of a fraudulent debtor.

—It might be wise to impose some disabilities upon discharged debtors until they should pay their debts, as in France; or to refuse a discharge to those who could be proved to have traded recklessly and wantonly after a knowledge of their insolvency; or to fix a minimum of dividend without the payment of which there should be no discharge. So far as we have been able to gather the opinions of persons interested in the question in this country, it is in favor of a liberal policy in the discharge of debtors who have been honest in their dealings.

—The mode of discharge by payment of a composition, accepted by a considerable proportion of creditors, and thereby made binding upon the minority, has been already referred to. It has the great advantages to creditors, of speed and certainty, and to debtors of restoring them, promptly, to the control of their affairs. It is the only mode of discharge practiced in France. It needs, however, to be very carefully guarded, in order that the apathy of some creditors, or the rapacity of others, may not produce great inequality and injustice. It is necessary, therefore, to provide for a thorough examination into the affairs of the bankrupt, in order to see that his offer is large enough, and for a very careful supervision by the court, to see that all creditors are treated alike, and that a composition offered shall be promptly and faithfully carried out. No mere promises of payment should be accepted without full security for their performance.

JOHN LOWELL.

BANKRUPTCY, National.

BANKRUPTCY, National. The private individual who borrows money, generally for productive purposes, is not always in a position to discharge his obligations to his creditors. Unforeseen circumstances may have interfered with his business operations; imprudence and bad faith may have diverted the loan from its rightful destination, and prevented the subsequent restoration of the capital he owed to the lender. What wonder is it then, that states which borrow nearly always for unproductive purposes, or even with destructive objects in view, have so often been placed in such a condition that it was impossible for them to meet their liabilities? The state has this poor advantage over the private citizen: no action at law lies against it, especially when its refusal to pay becomes general, and extends to all its obligations. In former times the state had, besides, the privilege of robbing its creditors without seeming to do so. To accomplish this, all it had to do was to debase the coinage Shortly after the first Punic war, the government of Rome reduced the as from twelve ounces of copper, which it contained, to two ounces only. With the sixth part of the sum which the government really owed, it thus paid the debts incurred during the war. This kind of legerdemain has been frequently practiced since the beginning of the Christian era. We can hardly mention a country that has not resorted to this sort of trickery at one time or another. It is still, to this day, a mode of liquidation or redemption which obtains in eastern countries. Sometimes governments made use of artifice in the matter. They debased the coinage, not by the manifest and tangible reduction of its weight, but by misrepresentation on its face. Sometimes, for instance, the government paid in silver crowns with a copper alloy of 40 per cent., a loan which had been contracted on the basis of crowns with an alloy of only 10 per cent. For some time this ruse prevented the inexperienced from detecting the fraud.

—The adulteration of the currency had the serious drawback of causing an endless series of dishonest acts by the inhabitants of the country. The adulterated money being used to settle private accounts, the national treasury was not the only defrauder; every creditor was robbed by his debtor. It was almost a step for the better when governments took the resolution to repudiate their debts more openly and heartlessly. They had the lamentable effrontery to carry this resolution into effect in the middle ages, and up to the eighteenth century. They borrowed as much as possible from the Lombards and the Jews, the great bankers and money lenders of that period, and then drove them out of the country as criminals, and confiscated their property. The compulsory conversion of the Jews to Christianity sometimes exempted them from expulsion. Their conversion, of course, saved their souls, but it saved neither the outstanding debts due to them nor their hoarded treasure. When the Lombards and the Jews had made room for native Christians in the financial marts, the national treasury met the claims of its creditors by periodical "blood-lettings," or forced levies on the property of the citizens. The most honest and upright ministers of the French monarchy, such men as Sully and Colbert, were not the least violent in the measures taken by them to reduce or cancel the indebtedness of the government; to pay its creditors in lettres de cachet by seizing their property and by sending them to work in the galleys The regency was inaugurated by the revival of the so-called chamber of justice, whose province it was to cause contractors, purveyors and other persons to disgorge the money they had received or were to receive from the national treasury. The restoration of this tribunal by the duke of Noailles, was preceded by the establishment of the visa-bureau, or auditor's office, whose "examination" of accounts reduced the floating debt from 600,000,000 francs to 250,000,000. It had been preceded, likewise, by the pretended monetary reform which debased, by one-fifth, the intrinsic value of the silver coin of the realm. Thus were different kinds of national bankruptcy introduced. Recourse was had to the same measures after the disastrous results of John Law's enterprise Subsequently the celebrated abbé Terrai, minister of finance, a man in every respect worthy the reign of Louis XV., proclaimed to the world the necessity and the legitimateness of a nation's going into bankruptcy at least once in every century. Before him, Richelieu had urged the expediency of a decennial re-examination of claims upon the national treasury. These claims, certainly, were not always genuine. Sometimes they were not very authentic, and emanated from suspicious sources; at other times they were burdened with exorbitant usurious interest. But, we may ask, was the lender here more guilty than the borrower? These shameful transactions could produce upon the public credit only one effect, namely, that of raising the premium charged for risk, which the lender then added to the price of money. The states which, like Great Britain and the United Provinces where the principles of liberty and equity prevailed, put an end to these perfidious practices, were the only ones that enjoyed good credit.

—But these bankruptcies, under the ancient régime, affected directly only a rather limited number of persons. They affected the contractors, large and small, to whom the treasury was indebted, the parties to whom these contractors had transferred the treasury's promises to pay, and other evidences of national indebtedness, together with the capitalists who had consented to make direct advances to the national treasury. In order that the bankruptcy of the treasury might become a really national calamity, and affect all citizens to a greater or less extent, a wider circulation of government paper was necessary, and it was necessary, above all, to discover a means of borrowing from the people generally without their consent. Paper money furnished this means. Modern history affords us several instances of this kind of public bankruptcy. There is the case of France, Austria, Spain, Mexico, and some of the states of the American Union. That of France and of Austria was the consequence of the events which followed the great French revolution. In both those countries the national bankruptcy affected the fundholders—the direct, voluntary creditors of the government, and also the holders of paper money—the indirect, involuntary creditors of the government.

—In France, the nation's bankruptcy grew out of the excessive issue of assignats. When, at last, the law of the 29th Messidor, year IV., did away with the compulsory circulation of the assignats, that is to say, with their circulation itself, since nobody accepted them voluntarily, the amount issued had reached the almost incredible figure of 45,578,810,040 livres—about $8,432,079,857. We can easily divine what was the value of this mass of waste-paper. The extent to which the assignats had depreciated was officially fixed by the law of the 5th Messidor, year V., proposed by the Conseil des Anciens "to devise rules to govern in the case of business transactions entered into while the depreciation of the currency lasted" According to the tabulated statement of the value of the assignats, drawn up for that purpose and which, be it remarked, rather extenuated than exaggerated their falling off in value, it appears that when the assignats were done away with at the beginning of the year 1796, 24 livres in specie brought from 5,000 to 7,000 livres in paper money. The law which authorized the issue of the mandats, of which 2,400,000,000 livres were issued between March and September, 1796, fixed their value at 30 times that of the assignats. In other words, 1,000 livres of the mandats represented 30,000 livres of the assignats, while the same thousand livres of mandats, as soon as they appeared in open market, were worth only from 100 to 120 livres in metallic money! This general bankruptcy was soon followed by another, less extensive in its character, and which involved the holders of government securities. It was called the Liquidation Ramel, after the cabinet minister who was the author of the law of the 24th Frimaire, year VI. This law provided that all perpetual and life annuities owed by the state, as well as all other state debts, old and new, should be redeemed to the extent of two-thirds, in vouchers payable to the bearer, with the superscription: Dotte publique mobilisée. As these vouchers, from the moment they were issued, lost from 70 to 80 per cent. of their value, it soon became impossible to keep them in circulation at all; and hence fundholders, pensioners, contractors and other creditors of the state lost two-thirds of their claims. Nor was the remaining third paid them. It was called the "consolidated debt," and bore 5 per cent. interest. This last third, known as the consolidated third, was the origin of the national debt of France.

—While France, recovered from the violent shocks caused by the revolution, was placing her own finances on a sound basis, the wars of the empire and the immense sacrifices which they entailed on all Europe, produced the greatest disturbance in the financial condition of other states. In England, where the sacrifices had attained fabulous proportions, these losses were borne with comparative ease, thanks to the inexhaustible resources of the country, and to its solid, well-established credit at home and abroad. It was otherwise in Austria, whose national wealth was not so fully developed, and whose finances were in an embarrassed state, even before the outbreak of the wars of the empire. When Joseph II ascended the throne the national debt amounted to 283,000,000 florins, and there were upward of 7,500,000 in bankozettel, or bank notes of a low denomination, in circulation. The war with Turkey swelled the debt to 372,000,000 florins, while the paper money circulation (circulation fiduciaire) rose to 28,000,000. The enormous expenses and the crushing reverses which attended the wars with Napoleon were Austria's total financial ruin, and obliged the government to have recourse to every possible expedient to raise money. At the beginning of the year 1811 the actual national debt had reached over 700,000,000 florins, and the paper money in circulation was largely in excess of 1,000,000,000 florins. This had so shrunk in value that 1,500 florins in paper were given in exchange for 1 florin in silver. After the peace of Vienna, which deprived the state of its finest provinces, Austria was less than ever in a condition to pay its debts. On Feb. 20, 1811, the imperial decree was issued to legalize, so to speak, de facto bankruptcy. The decree reduced the paper money (1,060,000,000 florins) and the baser coin (330,000,000 florins) to one fifth of their nominal value, and also lowered by one-half the interest on the consolidated debt. The paper money was withdrawn from circulation, and new vouchers were issued in its place (at the rate of 1 to 5 florins in bankozettel, bank notes,) the issue of which was never to exceed, in the aggregate, one-fifth of the bankozettel withdrawn from circulation. But this limit was soon exceeded in consequence of the wars of the years 1812 to 1815. In 1816 the amount issued had risen again to 639,000,000, while the paper money had depreciated to 28 or 29 per cent. of its nominal value. One hundred florins in bankozettel, replaced in 1811 by 20 florins in vouchers, were, therefore, worth in 1816 only 5 or 6 florins in specie. Advantage was taken of the creation of the national bank to bring order out of this state of chaos. The bank was authorized gradually to call in the paper money, and to substitute for it its own notes, convertible on presentation into specie. It was provided that 250 florins in paper money should be equivalent to 100 florins in specie. The holders of the evidences of the public debt were paid at the same rate.

—Is it necessary to call attention to the prodigious losses which such a catastrophe involved, and from which no class, we may say no individual, was exempt? There are writers who have striven to extenuate the gravity of national bankruptcy, and almost to give it the sanction of law. They argue that as the declaration of the fact of insolvency comes only as a consequence of the state's want of credit during a long period of time, and after a gradual depreciation of paper money, the loss in the end is really less heavy than it seems to be. The holder of the government paper at the fatal moment of the national bankruptcy, acquired it at a price quite as low as, perhaps even lower than the rate at which the insolvent treasury now holds it. Partial loss has long since been suffered by those through whose hands this paper has successively passed, while its holders, at the time of the bankruptcy, lose little or nothing. Even admitting this to be a fact, does it in any way extenuate the perfidy of bankruptcy in itself? Take the case of a merchant who fails with liabilities of a million. His financial condition or his bad faith has been suspected for two months, say, by his creditors; and they have sold his paper without indorsement, at a loss, let us suppose, of 50 per cent. Is his bankruptcy to be condemned any the less in law or morals, because, in this way, the loss of a million of which he has defrauded others is distributed among his original creditors and the buyers of his paper at a discount? The declaration of insolvency on the part of the state is not the only thing to be blamed and regretted; quite as deplorable and blamable is the loss caused by the gradual depreciation which precedes national bankruptcy itself.

—Fortunately the terrible evils which we have just mentioned are hardly possible in our day. Revolutions are less frightful and wars less protracted in our generation, than they were during the exceptional period from 1798 to 1816. Now, national resources are, as a rule, better developed, national finances are better managed, taxation and credit are better able to meet even exceptional demands. At the present time public opinion has more power to prevent unwise and ruinous outlays on the part of states. Barefaced national bankruptcy is left to such countries as Peru, Venezuela and Mexico. Still, cases of national bankruptcy, sometimes protracted in duration, occasionally occur in Europe. With the present system of public debts, when the principal is not paid and the interest alone represents to the capitalist the money he has loaned, the failure to pay accrued interest is an act of bankruptcy. When, for example, Spain refuses to pay the interest, or pays only a ridiculously small interest to a part of her creditors; or when Austria discharges in depreciated paper money the debts contracted on a metallic basis, they, in fact, repudiate the whole or a portion of the principal debt. The destruction of the debtor's credit is, and always will be, the first and inevitable consequence of such dishonesty. It is with the state as with the private individual: dishonest management is the costliest management. Hence, open or covert bankruptcy, be it total or only partial, is an abominable piece of speculation, and a wicked act as well. It is so in a higher degree in public affairs than in private transactions. With good laws, one might in some cases give credit even to a dishonest man. The law and the courts of justice will enable him to triumph over the bad faith of the latter. But it is not so in the case of the state. For the very reason that states have the power to be bad creditors, their desire to be honest should be above suspicion. Otherwise there could hardly be any national credit.

J. E. HORN.

BANKS.

BANKS. When through the indefatigable industry of the North American settler, a new town springs up amid the forests of the northwest, a bank is immediately established side by side with the church and the printing office, it may be in a grocer's store, who carries on the business of the banker and his own at the same time. The reason of this is, that the wants which the bank or banker supplies are among the most imperative wherever trade is active or tends to become so, even in a small degree. The bank is, in the circulation of capital, what the railroad is in the circulation of men and things, and what the newspaper is in the circulation of news and ideas. Like the railway and the newspaper, the bank does not create what it causes to circulate; but it not unfrequently happens that only it can render such circulation possible. It always accelerates and develops the circulation of capital. We might therefore define a bank. An office for the circulation of capital in the form either of accumulated labor (money of all kinds) or of labor yet to be done (credit). This definition embraces the whole series of services which can be reasonably asked of banks, or which have been asked of them at different times. These services are many and varied. They have not been the same in nature and extent at all periods of history. But every country whose industrial and commercial organization did not remain rudimentary has sought and obtained the services of banks. The origin of the banking business is of very remote antiquity.

—Recent research, especially that of Mr. Koutorga, has shown the important part played by the trapezites in Athens when trade began to develop and personal property to assume some importance In the fourth century before Christ, their sphere of action was so large that it was thought necessary to divide and specialize their operations. There were money changers who carried on the business of changing the different kinds of local and foreign money, money lenders engaged in the making of advances to borrowers, and bankers properly so called whose operations were much more extensive, of a higher character and approximated more closely to banking operations in modern times. The trapezites took the money of individuals either for safe keeping only, to effect payments, or to turn it to account in commercial, industrial or maritime enterprises. They were in constant relation with foreign places, and effected transfers of capital either in specie or by a clearing operation. They came to the assistance of the state when it was in financial want. Their trade did not occupy the highest place in public esteem, but it was lucrative. Pazion, the banker, immortalized in one of Demosthenes' orations, was able to lease his banking house in consideration of an annual rent of a talent, or about $1,200. The bank, however, was not always an individual enterprise. Recourse was had to the association of capital and to the formation of banking companies.

—The argentarii of the Romans corresponded to the trapezites of the Greeks. With the increasing extension of the limits of the empire and its relations with almost all of the then known world, the business of money changing could not but acquire a greater importance than it possessed among the Athenian bankers. But the trapezites of the Greeks had predecessors as well as imitators. Banking operations can not have been unknown to the nations which preceded the Greeks in the way of commerce and especially to the Phœnicians. When exchange proper took the place of barter in a country, when the exchange of services was operated only by the intervention of money, the want of an intermediary to facilitate the indirect exchanges was soon felt; and once the want was felt, institutions were established and men came forward to satisfy it. Money was weighed in ancient times It was also indispensable that its quality or value should be proven; and what more natural and practical than that recourse should be had to persons who had made a business of weighing and testing it, and who performed both these operations with accuracy and celerity, to establish its weight and value? It is very probable that goldsmiths were in ancient times, as in England in the middle ages, the first bankers.

—Let us now suppose that a vender A is in need of a kind of money different from that which the purchaser of his wares has just counted out to him on the goldsmith-banker's table; that, at the same moment, a vender B, accompanied by his buyer, presents himself before the same table and receives the very kind of money which the vender A is in search of, and that B wants the money which A is anxious to get rid of. The exchange of the two kinds of money will be immediately effected by the remunerated intermediation of the banker. But such a meeting of supply and demand can not always be calculated on. The vender A will therefore leave his money with the banker to effect the exchange as soon as the kind of money sought is brought to his table. From this, to the practice of bankers keeping a certain quantity of different kinds of money always on hand to effect changes of money for their clients, in case of need, directly and indirectly, there was but a step. At another time, perhaps the vender A or B having no immediate use for the money just counted out to him at the banker's, leaves it there for the moment, either because he thinks it safer with the banker than in his own house, or because he expects, later, to take in its stead the kind of money he may need, or because he wishes the banker to turn it to account in the meantime. If the money received by A or B is intended to pay a debt due to C, a resident of the locality itself or of some other place, it may still be left in the banker's hands that he may effect the payment; and if the creditor C, in turn, be D's debtor, and D E's and E F's, each of these creditors, who is at the same time a debtor, may instruct the banker to satisfy his own individual creditor, and none of them need touch the money. Thus, thanks to the intervention of the banker, the same sum of money may, without even changing hands, settle a whole series of debts. The banker, seeing that all the payments intended for his clients are made at his counter, does not hesitate to advance to them, in case of need, the amount of a deposit he may receive shortly or only after an indeterminate period. On the other hand, the banker, to profitably employ the sums deposited with him or which he holds in reserve, advances money even to others than his clients, on such security as he considers sufficient.

—Thus, the whole series of bank operations—money changing, deposits, clearings, advances, loans, etc.—springs logically and naturally from the modest beginnings of this one man's business, to whom buyer and seller address themselves to have their money weighed and assayed. The mechanism of these operations once known, it was not necessary that every banker should perform them all. One might have a preference for one branch and another for another of the banking business. It is conceivable, too, that at a given time or place one branch might be of much more importance than others. Where, for instance, metallic pieces used as money were subject to frequent alteration, and, therefore, could not be accepted by any one in any quantity until after a minute examination of them, the weighing and assaying of them played a very important part. On the other hand, that part was very unimportant, when confidence in the honesty of the coinage became general and was well founded; for such confidence did away with all the obstacles in the path of monetary circulation. The business of money changing had a wide field in the cities in which great fairs were held, to which great numbers of strangers flocked; but when more perfect instruments and modes of circulation diminished the direct employment of metallic money in large transactions, the business of money changing lost much of its importance. The absence of safety may have been the first motive which determined the capitalist to deposit his money with the banker, who had special means of watching and guarding it not possessed by others; and this making of deposits continued, but for different reasons, after the credit system was more developed. Circumstances sometimes introduced a new branch of the business. Thus knights, going to the crusades, borrowed money by pledging their jewels and silver ware for its repayment. Bankers soon generalized this mode of borrowing, and loaning on pledges occupied a large place in banking operations during the second half of the middle ages.

—Italy had a great share in reviving banking operations Violent measures, and the theological hatred of all trade in money, had almost wiped out even the memory of banking. The modification of lay barbarism and the removal of ecclesiastical pressure, no less than the imperious wants of commerce, restored the banking house to Italy. It was not long before Italy supplied the chief commercial cities and nations with bankers. The Lombards, and their competitors and compatriots the Cahorsians, instructed Europe again in banking from the thirteenth to the fifteenth centuries. They were the money lenders to governments in financial need. The Italian bankers were one day loaded with favors, hunted and robbed the next; and this in England as well as in France, in Germany, and even in Italy. But they found their business a very profitable one; for they were a very serviceable class of men. Not only did they restore the institution of banking to Europe, they assured its growth by assigning an important place to credit which was destined soon to be the preponderating one in banking. Whether it be true or not that the bill of exchange and the bill payable to order were not unknown to antiquity, or that they were invented by the persecuted Jews in the middle ages, certain it is that it was the Lombards who regularized and generalized the employment of these powerful and ingenious instruments of credit.

—Simultaneously, an innovation took place which was destined to exercise in the future a very great influence on the progress of banking: it was the creation of public banks. This simultaneousness was not accidental. From the time that the banker ceased to be simply a dealer in money, taking the word in its most material sense; from the time that fiduciary capital (credit) became the principal part of his business, the influence of association could not fail to be felt as a necessity of the situation, and to get the advantage over isolated individuals. Public banks were destined inevitably to take the lead of simple bankers, because the former had greater material resources and more numerous relations, inspired more confidence on account of the joint guarantee of men of good commercial standing, and offered more security because moral persons endowed, so to speak, with immortality. Private bankers, however numerous, rich and powerful they might become, from that time took the second rank; they were satellites revolving around the public banks. Private bankers were supported by and supported public banks. But public banks differed from private bankers whom they partly superseded, only in the extent of their business and the perfection of their organization; the essential principle of banking operations remained almost the same. This principle, as the reader may have already noticed, is that a banker can be and should be only an intermediary. Whether he exchanges for two merchants the money they mutually offer and ask; whether, by loaning to B a deposit made by A, he causes it to yield a profit; whether, by some strokes of the pen (clearings), he settles for his clients a whole series of accounts—whether he discharges C's debt in a distant city, and pays to D the claim, or letter of credit, he has on the same city; whether he advances to the state the funds in trusted to him by private parties: in all these cases a banker only facilitates between two or more persons, transactions the direct realization of which would have cost them trouble, time and money. The usefulness of this intermediary service is manifest; it sums up the whole part played by the banker. It was his business to facilitate the movement of capital, no matter through what channels; this was the mission of both banks and bankers.

—It seems certain that Italy, the country in which the institution of bankers was first restored, was also the cradle of public banks. Cibrario, an Italian economist, justly esteemed, speaks of a privilege of banks of exchange, "with the obligation to open eight banks," which the municipality of Genoa granted, in 1150, to William Veto, Oberto Torre and others; but he failed to mention the source of this information which would be valuable if it were less vague, and its authenticity beyond a doubt. The honor of having possessed the first public bank is generally conceded to Venice. Our information as to the date of its creation is contradictory. Some writers place it in the middle of the twelfth century, and others fix it at the beginning of the fifteenth. In any case, this last date can be only that of a re-organization of the original establishment. It seems certain that the bank of Venice was in operation as early as the first half of the fourteenth century. Therefore, it was anterior to the bank which, according to some writers, was founded in 1349, at Barcelona. There are no data concerning this Spanish establishment, the origin of which, it seems, was due to the guild of drapers. A bank of deposits, founded by the commune, was added to the former bank, or superseded it, in 1401. Much more certain is the foundation, in 1407, of the bank of Genoa, the Casa di San Giorgio. It ceased to operate only in 1740, when, after having been pillaged by the Austrians, it was forced to go into liquidation. Two centuries after the foundation of the bank of Genoa came the bank of Amsterdam; it was founded in 1609, and replaced, after 1814, by the Netherland bank. Ten years later a public bank was established at Hamburg, on the model of the bank of Amsterdam. It is still in operation, with its modest primitive organism, as a bank of clearings. The city of Nuremberg in 1621, and the city of Rotterdam in 1635, followed the example of the great Hanseatic city. In 1657 Sweden established a bank, which, it is said, was the first to issue notes payable to the bearer and at sight. Other writers attribute the introduction of such notes to the bank of Genoa.

—The immediate determining cause of the creation of these banks was not the same everywhere. The two following causes have been more particularly assigned: a national bank is sometimes called into existence by a government in the interest of its financial operations; sometimes commercial interests create it in order to paralyze the effect of certain fiscal manipulations. In the first category may be counted the bank of Venice. It appears to have been organized in consequence of the fusion and consolidation of three debts contracted by the reigning dukes during the twelfth and thirteenth centuries. The debt thus consolidated became the capital stock and assets of the establishment. The government debtors were thus transformed into the creditors or depositaries of the bank. The only cause for the creation also of the bank of Genoa and the bank of Stockholm, was a loan made, or to be made, to the government with its foundation capital. On the other hand, the bank of Amsterdam was created in the interest of commerce to protect it against daily embarrassments and losses consequent upon the alteration of money by the governments of the time. The founders and shareholders of the bank of Amsterdam deposited in the vaults of the bank a quantity of specie or bullion proportioned to the extent of their business. All their payments were made in money of the bank (invariable), and by means of transfers (clearings) in the books of the establishment. The bank of Hamburg was based on the same principle. Faithful to its origin, by confining itself to operations of deposit and clearing, and carefully abstaining from all dealings with the national administration, it was able to survive the most formidable storms. The bank of Amsterdam, less stable, prepared the way for its own downfall, when it was induced to loan its funds to the East India company.

—The severest trials ever experienced by the bank of England, founded in 1694, are likewise due to its accommodations to the government, accommodations sometimes voluntary, sometimes compulsory. The bank of England is the most important financial establishment in the world. It is the first institution in which, from the very beginning, the issue of money with no intrinsic value was a chief element in the mechanism of the bank. Wisely organized, ably administered, functioning successfully, the bank of England has become the model, more or less faithfully imitated, of all the great institutions of credit which have since been established, both in the new world and the old. It is true that its first and grandest imitation on the continent came to a disastrous end; but this disaster had been rendered inevitable by the perversion of the organic principle of institutions of credit, and the exaggeration beyond measure of the application of that principle.

—Public and private credit had disappeared in France when the Scotchman, John Law, proposed to the regent the establishment of a public bank. Fifty years of war, and 20 years of defeat, the incapacity of the Chamillards and the Desmarests, the prodigality of the court, and the rapacity of the farmers of the revenue, had reduced the treasury and the country to the most terrible straits. The bank for loans, established by Colbert and restored by his successors, was scarcely able to borrow anything to meet the daily and most imperative wants of the public service, at 8 or 10 per cent. of interest. The sad pictures which the Fénelons, the Vaubans and the Boisguilberts, trembling with suppressed emotion, drew of these times, tell of the misery of the people. Under such circumstances, how could the government refuse to listen to this compatriot of William Patterson, the founder of the bank of England, when he offered to increase public and private fortunes by means of an institution of credit? The concession he asked was granted him (May 2 and May 20, 1716,) for the space of twenty years; Law was director of the bank, the regent consented to be its protector; it began its operations in the month of June, 1716. Its capital was £6,000,000, divided into 1,200 shares of £5,000; the bank was authorized to issue notes payable at sight and to the bearer, to discount commercial paper, to receive deposits, to make payments and collections, to draw on the directors of the mint in the rural districts, and upon foreign banks; it was forbidden to engage in commercial operations, to make advances, or to engage in insurance or commission; it could not "under any pretext or in any manner" borrow money on interest. All accounts were to be paid in écus de banque of five livres; thus were the unpleasant effects of frequent monetary changes avoided; a rigid and constant surveillance, to be exercised by government commissioners, was intended to assure the public of prudent and honest management.

—The success of the bank was slow at first, but afterward brilliant. The public, from scoffing incredulity as to the seductive promises of the Scotchman, which it manifested at first, came gradually to acknowledge the great advantages of bank money, whose fixity enabled them to undertake long term operations, and enter into relations with foreign nations. The rate of discount was reduced to 6 per cent., and soon to even 5 and 4 per cent. per annum, whereas but a short time before 2½ per cent. per month was paid. The jealous care with which the bank held itself ever in readiness to meet its engagements; the favor of the government, which required its tax-collectors to make their returns in bank notes; everything contributed to strengthen the credit of the bank, and to enable it to render signal service to agriculture, industry and commerce. Public credit was benefited by this general improvement of the economic condition of the country; the stockholders, receiving large dividends before they had paid more than a fourth of the subscribed capital, had every reason to congratulate themselves. But this very success was destined to cause the ruin of the bank; it gave John Law courage and power to put into execution the vast projects he had long been revolving in his mind, to attempt the application of hazardous theories hitherto impatiently held in check. The bank became what Law had originally intended it to be, a mere wheel of his système. We can here neither give an exposition of, nor pass judgment on, this fantastic conception. Suffice it to say, that the Compagnie d'Occident, in which the system was personified, aimed at nothing less than monopolizing the foreign commerce, and the management of the finances of France, and becoming the great dispenser of labor, credit and wealth. An immoderate issue of fiduciary titles, that is, having no intrinsic worth, whose nominal value excessive agiotage endeavored to inflate, was to supply the funds for these vast enterprises, the plans of which were furnished to greedy speculators by the company. The result was one which inevitably follows upon such a course: the structure built upon the sand fell to pieces with a terrible crash, burying in its ruins all the fortunes which had not been saved in time. The bank, which had long abandoned all limitation and restraint, and whose presses had rivaled those of the company in the issue of worthless paper, was fatally involved in the company's ruin. Four years of honest and intelligent management had established and consolidated the credit of the bank; one year of recklessness sufficed to utterly ruin it. It disappeared, together with its founder, after having put into circulation more than 2,000 million of notes, which could not be invested in any way.

—Still, Law's bank merely hastened its ruin in allowing itself to be drawn into the vortex of the Compagnie d'Occident. In reality its fate was sealed from the day that it became a royal bank, (Dec. 4, 1718), by passing from the hands of its private founders into the hands of the government; from that date it ceased to be a credit establishment, for which the bank note is one of the instruments of action; it became a veritable paper-money manufactory, approving of every means of casting its products upon the market. This danger is inherent in the issue of money without intrinsic value from the moment it is intrusted to an irresponsible power which, prompted by caprice, may dispense itself from redeeming its bank notes on presentation; the danger was particularly great with the theories professed by John Law. In the opinion of this celebrated Scotchman, the bank note was not an instrument of circulation, it was money, since it performed the service of money. In other words, confounding currency and real money, money and capital, John Law, with that inflexibility of logic which characterizes makers of systems, reached this deceptive sophism. To manufacture bank notes is to manufacture money, that is, to create wealth; only short-sighted routine can not see this. It would impede, through timid and misplaced prudence, operations which would serve to enrich all. Law bowed to the existing prejudice, so long as this condescension was indispensable to the very establishment of his bank. When several years of success had increased his presumption and strengthened the faith of the public in his ability, he cast off this condescension, as the superfluous ballast of the aeronaut, and boldly undertook the flight to which he had so long and ardently aspired. In proportion as he rose in the air, and as the ground disappeared from his sight, Law lost his head more and more; the increasing depreciation of the bank note was for him but the effect of the ill-will of intriguers, seconded by the folly of the vulgar. He grew obstinate and angry, advised bold and desperate measures, proscribed metallic money, flooded the country with bills, he merely succeeded in rendering the inevitable ruin of his work disastrous to the last degree.

—More than half a century clapsed before the country, terrified by the disastrous fate of the système, dared again think of creating an establishment of credit. A decree of March 24, 1776, granted the privilege of doing it, to Mr. Besnard, who wished "to establish in the capital a discount bank, whose operations shall tend to lower the interest on money." Its charter in fact forbade the bank to go beyond the rate of 4 per cent. discount per annum. Besides discounting it was authorized to deal in gold and silver, and se charger en recette et en dépense des deniers, caisses et payements des particuliers. All borrowing on interest, the forwarding of merchandise, maritime enterprises, insurance or commerce of any sort whatever, was forbidden it. The capital of the company was fixed at 15 million livres, two-thirds of which were to be converted into an advance to the government; this clause was very strongly disapproved of by the public, and the bank was not finally established until a decree of Sept. 22, 1776, had released it from this dangerous requirement. The government, however, returned to the charge more than once, especially during the war of American independence. The bank had at one time to increase its capital, at another to ask that its notes should be endowed with compulsory circulation. In spite of the embarrassments which these involuntary arrangements with the government caused, the bank succeeded in rendering real service to the business world, and establishing itself strongly enough to withstand the first assaults of the revolutionary tempest; a decree of the convention (Aug. 4, 1793,) finally suppressed it, after a slow and painful agony had already deprived it of its strength. However short and painful its existence, the bank had nevertheless restored the use of credit in France. Scarcely was calm restored when other establishments of credit arose, which led to the foundation of the bank of France. Numerous and important establishments of the same kind were also founded in the other continental countries, for the epoch between the downfall of the system and the great revolution had been almost as barren throughout the whole continent of Europe as in France itself.

—In giving a sketch of the history of banks we pointed out the operations included within the circle of their activity. These still form a great part of the operations of banks both public and private. Nevertheless, the direct exchange of different kinds of money which was one of the first and most important operations of the bankers of ancient times and of the middle ages, is no longer practiced by public banks; the private bankers, too, leave this to a small number of houses of the second rank, which make it their specialty to a greater or lesser extent. The reason of this is, that the direct exchange of different kinds of metallic, money or of money having no intrinsic value is only required by travelers, and for small shipments of money outside of trade operations. On the other hand, the London merchant who has to make a payment at Vienna in Austrian money, or the merchant of Odessa who wishes to exchange the money he has just received from Paris for money which will pass at Berlin, whither he is going, will not ask the banker for Austrian florins or Prussian thalers, either in coin or paper; it will be infinitely more convenient for the one to purchase bills of exchange on Vienna, and the other letters of credit to his correspondent in Berlin. The importance of this branch of banking operations, which has long been known and practiced, is being continually increased in our times by the rapid development of international and interlocal commerce; we say interlocal as well as international, because these payments by means of letters of exchange, and similar instruments of credit, are made between one locality and another in the same country, as well as between two different countries.

—This is, moreover, merely a greater extension of the system of clearings which, as we have seen, was practiced by the trapezites of Athens, and the Roman argentarii. Instead of being effected between the clients of the same bank, or merchants of the same town, clearings are effected between two different localities, or two different nations. The application of this comparison ceases, of course, when the amounts of the debts are unequal. When the merchants of Paris owe 1,000,000 francs in London, and the English merchants owe an equal sum in Paris, the exchange of these debts is easily effected through the Paris and London bankers; the two accounts will be settled simultaneously without the intervention of any money. But if Paris owes 1,200,000 francs in London, and has a credit of only 1,000,000 francs, the difference must be paid in specie. Still the bank may find in the arbitration of exchange the means of avoiding this primitive and onerous mode of payment. Suppose Paris has 600,000 francs due it at Brussels, and owes there only 500,000 francs, the difference of 100,000 francs in favor of Paris in Brussels, will be forwarded direct to London there to pay the French indebtedness of an equal sum. The accounts of Paris with London on the one hand, and with Brussels on the other, will thus both be paid without any direct payment, simply by banking operations. It is plain that these transfers or clearings may be effected not only between three, but between any number of places and countries, and afford an opportunity for a number of most varied and complicated combinations. But the ablest combinations can not always obviate the necessity of payments in specie; at one time the total amount of the different credits of a country or city does not equal the amount of its debts; at another time its debts are such as to require more or less immediate payments, (unforeseen purchases of wheat, etc.), while its credits are payable only on long time; or there may be other reasons which render the perfect balancing of its accounts impossible Commerce in the precious metals, to which recourse must be had to supply the necessary complement in specie, will, therefore, long preserve an important place in banking operations.

—The general advantages of this intervention of the banker are manifest. It saves commerce the costly and hazardous transportation of the precious metals; it increases the facility and rapidity of transactions; it allows of an incalculable saving in the employment of specie. The bank finds in this intervention, over and above its commission, an abundant source of profit, especially by combinations of exchange and arbitrage. But whatever may be the extent of operations of this kind, they are nothing when compared to the far greater importance of operations of credit properly so called. Discount is their most faithful expression; hence it tends to monopolize the activity of public banks. In a business of 6,557 million francs, done by the bank of France in 1861, no less than 5,329 millions were discounts. To discount is to buy credits; they are bought either to sell them again, as is the common custom with private bankers, or to hold them until they mature, as public banks should do. We can scarcely imagine a brisk state of trade in our day without discount; discount alone tenders possible that uninterrupted activity of production, circulation and consumption which constitutes the prosperity of our time We shall now define, in a few words, the nature and end of discount: it is to-day the corner-stone of banking operations.

—The cloth manufacturer has just sold 50,000 francs' worth of cloth to a merchant tailor. The making and sale of the clothes to be made from this cloth, will require at least three months; the draper will be able to pay the cost of this cloth after he has disposed of his merchandise; this he binds himself to do in writing. But the manufacturer can not wait; unless he gets the money for his merchandise, he will not be able to procure a fresh supply of raw material, nor pay his workmen; his manufacturing establishment must lie idle for a time. What is he to do? He sells to the banker, with his own guarantee in case of non-payment, the draper's note; the banker pays him the amount of the note less the interest on the money from the time of discounting to the maturing of the note. Sometimes this note will not come to be discounted until it has served to pay several debts; the cloth manufacturer may make use of the draper's note to pay his own indebtedness to the wool-merchant, who may use it to pay the sheep raiser, and so on until it comes into the hands of some indorser who needs to have it cashed. The more a note has been used, that is, the more numerous the indorsements are, the solvency of the indorsers being presumed, the greater security it offers to the discounter, who gives his money, in the belief that the maker, and in case of need the indorser, of the note will be willing and able to pay it when it matures. The value of the signatures must therefore be examined carefully; the discounter would run the risk of losing his money, if he were to be too easy, and discounted notes whose maker and indorser have not the will or the means to pay. Thus, public banks, not being in a position to know the solvency and honesty of all the commercial signatures which might be presented at their discount window, require a third signature of a house which they know. This obliges small merchants to have recourse to a private banker to furnish this third signature: he discounts the note, to rediscount it at the bank; in other words, he buys the credit to sell it at a profit, disposing of it at a smaller deduction for interest than he imposed on the party from whom he took the bill. This severity which renders discounting more difficult and more costly for mediocre and small merchants, is made a subject of complaint by them; but it is hardly possible for the great central banks to act otherwise. The multiplicity of small banks could alone render the advantages of direct discount possible to every solvent and honest man.

—Apart from the personal guarantees of the maker and indorser, commercial paper is to a certain extent its own guarantee; it is based on something real. The cloth which the draper bought will be resold in the form of clothes, and the cost of the cloth, advanced by the discounter, can certainly be paid back. But the note presented for discounting may also be based upon a hazardous transaction, the returns from which are less certain; it may even rest upon no serious transaction at all, and be but an accommodation note made for the purpose of procuring on credit, by means of discounting, a certain amount of money. The making of accommodation notes was carried to its furthest limit previous to 1857, especially in London and northern Germany, and contributed to aggravate the crisis of that year. The bank, which, either through carelessness or a desire to do business at any price, would discount great numbers of these accommodation notes, or notes growing out of venturesome transactions, would expose itself to great risks, without rendering any important service to the general interest. The more it is to be desired that facility of discount should benefit honest and serious transactions, the more should we regret to see the resources of credit turned from their purpose to favor any speculations, or projects whose lack of solidity is not perhaps their greatest defect.

—Does this mean, as routine rigorism pretends, that discounting is the only form under which public banks should distribute commercial credit? This is not our opinion. The mechanic or the clerk, who wishes to start in business for himself, may need an advance, just as well as the manufacturer or merchant, who wishes to continue his business, after he has sold on credit a part of his products or merchandise; the advance made to the mechanic or clerk, on nothing but his note, is for them and from the point of view of the general interest, just as fruitful as the advance made to the manufacturer or merchant by way of discount. It may also happen that the cloth manufacturer, after selling 50,000 francs' worth of merchandise, needs 100,000 francs to enlarge his business, or to profit by an excellent opportunity of purchasing raw material. In a word, there are a great many cases in which a credit based upon future operations, and not upon operations already over, render very effectual service to individuals and to the business community. Entire classes of manufacturers and merchants, and certainly not the least important, can, by this means alone, share in the advantages of the credit which the public banks are supposed to distribute to all. And, in fact, to the cash credit, so largely granted by the Scotch banks and their numerous branches, must be accorded a fair share of the benefits which these institutions render their country. The great continental banks do not ordinarily grant open credits except to those who make large demands for discount. They give as much open credit as they can to those who are rich, and as little as possible to those who are not. But are they free to do otherwise? Open credit, which is entirely personal, can not, in fact, be given but by local banks, which know or can know their clients thoroughly. Such, for instance, are the popular banks, or banks-of-advance (Volks, or Vorschuss-Banken) which have recently become very numerous in Germany.

—It is also the upper classes—financiers, and those engaged in large commercial operations—who, in the present state of things, profit almost exclusively by the other forms of credit given by the public banks; we refer specially to advances on government securities. These advances, which are ordinarily made for a short time, afford the bank a good investment for capital momentarily idle; the merchant or the manufacturer may, in an unforeseen emergency, avoid, in this way, the losses attendant on hasty and expensive sales. It is none the less true that, as a general thing, these advances are oftener made to aid financial speculation than legitimate commerce. It is perfectly clear, likewise, that, whatever their object may be, they do not properly constitute credit transactions, unless monts de piété are also to be reckoned among the establishments of credit, which, for our part, we would hardly allow. Credit and pawning exclude each other, for one implies confidence, the other the very reverse. In making advances on bullion, stocks, or public and other securities, the bank makes of itself a financial pawn shop. We do not deny that this service may be of very great utility; but it does not come within the province of the bank. Another reason which still more strongly dissuades from these advances, or at least counsels their restriction within very narrow limits, is the supreme duty of every bank to have its assets in such a condition that they may be easily and promptly realized on.

—By accounts current the bank becomes the cashier of its clients. The greater the number of these clients, the more time and money are saved by the intervention of the bank, especially by its diminishing the amount of money used in consequence of payments made by transfers on its books. This constant influx and efflux of deposits and payments to be made for a large number of houses, always leave considerable sums at the disposal of the bank. With its knowledge of the customs of the place, of the nature and condition of the business of its depositors, the bank will know exactly what class of deposits and what amount of capital must be kept at the immediate disposal of their owners at each moment throughout the year, and what amount of capital it may dispose of for a longer or shorter period of time: this latter amount it will make use of in discounting and making advances and loans. How signal, therefore, is the service which the system of accounts current renders the business world! It concentrates and fuses together sums more or less important which, scattered in small portions through the country, would remain for the time being, unproductive in the different business houses; the bank, by uniting them, makes of them capital, which will supply the demand of the market, and increase labor, which will, in a word, form one of the principal means of operation in the credit system.

—Thus, the tendency of the system of accounts current is to keep even the smallest amount of capital from remaining unemployed for an instant. But banks have also to draw into the channels of trade all capital. Small merchants, farmers or manufacturers realize every year profits to the amount of some hundreds of dollars, for which they have no use in their business; a property owner takes advantage of a good opportunity to sell his house and wishes to await a good chance of re-investing the money realized. In all these cases, and other similar ones, banks attract these amounts to themselves and restore them to circulation.

—In Great Britain (in Scotland especially) and in America, the system of deposits has obtained a great development; every one endeavors to keep on hand as little idle money as possible; the smallest sums are deposited in bank, where they together form large sums, and serve to increase business activity. This is the principal reason of the facility with which capital can be obtained in England, and the comparative cheapness of money there. On the continent, and especially in France, the system of deposits is still in its infancy. The amount of capital which is thus kept out of circulation, to the great prejudice of its owners and of the business community, is almost incalculable. Considerations of greater safety or convenience may indeed determine this or that holder of money to deposit it in bank; but these are isolated cases. In order that the bank may act in a general, powerful and continuous manner, in order that it may attract to itself all idle capital, and be able to put it into circulation again, deposits must be rendered as easy and attractive as possible. easy, by putting the bank which receives the deposits within everybody's reach, by a system of local banks; attractive, by the direct advantage which the depositor receives from it, which can consist in nothing else than the inducement of interest. It must be borne in mind that the industrial and commercial movement of great cities leaves but little capital idle; it is in the country that those innumerable small sums of money are to be found, which it would be well to convert into capital.

—We have said that the bank is and should be merely the intermediary between the supply and the demand of capital. But it fills this office only partly, so long as it confines itself to acting the role of a broker and investor for others, so far as the patent supply, that is, the direct supply of capital is concerned, of the capital which is offered in the general market as any other merchandise is offered. The bank, in such case, does on a larger scale, it is true, just what the Athenian trapezite did. Is this all that the bank should do? Certainly not; the modern bank, in order to enlarge its sphere of action, and the better to fulfill the rôle of intermediary, can and must aim at something higher; it should bring face to face with demand not only the real and direct supply, the soliciting supply, but also the virtual or latent supply, the possible supply, for instance, of the one thousand francs which the French peasant hides away until the day when he may be able to buy with it a small piece of land. Then the bank should not limit itself to furnishing investments for capital seeking investment (real supply), or which might seek investment (virtual supply); its intermediation should provoke the creation of the supply of capital, by giving life to dead sums of money, by drawing them into circulation, and causing all money to become capital The system of deposits, when largely developed, is called upon to work these wonders. It undoubtedly has its inconveniences. In attracting money by the inducement of a higher or lower rate of interest, the bank may come to have an embarras de richesses, and may have, at times, more capital to supply than there is a demand for. This inconvenience reaches its climax in that strange clause which obliges the state bank of St. Petersburg to receive on interest all deposits brought to it—a clause evidently based on an utter misconception of the very essence of institutions of credit. On the other hand, a bank exposes itself and its patrons to great danger, when, in order to do business and to do a large business, it attracts deposits by the bait of too high a rate of interest. Being obliged to make a profit by obtaining a higher rate than it pays, it will be tempted to invest its deposits in hazardous enterprises, in which the borrower does not stop to consider the price he pays for the use of money. What must be the result? On the happening of the least perturbation in the economic situation, a great many deposits will be demanded, and the bank, unable to call them in promptly enough, will find it impossible to satisfy its creditors. This has happened frequently in the United States, and this imprudence of American banks has contributed, far more than the pretended excess of their issues of bank bills, to the embarrassment which they have so often experienced and caused. These mistakes do not, however, prove anything against the principle of deposits itself. A bank that is wisely administered will always be able, by timely varying the rate of interest which it pays and which it receives, as well as by the choice of its investments, so to arrange it that it will not be embarrassed either by the too great supply or by the withdrawal of deposits. Besides, how can it meet the uninterrupted want of new capital unless it aid in the formation of that capital, and hasten its entry into circulation?

—The banks of issue rather evade than solve this problem by the aid of their notes. Discounting is the ordinary way in which the bank note enters into circulation. To discount is, as we already know, to buy credits. The capitalist A, or the banker B, who has $50,000 at his disposal, purchases with this money C's credit, because C can not await the maturing of the bill of exchange, signed by his debtor D. If the bank confined itself within the same limits as A or B, it would not be able to discount more than the amount of its own capital and the sums received from accounts current and deposits. In order to do more than this, it does not pay for the credit which it buys; it merely gives its notes. It is as if it transformed into money the title which represents it. Suppose that D, instead of giving C one single draft for $1,000, had given him five of his own notes for $100 each, and ten for $50; or suppose that C substitutes his own personal notes of $50 and $100 for D's draft, and that the good credit which C or D. enjoys causes his notes to be accepted throughout the business community, in this case C will use them in making all his purchases, and in paying all his debts; he will have no need of selling the credit. What C was not able to do the bank does, by discounting the draft for $1.000: it becomes D's creditor in the place of C, but it constitutes itself the debtor, in the place of D (and of C, who indorsed the draft), in relation to those whom C will pay with the product of his sale made to D. Here, again, the bank fills the office of an intermediary: it borrows of the public, who accept its notes, to lend to C (the bank debtor to the public for the amount of its notes); it becomes D's creditor by putting itself in his place, and debtor to those who will accept its notes for D's draft. The money of the bank will be more readily accepted than D's draft. First because its notes of small denomination afford greater facility for circulation and in every-day trade; likewise because being bank notes payable at sight and to the bearer, immediate payment of them may be demanded, though, in reality, scarcely one of these notes will be redeemed before the maturing of D's draft, for which they were substituted; finally, and above all, because the solvency of the bank seems surer to every one than that of any private individual, no matter who, because this solvency is based on and guaranteed by the collective solvency of all the debtors whose discounted paper it holds, and of all the creditors who have indorsed this paper.

—The confidence a bank deserves and will obtain depends upon its management. When it discounts with discretion and prudence, when it is assured of always being paid by the debtors for whom it has substituted itself in the eyes of the public, it will be looked upon as good. Its notes will circulate without trouble: the discounted paper which it holds being sure, the bank notes, which are only money representing that paper, will appear equally sure. If, on the contrary, it be suspected that there is carelessness in the management of the bank, and a willingness to do business at any cost and to buy (to discount) doubtful credits, there will be hesitation to accept its notes; they will flow back to its counters for payment, that is, to be exchanged for specie. This is all elementary. But if credits, which are only doubtful, render the bank a suspected debtor, what credit does it deserve when it places its money in irrecoverable credits, such, for instance, as loans made to a state which will not or can not repay? Transactions of this kind necessarily make the bank the very worst of debtors; its notes, henceforth, deserve no credit at all. It is manifest, in like manner, that to wish to make this credit compulsory, that is to say, to compel the acceptance of its notes, is the most signal violence, based on the grossest misconception of the very nature of the bank note. C can not satisfy his debtors with D's draft, because they are not sufficiently informed or assured of D's solvency; and can they be compelled to accept the notes of a debtor (the bank) recognized and openly proclaimed insolvent? A bill of exchange can not circulate because the time of its maturity is remote, and because every one can not judge of the value of the signature to it; and can you substitute for it, by discounting, paper with no date of maturity and signed by a bankrupt? Better a thousand times, both in law and logic, give compulsory circulation to, or make legal tender of, all bills of exchange up to the time of maturity!

—From what we have already said of the nature and primary object of bank notes, it is manifest how little foundation there is for the theory which would make the issue of bank notes a privilege of the state, a right belonging to it alone, and which it might delegate at will. Why should not the bank also be as free as any one else to sign obligations, and give them to any who will accept them? As long as the confidence of people and the good will of those who receive them alone determine the acceptance or non-acceptance of the bank notes, what has the state to do with these transactions between debtors and creditors? It is useless to protect the creditor against the debtor, the public against the bank; suffice it for the state that it do not protect the insolvent debtor, the debtor in bad faith, against his creditor. As long as the bank is bound to honor its obligations just as any other debtor, and redeems its notes in specie upon presentation, the public will be able to determine its solidity, and consequently measure its credit. An excessive issue of notes will cause these notes to flow back into the bank and thus correct itself. Moreover, the history of the bank of England from 1797 to 1821, of the bank of France in 1848, and of the bank of Austria for a series of years, proves clearly enough that a more or less absolute monopoly of the issue of bank notes, and a more or less rigorous surveillance on the part of the state, do not offer the public more effectual guarantees than free banking affords them against the disastrous consequences of a shaking of public confidence. The better to secure the easy circulation of its notes, the bank may, in its charter or in its practice, impose upon itself certain conditions and limitations calculated to strengthen the confidence of the public, by proving to them that the bank is always in a condition to honor its signature; these measures of safety will relate to the proportion to be preserved between the actual capital of the bank and the demands that may be made upon it at any time, to the proportion between the amount of its issues and the amount of specie in its vaults, or it may relate to the limitation of the time of the maturity of the paper which it discounts, or to other points which study or experience may suggest. The law has only to watch over the execution of the contracts made by the bank; in doing this, it will have done all it can do, to give to the circulation of its paper all reasonable facility and security.

—It can not, however, be denied that, in practice, a multiplicity of different kinds of bank notes would have more than one inconvenience. These inconveniences must be felt the more, in proportion as the bank note obtains a more extended circulation, that is to say, as it penetrates into places in which there are no means of judging of the solvency of the debtor (the bank), and the degree of confidence its notes deserve. Besides, at a time when men are endeavoring to facilitate exchange by the simplification and unification of coin money, a diversity of kinds of bank notes would perhaps be a step backward. But it is hardly an established fact, that the issue of bank notes is an essential attribute, an indispensable wheel in the mechanism of banks. In proportion as these institutions shall develop the system of accounts current and of deposits, and the use of checks, the want of bank notes must necessarily diminish. Do we not find evident proof of this in the stability maintained by the bank of England for the past forty years, despite the doubling and trebling of the amount of general business; and in the operations of the London Clearing House, where, with some odd thousands of pounds, credit transactions amounting to more than a hundred times the amount are transacted every day; as well as in the fact that the Irish and Scotch banks, which were limited as to the amount of their issue by the laws of 1844 and 1845, still remain within that limit? We can to-day look forward to the time when, in countries advanced in civilization and commerce, the bank note will be merely a more convenient mode of exchange than coin money, and will have ceased to be regarded as an instrument of credit, whose distribution is intrusted to the banks, or, rather, in the distribution of which the banks are to serve as intermediaries. Whether the office of supplying this want of circulation be intrusted to one establishment or many, is but a secondary question. If entire liberty be otherwise allowed to the spirit of initiative and of association in banking operations, banks will be able to render the business community all the benefits which it has a right to expect from them. But this is a goal from which we are yet very far removed.

—Let us now examine; from a political standpoint, the relations of governments to banks. We must state, in the first place, that close relations exist in almost all great states between the government and the principal bank or the banks of the country, and we are rather inclined to consider as necessary a fact which steadily repeats itself. But we can not admit that whatever exists is necessary. History tells us that the relations between states and banks were entered into, almost everywhere, in consequence of special events which obliged governments to procure money as soon as possible, and that money was obtained through the agency of the bank. Unfortunately, in such cases, governments did not trouble themselves concerning the ulterior effects of this step. Resulting inconveniences did not fail to appear. They were inevitable. One of these inconveniences was compulsory circulation or the legal tender character of the notes of the bank, and, as a frequent consequence, the issue of paper money, the value of which was so variable (see PAPER MONEY). When the calamity, the cause of the loan, had ceased, it would have been well for them if governments had at least striven to return to a normal condition of the currency, to pay their indebtedness to the bank, and to resume specie payments. But as a return to such a normal condition is difficult, things were generally allowed to take their course. A habit is formed, and the existence of the evil is hardly noticed.

—It is not necessary to say that the banks on the one hand, and commerce and industry on the other, suffered in consequence of the relations established between the state and the banks. The history of the banks of Venice, Stockholm, Berlin, Amsterdam, Vienna, Lisbon, and St. Petersburg, and that of England, bears witness to these inconveniences.

—Nor do we know whether the other relation between the state and the bank, which consists in charging the latter with the collection of the taxes, is very useful to a country. It is not certain that a reduction of the cost of collection of the taxes is thus obtained; competent men have questioned it. But if there is economy in thus collecting the taxes, should it be purchased at any price? Too close relations between the state and the bank would result in the accumulation, in one single reservoir, of the whole metallic stock of the country, and the least crisis would be felt there more severely than elsewhere. We should not bring together things which should remain separate. In any case care should be taken to avoid entangling political and economic questions, the financial interests of the state and the interests of commerce. This is perhaps one of the strongest reasons in favor of the liberty, and, above all, of the multiplicity of banks.

J. E. HORN.

BANKS, Functions of.

BANKS, Functions of. In the consideration of the functions of banks and of bankers it will be necessary to assume that the money in use, where the bank is located, is good money and not bad, because all the transactions of banks are stated in terms of money. In the United States the name by which money is designated is dollar; in Great Britain, sovereign; in France, franc; in other countries, other names are used. Each name is the legal definition of a coin containing a certain quantity of gold or silver. It is the metal that gives value; the stamp certifies the weight and purity. Until it is admitted that such coins, and such coins only, are good money, the true function of the bank and of the banker can not be fully comprehended.

—The substitution of what is called inconvertible paper money, the "greenback," for instance; that is to say, the substitution of the deferred promise of a thing for the thing itself, under a statute which forces its acceptance as a legal tender, not only works a fraud upon the people of the country in which such a statute is in force, but it also vitiates all reasoning in regard to money and banks, and perverts the moral sense so as to forbid a clear conception of what is right and just.

—True money must contain its own value in its own substance, and that metal will constitute the best kind of money which retains its value under the most uniform conditions through long generations. The two precious metals, gold and silver, have met these conditions; sometimes varying in their ratio to each other, but either one constituting a more unvarying standard by which to measure the transactions of men than any other substance that has ever been used to serve the purpose of money.

—The great commerce of the world, to which no act of legal tender is or can be applied, is conducted on a gold basis, and the final settlement of the sum due in money on the balance of account is made by a payment of gold coin or its equivalent. This practice would not have become established unless it had been proved by the long experience of the great commercial nations that gold possessed greater stability in its value than silver.

—On the other hand, in all transactions with some countries, China for instance, in which country there is no act of legal tender and no paper money, silver passes by weight and best serves the purpose of money.

—If there were no acts of legal tender in any country and if all contracts were subject to being enforced by the payment in coins of gold or silver according to the kind designated in the specific contract, the metal which proved to be best fitted to the conditions and circumstances of each country would be adopted by it, while the great commerce of the world would remain upon a gold basis, as it now is.

—This statement is made in order to clear the subject of banks and banking from the obscurity that may be caused if the quality of true money is not first defined.

—Banks must exist and must perform their work even when the money by which their transactions are measured is false or bad. For instance, when an inconvertible government note has been made "lawful money" under an act that can only find legal justification as a measure of war, banks must still exist and work under the disadvantage of such a fluctuating and false standard of value.

—What, then, is the function of a bank, and how does it work?

—In general terms, it may be stated that a bank lends and borrows titles to capital measured in terms of money. If the money be good, that is, unvarying in its value, during the term of the loan, the risk of the bank will be in ratio to the solvency of its creditors only, and the rate of interest will be in ratio to the abundance or scarcity of the capital in the titles to which it deals. If the money be bad, that is, varying in its value according to the caprice of legislators or the decisions of executive officers of the government, another element of risk will enter into every transaction, and the rate of interest on loans will of necessity be higher in order that it may cover this element of hazard.

—No borrower wants to borrow money except as an instrument with which to buy the thing he actually needs, and no borrower pays interest upon money. The transaction is stated in terms of money and, in very rare cases, actual money is used, but the thing borrowed is the thing bought and the interest is paid for its service.

—What banks deal in are titles, measured and stated in terms of money, to capital of all kinds, such as gold, silver, copper, lead, iron, cotton, corn, potatoes, etc., etc.

—1. A bank lends its own capital or a title to a part of its own capital; such capital consisting of the coin that has been paid in by its stockholders.

—2. A bank receives from its depositors capital in the form of coined money, or a title to capital in the form of a note, check or draft payable in coin on demand.

—3. A bank lends such part of the capital or title to capital deposited with it, as the conditions of business will permit, to the applicants for loans whom its directors consider safe to trust.

—In the vast majority of transactions no money passes, no money is lent and no money is borrowed. Only a title passes which may be converted into money, but as a rule the money itself remains in the vault of the bank, or in the place of deposit where the bank has put it for safe keeping.

—Let us consider an example of the first class. A bank lends a part of its own capital. In this case it is a national bank, and its managers desire to issue bank notes; such notes serving the general purpose of money more conveniently than the coin itself, being themselves promises to pay coin. The bank subscribes for a certain amount of bonds of the United States and pays for them with a part of its coin, which coin constitutes the capital loaned, saved, subscribed and paid in by its stockholders. Upon this loan the government pays interest. These bonds are then deposited with the government as security for the payment of bank notes that the bank may issue if payment in coin is demanded.

—These notes being secured by the bonds and being payable in coin by the bank, for which purpose a bank always keeps a reserve in coin on hand, are a good and convenient substitute for money, and for that reason borrowers desire to become possessed of them. The borrower has sold a quantity of merchandise on credit for which the buyer has given a note due at a certain future date. This note is a title to, or promise of money, but payment is deferred. It will not serve the purpose of money as it is not divisible, it is not due on demand, and few persons know whether or not it will be paid. Its owner desires bank notes for use in the purchase of other merchandise to add to his stock in trade. He takes this note, or title to money deferred, to the bank, and, after a discount or deduction of interest, the bank exchanges its notes or titles to money payable on demand for this note or title to money deferred. The interest deducted constitutes the profit of the bank. The whole transaction has consisted in an exchange of titles to money, but no money has been used. Each has rendered a service to the other. The borrower has obtained notes that he can spend, and the bank has been paid interest for the use of its credit. This transaction constitutes the function of a bank organized with a department for the issue of circulating notes.

—The second class of transactions consists in a bank receiving deposits, either of money or of titles to money, in the form of checks, drafts or bills of exchange payable in money on demand.

—A merchant having sold produce for cash, has received, in payment therefor, either bank notes or checks on banks in settlement for the same. These he gathers together and deposits in his own bank. The sum of these deposits, named in dollars, is passed to his credit on the books of the bank, and the bank is liable to have the actual coin demanded, but no money has been used, nothing but a title to money.

—As the sum of all these deposits of many merchants and manufacturers is never wanted at one time, the bank is now ready to enter upon transactions of the third class, that is, to lend a title to a part of the capital of its depositors.

—Another note, being a deferred title to money promised to be paid at a future date, is presented for discount, and the sum of the net proceeds is passed to the credit of the borrower, to be drawn upon by check as he may wish to use it in his daily transactions. In this, again, the transaction consists in an exchange of titles; one is a title to money deferred, the other a title to money on demand.

—Merchandise or commodities on the way from producer to consumer require time for conversion and consumption. During that period of time trust or credit is given by one man to another, and a deferred title to the value of this merchandise takes the form of a note, draft or bill, in which the value of the merchandise is measured in dollars or other coin; that is to say, in true money. These notes, drafts or bills are of limited use, because the credit of the promisors is known to but few. It is the business of bank directors to keep themselves informed and to exchange bank promises to pay money for these deferred promises of persons or firms. Hence it follows that banks are most potent instrumentalities for enabling merchants or dealers to buy the products of farmers and manufacturers. They are as necessary to the quick movement of commodities as railroads, steamboats, carts or wagons.

—The conduct of the business of banks and bankers demands probity, integrity, foresight, and all other qualities that make a true man. All their profits depend upon the services they may render to the community. Hence it ensues that there is no better standard by which to gauge the intelligence and character of the people of any section, state or nation than by their use of banks. The place to choose for the establishment of a branch of industry or business is the one in which banks are numerous and well sustained, and the place to be avoided is the one where banks are subject to jealousy and suspicion. Men who can not trust their banks or bankers are not themselves fit to be trusted by bank or banker.

—The function of a bank is, therefore, to borrow and lend titles to property measured in money, and to keep in reserve a sufficient amount of actual money to meet the occasional demand for coin that may be made upon it. Their use is the measure of the trust reposed in, and deserved by, the merchants and tradesmen by whom they are sustained.

EDWARD ATKINSON.

BANKS OF ISSUE

BANKS OF ISSUE are those banks engaged in the transfer of credit by means of the issue of bank notes, i.e., by means of promissory notes of the bank which are payable at sight to the bearer. No questions connected with the money economy of modern times have been more hotly discussed than those in reference to banks of issue. The most extravagant charges have been made against them, and equally extravagant claims made in their behalf. One party sees in them the agency which, above all others, excites and promotes over-speculation, causes commercial crises and aggravates all the ills of our modern industrial economy. Another party regards them as the magicians under whose wands trade and industry are called into life, the healthy growth of credit is favored, palaces and ware-houses are made to appear, and national prosperity is created and sustained. Without taking sides with either party, for the present, we propose to introduce our discussion by an investigation into the origin and historical development of banks of issue; for only in this way can we hope to arrive at clear and distinct views of the nature and function of such banks, and to put ourselves in a position to answer satisfactorily the various questions which will come up concerning them.

—I. HISTORICAL DEVELOPMENT OF THE BANKS OF ISSUE. Modern banks may be divided into two general classes: those which are occupied mainly with dealing in money—money banks, and those which are occupied mainly with dealing in credit—credit banks The money bank was the original form of a bank, and that from which the credit bank was gradually developed. It is worth while to trace out this development for it throws a flood of light upon the nature of the bank of issue and its relation to other credit institutions.

—We must distinguish between active and passive accounts in the history of banking. Active accounts are those in which the bank is a creditor; passive, those in which it is a debtor. During the middle ages, owing to the imperfect coinage, to counterfeiting, to clipping, and to the inability of the public to test the purity of the coins, it was absolutely necessary that there should be some opportunity to exchange the coins and test their value. This opportunity the professional money changers gave. Their profits consisted in a deduction when they took the coins and a charge when they were taken away. It was a fee or commission for changing money. The business was carried on in the first place with their own capital which for this purpose was invested in coins or the precious metals. This circumstance, and the natural desire of making their capital as lucrative as possible, led them to lend out, on short time, whatever part of their money supply they were not using in their business. Thus arose the first kind of credit transactions as an active transaction of the old money bank, i.e., a transaction in which the bank was creditor. These operations, on account of the necessities of their money changing business, had to be conducted according to the same principles which modern banks have had to observe in all their active operations, on account of their rapidly increasing passive transactions. These principles were, security of the loans and constant and immediate control of all advances. These have remained down to the present day a controlling administrative principle of all banks of deposit and of issue. The very first loans of the money changers had to comply with the requisites. The first line of business was pawnbroking, i.e., short loans on pledges of various sorts, such as jewels, coins, precious metals in bars, etc., etc., which persons did not wish to sell. The insecurity of law led to a second branch of business, dealing in bills, which from the very first at times took the form of discounting. Pawnbroking and bill-broking were, then, the original forms of the active transactions of all banks.

—The course of industry favored simultaneously the gradual decline of the mere money changing business, and the growth of the loan business. For the improvement in coinage, and the adoption of a proper coinage policy, gradually lessened the necessity for the money changer, while the development of productive credit, the growing security of law, the increasing division of labor, rendered more and more necessary the money lender. In this circumstance we find the explanation of the transition from the old money banks to the credit operations of modern banks.

—This loan business could and can be carried on with the capital stock of the bank. And yet, with the low rate of interest prevailing in the discount business, a rate of profit equaling that in other lines of business could hardly be expected. As soon, therefore, as the capital no longer yielded a suitable rate of profit in the money changing business, this very circumstance paved the way for a new development toward which other influences were also working. The bank began to take up money with the intention of loaning it again, i.e., to the active transactions of the bank are now added passive transactions, whose enormous development has made possible the equally enormous development in modern times of the active transactions. The first and simplest passive operations, (i.e., those in which the bank was debtor), arose independently, but were soon connected with the money changing and money loaning business. In the earliest period of this development the term passive transaction could only be applied according to the usage of double entry, in which, by the fiction of a business personality distinct from the head of the house, not only the debts but also the capital stock of the bank, and, further, not only these two but also the property deposited for safekeeping, are entered among the liabilities. The beginning of this passive business was, namely, the acceptance of precious metals in coins or bars as a real deposit, (in legal language depositum), or in bank language as a deposit for safekeeping. The bank was merely a depositary with the ordinary obligations, not a creditor; it had no right, therefore, to loan out the sum intrusted to it.

—In course of time it became customary among these brokers and banks not to allow the deposits to lie dead at the depositories until the depositors withdrew them, but to make the payments of the depositors in the same bank to each other by a simple transfer in the accounts. In this way the actual movement of money was saved in many cases, and a simple, safe and convenient mode of payment found in the transfer of accounts. The profit of the bank (to which in the case of public institutions the term giro-bank, or circulation-bank, was applied, i.e., one in which deposits circulated from account to account,) consisted of commissions, which were charged partly for the safekeeping and partly for making payments for transferring accounts. This profit corresponded exactly to the profit in money changing, and was not interest, as in real credit transactions.

—From this time the subsequent development was very different in the case of the money brokers and the giro-banks. The real giro-bank holds fast to the actual deposit and the transfer of the actual deposits, loans no part of the money received, has consequently the total amount of all deposits on hand, and, in addition, generally a capital stock as guarantee. It is, therefore, in a condition, as long as embezzlement or robbery does not occur, to pay out at any time all its deposits at once. This absolute security of the deposits forms in the eyes of the friends of the giro-bank the great advantage of such banks over credit banks, and particularly over the modern bank of deposit and bank of issue. The giro-bank is the model to which many persons would like to see all banks reduced.

—Among the money brokers and goldsmiths, who took deposits for safekeeping and also for transferring accounts, the banking business developed in a different way. Those deposits became "deposits for use," the real deposits (deposita) became loans regularly for short, definite periods, sometimes to be repaid on demand. With this step the old money bank became the modern credit bank. When the deposits had once become loans, then the modern banks of deposit, check banks and banks of issue were inevitably evolved from the old banking system. The change of the deposit to a loan constituted an epoch in the history of banking. With the justification of this step is granted the justification of the whole modern system of banking. The subsequent phases of the development of the latter, the various influences which have been at work from the earliest period until the present, the ceasing to charge a fee for safekeeping, the payment of the services of the bank by letting it have capital without interest, the ever-increasing participation of the depositors in the profits of the bank, for example in the form of free collections on the part of the bank for its customers, and, later, in the form of interest on deposits; these and other points we need not pursue for our present purpose. These points explain the history of the growth of the banking system, and the peculiar forms which various kinds of banks and various branches of banking business have assumed at various times, and, in this connection, are full of interest. But for the main question as to the justification of the credit banking system, and of the particular form which we have under discussion, viz., the bank of issue, they are not important. The whole question here turns on the justification of that first decisive step, the change of the depositaries to debtors. Let us see whether there were any circumstances which justified this change.

—The deposits for safekeeping were all expected to be held in reserve at the money changer's or at the giro-bank. Experience soon showed that a balance constantly remained although the depositors could draw out all their deposits at any time. For even if each drew out all his money in the course of the year, as some did many times over, yet all did not do it at once. One drew out while another was just paying in. In the giro business many payments were made between the customers of the bank without affecting the total deposits. The average amount, the movement, the times of drain and influx, the lowest point to which the balance sank, could all be easily ascertained by experience. Now, the part which was never used lay fallow, was unproductive for the individual as well as for the whole. It could, therefore, be dispensed with in the real deposit business, and was consequently available for other purposes. It could, therefore, be loaned out in the same way and for the same reasons as that portion of the capital stock of the money changer which from time to time was not needed in the broking business. Only, in one case as the other, there had to be an assurance that the sum could be easily and quickly made available in case of unusual demands on the part of depositors The investment of the superfluous capital in short loans and advances on pledges afforded this security, and thus the change of the deposit to a loan was justified. This transformation could of course take place only under legal forms and with the full consent of both parties. The mutual advantage of both parties and the development of industry produced this understanding in one place at an early period, in another at a later. And thus the money-depository or giro-bank became the modern bank of deposit, and this last is the type of all other modern banks, and particularly of the banks of issue. Any objection against the bank of issue on account of its essential nature (and many such objections have been made even in the last few years), is also an objection to the bank of deposit.

—Now, of course, no one can deny the possibility of a temporary suspension of payments on the part of such a bank, inasmuch as the money which may be demanded is not all at once in the coffers of the bank. But it is a sufficient security if the probability of such a necessity can be reduced to a minimum by a proper conduct of the bank business, by a proper investment of the superfluous capital, and by a capital stock large enough to guarantee against ultimate losses. Experience shows that such a security can be assured. Modern banks promise to pay the debt which they incur when they accept a deposit. Experience shows that they can do this and still loan out a large part of their deposits; and thus their business is justified independently of the enormous advantages which accrue to trade and industry from rendering available a large amount of capital, which would otherwise lie dead and useless. But the justification of the deposit business carries with it the justification of the exactly similar business of issuing bank notes. The polemic against the bank note, which is not based dollar for dollar upon a cash reserve, applies just as forcibly to the deposit not so based.

—The business of issuing bank notes is nothing but a variety of the modern deposit business, and has been evolved in the same way from the old depositum. It makes no difference in the nature of the depositum or in the nature of the giro-bank, so far as the last is a place for the safekeeping of deposits, whether for the money deposited a certificate for the whole amount of every individual deposit or for portions of the same in round sums be given. Nor can it change the character of the old deposit banks, even if these certificates, given to individuals, can be further indorsed or furnished with blank indorsement, or even issued to the bearer. The so called recepisse of the Amsterdam giro bank were such deposit certificates These certificates were the bank notes of the old money banks. And the demand that bank notes shall be secured by a full cash reserve, dollar for dollar, is nothing else than a demand that the modern bank note shall be reduced to the old deposit certificate. For what is the difference between these two forms of bank notes? Exactly the same as between the modern deposit and the old deposit, i.e, as between a loan and a deposit for safekeeping. The deposit certificates are receipts of the bank for money deposited and kept in its coffers. The bank notes are bonds of the bank in which the bank acknowledges itself debtor for the given sum, and promises to pay it on demand to the presenter of the note. In our present system of bank notes, as little as in the modern deposit business, does the bank promise to keep cash on hand for the amount of its notes, but by a proper conduct of business it is able to keep its promise to redeem on demand. That is sufficient. Why talk in this connection of deception, of fictitious money, of the creation of imaginary capital, as do the opponents of the banks of issue? We might make the same objection to the deposit system of modern times, indeed to every use of credit, and with just as little reason.

—The subsequent development of the banks of issue and deposit banks upon the new basis has led to no essential change, but to a mere expansion of their business. The banks gradually began to borrow more and more for the purpose of loaning again, until their principal business consisted in the handling of others capital, and the capital stock of the bank lost all significance except as a guarantee for the proper conduct of the business of the bank. Wherever the banking system has been allowed by the government to develop itself naturally, the deposit business, as the original and simplest, has been the most important branch; the issuing of notes has been simply a complement of the former. They are but two forms of essentially the same business, that of contracting debts, and the one or the other has been employed according to the varying demands of trade and industry. The conduct of the passive transactions of the bank in both forms must be regulated by essentially the same principles The oft repeated demand for a separation of these two branches of business is inconsistent with the organic development of the whole credit banking system, and, where complied with, leads to the abandonment of the peculiar advantages which grow out of a proper combination of both systems of operations.

—II. THE BANK NOTE AND ITS ECONOMICAL FUNCTION The bank note must be clearly distinguished from both metallic and paper money. Money is a standard of value and a medium of exchange. But the pure bank note is only a medium of exchange, not a standard of value, and does not therefore discharge the money function. Paper money is inconvertible, and a legal tender, bank notes are convertible, and not a legal tender. But aside from the convertibility, bank notes are distinguished from paper money in their mode of issue, and consequently in their mode of reflux. Bank notes are regularly issued as loans, paper money as payment; the former, therefore, temporarily, the latter, permanently. In place of the bank note there remains a claim, by whose conversion the corresponding debt of the bank can be called in or protected by a cash reserve; in place of the paper money the state has merely a receipt; it can get rid of its money only by special transactions. The notes flow back to the place of issue gradually and regularly in the ordinary course of trade in the payment of the advances made by the bank, provided the bank capital has been properly invested in short loans. The different manner in which notes and paper money get into the channels of trade reveals further advantages for the former and disposes of a whole series of objections which in the case of the latter might seem well founded. An issue of notes is necessarily preceded by a demand for loans, and even if a bank has partly created this demand by carelessly advancing loans upon insufficient security, yet the danger is not great, particularly under a system of free banking. For the notes which exceed the momentary demand for such means of payment immediately flow back to the coffers of the bank for redemption, particularly under a system of competing banks The excessive issue of bank notes is, therefore, except in certain rare cases, impossible. The banks can not increase their issues at pleasure. The course of bank circulation under a well-developed system of banks of issue depends upon the changing wants of trade, and the latter upon the variations in price of commodities. These variations in price, according to Tooke's detailed investigations, precede the corresponding variations in bank circulation, and can not, therefore, have been caused by them. It is, consequently, wrong to attribute to banks of issue the fault of causing over-speculation and commercial crises. With this view of the subject a whole series of objections is effectually disposed of, which grew out of a false identification of paper money and bank notes, and out of attributing to the latter the qualities of the former.

—Bank notes are not only not money, but they are essentially like all other substitutes for money which fulfill the function of money as a medium of exchange. The bank note is only one member in the organism of credit institutions together with checks, drafts, notes, book credits, clearing houses, etc., a number whose relative importance with the development of the credit economy grows on the whole less and less, although at certain times, viz., at the turning point in commercial crises, it acquires again a greater importance. The consequence of this conception of the bank note is a corrector view of public legislation in reference to banks of issue. The unfair favoritism toward these banks on the one hand, or the limitation of them on the other, the artificial regulation, so often characterized as a natural necessity, thus appears erroneous and often enough injurious. The whole development of the credit economy suffers under it. So far are bank notes from being the most important form of credit, that the whole development of the modern credit system shows a constantly increasing tendency to substitute for bank notes some other form of credit. This tendency shows itself either in an absolute decrease in the quantity of bank notes in circulation, or more often by a relatively more rapid increase in the quantity of other substitutes for money.

—III. SYSTEM OF SECURING THE NOTES. From the history of the origin and growth of the bank of issue, and from a proper conception of the function of the bank note in industrial economy, may easily be deduced the proper system of securing bank notes. By this last term we understand that regulation of the resources of the bank or that investment of the bank capital (i.e., of both the capital stock and the capital which has been collected by the issue of notes), which will insure the constant and immediate redeemability of the notes in coin. What are the principles, then, which underlie a proper system of security?

—Three systems of securing the notes have been proposed and defended: 1, the basing of the note circulation, dollar for dollar, on a cash reserve; 2, the investment of the capital in securities not easily convertible, particularly in real estate or mortgages on the same, and in stocks or bonds; 3, the so-called banking security. Practically a compromise between one or more of these systems has been generally adopted as the basis for legislation, proceeding on the assumption that one portion of the notes might be secured by the second system, while another portion might be based on the third system.

—As to the first system, we refer the reader to what has been said above. Such a demand simply means the rejection of all that is peculiar in modern banking. For, if the bank note is to be nothing but that ancient deposit certificate, the deposit which has become a loan (at least the deposits payable on demand, i.e., the great mass of the deposits), must again become deposita, that is, real deposits for safekeeping. Those who demand a complete cash security confuse possibility and actual reality. All the notes can, of course, flow in at once for redemption, but, as a matter of fact, they do not. And under the banking system of security they find their economically proper and practically more important redemption, in their regular reflux, as payment of credit given them in a cash redemption.

—Basing the notes on real estate and mortgage security, as in the second system, has been warmly recommended, especially from financial considerations and in the interest of agriculture. But this proposition must be rejected for the same reasons as the similar one of basing the notes on stocks and bonds, viz., that resources in such form are not readily convertible into cash. We must grant, however, that that portion of the notes which, according to one of the compromises mentioned above, need not necessarily be secured by the banking system, might be made available for mortgage loans, if it were not that it is financial necessity which ordinarily leads to such compromises, and which, therefore, requires that the sum mentioned shall be secured by government bonds. The payment for the monopoly of circulation which occurs here and there (as in Austria) through such a loan to the government, might be better arranged by allowing the state a share in bank profits.

—The third system of securing the notes, the banking security, we consider the only rational, scientific and satisfactory one. It consists of a proper combination (changing according to circumstances) of a cash reserve and of securities which are easily and readily convertible into cash. Such securities are found most readily in the discount and Lombard business, particularly in the former. The discount business insures, further, the regular reflux of the notes to the bank, and in this way offers an opportunity for the most thorough control of the issue of notes. The discounted bills and the claims on pledges form, therefore, the chief security of the notes, compared with which the cash reserve is of secondary importance. A great heresy in the face of popular sentiment, which is fond of calling all notes "unsecured" which are not based on a cash reserve—an exceedingly materialistic view in the age of that most spiritual of all economical elements, credit.

—The cash reserve acquires its importance in view of the irregular reflux of notes to the bank for the purposes of redemption. This reflux can be controlled even in exceptional periods by properly regulating the loans of the banks, provided the banks of issue have developed under normal conditions. Its approximate amount can be told beforehand by observations in the banking business, because the question turns here on periodical movements. For critical times the strength of the reflux may also be estimated, with a little attention, by observing the transactions in the money market, in commerce, and in general production. Of course, such observations must be made by experts, conscientiously undertaken and thoroughly carried out by every banking institution. The relative and absolute amount of the cash reserve must be determined by these observations, and the necessary increase or allowable decrease be effected by the regulation of the discount and lombard business. After what we have said, we need lose no words over the attempt to fix, once for all, in an arithmetical ratio, the relation of the cash reserve to the note circulation. (See VI)

—The chief point in the banking security lies in the element of the easy convertibility of all resources of the bank which do not consist of cash on hand. This is demanded by the nature of the notes as obligations payable on demand. In this way the objection of those who demand a full cash reserve for notes payable at sight is met, so far as it corresponds to actual relations the irregular reflux can assume unusual dimensions, but under these circumstances can not be out of proportion to the time and place. The easy convertibility of the loans forms the real assurance against the dangers which do undeniably lie in note circulation.

—For these reasons, real estate, mortgages, direct claims on the state, great quantities of public securities, on long time, form no proper security for the notes. For even if they afford a safe security, which is often enough questionable, (particularly in the case of the first two in critical periods), yet they are difficult to convert into cash, even individually, not to say in large quantities. Mortgage credit must be taken on long time, owing to the nature of agriculture and of investments in building. In this consideration, and not in an arbitrary monopoly of banking for the advantage of commercial credit, (as the agricultural interests maintain), is to be found the reason of preferring discounts to mortgages on real estate. Other securities, such as running accounts, book credits, ordinary obligations, good bonds, i.e., such as vary but little in value in exchange, preference bonds, etc., may be accepted in limited quantities, but ought to be considered inferior to discounts and lombard claims. Shares in industrial undertakings, and speculations of all sorts on change ought to be excluded. (See VI)

—IV. FUNCTION OF THE BANK NOTE IN COMMERCIAL CRISES. The discount business is a necessary presupposition of the modern development of trade and industry. A commodity, in the process of its manufacture, must pass through many different hands before it finally reaches the consumer. As the commodity is ultimately paid for by the consumer, the various intermediate agents find difficulty in paying for the commodity as they receive it. Under these circumstance one of two things is necessary. Each of these agents must carry on the business with a greater amount of capital, (in other words, a portion of the capital becomes unproductive), or they must run the risk of letting trade and production come to a standstill at times for want of payment. A help for this condition of affairs is found in the draft of the seller upon the buyer for the selling price and for the time that will probably elapse until payment can be made, and in the acceptance of the draft by the buyer. The seller now has this discounted and thus receives his necessary capital in the form of money or of a substitute for money, such as book credit or bank notes. The modern credit bank has evidently a very important relation to this discount business. Individual merchants could not carry on this business in the regular way and on a large scale necessary for the demands of trade and industry. Particular institutions appear which make it their function to collect the surplus capital in the community and apply it in this discount business. These institutions are called banks of deposit. The whole credit economy has become a highly organized and yet, because constructed on rational principles, a very accurate mechanism. But at times some of the wheels in this mechanism give out. In critical periods we see that, after all, we have not a material mechanism but an organism, whose vital principle is credit, confidence, the spiritual element par excellence in the credit economy. Let confidence disappear, the soul departs, the organism is dead. At such times the bank note shows its importance as a "primary" means of credit.

—The whole credit economy is based on confidence. The confidence of one man conditions that of another. Let mistrust appear, and it spreads rapidly in all directions, destroys the credit of those who deserve confidence, and together with many guilty parties who have abused credit it overthrows many more innocent parties who have only used it. In this lies the danger of all commercial and credit crises. The crisis generally begins, however, in some one branch of industry. The mistrust extends to all the business relations, and particularly to all forms of credit payment usual in that branch. Now, the kind of credit payment which can command most confidence at such a period acquires an unusual importance in the failure of all other ordinary means of credit payment. The bank note commands this confidence because it circulates in other quarters, and because the security of the notes need not be affected even by a great industrial crisis, if the bank has been properly conducted. We may, therefore, designate the bank note as a suitable and important substitute to fill up the temporary chasm made in the credit economy by too great mistrust. Where it is lacking, or confidence is not felt in it, the only resource is specie. Historically the crises have been most severe where the bank note did not exist. Of course, great care must be taken at such a time in issuing notes that credit be given only to solvent houses after the turn in the crisis and not for the sake of keeping up the prices and furthering speculation. At such times the advantages of large banks appear most clearly, as the notes of such banks possess most confidence.

—The banks must exercise unusual vigilance in their discounts during crises; for a proper regulation of the discounts affords the best security for the notes. A proper policy in reference to discounts is of most importance in times when the rate of interest is rising, and a scarcity of money begins to be felt; toward the end of speculative periods, when speculation feels the ground giving way beneath it, and uses its short respite for all sorts of extravagances; when exchanges become unfavorable; when specie ceases to come in and begins to be exported; in a word, when all the signs indicate the approaching storm. The discount capital of the banks forms, then, a large part of all the funds in trade and industry available for short loans in mercantile business. The operations with it, therefore, are of wide-reaching influence at the time when the pressure upon the banks for discounts is increasing. In three ways can the bank counteract this pressure and thus favor the necessary reaction in the money market, and revolution in the rate of exchange, while it secures at the same time its own position. It may refuse to make certain loans, to accept certain notes, may limit the maximum credit of certain houses—not a very desirable means, and never thoroughly impartial and safe. Or, it may shorten the maturity of all notes and loans, which is more equal in its effects. Or, it may raise the rate of discount, either on all loans, or somewhat differently for notes and lombards, and for the shorter or longer maturity of the notes. The last method deserves the preference; it best secures the bank, affects merchants more equally, and furthers in the most efficient way, the necessary reaction in the money market, in the rate of exchange, in the prices of commodities and the course of securities. This method, which is a logical necessity of the nature of the credit bank, is condemned only by the short-sightedness of practical business men. For the condition of extensive active transactions on the part of the bank is an extensive passive business; but the latter is diminished by the withdrawal of the deposits and the reflux of the notes, or, at least, the bank has such a change in its passive business to fear, and must regulate its active business accordingly, i.e., lessen the loans by making them more difficult.

—V. RELATION OF THE STATE TO THE BANK NOTE. In what precedes we have presented the natural development of the system of banks of issue, or rather, the tendency of its natural development; for, as a matter of fact, this tendency has never been fully realized, because the state has interfered with it everywhere. It is probable, that if there had been no interference, and no artificial regulation, the system of banking would have been changed from the old money banks to the modern credit banks, at the same time with the general change in industry and commerce characteristic of modern times, and that the deposits would have remained the chief branch of the banking business, and that the bank note would have come into use as an incidental means of assisting the deposit business. But it would have been wonderful if the banking business, in its early history, had escaped regulation on the part of the government at a time when all other branches of business were subjected to a most minute supervision. And, indeed, we find that the paternal care of the government was extended to banks in general, and banks of issue in particular, to an unusual extent. Every civilized government undertook in some way the direct control of the issue of notes; England, France, Austria, Russia, Prussia, all the small German states, Norway and Sweden, Italy and Switzerland, committed themselves to a distinct policy in reference to banks of issue. After the interference was an actual fact, the attempt was made to justify it on various grounds. On the one hand, the right to control the issue of notes was deduced from the coinage prerogative. On the other, the necessity of controlling such issue was based on the essential difference between bank notes and other credit circulating media.

—Let us examine how far theoretical considerations can justify such interference. As we have already said, according to our view, the bank note is not money, not even paper money, and is not essentially different from other credit circulating media. All the reasons advanced, therefore, in favor of interference on the part of the state, based upon the false identification of bank notes and money, and upon the essential difference between bank notes and other credit means of payment, are of no force. But there are certain inferences from our views of the nature and function of the bank note, which justify a proper positive relation of the state to the bank note and its organs of issue.

—In order that the bank note shall remain a bank note, no conjunction of circumstances should be allowed to assimilate it to money or paper money. Everything depends upon this one thing: the acceptance of the bank note must remain completely voluntary. Only under such circumstances is the bank note like other credit means of payment. All the objections which have not been answered by the foregoing discussion are concentrated in this one point. All the peculiarities of the bank note which call for a positive interference of the state, turn upon this one feature. The state, consequently, must see to it that the acceptance of the note is really voluntary, and should limit its interference to the performance of this function.

—Now the acceptance of the note may become to a certain degree compulsory, although the note may not be made a legal tender or irredeemable. Thus the bank note may have passed into such widespread circulation that it must be accepted for want of any other circulating medium. Or, it may exist in small denominations which can hardly be refused by the poorer and more uneducated classes, particularly as payment for wages. Or, it may be that the individual can not easily present it for redemption on account of his distance from the place of redemption. Now, under such circumstances the state should hold fast to three points: 1, It must not make the notes a legal tender, or by its own action artificially favor the note circulation; 2, it must forbid the issuing of notes below a certain denomination; 3, it must see to it that the convertibility of the note is a reality, and is not made illusory by certain unfair practices.

—Tried by the first principle, the legal tender quality of the bank of England note and of similar notes is to be condemned. Nor will it do to answer this objection by saying that the legal tender quality enables a bank note to perform more easily the peculiar function in commercial crises, which we have ascribed to it above; for English experience before 1844, and continental experience before and after, show clearly, that it is not the legal tender quality that adapts a bank note for that function. And theoretical considerations lead to the same result. Any other possible advantages are outweighed by the inconsistency of the policy with the general principles of banking, or, if this be a too doctrinaire objection, by the very practical consideration that the transition from the legal tender bank note to the legal tender paper money is easier and more alluring.

—In other cases the state favors the bank note as a means of payment by receiving it, for instance, in payment of taxes. This favor is generally accorded to the large centralized banks, and affords what might be called a tax security of the notes. This must also be condemned. For the public, knowing it can pay the notes as taxes, receives them more readily and thus give them a wider circulation, while at the same time neglecting to examine as closely as it otherwise would, the condition of the banks. The banks, relying on the ready acceptance of their notes, and their more irregular reflux for redemption, are less careful of their banking security. The government in critical periods, when it must have the specie, can get it only by endangering the existence of the banks whose condition it has made insecure by its mistaken policy of favoritism; and the state, in case of ultimate failure of the banks, can hardly escape the fair charge of being accessory with the banks to the distress in trade and industry which must ensue. Giving the holders of the notes a priority over the other creditors of the bank has also a tendency to unduly favor the issue of notes. And, negatively, the government must not favor the note circulation by allowing the banks to conceal their condition, but must insist on periodical publications of the exact state of the banks' resources and liabilities.

—It is necessary to insist upon the second point mentioned above, because there is a difference not only of kind but of degree between bank notes of large and small denominations. The latter are very similar to paper money in their qualities. They supplant money to a greater degree than large bank notes. They circulate in spheres where other substitutes for money do not come at all. They pass into the hands of laborers and artisans who never have any great amount of money on hand at once. It hardly pays to present them for redemption, and thus they stray away from their place of issue so far that they can not be presented for redemption without sacrificing a large per cent. of their value. The fundamental conditions, then, of their remaining true bank notes are wanting, and they become to all intents and purposes paper money.

—By the third point we do not mean that the state is to undertake to insure that every bank shall be constantly in a condition to redeem its notes, but simply to see to it that a bank does not practically escape its obligations of redemption under various pretexts. If a bank is no longer able to redeem its notes, let it pass into bankruptcy at once. But banks often manage to keep from redeeming their notes while they are perfectly solvent. The banking history of the United States affords very good examples of such conduct. The banks often made it so tedious to get money for the notes (as, for instance, by appointing a certain inconvenient hour of the day, by slowly counting out the coins one after another, etc.), that the note holders were deterred from presenting them for redemption. In this connection abuses of four kinds may arise, in reference, namely: to place, time, coins, and manner of redemption. In a system of local banks, the banks ought to be compelled to redeem their notes wherever they are likely to circulate in large quantities at convenient times and in proper coins, i.e., the coin money of the realm, and in a manner convenient for the note holders. All these points ought to be features of every general banking law, and are not inconsistent with a system of free banking.

—VI. RELATION OF THE STATE TO THE CONTROL OF THE BUSINESS OF BANKS OF ISSUE. Our investigations so far lead us to the conclusion that there are no economical reasons why the state should take any different relation toward the establishment of the banks of issue than that which it occupies toward the establishment of other credit banks. The so-called free banking system may prevail in the case of banks of issue as in the case of other banks. From this point of view any regulative interference of the state in the business of the banks is to be condemned. But the case is very different if the state claims the monopoly of issuing notes, or insists that every bank before issuing notes must secure special permission for that purpose. For the logical consequence of such a claim is further interference, leading ultimately to more or less direct control of the banking business. The contrast here lies between a free banking system with a formal bank law not at all inconsistent with such a system, and governmental control of banking with regulative legislation. In the last the system of securing the notes, the amount of circulation, and the amount and mode of investment of the capital stock of the banks, are all prescribed. As typical forms of such laws with manifold but unimportant modifications in detail, we select the German or continental, the English system of Peel's law, and the North American system.

—The first system rests upon the principle of the banking security, i.e., the notes are based upon a cash reserve, and loans of various sorts easily convertible, and a capital stock as a guarantee fund. The government has in many cases made further provisions fixing the absolute and relative amount of note circulation in relation to the capital stock, nearly always determining the minimum cash reserve, and often regulating the loan and discount business. These all have the defect of attempting to fix mathematically the ratio between the capital stock and the various active transactions of the bank, which is naturally impossible and frequently very injurious. The bank itself is often led to depend upon the law instead of its own careful conduct of business. The idea that fixing the maximum of note circulation is a wise step depends upon the false view that banks can expand their circulation at pleasure. The provisions requiring that the circulation shall bear a constant relation to the capital stock has but little in its favor, while the fact that it hampers the healthy development of banking constitutes a serious objection. Still more arbitrary is the provision occurring in most laws that the cash reserve shall be equal to one-third the note circulation. The only excuse to be made for such a provision, is that it is intended to fix the minimum. But even in this sense it may be injurious under some circumstances. In any case there ought to be a similar provision in reference to deposits, or else the banks will make the one-third reserve for the notes serve as reserve for both notes and deposits. The capital stock of the bank, according to most of the laws, must be invested, like the deposits and loans, through notes, in securities which are easily convertible. It is decidedly best that the capital stock be restricted to this banking investment. The bank should not invest its capital in stocks and bonds which are exposed to great variations in value. Still more questionable is the policy of immobilizing the capital, i.e., investing it in a loan to the state on long time, (as in the case of the Austrian bank) or in untransferable bonds (as in the case of the French bank). Of course such an investment need not endanger the convertibility of the notes, as this depends immediately upon the investment of the note capital, i.e., the capital received in return for notes. But in such a case the capital stock loses all significance as a subsidiary means of securing this convertibility, and is of no more assistance for such a purpose than if it did not exist. It is of importance only in the case of ultimate insolvency of the bank. Of course such a provision grew out of the monopoly policy and financial necessity. But it would be better, as has been said above, to have the bank allow the state a portion of its profits and invest its capital in the proper banking method.

—The bank of England is historically a realization of the so called "currency theory" of Lord Overstone. This currency theory rested upon the false views of the nature of the bank note which we have discussed above. It identifies bank notes and money and posits an essential difference between bank notes and other credit substitutes for money, and demands that a bank note circulation shall vary exactly as a specie circulation would in its place Peel's act does not aim to secure the convertibility of the note, nor even to limit the amount of the note circulation, but to regulate the latter artificially so that it shall increase and decrease in exact keeping with the increase and decrease in the cash reserve of the bank of England. This attempt sprung from false theoretical views, from a complete mistaking of the importance of deposit business and its functions in the influx and efflux of the precious metals, as well as from a misunderstanding of the causes, effects and phenomena accompanying an exportation or importation of specie. Peel's act did not succeed in its attempt, nor was the practical object attained of avoiding commercial crises in the future. On the contrary, the act has repeatedly aggravated the crises, injured the efficiency of the bank, and has been several times suspended by the English ministry.

—Its system of securing the notes is as follows. A minimum amount was taken below which, according to experience, the note circulation of the country had never fallen. Such an amount of notes, it was assumed, was secure even without a cash reserve, on account of which it was chosen as the maximum amount of unsecured notes. Every further note had to be secured by a full cash reserve, pound for pound.

—As a matter of fact, the bank of England holds in general to the banking system of security. The only point is that the provisions as to the cash reserve are different in the case of the English system from those of the continental. And all points of difference are, in our opinion, to the disadvantage of the English system.

—The North American system secures the notes by fixing their amount at a high percentage of the capital stock of the bank, immobilizing this capital, and giving the note holders a priority right to it. The security of the notes as such is left to the banks, with the exception of prescribing a minimum cash reserve, and is ordinarily the usual banking security. The state does not aim to secure the instant convertibility of the note, but in case of bankruptcy its ultimate redemption. In this feature, and in the immobility of the capital stock, lie two great defects of the American system. The fiscal tendency of the whole system is apparent in its every feature.

—It will thus be seen that the continental system, although hampered by many arbitrary restrictions, is, on the whole, the most natural, because it adheres, in principle, at least, to the banking security. A vigorous bank administration would undoubtedly feel itself cramped in many respects by its provisions. And yet, it keeps in view, on the whole, the points which under a free banking system every bank would have to observe. It adapts itself more easily to the wants of trade than the English or American systems; and experience certainly does not condemn it in comparison with the others. And if we assign to the state the office of controlling the banking business there is no reason why a different basis should be sought than that which underlies the continental system. As a matter of fact, both the English and American systems approach the continental more nearly in practice than in theory, for both maintain in practice the banking security which they reject in theory. The continental system, we must conclude, is best for all kinds of banks of issue, as well for a great monopoly bank like that of England, as for a system of local banks like that of America or Germany.

—VII. RELATION OF THE STATE TO THE ESTABLISHMENT OF BANKS OF ISSUE. Although a system of free banking may be demanded on theoretical grounds for banks of issue as well as for others, yet there may be practical considerations which justify an interference on the part of the state, for instance, if one kind of banks of issue possesses advantages for trade and industry over other kinds and needs governmental aid in establishing itself. The question here turns on the respective advantages of a centralized and of a local system of banks of issue. The contest over this point has been as warm and as one-sided as over any other point connected with this whole subject. The abuse of credit has often been noticed, and then in theory and practice some one kind of credit institution made the scapegoat of all such abuses. But experience has by this time pretty well demonstrated that an abuse of credit is possible everywhere and under every form, that no kind of banks can hinder it, no credit banks and no particular form of banks of issue necessarily favors or prevents it more than any other, and that the respective advantages of the various systems have been greatly over-estimated by their supporters. In fact, the arguments in favor of a centralized system can be nearly all matched by arguments equally as strong in favor of local banks, while all the defects of the latter have their counterparts in the former. The question is pre-eminently a practical one, and can hardly be decided upon theoretical grounds. The objection to local banks, that in competing with each other they will succeed in issuing an excessive quantity of bank notes, has been answered already. The position of a great monopoly bank is connected with some dangers because its great resources enable it to persist in a false policy for a longer period, and thus it may favor the feverish speculation preceding a crisis to too great an extent. But in return for that, after the crisis has come, such a bank can do much more toward alleviating its effect than local banks could.

—One great advantage of local banks is, that by these the business of issue is developed in more intimate connection with the other banking business, and can become, as it ought to be, a mere complement of the deposit business. The reflux of the notes is more regular and powerful, and, in so far, the notes are better secured; while, on the other hand, as they must secure both deposits and notes, the latter are ordinarily based on a relatively smaller cash reserve than those of a great central bank.

—The comparison between a system of local banks and a great central bank with many branch banks, must end similarly. Each has its advantages and disadvantages, and other influences than banking considerations must finally give the decision. The local banks, besides the advantage mentioned above, can adapt themselves better to local demands. But the central bank with branches can afford a greater extension of the remittance business. If there is less self-dependence in the great bank, there is a more effectual control through the publicity which all its acts possess. If there is greater danger of its becoming involved in the financial difficulties of the government, of its bank notes becoming paper money, there is less danger of the government's going over to a pure paper money system. Which is generally far worse. Besides that, American history shows clearly enough that a system of local banks affords no security against abuse for financial purposes. If in the great bank the reflux of notes is weaker, there is a greater cash reserve. If there is occasional partiality in discounting, there is in general greater safety in the loans, less danger of being ruined by local swindles, etc., etc. One point, however, must be kept in mind, which, in general, will give the decision in favor of free local banks of issue. Modern trade and industry by their own natural development tend to give us all the advantages of these great central banks, without any of the disadvantages which come from monopoly banks. And it is probable that great banks would have appeared in London, Paris, Berlin and Vienna able to confer all the advantages afforded by the state banks in those places, with almost none of their defects.

—VIII PRINCIPLES OF LEGISLATION IN REFERENCE TO BANKS OF ISSUE. It follows from the previous considerations that the relation of the state to banks of issue need not consist in a regulative interference. The application of general legal principles to the system of banks of issue, and a general banking law in which there need be only a few particular provisions for banks of issue, are sufficient. We enumerate here some of the principles which should underlie general bank legislation.

—1. The establishment of banks of issue may be free as well as that of other credit banks.

—2. The provisions as to the capital stock of banks of issue and the amount of liability of the stockholders may be the same as in other banks.

—3. A regulative control of the business of the bank ought not to be attempted by the state, as it can never be really carried out. The amount of the capital stock and its investment, the amount of the cash reserve, its yearly increase, the distribution of the profits, the establishment of branches, the extension of the business, the conditions as to the acceptance and amount of deposits, the kinds of bank notes and their total amount, the security of its liabilities, etc., etc., ought to be left entirely to the bank.

—4. The care of the state must extend, however, to two, possibly three, points. It must insist on the strictest publicity of the transactions of the bank, so that the public can judge at any time of the bank's solvency; it must fix the lowest denomination of note and provide proper means to force every bank either to convert its notes on demand or go into bankruptcy; and it may exercise a formal control so long as it does not interfere with the principles of free banking.

—5. The principle of publicity demands the preparation and publication of regular reports as to the condition of the bank, and the law ought to be framed with the utmost care so that the banks may not be able to evade its provisions.

—6. The strictest personal responsibility, on the part of directors, etc., for the full execution of the law, ought to be part of all banking legislation. Provision ought to be made for a compulsory examination of the books by the proper authorities and the publication of the results from time to time.

—In a word, the action of the state is in general to limit itself to making possible a strict and immediate control of the banks by public opinion. The state guarantees the publicity of all bank affairs; the public must really watch the banks and hold them to their duty.

—LITERATURE. The literature of the question is simply enormous. All the ordinary text books on political economy discuss the subject in one or more of its phases. The various encyclopædias contain articles of more or less value. Worthy of particular mention in this connection is the article on Zettelbankwesen, in Bluntschli and Brater's Staatsworterbuch; by Adolph Wagner, of which the present article is essentially an abridgment, and the discussions under various heads in Macleod's dictionary of political economy, and M'Culloch's commercial dictionary. The periodical literature of the last 80 years, in French, German and English, is full of the discussion. The various reports of the English and French governments and banks are also full of valuable matter. The writings of Gilbert, Wilson and lord Overstone, Wolowski and Horn, Schaffle, Rau, Wirth, Wagner, Carey, Walker (Amasa and Francis), Gibbon, and Price, contain many interesting discussions of the topic. Of formal works on the subject we mention the following, in which the reader will find references to all that is valuable on the question in any language: Tooke and Newmarch, History of Prices, London, 1838-1857; Fullerton's Regulation of the Currencies, London, 1845; Walker's Money, New York, 1878; Walker's Money, Trade, and Industry, New York, 1879; Macleod's Theory and Practice of Banking, London, 1875; Gibbons' Banks of New York, New York, 1859; Wolowski's Quest. des Banques, Paris, 1864; Horn's Liberté des Banques, Paris 1867; Geyer's Theorie and Praxis d. Zettelbankwesens, 1867; Tellkampf's Princip. d. Geld and Bankwesens, Berlin, 1867; A. Wagner's Zettelbankpolitik, Freiburg, 1873. The last contains a very full account of banks of issue and an exhaustive discussion of all points, theoretical and practical, relating to them.

E. J. JAMES.

BANKS, Advantages of Savings.

BANKS, Advantages of Savings. Saving does not create capital; it collects the small elements and parcels of it, which, when accumulated, gradually swell to values large enough to be employed with fruit.

—Savings banks are institutions of credit, founded to inspire, facilitate, favor and encourage savings. The savings bank receives the smallest savings of the poor; it preserves and guarantees them; it shelters them from the temptations of the hour and from disastrous risks; it throws them into circulation; and out of the sterile sums, which they were while they remained at the bottom of a box or drawer, makes of them sums productive of interest which serves, month by month and year by year, to swell the amount of a little account current. Lastly, the bank pays back all or part of the deposit, according to the wish of the person who deposited it, and upon his simple demand.

—Savings banks are altogether a modern invention. Inspired by the purest philanthropy, instituted with enthusiasm and generosity by men of the most respectable character, administered with disinterestedness and rare ability, sustained in their benevolent action by the unanimity of public opinion, aided by the indefatigable co-operation of a host of intelligent propagators, and the ever faithful support of the widest publicity, the savings banks in most parts of Europe have grandly accomplished their mission, such at least as it was conceived by the thought which inspired it, a thought exclusively charitable and moral. Surely after considering all these benefits, the economist will not refuse to recognize the great and noble services which the savings banks have rendered since their first foundation. He takes pleasure in praising them; but he reserves to himself entire liberty in examining and judging in what concerns the legislation, organization and progress of these establishments, whose reach would perhaps have been wider and whose results would have been still happier, if the charity which produced them had been found more intimately united to the science which would have given them liberty as a basis.

—Very few raise any objections against the institution of savings banks in itself, but there are a few who do. Their objections are so weak and trivial that they do not deserve a serious refutation. Independently of the very worthy sentiment which first produced the savings banks, and which is a good in itself; aside from the very moral habit of saving, a habit which savings banks have largely extended and developed; they have two important economic results, which seem to us henceforth beyond all discussion: one affects the personal and direct interest of the depositor; the other, which is less apparent, is to the general advantage of society.

—1. The foresight which, according to the expression of J. B. Say, sacrifices actual satisfactions, in order to insure security in the future, is not only a moral quality; necessity imperatively demands it. Labor, which is possible in strength and health, becomes impossible in old age and sickness, not to speak of crises, times of enforced idleness, and the thousand accidents which trouble and disturb even the most favored lives. A prudent man has strength enough to practice privation when he can, and prefers to a passing satisfaction the permanent satisfaction of assuring himself the means of subsistence during the evil days and fatal period of old age. He moreover increases his productive power by having some capital to rely upon, the revenue from which, whatever it may be, increases his daily earnings. Possessed of greater freedom, he is less anxious to offer his labor to others, and more easily discusses the conditions of its sale.

—2. The advantage to society is two-fold. There are fewer unfortunates left to the care of society, in which the proportion of poor people exceeds that of the rich. Then—and it is a great service rendered by the savings banks, which certainly have prompted and favored in many minds the desire to save—these banks utilize a capital, which without their continuous action would remain absolutely unproductive. Very small savings are not invested until they have increased to a certain amount, which varies greatly with individuals, times and places.

—Close observation and investigation in many places, and the very nature of things prove to us, besides, the reality of the fact that savings, small, very small, when we consider the amount saved by each individual, assume in the aggregate proportions of enormous importance, as is shown by the official reports of the savings bank. Society is therefore indebted to savings banks for the enjoyment of a considerable amount of capital, which, without them, would be, like the stone which Horace advises avaricious men to substitute for their treasures, hidden in an absurd barrenness.

LOUIS LECLERC.

BANKS, History and Management of Savings,

BANKS, History and Management of Savings, institutions established without capital by philanthropists, where the economies of the poorer classes are received and invested, so as to return a profit and be payable on demand or at short notice.

—They are managed by trustees without salary, who have no interest in the profits of the business, which are credited or paid to the depositors at stated intervals, and when credited, become new capital which is re-invested and earns interest the same as a fresh deposit, and this operation goes on as often as dividends are declared and are allowed to remain uncollected.

—Savings institutions are essentially the banks of the poor, where they can safely place their temporary surplus and feel that their deposits will be returned with whatever additions they can be made to earn consistent with that safety. The proceeds of labor converted into capital by depositors in this way, are made to produce a revenue without impairing the original sum, and go on increasing, while the owner is engaged in the production of other surplus, which he can convert into capital with similar results. Such accumulations earned by individuals tend to distribute property among the masses of the people, to the extinction of pauperism, to produce comfort and happiness, to encourage education, and to the general enlightenment of the individual and the community where they exist; besides, the cares which accompany their possession sharpen the mental faculties, and incline to enlarge the moral perception of the owner. So manifest had this become late in the last and early in the present century, that efforts were then made to encourage habits of economy and thrift among those who had never enjoyed their fruits and knew nothing of the benefits of saving for themselves.

—The first publication in England on the subject of savings banks is attributed to Jeremy Bentham, in whose plans for the management of paupers he included a system of "frugality banks."

—Among those who first interested themselves, practically, was Mrs. Priscilla Wakefield, the superintendent of a "friendly society for the benefit of women and children," which, in 1801, combined with it a bank for savings for their benefit.

—In 1810 the Rev. Henry Duncan established at Ruthwell, in Scotland, a "parish savings and friendly society," which more nearly resembled a modern savings bank than anything which had been previously established. It was brought to the public attention by a publication of its system, and the details were received with so much favor that in 1817, when the first act of parliament was passed which established the system under government control, 78 private societies, which received and invested the savings of the laboring poor, were in operation in England, Ireland and Wales.

—In 1805 savings banks were first opened in Switzerland, at Zurich.

—The first institution in France was opened in Paris in 1818. Since then they have extended into nearly every European state.

—The philanthropic spirit was displayed in the colonial history of this country, and found expression in efforts to fix by law the price of articles of necessity, and the wages of mechanics and laborers; but experience demonstrated that such regulations were detrimental to the interests of the people they designed to serve; afterward lotteries with charitable designs were legalized, and charitable societies for the protection and support of members who might be in need of assistance, by reason of sickness or accident, and for the relief of destitute widows and orphans of deceased members.

—In 1803 a petition was presented to the legislature of the state of New York, praying that sundry persons might be incorporated into a society, with power to build workshops and purchase materials for the employment of the poor.

—The present political society of Tammany or Columbian order in the city of New York, was incorporated in 1805, as a charitable institution, for the purpose of affording relief to the indigent and distressed members of the association, their widows and orphans, and others who may be found proper objects of its charity.

—Many benevolent and charitable societies were incorporated in the New England and middle states in the next decade, some of them fulfilled the designs of their founders to a limited extent, but all failed to accomplish anything for the permanent well being of those they intended to benefit: instead of helping the beneficiaries so that at some time in the future they would take care of themselves, they ministered to present wants only, which were ever recurring and were never fully satisfied; with every succeeding dispensation the receivers became more dependent, finally lost their own self-respect, and were really becoming paupers; the disease had been aggravated by improper remedies. Experience demonstrated that, in most cases, temporary relief resulted in entire dependence, and the number of poor instead of decreasing was stimulated to increase; it was learned, that as soon as it was known in a community that anything could be had without labor, that soup, fuel, clothing or shelter could be had without cost, that moment the moral standard of the neighborhood was lowered, and when the way of supply was made plain by individuals, societies or the state, all further efforts on the part of recipients to earn their own living were abandoned, not only for the part gratuitously offered, but all honest work was given up, and ingenious schemes were resorted to in order to obtain the greatest amount possible; time and labor were wasted, which if they had been directed by honest efforts would, in most cases, have comfortably supported the degraded persons and their families.

—Having learned this plain lesson taught by experience, a class of philanthropists resorted to the system to help others to provide for themselves, by teaching the poor to acquire habits of thrift in laying aside some part of their earnings in a time of prosperity, to provide for future wants in the days of adversity or old age.

—The ideas which inspired the founders of the first savings bank incorporated in the United States, the one at Boston, in 1816, are well expressed in their announcement of intention to apply to the legislature of Massachusetts for an act of incorporation. They say: "It is not by the alms of the wealthy that the good of the lower class can be generally promoted. By such donations encouragement is far oftener given to idleness and hypocrisy than aid to suffering worth. He is the most effective benefactor to the poor, who encourages them in habits of industry, sobriety and frugality."

—This, the Boston provident savings institution, was incorporated Dec. 13, 1816. thus giving to the United States the honor of first sanctioning by law these most useful institutions.

—The Philadelphia savings fund society had gone into voluntary operation in the same year, but was not incorporated until Feb. 25, 1819. The savings bank of Baltimore was incorporated in December, 1818; the Salem (Mass.) bank in the same year; the bank for savings in New York, March 26, 1819, and in the same year also, the society for savings, Hartford, Conn., savings bank of Newport, R. I., and Providence institution for savings, R. I.

—All of these institutions are still in existence, and the latest annual reports show them to be in a flourishing and prosperous condition, the results of honesty and common sense in their management which have characterized them from the beginning.

—The method of operating savings banks is not the same in all the states where they exist. In some they take the form of a society, with power to add to their membership, and with perpetual succession, a certain number of members are yearly chosen by ballot to act as managers, these managers elect their own officers, make rules and by laws, and alter or rescind them at pleasure.

—In others the corporators are a limited number, and are themselves trustees with power to fill vacancies, and are responsible for the management to state authority, to which they report at regular intervals, which reports are published. In some they do business under special charters, in others under general laws to which every institution in the state conforms; this last system is growing in favor as supervision is simplified, so that superintendents or commissioners familiar with the one law, can easily determine if investments have been made in prohibited securities or generally in too great amounts on permissible ones.

—The laws in the six New England states in relation to savings banks are very similar, although in some banks the managers are more conservative in their practice than in others. All invest to some extent in United States bonds, in bonds and mortgages on real estate, in national or state bank stocks, state, county, city, town or village bonds, loans on personal security, in railroad bonds, and some in railroad stocks.

—Most of the banks are operated under special characters, but in some of the states general laws have been enacted, to which savings banks may conform if they so elect.

—The general law of Massachusetts is similar in many of its wisest provisions to that of New York, but as the old chartered institutions of the former state are not required to conform to it, its full benefits are not realized. All banks pay a tax on the average amount of their deposits to the treasurer of the state in which they are located. In Massachusetts this tax is ¾ of 1 per cent. per annum, payable semi-annually.

—Banks in all these states loan on bond and mortgage on property located in nearly every state in the Union. They may invest in, or loan on, one-quarter of the capital stock of any one bank (state or national), provided the sum is not more than 10 per cent. of their deposits, nor more than $100,000, but they may deposit in addition on call in such bank, 20 per cent. of the amount deposited in the savings bank, so that in case of the failure of the state or national bank the savings bank would become liable as a stockholder for its debts over and above the amount of capital stock owned by it, and would be obliged also to take its chances with all other creditors in recovering the amount on deposit in the failed bank. To illustrate the effect on a savings bank of the failure of a national bank in Massachusetts, let us take a savings bank having $1,000,000 due its depositors, which has invested and deposited the sums permitted by law, viz.:

Say 10 per cent. of deposits invested in stock...	$100,000
Say 11 ability equal thereof...	100,000
Say 20 per cent. of its deposits placed with the bank	200,000
Would make the amount involved...	$400,000

Or 40 per cent of its assets. This seems a dangerous section in the law, and the risk is not diminished, if, as is often the fact, any number of trustees in a savings bank are at the same time directors and stockholders in the national bank.

—The amount of savings bank deposits are present invested in, and loaned on bank stocks, and on deposit in national and state banks, is 14 per cent. in the New England states.

—Town and village bonds are not usually desirable securities, for the reason that they are required under state laws to be issued in a prescribed manner, and if all the forms have not been complied with, and the burdens bear too heavily on the issuing towns or villages, the interest usually ceases, and the principal remains unpaid at maturity.

—In the case of a village in Maine, which issued its bonds in aid of a railroad, (the usual reason for such issues), when the burden on the taxpayers became heavy, the selectmen concluded to leave their creditors in the lurch, and arranged the property in the town so that it would be valueless for even a combination of their creditors to take it. They then repudiated the interest on their bonds, and when the holders offered to take 50 per cent. of their dues, they still declined to pay, thinking to settle for less if they kept them waiting long enough.

—The effect is, that nearly every city and town bond in the state sells at a reduced price, most of them below par, and savings banks are the largest sufferers by the decline.

—The court of appeals in the state of New York, the court of last resort there, has just decided in the case of Cagwin vs. The Town of Hancock, that the town was not liable on certain bonds and coupons, issued in aid of the New York 8 Oswego Midland R. R. Co., because the tax-payers of the town, representing more than half of the property, had not consented to their issue, and that they were null and void in whatever hands they might be found, although the plaintiff insisted, which was not contested, that he was a bona fide holder for value, and that the affidavit of the assessors that a majority of tax payers, representing the major part of the property, had consented, which was conclusive evidence that the requisite consent had been obtained, and that such affidavit attached to the consent was recorded in the county clerk's office, and was a decision in the nature of a judgment. The court held that the affidavit of the assessors was not conclusive evidence and might be disproved, as it was. Under this decision no savings bank can safely hold town bonds in that state, unless it attends the town meeting at the time the vote is taken, knows every voter by name and the assessed value of his property, and can produce evidence that a full majority voted in favor of bonding. Even with this knowledge, it should also know that the meeting was properly called and due notice given according to law.

—Loans on personal security to the extent of one-third the amount held by savings banks may be made in the New England states with two sureties, i.e., they may discount indorsed notes, not, according to the custom of banks of discount, those having two or three months to run, but they may loan on notes running one year. It is only necessary to mention this form of investment, comment is needless; the practice is unsound and should be discarded. Loans on bond and mortgage have always been thought the best kind of security for trustees and executors. We have inherited this notion from our old world ancestors, and the idea suited the fathers in this country because, in earlier times, land was the most abundant thing of value to offer for the less abundant commodity money, which was a necessity, though to a less extent. Banks were permitted to issue notes to be used as money based on mortgages on land. A land bank was organized in 1740 at Boston. Each stockholder made over to the directors an estate in land for which he received its equivalent in bank bills which passed as money, the provisions for the payment of interest and a certain part of the principal per annum were very stringent, and yet the bank came to grief, its mortgage securities being insufficient to realize enough to pay its debts. Widows and children were large sufferers, and twenty-eight years after its organizations, and many years after its failure, creditors were still clamoring for their just dues from the few remaining stock-holders who were solvent. With such examples on their historical records. New England savings banks have loaned large sums on bond and mortgage belonging to other widows and children, not only to people in their own states, but in all parts of the United States, with similar results. The truth about mortgage loans is, that the value of land in this country is as changeable as that of most other security. When it is said that land security can not run away, which is thought to be unanswerable, it is not to say overmuch, for the land may remain and still become unsalable or worthless for the purpose of realizing the loans on it years after creditors have ceased from troubling; and even when good for the loans. foreclosures may be delayed and auctioneers driven away as they have been, although the interest money was not paid for more than one term.

—To be good security for savings banks, mortgage loans should be taken on productive property, in the vicinity of the bank making it, at not more than 40 per cent. of its cash value, and receipted tax bills should be produced once a year, as well as certificates from proper authorities that no assessments remain unpaid. These mortgages should be made payable within one year, after which the bank should have the option of calling in the principal or any part of it. Not more than 20 per cent. of the bank's assets should be loaned in this way, and it should stipulate that both principal and interest should be paid in coin of the United States of the standard of weight and fineness fixed by law at the time the loan was contracted.

—Had similar conditions been made by savings banks in this country, many would have been saved from the disaster and ruin which came to them between 1876 and 1879 and which may yet come to others in the future. Railroad stocks, which by their nature never become payable and may never pay a dividend, which are liens, only after five or more mortgages, are eminently unfit for investments such as we are considering. Railroad bonds secured by a first mortgage to a small amount per mile, wholly within the state in which the bank is located, which have paid the stock of dividends for at least three successive years previous to their purchase, may be considered proper investments for savings banks; but the purchase of bonds issued by a railroad for its equipment, or to raise money to build or extend a road, because trustees know the men engaged in the enterprise and have confidence in their ability or integrity, is a mistake and should be prohibited. The prospects of the road may be first class, but, in this era of railroad building and managing, combinations and consolidations are too frequent, by which the small road with good prospects may become an insignificant feeder to a great system of roads, with a revenue insufficient to pay its fixed charges. In some instances sums large in amount are received, or allowed to accumulate on deposit. $40,000 in our bank and $34,000 in another are moneys of capitalists not of savings depositors. It should not be forgotten that these are benevolent and not charitable institutions, organized to assist those who are unable to take proper care of their own, who through poverty have no secure place, or whose savings are too small to be used singly to advantage. As a rule, owners of sums larger than $2,000 should be directed elsewhere for investment, and not put needless burdens on trustees who work without fee or reward, because it is easier to do it, than to look about for themselves when pasturage elsewhere is scanty, and government bonds pay but 3 to 3 1/3 per cent. They are the ones, who, in a time of panic, when prices are depressed and money scarce, ask eagerly for their large deposits to buy the very securities which savings banks are obliged to sell at a loss to pay their deposits with. If the receipt of deposits from a single person is limited to $150 or $200 in any six months. and no interest is paid on aggregates above $2,000, it would have the effect to keep out capitalists and reserve the banks for their proper customers.

—BANK BUILDINGS. Extravagant amounts spent for palatial buildings to be used simply for banking offices, or even if a part of the bank if rented, has an ill effect on its depositors and the community. It is not only unwise and unjust to expend deposits or surplus in this way, but the example taught is unqualifiedly bad. When depositors see the costly buildings, and on entering are startled at the sumptuous furnishings, on lesson of economy or thrift is taught them, even if the portrait of Franklin larger than life is posted in a conspicuous place, with the motto "Save your pennies." They learn rather that trustees who build such banking houses are not the proper custodians of their savings, and if they are wise they will go elsewhere than to a bank that has cost $600,000, or even $500,000, several of which exist in the empire state, for although they may be unable to cipher it out, they know there must be a great loss of interest, and it could with truth be told them, that 10 per cent. per annum is not too much to estimate for interest, taxes and repairs, and if the building cost $500,000, $50,000 must come off their dividends annually, and if the deposits are $10,000.000, it is equal to one-half of 1 per cent. on each depositor's credit in the bank.

—SALARIES. This is an item well worthy of notice. With the exception of the executive officer, who devotes the principal part of his time to the interests of the institution and has charge of the internal management, no trustee should receive a salary or fees. Neither the secretary nor treasurer, who with the president jointly, should have charge of the bank's securities, should be a trustee, the influence of one salaried man in the board is enough; when the question of compensation to under officer or clerks is under consideration, it should be settled on its merits, and not with the bias that one must always feel for another of the same guild. The qualifications of a trustees should be integrity and capacity; honesty and common sense will enable any board to discharge its duties in a way that will place it above just reproach. Trustees should be selected from a class of men who have "made their way," soberly and honestly in the face of competition; these men know the value of money and how to use it economically. Great bankers are not required. Speculators should be kept out, for it is the principal sum that must be guarded, large profits are not to be sought.

—Directors and stockholders in banks of discount in which any part of a savings bank's available or uninvested funds are kept, should not be trustees of the savings bank, as their interests are opposed to their trusts, and they are interested peculiarly in having the sums deposited as large, and the interest paid for their use as small as possible, and when the trustee is called upon to vote, the director's interest comes up, so that he should not be required to submit to the temptation; his eligibility for one of the offices should be abolished. Directors of a corporation have been known to vote as trustees to loan the money of their savings bank in order to buoy up their sinking concerns, which resulted in the ultimate failure of the savings bank without saving the corporation. Trustees should never forget that the funds they manage belong to others, who have put them in their charge to be invested, so that the principal sum, at least so far as human foresight can determine, will be secure: trustees have no moral right, even if they are within the law, to take risks which as business men using their own capital they could afford to do. If errors are to be committed let them be on the side of security.

—Investments worth more than par are very desirable on account of their salable value in case of need, but the premium paid should never be counted among the assets, but be regarded as a bonus paid for the guarantee that the bonds are good for their face at maturity, which is all that can be received, and that the interest will be regularly paid.

—EXPENSE OF MANAGEMENT. This should be reduced to the minimum of safety. Large salaries, expensive bank buildings, incidentals, like coal, gas, janitor's wages, expensive stationery and the extravagant use of it, swell the expense account to 1 or more per cent. in some banks outside of New England, while there, notwithstanding the payment of large taxes, the average in most cases is not much above ¼ of 1 per cent; this amount, or, in large cities 1/8 of 1 per cent., is the most that needs to be expended.

—The business of savings banks should be confined to legitimate functions, that is, receiving, investing, and paying again, proper deposits, under suitable regulations. Accounts of business people, small traders and others, who requires interest on monthly balances, draw checks at sight without the production of the bank book, who deposit notes and drafts for collection, should be refused; buying and selling domestic and foreign exchange should be prohibited; all belong to banks of discount which are liable to general taxation, from which savings banks, as benevolent institutions, are in great part relieved. New England savings banks are properly taxed by their states because they are permitted so wide a range of investments, and receive a higher rate of interest than in New York for example, where they are more restricted in investments and are mostly untaxed.

—The practice of paying a premium on deposits arises from a desire to get new customers and increase the aggregate amount. Notices are posted in many institutions, that deposits made on the 10th day of January or July will commence to draw interest from the 1st day of those months. This is unfair to those whose money is in the bank on the first day, as it must earn dividends both for them, and the sharper customer who is making 10 days' interest for himself elsewhere, but who can, by making a deposit on the last day, claim a dividend for the days already passed, and so make his capital earn two dividends, although it was employed in but one place. The custom also tends to induce slothful habits and laxity in business, as there is nothing to be gained by promptness, for the profit is the same whether one gets to the bank 10 days earlier or later. Larger aggregates of money are presented for deposit on the first 10 days of the half year to nearly all the large institutions in New York, although some of the banks refuse to credit them as deposits of the first day.

—SURPLUS. The question of surplus to meet loss and depreciation in values, is attracting attention in all the states, although in the banks of some of them this important provision is over-looked, in others, a very small percentage accumulated gradually is considered sufficient.

—In New York the general savings bank law forbids the payment of more than 5 per cent.—it may be less—interest per annum, until the surplus, estimating all securities that are worth it at par value, and those of less worth at the market value, amounts to 15 per cent. After this surplus is secured, extra dividends must be declared as often as once in 3 years out of the excess. When this time arrives, all accounts should be classified according to the length of time the money has been in the bank so that accounts only 6 months old should receive a less proportion than others, the credits of which have been one or more years in possession of the bank, as it is evident that the surplus will have been earned with undisturbed balances, and that recent accounts will have had no share in making the accumulations. If some such plan is not adopted, the best banks will be overloaded with money 3 or 6 months before extra dividends are declared, by persons determined to get a large interest for their capital, and who have not accepted the more moderation rate while the surplus was accumulating, and who, therefore, have no moral right to participate in extra profits which their capital did not earn.

—Some instances of savings bank failures have occurred in this country through the dishonesty of officials, and many losses have been incurred by the rascalities of clerks which they were enabled to accomplish by false entries. Nothing is more detrimental to the welfare of an institution that a slovenly or careless method of keeping accounts. Monthly examinations by trustees should be the inflexible rule, and the balance due depositors in dealers' ledgers should agree with the total deposits as shown by the general ledger, which should be confirmed at least twice a year when all accounts are listed.

—In the larger cities where silver is refused, and the banks receive only gold or its equivalent on deposit, those securities should be preferred as investments which by their terms are to be repaid in gold of the present standard of weight and fineness, and in drawing mortgage instruments, clauses should be inserted whereby both principal and interest should be paid in like coin. As only gold or its equivalent is received, if the time should come when depreciated silver has to be returned, depositors will have good cause to complain that their trustees did not manage wisely, and there may be a responsibility fastened on the latter which it will be difficult to get freed from.

—Failures among savings banks have generally occurred in the past on account of competition between them to pay large dividends; primarily this was the fault of legislatures in chartering too many institutions. In the city of New York, between the years 1867 and 1870, 20 new savings banks were chartered; 7 were located on one avenue, 5 of them failed before 1876. From 1819, when the first one was chartered by the state, to 1867, a period of 48 years, 22 new banks were established in that city, and nearly all were doing business at the last date. In the four years first named this number was nearly doubled, although it was afterward proved that the public necessities did not require them, as the entire assets of the 20 new banks in 1875 fell short of the deposits in a single bank of the better class in that city.

—Savings bank charters in the days of the "ring," were made a means of payment for political services, and places of trust and honor in the banks were often given as rewards of partisan merit. The desire for new banks became an epidemic, and the legislature yielded to the solicitations of interested parties, and granted special charters with little or no reference to the qualifications of the incorporators for taking care of the people's money. They soon demonstrated their incapacity by buying low-priced securities which promised large dividends on the sums invested; they fitted up expensive offices with extravagant furniture, built costly banking houses, paid round salaries, advertised largely agreeing to pay high rates of interest, which promise was kept as long as sufficient deposits could be kept available, but soon there came a chilling frost and nipped those flowers in the bud, states defaulted on their mortgages, towns repudiated and failed to pay interest on their bonds; depositors heard of these things and asked for their money, then the climax was reached and the receivers stepped in and took possession.

—The percentage of loss by depositors, to the total deposits, has been small, still many individual cases of hardship have occurred, but they are not likely to be repeated from the same causes.

—Deposits in savings banks are left there by their owners against a time of need, in many cases they remain undisturbed 10 and even 20 years to accumulate interest and increase in amount: the depositors have no voice in the management of their funds nor in the election of trustees; the state, therefore, is bound to exercise a strict supervision over the investments and practices of the latter in order to correct illegalities of every sort.

—Sound laws are indispensable as guides, and proper authority should be invested in superintendents and commissioners, which they should not fail to exercise in case of need: much depends on good laws, more on their administration, but most of all on trustees themselves. A careless or foolish board may wreck an institution beyond hope of redemption before the supervising authority can have knowledge of the damage.

—The largest and most successful banks now doing business, have been managed by prudent trustees, in a way that excites admiration and profound respect, but they have been conducted in the same way for 30 to 60 years, their present prosperity being attained by early economy and strict attention to right principles. Attempted rivals have come to grief, because they disregarded these requisites; they saw results but did not care to inquire how slowly they were obtained, they plunged into extravagances from the start, they had no idea of savings and lost all in speculating.

—The general savings bank law of 1875 with its amendments, in the state of New York, is undoubtedly the best in existence in this country; some modifications, which have been suggested in the course of this article, might still be made. Its best features have been adopted in other states, and it would be for the interest of all if this was general in every state. Its prominent provisions are. All savings banks must conform to the law, old charters are repealed where their provisions conflict with it; the organization of new banks is thus restricted; notice of intention must be published previous to filing the certificate, in the local papers, and all savings banks in the county must be served with a copy. The superintendent is then to ascertain whether the proposed bank is needed, whether there is a population sufficient to promise success, and whether the proposed corporations are men who can command confidence; if not satisfied that the proposed institution will be a public benefit, he is to refuse his consent.

—The trustees' meetings are to be held at least monthly, at which the president or one of the vice presidents must be present to from a quorum.

—A trustee who fails to attend six consecutive meetings of the board unless he has been previously excused, or who becomes an officer, clerk or employé in any other savings bank, or upon borrowing directly or indirectly any of the funds of the bank, or becomes a surety for any money borrowed or loan made by his bank, vacates his office. Deposits shall be repaid after demand, in such manner and times as trustees shall prescribe, of which notices shall be posted in the banking room and printed in the pass books.

—Trustees may limit deposits in amount, refuse to receive them, or return them after deposit, in their discretion. Deposits to the credit of any one individual or corporation shall never exceed $3,000 in the aggregate, unless made prior to the passage of the act, or in pursuance of an order of court.

—Deposits made by a minor or a female, are subject to their exclusive control, except creditors, and shall be paid, together with dividends thereon, to the person in whose name the deposit was made. Deposits made by one person, in trust for another, unless written notice of the existence and terms of a legal and valid trust shall have been given to the bank, may, in the event of the death of the trustee, be paid to the person for whom the deposit was made.

—Investments may be made only: in United States bonds; three-sixty-five District of Columbia bonds, stocks or bonds of the state of New York bearing interest, and of any state which has not for 10 years previously defaulted in the payment of principal or interests on any debt authorized by any of its legislatures. In bonds of any city, county, town or village of this state, issued under state laws, or in any interest bearing obligations of the city in which the bank is situated. In bonds and mortgages on unencumbered real estate, situated in the state, up to 50 per cent. of the value of improved, or 40 per cent. of unimproved or unproductive property; but no loan shall be made except on a report of an investigating committee, which report shall certify to the value of the premises and be filed among the records of the institution; not more than 60 per cent. of the deposits shall be invested in mortgages. In real estate necessary for the bank's business, a portion of the building not required may be rented. The total cost of the buildings, and lot must not exceed 50 per cent. of the bank's net surplus. In real estate purchased under foreclosure of mortgages, but such real estate shall be sold within 5 years, unless the time is extended by the superintendent of the bank department on application of the trustees. To meet contingencies, 10 per cent. of deposits may be kept on hand or deposited in state or national banks or trust companies, provided the sum deposited in any one does not exceed 25 per cent. of the paid up capital and surplus of such bank or trust company. In case of insolvency in depositories, savings banks are preferred creditors for the full amount of their lawful deposits in state banks, and in trust companies after a small class of accounts. They may loan on securities they are authorized to purchase, up to 90 per cent. of their market value, and not above their par. Interest is restricted to 5 per cent., until after the surplus is 15 per cent., estimating securities at par value, or, at their market value if it is below par, when, at least once in 3 years, the accumulation beyond is to be divided as an extra dividend. Trustees may classify their depositors, according to the character, amount and duration of their dealings with the bank, and regulate all dividends, so that each shall receive the same ratable proportion as all others of his class.

—Loans upon notes, bills of exchange, drafts or any other personal security whatever, are forbidden, as well as buying or selling exchange, gold or silver, or collecting or protesting promissory notes, or time bills of exchange, or to deal or trade in any goods, wares, merchandise or commodities whatever, except as authorized by the terms of the act, and except such personal property as may be necessary in the transaction of the bank's business.

—It is unlawful to allow interest on deposits for a longer time than they have been in bank, except 10 days of grace, at commencement of semi-annual interest periods, or 3 days at the beginning or end of any month may be allowed.

—No dividends or interest shall be declared or paid except by a vote of the board of trustees duly recorded, and trustees voting for a dividend are made personally liable for the amount voted for unless it has been earned and appears to the credit of the bank on its books of account.

—Trustees acting as officers, who give regular and faithful attendance at the bank, may receive such compensation as a majority of the board deem just and reasonable, but such majority shall be exclusive of the trustee to whom compensation is voted.

—It is unlawful to pay trustees for their attendance at board meetings.

—A committee of trustees must examine the books, vouchers, assets and affairs generally of the savings bank, twice each year, i.e., in January and July, and report to the bank department, on or before the first of February and August in each year, under a penalty of $100 per day, for each day's delay beyond the time; this report must give a list of bonds and mortgages, and location of the mortgaged premises, and of such as have been paid, wholly or in part, or have been foreclosed, since the previous report; the cost par value and estimated value of all stocks or bonds owned, with a detailed statements of each particular kind; the amount loaned on the pledge of securities, with full details of each kind, and the amount invested in real estate, and cost of same; the amount of cash on hand, and in banks or trust companies, with the names of depositories, and the amount in each; and any other information the superintendent may require. The report shall also state all the liabilities, the amount due depositors, any debts or claims against the corporation, which are or may be a charge upon its assets. The amount of interest or profits received must also be stated, as well as the amounts credited or paid to depositors, the number of accounts opened and closed during the half year, and the number remaining open at the end. All reports must be verified by the oath of the two principal officers of the institution, and the statement of assets shall be verified by the oath of a majority of the trustees who examined the same. Any willful false swearing regarding reports to the bank department, shall be deemed perjury, and subject to prosecution and punishment prescribed by law.

—The superintendent of the bank department is required to make to the legislature, on or before the first of March, in each year, a statement of the condition of each bank that has reported to him, and to compile the whole. This report is afterward printed by the legislature with every detail.

—The superintendent is required to visit in person, or by agents, and thoroughly examine each bank once in two years, and oftener, at discretion, and whenever he is satisfied that any one is violating law, or following unsafe practices, or whenever it appears to him to be unsafe or inexpedient for it to continue business, he shall communicate the facts to the attorney general, who shall institute proceedings, which may look to a removal of trustees, to consolidation with another bank, or to such other relief as may be required.

—It is unlawful for any bank, banking association or individual banker, to advertise or put forth a sign, as a savings bank, or in any way to solicit deposits as a savings bank, under a penalty of $100 for every day such offense is committed.

—The development of savings banks in the New England and old middle states is simply enormous; from one, with a few thousand dollars, in 1816, they have increased to 594, with $824,515,162 of deposits, belonging to 2,416,280 depositors. Institutions of the name do business in nearly all the states, but as they are organized with capital, do a general banking business, and receive the largest sums of capitalists on deposit, they are not considered in this article or as belonging to the system. From the imperfect data attainable, some states not requiring reports to be filed, and there being no uniformity among those which do require it, the table on this page is compiled.

—The amount invested in and loaned on United States bonds is shown to be $199,675,922, no inconsiderable part of the public debt, which is a sufficient guarantee that the public faith with its creditors will be maintained unimpaired.

—The largest and among the oldest banks in the country, the Bowery savings bank, in the city of New York, chartered 1834, has 89,922 depositors, and $37,435,877 deposits, and total assets of $39 217,977, showing a surplus of $1,782,100, estimating the securities at par value; estimating them at the market value it is more than four times as much. $22,671,000 of these assets are invested in United States bonds at par value.

—The high place that the savings banks occupy in the states named, can not be over estimated; they are important regulators of the moral health of communities, they prevent crime, discourage pauperism, and lessen the tax-burdens of the people. Wherever a well managed institution exists, the people are industrious and thrifty; every week, on the days that wages are received, the bank is thronged with depositors; but their use should be still better understood, the cumulative nature of interest needs to be explained, and impressed upon the minds of the young and the poor, for many persons go through life without knowing anything of the fact that their savings may be made to earn money as truly as their labor. There are many states where savings banks have no existence, which present wide fields for benevolent labor, and which are well worthy the attention of the enlightened and philanthropic economist and statesman.

—SAVINGS BANKS IN THE UNITED KINGDOM. Like similar institutions in the United States they have been subjects of special legislation, but since 1863 all are managed under an act passed by parliament in that year. Every savings bank is certified under its provisions, and no other institution can take the title of "Savings Bank certified under the act of 1863." They are managed by boards of local trustees, none of whom are allowed to be depositors. At least two persons are required to be parties to every transaction with depositors; every officer must give good security for the faithful and just execution of his duties; one or more auditors, independent of the board of trustees, must be appointed by them, who shall examine the books and report in writing to the trustees the result of such audit, not less than twice each year; also at the close of each year examine an extracted list of the depositors' balances, and certify to the assets and liabilities of the bank, such extracted list to be open to the inspection of any depositor as regards his own account.

—The depositor's pass book must be compared with the ledger on every transaction of repayment, and on its first production at the bank after the annual balance.

—The trustees are required to hold meetings at least twice a year, and keep proper minutes of the proceedings; also to make weekly returns to government of business transacted, and render annually such general statement of the funds, etc., as the commissioners for the reduction of the national debt may require. If these regulations are duly complied with, the trustees are free from personal liability.

—Savings banks may receive from individual depositors any sum up to £30 in any one year, or £150 in all, which, with interest credited, may run up to £200, when interest shall cease. From charitable societies or penny banks, £100 in one year and £300 in all, or without limit if the government officials give consent. From friendly societies, duly registered, deposits without limit either as to time or amount.

—No person is permitted to have more than one savings bank account. Every person on opening an account in a savings bank is obliged to testify in writing that he has no other account, and is not entitled to any benefit from the funds of any savings bank; any violation of this law within the United Kingdom works a forfeiture of his whole deposit or benefit, to the government.

—These deposits are all to be placed in the bank of England, or the bank of Ireland, to the credit of the commissioners for the reduction of the national debt, who invest them in government securities, paying the bank £3 per cent. interest on the same.

—The trustees of each bank allow their depositors such interest as they think proper, not exceeding £2 15s. per cent.; with the difference they must pay all expense of managing their bank.

—To secure depositors whose balances amount to £200 from loss of interest, trustees may invest for depositor's benefit that, and any larger sums in any manner that may be desired, with the approval of the trustees, but at the depositor's risk. By an act of parliament passed at the last session, any depositor in a savings bank, besides having under £200 there, drawing £2 15s. per cent. interest, has the additional privilege of depositing any sum from £10 to £100 in a year or £300 in all, for the purchase of government stock. The bank and the national debt commissioners will effect purchases and sales for investors at the market price of the day, charging them a small commission for each transaction, viz., 9d. for £10; 1s. 3d. for £50; 2s. 3d. for £100, investors to take the risk of fluctuations in market value.

—The returns for November, 1878, show that there were 458 banks with £44,255,890 deposits, due to upward of 1,500,000 depositors; the expense of managing averages about 1/8 of 1 per cent. The surplus in commissioners hands was about 7/8 of 1 per cent.

—The banks vary in size; nearly half the number have under 1,000 depositors, while several have over 50,000, and one, the National Security savings bank, of Glasgow, has 110,051 depositors, and £3,288,448 due them. The most successful banks are those which are open for business daily at convenient hours, where money is paid on demand without notice; which have branch offices and conduct their business with freedom from unnecessary routine. In Glasgow the bank named has a head office and four branches open daily from 10 to 3, and three evenings a week from 5 or 6 to 8 o'clock. In Manchester there is a head office and three branches; in Liverpool, a head office and two branches; in Edinburgh, a head office and two branches. All these are open during the same hours. In London there are several large banks, also at Exeter, Leeds, Sheffield, etc.

—PENNY BANKS are feeders to the ordinary savings banks; their work is elementary and educational. In some towns they are associated to promote harmony of action, the formation of new ones, and for general efficiency. In Glasgow there are 209 such banks with 55,744 depositors, and in Liverpool 119, with 33,674 depositors; all are conducted on the same principles. Each is an independent institution connected with some school or religious body, and under the management of a small number of trustees, who guarantee the depositors against loss and appoint the officials. They are generally open one or two hours on one evening a week and are conducted almost entirely by volunteers. Any sum from one penny upward is received, and wherever any depositor has saved a pound sterling, that sum is transferred in the depositor's own name to the savings bank. By this process the trustees diminish their responsibility, and their depositors are taught the way to the savings bank. These little banks do an incalculable amount of good in their modest way. In and around Glasgow last year £17,686 were thus transferred, and in Liverpool £5,296. Statistics show that 921 permanent savings bank depositors were trained during the year by the Liverpool penny banks.

—The attention of educators has been directed toward the policy of giving some instruction in the principles of thrift in the elementary schools. The results are shown in the annual reports of the Glasgow and Liverpool penny banks already cited, and it is found that, not only are children easily taught, but that parents are induced by their children also to save and open accounts in the banks.

—POSTOFFICE SAVINGS BANKS were established by act of parliament in 1861. On Sept. 16 of that year 301 were opened in England and Wales. They were chartered to meet the growing wants of the people for a place of security for their savings, and to give facilities to those who lived in places remote from any trustee savings bank. Losses had occurred, the result of fraud and embezzlement on the part of the officers of the last named institutions, for which trustees could not be held responsible; efforts to reform existing abuses resulted, in the year stated, in the establishment of the new system without arbitrarily interfering with the old. Certain postoffices in the United Kingdom are designated, which at present includes nearly all the money order offices, where the deposits of one shilling or its multiples are received. The law relating to the amount that may be received from one person and its accumulations, is the same as that in force with regard to other savings banks. The depositor receives a passbook in which his deposit is entered, and the postmaster general is notified by the official on the same day, and he acknowledges it to the depositor within 10 days.

—The money is invested by the national debt commissioners in the usual way, in government funds. Interest at the rate of £2 10s. per cent. per annum is allowed on amounts of £1 or any multiple, up to the maximum amount allowed to be deposited by one person. The government is responsible for the repayment of all moneys received at designated postoffices, so that depositors are secured against the dishonesty of officials. A depositor may apply for repayment at any postoffice savings bank in the kingdom, and may direct payment to be made to him at that, or any other postoffice bank. His order is forwarded to the postmaster general in London, and after waiting two or three days, he receives a warrant on the designated office, which he presents, together with his passbook, and receives the money.

—These banks seem to grow in favor year by year; they are admirably adapted for the rural districts, small towns and villages, but the formality and delay inseparable from postoffice repayments, also the postman's visit with letters, revealing a postoffice account to the household, and often to the neighborhood, make them undesirable for many of the dwellers in large towns and cities. They are preferred in localities where the old savings banks are only open a few hours a week, while the postoffice banks are open every day during business hours. They pay ¼ per cent. per annum less interest; but the security is considered better for reasons before stated.

—In December, 1878, the number of depositors in the United Kingdom was 1,892,756, of whom 1,773,010 were in England and Wales, 51,107 in Scotland, and 68,639 in Ireland. The balance standing to their credit was £30,411,563, the average balance to each being £16 1s. 4d., and the total amount of interest paid in the year £699,603. The number of deposits was 3,360,636, and the number of withdrawals 1,304,616.

—The average daily number of deposits was 10,982, but one day they numbered 24,217, the amount deposited being £80,096.

—The success of postoffice savings banks in the United Kingdom, and their introduction in other European countries, have attracted attention in the United States, and the late postmaster general recommended their adoption by the United States government as a means of funding the national debt. If this scheme should be resorted to, the government would be obliged to offer a fixed rate of interest. United States bonds having 25 years to run, are selling in the market at a price that pays the investor but a fraction over 3 per cent. per annum, and if a series should be issued to run an indefinite number of years at the pleasure of the buyer, as savings bank deposits do, they could be easily negotiated at par or above it, if they bore 3 per cent. per annum interest. This is the maximum rate that the government needs to pay when it wishes to borrow: now to manage a system of postoffice savings banks, would cost the department at least 1/8 of 1 per cent., which deducted from the maximum rate, would leave but 2 2/8 per cent. for depositors. As the savings banks in the United States pay about 4 per cent., the government could not hope successfully to compete with them at this reduced rate.

—The conditions not being the same in this and European countries, is another hindrance to the establishment of postoffice banks: there, public debts increase; here, the people pay off the debt, and if this is continued at the same rate, in the future, that has ruled in the past 15 years, the funded debt will be entirely paid off in about 25 years; therefore it is evident, that the debt, on which it is proposed to found these institutions, being temporary, the institutions themselves would be short lived.

—Looking at the matter from another standpoint, civil service reform would have to make further progress before it would be possible to induce the two million savings bank depositors, or two other millions, to place 824 million dollars into the hands of the postmasters of the country, and the government would require a higher standard of capacity for these officials than mere party loyalty before it could afford the risk of transit for so large a sum.

—MILITARY SAVINGS BANKS, and SAVINGS BANKS FOR SEAMEN, have been established in the United Kingdom for the benefit of soldiers and sailors, and as auxiliaries to the general system.

—The statistics are not important, and do not show anything of the thrift of these classes; those among them who desire to save usually prefer to go to the ordinary banks.

—SAVINGS BANKS IN FRANCE. The first institution was a joint stock society established in Paris under the name of the "Caisse d' Epargne et de Prévoyance de Paris" in May, 1818, modeled after the English savings banks. Similar banks were established at Bordeaux and Metz in 1819, at Rouen in 1820, and at Marseilles, Brest, Nantes, Troyes, etc., in 1821. The founders were the managers, and they constituted a close corporation; this method has survived in some savings banks, but it has been generally replaced by an organization in which the administrators are elected by the municipal council and of which the mayor is president.

—The personal liability of a joint stock association, became a source of uneasiness to the trustees who were d ing a work of pure benevolence, and the state, by law in 1829, authorized the funds to be paid into the treasury, which in 1837 was amended by ordering them into the government deposit and consignment office, a bank under direct control of parliament. On the 15th of June, 1835, the first organic law was passed in relation to savings banks. An amendment of June 22, 1845, reduced the maximum of each deposit from 3,000 francs to 1,500 francs, or 2,000 francs, including accrued interest. In 1851 a further amendment reduced the maximum to 1,000 francs. This limitation was owing to the fear of difficulty in paying cash in a time of crisis, which owing to injudicious management in 1848 (a time of revolution) has forced nearly all the banks into liquidation. In 1870 they had less trouble, which in Paris was altogether neutralized by adopting a measure which had been used with success in this country in 1857: this was to pay a percentage only of deposits on the first application, and require an interval of time for each successive payment, except in cases of extreme necessity on the part of the depositor, when the regulation was modified to the circumstances of each case. This clause de sauvegarde was embodied in the Sella law for savings banks and adopted by the Italian parliament in 1875. The trustees of savings banks in the United States are allowed by law to require 30 or 60 days' notice of intention to withdraw a deposit, which in a time of crisis they are obliged to take advantage of, and in a panic it usually stops a run on the bank if the institution is in a sound condition. At such times the great majority are influenced to ask for their deposits, only from fear that the early applicants will get all the money and leave them in the lurch. They know by experience, that if an unusual call is met at first by prompt payment in full, it is only a question of a few days when the bank will be compelled to suspend from lack of ready cash, if the demand continues. Their conclusions are right although they may not reason from the proper premises; but it is simply impossible to receive deposits and invest them and return the money on demand.

—By the law of April, 1881, deposits with accrued interest may amount to 2,000 francs, but when an account surpasses this sum written notice is to be sent to the depositor, and if, within three months following, the deposit is not reduced, 20 francs of it will be invested in rentes for his account without expense to him. Interest on the surplus will cease from the time written notice is sent. This law also provides that in time of extreme necessity the council of state may authorize the savings banks to make payments in installments as small as 50 francs at intervals of two weeks.

—All French savings banks are under state superintendence through its inspector of finance, and the government deposit and consignment office receives and manages the funds and pays 4 per cent. interest to each bank. The savings banks are, in fact, simple administrative agencies, intermediates, between the depositors and the government deposit and consignment office, where the money is received and increased by interest. Each savings bank receives 4 per cent. interest, which it pays to each depositor, less a deduction reserved for expenses, which is from 25 to 50 centimes, except in Paris where it is 75 centimes, i.e., ¼ to ½ of 1 per cent. in the provinces, and ¾ of 1 per cent. in Paris. Out of this amount, reserved for expenses, the best managed banks are enabled to create a surplus fund to meet crises and pay extraordinary expenses. Deposits of one franc and upward are received. The account of a mutual aid society may amount to 8,000 francs, or if the society is registered, the amount of the account may be equal to 1,000 francs for each member.

—Sailors on the maritime registry are allowed to deposit at one time the total amount of their pay on being shipped or discharged.

—Every depositor may have the whole, or any part of his account converted gratuitously into rentes, by his savings bank, and it may be authorized by the depositor to retain the securities and collect the interest.

—The funds deposited are payable on demand, certain delays of the treasury excepted.

—On making his first deposit each depositor receives a numbered book, in which is entered every transaction with the bank, and which is his voucher against the bank. No depositor can have more than one book, either in the same or different banks. If one violates this rule his deposits will be returned without interest, and he will be forever excluded from the savings bank.

—By a law of Aug. 23, 1875, the post-offices and tax offices can be employed as auxiliaries by the savings banks, and be authorized by the minister of finance jointly with the minister of agriculture and commerce, who has the savings banks in his department. A bank which obtains these aids in its district, possesses the advantages of having more agents spread over a larger territory, particularly in the country, and working every day through the postoffices, and in the smaller localities through the tax collectors, thus taking as assistants the receivers and payers of deposits, who do the greater part of the work, and are paid the moderate sum or 10 centimes for each deposit or draft, which is less than the amount reserved for the expense of each transaction by the savings bank, and it transacts its business by means of documents, and without handling coin, or incurring the risk of embezzlement, since the agencies, both postmasters and collectors, receive the deposits for the bank and pass the funds directly to the government deposit office, where the savings bank is duly credited with the proper amount. In the same manner the withdrawals are paid to the depositor, with the money furnished by the same office, and all the transactions with the savings bank are in writing.

—The convenience to the depositor is also augmented, and his deposits tend to increase by bringing the savings bank nearer to him. By the law of April, 1881, the postal savings banks received from the government 3¼ per cent. interest per annum, and will pay to the depositors 3 per cent. interest, beginning on the 1st and 16th of each month after the day of deposit. The majority of savings banks also have branches of their own; there were, in 1880, 521 banks and 736 branches, with about 3,838,000 depositors, and 1,281,000 of francs on deposit, equal to $256,200,000 of francs on deposit, equal to $256,200,000.

—SCHOOL SAVINGS BANKS. The first legacy of 10,000 francs, which by his will, Dr. Guinard, who died in 1867, directed should be given in perpetuity, every 5 years, to the one, who should have made the best treaties, or the best invention, to ameliorate the material or intellectual position of the working class in general, without distinction, was in 1872 awarded to M. F. Laurent, professor of civil law in the University of Ghent, for his treatise entitled, Conference Sur l'Eparagne. The jury of five distinguished persons, chosen by the king of Belgium, from a list of ten, proposed by the royal academy, says; "that the idea which the treatise develops is so just, so fruitful for the future, and in the places, where it has been applied, and notably in Ghent, has given results so remarkable, that it has appeared to re-unite all the conditions which the founder of the prize had in view in really ameliorating the condition of the working case, as to fully merit the suffrages of the jury."

—The professor had demonstrated the benefits of the theory by 6 years of work, having commenced in 1866 to apply this new branch of education, by showing the teachers in the public schools, the heads of families, and the pupils, the moral value of the idea, by means of his treatise and by personal visitation. The book was soon published in Flemish, as well as is French, by the government, and 12,000 copies were distributed. In it he shows that adults have inveterate habits of expenditure, and maintains that the best means of causing the spirit of economy to become a habit of the people, is to teach it to their children and require them to practice it; that nothing is easier than to inspire in the young a taste for saving which can be accomplished in the public schools, where the managers and teachers have constant opportunities of enforcing and illustrating the advantages of saving, and where facilities can be easily afforded for carrying out the lessons of economy, by means of penny banks, conducted in the schools. Then he arranged the operations of them, and their relations with the savings bank of the city, in a way which seemed to his the simplest, the safest, and the most educating. His labors were crowned with singular success; out of 15,392 pupils in the city of Ghent, in 1873, 13,032 were depositors in savings banks, and they had to their credit, 462,800 francs, nearly $7.20 each.

—The managers testify that the system has produced a marked effect for good on the social and moral life of the working class.

—The system extended to hundreds of other towns, and has created great interest throughout Belgium. France, great Britain, Austria, Hungary. Italy and other countries.

—In France these school banks had been introduced, up to 1879, into 83 departments out of 86 in the republic. Returns, duly certified, to January, 1878, show that there were in 60 departments, 8,033 school banks with 177,040 depositing pupils, 143,272 of whom had books in the large savings banks. The total deposit of these pupils was 2,964,352 francs.

—The plan of operating these school banks is so simple and inexpensive, that they may be introduced into any school with little trouble. A blank book is provided for the school, ruled with 12 vertical columns for months, which are subdivided into 4 or 5 for weeks, with inter-columns for dollars and cents. At the left hand the pupil's name is written. On two or more large pages the accounts of a good sized school can be kept. Cards to be folded once, to keep the writing clean, are ruled like the register and provided for each depositing scholar, on which his name is written. An appointed hour one day in the week is set apart for instruction and practice in the lesson of thrift. As each scholar's name is called, he comes forward with his deposit of a penny or more, which is received by the attending teacher, the amount entered in the register, then in the scholar's card book, which is returned to him as his voucher. The total amount received each day is footed in the register and deposited in gross in some savings bank, in the name of the school. When any scholar's total deposit amounts to a certain sum, (in France and Belgium it is one franc, in Great Britain a pound sterling,) it is transferred to his credit in the savings bank and charged to the school account by authority of the teacher, the school register and scholar's card book, each having conforming entries made in them. The card book is retained to enter pennies in and the account runs on as at first.

—The scholar receives no interest until he opens his account in the large bank. but the school receives interest on the gross balance to its credit, which pays for stationery, and if anything remains over, it is distributed in rewards, to the most worthy or the most regular depositor among the scholars.

—Parents become interested, and not only add extra pennies to their children's deposits, but are induced to try the experiment for themselves, by opening deposits in the savings bank on their own account. Once the habit is begun, it tends to increase as time goes on; and as they note the semi-annual additions of interest credited, which their savings have earned, but which they do not always quite understand, it acts as an additional stimulus, and induces further economies which in the beginning they had not thought possible.

—No people, probably need to be taught thrift more than the poorer class in the United States. On account of the case with which money is obtained in prosperous times like the present, no nation is more extravagant and prodigal in expenditures. Too many of our wealthy people set bad examples by their luxurious habits, but there is a large class of prudent rich ones, who, though they may censure a servant for using two matches to light a candle when one is sufficient, still give $100 for a benevolent object; they agree with Franklin who said. "Whoever tells you that the condition of humanity can be ameliorated by any other means than labor and saving, is your enemy and would corrupt your judgment." Let us therefore, instead of opening soup houses in the days of adversity, establish savings banks in prosperous times, and by the systematic distribution of information in workshops and dwellings, instruct the people, and by establishing penny banks in the schools, teach the children how they may become capitalists, so that when they become men and women they will know how to help themselves and their posterity.

—Savings banks in other European countries have increased in number and in influence since 1875 At that date in Switzerland, the depositors were about 1 in 5 of population; in Denmark about 1 in 6; in Sweden and Norway about 1 in 8; in Prussia about 1 in 12; in Austria and Hungary about 1 in 14; and they are conducted with success in Belgium, Holland, Italy, Spain and Portugal and Russia.

—In the civilized part of Europe, comprising in 1879 210,000,000 of inhabitants, there were, according to A. de Malarce, 14,000,000 depositors with a sum on deposit of more than 8 milliards of francs, equal to $1,600,000,000.

—For fuller details the reader is referred to the following works and essays: A Practical Treatise on Savings Banks, their Past History and Present Condition, by Arthur Scratchley, M. A., London, 1860; article, Caisse D'Epargne, par Louis Leclerc and Ch. Coquelin. Dictionnaire de L'Economie Politique, Paris, 1873; Conférence sur L'Epargne par F. Laurent, Bruxelles, 1873; précédéc du rapport du Jury, qui a décerné le prix; Guinard a la Conférence sur l'Epargne; L'Ecole Primaire et la Caisses d' Epargne, par Arthur LeGrand, Maire de Milly, Paris, 1874; History of Savings Banks from their Inception in 1816 down to 1874, with discussions of their Theory, Practice, Workings, Present Condition and Prospective Development, by Emerson W. Keys, New York, 1876; The Law relating to Trustees and Postoffice Savings Banks, with notes of Decisions and Awards, by Urquhart A. Forbes, London, 1878; Trustee or Certified Savings Banks of the United Kingdom, by Thomas Banner Newton Liverpool, 1878, pamphlet, 8vo; Les Caisses d' Epargne, Scolaires en Hongrie, par Bernard François Weisz, (Traduit du Hongrois). Budapest, 1878; La Caisse d'Epargne, pour la Ville D'Amsterdam, Amsterdam, 1878, par E. J. Everwijn Lange, Secretary; Les Services D'Epargne Populaire, Caisses d'Epargne, Caisses d'Epargne Scolaires, Bureaux d'Epargne des Manufactures et Ateliers, par A. de Malarce, Paris, 1879, Br. in 8; Lette, Sparkassenwesen in Faucher's Vierteljahrschrift, 1, p. 54, etc.; Mangoldi, Die aufgabe, stellung und Einrichtung der Sparkassen; Constantin Schmid, Das Sparkassenwesen in Deutschland; Spyri, Die Ersparnisskassen der Schweiz; Horn Des Caisses d'Epargne en France, in the Journal des Economistes, vol. 41. p. 70, etc.; and the official works, Rapports sur les Caisses d'Epargne; Casse di risparmio, in the Annuano Statistico Italiario, by Correnti and Maestri, p. 603, etc. (See ACCUMULATION, SAVING.)

JOHN P. TOWNSEND, New York, 1881.

BAR

BAR, The, a term applied collectively to all who give professional assistance to others in legal controversies, and are licensed by some competent authority to do so. The term in this sense is variously ascribed to the fact that the space occupied by advocates in a court of justice, is separated by a rail or bar from that which is appropriated to spectators, and to a separation in a like manner of the benchers and readers from the students in inns of court on public occasions.

—As soon as a people emerge from barbarism, a body of men who make it their business to expound the law, and assist those who may need assistance in legal matters, is always observed to make its appearance, as one of the requisites of civilization and legal order, and the state confers upon its members special and peculiar privileges by law, and at the same time places them under regulations more or less strict, for the protection of the public and of those who may place their interests in their care. In the earliest accounts we have of judicial investigations, the litigants are brought into court in person, and are permitted to give their own account of the controversy, and the judges, after inquiring further, if the case seems to require it, proceed to give judgment for the one or the other, according as his story seems most plausible, or best supported by such evidence as is at hand. This places the ignorant and simple at the mercy of the cunning, crafty and designing, and it is easily made the means of perverting justice, and clothing wrong with the forms of law. In the famous description of the shield wrought by Hephæstus for Achilles, the picture of a judicial trial is given, and we perceive, immediately, that the most persuasive voice is expected to succeed, whatever may be the merits, unless perhaps the clamor of partisans, who are active and noisy about the court, shall sway the action of the judges in the other direction. That this would be so is by no means unlikely in any case in which popular sympathy is aroused or popular prejudice strongly excited, or even where money or family influence was able to produce the appearance of strong popular feeling. In Athens there seems to have been no distinct class of men who made advocacy their business, and causes were expected to be managed by some one interested therein; but friends sometimes appeared to support the cause of those who lacked the ability or the eloquence to speak on their own behalf, and sometimes a public prosecutor was appointed for a particular case, as Pericles was called upon by the people to prosecute Cimon, when the latter was accused of having been bribed to abandon the invasion of Macedon.

—In Rome, in its early days, the state of things was quite as little conducive to regular and unimpassioned judicial investigations, but gradually patrons assumed the defense of their defendants or clients, and, as Niebuhr describes the obligations and duties springing from that relation, "all clients, however different in rank and consequence, were entitled to paternal protection from the patron; he was bound to relieve their distress, to appear for them in court, to expound the law to them, civil and pontifical. On the other hand, clients were obliged to be heartily dutiful and obedient to their patron, to promote his honor, to pay his mulcts and fines, to aid him, jointly with the members of his house, in bearing burdens for the commonwealth and defraying the charges of public offices, to contribute to the portioning of his daughters, and to ransom him or whoever of his family might fall into the enemy's hands." The obligation to expound the law for his defendants rendered the patron subject to frequent calls, and made the study of the law a necessity, and those patrons who acquired reputation as specially learned and wise were frequently consulted by others also, and became known as juris consulti. So extensive was the business of some of them, that students attended them to learn the law from their exposition of it, and followed them into the forum that they might study and imitate their oratory. Some of them, however, were not advocates, but sat at home like oracles delivering opinions to those who called for them, with their students gathered about to listen and learn. The advocates were not compensated for their services unless by voluntary gifts, nor did the patron expect payment from his client otherwise than in the discharge of the reciprocal duties of the client above enumerated; but it was the patron's aim and interest to make his clientage as large as possible, for his importance in the state, his political influence and the gratification of his ambition for high office depended largely upon it. He was, therefore, interested in espousing earnestly the cause of his client, and protecting him to the full extent of his ability. Many jurisconsults delivered opinions freely upon similar considerations, but others took fees, and their services were often employed by advocates in their preparation for important trials. Forensic orators were also sometimes employed by others than their clients, and instances are recorded where their services were engaged by cities and provinces to impeach or prosecute at Rome, the officers who were accused of high crimes. In such cases a gratuity would be expected, and the advocacy of causes thus, at length, became a matter of business, which was sometimes united with the giving of opinions and sometimes not. The advocate was not expected to gather the information, or, as it would now be phrased, look up the evidence for the trial, but this was done by a lower grade of professional agents called procurators. A like distinction between those who prepare the case for trial and those who present it to the court has prevailed in most European states in modern times; and in France, Belgium, Geneva, and some of the German states, the advocates constitute an association or order into which admission can be obtained only by their own consent.

—Lawyers, as a distinct class or profession, made their appearance in England soon after the conquest, and as soon as the courts were permanently located at Westminster, practitioners gathered about the place of sitting, and schools for the reception of students sprung up, in which the most eminent and approved practitioners gave instruction. These schools were not always regarded with favor, and in 19th Henry III., that monarch issued a mandate for their suppression by the municipal authorities of London; and this led to, or was followed by, the establishment of inns beyond the jurisdiction. A palace before occupied by Henry Lacy, earl of Lincoln, was taken for this purpose in the early part of the fourteenth century, and has since been known as Lincoln's inn. The temple was also taken for the same purpose soon after, and a little later Gray's inn was established, the name taken for it being that of the proprietors of the soil. In the temple two societies were established, known as inner temple and middle temple, and the four inns of court exist as places for instruction in the law to this day, and each has subordinate and dependent inns known as inns of chancery, where instruction is given preparatory to admission to the inns of court. Each of the inns of court is independent of the others, but their regulations for calling persons to the bar are substantially the same. The government is in the hands of the benchers, who are selected from the barristers according to seniority. Students are not called to the bar until they have been for 5 years members of one of these societies, unless they are of the degree of master of arts or bachelor of laws of one of the universities, when it may be 3 years; nor until they have passed an approved examination by the society to which they belong. The call makes them barristers, and after 16 years' service a barrister may be called to the degree of sergeant. From the sergeants the attorney general and solicitor general are chosen, and it is customary also to designate certain members as king's (or queen's) counsel; the designation being one of honor rather than of profit. The societies named enjoy the exclusive privilege of calling to the bar, and they may also expel a member for cause, and thereby disbar him. Barristers and sergeants can make no contract for compensation, but the custom is to deliver with the brief a fee proportioned to the importance of the case, and the expected value of the desired service, and also to pay a like fee on any consultation. The lower order of practitioners in England is that of attorneys, who are regularly admitted to practice by the respective courts upon examination. These issue writs, prepare and serve pleadings, do whatever may be necessary to prepare the case for the advocate, and then instruct the advocate by a brief which is to be his guide on the trial. They are not at liberty to appear as advocates in the higher courts, but are represented there by barristers or sergeants. Attorneys are paid according to a fee bill prescribed by law, and they may bring suit for their fees. In chancery the practitioners are called solicitors, corresponding to attorneys in the law courts, and counselors who are the advocates. In the ecclesiastical courts the practitioners are proctors and doctors of the civil law, and in the courts of admiralty they are proctors and counselors. Advocates may practice in different courts, but they are expected to choose the branch of law to which they will give attention, and confine their practice chiefly to the appropriate court or courts.

—The profession in Ireland corresponds to that of England, and requires no special notice. The barristers are only admitted after keeping certain terms in the inus of court of London, and at the king's inn at Dublin.

—In Scotland the several grades are writers, solicitors and advocates, the latter being licensed by the faculty of advocates.

—In the United States the members of the legal profession are attorneys and counselors at law, solicitors and counselors in chancery, and proctors and counselors in admiralty; but the distinction between the two grades has become almost nominal in the states generally, and purely nominal in some. Attorneys may appear as advocates in all the courts, but in a few cases counsel are required to sign pleadings or give certificates of merits. Counsel, when any distinction is made, are merely attorneys who have been for a certain time at the bar. They may not only contract for a compensation for their services, but in the absence of any special contract, the law implies one on which suit will lie. It is never thought discreditable for counsel in America to bring suit for fees which will not be paid with out, though reputable counsel seldom do so except in extreme cases. In France, where an advocate may sue for his fees, it is commonly esteemed unprofessional to do so, but the custom is more general to pay in advance than it is in America. Attorneys are licensed to practice in the several courts by the courts themselves, sometimes under rules prescribed by statutes, and sometimes under regulations which the courts prescribe. The rules are exceedingly dissimilar: all that is prescribed in many states is, that an applicant for license shall be a male resident of the proper age, and pass an approved examination, but in other states he must produce evidence of having pursued the study of the law in the office of a practitioner or in a law school for a period of time named, which period ranges from two years to five. A very large proportion of students are educated in the law schools. In some states females, giving evidence of the proper qualification, may be admitted to the bar, and some few have been admitted. The federal courts admit, on motion, those who are practicing attorneys in the highest state court.

—In Great Britain advocates as well as the judges must appear in court in wigs and gowns, but this is not required in America. In the supreme court of the United States, however, the judges wear gowns.

—It is important now to understand what are the privileges of the members of the bar, and what are the rights and privileges of those who employ them. In general terms it may be said that the conduct of business in the higher courts is exclusively in the hands of the bar, though a party has a right to conduct his own suit in person if he shall see fit to do so, but unless he is familiar with legal forms he would scarcely be safe in venturing to act in person, whatever might be his ability. Judges of courts are also expected to be appointed from among the members of the bar, and in some states this is required by law. Prosecuting or district attorneys are also chosen from the same body of men, and so are the officers who perform the duties of master in chancery. In respect to justices and judges of inferior courts no such requirement is made, and in those courts any one may appear as an advocate whom a party sees fit to employ.

—It is remarkable that the full privilege of transferring the defense of his case to counsel was formerly restricted in England to civil cases and cases of misdemeanor. On trials for treason and felony the accused was permitted to be heard by counsel on such questions of law as might arise; but it was considered the duty of the judge to be vigilant that no injustice be done to an accused party, and the judge alone could call the attention of the jury to such facts as might be supposed to favor the defense. This idea that the accused, if innocent, would be protected by the counsel and assistance of the judge was pleasant in theory, but it could seldom have much foundation in fact, and was sometimes a cruel mockery. The prosecution was usually presented by able counsel, and the keenest and most fair-minded judge would be wholly unprepared, except in the simplest cases, to bring out the facts which might rebut the case for the crown. To do this, outside investigations would be required, and these the accused would seldom have the opportunity for making, and the judge never. "I have myself often," said a learned counselor whose practice in the last century was unsurpassed in extent, "seen persons I thought innocent convicted, and the guilty escape, for want of some acute and intelligent counsel to show the bearings of the different circumstances on the conduct and situation of the prisoner." Learned judges gave testimony to the same effect. Yet, although the privilege of full defense by counsel was conceded to persons accused of treason by stat. 7, William III, c. 3, it was not extended to those charged with felonies until 6 and 7 William IV., c. 114. In the United States the privilege is converted into a constitutional right. By the constitution of the United States a person charged with an offense in the federal courts is to have the assistance of counsel in his defense; and the several state constitutions contain similar provisions. If an accused party is unable to procure the assistance of counsel, because of his poverty, it is customary for the courts to designate some member of the bar to aid him; and though it has been decided in one state (Indiana) that counsel can not be compelled to give gratuitous services, it would be looked upon as unprofessional to refuse, and also as discourteous to the court. It is customary, however, for the state to provide some small compensation for counsel thus assigned. In the prosecution or defense of a case counsel are at liberty to do or say whatever might be done or said by their clients, and they are protected in doing so to the same extent that clients themselves would be if personally managing their own cases. The counsel is therefore privileged from prosecution for any defamatory matter that may be contained in his pleadings, and the same privilege protects his arguments in court. If, therefore, the counsel put forward theories or urge conclusions not warranted by the facts, he is not subject to responsibility, either civil or criminal, therefor, The privilege, however, may be said to be conditional: it is not so far absolute as to protect him if he shall wander from the subject in controversy to inflict gratuitous injury by dragging in irrelevant matters, or by defaming persons who have no connection with the controversy. It is expected that counsel shall argue questions of law to the court, and questions of fact to the jury when there is one, but in some cases—particularly in cases of libel—the jury, by constitution or statute, are made judges of the law as well as of the facts, and it is proper to address the argument on the law to them. Some courts have also held that the jury were judges of the law in other criminal cases, but the prevailing doctrine is that they must receive the law from the court. Nevertheless, if the jury disregard the instruction of the court and acquit an accused party, the acquittal is final.

—Next to being defended by counsel the most important privilege of the client is that his attorney shall preserve inviolable secrecy in respect to all facts which have been communicated to him for the purpose of obtaining his professional assistance, or which have come to his knowledge in the course of or because of his employment. The necessity that the client should be perfectly confidential with his counsel in order to have the full benefit of his assistance is conceded, and he is, therefore, encouraged by the protection which the law throws over his communications, to disclose fully all the facts known to himself which bear upon or may affect any question on which he needs advice or professional aid. The obligation to observe secrecy is not limited to the pendency of the particular case or controversy, but is perpetual, and the counsel will not be suffered to make disclosure as a witness in other cases, even if he were disposed to do so; the privilege of secrecy being that of the client himself, and not of the counsel. The client himself, however, may waive it, and permit a disclosure. The privilege is limited strictly to communications made with a view to professional assistance: what the party shall say in mere social intercourse, or communicate for any other reason than professional aid, is no more privileged than the ordinary talk between man and man. Communications in writing, the exhibition of title deeds, securities and other papers, are within the protection.

—Attorneys and counsel have a lien upon all papers and securities their clients may place in their hands, and upon moneys collected by them, as security for any sum that may be owing to them for professional services and expenses. They probably have at common law no lien upon any judgment that may be recovered by them except to the extent of their own fees that may be included therein, and which have been taxed against the opposite party. As between themselves and their clients their own fees are not measured by the allowances of the fee bill, but, in the absence of special contract, rest upon a quantum meruit; the fee bill being the measure only as between the successful and the defeated party to the cause. But in England the attorney recovers according to the fee bill, and may be required to have his bill taxed before payment. Sometimes attorneys take charge of suits on an agreement that if successful they shall have for their services a certain portion of the damages or other thing recovered; but the practice is thought by many to be unprofessional, and is held by some courts to be illegal for champerty. An agreement by an attorney to warrant success in a suit is contrary to public policy, and void.

—An attorney when licensed to practice takes an oath, which is somewhat different in different states, but the most important provisions of which are that he will conduct himself with all due fidelity to the courts in which he may practice and to his clients. He then becomes an officer of the court, and is under obligation to assist the court with his advice whenever called upon, and becomes under a moral obligation to defend the honor and integrity of the court if they shall be unjustly assailed. He also becomes subject to the discipline of the court if he shall be guilty of improper practices, and he may be punished as for contempt of court for disorderly or unbecoming conduct in its presence, for refusal to obey its proper orders, for making wrongful use of its process, for abusing the confidence of his clients, or for dishonesty in his professional employment. In gross cases he will be disbarred, by which is meant that his license to practice will be revoked: and this may be done for any reason that would render him unworthy of general confidence; as for example, if his reputation for truth should become so bad that the community would not believe him under oath, or if he should be convicted of some heinous or degrading offense. The power to disbar an attorney for assaults made upon the judge out of court because of something done by him judicially, or for intemperate criticism of his judicial conduct in the public press, has sometimes been exercised, but the right to do so has as often been questioned, and a prudent judge will leave such abuses to the same remedies that are open to others.

—In respect to the institution of suits the attorney must obey the directions of his client, and he will be responsible in damages in case he shall refuse or neglect to do so. When the suit is instituted, however, the attorney must exercise his own judgment, and the client's remedy, if he is dissatisfied, is to dismiss him and put his case into other hands. The employment obliges the attorney to give his client his best endeavors for success; but he never by any implication of law warrants success, and is entitled to compensation even when the client, acting upon his mistaken advice, has lost his cause. But for losses occurring through his fraud or negligence, the client may recover damages; and for gross frauds or other misconduct to the prejudice of the client, the court will sometimes give summary remedy by attachment.

—How far the counsel is morally bound to consider the interests and the feelings of others when his client's interests are at stake, is a much mooted question. Lord Brougham, in the defense of queen Caroline, advanced the extraordinary doctrine that, "an advocate in the discharge of his duty knows but one person in all the world, and that person is his client." But advocates equally eminent with himself have rejected such a doctrine as being degrading to the profession, subversive of the very reasons upon which their peculiar privileges exist, and because it would convert a class which are supposed to be ministers of justice, into instruments of injustice, oppression and outrage whenever the necessities of bad cases shall require it. No client has any right to require that any counsel shall in his interest pervert the law, or give a false color to the facts, or abuse witnesses who are apparently fair, or inflict wanton injury on any one: being called to the bar as an aid to the court in administering the law, the first duty of counsel is to assist in seeing justice done, and his services to his client must keep this primary duty in view. That sentiment, however, which is often expressed, that counsel have no moral right to render legal assistance to those whom they may know or believe to be guilty of crimes with which they are charged, has no just or reasonable foundation whatever. For, in the first place, the counsel is not made by the law the judge of his client's guilt, and if he were, he might misjudge upon some preliminary statement, and leave an innocent party to be condemned without a defense. But, in the second place, it is a duty which every one connected with the administration of the law owes to the law, to see that all, even those most guilty, are only condemned according to the law; for only by that course can order be preserved, and the law made an effectual protection to the innocent. The sentiment referred to, pushed to its legitimate conclusion, would justify summary execution without trial in every case where guilt appeared certain; for a trial without defense—especially if defense be refused because of supposed guilt—has little or no significance or value as a judicial investigation. It is, therefore, a part of the obligation the counsel assumes, not less to the law than to his client, to point out and insist upon all the defects, whether of law or of fact, that may exist in the case against him, and to urge an acquittal whenever he can show that the case is not complete. To this extent, to quote the language of Mr. Charles Phillips, "the counsel for the prisoner has no option. The moment he accepts his brief every faculty he possesses becomes his client's property. It is an implied contract between him and the man who trusts him." But further than this he can not rightfully go. It would be improper for him to endeavor to influence the jury by urging upon them his own opinion, and it would be as well unprofessional as dishonest if he were to do this when the opinion he expressed was not that which he held. In cases where only civil rights are involved, counsel has a right to take advantage of legal rules for the benefit of his client, even when in the particular case they seem to operate unjustly. Legal rules are established from reasons of general policy, and because they produce the best results in the great majority of cases, and injury in particular cases is inseparable from any rules of general order. All that can be properly required of counsel in such cases is, to use his best endeavors to bring about voluntary arrangements when equity seems to require it.

—The evidence of an attorney's retainer in a case, as between himself on the one hand and the court and opposite party on the other, is found in the fact of his entering his appearance of record. In general the opposite party is not at liberty to question the fact that the appearance has been entered on a proper employment, and if the appearance is unauthorized, the party is nevertheless bound, though he may move to set it aside on showing the facts. He may also have an action for the recovery of any damages he may have suffered as a consequence of the attorney's unwarrantable act. When the relation has been formed by an actual employment, it is supposed to be based on a degree of confidence in the professional adviser that must subject the client in a very great degree to his influence. As the attorney is an officer of the court it becomes then the duty of the court to see that this confidence is not abused; and any business dealings between client and counsel will be scrutinized with a degree of jealousy, and with some presumption against its fairness. In some cases the courts have set aside gifts that were made by the client pending litigation, and held contracts which were made for a larger compensation than was stipulated for at the outset to be prima facie oppressive and void. They have also held void all securities obtained by the counsel for the purpose of protecting him against liability for his own wrongful acts or negligences. So a purchase by the attorney of the claim of the adverse party would give him no interest as against his client, and any contract whereby, directly or indirectly, he would obtain compensation from both parties, would not only be corrupt and void, but might subject him to summary punishment. If an attorney, by means of his employment, acquires knowledge of any defects in his client's title, the disability to take advantage of the fact for his own profit does not terminate with his employment, but is perpetual.

—All notices which a party to litigation may have occasion to serve upon the other, must be served upon his attorney, who is supposed to keep him informed of all the proceedings, and also of all collateral facts that may professionally come to his knowledge, so that it is a maxim of law that notice to the attorney is notice to the party himself.

—The attorney's employment in a cause continues until judgment is given, and afterward, if his client is the successful party, so far as to authorize him to issue process and receipt the amount when paid. If his client shall discharge him, the discharge does not become complete so far as the opposite party is concerned, until it is made effectual by rule of court and the substitution of another in his place.

—The following acts are not within the general authority of an attorney: To submit his client's case to arbitration against his will; to sell or assign a claim placed in his hands for collection; to compromise the claim; to accept in payment anything else but money; to buy in for his client land which he sells on execution or mortgage foreclosure; to file a creditor's bill or other supplementary proceedings to enforce the payment of a judgment when collection is not made by execution; to employ assistance in the case, or to pledge the credit of his client except for the legal expenses and other necessary costs in litigation. If an attorney should make a compromise of a case by consenting to a particular judgment, the client, by showing that it was without his consent, might have it vacated.

—An attorney may be a witness in a cause in which he is employed, but reputable attorneys seldom consent to this where their evidence is of much importance, or is disputed, but will withdraw from the case when they discover that their evidence is to be material and allow another to be substituted, that there may be no suspicion that they testify under bias.

—The business of attorneys and counselors may be and frequently is conducted by two or more as partners, and under all the rules that govern partnerships in general. But as this is not a commercial partnership, one of the number has prima facie no right to give commercial paper in the name of the firm.

—There is a bar association of the United States, composed of such members of the bar as see fit to join it, which holds annual meetings, at which an address is delivered by the president and papers read by others, and discussions had on important legal subjects. There are also state bar associations in some states, and also local associations in some cities and counties. These are expected, among other things, to promote good fellowship, and to take steps to rid the profession of members known to be unworthy.

THOMAS M. COOLEY.

BARNBURNERS

BARNBURNERS. (IN U. S. HISTORY). (See FREE SOIL PARTY.) The name was given and accepted as indicative of their supposed readiness to resort to radical measures, and its origin is usually assigned to a story, often told by Hunker orators, of a stupid farmer who was persuaded to burn his barn in order to free it from rats. (See NEW YORK.)

A. J.

BARRICADE

BARRICADE. In its widest sense the word barricade means an improvised fortification intended to obstruct the progress of an enemy.

—Barricades are most frequently mentioned in connection with revolutionary movements. They were used for revolutionary purposes as early as in the middle ages. History tells us of those that were erected in Paris, in 1588 and 1648. In the nineteenth century they re-appear with distressing frequency. We may call attention, for instance, to the barricades erected in July, 1830, when the throne of the elder branch of the house of Bourbon was subverted, and the crown was placed upon the head of Louis Philippe, the duke of Orleans; also, to those of Sept. 17, 1831, raised on receipt of the news of the disaster at Warsaw. We may likewise recall those of June 5, 1832, on the occasion of the obsequies of general Lamarque; and those of Feb. 11, 1848, in France. The revolution of Feb 24 resulted in the creation of the ateliers nationaux, the closing of which was followed by the mournful days of June, 1848. At the time of the coup d'état, Dec. 2, 1851, the barricades erected were very weak and feebly defended. The events of the month of June had demonstrated the utter inadequacy of barricades to resist an attack by well disciplined soldiers.

—During the empire no barricades were raised in the streets of Paris; two or three attempts were immediately checked. The empire did not fall through the agency of barricades. When will men understand that violence is generally a bad means to establish durable institutions, that reformation is better than revolution, and that the surest road to amelioration is the road of the law?

—It is hardly necessary to say that Paris has had no monopoly of barricades. Brussels had her barricades in September, 1830. Berlin, Vienna and Dresden had theirs in 1848 and 1849. But neither in Germany nor in France has the use of barricades produced aught but a result of short duration.

—No reference is here made to barricades erected in open cities with a view to stop the passage of an enemy. It would cause great evils, without any good to the country, to fortify an open or unfortified city, save when it becomes part of a strategic plan.

MAURICE BLOCK.

BARTER.

BARTER. (See EXCHANGE.)

BASTILLE

BASTILLE. In former times the term bastille denoted a fortification extra muros, a temporary construction for the siege or the defense of cities. In our day it is applied more particularly to the castle erected in the year 1380, under Charles VI., in the quarter of Paris called Saint-Antoine.

—It was at first intended that the bastille should serve as a stronghold of defense against aggressions from without. We need, however, say nothing here of the part it has played in history as a military post. We are now concerned with the bastille only as a state prison. Looked at from this stand-point, the grim old pile furnishes matter for an interesting page in the annals of the French monarchy.

—Hugues Aubriot who superintended the construction of the bastille, was the first prisoner to enter its walls; but political considerations had nothing to do with his incarceration. Suspected of heresy, accused, tried and convicted by ecclesiastical authority, he merely passed through the prison he had constructed. and thence to the perpetual confinement to which he had been condemned, behind the bolts in the dungeon of the bishop of Paris. The bastille became a place of confinement for prisoners of state, only when the conflict between royalty and the great vassals of the crown commenced. In 1477 we find there immured such powerful lords as Jacques d'Armagnac, the duke of Nemours. Later, when the circle of those who took an interest in the political life of the nation grew to much larger dimensions, and extended so as to embrace many of the great body of the people, members of the bourgeoisie and persons belonging to the humbler ranks of society were to be met within the walls of the bastille. But up to the middle of the seventeenth century its doors closed only on men of quality and great dignitaries, who have left legendary accounts of their captivity. Those of cardinal Balue are not the least popular if not the most interesting. However, Charles XI., who struck so rude a blow at this prince of the church, made hardly any use of the bastille. He had his own private dungeons and executioner. Among the numerous political conflicts during his reign, Jacques d'Armagnac and Balue are nearly the only ones who underwent the severe penalty of the bastille. Richelieu, who followed up the line of policy pursued by Louis XI., caused many a man of gentle or noble birth to be imprisoned or executed in the bastille. Mazarin, the successor to Richelieu, restored to liberty most of the prisoners detained by order of the cardinal-duke, and, substituting craft for violence in the government of France, he used the bastille with moderation. It was under Louis XIV. That the memorable period of religious and political proscription commenced; and it was also from the beginning of his reign that the cells of the bastille began to be overcrowded with prisoners. Fouquet and the mysterious personage known under the name of the "Man with the Iron Mask," stand out conspicuously from the throng soon to be recruited from the ranks of the dissenters from the bull Umgenitus. Jansenists, Protestants, and religious enthusiasts of every kind, filled the dungeons of the royal prison. If the regency of the duke of Orleans checked somewhat the abuse of arbitrary warrants of imprisonment, the practice of sending out letters de cachet soon became a sort of pastime for the mistresses of Louis XV. These letters de cachet or royal warrants, were frequently issued even under Louis XVI. Turgot and Malesherbes vainly attempted to effect the release of the prisoners, at least those not confined for what were called "state reasons" (raison d'etat). The weak monarch, surrounded by advisers and courtiers who would yield in nothing to the progressive ideas of the time, sacrificed his ministers and abandoned to the bastille, the melancholy prerogative of royal absolutism. But this absolutism had seen its day. When, on July 14, 1789, the bastille fell under the blows of the Parisian populace and the "French guardsmen, "it is said that the court was paralyzed with consternation It seemed to it as if monarchy had received its death stroke. Nor was this fear ungrounded The ruins of the old monarchy were soon mingled with those of the dread fortress which, for so many centuries, had stood the symbol of the omnipotence of kings.

MAURICE BLOCK.

BAVARIA

BAVARIA. The kingdom of Bavaria is, after Prussia, the most important state in the German empire.

—It had its origin in the duchy of Bavaria, the title to which, as a fief, was conferred in 1180 by the emperor Frederick Barbarossa, on Otto Wittelsbach. The descendants of this prince gradually extended the limits of the territory. In 1506 they established the order of primogeniture in the case of succession, and acquired the Palatinate, which entitled them to the rank and powers of electors.

—The kingdom as composed at present is the result of events which agitated men's minds at the beginning of this century. The titles to the new provinces of Bavaria were acquired by the treaty of peace signed at Luneville in 1801; by the decision of the states of the empire promulgated on Feb. 25, 1803; the treaty of Presburg in 1805; the act of 1806, which created the confederation of the Rhine; the treaty of Vienna, 1809, and the treaty of Paris, 1814. Eighty-three pieces of territory, reckoned within the states of the empire but comparatively independent, were, by these different acts, annexed to the kingdom created on Jan. 1, 1806. In exchange for these possessions the kingdom ceded the part of the Palatinate situated on the right bank of the Rhine.

—Bavaria has 4,863,450 inhabitants (census of 1871), against 3,707,966 in 1818. The population is composed principally of Bavarians. Franconians and Swabians. A majority of the inhabitants, 3,439,000 in number, are Roman Catholics, while the protestant churches comprise about 1,327,000 persons. There are, besides, about 50,000 Israelites. Most of the inhabitants are employed in agriculture. The farmers are almost twice as numerous as the mechanics and artisans. The mass of the people are in easy circumstances, since only 2 per cent. of the whole population are at the charge of public charities.

—The area of Bavaria is 75,863.42 square kilomèters. It is divided into two separate parts. The larger lies in the south of Germany, and principally in the basin of the Danube. Only a few districts are crossed by the river Main, and are thus drained by the Rhine. The valley of the Saale and the Eger slope toward the Elbe. The other part of Bavaria lies on the left bank of the Rhine, and is called the Palatinate (Bayerische Pfalz). The soil may be classified thus: 60.7 per cent. Utilized by agriculture, 34 per cent. Forests, and 5 per cent uncultivated land. Agriculture supports, we may say, 67 per cent. of the whole population.

—One-half of the forests of Bavaria belongs to private individuals, 34 per cent. belongs to the national domain, 14 per cent. to the communes, and the residue, or 2 per cent., is apportioned among endowed institutions.

—Cereals and potatoes are everywhere the principal agricultural products. In several districts, such as the upper palatinate, the farmers raise an abundance of flax. Hemp and tobacco are grown in Franconia and the Palatinate. Latterly the cultivation of hops has so gained in importance as to supersede the vineyards in many places. However, large quantities of wine are still produced, the best of which is grown in lower Franconia and the Palatinate.

—For administrative purposes the country is divided into 8 circles (Kreise), 7 of which, upper, Bavaria, lower Bavaria, the upper Palatinate, upper, middle and lower Franconia, together with Swabia, lie on the right bank of the Rhine. We have already mentioned the eighth circle, the Palatinate. These circles are subdivided into administrative districts (Bezirksaemter) and judicial circuits. In each circle there are from 4 to 7 courts of first resort, while the number of administrative districts varies from 17 to 25. Each circle, administered by a government (Regierung), or committee with governmental powers, has one court of appeal.

—The political constitution of Bavaria began with the charter of May 26, 1818, granted by the king, Maximilian—Joseph I. This fundamental act has undergone many changes since that time; and it may here be remarked, to the honor of Bavaria, that these changes have been made in a constitutional manner. The government has respected the law it had imposed on itself.

—The principal provisions of the Bavarian constitution are these: The crown is hereditary in the house of Wittelsbach, in the male line according to the law of primogeniture. If the male line becomes extinct, and no treaty for the succession has been concluded with a German family of the royal blood, then the crown goes to the female line. The king is the head of the state. He is invested with all governmental powers, and exercises them in conformity to the constitution, with the assistance of the chambers. His civil list amounts to 2,350,580 florins. The king has, in addition, the free use of the royal castles and other domains of the crown.

—The diet (Landlag) comprises two chambers: that of the counselors of the empire (Reichsrethe) and that of the deputies. The former chamber includes hereditary members, and also life members appointed by the king. But the number of life members must not exceed one-third of the number of hereditary members. The following personages are members of the upper chamber, in virtue of their office or hereditary right; Princes of the royal blood, the four grand dignitaries of the crown, the two archbishops, one of the bishops designated by the king, the president of the superior Protestant consistory, the heads of the families of princes or counts who figured in the states of the empire up to 1806, and who at that period were medint zed, and the owners of majorats, upon whom the king has conferred this dignity as hereditary.

—A new election for all members of the chamber of deputies takes place every 6 years. There is one deputy for every 31,500 inhabitants. There are two degrees of electors. All citizens who have attained the age of majority, and pay direct taxes, are primary electors. There is an elector of the second degree for every 500 inhabitants. The electors of the second degree appoint the deputy. All citizens, from 30 years of age who have not been convicted of crime or infamous offense, and have not forfeited their political rights, are eligible without distinction or restriction. The diet must be convened at least once every 3 years.

—The constitution grants the diet the following rights: 1. No general measure concerning the personal liberty or the property of a citizen can be taken or modified, except after the matter has been discussed and approved by the chambers. The chambers share with the government the right to propose new laws, but to approve them is the prerogative of the king, who possesses an absolute veto.

—2. No new tax, no reduction nor increase of a tax, can be introduced without the concurrence of the chambers. The collection of direct taxes must be authorized by the diet, which generally grants the permission for a fiscal period of 2 years. The diet can not grant the permission for a longer time without an abuse of power. The chambers, before passing the budget of the revenues, have of course to examine the budget of state expenditure.

—3. The debt is guaranteed by the diet, and can not be increased without its consent. Each chamber appoints a member of its body to watch over the state of the debt.

—4. The chambers have likewise the right to present petitions, to make propositions, and even remonstrances whenever a provision of the constitution has been violated. The diet has also the power to impeach ministers of the realm and their agents before a high court of justice.

—The constitution guarantees personal liberty to every citizen, as well as security for his life and property. Liberty of conscience is recognized. The protection of the state can be refused no one on account of his religion. All creeds are free to worship in private houses, but the liberty of public worship depends upon the authorization of the king, except of course in the case of creeds already recognized. The latter are divided into two classes. The Catholic, Lutheran and Reformed parishes are recognized as corporations or public establishments. The Greeks, Anglicans, Mennonites, Moravian Brothers, and Israelites constitute only private associations. The affairs of the Catholic church are regulated by the concordat of 1817, so far as its provisions do not conflict with the constitution subsequently promulgated. The affairs of the two Protestant forms are governed by a royal edict published with the charter of 1818.

—The public law of Bavaria discriminates between three classes of communes: the local communes (Ortsgemeinden), the district communes, and the circle communes. According to official statistics there are now in Bavaria about 225 cities or urban communes (17 of which contain each more than 2,000 families), and 7,890 rural communes. These 8.125 municipal communes are divided into 222 cities, 400 boroughs, 11,100 villages, 11,200 hamlets, and 21,500 isolated dwellings. The communes of which a district is composed, taken all together, constitute a district commune; while the communes of one and the same circle, as we have stated, form a circle commune. We may simply and that the more important cities constitute separate districts.

—The different classes of communes have each their representatives, freely elected. A syndic (Gemeindevorsteher) or mayor, assisted by a municipal committee, is at the head of each rural commune. The towns and boroughs are governed by a committee invested with magisterial powers, which, in important matters, especially when contracts are to be made in the name of the commune, must consult; and by a municipal college or council, the number of whose members varies according to the population in the town. One-half of the committee and one-third of the municipal college are elected every 3 years. The burgomaster presides over these bodies.

—The district commune, or the district itself, is represented by a council elected for 3 years, chosen from among the members of the municipal corporations, to whom are added delegates from the ranks of the great landed proprietors. The district council assembles only once a year, but it appoints, from its own members, a standing committee, charged with the duty of preparing the deliberations of the council, of attending to the execution of its decisions, and even taking action in all affairs concerning the district which have not been reserved especially for the action of the council.

—The circle commune has for its organ the general council, composed of delegates elected for 6 years by the district councils, the municipal councils of cities with more than 10,000 inhabitants, the great landed proprietors, the parish priests, and, when there is one, by the university. The general council meets every year, but itself is likewise represented by a standing committee in the intervals between the sessions.

—In Bavaria it is generally conceded that the best security for the rights of the citizens, and particularly for the liberty of the individual, is found in the principles, upon which rests the administration of penal justice. Publicity and oral proceedings in jud; capture are powerful obstacles to arbitrariness, and foster a spirit of order and equity among the people. A jury passes judgment upon the guilt of a person accused of crime, after a defense to which the widest latitude is granted by the laws.

—Every Bavarian citizen must pay taxes and render military service. Recruiting is done by casting lots. All young men who have attained the age of 21 years are liable to military duty. The length of service required is 6 years in the standing army and 5 years in the landwehr. Substitutes are no longer allowed.

—The burden of taxation is not very heavy in Bavaria. It is certainly less than that borne in many other countries of the same size. About three-fifths of the 60,000,000 florins to which the national expenditure amounts, are derived from taxation The other two-fifths come from the public domain, particularly from forests and royalties. The direct taxes furnish about one-third, and the indirect taxes two-thirds of the total taxation—say one-fifth and two-fifths of the whole revenue of the State.

—In the statement of expenses, attention must be called, in the first place, to the interest on the national debt, and to the sinking fund, which, altogether, require the sum of 16,620,300 florins; the sinking fund is 2/8 per cent. of the principal. Then follow the 6 ministerial departments into which the civil administration is divided, the maintenance of which costs 6,000,000 florins; the schools of education and of instruction, 1,153,000 florins; religious establishments, 1,600,000; public works, 2,500,000; public safety, 1,300,000, and the army, 11,450,000 florins.

—But it would be an error to suppose that the 1,153,000 florins mentioned above, cover the exact amount expended in Bavaria for public education and instruction. This sum is only the state contingent. The greater part of the total expenditure is borne by the circles, the communes, and endowed institutions. The elements of education are taught in the German schools which the communes are required to establish and sustain. There are now 7,200 of these primary schools which, generally speaking, are intended exclusively for children of the same religion. Attendance at school is compulsory for children from 6 to 13 years of age. Children must, besides, attend a Sunday school, until they have completed their sixteenth year.

—Teachers are trained in 10 primary normal schools, founded and maintains at the expense of the state. A law has fixed the minimum of their salaries at 350 florins, but in many communes the salary amounts to 500 florins—Affiliated with the German schools are the agricultural and the industrial schools, 26 in number, whose special instruction is continued in the schools of exact sciences (Real schulen), and in a polytechnic school. The latter is designed to take the place of the three institutions which were formerly in operation under this name in Munich, Augsburg and Nurenberg—we mean a school of arts and manufactures.

—Instruction of a secondary class is imparted, in the first grade, at the Latin schools. There are 96 of these Latin schools, but only 72 include the 4 normal classes, the remainder have only 2 or 3 normal classes.

—Instruction in the higher branches of literature and science is reserved to the universities of Munich, Würzburg and Erlanger. It is proper here to mention the academy of sciences, founded in 1759.

—There are also in Bavaria 10 lyceums, established principally as seminaries for the training of priests. There is likewise a multitude of other special institutions which, for want of space, we can not here enumerate.

—For further details we would refer the reader to the following authorities: Ueber den Zustand des Koenigreichs Bayern, by Dr. Ig. Rudhart, a semi-official work published in three volumes, from 1825 to 1827; and also to Bavaria, Landes-und Volkskunde des Koenigreichs Bayer, etc., which was published under the patronage of the king. In regard to the public and administrative law of the kingdom, all requisite information may be found in the two following works by the author of this article: Lehrbuch des bayerischen Verfassungrechts 14th edition, Munich, 1870; and Lehrbuch des bayerischen Verwaltungsrechts, 3d edition, Munich, 1871.

—Buchner, Geschichte von Bayer, 8 vols., Munich, 1820-51; Zchokke, Sechs Büucher der Geschichten des bair. Volts 2nd ed., 4 vols., Aarau, 1821; Mannert, Geschichte Bayerns, 2 vols., Leipsig, 1826; Böttiger, Geschichte Bayerns, Erlangen, 1836, Rudhart, Geschichte der Landstaende in Bayern, 2nd ed., 2 vols., Munich, 1819; Spruner, Leitfaden zur Geschichte von B, 2nd ed., Bamberg, 1853; same author, Histor. Atlus von B., Gotha, 1838; Contzen, Geschichte B's, Münster, 1853; Rudhart, Aelteste Geschichte B's, Hamburg, 1841; Siegert, Grundlage zur aeltesten Geschichte des bair. Volksstammes, Munich, 1854; von Lercheufeld, Geschichte Bayerns unter Max Joseph I., Munich, 1854; Preyer, Lehrbuch der baier. Geschichte, Erlangeu, 1864; Heigel und Riezler, Das Herzogthum B. Zur Zeit Heinrich's des Lowen, Munich, 1867; W. Müller, Polit. Geschichte der Gegenart, Berlin, 1867-74; same author, Bayernseit 1870, in 'Unsere Zeit,' 1874; Quitzmann, Die aelteste Geschichte der Bayern, Braunschweig, 1873.33

DR. DE POEZL.

BELGIUM

BELGIUM. History. Considered as the creation of the treaties of 1815, modified after the successful insurrection of 1830, Belgium is one of the youngest states of Europe. Considered as a nation, it is one of the most ancient, its origin dating back 2,000 years.

—Three or four centuries before the Christian era, and six or seven before the incursion by the Franks, the Belgians—a German or Teutonic race on the right bank of the Rhine—crossed that river and conquered the northern part of Gaul. This extensive country, which the Romans called Belgic Gaul, was divided into Upper and Lower Germania, and First and Second Belgium. Within these historical limits, Belgium comprised Strasburg, Speyer, Worms, Mayence, Coblentz and Andernach; Cologne, Nimègue, and Leyden; Treves, Metz, Verdun, and Toul; Bavai, Tournai, Cambrai, Thérouanne, Boulogne, Arras, Amiens, Beauvais, Soissons, Reims, and Châlons-sur-Marne.

—The coasts of Brittany and of other more distant regions were settled by Belgian colonists. Saint Jerome, in the fourth century, traveling in Asia Minor, recognized among the Galatians, to whom the apostle Paul addressed one of his epistles, the language used in the vicinity of Treves. Ireland was peopled by the Menapians, the original inhabitants of Flanders.

—The Belgians who, says the historian Florus, fought for liberty, were, according to Cæsar in his Commentaries, the most valiant of the Gauls; a testimony which can not be said to be exaggerated, when we consider what little sympathy exists between the victors and the vanquished. Propertius, a writer almost contemporaneous with Cæar, says: "It is folly for you to paint your face after the manner of the Belgians. Believe me, there is no true beauty but that of nature, and Belgian colors can only render homely a Roman head." It is true that the emperor Claudius raised the Belgians to the highest dignities, such as those of senator, knight, consul, perator and general. But this was not without opposition on the part of the people of Rome.

—The warlike disposition of the Belgians did not belie itself during the centuries which followed, and up to the time of the empire of Napoleon I. At the battle of Raab, in Hungary, on June 14, 1809, a regiment, the 112th of the line, composed entirely of Belgians, won the distinction of having the cross of the legion of honor fastened to its victorious colors.

—In other respects the Belgians, true to the faith of their fathers, have been counted among the most zealous of Catholics. Francis Xavier, writing from India, used to say: "Send me Belgains." The first leaders of the crusades were Belgians. Au equestrian statue of Godfrey de Bouillon has stood, since 1848, in one of the public squares in Brussels.

—Territory and Population. The southern provinces, having been violently separated from the northern provinces of the Netherlands, formed themselves into an independent state under the title of the kingdom of Belgium, and adopted a constitution after free deliberation. This constitution was voted for and promulgated by representatives of the people assembled in a national congress. The first article of the constitution enumerates, in alphabetical order, the great divisions of the kingdom called provinces in conformity with historical traditions. This enumeration we may complete by the full number of urban and rural communes, the area of the country according to the official land registers, the population according to the census of Dec. 13, 1869.

—2,945,516 hectares are equivalent to 11,373 English square miles. On Dec. 31, 1876, the population of the kingdom, by provinces, was as follows:

Antwerp...	538,381
Brabant...	936,962
Flanders (West)...	684,468
Flanders (East)...	863,418
Haiuant...	956,354
Liège...	632 228
Limburg...	205 237
Luxemburg...	204,201
Namur...	315,796
Total...	5,336,185

Belgium is the densest inhabited country in Europe. In 1876 its population averaged 469 per square mile.

—In 1856 the people were engaged as follows: in agriculture and sylviculture, 1,062,115; exploitation of mines, ores and quarries, 73,292; metallurgie industry and working of metals, 58,657; glass works, pottery, etc., 6,012; flax and Lemp industries, 199,779; woolen industries, 22,044; cotton mills, 24,746; setiferous industry, 4,486; leather dressing, skins, carriage works, saddlery, etc., 30,021; articles of food, 45,146; clothing, 252,517; building, 108,418; furniture and ornaments, 16,167; chemical products, printing and various other industries, 25,662 commerce, 156,803; general administration, 15,888; administration of justice, 9,100; religious communities, 22,450; public instruction, 9,005; sanitary service, 5,206; literature, arts, and sciences, 5,862; police force, 36,106; property holders, persons living on their income, pensioners, 50,314; domestics, 86,974. The remaining 2.202,790 inhabitants, or nearly the half of the whole population, include persons without profession or occupation, and also old men, women and children.

—The census of 1866 shows that in Belgium the population is remarkably sedentary. On an average in every 1,000 inhabitants of a Belgian commune, 694 were born within its limits, 227 within same province, and 63 in some other province; leaving a remainder of 16 foreigners. The foreign element which, in 1856, was 21 in every 1,000, therefore diminished during the following decade.

—In proportion to its population Belgium contains a great number of large cities. It has 4, with a population of more than 100,000 each. Brussels, the capital of the kingdom, had, in December, 1876, 376,965 inhabitants; Antwerp, 150,650: Ghent, 127,653; and Liège, 115,851.

—Two distinct languages are spoken in the country: Flemish in the north, in the provinces of the two Flanders, of Antwerp and Limburg, also in the districts of Brussels and Louvain in Brabant. French or Walloon is spoken in the south, including Nivelles and its district in Brabant, the provinces of Hainaut, Namur, Luxemburg and Liège. This contiguity of two races speaking different languages, may be explained by the fact that the first Belgian colonists did not succeed everywhere in their attempt to supplant the native inhabitants. The part of the latter who remained in the country were called Walloons, a corruption of the world Gaul, while Flemish is a low-German dilate perfected in the thirteenth century. It is somewhat remarkable that the line of demarcation of the two languages is about the same which divides the country into two large valleys: the Escaut in the north and the Meuse in the south. Numerically, four-sevenths of the Belgian population are of Flemish or of German origin, while the remainder are of Walloon or of Gallic extraction. Out of the 35,356 Germans enumerated in the census of 1866, 20,799 inhabited the eastern frontier of the province of Luxemburg, and 10,793 the province of Liè.

—The use of either language is optional in Belgium, according to article 23 of the constitution; but the French prevails generally, even among the Flemish inhabitants, notwithstanding their ceaseless opposition to it, which does more credit to their patriotism than to their intelligence. But it is certain that the use of French, as it spreads into the Flemish provinces, will not suppress the primitive language.

—Political and Administrative Organization. The Belgian constitution of Feb. 7, 1831, gives its sanction to the most liberal principles in matters of public right. It may suffice here to mention the most salient of them.

—Art. 6. There exists in the state no discrimination between classes. All Belgians are equal before the law. Only Belgians are eligible to civil and military offices, save the exceptions which may be established by law to meet particular cases.

—Art. 14. Liberty of conscience, liberty of the public practice of religion, and also liberty of speech in all matters, are guaranteed; but crimes or misdemeanors committed under the pretense of the exercise of these rights are punishable.

—Art. 17. Education is free; every preventive measure is forbidden; the repression of misdemeanors is to be exercised only by the law.

—Public education, given at the expense of the state, is also regulated by law.

—Art. 18. The press is free; no censorship shall ever be established over it; no bond of security is required of writers, publishers or printers.

—When the author of a writing is known, and domiciled in Belgium, the publisher, printer or distributer can not be prosecuted.

—Art. 20. All Belgians have the right of free association, and this right can not be submitted to any preventive measure.

—All powers emanate from the nation. They are exercised in the way prescribed by the constitution.

—In the enjoyment of these liberties loyally respected by the depositaries of power, Belgium has progressed in every direction. The sovereign, identified with the Belgian character, is beloved by the people, as was the duchess of Parma, governess in the place of her brother, king Philip II. According to Strada, in his Historie des guerres de Pays-Bas, the duchess of Parma used to say that terror is a bad means to win the affections of the Belgians or conciliate them. A law of Dec. 23, 1865, fixed the civil list at 3,300,000 francs, with the use of the royal palaces. The endowment of the king's brother is 200,000 francs.

—Art. 68 of the constitution, which confers upon the king the right to declare war and to make treaties of peace, provides, besides, that no cession, no exchange, no addition of territory can take place except by virtue of some law.

—Three principal enactments determine the public law of Belgium, and the position of the kingdom in relation to foreign powers: 1. The law of Nov. 7, 1831, which authorized the government to sign the treaty called the Treaty of the Twenty-four Articles, concluded on Nov. 15, 1831, between Belgium and the plenipotentiaries of the five great powers assembled in London, but the fundamentals of which the king of the Netherlands accepted only in 1839. 2. The law of April 4, 1839, which authorized the king to conclude and sign the treaties regulating the separation of Belgium and Holland, upon the basis laid down in the London congress, on the 23rd of the preceding January, 3. The law of Feb. 3, 1843, approving the boundaries between Belgium and the Netherlands, definitely fixed by the treaty concluded at the Hague on the fifth of November in the year previous.

—In consequence of the constitutional principle already mentioned, that all power emanates from the nation. Belgian citizens are entitled to direct election to the legislative chambers, the communal councils and the provincial councils. The body of electors is composed of all citizens who pay direct taxes, the minimum of which is fixed by law. Formerly, in 1830, the liberal professions were also admitted, without further qualification, as electors to the national congress.

—The electoral law relating to the formation of the chambers, was passed March 3, 1831, and modified by several successive amendments. The communal law and the provincial law have each been modified 17 times, and the electoral law 25 times, since their promulgation. According to the terms of article 26 of the constitution, the legislature is composed of a senate and a chamber of representatives. Since the law of June 2, 1856, the apportionment of the members of the legislative chambers is based upon the general census of the kingdom taken every 10 years. Their numbers, as determined by the law of May 7, 1866, is 124 for the representatives, which would be at the rate of 1 representative for each 40,000 inhabitants; and 62 senators. The latter hold office during 4 years, and every 2 years a new election takes place for one-half the number of representatives.

—The enactments of June 3, 1859, and Feb. 29, 1860, fix the number of provincial and communal judges according to the latest returns of the number of the population.

—The number of provincial and commercial councilors was increased according to laws passed in 1872.

—The offices established by the organic law of March 30, and April 30, 1836, in the communal administration, were those of burgomaster, aldermen (échevins), college of burgomasters and aldermen, and the communal council. In the provincial administration the offices are those of governor, provincial council, standing committee of the provincial council, and arrondissement commissioner. The governors and arrondissement commissioners, corresponding to prefects and sub-prefects in France, are appointed by the king, as are also the burgomaster and the aldermen or échevins, who correspond to the mayors and deputy-mayors in France. The provincial councilors are elected for a term of 4 years, and the communal councilors for 6 years. The burgomasters and the aldermen (échevins) are likewise appointed for the term of 6 years. The king's ministers, 7 in number, in the departments of foreign affairs, the judiciary, the interior, public works, war, finance, are the heads of the general administration, each within his own sphere. Assembled in council, they deliberate upon the subjects which the king submits to them, or which any one of them proposes. There are also ministers without portfolio, entitled ministres d'état, with or without admission to the council.

—Finance. Official documents establish the fact that Belgium, during the 15 years of her union with Holland, annually contributed more than 81 million francs to the expenditure of the state. This was one of the principal grievances which brought on the revolution of 1830. After the separation, there was an increase of expenses, instead of the diminution which had been expected. During the period of 27 years, between 1981 and 1857, the average revenue was 127,220,100 francs per annum, while the average expenditure was 127,439,900 francs, showing a deficit of 219,800 francs a year, for which provision was made by the emission of treasury notes.

—These deficits greatly increased during the ensuing years, the final accounts furnishing the following figures: Receipts, 155,880,739 francs for 1858; 158,349,646 francs for 1859; and 169,709,218 francs for 1860. Then 209,641,495 francs for 1868, against 223,404,893 francs for the year 1867. A loan of 50 millions is included in the amount for 1867, and a loan of 33 millions in the amount for 1868.

—Revenue and expenditure of Belgium, from 1870 to 1879, (the figures for the years 1870 to 1875, both included, are the actual figures, the others are estimated):

Every year the chambers decree the law of accounts, and vote the budget estimates. All laws relative to the revenue and expenditure of the state, or to the appropriations for the army, must first be passed by the house of representatives. (articles 27 and 115 of the constitution).

—Summary, under proper heads, of receipts and expenses, according to the official financial statement for the year 1879:

RECEIPTS.
	Francs
Land taxes...	21,903,000
Assessed taxes...	15,300,000
Trade licenses...	6,000,000
Mines...	800,000
Customs...	18,200,000
Succession duties...	17,320,000
Excise on foreign wines and spirits...	3,855,000
Excise on native spirits...	15,892,00
Excise on beer and vinegar...	10,172,000
Excise on sugar...	3,190,000
Registration duties and fines...	28,800,000
Domains...	2,400,000
Postoffice...	5,902,500
Railways and telegraphs...	92,000,000
Packet boats between Dover and Ostend...	1,150,00
Miscellaneous receipts...	23,156,360
Total...	263,141,860

EXPENSES.
	Francs
Interest on public debt...	74,785,815
Civil list and dotations...	4,535 303
Ministry of justice...	16,272,349
Ministry of foreign affairs...	1,903,535
Ministry of interior...	20,371,424
Ministry of public works...	81,354,389
Ministry of war...	41,063,000
Ministry of finance...	15,274,950
Miscellaneous expenditure...	4,046,000
Total...	239,606,765

Condition of the national debt of Belgium on Jan. 1, 1879:

	Francs
2½ per cent. old debt...	219,959,832
4½ per cent. of 1844...	122,847,182
4½ per cent. of 1853...	141,284,900
4½ per cent. of 1857-60...	63,846,400
4½ per cent. of 1865...	58,581,000
4½ per cent. of 1867-70...	77,578,200
4 per cent. of 1871...	56,394,900
3 per cent. of 1873...	283,083,000
4½ per cent. Railway annuities...	495,870,230
Total consolidated debt...	1,521,947,444
Floating debt (Bons du Trésor)...	19,400,000
Total debt...	1,541,347,444

—Military Organization. The Belgian army consists, on a peace footing, of 42,933 men, officers included, and of 8,791 horses; the war effective is 104,658 men, officers included, and 15,052 horses These numbers comprise the gendarmerie, with 1,562 men and 1,114 horses.

—The army is recruited by voluntary enlistment and by conscription. In times of peace the service of the volunteers and militia-men lasts 8 years, or from the age of 19 to 26.

—Barracks are established in 38 places, for the accommodation of 80,000 men and 10,000 horses.

—Sleeping accommodations are provided by a company, and also by cities, which have undertaken, for a compensation, to furnish quarters for the troops.

—The military workshops and the school of pyrotechny are located at Antwerp. Liège has a foundry for casting cannon and an establishment for the manufacture of arms.

—In 1872 there were 11 strongholds, forts and fortified posts in the kingdom; while the garrisoned towns, or posts not fortified, occupied by the troops, were 20 in number.

—There are military bakeries in 18 towns. The ration of provisions during a campaign consists of 75 décagrammes of bread, 25 déagrammes of meat, 3 déagrammes of rice, 16 grammes of salt, 5 centilitres of gin, 4 centilitres of vinegar. The ration of firewood is 1.375 of a stère. Each soldier in camp receives 5 kilogrammes of straw for bedding, every fornight.

—The ration of forage, for horses of heavy cavalry and artillery, is 4½ kilogrammes of oats, 4 kilogrammes of hay, 4 kilogrammes of straw. For the horses of light cavalry, 4 kilogrammes of oats, 3½ kilogrammes of hay, and 4 kilogrammes of straw. The military pensions registered in favor of retired soldiers, from 1830 to Jan. 1, 1872, inclusive of pensions transferred by Holland, are in number 13,534, reduced by expiration to 4,084, and amounting to 3,815,162 francs. The pensions to widows amounted to 4,198 francs.

—The state navy, formerly reduced to 1 brig and 1 schooner, now comprises 5 steamers. An allowance in the budget has been proposed to build a sixth steamer. In 1878 the commercial marine consisted of 48 vessels, inclusive of 23 steamers.

—The civic guard is in Belgium what the national guard was in France. It numbers about 22,000 men. On June, 1, 1879, the effective force was thus distributed: 23,983 infantry, 5,339 cavalry, 6,937 artillery, 1,262 engineers, and 3,069 other troops.

—Besides this active civic guard, there are yet 668 battalions of civic guard in reserve, representing an effective force of 200,400 men, with commanders and staffs.

—Public Education. On Dec. 31, 1869, there were in Belgium 1,522 primary schools for boys, 1,854 for girls, and 2,265 for both sexes, making, together, 5,641 public and private schools. At the same period there were 5,178 male teachers, and 4,350 female teachers. On Dec. 31, 1869, there were 593,379 school children, of whom 290,510 were boys, and 302,869 were girls. 366,572 boys and girls received gratuitous instruction. The subtraction of 593,379, the number of children in attendance at school, from 753,200, the number of children from 7 to 14 years old, would leave a remainder of 159,821 not receiving instruction. But of this number, at least 20,000 children attended the middle schools, the athenæums and colleges, or special institutions such as schools in almshouses, poor-houses, penitentiaries, and reformatories at Ruysselade and Beermen. Other children attended private classes at home or schools in military garrisons. In 1869 there was one school to every 890 inhabitants. The proportional number of pupils to the populations, in 1869, was 11.8 to every 100 inhabitants. Of 44,179 militia-men inscribed for the levy of 1869, 16,337 could read, write and cipher; 13,811 could only read and write; 2,626 could only read; 10,943 had no school education whatever; and there were 462 whose degree of proficiency in education was not known. Independently of the primary schools, there were, on Dec. 31, 1869, in asylums and infant schools, 27,219 boys and 33,371 girls, or 60,590 altogether; of whom 37,133 were admitted gratuitously. In midday, evening and Sunday schools for adults, there were 112,787 males and 104,381 females, or 217,168 altogether; of whom 214,213 were admitted gratuitously. Among these 217,168 pupils were included 97,737 children under 15 years of age, a large part of whom attended also the primary or industrial schools. In the industrial and manufactory schools and charity workshops (ateliers de charite) there were 1,310 boys and 25,873 girls, or 27,183 children altogether; of whom 18,928 were admitted gratuitously. In the schools connected with hospitals, almshouses, reformatories and prisons, there were 3,713 boys and 1,851 girls, or 6,564 children altogether. Industrial and manufactory schools, charity workshops and schools for apprentices, etc., are found almost exclusively in the provinces of Hainaut and the two Flanders. Most of the children who attend these schools also attend Sunday schools and their number is included in the figures above, which represent the attendance at the Sunday schools. In 1869 the expenses incurred for the ordinary maintenance of the primary schools amounted to 14,500,518 francs. This sum consisted of the following items: Cash balance in hand, 236,155 francs; received from the state, 5,675,036 francs; from the provinces; 1,633,313 francs; from the communes, 5,258,366 francs; from public and private donations, 487,990 francs, and from tuition fees, 1,009,651 francs. From 1867 to 1869, 12,370,910 francs were expended for the construction, purchase, etc., of schoolhouses and residences for teachers. There are two state normal schools, one at Lierre and the other at Nivelles. There are also seven Episcopal normal schools, and five normal sections connected with the middle schools at Bruges, Ghent, Huy, Couvin and Virton, where pupils are trained to become teachers. Female teachers are trained in 15 model schools connected with establishments for the education of young ladies. These establishments are situated in different provinces. At the royal institute of Messines there is, for the daughters of soldiers, a normal school, including a section for the special training of teachers of infant schools.

—The law of June 1, 1850, relative to education in the middle schools, limited the number of athenæums to 10, 2 for Hainaut and 1 for each of the other provinces. The establishments, 50 in number, of the next grade below, are called state middle schools (écoles moyennes de l'état), 18 of which belong to the lower class, 25 to the intermediate, and 7 to the higher class. There are, besides, many communal colleges and communal middle schools, almost all of which are subsidized by the public treasury. There are also some private institutions or boarding schools in the different provinces. In 1869 there were 312 prefects of studies, professors, masters and tutors connected with the athenæums; 506 directors, professors, regents, teachers and assistants in the state middle schools; 181 directors, professors, etc., in the communal colleges which received a subsidy from the public treasury; 96 in the subsidized communal middle schools; 33 in the middle schools exclusively communal; 100 in the colleges; and 43 in the middle schools patronized by the state. At the same period there were 3,569 students in the royal athenæums; 8,313 in the 50 middle schools of the state, 1,453 in the subsidized communal colleges, 1,374 in the subsidized communal middle schools; 456 in the middle schools exclusively communal; 1,236 in the colleges; and 723 in the middle schools patronized by the state. The number of scholars in private schools is not known. 691 pupils are admitted to the athenæums gratuitously or on reduced terms; 1,911 to the state middle schools; 341 to the subsidized communal colleges; 158 to the subsidized communal middle schools; 9 to the middle schools exclusively communal; 195 to the colleges; and 77 to the middle schools patronized by the state: total, 3,382. In 1869 the funds of the middle schools amounted to 2,391,451 francs. Of this sum the state furnished 1,051,773 francs; the provinces, 6,800 francs; the communes, 724,298 francs; tuitionary fees, 554,272; bequests, 19,995; and the balance of cash in hand from the accounts of the previous year, 34,312 francs. The normal institution for the training of teachers in the higher middle schools, is divided into two sections: one for the humanities and the other for the sciences. The humanities are taught at Liège, and the sciences at Ghent. There is a normal institution at Bruges and another at Nivelles for the training of teachers in the lower middle schools. There are two schools of practical agriculture, an agricultural institute, and a veterinary college. There are naval academies at Antwerp and at Ostend, a higher commercial school at Antwerp, more than 80 workshops for apprentices in eastern and western Flanders; 11 institutions for deaf-mutes and the blind, a royal institution exclusively for the benefit of soldiers' daughters, and a reformatory school for boys and one for girls.

—The higher branches of education are taught in a state university at Ghent and another at Liège, in the Catholic university at Louvain, and in another free university at Brussels. A school of civil engineering is connected with the university of Ghent, and a school of arts, mines and manufactures with the university of Liège. During the academic year 1866-7, there were 2,313 students in the four universities, including the special schools connected with the university of Ghent and the university of Liège.

—During the year 1877-8 the number of students attending the various branches of study in each of the four universities was as follows:

—The military school in Belgium is intended for the training of officers for the infantry service, the cavalry, the artillery, the corps of engineers, and also the marine. From the foundation of this school in 1834, until Dec. 31, 1871, 1,424 young men were received into the establishment and afterward admitted to the different branches of the army. The other schools organized in the army are the war school intended for the training of staff officers; the target school for the artillery; the pyrotechnic school; the cavalry school; the special school of subordinate officers of infantry and cavalry, etc; the regimental schools; and the company of soldiers' boys, composed at present of 257 pupils.

—Public Charity. The charitable institutions include three principal classes: 1. The local institutions which afford relief or an asylum to the indigent in sickness, old age, in case of desertion, want of work, and accidents of every kind. 2. The state institutions which are particularly designed to prevent and repress vagrancy and mendacity, to reform beggars and vagabonds. 3. The institutions which are intended to secure the independence of the working classes by fostering among them a spirit of foresight. These institutions are under the patronage of the state.

—Besides these public institutions there are many private establishments of charity, organized by citizens and benevolent associations. These establishments are not under the control of either state or municipal authorities.

—Public charity is dispensed through relief offices and almshouses.

—According to the terms of article 92 of the communal law, every commune must have a bureau of charity for the distribution of provisions at the homes of the needy.

—Establishments managed by hospitalers are generally found in cities. Most of these establishments are old endowed institutions.

—On an average, from 160,000 to 170,000 indigent families, representing 600,000 or 700,000 persons, are yearly registered in the offices of public charity. In years when great distress prevails, there may be registered 200,000 pauper families or 800,000 individuals. The provisions distributed are valued at eight or nine million francs. A law of Feb. 18, 1845, laid down the principle that a pauper is entitled to public assistance by his native commune, provided he has not removed from it. He must have resided during eight consecutive years in one place, before he can become entitled to draw assistance from the communal bureau of public charity. Every pauper has a claim to assistance by the commune in which he happens to be. A commune which furnishes relief to an itinerant pauper has the right to demand re-imbursement of his commune. Donations and bequests made by private citizens, for the benefit of charitable institutions authorized by the terms of article 910 of the civil code, have been valued, in an average year, at more than a million francs.

—In 1869 there were in Belgium 439 almshouses and hospitals, with 30,000 inmates. Their expenses amounted to some 7,500,000 francs per annum.

—In some of the provinces poor-farms (fermes-hospices) were established.

—There are special lying-in hospitals at Brussels, Louvain, Ghent, Bruges. Nieuport, Tournai and Liège. The Brussels hospital, the most important of all, annually receives from 700 to 800 women, who receive all the necessary assistance during their confinement.

—In some of the larger cities of the kingdom there are societies organized to aid friendless women during confinement, and for the maintenance of infant asylums.

—In some 20 towns there are special institutions for the benefit of foundlings and abandoned children who, under the protection of these institutions, are sometimes boarded in the country with farmers. The tours or receptacles for foundlings, introduced by imperial decree on Jan. 11, 1811, have been gradually discontinued. Since the discontinuance of these receptacles, the number of foundlings born of unknown parents has noticeably, even considerably, diminished. The expense of the maintenance of these children formerly amounted to more than 150,000 francs per annum. It has been reduced to 50,000 francs. The last receptacle for foundlings, at Antwerp, was closed in 1860.

—In Brussels, Ghent and Antwerp there are special establishments for the treatment of sick and deformed children.

—There are 10 institutions for the maintenance and instruction of deaf-mutes and the blind. The number of these unfortunates received at the expense of the communes, the province, and the state, is about 300. In 1869 there were 617 blind persons and 521 deaf-mutes in the different asylums, almshouses, etc, besides 3,058 blind persons and 1,468 deaf-mutes living at home. There are 58 insane asylums, of which 18 are public and 40 private, including the colony at Gheel, the only one of its kind, with 1,200 inmates. The number of insane is reckoned at 5,000 in the public institutions, and 2,000 eared for at home.

—There are ophthalmic institutes at Brussels, Mons and Namur.

—In manufacturing towns there are savings banks, most of which are founded by financial corporations.

—There are 22 monts de piété. The capital loaned on pledges amounts to 10 million francs. There are only 3 poor-houses left: one at Stoogstrachin, the other at Bruges and the third at Reckheim. The poorhouses at Mons and Cambre have been discontinued; but a new agricultural colony for the benefit of able-bodied paupers has been established at Merxplas. The inmates of the poorhouses number 1,800. In the reformatory schools at Ruysselade and Beermen there are also 500 boys and 250 girls, committed on account of mendicancy or vagrancy.

—In the cantons there are committees appointed to aid liberated prisoners who manifest a disposition to engage in some honest pursuit. Children acquitted by the magistrates for having acted without discernment, and likewise young beggars and vagrants, are indentured or placed in apprenticeship through the instrumentality of these committees. But most of these committees have gone out of existence. At Namur, Mons, Antwerp, Brussels, Liège and Ghent there are houses of refuge for girls and women, discharged from custody, who show a disposition to renounce the ways of vice. There are also charity workshops for the poor and for those who can not procure work elsewhere.

—Mutual benevolent societies, more than 200 in number, are organized for the benefit of workmen when sick. These societies are regulated by a special law of April 3, 1851. There are savings associations for the purchase and distribution of provisions in winter.

—There are savings institutions for mining laborers, laborers of the state railways, fishermen and seamen. These institutions extend their benefactions to workingmen when sick, wounded, or otherwise disabled, and likewise to their widows and children.

—A law of March 8, 1850, created a general caisse de retrade for the special purpose of providing, by the payment of a certain sum during life, a sure way for any provident person to lay up means against old age. This institution, under the management of the government, was reorganized by a law of March 16, 1855, which added to the institution a savings bank. Deposits in this bank may be effected through any postoffice.

—Religion. The population of Belgium is almost exclusively Catholic. There are only some 13,000 Protestants, and about 1,500 Jews.

—The country is divided into 6 dioceses: the archbishopric of Malmes, including the provinces of Antwerp and Brabant, and the bishoprics of Bruges, Ghent, Liège, Namur and Tournai. The archbishopric has 3 vicars-general and a chapter of 12 canons, and each of the bishoprics 2 vicars-general and a chapter of 8 canons. In each diocese is an ecclesiastical seminary. There are few endowments, and the clergy derive their maintenance chiefly from fees and voluntary gifts. The state pays a salary of 21,000 francs to the archbishop; 16,000 francs to each of the bishops; 2,000 francs to canons; and about 700 francs to parish priests According to the last census there are 1,322 religious houses, 178 for men, and 1,144 for women, with an aggregate number of 18,196 inmates.

—There are 8 ministers of the English Episcopal church, and also 8 chapels—3 in Brussels, and one each in Antwerp, Bruges, Ostend, Spa and Ghent. There is a central Jewish synagogue in Brussels 3 branch synagogues at Antwerp, Ghent and Liège, and 2 of an inferior class at Arlou and Namur.

—Justice. The civil and criminal laws of Belgium are based upon the laws of France, to which country Belgium was long united. Many of these laws have been revised, particularly the penal code, the laws on mortgage, and the legislation in reference to bankruptcy and judicial organization.

—Justice is administered under the control of the cour de cassation (highest court of appeal), by appellate, military and assize courts, by tribunals of first resort, tribunals of commune, councils of war, justices' courts, and councils of prud'hommes. The cour de cassation is located in Brussels. There are 3 courts of appeal, one at Brussels, another at Liège, and the third at Ghent. There are 26 tribunals of first resort, one in each arrondissement; and 204 cantons, each having a justice of the peace.

—The officers of the courts and tribunals are the following: 30 first presidents, 24 presidents and vice-presidents of chambers, 149 counselors and judges: 37 examining officials; 30 attorneys general and king's counselors (procureurs du roi); 8 general and military auditors; 59 attorneys general and substitutes of inferior courts; 30 clerks of courts; 97 deputy clerks; and 48 secretaries and clerks to the prosecutors.

—The tribunals of commerce consist of 74 members, including the presidents and 14 clerks. There are 203 justices of the peace.

—In the budget estimates for the year 1872 the sum of 3,395,850 francs was appropriated for the administration of justice.

—The jury takes cognizance of criminal matters and of political offenses as well as offenses of the press.

—In 1870 the costs of the courts amounted to 722,608 francs. In the same year the fees accruing to the treasury aggregated 246,530 francs.

—Agriculture. Belgium is rich in agricultural products, although its cereals do not suffice for home consumption. In has, considering the relative extent of its area, as much live stock as any other country in Europe. According to the numeration taken at the same time with the census of the population at the close of the year 1866, there were 283,163 horses, 1,242,445 horned cattle, 586,097 sheep, and 632,301 swine in Belgium.

—In 1866 there were 2,663,753 hectares of land under cultivation, of which 1,309,795 hectares (the hectare equals 2,4711 acres) were cultivated by the owners of the soil, and 1,323,958 hectares were leased. These 2,663,753 hectares were divided among 744,007 cultivators, comprising 246,302 owners of all the land which they cultivated; 74,670 owners of more than half the land which they cultivated; 279,433 lessees of all the land which they cultivated; and 143,603 lessees of more than half the land which they cultivated. Cereal and farinaceous products covered 867,135 hectares: vegetables, 37,909; roots, 200,204; grasses and forage, 495,051; plants used in manufactures, 115,308: woods and forests, 434,596; health, brushwood and fallow ground, 262,477 hectares.

—1871 was a good year for crops, except wheat, spring rye, buckwheat and potatoes, of which the crop was only middling. During the year the average yield to the hectare under cultivation was estimated to be as follows: Summer wheat, 16,70 hectolitres (the hectolitre equals 2.75 bush.); bearded wheat, 26 hectolitres; spring rye, 15.87 hectolitres; summer barley, 30 hectolitres; buckwheat, 22 hectolitres; pease, 19 hectolitres; potatoes, 8,838 kilogrammes (the kilogramme equals 2.67951 lbs. troy); summer colza, 19 hectolitres; flax, 561 kilogrammes; meadow grass, 3,931 kilogrammes; clover grass, 20,319 kilogrammes.

—Official statistics of a subsequent date show that agriculture is making steady progress in different part of the country. This is especially apparent in actual improvements, new manures employed, new modes of cultivation, agricultural implements, the use of plaster in fertilizers, the increase in the market value of land the price of farm rents.

—Between 1847 and 1869, 28,289 hectares of waste land belonging to the communes, were converted into arable lands; 28,277 into forests, 3,878 into meadows, and 260 into gardens; which gives an average of cleared land amounting to 2,640 hectares a year. There still remain 102,455 hectares susceptible of improvement.

—Industry. The main branches of industry, generally prosperous, are constantly improving, according to the official statistics of the mines and foreign commerce.

—In 1869 there were in exploitation 285 coal mines, covering an extent of 140,640 hectares. These mines yielded 12,944,000 tons, valued at 136 million francs, and furnished work at wages showing an upward tendency to 89,900 laborers. In 1865 there were only 82,000 men working in the coal mines.

—In 1869 the metallic mines gave employment to 8,526 workmen who worked in 99 mines, and 81 communes having free mines. The yield of these mines represents a value of 5,708,943 francs for the iron, 2,941,065 for the lead, and 2,638,509 for the calamine. In 1840 the corresponding figures were 1,470,896, 12,147 and 804,990.

—In the same year, 1869, there were 322 welding furnaces for the manufacture of iron and cast-iron, employing 23,024 workmen, and yielding products valued at 135,507,352 francs, against 125 millions in 1866, 117 in 1865, 09 in 1867, 103 in 1868, 81 in 1860, and 30 millions in 1850. In other establishments, during the same year, the product of zinc amounted to 34,001,670 francs; of glass, to 28,652,500 francs; of lead, to 5,078,798 francs; of copper, to 4,576,000 francs; of steel, to 2,190,000 francs; of alum, to 331,014 francs; and of nickel, to 152,100 francs. The products of the quarries, 2,361 in number, with 21,262 workmen, amounted to 27,289,509 francs in 1869, a figure slightly different from that of the four preceding years, but ten millions above that of 1860.

—Seraing, near Liège, Verviers, Tirlemont, Brussels and Ghent are the principal places for the manufacture of machinery.

—In Liège and the neighboring communes there are more than 20,000 artisans, men, women and children, engaged in the manufacture of arms. The cannon foundry of Liège is a monopoly of the state. It ships iron and bronze cannon to every country on the continent, and also to countries beyond the see.

—Among other metallurgical industries of Belgium we might mention the cutlery of Namur, the flourishing manufacture of nails, and especially of zinc in its various forms, at Vieille-Montagne, Corphalie and Nouvelle-Montagne, the three great establishments in the province of Liège. The factory of Corphalie turns out also large quantities of lead.

—Woolen industries have long existed, in Belgium, in a prosperous condition. For many years they have proved a source of comfortable livelihood to the people in the Flemish districts. Woolen factories, like all others, had to be centralized and subdivided into several branches, such as spinning, weaving and bleaching, separately conducted in large factories. Uniformity of management and the magnitude of the capital invested have been the principal factors of a cheap production such as the times demand. In the inevitable crisis which ensued Flanders came out victorious. The spinning mills turn out threads of a quality at least equal to the threads manufactured by the best mills in other countries. Belgian textiles fabrics compete as exports with the English in many a market.

—The manufacture of woolens and cloths, which formerly constituted the wealth of Flanders, has had to undergo the same pauses of transformation as the manufacture of flax and linens. At the opening of this century Verviers resolutely adopted the steam woolen spinning which was to supersede band spinning. Woolen factories are now ranked among the most rapidly developing industries in Belgium. Verviers and its suburbs continue to be the center for these factories. A considerable number of mills and more than 18,000 operatives are kept busy turning out woolen fabrics, cloths and fancy stuffs.

—Carpet factories are mostly found at Tournai. For some time past there has been an important carpet factory also at Ingelmünster in western Flanders.

—It is estimated that 28,000 persons are engaged in cotton industries, only one-third of this number being in eastern Flanders. Calicoes made at Ghent still find buyers at Manchester, the center of English manufactures. Cotton industry, which was planted in Belgium at the beginning of this century, grew rapidly during the French empire and the union of Belgium with Holland. After having remained almost stationary from 1830 to 1845, commencing at this last date cotton industry entered on an era of prosperity, such as marked the progress of other branches of manufactures in Belgium. Hosiery, a branch of industry which is constantly improving, is carried on mainly near Tournai and the French frontier. Besides the workmen regularly employed in these factories, these establishments furnish work to a large number of women and girls, who derive great benefit from it. Ribbon-making, one of the old industries of the country is rising from the decay into which it had fallen. The passementeris is also advancing, and its contributions to foreign markets become more important every year in consequence of improvements introduced into this branch of industry.

—Lace-making, one of the principal branches of manufacture in Flanders and the provinces of Brabant and Antwerp, gives employment to about 125,000 women and girls, 20,000 of whom are engaged at work in Brussels, which is celebrated for its lace works. Nets, the best of which formerly came from Scotland, are now manufactured at Brussels in such perfection that the best houses in Paris important them from Belgium to apply on them the flowers which for some years past are being manufactured in France. The Mechlin, made of linen, the Grammont, made of cotton and silk, the Brussels and the Valenciennes, are the four principal laces manufactured in the kingdom.

—The manufacture of silks is not sufficient for home consumption. There are about 600 looms in operation, divided among some 30 manufacturers, in the provinces of Antwerp and eastern Flanders, and also at Brussels. Belgium has a rich population, who consume perhaps more silks than any other in Europe, and among whom silk materials are yearly entering more largely into the manufacture of garments and upholstery.

—Breweries and distilleries, sugar refineries, cigar and tobacco factories, manufactories of paper and articles of gold, have received a great impetus and yield large profits every year.

—Commerce. From 1841 to 1850 to import and export business of Belgium amounted, in the aggregate, to 6,500 million francs. From 1831 to 1860 this figure was more than doubled, having risen to near 14,000 millions; and from 1861 to 1870 it was quadrupled, or amounted to 25,850 millions. These figures need no comment.

—In 1870 the "general commerce" amounted to 3,282 million francs, of which 1,760,200,000 was for imports and 1,521,800,000 for exports; or 2,094,800,000 francs by land and by river transportation, and 1,187,200,000 by sea.

—The value of the general commerce in the year 1878 was represented by 2,450,858,592 francs for imports, and 2,084, 341,792 for exports. The "special commerce" was as follows in the year 1878: imports for home consumption, 1,457,240,512 francs; exports of home produce, 1,117,278,288 francs.

—Means of Transportation. The number of highways constructed since the independence of Belgium is truly marvelous. During this period more roads have been opened than had been constructed for centuries before. In 1869 there were 1,053 leagues (of 5,000 metres) of state roads, 289.71 leagues of other roads, and 127.61 of leased roads, making altogether, 1,473.15 leagues.

—The first railway in Belgium from Brussels to Malines, was opened for traffic on May 5, 1835.

—In 1869 there were 589 kilomètres or railways belonging to the state, and more than 259 kilomères of lines constructed by private companies, but operated by the state. Travelers to the number of 13½ million were carried by the roads belonging to the state. There are more than 2,000 kilomètres of roads operated by private companies.

—On Jan. 1, 1880, there were in operation: state railways, 2,662 kilomètres; private companies' railways, 1,350 kilomètres; total, 4,012 kilomètres.

—The opening of parish roads is also encouraged by the government. A law of April 10, 1841, provided for the preservation, improvement, maintenance and police of these roads. At the close of the year 1830 there were 1,494 kilomètres parish roads of all classes, and in 1855 there were 9,866 kilomètres. From 1841 (when the state assumed a part of the expenses of roads then inaugurated) until the year 1866, the various sources of revenue applied to the defraying of these expenses amounted to 66,927,054 francs. By means of these subsidies about 11 million metres of roads were paved, ballasted and finished.

—In Belgium there are 851 kilomètres of canal and 974 kilomètres of river navigation. The two longest canals are the Campine, which unites the Meuse to the Escaut, and measures with its branches, 168 kilomètres in length; and the Charleroi at Brussels, which is 89 kilomètres long, including its branches. Since 1830 only one-half of the length of these canals has been open to navigation. Several other canals and rivers have undergone improvements since 1830. The principal navigable rivers are the Escaut (233 kilomètres), the Meuse (186), the Lys (115), the Sambre (94), the Dendre (75) from Ath to Termonde.

—BIBLIOGRAPHY. There are many works of reference on Belgium. Confining ourselves to political history and statistics, we may mention the following: Essai historique et politique sur la révolution belge, by J. B. Nothomb, third edition, Brussels, 1833, 1 vol. 8vo; La Belgique sous le règne de Lépold I. Etudes d'historie contemporanie, by J. J. Thonissen, 2nd et., Louvain, 1861, 3 vols. 8vo: Les foundateurs de la Monarchie belge, by Thomas Juste, Brussels, 12 vols. 8vo, (1872); Statistique générale de la Belgique, Exposé de la situation du royaume, période décennale de 1841 à 1850, published by the minister of the interior, Brussels, 1852, 1 vol. 4to. The ensuing period, from 1851 to 1860, appeared in 1864—5, in 3 vols. 4 to, Annuaire Statistique de la Be gique, published since 1870, by the department of the interior; La Belgique; ses ress nurces agricoles, industrielles at commerciales, by H. Tarlier, Brussels, 1879, 8vo; La révolution belge de 1830, d'aprés des documents inédits Brussels, 1872, 2nd ed.

XAVIER HEUSCHLING.

BELL

BELL, John, was born near Nashville, Tenn. Feb. 15, 1797, and died near Nashville, Sept. 10, 1869. He was graduated at the university of Nashville in 1814, was admitted to the bar in 1816, was a representative in congress (whig) 1829-41, was secretary of was under Harrison and Tyler (see ADMINISTRATIONS), and was United States senator 1847-59. During the latter part of his term of office he was one of the "south" Americans (see BORDER STATES, WHIG PARTY) who held aloof from both the democrats and republicans, only wishing to stop all agitation for or against slavery; and in 1860 he was the candidate of the constitutional union party for the presidency.

A. J.

BELLIGERENTS

BELLIGERENTS, parties actually at war.

—I. Just as, in the eyes of international law, not every armed contest is a war, the quality of belligerents is not recognized as existing in all parties engaged in war. Sovereign states at war are always belligerents. Doubt arises only when one of the parties to the struggle, or both, are not in the enjoyment of political sovereignty. Combatants must therefore be recognized, either implicitly or explicitly, as belligerents. In what case do they enjoy this quality? This depends on circumstances. Generally the quality of belligerents is accorded to members of a confederation which engage in a struggle with each other. The reason of this is, on the one hand, because they are regularly organized and observe the rules of international law; on the other, because the neutral states have neither the wish nor the right to decide which party is in the wrong, the interpretation of a constitutional or federal question being a domestic affair; and finally, for humane reasons, because belligerents are treated more mildly than insurgents. The quality of belligerents is accorded to two parties even in the case when a federal government presents the question as in the nature of an execution, that is to say, as an act of justice or coercion foreseen by the law. This was the case in the struggle of the Sonderbund in Switzerland, in 1847; in that of the United States from 1861 to 1865; and in that of Prussia in 1866 against the majority of the other states of the German Confederation.

—In case of civil war what the custom of nations in the premises is, is not so well defined. Usually, the quality of belligerents is refused to insurgents as long as the government they have rebelled against remains in a condition to subdue them. When insurgents seem about to gain the upper hand, other states consult their own policy and act accordingly. More than one state has come to the assistance of insurgent provinces, and even been seen to foment the rebellion to its own profit; but these acts are not within the domain of international law. Their forum is conscience, public opinion and history.

—Governments do not see with pleasure the quality of belligerents accorded to these whom they look upon as rebels, because this ends the latter a certain moral force: in return, however, it frees such governments from all responsibility for any damage which the insurgents may commit. For example, during the war of secession in the United States, if English or French subjects had suffered a loss by the act of one of the agents of the government of the south, it was to this government of the south only that England or France could turn for redress, and with the fall of the confederacy every chance of remedy was lost. In the case of a Turkish subject it would have been different. Turkey not having recognized the confederates as belligerents, could have had recourse to Washington and said. Your rebels have committed depredations to my loss; I ask to be indemnified.

—Here is a case somewhat older, cited by Mr. Lawrence (Commentary on Wheaton): Mr. Canning wrote to Lord Granville, June 22, 1826, that if the English government admitted with M. de Villèle that the powerlessness of the Greek government to keep its population in order justified an appeal to the English government and reprisals in case of the failure of such an appeal; that if it admitted with Austria (and he feared then with France) that the Greek government itself was only an insurrection, without rights or national duties, then the Turkish government itself was the one to which appeal should be made; that if the Turkish government was rendered responsible for the acts of piracy committed by certain Greek ships, then the Greek government being only a great act of piracy, the porte was responsible for the consequences.

—Moreover, recognition of belligerents is often nothing more than the recognition of a fact, and does not in any was weaken the legal tie which may exist between the combatants (see session of the French senate, Feb. 12, 1864, Rapport sur la pétition des Polonais). In other terms it is recognized that there is war, that is all: no decision is made as to which side is in the right.

—But how if a government at war with insurgents recognizes them as belligerents? Then one should distinguish according as the neutral states have themselves recognized the insurgents as belligerents, or have not recognized them. In the first case they relieve the rightful government of all responsibility for the acts of the de facto government; in the second, it is the government de jure which is responsible. It may happen that the insurrection is so great that a government, while proclaiming the insurgents to be rebels, treats them in fact as belligerents, through humanity or for other reasons, as took place during the war of secession in the United States. As a matter of fact an order of the day issued at Memphis, announced in April, 1865, that, beginning with May 23, confederate soldiers who should not have surrendered by that date should be treated as rebels and not as prisoners of war. This king of recognition has no influence on international law. It is a domestic matter entirely.

—The character of belligerents has never been accorded to pirates, nor to filibusters, nor brigands, not to any of those who commit violence in their own private interest, or even to those who, guilty of violence, have not been duly authorized by their sovereign.

—Thus, in 1866, during the war between Prussia and other German states, and notably Bavaria, a Bavarian collected some men together and made an incursion into a place in the vicinity of the principality of Hohenzollern, of which he took possession in the name of his government, without having been censured for the depredation. He was nevertheless brought before a Bavarian tribunal for this deed and punished for having acted without authorization. For the same reason citizens not forming a part of the army should abstain from taking part in war, for the enemy will not recognize them as belligerents and will punish them severely. All nations are at one on this point.

—II. Having examined the question as to whom the quality of belligerents belongs, we shall set forth in brief what the rights and duties connected with it are.

—These rights, which in ancient times and up to the middle ages were considered without limit, since there was no right for the conquered—vœ victis—became more restricted by degrees since modern usage did not permit more harm to be inflicted on the enemy than was necessary to obtain victory. Even this is enough to make humanity shudder, but once war is admitted, it can not be otherwise. Consequently, combatants have a right to kill the soldiers of the enemy who attack them, but they must spare the wounded and the soldiers who surrender. The lives of non-combatant citizens and, for a greater reason, the lives of women and children, are sacred; for them the law of war does not exist; they remain under the rule of peace, provided, be it well understood, that they commit no warlike act. If non-combatants violate the peace, their punishments is all the greater, as they were not suspected. All civilized nations without exception are agreed on this point.

—Just as the lives of non-combatants are safe, so should their property be. But as the occupation of the enemy's territory brings with it the suspension of the authorities established there who are replaced by those of the enemy, the latter enjoy, provisionally or temporarily, all the rights of sovereignty. The hostile authority, therefore, can demand of the inhabitants of the places occupied all that the national authority might have exacted, notably the maintenance of their troops, of ordinary or extraordinary taxes, requisitions in kind according to regular rule, and by giving receipts, so that if there is a chance the requisitions may be paid for by the country. Requisitions, however, can be levied only in so far as they are unnecessary to the enemy's army. But the single soldier never has the right to use force in his own private interest.

—However, if the established authorities are de jure suspended, the enemy may nevertheless see fit to retain them. He can do so in his own interest as well as through humanity; but I his step is useful to him it is far from being harmful to the country occupied. Governments have seen fit to command their agents to quit their posts under similar circumstances, and the agents may have thought patriotism imposed on them the duty of departing; but we do not know if this way of looking at the question is correct. Their departure causes less harm to the enemy than to the people. On the other hand, if the enemy enjoys de facto all the rights of sovereignty, the sovereignty of the enemy does not go to the length of prescribing constitutional changes. In return he is not limited by the ordinary laws of the country, since he can legislate in virtue of his temporary but de facto sovereignty.

—The powers which the usages of war accord to belligerents are too extensive not to make it their duty to use them moderately. The modern laws of war condemn cruelly and useless devastation, the breaking of one's parole, and everything contrary to honor. They proscribe also the use of barbarous weapons, poison, explosive bullets (but no cannon balls). Happily if war has remained cruel (and it will be so always), no nation has here a right to throw stones at its neighbors—still the horrors so frequent in former times have become rare. Adversaries, it is true, mutually accuse one another of abominable cruelty, but there are generally either exaggerations or disputed facts, more frequently the latter. Lies are always to be regretted, but in this case they are criminal, for they envenom and perpetuate quarrels, and always cause the shedding of innocent blood. The evil is great enough of itself: it is quiet unnecessary to add anything to it. (See WAR; WAR, CIVIL.)

MAURICE BLOCK.

BENTON

BENTON, Thomas Hart, was born near Hills borough, N. C., March 14, 1782, and died at Washington City, April 10, 1858. He began practicing law in Nashville, Tenn., and was Jackson's aide; but a street fight with Jackson made life in Nashville so unpleasant to him that he removed to Missouri, and served as United States senator from that state (democrat) 1821-51. In the senate he was a voluminous and rather tiresome speaker, but his speeches were widely read and had great influence with the country. He was a southern democrat, opposed to secession and to agitation for or against slavery, and so lost ground in his own state. He served as representative in congress 1853-5, but was defeated in every other election after 1851—See 1 Parton's Life of Jackson, 392; Benton's Thirty Years' View; Benton's Debates of Congress; 26 Atlantic Monthly.

A. J.

BERLIN DECREE

BERLIN DECREE. (See EMBARGO.)

BILL

BILL A bill is a draft of a law presented to a legislative body for enactment. In the British parliament it is a form of statute submitted to the house of lords or commons, and becomes an act after passing both houses and receiving the royal assent. It is the same in the American congress, with the exception that under its rules, a joint resolution may be construed to be a bill. In English legislation no bill can become a law without the sovereign's assent. In American legislation a bill may become a law without the sanction of the president, provided, that after its disapproval by the executive, upon its re-consideration by congress. Two-thirds of both houses shall agree to pass the bill. It is also provided by the constitution that if any bill shall not be returned by the president within ten days (Sundays excepted) after it shall have been presented to him, the same shall be law. In England. Previous to the reign of Henry VI., the form of proceeding was by petition from the house of commons, with the concurrence of the house of lords and prelates, assented to by the king, and enrolled thereafter by the judges or others of the king's council. Frequently by modification or addition to the subject matter presented by the commons, or by abridgment in the answer of the crown, the certain purpose of the proceeding was defeated As early as the reign of Henry V. the house of commons remonstrated, and insisted that the statutes would be framed in strict accordance with the petition. The opposition to these evils became so intense, that in the succeeding reign of Henry VI the practice was established of presenting the matter for which the sovereign's approval was entreated, in the form of a bill, and since that period the rule has been engrafted upon English constitutional law, that nothing shall be enacted without the consent of the commons; and while the crown, at its option, may reject or assent to the bills of parliament, it can not alter them. But the rule is likewise established, that if the crown is specially interested in a bill, its assent must be obtained before its passage by the two houses; and should the royal patronage in anyway be affected, royal assent must be had before any proceedings are begun. The English rule also prescribes that the purport of a bill of attainder, or a bill granting titles, before presentment in parliament, must be laid before the sovereign. In early times the chief duty of the commons when summoned by the crown, was, at its dictation, to vote its supplies. The custom is partially preserved as the house of commons will not entertain a supply bill unless the crown first submits it. A bill granting a pardon is always first signed by the sovereign before any proceedings are entertained, and is subject to but one reading in each house of parliament. A bill consists of a preamble stating the need of the particular legislation, and the enacting clauses. Bills are of two kinds, public and private. A public bill relates to matters in which the public generally are interested. A private bill is for the particular interest or benefit of an individual, a private corporation, or a town or county.

—The procedure with regard to bills is in many respects similar in both English and American legislation. In fact, American parliamentary law has been moulded after that of the English. Any member can introduce a hill in congress on one day's notice (unless by unanimous consent) in the senate, and in the house every Monday, and at other times by unanimous consent. There are under the rules three readings of every bill, two of which are usually by the title only: the first on its presentment, the second at least one day later, and the third before the vote on its final passage. In cases of emergency, however, under a suspension of the rules, requiring a vote of two-thirds, all the proceeding may take place on the same day. On the second reading the bill is either committed or ordered to be engrossed and read a third time. If committed. It is then referred to committee of the whole house, or to a standing committee, which the speaker names. When ready to report, the chairman, or some member of the committee to whom the bill was referred, presents a written report to the house, with or without amendments to the bill, as the case may be, and the committee is discharged from its further consideration. Upon order of the house, however, the same matter may be re-committed to them; in that event the whole question comes before the committee de novo, and they proceed again upon its consideration as if nothing had passed. After the bill has been read a second time, if no proposition for commitment be made, its is read by paragraphs, and if it has come from the other house the order is, whether it shall pass to the third reading. If it originates with themselves the question is, whether it shall be engrossed and read a third time. After the bill is passed it can not be altered in any particular; its title, however, can be amended. The bill is then sent by message to the other house, requesting its concurrence. After its passage by both houses it is enrolled on parchment, certified by the clerk or secretary of the house in which it originated, and sent to the joint committee on enrolled bills for examination. Having been signed by the speaker of the house and the president of the senate, and entered (by title) on the journal of each house, it is presented finally to the executive for his approval. (See ACT.)

JOHN W. CLAMPITT.

BILL OF EXCHANGE

BILL OF EXCHANGE. In commerce this term is generally used to designate that species of mercantile transactions by which the debts of individuals residing at a distance from their creditors are canceled without the transmission of money.

—Among cities or countries having any considerable intercourse together, the debts mutually due by each other approach, for the most part, near to an equality. There are at all times, for example, a considerable number of persons in London indebted to Hamburg; but, speaking generally, there are about an equal number of persons in London to whom Hamburg is indebted. And hence, when A of London has a payment to make to B of Hamburg, he does not remit an equivalent sum of money to the latter, but he goes into the market and buys a bill upon Hamburg; that is, he buys an order from C of London addressed to his debtor D of Hamburg, requesting him to pay the amount to A or his order. A, having indorsed this bill or order, sends it to B, who receives payment from his neighbor D. The convenience of all parties is consulted by a transaction of this sort. The debts due by A to B, and by D to C, are extinguished without the intervention of any money. A of London pays C of ditto, and D of Hamburg pays B of ditto. The debtor in one place is substituted for the debtor in another; and a postage or two, and the stamp for the bill, form the whole expenses. All risk of loss is obviated.

—A bill of exchange may, therefore, be defined to be an order addressed to some person residing at a distance, directing him to pay a certain specified sum to the person in whose favor the bill is drawn, or his order. In mercantile phraseology, the person who draws a bill is termed the drawer; the person in whose favor it is drawn, the remitter; the person on whom it is drawn, the drawer; and after he has accepted the acceptor. Those person into whose hands the bill may have passed previously to its being paid, are, from their writing their names on the back, termed indorsers; and the person in whose possession the bill is at any given period, is termed the holder or possessor.

—The negotiation of inland bills of exchange, or of those drawn in one part of Great Britain and Ireland on another, is entirely in the hands of bankers, and is conducted in the manner already explained. Bills drawn by the merchants of one country upon another are termed foreign bills of exchange, and it is to their negotiation that the following remarks principally apply.

—Par of exchange. The par of the currency of any two countries means, among merchants, the equivalency of a certain amount of the currency of the one in the currency of the other, supposing the currencies of both to be of the precise weight and purity fixed by their respective mints. Thus, according to the mint regulations of Great Britain and France, £1 sterling is equal to 25 fr. 20 cent. which is said to be the par between London and Paris. And the exchange between the two countries is said to be at par when bill are negotiated on this footing; that is, for example, when a bill for £100 drawn in London is worth 2,520 fr. in Paris, and conversely. When £1 in London buys a bill on Paris for more than 25 ft. 20 cent., the exchange is said to be in favor of London and against Paris; and when, on the other hand, £1 in London will not buy a bill on Paris for 25 fr. 20 cent., the exchange is against London and in favour of Paris.

—The foregoing statements explain what is usually meant by the par of exchange; but its exact determination, or the ascertaining of the precise equivalency of a certain amount of the currency of one country in the currency of another, is exceedingly difficult. If the standard of one be gold and that of another silver, the par must necessarily vary with every variation in the relative values of these metals. This, however, is not all: even where two countries use the same metal for a standard, its value may be greater in one than in the other, and in estimating the par of exchange between them this difference must be taken into account. In illustration of this we may take the case of France and Mexico: they both, let us suppose, use silver for a standard; but silver being largely produced in Mexico, is always cheaper there than in France, and is extensively imported into the latter; and taking the cost of this importation at 2 or 3 per cent., it is plain that the exchange would be really at par when it appeared to be 2 or 3 per cent. Against Mexico. But the value of the precious metals, even in contiguous countries, is always exposed to fluctuations from the over-issue or withdrawal of paper, from circumstances affecting the balance of payments, etc., as shown above. It is obvious, therefore, that it is all but impossible to say, by merely looking at the mint regulations of any two or more countries, and the prices of bullion in each, what is the par of exchange between them. And, luckily, this is not necessary. The importation and expiration of bullion is the real test of the exchange. If bullion be stationary, neither flowing into nor out of a country, its exchanges may be truly said to be at par; and, on the other hand, if there be an efflux of bullion from a country, it is a proof that the exchange is against it, and conversely if there be an influx of bullion into a country.

—Circumstances which Determine the Course of 'Exchange. The exchange is effected, or made to diverge from par, by two classes of circumstances: first, by any discrepancy between the actual weight or finances of the coins, or of the bullion for which the substitutes used in their place will exchange, and their weight or fineness as fixed by the mint regulations; and secondly, by any sudden increase or diminution of the bills drawn in one country upon another.

—1. It is but seldom that the coins of any country correspond exactly with their mint standard; and when they diverse from it, an allowance corresponding to the difference between the actual value of the coins and their mint value must be made in determining the real par. Thus, if, while the coins of Great Britain correspond with the mind standard in weight and purity, those of Finance were either 10 per cent. worse or debased below the standard of her mint, the exchange, it is obvious, would be at real par when it was nominally 10 per cent. against Paris, or when a bill payable in London for £100 was worth in Paris 2,772 fr. instead of 2,520 fr. In estimating the real course of exchange between any two or more places, it is always necessary to attend carefully to this circumstance; that is, to examine whether their currencies be all of the standard weight and purity, and if not, how much they differ from it. When the coins circulating in a country are either so worn or rubbed as to have sunk considerably below their mint standard or when paper money is depreciated from excess or want of credit, the exchange is at real par only when it is against such country to the extent to which its coins are worn or its paper depreciated.

—2. Variations in the actual course of exchange, in the price of bills, arising from circumstances affecting the currency of either of two countries trading together, are nominal only: such as are real grow out of circumstances affecting their trade.

—When two countries trade together, and each buys of the other commodities of precisely the same value, their debts and credits will be equal, and, of course, the real exchange will be at par. The bills drawn by the one will be exactly equivalent to those drawn by the other, and their respective claims will be adjusted without requiring the transfer of bullion or any other valuable produce. But it very rarely happens that the debts reciprocally due by any two countries are equal. There is almost always a balance owing on the one side or the other; and this balance must affect the exchange. If the debts due by London to Paris exceeded those due by Paris to London, the competition in the London market for bills on Paris would, because of the comparatively great amount of payments our merchants had to make in Paris, be greater than the competition in Paris for bills on London; and, consequently, the real exchange would be in favor of Paris and against London.

—The cost of conveying bullion from one country to another forms the limit within which the rise and fall of the real exchange between them must be confined. If 1 per cent. sufficed to cover the expense and risk attending the transmission of money from London to Paris, it would be indifferent to a London merchant whether he paid 1 per cent. premium for a bill of exchange on Paris, or remitted money direct to that city. If the premium were less than 1 per cent., it would clearly be his interest to make his payments by bills in preference to remittances; and that it could not exceed 1 per cent. is obvious; for every one would prefer remitting money to buying a bill at a greater premium than sufficed to cover the expense of a money remittance. If, owing to the breaking out of hostilities between the two countries, or to any other cause, the cost of remitting money from London to Paris were increased, the fluctuations of the real exchange between them might also be increased; for the limits within which such fluctuations may range correspond in all cases with the cost of making remittances in cash.

—Fluctuation in the nominal exchange, that is, in the value of the currencies of countries trading together, have no effect on foreign trade. When the currency is depreciated, the premium which the exporter of commodities derives from the sale of the bill drawn on his correspondent abroad is only equivalent to the increase in the price of the goods exported, occasioned by this depreciation. But when a premium on a foreign bill is a consequence, not of a fall in the value of money, but of deficiency in the supply of bills, there is no rise of prices; and in these circumstances the unfavorable exchange operates as a stimulus to exportation. As soon as the real exchange diverges from par, the mere inspection of a price current is no longer sufficient to regulate the operations of the merchant. If it be unfavorable, the premium which the exporter will receive on the sale of his bill must be included in the estimate of the profit he is likely to derive from the transaction. The greater that premium, the less will be the difference of prices necessary to induce him to export. And hence an unfavorable real exchange has an effect exactly the same with what would be produced by granting a bounty on exportation equal to the premium on foreign bills.

—But for the same reason that an unfavorable real exchange increases exportation, it proportionally diminishes importation. When the exchange is really unfavorable, the price of commodities imported from abroad must be so much lower than their price at home as not merely to afford, exclusive of expenses, the ordinary profit of stock on their sale, but also to compensate for the premium which the importer must pay for a foreign bill if he remit one to his correspondent, or for the discount, added to the invoice price, if his correspondent draw upon him. A less quantity of foreign goods will, therefore, suit our market when the real exchange is unfavorable; and fewer payments having to be made abroad, he competition for foreign bills will be diminished, and the real exchange rendered proportionally favorable. In the same way it is easy to see that a favorable real exchange must operate as a duty on exportation, and as a bounty on importation.

—It is thus that fluctuations in the real exchange have a necessary tendency to correct themselves. They can never, for any considerable period, exceed the expense of transmitting bullion from the debtor to the creditor country. But the exchange can not continue either permanently favorable or unfavorable to this extent. When favorable, it corrects itself by restricting exportation and facilitating importation; and when unfavorable, it produces the same effect by giving an unusual stimulus to exportation, and by throwing obstacles in the way of importation. The true PAR forms the center of these oscillations; and although the thousand circumstances which are daily and hourly affecting the state of debt and credit prevent the ordinary course of exchange from being almost ever precisely at par, its fluctuations, whether on the one side or the other, are confined within certain limits, and have a constant tendency to disappear.

—This natural tendency which the exchange has to correct itself is powerfully assisted by the operations of the bill-merchants.

—England, for example, might owe a large excess of debt to Amsterdam; yet, as the aggregate amount of the debts due by a commercial country is generally balanced by the amount of those which it has to receive. The deficiency of bills on Amsterdam in London would most probably be compensated by a proportional redundancy of those on some other place. Now, it is the business of the merchants who deal in bills, in the same way as of those who deal in bullion or any other commodity, to buy them where they are cheapest, and to sell them where they are dearest. They would, therefore, buy up the bills drawn by other countries on Amsterdam, and dispose of them in London; and by so doing, would prevent any great fall in the price of bills on Amsterdam in those countries in which the supply exceeded the demand, and any great rise in Great Britain and those countries in which the supply happened to be deficient. In the trade between Italy and Great Britain the bills drawn on the latter country amount almost invariably to a greater sum than those drawn on Italy. The bill-merchants, however, by buying up the excess of the Italian bills on London, and selling them in Holand and other countries indebted to England, prevent the real exchange from ever becoming very much depressed.

—Negotiation of Bill of Exchange. Bills of exchange may be made payable on demand (the invariable term of payment in the case of checks), at sight, at a certain specified time after sight or after date, or at usance, which is the usual term allowed by the custom or law of the place where the bill is payable. In most countries, though not in all, a few days are allowed for payment beyond the term when the bill becomes due. These are denominated days of grace, and vary in different parts. In Great Britain and Ireland, and the United States, there days' grace are allowed on all bills except those payable on demand, which must be paid as soon as presented.

J. R. M'CULLOCH and HUGH G. R.EID

BILL OF RIGHTS

BILL OF RIGHTS. A bill of rights is an abstract of rights and privileges claimed by a people.

—In English constitutional law the bill of rights is known especially as the act of parliament 1 William and Mary, (see. 2, c. ii.), by which certain demands contained in the declaration of rights, were enacted as essentials principles of political liberty.

—The formation and adoption of the English bill o rights constitutes one of the most important epochs in the history of British constitutional law. It is the last of the three great acts upon which the liberty of the English citizen has been founded, and which, with such a unity of principle, so pervades and sustains his personal freedom, that they may be proclaimed to be a trinity of principles, consolidated in a great fundamental truth, forming what lord Chatham called "the Bible of the English constitution."

—The first of these acts which have been so firmly engraven upon English constitutional law, is that of magna charta, which in crude text before the discernment of legal forms had appeared, proclaimed in king John's oath before the barons at Runnymede, in 1215, that "No freeman shall be taken or imprisoned or disseized or outlawed or banished or any ways destroyed—nor will we pass upon him, nor will we send upon him, unless by the lawful judgment of his peers, or by the law of the land." "We will sell to no man; we will not deny to any man either justice or right." This has become a perpetual law of the realm, and each English sovereign swears, in express form of words, to support it, as a part of the coronation oath.

—The second of these acts was the famous "Petition of Rights," which was an explicit affirmation of the principles of magna charta, applied to existing grievances. The arrest of John Hampden and four other citizens, for refusing to pay certain taxes levied by the king's order, and their subsequent treatment, occasioned the excitement which produced this act, and started the revolution which fills so many memorable pages of English history. They applied to the court of king's bench for the writ of habeas corpus, to know whether their commitment was by the "law of the land," and the charge upon which it was made.

—The writ was granted; but the warden of the fleet made return that they were detained by a warrant from the privy council informing him of no particular cause of imprisonment, but that they were committed by the special command of his majesty, the king.

—This return, made by the warden of the fleet, was followed by fierce denunciation on the part of the people, resulting in the petition of rights. This instrument, among other things, recited that, "whereas by the statute called the 'Great Charter of the Liberties of England,' it is declared and enacted that no freeman may be taken or imprisoned, or be disseized of his freehold or liberties, or his free customs, or be outlawed or exiled, or in any manner destroyed, but by the lawful judgment of his peers, or by the law of the land." "And in the eighth and twentieth year of the reign of king Edward III. it was declared and enacted by authority of parliament, that no man of what estate or condition that he be, should be put out of his lands or tenements, nor taken, nor imprisoned, nor disinherited, nor put to death without being brought to answer by due process of law." "Nevertheless, against the tenor of said statutes and other the good laws and statutes of your realm, to that end provided, divers of your subjects have of late been imprisoned without any cause showed, and when for their deliverance they were brought before your justices by your majesty's writs of habeas corpus, there to undergo and receive as the court should order, and their keepers commanded to certify the causes of their detainer, no cause was certified, but that they were detained by your majesty's special demand, signified by the lords of your privy council, and yet were returned back to their several prisons without being charged with anything to which they might make answer according to law."

—In answer to this petition, to appease the excitement of the people, the king signed new guarantees of liberty. The royal work was, however, again broken, and odious and oppressive acts imposed upon the nation. The struggle between the people and the king began again and raged with great passion until Charles I was beheaded, and the form of government known as the "Protectorate of Oliver Cromwell" came into existence.

—The third great act in British history which was the culmination of the principles of magna charta and the petition of rights, was after the restoration, in the year 1689, and under the reign of James II. This revolutionary period closed with the enactment of the "Bill of Rights," the exile of James II., and the closing forever, among British sovereigns, of the line of kings from the house of Stuarts.

—James II. ascended the British throne with two aims as the summit of his ambition. One was the overthrow of the constitutional system of England; the other, the restoration of the Catholic religion. In these endeavors the king resorted to the use of a vast number of illegal means, chief among which was the creation of a great standing army; the erection of a new court of ecclesiastical commission; the violation of the privileges of the universities; the suspension of the writ of habeas corpus; the nullification of the test act; and the modeling and remodeling of corporations in the hope that a parliament might be packed that would give to the king's illegal acts the color and form of law.

—By these acts of usurpation and oppression, in the attempted overthrow of the English constitutional law, he arrayed against him nearly all of his subjects. And, as it were, to complete that alienation of feeling between the subject and the sovereign, he adopted other odious measures. He made the foreign policy of his country subservient to that of France, so as to gain the favor of Louis XIV to his home policy. And to crown his acts of illegal seizure, he ordered the arrest of the archbishop of Canterbury and six bishops of the church of England, and their imprisonment in the Tower, for petitioning the king against his majesty's order that the "declaration of indulgences should be read in the churches".

—These tyrannous acts so aroused the people that upon the pretended birth of a son to queen Mary to create an heir to the kingdom and thus perpetuate the king's line, the revolution began.

—William, prince of Orange, Protestant, and Mary his wife, who was the daughter of James, were invited by the earls of Shrewsbury, Devonshire and Derby, lord Lumley, Henry Sidney, Edward Russell and Henry Compton, the suspended bishop of London, to invade England and strike for the crown. In response to this invitation from some of England's most powerful leaders, William landed with a military force of 15,000 men. Although meager compared to king James' army, and totally inadequate to the conquest of a kingdom, yet such was the feeling of the English people, and so pronounced their hostility to James, that all classes in great numbers flocked to the standard of the prince of Orange, and James, abandoned by all, including his daughter Anne, fled to France, where he was received and pensioned by the French king Louis XIV. In the following year he attempted to regain his throne by invading Ireland, and in July, 1690, fought the battle of the Boyne, where he was signally defeated by William, and driven forever from British soil.

—At the time (Feb. 13, 1689,) that the crown was tendered to the princess of Orange, an instrument called the "Declaration of Rights," a digest of those fundamental principles of the English constitution, which were to be imposed as a condition of their acceptance of the crown, was delivered. This declaration recited the principal grievances which the nation had suffered under the preceding reign, viz., the assumption as a royal prerogative to grant a dispensation from penal acts of parliament; the establishment of a new tribunal to determine ecclesiastical questions; levying taxes without consent of parliament; maintaining a standing army in time of peace; interfering with the administration of justice, and the freedom of elections; exacting excessive bail from prisoners; inflicting barbarous and unusual punishments; exercising to an unlawful degree the dispensing power; and treating as criminal, petitions for redress of wrongs—all of which acts were declared to be illegal. The instrument then proceeded to assert the right of petition to the subjects of the crown; the right of freedom of debate in parliament; the right of electors to choose their representatives without interference by the emissaries of the king; the right of the people, through their representatives in parliament, to levy taxation in support of the crown; the right of the subject to a speedy and impartial trial under the laws by established courts of justice; the right to have jurors duly empanneled, and that jurors in trials for high treason should be freeholders; the right of impartial proceedings under writs of habeas corpus; the right of the subjects to have arms for their defense; the right that excessive fines should not be imposed, and that all grants and promises of fines and forfeitures before conviction shall be adjudged illegal; and that for redress of all grievances, and for the amendment, strengthening and preserving of the laws, parliaments ought to be held frequently.

—This declaration of rights was presented to the prince and princess of Orange at Whitehall, and by them accepted with the crown. The establishment of the claims of the English citizen to personal and political freedom under constitutional law appeared complete. There were those, however, who had aided in the re-establishment of English liberty who firmly and conscientiously believed that the convention known as "A convention of the Estates of the Realm," which had proclaimed this declaration of rights and conferred the crown on William and May, was an illegal and revolutionary body; that it was not a parliament in a lawful acceptation; that it had not been convoked in accordance with long established usage, not having been summoned by a royal writ, which was held to be indispensable to its legal authority; that the instrument it had drawn up and presented to the prince and princess of Orange was unknown to the ordinary law, not having received the royal sanction, and was not therefore binding in any lawful degree.

—It was urged by others, equally zealous in the interest of constitutional law as a protection of personal rights, that the royal writ was a mere matter of form, and that to expose the substance of laws and liberties to serious hazard for the sake of a form would be senseless superstition. They further held that no royal writ had summoned the convention which recalled Charles II., and that it continued to perform legislative functions after his restoration without a change of legal statutes. Finally, that where the sovereign, the peers, spiritual and temporal, and the representatives freely chosen by the constitutional bodies of the realm, were met together, there was the essence of a parliament. It was finally determined that this great contract between the "governor and the governed," this "title deed," by which the king held his throne and the people their liberties, should be put into a strictly legal and regular form. To effect this, it was resolved that the declaration of rights should be converted by law into a bill of rights. The first act to be performed was that of changing the "Convention of the Estates of the Realm" into a parliament, so that its legislative acts might acquire a legal status. This was speedily accomplished by the king appearing in state at the house of lords, taking his seat on the throne and summoning the commons before him, for the purpose of delivering his speech to the two houses of parliament. On the king retiring, a bill declaring the convention a parliament was rapidly passed by both houses, and, on the tenth day after the accession of William and Mary, received the royal assent.

—The house of commons immediately thereafter passed an act converting the provisions of the declaration of rights into a bill of rights. It did not, however, become a law at this session.

—The declaration, among other things, had settled the crown first on William and Mary jointly, then on the survivor of the two, then on Mary's posterity; then on Anne and her posterity; and lastly, on the prosperity of William by any other wife than Mary. The bill was drawn in exact conformity with the declaration.

—At the suggestion of the king, when the bill of rights came before the house of lords for passage, an amendment was adopted, defining that the crown should, failing heirs of his majesty's body, be entailed on an undoubted Protestant, Sophia, duchess of Brunswick, Luxemburg, granddaughter of James I., and daughter of Elizabeth, queen of Bohemia. On the return of the bill to the house of commons for concurrence in this amendment, for some cause not clearly discernible, that body, by a unanimous vote, refused to concur. As the house of lords likewise refused to recede from its amendment, the bill of rights was dropped for that session. On the re-assembling of parliament at the following session, the house of lords no longer insisting upon the amendment entailing the throne upon Sophia, the granddaughter of James I., or any other person designated by name as successor, the bill became a law, and the declaration of rights, that changed the dynasty, seated William and Mary on the throne and secured to the English citizen personal and political liberty, became engrafted upon English constitutional law as the "Bill of Rights."

—The bill of rights, in addition to reiterating the privileges contained in the provisions of the declaration of rights, embraced some others of greater stringency. It stipulated that every English sovereign should, in full parliament and at the coronation, repeat and subscribe to the declaration against transubstantiation. It also enacted that no person who should marry a Papist should be capable of reigning in England, and that if the sovereign should marry a Paptist, the subject should be absolved from allegiance.

—The declaration of rights had contained no other provision with regard to the dispensing power of the king than to pronounce that power, as of late exercised, as illegal. All authorities and precedents sanctioned the theory that to the crown there belonged a certain dispensing power. How far that power might be exercised for the good of the realm, to what extent it might be judiciously exerted for the benefit of the subject, and to what limits it should be imperatively confined to prevent encroachment upon the constitutional law of the land, were questions that occasioned a wide divergence of opinion. Consequently every attempt to frame a definite policy failed from want of unison, and it was finally determined, as the only concurrent sentiment that could be obtained, to abolish it entirely. And thus, by the bill of rights, this peculiar privilege which for centuries had been held a prerogative of English kings, and which had been the cause of many fierce contentions, was forever swept away. The constitutional rights contained in this bill, with some additions, were re-asserted in the act of settlement by which the crown was limited to the Hanover family. (12 and 13 William III., c. ii.)

—Similar provisions to those contained in the English bill of rights were appended to the constitution of the United States as amendments. Article I. provides, that "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press, or the right of the people peaceably to assemble and to petition the government for a redress of grievances." Article II. provides, that "A well regulated militia being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed." Article III. provides, that "No soldier shall, in time of peace, be quartered in any house without the consent of the owner; nor in time of war, but in a manner to be prescribed by law." Article IV. provides, that "The right of the people to be secure in their persons, houses, papers and effects, against unreasonable searches and seizures, shall not be invaded, and no warrant shall issue but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the person or things to be seized." Article V. provides, that "No person shall be held to answer a capital or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall he be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty or property without due process of law; nor shall private property be taken for public use without just compensation." Article VI. provides, that "In all criminal prosecutions the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the state and district were the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the assistance of counsel for his defense."

—It has been held by American statesmen that the foregoing amendments to the constitution of the United States are a concentration of all the tenets of liberty contained in magna charta, its continuation in the petition of rights, and its extension in the English bill of rights. And in verification, as it were, of the tribute paid by the earl of Chatham, that "the great acknowledgement of national rights contained therein is not confined to themselves alone, but confers a common blessing upon mankind," their adoption in the American constitution is a broad exemplification. Other nations have taken them for a guide in promulgating their principles of personal liberty, notably the declaration of rights adopted during the reign of Louis XVI., by the French national assembly. It differs somewhat from the English bill of rights in form of expression, its opening sentence resembling that of the American declaration of independence. It declared that all mankind are originally equal; that the ends of the social union are liberty, property, security and resistance to oppression; that sovereignty resides in the nation, and that all power emanates from it; that freedom consists in doing everything that does not injure another; that law is the expression of the general will; that public burdens should be borne by all the members of the state in proportion to their fortune; that the elective franchise should be extended to all; and that the exercise of natural rights has no other limits than their interference with the rights of others. This declaration of rights by the French assembly became a law by the sanction of the king.

—A similar recital of rights as contained in the amendments to the constitutions of the United States, usually including the writ of habeas corpus, is found in the laws or constitution of a number of the states of the American Union.34

JNO. W. CLAMPITT.

BILLION

BILLION. Economists call by this name the instruments of exchange of a metallic nature which take the place of money, for two special uses: for small change and small payments which could not be made with gold or silver coins, because these coins are not small enough. The word billion is applied to pieces formed of a base alloy of silver, as well as to those made of copper. Although pieces of billion are always given in the form of pieces of money, care must be take not to confound billion with money. There is this radical difference between them, that the piece of money is reckoned in exchange as equivalent in value to the objects for which it is bartered. It is otherwise in the case of billion. When a Frenchman pays five francs for an article, the article has a value equal to that of 25 grammes of silver nine-tenths fine, contained in the five-franc piece. If he pays 20 centimes in copper for a kilogram of bread, the metal which he gives is far from equaling the value of the bread which he receives. The proof of this is, that it is not worth the twenty-hundredths, that is to say, one-fifth part of the quantity of silver in a one-franc piece; the respective value of the two metals, silver and copper, in an uncoined state, shows this clearly. The difference between the real value and the nominal value of the copper coins varies in different countries. It is generally between one-half and two-thirds. A grain of copper passes as if it was worth two or three. With base alloyages of silver, there is always a smaller departure from equality. There have been cases in which this departure was almost nothing. In England, where silver coin is considered billion, the nominal value of these coins differs from their real value only by one-tenth.

—The difference between the nominal and the real value of copper coins is based upon this reason, that it would be too great an inconvenience for the public to carry even a very small number of them, if they contained an amount of metal equivalent to their nominal value. Besides, copper is a metal whose value is very variable, as compared with that of silver. The tables of prices current prove this; within a space of a few years it is not unusual to find variations of one-fourth, one-third and one-half. In order, therefore, to give to copper coins, as compared with silver, a value free from great variations, they would have to be frequently recoined.

—But when the law rigorously limits billion to the two uses indicated above, to the making of change, and to all minor transactions. Such as those of the daily purchase of bread, meat and coal for a poor family, this sort of faiblage of copper coins has no inconvenience. The restriction of billion to those uses also reduces the amount necessary even in very large states to quite a moderate sum. In France this sum is reckoned (1853) at from 40,000,000 to 45,000,000 francs, as against 2,500,000,000 of money; this is not 2 per cent. In Russia, at one time, the issue of billon had been exaggerated to the utmost. From 1762 to 1811 it amounted to 90,000,000 rubles against 137,000,000 rubles in gold and silver: 65 per cent. In England, if we consider silver billon alone, it forms quite a considerable proportion. The coinage from Jan. 1, 1816, to Jan. 1, 1848, amounted to £13,390,000 of silver against £92,029,000 of gold, or nearly 1 to 7, but the legitimate circulation of silver coins is necessarily much more extended than that of copper coins.

—It has happened more than once that governments have wished unreasonably to increase the uses of billion, by decreeing that it should constitute a certain proportion, one-twentieth or one-fortieth part, for instance, of payments of every kind. This was actually debasing the money of the country exactly in this proportion, leaving out of consideration the real value of the billion. If it be decreed that merchants must accept in payment one-fortieth part billion, and this billon contains only one-fourth of its nominal value, the debasement is three-fourths of one-fortieth, or nearly 2 per cent. All prices rise in this proportion, and this without almost any noticeable effect at home; but accounts with foreign nations give warning of the evil, for the course of exchange becomes unfavorable in the same proportion.

—The poverty of the treasury is the motive which determines governments to tolerate or expressly authorize these abuses. Thus the French directory, when extremely hard pressed undertook to coin a quantity of copper décimes (nearly 20,000,000), and the right which it gave to private persons to use them in making payments enabled it to put them into circulation after having coined them. Mexico was flooded in like manner in 1835, with small pieces of a similar origin called quartillas.

—This mischievous practice is met with several times in French history. It is met with under the old régime in the times immediately preceding the revolution. Necker, who had been a banker, and in this quality had recognized the inconvenience of the practice, although tolerably familiar with the principles of public economy, did away with it. The directory, with monstrous effrontery, restored it in 1796 by a simple resolution. Beginning with this year, in all commercial payments one-fortieth part was paid in copper coin. This abuse, once established in principle, led to many other vicious practices. So-called banks were established, which issued notes payable in copper coins. Under pretext of correcting the most palpable inconveniences of the abuse, this served to sanction it, and to give it consistency; this was giving private individuals an interest in it, who would violently defend it when attacked. The bank of France itself, under the directorship of Cretet, paid the proportion allowed its own notes in copper coin. Mollien gives some curious details on this subject in his Mémoires d'un ministre du Trésor, vol. 3, pp. 165, 469. Finally, in 1810, this enlightened minister obtained of the emperor Napoleon a decree which forbade the use of copper coins in commercial payments, except in making change, to an amount not exceeding five francs. The receivers of the public revenues had, up to the time of the issuing of this decree, taken an excessive proportion of sous; so that nine-tenths of the receipts from the mail service consisted of sous, and in a total budget of 850,000,000 francs, some 40 millions in sous were annually paid into the treasury. All the receivers of the revenue were ordered, by this decree, to be very severe on this point in future. Those who were likely to receive considerable quantities of these sous were paid a supplementary salary to induce them to reduce to an insignificant proportion the quantity of copper they took in. Nothing more was needed to destroy a custom which savored of the grossness and ignorance of barbarous times.

MICHEL CHEVALIER.

BILLS

BILLS, Public, Private, Enrolled, Engrossed, Omnibus, etc. (See PARLIAMENTARY LAW.)

BI-METALLISM.

BI-METALLISM. (See PARIS MONETARY CONFERENCE.)

BIRNEY

BIRNEY, James G., was born in Danville, Ky., Feb. 4, 1792, and died at Perth Amboy, N. J., Nov. 25, 1857. He was a slaveholder, and, while practicing law in Huntsville, Ala., was general agent for the colonization society in northern Alabama. In 1834, returning to Kentucky, he freed his slaves and undertook to establish an abolition newspaper. He was compelled by violence to leave Danville and go to Cincinnati, whence he was again driven to New York city in 1836. Here he became corresponding secretary of the American anti-slavery society. In 1840 and 1844 he was the abolition (or liberty party) candidate for president. (See ABOLITION.) In 1842 he removed to Michigan, and there became disabled for political work, by a fall from his horse.

—See Beriah Green's Sketch of Birney.

A. J.

BLACK COCKADE

BLACK COCKADE (IN U. S. HISTORY). Throughout the American revolution a black cockade upon the side of the hat was a part of the continental uniform. When, therefore, the intense war feeling against France, roused by the dispatches from the X.Y.Z. Mission, became useful in politics, the black cockade was mounted by the federalists, partly as a patriotic badge, and partly as a popular reminder of the tri-color cockade, which the republicans had been accustomed to wear as a mark of affection for France. The new badge provoked the anger of the more violent republicans, and several persons were beaten for wearing it. In the decadence of the federal party, "black cockade federalist" became a common term of reproach.

—See 5 Hildreth's United States, 207; 1 Schouler's United States, 387.

A. J.

BLACK CODE.

BLACK CODE. (See SLAVERY.)

BLACK REPUBLICAN.

BLACK REPUBLICAN. (See REPUBLICAN PARTY.)

BLAINE

BLAINE, James Gillespie, was born in Washington county, Pa., Jan. 31, 1830; became a newspaper editor in Maine; was a representative in congress, (republican), 1863-75; was speaker of the house, 1869-75; was United States senator, 1876-81; and became secretary of state under Garfield. (See ADMINISTRATION.) In 1876 and 1880 he was one of the prominent competitors for the republican nomination for the presidency. (See REPUBLICAN PARTY).

A. J.

BLAIR

BLAIR, Francis P., Jr., was born at Lexington, Ky, Feb. 19, 1821, and died at St. Louis, July 8, 1875. He was graduated at Princeton in 1841, began practicing law in St. Louis, and served as a representative in congress, (free soil), 1857-62. In the Union army he reached the rank of major general. Until 1868 he was a republican, but then, because of his opposition to reconstruction by congress, was the candidate of the democratic party for vice-president. He was United States senator, 1871-73.

A. J.

BLOCKADE

BLOCKADE is the shutting out of neutral commerce from access to an enemy's ports or coast. The right of blockade can not be confined to ports or fortified towns alone, as has been sometimes urged. It may include, the entire coast line of a state, with all harbors, mouths of rivers or localities of any sort where goods can be landed. For the object of a belligerent in laying blockade is to prevent trade between his enemy and neutral states. Any spot along the coast where this trade could take place can therefore be blockaded. But if a river or other waterway serves as the boundary between the hostile and a neutral state, only the enemy's portion can be closed.

—some writers found the unquestioned right of a belligerent to shut out neutral trade from his enemy's shores, upon the sovereignty which he was acquired, by occupation, over its coast sea, in the course of his blockading operations. But this is not a good explanation. For, first, the sovereignty over waters near a coast is simply an incident to the possession of the coast itself, and not separable from it. And again, many of the operations of a blockade take place far beyond that distance from the shore which is the accepted limit of territorial waters, and therefore outside of the jurisdiction formerly claimed by the hostile state. So that a blockade has greater extent than a simple transfer of sovereignty can account for.

—The true basis of the right of blockade is to be found in the general right, which every belligerent possesses, of distressing his enemy and weakening his powers of resistance by cutting off his foreign trade. Incidentally this may injure the neutral too, but plainly that is not the object of the act; it results from the necessities of war; and the neutral who may gain in other ways, in marketing certain products or in his carrying trade, must be content to lose in this. The part which blockade may play in warfare is readily seen in our own recent history. So long as the ports of the southern confederacy were open, and the south could exchange its cotton and rice and tobacco for European manufactures, its power of resistance could be indefinitely prolonged. But with its ports closed to foreign commerce, unable to market its products or supply its necessities abroad, it was at an immense disadvantage from the outset.

—Since blockade is a belligerent right, its observance is a neutral duty. Yet the onus of prevention is not laid upon the neutral, nor can a breach of blockade be considered a municipal offense, which he is bound to take cognizance of.

—If the neutral ship owner tries to run a blockade and is caught, his property suffers penalty, just as dealers trying to introduce provisions into a besieged town would lose their venture. The principles involved in siege and in blockade are somewhat the same, but the two should never be confounded. For siege implies a trying to get in, as well as a shutting out, on the part of the besieger, and is a term in land warfare; while blockade is simply restrictive and preventive, and the term applies solely to traffic on the sea.

—The declaration of blockade is a sovereign act, open, generally speaking, only to the highest executive authority of a state. Yet it has been delegated sometimes to lesser authorities—a fleet commander, for instance, with instructions to blockade a certain port at his discretion. But to-day, when all parts of the world are reached by telegraph, such discretionary powers would not be necessary.

—Since a blockade is a very serious limitation upon the rights and interests of neutral states, the neutral has a right to demand a certain efficiency in its operations, and a due notice of their beginning and end, before he is bound to recognize it as valid. Thus, it must be a positive act, and not a mere threat without the power to enforce it, and it must be preceded by notice of the extent of its operations, and their date of commencement. For obviously a neutral ship owner ought not to suffer penalty for failing to respect a restriction of which he is necessarily ignorant. These principles in the course of time have been formulated into rules, so that now, in order to make a capture for breach of blockade valid, three things must be proved: 1, that the blockade is effective; 2, that due notice of it has been given; 3, that there has been an attempt to break it.

—1. Effective Blockade. We proceed to examine these rules more particularly. The first was in doubt for many years, but is now happily settled. There is no general agreement, it is true, as to the number of ships, their arrangement or armament, which shall make any given blockade effective. It has been suggested that an are of circumvallation be drawn about the blockaded point, with ships patrolling up and down along it. But the method of conducting a blockade must differ according to the nature of the navigation, the contour of the coast or harbor, and the importance of the operation. A hundred miles of harborless coast might be patrolled by a single ship, while a port like Charleston would need a number.

—Nor is it inconsistent with an effective blockade that it be occasionally evaded. Some blockade runners made the round trip from Nassau to Wilmington and back almost every month in spite of the blockade, yet it was not considered invalid. It is enough if there is so great risk of capture, in running the blockade, as to make the operation a very dangerous one. No blockade has been or could be land an evasion of which would be impossible. This rule, however, that blockades to be binding must be effective, was aimed at a specific abuse of the system, generally called cabinet or paper blockades—those which do not exist in reality but only on paper. The most striking instances of this, though not the earliest, occurred during the wars between France and England at the beginning of the present century. Prussia, in return for Hanover, went over to France, and closed her ports against England. It was a treacherous act, but if she were resolved upon war, the closing of the ports was a legitimate war measure. England, in retaliation, after trying a milder measure, declared the coast, from the Elbe to Brest, under blockade. It was far beyond the power of the English navy to blockade effectually so great a stretch of coast, with its ports and river mouths and intricate estuaries. So that the declaration of blockade could not be supported by the fact. The ports under blockade were really closed not by a belligerent force, but by a stroke of the pen. The harm and injustice of such a course, to the neutral, is plain enough. Such a method of closing an enemy's ports is not blockade. It is an order to the neutral not to trade with one's enemy, even in innocent, non-contraband property, under penalty of capture and confiscation, which is an entirely different thing from a warning that certain ports or a certain coast are closed to neutral commerce by their blockade. And, as was immediately seer, the system was capable of indefinite extension. For Napoleon, by his Berlin decree of Nov. 21, 1806, laid the whole British coast under blockade, although he had hardly an available ship with which to enforce it, and never intended to enforce it in fact, but simply to exact the penalty for its breach, when neutral ships which had traded with Great Britain came to his ports. Then England, in turn, laid the entire continent under blockade from Prussia to Italy, and Napoleon renewed his Berlin decree with fresh penalties. Neither state justified its stretch of the correct principles of blockade, save as a measure of retaliation. As a matter of fact this retaliation affected neutrals rather than the other belligerents. In their deadly struggle neither combatant regarded the rights of third parties, so long as it injured its foe. When peace returned, and men's passions grew cool, they could look at such acts more calmly, and even condemn what they had themselves before defended. During the Crimean was a correct system of blockade was observed by the allies, and after it, when the representatives of the great powers met in Paris to settle the terms of peace, they took up, among various questions of international interest, this one of paper blockades; and declared as between the signatories that "Blockades, in order to be binding, must be effective, that is to say, maintained by a force sufficient really to prevent access to the coast of the enemy." This is the fourth article of the important declaration of Paris, of 1856. The United States unfortunately did not accede to this declaration, but had long before, and very consistently maintained the same rule, so that it may now be considered universally adopted.

—II. Notice of Blockade. There must be an actual notification of the commencement of a blockade, before valid captures can be made for breach of it. Common notoriety is not sufficient, without this official notice, even when a blockade has been raised and then renewed again. (The Hoffnung, 6 Rob. 112.) This notice may be of two kinds: a special notice to each ship trying to enter the blockaded port, at its mouth, with the fact of the warning inscribed upon her register; or a general diplomatic notice to all neutral governments. After sufficient time for it to become generally known, this is constructive notice to every captain or shipper in that state. These two forms of notice are sometimes made to supplement one another; for example, the blockade of the ports of the south in 1861. On the 19th of April president Lincoln, by proclamation, put under blockade the ports of the confederacy, from South Carolina to Texas inclusive. A week later this was extended to Virginia But at that time there were but 42 United States ships in commission, and some of these were on foreign stations. How could a blockade of such vast extent be laid, when so few ships were available to make it effective without being open to the charge of being a paper blockade? To avoid this, with the general diplomatic notice was coupled for awhile a special notice at the mouth of each port actually closed; so that in spite of the general announcement, one warning was allowed every ship touching at a blockaded port before capture. Thus each port was brought under the application of the proclamation, only when this was supported by the fact, and a squadron was at its mouth. Though within the letter of the law, this course was unjust to the neutral. For, shut out from all southern ports by proclamation, when only a few were actually blockaded, he was exempt from capture indeed but could not know, at any given moment, which were still open and where he could trade. But no special complaint seems to have been made of this looseness. By degrees, as the blockading force grew larger, the blockade became more extensive and more stringent. And as this occurred, the general replaced the special notice, so that after the effective closing of any port had become notorious, the special notice was no longer given, and capture took place without a warning. A state may thus employ either form of notice at will; it is only the French who think both together necessary—that there must be a diplomatic notification and notice at the harbor's mouth also. The ground for this seems to be the idea that a shipper's or ship captain's knowledge of a blockade, announced only officially, can not be presumed; in other words, that no constructive notice and knowledge of its existence can fairly be ascribed to him. But what, as a matter of fact, is better known than that a certain country is under blockade, whether by hearsay, by public announcement, or through the newspapers, among seafaring men? Upon such matters, within reasonable limits, it is their duty to be informed. The French usage simply opens the door to fraud. What motive can a captain have in visiting a port which he knows to be blockaded, if it be not to evade that blockade, knowing that no penalty can attach until after one attempt?

—With this exception, the usage of maritime states in regard to notice is pretty much the same. When a blockade is raised for any reason, notice of this should be given as publicly and as widely as of its commencement. And even the temporary departure of the blockading squadron is to be considered a raising of the blockade, except only when caused by stress of weather. Thus, if driven away for two days by the enemy's fleet, and returning at once thereafter to its post, it is a new blockade of that port, and fresh notice should be given. This is the rule, though it is not always strictly enforced. Thus, during the blockade of the south, in several instances there was an interval of a number of days between the departure of one vessel or squadron and the arrival of another sent to relieve it, yet no new notice was thought necessary by Mr. Seward, though his attention was called to the irregularity.

—III. Breach of Blockade. There must, lastly, be an attempt to break the blockade, after it has been effectively established and duly announced. This may appear from a ship's actual entrance within the lines of the blockade, or from such circumstances as imply an intention to effect an entrance. Such facts as the avowed destination and actual course of the ship; the owner's instructions; the nature of the cargo, its form of consignment; any irregularity in the vessel's papers, their concealment or destruction, would be carefully looked into by the courts, and might fasten upon ship or cargo an intended breach of blockade. Thus at the very outset of the voyage a ship may be liable to capture; because it has thus taken the first step toward committing the offense. Sir William Scott states this authoritatively (The Columbia, 1 Rob. 154): "I am clearly of opinion that the sailing with an intention of evading the blockade of the Texel, was beginning to execute that intention, and is an overt act constituting the offense. From that moment the blockade is fraudulently invaded." This seems to be the rule adopted by English and American prize courts, though not universally accepted by foreign jurists. Bluntschli, for instance, would attach no penalty to a ship, although intending to run a blockade, until it was so near to the blockaded port as to leave its intention beyond doubt, on the plea that until then its original intention might be changed. Some recent decisions of United States courts35 have gone still further in inferring this intention to break blockade, by means of the doctrine of continuous voyages. This was applied to ships and cargoes bound nominally to a neutral port, but which appeared to have as their ultimate destination a blockaded port. The touching at a neutral port en route, Nassau, for instance, between London and Charleston, was not allowed to free the voyage, thus far, of its noxious character. It was still held one continuous voyage to a blockaded port.

—A breach of blockade is committed by egress from as well as entrance into a blockaded district. And in this case no notification need be proved. The fact of the blockade is presumed to be known to the place blockaded. But not to be too severe toward neutrals, after the closing of a port, a certain delay is usually granted, to enable neutral ships loaded or in ballast to get away. This was 15 days in the blockade of the southern ports, and in special cases the time was extended.

—Upon these three conditions, then, that the blockade is effective, that notice of it has been duly given, and that its violation is attempted, a neutral ship may be arrested, tried, and, upon conviction, may suffer penalty. This penalty is primarily the confiscation of the ship. The cargo follows the fate of the ship unless its owners can remove it from complicity in the act of the ship by direct evidence. The captain is the agent of the owners of the ship, not always for the cargo too, so that it may happen that a voyage to a blockaded port is undertaken without any interest in such a venture, or knowledge of the existence of a blockade, on the part of the owners of the cargo. But if both ship and cargo are owned by the same persons, the guilt of the latter is conclusive. And in general the presumption seems to lie against the innocence of the cargo. For if not for the cargo's sake, why should a master imperil his ship by attempting a blockade?

—We have already seen that the penalty for attempting to break a blockade may attach at the very commencement of a voyage. It also lasts during the return voyage or round trip, which is looked upon as one transaction. Thus after successful egress from a blockaded port, a ship might remain liable to confiscation during a year's cruise. As soon as the blockade is raised, however, this liability ceases.

—There are two possible exceptions to the rule forbidding neutrals to enter a blockaded port. Neutral ships of war are sometimes admitted, out of comity, on diplomatic errands; and a ship in absolute danger of destruction from accident or storm, may take refuge in it, if no other refuge is possible. A general license to trade granted to the neutral by the government laying the blockade, does not warrant entrance within the blockading lines.

—The penalty for breach of blockade is confined to the ship and its cargo; no punishment can be visited upon the crew. When during the war of secession certain northern officers paroled the crews of blockade runners not to serve again during the war, they were unauthorized, and their prisoners were discharged without condition.

—Pacific Blockade. This, in spite of its title, is not properly a branch of our subject. It should rather be classed among preliminary war measures. It is a contradiction in terms, for blockade implies a war. No blockade can be laid unless excused by the necessities of war, since it would violate the rights of neutrals. Pacific blockade is simply an act of force employed by a strong toward a weaker power, in order to compel it to redress certain wrongs, or pursue a certain line of action. The one state closes the ports of the other, yet without considering this a war measure, or taking any other steps toward war. Thus the allied fleets closed certain ports in Greece, in 1827, in order to force Turkey to do her justice. Whatever may be thought of such an act, the term pacific blockade is to be deprecated.

THEODORE S. WOOLSEY.

BLOODY BILL

BLOODY BILL. (SeeFORCE BILL, under NULLIFICATION.)

BLUE LAWS

BLUE LAWS (IN U. S. HISTORY), codes of laws of remarkable severity against minor offenses, based upon the Mosaic law, so far as applicable, said to have been adopted by the original settlers of Connecticut and New Hampshire. Their existence, in the form commonly attributed to them, has been frequently disproved.

—See Code of 1650, with extracts from the laws of New Haven, commonly called Blue Laws; Trumbull's True Blue Laws; 107 Blackwood's Magazine; 30 New Englander.

A. J.

BLUE LIGHT

BLUE LIGHT (IN U. S. HISTORY). In 1813 Decatur attempted, on several dark nights, to get to sea with his two frigates from the blockaded port of New London. On each occasion, as he claimed, he was prevented by signals made with blue lights at the harbor mouth, to warn the British fleet to be upon the alert. The story spread, and all opponents of the war, in New England and elsewhere, were stigmatized as "blue light federalists."

—See 6 Hildreth's United States, 467.

A. J.

BOARD OF TRADE.

BOARD OF TRADE. (See CHAMBER OF COMMERCE.)

BOLIVIA

BOLIVIA. Bolivia is a vast territory of South America, of 1,297,255 square kilomètres, extending from 7° to 26° 40 south latitude, and from 60° to 75° west longitude. It is bounded on the south by a branch of the Andes and the desert of Chaco, which separates it (and this word should be understood here in its strictest sense) from the Argentine republic; on the southeast, east and the northeast by the plains of Uruguay and Brazil; and on the north, northwest and west by other spurs of the Andes or by the principal chain itself which separates it from Peru, and by the Pacific ocean which it touches for a distance of about 250 miles, between San Taltal-Point and the river Loa. This country, which later received the name of Bolivia, was formerly a part of upper Peru. It was dependent at first on the vice-royalty of Buenos Ayres, with whose capital the great distance and a number of deserts rendered communication almost impossible. It was afterward united to the vice-royalty of Peru. It took part but tardily in the movement which, for many years, had raised up the Spanish colonies against the mother country. The impulse to this came to it from the north. It was only in 1824 that Sucre, a young Colombian general, the conqueror of Pinchincha, where he had assured the independence of Colombia, for a moment the supreme chief of Peru which he had freed by the victory of Ayacucho, the friend and principal lieutenant of the celebrated Bolivar, the man who next to the liberator, was most distinguished in the war of independence, conquered that part of upper Peru. In the name of the revolution he proclaimed the independence of these conquered that part of upper Peru. In the name of the revolution he proclaimed the independence of these provinces, on the 6th of August of the same year, and on the 11th of March, 1825, he gave them the name of Bolivia, in honor of his master. Bolivia was at first united to the republic of Peru, and Bolivar exercised over it an unlimited power, the rigor of which Colombia and Peru themselves had not felt to the same extent. However it was erected into an independent state soon after, and when the Peruvian congress at Lima, in 1825, renounced its rights to these provinces and gave its consent to the separation, Bolivar imposed on them the constitution known as the Bolivar code, and offered the presidency of them to general Sucre, who till then had governed them in his name; but this régime was of short duration. It had lasted barely two years, when Bolivar, seeing his power menaced by insurrection in Colombia, left Peru in all haste. The fragile structure which he had wished to raise did not survive his departure. Two insurrections against marshal Ayachcho (Sucre), one at La Paz, on the 25th of December, 1827, the other at Chuquisaca, on the 18th of April of the following year, broke out; they were forcibly put down; but the president, disgusted with the exercise of power thus contested, gave in his resignation, and, after incurring great danger, succeeded in rejoining Bolivar.

—The first constitution of Bolivia intrusted the executive power to a president for life, to a vice-president, and to three secretaries of state. The legislative power, shared by three chambers, that of the tribunes, that of the senators, and that of the censors, was the result of an election of two degrees. Each chamber was composed of 30 members, elected for 4 years, and held a session of 2 months each year. This first constitution was followed by several others. The most recent, voted in 1868, intrusted the executive power to a president elected for 4 years, and the legislative power to a congress. It is true that this constitution was abolished in 1869, but that which was to replace it and those which may have followed this, can not but reproduce the two fundamental institutions of the South American republics, a congress and a presidency. Moreover, whatever be the mechanism of these governmental forms, often borrowed from the most elaborate and most liberal theories of Europe, the Spaniards and the Indians of South America scarcely understand the exercise of power, except by means which would pass in Europe for simple tyranny. We are seized with an invincible sadness when we compare the debasement into which these vast and rich countries have fallen under the dominion of European conquerors with the prosperity which they enjoyed under the paternal government of native princes, called barbarians. Europe brought misery and oppression to a happy people, who, under the mild government of native princes, lived in plenty. Have the conquerors fared better? This may be doubted Victims of low ambition torn by factions, incapable of reaping any advantage from the wealth of their soil, they seem doomed to inevitable decay. Let us hope that they will find a means of escape by attracting foreigners to the country, and by an infusion of new blood.

—Some administrative and judicial progress is due to Mr. J.M. Linarès, a liberal raised to the presidency in 1858. Although he maintained an army very burdensome to the country, and put at the head of the troops too many colonels and generals of his own style, although it is impossible to approve all his financial schemes, we must give him the credit of having introduced some economy into the finances, of having increased the number of schools, of having had laws made in favor of the Indians, of having regulated municipal government and reformed the judiciary. A quarrel with Peru, in which Peru seems to have been altogether in the wrong, came near compromising, in 1860, this favorable movement, but harmony was restored between the two republics, and they became more closely united, some years later, under the influence of common interests and common dangers. The idea of a federation of South American republics was obtaining root. It was desired to hasten, by more intimate political relations, the civilization of that vast continent, to create a counterpoise to the influence of the United States, and to reject all intervention of Europe in the politics of the new world. But the states which it was desired to unite are separated by much more than their geographical distance; and four states alone occupying the Pacific coast, in the central region of South America, commenced the realization of this vast plan.

—In 1864 Bolivia, Chili and Ecuador sent deputies to a congress convened at Lima by the Peruvian government, which was threatened by the arms of Spain. Spain justly claimed reparation for damages done to her citizens, but the plenipotentiary sent from Europe to set forth the grievances of the former mother country assumed the aggressive title of commissioner extraordinary of the queen, the title of the governors before the period of independence. The war of secession in the United States was at its height, as was also the Mexican war. The republics of South America were convinced that France and England favored the dismemberment of the United States, and the congress of Lima inferred from this the existence of a European plan, by which Spain would endeavor to recover her colonies.

—Peru secured the alliance of the three republics which had sent delegates to the congress of Lima. Bolivia concluded its treaty in February, 1866, but was not able to furnish any other assistance in the war except to prevent the revictualing of the Spanish fleet in the Bolivian harbor of Cobija. The war was closed by the retreat of the Spanish fleet, which was repulsed at Callao, but the treaty of peace was not signed till 1868.

—In the interval Bolivia formed a more intimate alliance with Chili. The two republics were disputing the ownership of the guano deposits on the islands of Mejillones. A treaty of the 10th of August, 1866, confided the working of the deposits to a French company.

—Bolivia occupies, in the centre of the American continent, a very unfavorable situation which condemns it to an isolation almost absolute, and seems to raise up an insurmountable obstacle to the development of its political or commercial power. It is divided by nature into two very distinct parts: the mountainous country in the west, and the country of the plains in the east which forms the largest portion of it and which extends from the banks of the Pilcomayo, an affluent of the La Plata, on the south, to the northeast point of the territory, where the Rio Mamore joins the Rio Beni and forms the Rio Madeira, the principal affluent of the Amazon. The valley of Pilcomayo occupies the south of the eastern region. The north is watered by the Desaguadero, which empties into lake Titicaca, the largest lake of South America. It constitutes the boundary between Bolivia and Peru. Its immense basin is inclosed by a double chain of mountains, the Cordillera of the Andes and the Cordillera of Alama. The mean elevation of this valley is 13,000 feet above the level of the sea. It communicates with the ocean by six passes, whose highest points overlook the Pacific at a height of 15,000 feet, and the valley at 2,000 feet. Besides lake Titicaca and the great watercourse just named, the vallies and plains of Bolivia are irrigated by numerous rivers which flow southward to the Rio de la Plata and north to the Amazon. Bolivia owes to the elevation of the greater part of its territory a more temperate climate than would seem to be indicated by its geographical position. Gold is found in some parts, especially on the slope of the eastern Cordillera. The silver mines of Potosi have a reputation of ancient date which, according to report, they have ceased to deserve. Copper is met with in abundance, particularly in the district of La Paz, as are also deposits of lead and tin. The soil of these vast countries, ill cultivated, badly worked, and lacking inhabitants, yields to the most varied kinds of cultivation. The fruits of Europe and the products of tropical regions are there gathered: Cocoa, sarsaparilla, copaiba, India rubber, aromatic and medicinal plants, quinine, etc.

—The population of Bolivia, of which little is known, is variously estimated. In 1835 it was estimated at more than 2,300,000 inhabitants, of whom 1,630,000 were whites of foreign origin or of mixed blood, and from 700,000 to 800,000 Indians. Dr. Petermann reduced it, in 1848, to 1,742,000, not including about 245,000 aborigines. In 1867 it amounted to 1,987,352, the number of aborigines being still estimated at 245,000.

—The organizers of Bolivia took the French administration as their model. They introduced the French prefect, sub-prefect and municipality. They have translated the French civil code which was unceremoniously called the Santa Cruz code. The republic is divided into two bishoprics, whose seats are at Cochabamba and at Santa Cruz. The army consists of 2,500 men, with 3,200 of a national guard. The revenue of the republic was estimated, in 1850, at 1,976,000 piastres, and the expenses at 1,730,000 piastres; the public debt at 5,850,000 piastres. Since then the debt has been increased by the total of the unpaid interest. In 1870 the receipts rose to nearly 2,500,000 piastres or pesos, of which about 1,000,000 were in direct taxes. Anarchy does not allow Bolivia to use the elements of wealth which its soil contains. Its agriculture is neglected, its industry amounts to nothing, and its commerce is in a languishing condition. It manufactures some cotton stuffs, especially at Oropesa; woolen cloths, from the wool of the lama and alpaca, among which those of La Paz occupy the first rank; and vigonia hats and glass of good quality, made especially at Oropesa. But metals are its chief article of foreign commerce. The export of copper is estimated at 400,000 quintals per annum. In 1869 the total exports, from the port of Cobija, reached 17,403 tons, distributed as follows: coined silver, 1,000,000 piastres; copper, 17,300 tons; tin, 4,000; guano, 6,000. The imports reached, it is said, the figure of 7,000,000 piastres. They consist chiefly in iron or hardware, to which must be added certain articles of luxury, especially silk stuffs. In June, 1852, the navigation of all the rivers which flow into the Amazon and the Rio de la Plata, were declared free to all nations.

—BIBLIOGRAPHY. Bosquejo estadistico de Bolivia, by M. Dalence, 8vo. Chuquisacu, 1851; Geographie und Statistik der Republik Bolivia, by Hugo Reck, (Petermann's Mittheilungen), 4to, Gotha, 1865; The Land of Bolirar, by James Mudie Spence, 8vo, London, 1875; Descripcion geographica historica yestadistica de Bolivia, Paris, 1845, with map; Bosch-Spencer, Statistique Commerciale du Chili de la Bolivie, etc., Brussels, 1848; Weddell, Voyage dans le Nord de la Bolivie; Hugh de Bonelli, Travels in Bolivia, London, 1857; Archivo Boliviano, Coleccion de documentos relativos de la historia de Bolivia, Paris, 1877; Mossbach, Bolivia-Kulturbilder aus einer südamerik Republik, Leipsig, 1875.

A. RABUTAUX

BOOTY

BOOTY. Borrowed from the Scandinavian word buty (latinized into butinum), in middle German bûten, at present beute. Booty is analogous to the Anglo-Saxon bot, and appears now as the English word booty. It is found in the Italian bottino. The word is found in all languages, and it could not be otherwise since it expresses a fact of war, almost general, in former times.

—To take booty is to take possession, by the right of the stronger, of that which belongs to the vanquished. At present the word booty is applied only to movable objects, but formerly it comprised immovable property. Most of the great feudal fortunes had no other beginning. In Sicily and in England the Norman barons divided the estates of the conquered among them, and what the Normans did the Franks had done in Gaul, and the Visigoths in Spain. In a word, wherever there was a conquest there was booty. With the development of civilization the word booty gradually lost its original extensive application. The following are the provisions relating to it, now considered in accordance with the law of nations: The armies and the navies of states, privateers and even isolated combatants, may take as booty from armies, war vessels and the privateers of the enemy, by force, open or concealed, as well as all the movable property possessed by the latter. (Klüber, Droit des gens moderne de l'Europe, page 324, § 253; Heffter, § 153.) This booty belongs, according to the natural law of nations, to the government waging war, but to-day it is generally left to the soldiers who have taken it. (Vatel, liv. III, chap. ix, § 164.) The victor in our day respects public monuments, products of literature and fine art, the movable property of the castles, edifices and gardens belonging to sovereigns or their families, as well as objects pertaining to worship, and ordinarily abstains from destroying or carrying them away. (Kamptz, Neuere Lit., § 309.) According to the usage of the law of nations established in Europe the enemy acquires, in wars on land, the ownership of booty by a possession of it during twenty-four hours, (Strube's Rechtliche Bedenken, Bd. II, No. 20); so that when this term has expired, any third party may acquire it of him, by a true title without danger of its being reclaimed, and to the exclusion of the right of postliminy. (Vatel, liv. III, chap xiii, §196.) Most governments still recognize the same principle with regard to captures made in naval warfare by war vessels or privateers, (Martens, Essai concernant les armateurs, chap. iii, sec. 11); still there are some who pretend that property in this booty is not lost to the original owner till it is put in a safe place that is to say, till it has been transported to the territory of the victor or into a neutral country. (Vatel, liv. III. chap. xiv, § 208) The plunder of a marauder or pirate does not enjoy these advantages. Movable property belonging to private persons not taking part in hostilities, is not accounted booty by the laws of war, and can not be taken from the proprietors, with the exception of merchant ships and their cargoes, which are lawful prizes for war vessels. (Martens, Recueil, II, 56. et Déclaration de 1856.)

—War has such a demoralizing effect that men who leave home with a horror of booty, become sometimes, if the war is long, familiar with the idea, and permit themselves to take that which does not belong to them. But the plundered proprietor has been seen to follow his goods to the enemy's country, bring the thief before a court and win his case. It would be well if such instances—of which we know but one—should become more frequent; for no matter how rigorous discipline may be, there is always in a large army a number of people who have few scruples. It would be well to teach them that war does not insure impunity.

MAURICE BLOCK.

BORDER RUFFIANS

BORDER RUFFIANS (IN U.S. HISTORY), pro-slavery Missouri men who, in 1855 and afterward, made a practice of crossing the border into Kansas to carry elections, or to overawe free state settlers. The name does not seem to have been entirely one of contempt, as it was occasionally accepted and used by the border ruffians themselves.

—See 1 Greeley's American Conflict, 238; Cairnes' Slave Power, 117; and authorities under KANSAS.

A. J.

BORDER STATES

BORDER STATES. The (IN U.S. HISTORY), the tier of slave states, Delaware, Maryland, Virginia, Kentucky and Missouri, lying nearest the free states. North Carolina, Tennessee and Arkansas were sometimes included among the border states as distinguished from the gulf or cotton states, but the name was usually given to the states first named. The rise of a distinct border state interest first becomes evident about 1820-30 (see SLAVERY), when the development of the cotton culture in the extreme south had begun to create a demand for slaves there, which could be filled only by the inter-state slave trade, since the African slave trade had been abolished. (See ABOLITION, I.) From that time until 1860 the border states, except Missouri, became a breeding ground for slaves to be sold in the gulf state markets when mature Even in 1832 it was admitted on all hands in the Virginia convention of that year that Virginia's exportation of slaves was more profitable than any of her domestic industries. The border states therefore suffered most from the operations of the underground railroad (see ABOLITION, II.), and were loudest in their complaints of the non-execution of the fugitive slave law. In 1860 this feeling caused the introduction, by a Missouri senator, of a proposition to maintain an armed national police force along the line between the border and free states, to prevent the escape of slaves.

—During the political excitement of the period, 1850-60, the position of the border states was one of peculiar difficulty, owing to the acceptance in the north and south of the slavery question as an issue in American politics. In this acceptance the border states never concurred; to them it meant only present trouble and confusion, and a threat of future armed conflict of which they should be the principal theatre. They were therefore only anxious to keep the slavery question out of sight. In this section the American party, or know nothings, first took rank as a national party; in 1856 it carried Maryland, and polled a strong vote in the other border states. Here again, in 1860, the constitutional union party, based also on the desire to ignore the slavery question, found its strongest anchorage: all the electoral votes given to its candidates were those of Kentucky, Virginia and Tennessee, and the plurality against it in the other border states was exceedingly small. When Lincoln's election had brought the rebellion into plain view, the border states were still anxious for compromise and peace. They originated the peace conference of 1861 (see CONFERENCE, PEACE), and the Crittenden compromise (see COMPROMISES, VI.), and labored with little prospect of success to secure the adoption of either of them as a basis of settlement.

—At the outbreak of the rebellion the border states were emphatic in demanding that neither the federal government nor the seceded states should do anything "calculated to provoke a collision of arms between the states and the government of the United States." (See STATE SOVEREIGNTY, SECESSION.) When president Lincoln's call for troops in April, 1861, showed that the federal government meant to fight for its existence, Virginia, North Carolina and Arkansas seceded: the other border states refused to do so, though some of their ancient politicians wished to maintain an attitude of "neutrality." Governor Beriah Magoffin, of Kentucky, by proclamation, even warned "all other states, separate or united, especially the united and confederate states," that he forbade any occupation of Kentucky without consent of its legislature and governor; but the people of Kentucky, and of the other border states, except Tennessee, which was divided, and the three seceded states, generally supported the government. (See the states in detail.)

—Throughout the war against the rebellion the border states continued to urge, but without success, their project for "reconstruction," which, in its original sense, meant the settlement of all existing difficulties by a convention of all the states, including those that had seceded. (See RECONSTRUCTION.) Delegates from all the border states, even from those which had not seceded, except Delaware and Maryland, held seats in the congress of the confederate states, but these were chosen by soldiers of regiments in the rebel armies, or by those districts temporarily under rebel control, and in no sense represented the people of the state. (See DEMOCRATIC-REPUBLICAN PARTY, SECESSION, REBELLION, UNITED STATES, and authorities cited there and under articles above referred to.)

ALEXANDER JOHNSTON

BOURGEOISIE

BOURGEOISIE. The history of the bourgeoisie is mixed up in its origin with the history of the renaissance of towns. The middle ages had founded two classes of society: the one dominant and idle, warlike, and in possession of the soil; the other subject and laborious, under the protection of the proprietors of fiefs, and excluded from all share in the sovereignty. The first protest against this order of things showed itself in the opposition of the cities against the feudal system in the twelfth and thirteenth centuries. In Italy and in the south of France the political movement was the consequence of Roman reminiscences; in the north of France and in Germanic countries the sworn commune came from German customs. It is the municipality formed by association and by mutual assurance on the faith of an oath. These two origins led to the same end. Whether it be under Roman or Germanic influence this restoration of the cities and of their civil and political liberties laid the foundation of modern society.

—The history of the bourgeoisie, or of what is known in France as the third estate, is the history of evolution which by degrees acquired for the lower and oppressed classes of society the fullness of political rights and abolished all unjust inequality among the people. This is not the place to write the history of communal life in the middle ages; but it must be at least mentioned since it was the cradle of the bourgeoisie. The bourgeoisie was from the first opposed to the feudal principle. Nevertheless, it found the means of winning, by degrees, a regular place in the society of the middle ages. In France he third estate was the soul of the states general. By its alliance with royalty it modified feudal society up to the very point of the dissolution of that society, and when the municipal spirit of the towns commenced to grow weak, and the king to do away with the privileges of the lords, the third estate remained none the less powerful. Offices of justice and administration, which demanded long study, became the property of the third estate. The nobility rather retired of its own as accord from these offices than was removed from them. In the sixteenth and seventeenth centuries the third estate was everywhere. It was in vain that Sully wished to attract the nobility to the council of state. The nobility limited itself to retaining the command of the army, the government of the provinces and the offices of the king's household. But the council of state, the intendants created in 1635, and the parliaments, were recruited mainly from the third estate, from what is called to-day the upper bourgeoisie. The parliaments, especially after the suppression of the states general, represented the third estate. The parliaments thus became an inferior kind of aristocracy, and in the last two centuries of the ancient French royalty the development of the third estate was rather a social than a political fact. The lower classes rose silently to power, and in 1789, at the time of the convocation of the states general, the third estate endeavored to take advantage of its numerical superiority and to represent the entire nation. Hence the saying of Sieyès: "What is the third estate? Nothing What should it be? Everything." This statement defined the culminating point of the development of the bourgeoisie at the opening of the French revolution, and at the same time put an end to it. From the twelfth century the third estate had tended toward the suppression of privileges, even when it had itself granted them, to guarantee its own liberties. Its rôle of emancipation terminated the moment that the revolution made liberty and equality before the law its fundamental principle, applicable to all without distinction. The word bourgeoisie from that time forth changed its meaning. A man is no longer a bourgeois because he belongs to such and such a town, but because he fulfills certain social conditions. By the bourgeoisie is now understood that part of society which represents property acquired, or in course of acquisition, through industry or commerce, and that which follows the liberal professions. In this sense the expression third estate is not sufficient to define it; for the third estate was not the bourgeoisie, but the nation minus the nobility and the clergy. To-day, on the contrary, the bourgeoisie is not a close caste. It has a character of universality such that by the finest shades of difference it is lost in the nobility above and touches the proletariat below. In a state of society in which fortunes are made and lost with a rapidity unknown to our fathers, the passage from one class to another is so frequent that it is hard to find lines of demarcation between them. Nevertheless, the word bourgeoisie has a more special meaning when it serves to express the distinction between the bourgeois and the peasant and workman. In this sense the bourgeoisie has pretended to a political rôle independent of the two latter classes. Taking the saying of Sieyès literally, it wished to assume the entire government of society. It has manifested in this attempt qualities and defects which are easily described. These qualities consist in a reasonable conduct of affairs, in a taste for self-government, in the want it experiences of controlling the government; in a word, in the practice of constitutional government in monarchies and of representative democracy in republics. Its defects consist in too great an attachment to its own interests, and, generally, in a too great timidity. It exhibits more adroitness in petty than in great affairs, more aptitude for a temporary than for a permanent policy. It may be said that the defects and qualities of the French bourgeoisie were manifest during the reign of Louis Philippe. What contributed most, then, to put an end to the rule of the bourgeoisie was its neglect of the interests of the lower classes. It forgot that it should not be a distinct class, but simply the medium in which all should meet. The endeavor, therefore, to found a government on the middle classes alone, or even to consider them as a class apart, is an undertaking that has no chance of success. M. Guizot, in an able article, entitled Nos méscomptes et nos espérances, denies that the middle classes have good political judgment, the political sense; and he requires, as a counterpoise to their changeable disposition, the political influence of a nobility or of great landed proprietors. It is impossible to find such a counterpoise in France in our day, for the reason that well defined classes no longer exist there. The nobility is dead, socially; large landed estates are not permanent. Neither the one nor the other, therefore, could serve as a counterpoise to the alleged inconstancy of the bourgeoisie. The salvation of the latter will depend on its solicitude for all the interests of the nation even when they are not its own. It should open its ranks to all, and take into them all who are not as yet a part of it. There is no better way to attain this end than to disseminate public instruction and favor the creation of public wealth, by the proper application of sound principles of political economy. By the development of public instruction the social strata, which have not yet taken part in the intellectual life of the nation, and which consequently contribute but little to the formation of public opinion, will do their part in the formation of that opinion, and free it from the narrowness inherent in opinions born of special interests. By the application of sound principles of political economy, which is a corollary to the diffusion of education, the opposition between the interests of classes would be made to disappear. The social rôle of the bourgeoisie before the revolution was to elevate the lower classes. This is its rôle to-day. It is the only one which can guarantee it enduring influence. It is also the only one which has a meaning. The bourgeoisie commenced as a solvent of feudal society. It prepared the way for democracy. It would poorly understand its interests were it to oppose that which it contributed to establish. It has better work to do. After its negative and dissolving labors come positive work and the work of organization. This remains to be accomplished, and the expression bourgeoisie should have no meaning but that of an educated and intelligent democracy.

JULES GRENIER.

BOUTWELL

BOUTWELL, George Sewall, was born at Brookline, Mass., Jan. 28, 1818; was admitted to the bar in 1850; was governor of Massachusetts 1851-2; was a representative in congress (republican) 1863-9 (see RECONSTRUCTION); was secretary of the treasury 1869-73, and United States senator 1873-7.

—See Boutwell's Speeches during the Rebellion.

A. J.

BRAHMANISM.

BRAHMANISM. Brahmanism is an institution at once civil and religious, which by the grandeur, originality and unshaken persistence of its results should hold a considerable place in the history of mankind. It has governed Hindoo society from time immemorial and governs it still. There is no possibility of assigning a term to the all-powerful influence which it exerts on Hindoo society, an influence legitimate in certain respects, but disastrous in others. It seems destined to endure as long as the race which it has guided for the last 3,000 years.

—Brahmanism has this peculiar character, among all the religions resting on sacred books, that it has no founder, and that the person who first conceived the system is altogether unknown. Brahma, from whom it takes its name, is no other than the infinite being, the universal soul. Brahma is not the name of an individual like those of Buddha, Moses, Jesus, or Mohammed. The origin of Brahmanism is hidden by a veil thus far impenetrable, and it is not to be believed that this obscurity can ever be cleared away completely. India has not written its own annals, any more than the rest of Asia; and history as written in the west, since the time of the Greeks, is a virile work of intelligence such as Asia never conceived, and which even seems to be beyond its power. India, therefore, can not tell us herself whence Brahmanism has come, and her monuments do not yield up to the questionings of erudition the secrets which are contained in them only in an imperfect manner. At present when we know the Vedas, the source of Brahmanic religion, it can be affirmed that they do not contain Brahmanism as afterward organized, and the only hymn of the Rig-Veda in which there is mention of the four castes, passes justly either as apocryphal or of much later origin than most of the others. It is the famous hymn to Purusha, which we read in the tenth and last Mandala, in which are brought together in a confused mass fragments more or less authentic and more or less orthodox. Now the Vedas, and above all the Rig-Veda, being a collection of the religious and national hymns of the Aryans when they arrived in India from the northwest by the passes of the Hindu Kush, the last ramification of the Himalayas, it may be looked on as certain that these people had not yet established in their midst that special form of religion and society called Brahmanism. We read in the Vedas of priests presiding at sacrifices and solemn prayers; but they do not form a class apart; they are not the masters of society nor the spiritual governors of the people. At what epoch did they become such? This can not be precisely told; but it is necessary to go back at least fifteen centuries before the Christian era to come near the epoch, and perhaps it may be necessary to ascend to a remoter time. In the seventh century before Christ Buddhism arose among the Brahmanism to reform and destroy Brahmanism. Brahmanism must, therefore, have existed a long time in order to reach the state of corruption in which Buddhism exhibits it to us, and from which it strove to rescue it. The date of Buddhism itself is incontestable (622 to 543 B. C.), and it puts the date of the origin of Brahmanism very far back, which, without exaggeration, must have arisen ten or twelve centuries earlier.

—On the other hand, the canon of the Vedic scriptures is composed of several parts which are held to be equally sacred and equally revealed. They are first the mantras or prayer hymns, mostly in verse; then the brahmanas, with the upanishads and the aranyakas, mainly in prose. The hymns which, properly speaking, constitute the Veda, are much the more ancient, unless it be those of the fourth and last Veda, called the Atharvan. Now if the hymns or mantras mention Brahmanism only in the manner of which we have just spoken, we meet, on the contrary, with all its developments and with its whole power in the brahmanas which are, as their name indicates, for the special use of the brahmanic caste, who alone perform the sacrifices. It is, therefore, in the interval between the mantras and brahmanas that the Brahmans acquired power. But since there is in India no chronology for monuments of the mind any more than there is for events of history, it is impossible to determine the epoch of the mantras or the liturgical books which accompany them and which regulate all the details of worship. Nevertheless, by a process of reasoning, probably correct, the learned have come to believe that the primitive mantras appeared at least 1,500 years before the Christian era, and by the same method they fix hypothetically the date at which Buddhism originated in the bosom of the brahmanical society already grown aged and corrupt.

—One may well believe that not without a struggle did the Brahmans attain that dominion which they afterward held in such an imperturbable manner. The earliest traditions of the Aryans show that when these people came to India to conquer and civilize the country, they were under the lead of military chiefs, and no matter how pious they might have been from the beginning, it was their kings and not their priests whom they obeyed. This was a necessity of their situation, and in that splendid epic poem, the Ramayana, the legend of a hero who conquered the south of India and even the island of Ceylon (Langkaâ), it was the kings who led the people and the Brahmans occupied only a subordinate place. But when the time of combat had passed away and the Aryans were able to enjoy their conquests quietly in the immense space that extends from the headwaters of the Indus and the Ganges to the Vindhya mountains, the priestly class could become dominant without danger, and as the nation had no longer anything to conquer or even to defend, it yielded itself up entirely to its religious instincts, and, once upon that incline, soon intrusted to the priestly caste the power which had at first belonged to the warriors or kshatriyas. The latter resisted energetically, and if dissensions had not then sprung up among them, it is likely that they never would have lost the supremacy, and the Brahmans would never have acquired it. But Parasu-Rama, a kshatriya famous for his courage and his ferocity, took sides against his own class to avenge certain outrages inflicted on his family, and, through bloody victories, he assured to the Brahmans a power which without him they would probably have never usurped.

—It is from this time, of which a vague souvenir is preserved by tradition and by some important works, among them the laws of Manu, that Brahmanism really dates, and that it began to give to Hindoo society its final and immutable form. At the head of this new society, as a permanent divine incarnation stood the Brahman, issued from the mouth itself of Brahma. Below him, but at an impassable distance, was the kshatriya, or warrior, who had come from the arms of the god. Below the warrior was the Vaisya, or laborer, who had sprung from his thighs. Last of all, and very far from the other three, was the Sudras, made to serve and support the others because his origin was in the feet of the divinity. These are the genuine castes, four in number, and no one of their members could marry legitimately except in his own circle. By force of circumstances some marriage unions were necessarily contracted outside these narrow limits. But these exceptional alliances were contrary to law, and religion, so far as it was able, proscribed them by menace of eternal punishment and by social reprobation in this world, while the punishment of the next was being deferred. This creation of castes is both the masterpiece and the strength of Brahmanism, thanks to which it has endured for upward of 30 centuries and may perhaps endure still longer.

—The religious faith of the Hindoo people must have been blind indeed and quite irresistible, to accept this dogma and yield to it so completely. Birth fixed forever the rank of each man in society, and instances of escape from the social limits it imposed have never been numerous or lasting. Caste is maintained with its essential characteristics, and it could be seen by the insurrection of 1857, that the popular conviction is far from being weakened, and that superstition has retained all its inextinguishable ardor. How have the Brahmans been able to impress such a belief on men's minds traced in ineffaceable lines? This can not be explained by their adroitness alone. The Hindoos, independent of the priests who have gained their confidence, have beliefs which may be called endemic and which have singularly favored usurpation. Every one in Brahmanic as well as Buddhistic India believes in the transmigration of souls, and as the present life in all its conditions results inevitably for each man and each creature from the lives and existences which they led previously, they submit without murmur or despair to the destiny given them and from which nothing can escape. It is true that in Asia there are many other peoples besides the Hindoo who believe in transmigration, and that none of them have been subjected to caste to the same degree; but if belief in transmigration is not the only cause of Brahmanism, it is certainly the chief one, and without it the others would to all appearance have remained powerless. The Hindoo people have found in caste the irrevocable decree of God, or rather, the indestructible chain put upon them by another more mysterious and terrible power than that of God, such as it is understood by religions more humane and enlightened. The Hindoo has bowed down his head with all docility, and one may predict almost certainly that he will never raise it again. Once in possession of power Brahmanism left nothing undone to retain it, and one of the most curious spectacles that can engage our attention is the minute and astonishingly effectual precautions taken to maintain forever the superior caste in the high position assigned to it. The education of the Brahman is a marvel, and it would have been surprising if with care so intelligent and continuous there had been a failure in forming persons worthy to succeed their instructors. Nothing can be looked for on this most interesting and weighty subject either in the sacred or liturgical books, or at most very little can be found in them. It is to the codes we must turn and particularly to that one known as the laws of Manu, a work less ancient than it was thought to be at first, but which without the least doubt antedates our era by three or four centuries, and which still enjoys unquestioned authority in the tribunals of India.

—To begin with, the legislator has the most exalted idea of the Brahman. By the very order of Brahma, the first of his sons, the Brahman charged with the study and teaching of the Vedas the performance of sacrifice and the duties of worship, is of right the lord of all creation and of all beings. Master of everything, it is only through his generosity that other men enjoy the goods of this world (Laws of Manu, book I., verses 88, 93, 100 and 101). He alone is rightful proprietor of these goods which he yields to others, and this is why the other castes, to whom he shows himself so kind, owe him in return respect and a large part of all the benefits which he leaves them. Even before the Brahman is born the law concerns itself with him. He is barely conceived in the womb of his mother when it is necessary to offer a sacrifice in his favor for the purification of the fœtus (book II., verse 27). After his birth and before cutting the umbilical cord he must be made to taste of honey and clarified butter. There are certain conditions connected with the name given him, as there are to the taking him for the first time into the open air, and for his weaning. He must receive the tonsure at an age of from one to three years (book II., verse 35). He may be invested with the sacred cordon beginning with his eighth or even fifth year; but he must not be invested with it after his sixteenth year under pain of excommunication. The law regulates the composition of the sacred cordon put about the novice, and of the belt and baton which he carries, made of a certain kind of wood and of a certain length The novice, once initiated through the ceremony of Kesanta, must no longer receive his food otherwise than in alms, and he must beg his bread. He may not take more than two meals a day, one in the morning, the other in the evening. He must sit while eating, and observe the prescribed rules, and perform his ablutions. At the age of 16 he begins-his studies with a spiritual preceptor called a Guru, who becomes his second father, even more venerated than the father whom nature gave him. The Guru never gives any but free lessons, and it is with difficulty that the disciple when leaving his master after 15 or 20 years of study is able to offer him a slight souvenir of his gratitude. The Guru makes the novice study the Vedas constantly, and the young man must pray night and morning every day, and read the sacred books with the explanations which complement and interpret them. The brahmatchari or novice must also daily, without exception, witness the rising and the setting of the sun, and while he imbibes respect for the sacred writing and for his teacher, he learns to bridle his senses and for his youthful passions (book II., verses 220, 245). All his acts are determined in the minutest details, from which he can not depart without sin.

—The novitiate, no matter how painful it may be, is at least of 9 years duration, and may extend to 18 or even 36; in a word, as long as necessary, depending on the student's intelligence for the understanding of the Vedas and everything connected with them (book III., verse 1). When the novitiate is finished, the brahmatchari may become father of a family and head of a house, Grihastha, and this is the second period in the life of the Brahman. He is obliged to marry and choose a woman of his own caste for his first marriage. For subsequent unions, in case such should take place, the law is less exacting and the wife may be chosen from the other castes, although this is a degradation more or less censurable (book III., verse 12). The law prescribes carefully the means which the Grihastha should use for his own support and that of his family. He can never descend to degrading labor; even the cultivation of the earth is forbidden him. It is from alms especially that he is obliged to live, and this is how the law proposes the holy practice of almsgiving to the rich, (book IV., verse 226), by which they only return to the Brahmans the property belonging to the latter. The Grihastha should always devote the best part of his time to reading the Veda, to the numberless ceremonies of worship, to the sacrifices which they require, and all the prescriptions of the liturgy. He must abstain from meat (book V., verse 4), and all impurity which might defile him must be removed according to the rites. The second period in the life of a Brahman finishes when he is the father of a family and has brought it up. He may then, especially if he has a grandson, retire from the world and think only of himself, that is, of his eternal salvation. This is a new career begun, and which is divided into two parts. The Grihastha, withdrawn from society, and living in the forest (Vanaprastha), has not yet broken all his ties with the world. First of all, he may take with him his old wife, and preserve certain bonds of relationship with his neighbors. However, all his existence is ordered as is that of the novice. He has taken with him the consecrated fire, and all the utensils needful for religious oblation. Wearing the skin of a gazelle or a garment of bark, he must bathe night and morning (book VI., couplet 6); he must leave his hair long, gathered up on the top of his head, and let his beard grow, also the hair of his body and his nails. Occupied continually in reading the Veda, he is to live ordinarily on roots alone or wild fruits gathered by himself. And it is only in rare cases that he is still permitted to receive alms. He must remain as inflexibly chaste as the novice, endure without complaint the burning heat of summer and the driving rains of winter. The earth is his only couch, and if an incurable disease should attack him, "let him walk without stopping in the direction of the northeast till his body is dissolved, living only on air and water," (book VI., couplet 31).

—To this third period, hard enough, succeeds a last, more rigorous still, if possible. He definitively takes up the ascetic life and renounces every species of affection. He becomes Sannyâsi (or yet a Yati, Parivrâdjaka); he has need no longer to read even the Veda, he must remain absolutely alone and without companions, (book VI., couplet 42); he has no longer a hearth or a home; when hunger torments him he goes to seek for food in the neighboring village; he purifies his steps by seeing to it that he does not tread on any impure object; he cleanses the water he drinks by filtering it lest he should kill any animalculæ it might contain; he purifies his words by truth; inaccessible to his every surrounding, raised above every sensual desire, without any society but that of his soul, he has but one perpetual thought, that of the Supreme Soul (Paramâtma), the divine spirit with which he is to be united in eternal beatitude.—"Just as the trunk of a tree leaves the river bank when the current bears it away, just as the bird at its caprice leaves the branch where it has perched, so the Sannyâsi, freed by degrees from every earthly affection and become insensible to all tribulation, leaves his body and is forever absorbed in Brahma," (book VI., couplets 78 and 81.)

—Such are the four periods of a Brahman's life. We can understand how, with such a rigid discipline, an intelligent and superstitious race has been able to produce all that Indian genius has produced. Almost numberless generations of masters and disciples, of fathers of families, and hermits, have accumulated by degrees all those Brahmanic works which we know, and they have ended by building an indestructible edifice which may be indeed criticised in some of its parts, but which must in justice be admired in many others.

—This is not the place to linger over Sanskrit literature, but it is nevertheless well to cast a rapid glance at the chief monuments of which it is composed and which are exclusively Brahmanic work. First of all, by right of religion and age, are the Vedas, four in number: the Rig-Veda; the Sama-Veda; the Yadjur-Veda, in two texts known as the white and the black; and the Atharva-Veda, more recent than the other three. Although in the Vedas there is not anything but a system of naturalism, about the same as the paganism of Greece and Rome, the hymns are so beautiful and the religious sentiment in them so profound, that they may be ranked inferior only to the Bible. Around the Vedas is grouped a whole liturgical literature, presenting at times, moreover, admirable morsels of inspired semi-poetical metaphysics. The study of the Vedas has besides given birth to an immense exegetical literature, leading, on one hand, to grammatical studies in which the Hindoos, while learning no language but their own, have outstripped in philology all other people, and in which they will be without rivals for all time; leading, on the other, to systems of philosophy (Darsanas), six in number, some orthodox, the others independent and heretical. So much for sacred and serious literature. Next come the epic poems, of which the two principal, the Mahabhârata, the receptacle of all the national traditions, is in more than 200,000 verses, and the Râmâyana in 70,000. Then they have a dramatic literature entirely indigenous which dates from the first century of the Christian era. Lastly, there are their codes, written in verse, it is true, but put in this form so that all the laws of these people should be engraved on their memory. The Hindoo genius has had less success in the sciences, except that of grammar. Herein lies its weakness. It has not been able to write history, just as it has not been able to observe accurately a single fact in nature.

—But in spite of these deficiencies, the Hindoo, or more correctly the Brahmanic genius, must take a very high rank in the annals of the human mind; and in many regards we may say with justice that it is second only to the genius of Greece. The Semitic race to which we owe in part our religion, is very great indeed. That must be admitted, but it must be acknowledged, also, that it is somewhat inferior to the Aryan; and on the banks of the Ganges intelligence was more amply developed than in the deserts of Palestine or Arabia. At present, when a great number of Hindoo productions are being printed and translated and commentated, we must without doubt withdraw from them some of the excessive admiration which was felt for them when unknown, whether in antiquity, or in the eighteenth century: but while making a correct estimate of them, our esteem for them has hardly diminished. The object and the nature of our esteem is changed, but it has become at once more enlightened and more impartial.

—The most undoubted discoveries of the learned of our time should also increase our curiosity and our sympathy for the Brahmans. It has been shown that they are of the same race as ourselves, not only from an ethnological point of view, which would be of no great account, but from a point of view the most intimate and direct. This Aryan people, who turned their steps from the high plains of Asia toward the northwest of India, between the sources of the Indus and the Ganges, had for a long time inhabited the same region as the ancestors of almost all the European peoples, and as our own, Greeks, Latins, Celts, Germans, Goths, Slavs, etc. The common birthplace of all these peoples is shown by the evident affinity of their languages. The Sanskrit is not the mother of all these idioms, as was once said, but it is their sister, and the Aryans, who went eastward to the Indian peninsula, belong to the same current of civilization which went westward through Persia, Asia Minor, and the centre and north of Europe. Thus the Brahmans are really our brothers: they are one with us, and yet as distinct as we from the other two currents of civilization which formed the Semitic world, and the world called Turanian which is made up of China, Tartary, Thibet, Turkey and some countries of Europe. We can say with just pride that the civilization to which we belong is the true one, and without belittling others, we may believe ourselves their superiors. The Aryans share our glory, and they are certainly one of the most distinguished branches of the great family. They are represented especially by the Brahmans, who are at once the religious and intellectual chiefs of the people whom they enlighten and govern. The military element found among them in the beginning, disappeared to make room for the spiritual. The kshatriyas subordinated themselves to the Brahmans; and these two orders which came from the north imposed themselves on the natives who were incapable of resistance and who have formed the two other castes, the Vaisyas for the higher, and the Sudras for the lower classes, who already occupied the country. Little by little Brahmanic rule, starting from the higher Indus and the sources of the Ganges, gradually spread through the peninsula and finally became prevalent, but in proportion as it penetrated southward, its influence became less marked, and there are in certain parts of southern Hindostan peoples which have escaped its yoke. These are the remnants of the most ancient inhabitants who may be called autochthones, while the Aryans were only strangers and conquerors.

—However the case may have been, Brahmanism has reigned over these vast countries, not only by the right of the stronger, but by right of intellectual superiority. And the organization which it founded answered so well to the genius of these peoples that they have lived under it for 40 centuries, and nothing indicates their desire to reject it. India has been frequently conquered, but without changing at all since the Brahmans appropriated it. The invasion of Alexander only touched some western parts and touched them without leaving any traces beyond the establishment of kingdoms, half Greek, half Hindoo, which have lived down to our era. Later, the Mussulman conquest went much farther. It invaded whole provinces, and Islamism spread over a great part of the peninsula without making many proselytes there. After Islamism, the incursions of Tartar hordes created frightful disorder in Hindostan. The torrent only swept over it. It did not extend very far, and left nothing permanent in its track. Even the power of the Mongols who ruled almost the entire peninsula for a considerable length of time, and who had taken firm hold in the ancient home of the Aryans, brought little change, and Brahmanism was neither destroyed nor even greatly modified by them. After the sixteenth century new adversaries appeared. Europeans came into contact with the Hindoos. The conflicts of the French and English with them during the last century are well known. The English came out victors and masters of India, and to-day their government is at once more firmly seated, and more beneficial than it has ever been. The authority of the crown of England has replaced that of the East India company, an inestimable advantage to colonization. During the last century, the English have done wonders in Hindostan, but their task is an immense one, and it is an enterprise worthy of a great Christian people to civilize 200,000,000 of subjects. Will England, energetic and powerful as she is, succeed? Only the future can answer this question.

—As to Brahmanism, it is sure that it never has had to fear a graver crisis than that which Christianity is preparing for it, both under the form of a religious faith and a better civilization. Brahmanism is perhaps able to stand this trial. On its side are tradition, and an immemorial antiquity. It has also popular superstition; and as Christianity is at heart very tolerant, especially in the Anglo-Saxon race, there is little probability that simple preaching can ever make great progress and effect a general conversion of the Hindoos. The most serious danger that Brahmanism ever met, was the Buddhistic reformation, because it was so like the faith it sought to replace. Where Buddhism has failed, it is not likely that Christianity, with all its worth, will succeed. The English individually have an enormous proselyting zeal; but as to the government it is very reserved on these delicate questions; and save certain barbarous customs, which to its honor it has eradicated, as the sacrifice of widows burning themselves on the dead bodies of their husbands, it wisely abstains from all interference in the national worship, leaving to each one full liberty of faith and religious observance. This is perhaps the surest method of propagandism. The use of force, besides being odious on the part of a Christian people, would be fruitless It would revive instead of destroying the national faith. It was religious scruples that served as pretexts to the military insurrection which desolated the north of Hindostan in 1857 and 1858.

—If it be permitted us to cast a glance into the dim future, it must be supposed that Brahmanism, no matter how degraded, it be to-day, has not much to fear from Christianity. The two religions will live in peace without the better absorbing the other. This will be a new phase in the history of Brahmanism, and that is all. It will not be its ruin. In the meanwhile there is much work to be done, to learn it thoroughly, and European philology, which, since the opening of the nineteenth century, has made so many discoveries regarding India and its religions, has before it still a vast field which is far from having been exhausted.

—BIBLIOGRAPHY: Colebrooke, Essays on the Religion and Philosophy of the Hindoos, 2nd ed., London, 1853; Moore, Hindu Pantheon, London, 1810, new edition by Simpson, Madras, 1864; Coleman, Mythology of the Hindus, London, 1832; Muir, Original Sanskrit Texts, etc., London, 2nd ed., 1873; and the works of Lassen, Benfey, Roth, Max Müller, Weber, Kuhn, Spiegel, de Gubernatis, etc.—(See BUDDHISM, LAMAISM.)

BARTHÉLEMY SAINT-HILAIRE.

BRAZIL

BRAZIL. This South American empire is of yesterday. Formerly a Portuguese colony Brazil has had an independent existence only since Sept. 7, 1821. Its constitution dates from March 25, 1824.

—Brazil, discovered in 1500 by Pedro Alvares Cabral, belonged continuously to the crown of Portugal until the Brazilians, with the spontaneous concurrence of the regent Dom Pedro, the immediate heir of the house of Braganza, proclaimed and won their independence, which was subsequently ratified by a treaty, concluded with Portugal. Since that treaty, dated Aug. 29, 1825, a separation has been effected de facto and de jure, and the new American monarchy has been recognized by all the powers, with its chief Dom Pedro I. as constitutional emperor and perpetual protector of Brazil.

—The entire surface of Brazil is estimated at 3,275,326 English square miles. Brazil is watered by numerous rivers. Nearly all of these are navigable or capable of being made so. The principal one is the Amazon. Owing to these rivers which fertilize the soil and bear its products to the sea, to the vast extent of its coasts and to its splendid harbors, Brazil's relations with the civilized world are destined to increase and grow in importance from day to day.

—The resources of the country are as rich and abundant as they are varied. It has magnificent forests which will furnish for centuries the rarest and most exquisite wood for dyeing purposes, for cabinet makers' work, building. and for all the uses of industry, and of the arts and sciences. It is also extremely rich in agricultural products. Coffee, sugar, cocoa, cotton and tobacco, are produced in abundance in this favored land, the population of which, still unfortunately too sparse, receives with eagerness the fruits of the genius of Europe as well as the agricultural products of its temperate zone.

—All that Brazil wants is a population more nearly in proportion to its extent, and that would furnish to agriculture the hands it needs, and to foreign commerce buyers to increase its exports; that is to say, it needs producers and consumers. This immense territory, which could easily maintain 200,000,000 people, has a population of only 9,448,233 (1872).

—This population concentrated in the large cities of the coast, is divided among 20 provinces, only 4 of which do not border directly upon the Atlantic ocean.

—These 4 provinces of the interior are: Amazon, Matto-Grosso, Goyas, and Minas-Geraës. This last province is the most populous of the empire. It contains 1,500,000 inhabitants. Gold and diamond mining has attracted thither and kept there for a long time a considerable number of workmen. The other 3 central provinces, almost entirely covered with virgin forests, contain altogether, according to the census of 1872, 280,000 inhabitants.

—The maritime provinces, in their order from north to south on the map, are: Para, Maranham, Pianhi, Rio Grande do Norte, Ceara, Parahyba, Pernambuco, Bahia, Sergipe, Alagoas, Espiritu-Santo, Rio Janeiro, Saô-Paolo, Parana, Santa-Catharina, Rio Grande do Sul.

—Four of these provinces alone contain nearly one-half the population of Brazil. They are: Rio Janeiro, 1,050,000; Bahia, 1,450,000; Pernambuco, 841,000; Saô Paolo, 837,354. The capitals of the first 3 principal provinces are the 3 great seaports of Brazil, where the population is very dense. Rio Janeiro, the capital, had a population of 274,972 in 1872. The province of Saô Paolo also has its port, Santos, which has a rapid growth; but the population increases faster in this province, principally on account of its magnificent coffee plantations, where experiments of free labor have been tried with doubtful success at first, but which it appears must result favorably.

—Three races contribute to the population of Brazil, in unequal proportions. The white race, mainly made up of natives of Portuguese origin, constitute a majority of the inhabitants. The black race, of African origin, was composed in 1872 of freemen and slaves. The number of the latter was not given by any official returns. It was placed at one-fourth of the population. A law of 1871 has opened the way for emancipation of the slaves, and after a time all the blacks will be free.

—The red race, indigenous to the soil, has a very small place in the total of the population. The Indians are either domesticated or savage The first, converted with great difficulty by the missionaries, inhabit small villages (aldéas) where they perform rude labor very unwillingly, ready as they are at the slightest pretext to go back to forest life. Others, in greater numbers, lead a savage life. Save with rare exceptions, there is no progress observable among these tribes. Thus, in South as well as in North America, the red race is on the road to extinction.

—The mixture of these three races has produced in Brazil an infinite variety of colors and all the shades of complexion which arise from the mingling of blood in every degree. Even the yellow race is not wanting there, since certain attempts at Chinese colonization have been made. But another element, which has also come from abroad, is of more value to the physical and mental improvement of the population: we mean the European element. Not all Europeans who settle in Brazil intend to become Brazilians. Many desire to return, and preserve their nationality with care. These last live in the cities, are occupied in wholesale and retail trade, and in manufacturing. They contribute to the prosperity of the empire by their capital, their spirit of enterprise or their industrial power. The beauty of the climate, the cheapness of living, the connections and relations which a long residence creates, often cause them to forget their native country which is replaced in their affections by their adopted one.

—But without taking these numerous exceptions into account, there is in Brazil at present, a considerable number of Europeans who have come to seek in the new world, in return for their labor, the prosperity which the old world did not give them. These immigrations, made without thought of leaving the country again, have assumed considerable proportions. The principal current between Brazil and Europe is that which starts from Portugal. This ancient country, while losing its dominion over Brazil, has preserved its relations and affinities with it. Thus the Portuguese in Brazil are numerous; in the cities of the coast they are artisans, and the retail business is partly in their hands—a fact which rouses some what violent Jealousies in the Brazilian people, which from time to time give rise to disturbances, quelled only with some difficulty by the police. In these times of crisis, it is the recollection of the old tyranny of the mother country which causes the populace to assail these unfortunate people, whose only fault is that they bring more activity and intelligence than the natives do to the lower walks of commercial life and industry.

—It is not in the cities alone that the Portuguese settle; and Brazil is indebted to them for an exceptional class of colonists. The north of the empire, that is to say, the portion nearest the equator, is uninhabitable for nearly all Europeans, on account of the prevailing heat. The Portuguese alone, especially the Portuguese of the Azores, are able to endure this torrid climate, and the few attempts at colonization which have succeeded in the equatorial provinces have had the Portuguese element as a basis. Where enterprises of this kind have failed, notably on the banks of the Amazon, the failure has come, not from the heat of the sun, which the native of the Azores endures to a marvel, but from the insalubrity of the climate and the pestiferous evaporations of the soil covered with slime and marshes.

—The colonists of German and Swiss origin form, after the Portuguese, the most considerable element of European immigration. It is in the south of the empire, in comparatively temperate latitudes, from the south tropical border to 33° of south latitude, that German colonization has met with the greatest success. In the province of Rio Grande do Sul there is a whole city, of 10,000 souls, peopled almost entirely by Germans, who are very prosperous. Its success is so complete that at the present time, without any effort on the part of the government, but by the sole instigation of the colonists, who have maintained their relations with the mother country, a stream of emigration is kept up between this province and Germany, so that land is becoming scarce in Rio Grande for new colonists who come of their own accord to acquire it. The province of Saint Catherine, until recently almost covered with forests, is beginning to be inhabited by Germans, thanks to the initiative of the prince de Joinville, who has prepared and opened to colonization the immense domains given as dowry to his wife, the sister of the emperor Dom Pedro II. This enterprise seems on the road to success. Other colonies are springing up by the side of Dona Francisca. The government is constructing ways of communication which will afford an outlet to the products of these virgin lands.

—In the neighboring province of Saô Paolo, the Swiss element predominates in the work of colonization. At all times the intelligent and industrious population of this province has cultivated coffee on a large scale. Certain very rich and enlightened landholders have had the idea of introducing free labor in the cultivation of their plantations. They have brought in Swiss colonists by making arrangements with them, based on the system of shares, in use in the south of Europe. The attempts did not succeed completely at first; it is evident that the system of working on shares is not the final form of colonization in Brazil, and that in order to attract European immigration it is necessary to offer it the inducement of ownership.

—To these three classes of emigrants must be added a small number of Belgians and Italians. The French are barely numerous enough to be mentioned among the colonists. Except in a few cantons of the Pyrenees, where the stream of emigration is turned toward the La Plata, the French people do not abandon their homes, and if they do emigrate it is to cities and with the intent of returning.

—Constitution. The fundamental law of Brazil did not originate with a constituent assembly. In proclaiming its independence, the Brazilian nation proclaimed monarchy as its form of government, and as its monarch Dom Pedro I., eldest son and legitimate heir of the head of the house of Braganza, Dom Joâo VI., king of Portugal. It was now necessary to draw up a constitution.

—This was the time when the old and new world were in a ferment; when the first attempts of Italian liberty had failed; when Spain and Portugal given up to adventure were still debating in sovereign assemblies over the most arduous problems of the government of empires. Common sense was rarely present at these deliberations.

—In Brazil the difficulties peculiar to the country still increased the dangers arising from the general situation. On a single point the immense majority of the nation had taken an irrevocable decision. They had determined to crush the monopoly of the mother country, to separate themselves for ever from Portugal, and to govern themselves by the chief whom they had chosen. But the mother country did not consent to yield its rich colonial prey without a struggle. War broke out on land and sea between Brazil and Portugal. Besides, an entire army of officials lived in the empire, regretting the past which had honored and enriched them, and little disposed to open the way to new ideas which for them meant new men in their stead. These champions of a fallen régime, through the position which they occupied and their personal weight, were not without influence.

—It is under these circumstances, and with these elements to deal with, that the emperor Dom Pedro I. was called to give a constitution to Brazil. He set about the task without delay A short time after the proclamation of independence a constituent assembly was convoked at Rio Janeiro.

—It soon became evident that this attempt, honestly undertaken, could have no useful result. To begin with, the assembly adopted all the methods of demagogues; the whole country was given over to a feverish agitation, and the emperor having tried in vain to restore quiet by changing his ministry, decided on a coup d'élat. He had the house of representatives surrounded by troops, the doors closed, and announced by a proclamation to the Brazilian people, that the assembly was dissolved and that another chamber, to be called later, would deliberate on the plan of a constitution which the emperor would lay before them, and which would give the surest guarantees for the liberties of the nation.

—This engagement was only half carried out. There was not a new constituent assembly, but the emperor granted a constitution which was submitted for approval to the nation, which was accepted unanimously by the municipalities, and which, on the demand of the elective bodies, was promulgated March 24, 1824, as the supreme law of the empire. The method, indeed, was not regular; but Brazil was so steeped in anarchy that the act was accepted with thankful enthusiasm, and no protest came after the event, not even when the chiefs of the dissolved assembly came later into power.

—It must not be forgotten here that the works of Benjamin Constant were consulted by Dom Pedro I. in drawing up the constitution, and that the machinery put in movement by that constitution, and the original points which it contains, were thought out by the fertile and ingenious brain of that man, who, by reason of his habits of opposition, one could not have believed endowed with common sense to such a degree. Better inspired than Rousseau, who, ruled by socialistic instinct, offered the people only impossible constitutions, Benjamin Constant, enlightened by experience and by his fertile intelligence, applied himself to the solution of problems raised up by practice, and there he succeeded. By adopting the ideas of the old French parliamentarian, by adapting his plan to the genius of the Brazilian nation, Dom Pedro I. performed an act of sovereign good sense, and immortalized his reign.

—We have not to speak here of the numerous points in which the Brazilian constitution resembles all other constitutions past and present. The important thing is to note the points in which it differs from them, and what are the original points which it presents. Brazil is a monarchical state. To the title of constitutional emperor, the head of the state adds that of perpetual protector of Brazil, an appellation connected with the historical position of the time when the struggle with Portugal was still unfinished and which imposed upon the emperor, the heir of the house of Braganza, the irrevocable duty of maintaining the separation between the two countries. Essentially a Catholic nation, Brazil has a state religion, and, as in certain European monarchies, the rules of the council of Trent regulate the civil status of the citizens. But the necessities of colonization have in this respect brought about a reform, in so far as civil marriage is concerned, which must in time be completed. Constitutions generally admit but three powers: the legislative, the executive and the judicial. The constitution of Brazil recognizes a fourth: the moderating power, which is assigned exclusively to the chief of the state. It defines in these terms (article 98) the function of this power: "The moderating power is the keystone of the whole political edifice; it is delegated exclusively to the emperor, as supreme chief of the nation and its first representative, in order that he should watch incessantly over the upholding of its independence, and the equilibrium and harmony of the other powers."

—This power is exercised without the aid of ministers and under the following circumstances, enumerated in article 101: nomination of senators according to form prescribed by the constitution; convocation extraordinary of the general assembly; sanction of the decrees of the same assembly; approval or suspension of the resolutions of the provincial chambers; prorogation or adjournment of the general assembly; dissolution of the chamber of deputies; nomination or dismissal of ministers; suspension of magistrates in cases provided for by the constitution; exercise of the right of pardon or mitigation of punishment; exercise of the right of amnesty.

—These attributes of the moderating power, if examined closely, are connected with the exercise of the very prerogatives of the monarch whom they free from all ministerial pressure. When, for example, the chief of the state wishes to change his ministry he should be free to do it without obtaining the signature of the members whom he dismisses. All these acts, by which he exercises the moderating power, have the same character, and the innovation noted in the constitution of Brazil seems intended to put in practice the celebrated maxim The king reigns but does not govern.

—But the moderating power, although outside of ministerial action, is not exercised without control. The council of state, established by the fundamental pact, is called upon to give its advice in every case in which the emperor undertakes to exercise any of the prerogatives peculiar to the moderating power, and the constitution declares the members of the council of state responsible for the advice which they give. Parallel with this responsibility is the guarantee of permanence in office, or irremovability granted to these high functionaries.

—This institution is held to be the highest in Brazil. In the Imperial Almanac, the council of state takes rank before the senate and the chamber of deputies. This pre-eminence, accorded it by public opinion, is based upon the importance of the services which the council is called upon to render, and upon the personal significance of the members who compose it.

—The legislative power is exercised in Brazil by the emperor and the general assembly: what is called the general assembly is composed of the senate and the chamber of deputies, which contribute almost always separately, but in rare cases in common, to the passing of laws. Both chambers are chosen by a popular election. The deputies are chosen directly by the country, according to a system of election of two degrees. The same method is applied in the election of senators, but popular action is restricted to designating to the emperor for each vacant senatorial place three candidates from among whom the emperor makes a choice. Senators are appointed for life, but the chamber of deputies is removed every 4 years. To be senator a person must be 40 years of age and have an income of 2,400 francs. To be elected deputy a person must be 25 years of age and have a revenue of 1,200 francs. The ordinary session begins, according to the constitutional provisions, on the 3rd of May of each year, and lasts 4 months. Unfinished work is carried over from one session to another during the 4 years' interval between the meetings of the legislature.

—Deputies and senators receive a salary. In case of the deputies this salary is fixed during the last year of each legislature for the following legislative term. The salary of the senators is one and a half as great as that of the deputies.

—The right of initiative belongs to the emperor and the two chambers. The chamber of deputies has the exclusive initiative in questions of taxation and recruiting for the army. It also must pass upon the choice of a new dynasty in case of the extinction of the reigning one, as well as upon proposals by the executive power.

—As in all constitutions implying a responsibility of political agents, it is the chamber of deputies in Brazil which decides whether ministers and counselors of state are to be impeached or not; and it is the senate which, performing the functions of a high court of justice, passes upon these accusations and certain others of an exceptional character.

—Such, in short, are the attributes of the Brazilian chambers. As to the forms of procedure, we may mention, in passing, the application of the English system which is very happily made in Brazil, and which consists in obliging the orator to address his speech to the president of the assembly. This rule, which lightens the effects of attacks and personal recriminations by turning them aside, maintains habits of calm and decorum during debates which are sometimes violent. Besides this parliamentary detail there are two points to be noted as giving an imprint of originality to the Brazilian constitution: in case of conflict between the two chambers, if one adopts and the other rejects a proposed law, the constitution has created a very simple procedure to terminate the difference. It authorizes the two chambers to form themselves into one, and to decide the question according to the majority of votes. The other point is: Who shall have the last word in case of disagreement, the monarch or the chambers? The publicists of Europe have long debated the question. The constitution of Brazil has solved it in favor of parliament. The refusal to sanction a law is only a retarding power; but in order that a proposition emanating from the chamber should have the full force of law, it is necessary that it should have been adopted by three successive legislatures, that is to say, by three votes of three different assemblies, at an interval of four years between two of these votes at least.

—The organization and working of the elective body has just been mentioned. It now remains to indicate, in a few words, what the institutions are which protect the provincial and municipal interests of the empire. Since 1834 there are provincial assemblies in Brazil, which have legislative authority in all matters concerning finance and administration in the provinces. Decentralization exists in Brazil in the broadest sense of the term. Each province uses its resources as it likes. The central government, represented by the chief of the administration, who bears the title of president of the province, has only a very limited power in matters of provincial interest, and although there is a method of reforming the decrees of provincial assemblies, recourse is scarcely ever had to it.

—It is needless to say that in a country where provincial institutions enjoy a liberty so complete, under the shadow of the elective principle, municipal liberty, which comes nearest to individual liberty, is fully respected. The cities govern themselves through administrators of their own choice under the control of elected assemblies.

—There are two degrees of electors in Brazil, parish voters and provincial voters.

—Every Brazilian citizen, native or naturalized, is a voter, provided he is 25 years old. The only exceptions to this rule are paid laborers, cloistered monks, and persons who have not an income of 300 francs, no matter from what source, even the product of daily manual labor.

—The first degree of electoral right is thus constituted. Voters of the first degree, or of the parish, have but one thing to do: they name the provincial voters who form the second electoral degree; the latter choose incumbents for all elective offices. Every Brazilian citizen may be chosen provincial elector provided he has a revenue of 600 francs.

—On periodical occasions, determined by law, the whole electoral machinery is put in motion in the empire. Parish voters choose the provincial voters, these in their turn choose men to every elective office, from justice of the peace, who is elected, to the deputy in the general assembly.

—The election of deputies to the assembly was made, up to 1836, by voting for the representatives of a whole province on a single ticket.

—At this date the system of electing deputies was modified by law. Election by districts and individually was substituted for collective elections and by provinces. Another law, passed in 1860, has in a certain way established a middle system between the old and the new, by suppressing a certain number of electoral districts having but a small number of provincial voters, and establishing, in such cases, collective election.

—To complete this general description of the constitution of Brazil, it remains to mention the declaration of rights, contained therein. The last article of this constitution (179) enumerates in 35 paragraphs, all the guarantees which in Brazil protect the man and the citizen.

—Finances. The increase of public receipts is the surest sign of the prosperity of states, provided this increase does not result from an increase of old taxes or the creation of new ones. Now the government of Brazil for the past 30 years has been decreasing the public burdens. Its budget of receipts has increased each year in considerable proportions. We have the table of these receipts from July 1, 1844, to June 30, 1861, and, in the space of these 17 years, the receipts increased by an almost continuous movement upward from 74,000,000, in round numbers, to 157,000,000. In 17 years the public revenue has more than doubled, and the mean annual increase has been about 5,000,000 francs.

—Expenses have naturally increased in proportion to the growth of the receipts; but the years 1867, 1868, 1869 were exceptional on account of the war with Paraguay. Then the expenses were 306, 426 and 392 millions. The year 1870 brought a normal budget, and the amount of expenses scarcely reached 177,000,000 francs.

—A rapid glance at the budget of expenses for 1870 gives an idea of the burdens which the government is called to bear. The ministry of the empire (interior) expends about 14,000,000 francs. In this sum is included the allowance to the emperor, 2,400,000 francs; the allowance to the empress, 288,000 francs; the salaries of the counselors of state, senators, deputies and presidents of provinces; expenses of schools of law and medicine, of the school of fine arts, of the sanitary establishments, etc. Expenses of religion at the charge of the state, belong to the budget of the interior, and amount to about 2,500,000 francs.

—The budget of the minister of justice amounts to a little less than 10,000,000 francs. Justice is dispensed in Brazil by a supreme court; four courts of appeal, sitting at Rio Janeiro, Bahia, Maranhao and at Pernambuco; and by judges of courts of first resort, distributed throughout the extent of the empire. The police and the national guard are connected with the ministry of justice. The allowance of the ministry of foreign affairs does not exceed 2,500,000 francs. It is almost entirely devoted to the salaries of diplomatic and consular agents.

—The ministry of marine takes from the general budget a sum of about 21,000,000 francs. The Brazilian navy has developed considerably during the last decade. The budget of the ministry of war is about 33,000,000 francs. The chief expenses of this department are for the army 17,000,000 and for arsenals more than 5,000,000 francs. The ministry of finance expends annually more than 70,000,000 francs. This department has charge of the public debt, both home and foreign, which alone consumes a good part of the sum.

—The ministry of agriculture, commerce, and of public works uses about 30,000,000 francs. It is with this department that the expenses made in view of progress are connected, those which have the future in view and which should be considered as reproductive. In this class of expenses, the first place should be given to the interest guaranteed to railroads, the grant made for the development of colonization amounting to 2,000,000 francs, and the subsidy of nearly 7,000,000 francs given to various companies which serve the vast coast of the empire and the immense river Amazon with steam navigation. Postal communication forms a comparatively recent part of this ministry.

—To meet these expenses the budget for 1870 placed the receipts at about 194,000,000 francs. The principal receipts are the import duties, about 100,000,000 francs; the export duties nearly 35,000,000 francs; receipts for railroads 7,000,000 francs; postoffice, 1,200,000 francs; stamp duties, 13,500,000 francs; patents, 3,000,000 francs; land tax, 3,500,000 francs; lottery, nearly 4,000,000 francs; court fees, 1,500,000 francs; beside receipts extraordinary to a considerable amount.

—The amount of the debt was 1,453,000,000 milreis, in 1870, of which 113,600,000 milreis, or 283,000,000 francs, were a foreign debt, and 240,000,000 milreis, or 600,000,000 francs, home debt, at 4, 5 and 6 per cent.; 150,000,000 milreis, or 375,000,000 francs, in paper money; and 54,000,000 milreis, 135,000,000 francs, in treasury bonds. The interest on the public debt amounted, in 1872, to 15,900,000 milreis, that is, 38,750,000 francs. In 1860 the foreign debt was 125,000,000 francs, and the consolidated debt 145,000,000.

—Defensive Power. The army of Brazil is composed of 25,000 men, and the navy has 76 vessels of all sizes, carrying, altogether, 290 cannons.

—Products. We can understand that it has not yet been possible to draw up the industrial and agricultural statistics of so large a country; only the figures of its commerce are known which in 1868 amounted to 460,000,000 francs exports, and 350,000,000 imports; in 1869, to 500,000,000 and 410,000,000 francs, respectively. The export of coffee amounts to 150,000,000 francs; of cotton, to nearly 75,000,000; of sugar, to 50,000,000; of skins, to 18,000,000; of tobacco, to 8,000,000; of diamonds, to 7,000,000; of india rubber, to 5,000,000; of cocoa, to 3,000,000.

—Let us add, in conclusion, that the length of railroads was 651 kilomètres in 1870, and that of telegraphs was estimated at 1,500 kilomètres. 36

—BIBLIOGRAPHY. Brazilien Land and Leute, by A. Constatt, 8vo, Berlin, 1877; Brazil and the Brazilians, by Fletcher and Kidder, 8vo, Philadelphia, 1857; de Erpily, Le Brésil, tel qu'il est, Paris, 1862; The Amazon and Madeira Rivers, by Franz Keller, fol., London, 1877; Brazil and the River Plata, by Wm. Hadfield, 8vo, London, 1877; Journey in Brazil, by Louis Agassiz, 8vo, London, 1868.

CHARLES REYBAUD.

BRECKENRIDGE

BRECKENRIDGE, John Cabell, vice-president of the United States 1857-61, was born Jan. 21, 1825, at Lexington, Ky., where he died May 17, 1875. In 1860 he was nominated for the presidency by the slavery-extension wing of the democratic party (see DEMOCRATIC-REPUBLICAN PARTY,) and was defeated; but in the same year was elected United States senator, his term expiring in 1866. He took considerable part in the extra session of 1861 (see REBELLION,) then went south and became a major general in the confederate army. He was expelled from the senate by vote in December, 1861. As his state had shown no intention to secede, his action in taking service under a foreign and hostile government was remarkable from any point of view of the relations between state and federal governments. After the rebellion he practiced law in his native place until his death.

A. J.

BROAD SEAL WAR

BROAD SEAL WAR, The (IN U. S. HISTORY). I. Until 1846 all the six members of the house of representatives were chosen in New Jersey, by general ticket, by the people of the whole state. At the election in 1838, (Oct. 9-10), the democratic candidates received an average majority, on the face of the returns, of about 100 votes in a poll of nearly 57,000. In one township (South Amboy) of Middlesex county, giving 252 democratic majority, the return had no certificate of the election of one of the inspectors, and was not signed by the election clerk; the county clerk therefore struck the whole return out, thus giving the whig candidates a majority in the state. The democrats claimed that exactly similar defects had been passed without question in whig counties, and that in any such case the laws required the state canvassing board, the governor and council, to send by express for the missing returns and decide upon their validity; this the board refused to do, decided that they were bound by the clerk's decision, and gave the whig candidates certificates of election, under the broad seal of the state. A case similar in most respects occurred in Millville township, Cumberland county; and the whigs claimed to have discovered a number of illegal votes cast in democratic townships. But the Millville democratic majority was under 100, and so was not vital, and the alleged fraudulent votes were not brought before the board and did not influence its decision. The South Amboy case, and the county clerk's power to finally decide it, were therefore the pivotal points of the controversy.

—II. When congress met. Dec. 2, 1839, the house contained 119 democrats and 118 whigs outside of New Jersey, whose seats were claimed by both parties. The clerk of the house, H. A. Garland, of Virginia, offset the action of the Middlesex county clerk, by refusing, when the roll call reached New Jersey, to call the names of five of the whig delegation, on the ground that their seats were disputed, a fact of which he could have had no official knowledge. His decision made the house for the next three days a bedlam, each party struggling to force in its New Jersey delegation, in order to control the house and the election of speaker. Dec. 5, the house spasmodically chose John Quincy Adams, a neutral (see ADAMS, J. Q.) speaker pro tempore. An angry, confused and disorderly debate, and unsuccessful attempts to choose a permanent speaker, followed, both New Jersey delegations voting on many questions. Dec. 11, the right of either delegation to vote was denied by a small majority, and Dec. 17, the house at last chose as speaker R. M. T. Hunter, of Virginia, a whig, but in favor of the subtreasury, and therefore (see INDEPENDENT TREASURY) more acceptable to the democrats. March 10, 1840, by a vote of 111 to 81, the democratic contestants were seated, and July 16, the majority report of the committee on their case, declaring them duly elected, was adopted by a vote of 102 to 22. Owing to the length of the report and testimony, and lack of time to examine them, most of the whigs refused to vote.

—The controversy is mainly interesting because of the reversal of parties upon it. The loose constructionist whigs, in this case, held the action of a state government binding, even in a congressional election, until reversed by the house; the strict constructionist democrats, on the other hand, treated the action of a state government, in this case, as a nullity. In this respect the broad seal war is illustrative of the disputed election of 1876. (see DISPUTED ELECTIONS, IV.; CONSTRUCTION, III.)

—See 2 von Holst's United States, 337; 10 Adams' Memoir of John Quincy Adams, 176, 236; 2 Benton's Thirty Years' View, 159; Democratic Review, June, 1839. 16 Benton's Debates of Congress practically ignores the whole affair.

ALEXANDER JOHNSTON.

BROKERS

BROKERS, persons employed as middlemen to transact business or negotiate bargains between different merchants or individuals. They are sometimes licensed by public authority, and sometimes not.

—Brokers are divided into different classes; as bill or exchange brokers, stock-brokers, ship and insurance brokers, pawnbrokers, and brokers simply so called, or those who sell or appraise household furniture distrained for rent. Exclusive, too, of the classes now mentioned, the brokers who negotiate sales of produce between different merchants usually confine themselves to some one department or line of business; and by attending to it exclusively they acquire a more intimate knowledge of its various details, and of the credit of those engaged in it, than could be looked for on the part of a general merchant, and are consequently able, for the most part, to buy on cheaper and to sell on dearer terms than those less familiar with the business. It is to these circumstances—to a sense of the advantages to be derived from using their intervention in the transaction of business—that the extensive employment of brokers in London and all other large commercial cities is wholly to be ascribed.

—In France the brokers who deal in money, exchange, merchandise, insurance, and stock, are called agents de change, and their number at Paris is limited to 60. The company of agents de change is directed by a chamber of syndics chosen annually by the company. They are severally obliged to give bonds to the amount of 125,000 francs for the prevention of abuses. They are also obliged to keep books; are restricted to a charge of from 8frac18; to ¼ per cent.; and are interdicted from carrying on, or having any interest in, any commercial or banking operations. In the United States brokers are not licensed nor do they give bonds.

J. R. M'C.

BROOKS

BROOKS, Preston, a representative from South Carolina in the 34th congress, and a nephew of senator Butler, of the same state. In a speech on the Kansas troubles senator Charles Sumner, of Massachusetts, had criticised senator Butler, and May 22, 1856, after the senate's adjournment, Brooks, backed by two other southern representatives, Keitt, of South Carolina, and Edmundson, of Virginia, entered the senate chamber, struck Sumner senseless to the floor with a heavy cane, and then beat him so cruelly that an absence of several years in Europe was necessary for his recovery. The house censured Brooks, who resigned, and was unanimously reelected by his district. Massachusetts refused to choose another senator, and Sumner's empty chair was for several years her silent protest against Brooks' unpunished violence. (See authorities under SUMNER, CHARLES.)

A. J.

BROWN

BROWN, John, was born in Torrington, Conn., May 9, 1800, and was hanged at Charlestown, Va., Dec. 2, 1859. He had lived in Essex county, N. Y., in "John Brown's tract," until 1851, when he removed to Akron, Ohio, and in 1855, without his younger children but with his four older sons, settled in Kansas, where he soon became known as "John Brown, of Osawatomie," one of the foremost leaders in resisting Missouri border ruffian violence by force. He at last began the forcible liberation of Missouri slaves, and rewards were offered for his arrest by state and federal authorities. In January, 1859, he left Kansas for the east, to fulfill his life-long ambition of beginning a forcible, not a political, opposition to slavery by renewing the liberation of slaves on a far larger scale. In July, 1859, he settled near Harper's Ferry, Va., with some of his Kansas associates, and began preparations. Late on Sunday evening, Oct. 17, with 17 white and 5 colored men, he seized the United States arsenal at Harper's Ferry "by the authority of God Almighty," and spent the next 18 hours in freeing slaves, cutting telegraph wires, preparing defenses, and making white prisoners, of whom he secured nearly 50. His intention was to retreat at once, with his negro recruits, to the strongholds of the mountains, and keep up a guerrilla warfare, with the Alleghanies from Alabama to Maryland as his base, but he delayed until he was too late. By noon of Monday militia began to pour in, and before evening 1,500 soldiers, of all arms, had surrounded the armory engine house, which was Brown's last refuge. Early on Tuesday morning the United States marines, using a ladder as a battering ram, burst in the engine house door, and the Harper's Ferry insurrection was over. Eight of the insurgents had been killed, one was dying, and three had already been captured, two of them mortally wounded. The prisoners in the engine house were brown, three other whites, and half a dozen negroes. John Brown's trial was fair, but his conviction was inevitable, and he was executed as above stated. Four of his associates, Cook, Coppoc, Copeland, and Green (a negro), were hanged at Charlestown Dec. 16, and two others, Stevens and Hazlitt, on the 16th of the following March. His sons, Watson and Oliver, had been mortally wounded, and died during the conflicts at the armory Owen Brown, Barclay Coppoc, Tidd, Merriam, and Anderson (a negro), escaped.

—The political importance of the Harper's Ferry insurrection was twofold. In the north it forced the slavery question upon public attention, and put the abolitionists (as distinguished from the republicans) in an entirely new light. Opinions, in a democracy, are always more respectfully considered when their holders are ready to die in their assertion, and, though the north almost unanimously condemned the whole insurrection, John Brown's steadfast life and death, for most northern men, laid the foundation of a kindly reception of the emancipation proclamation only three years afterward. In the south the officeholders and slaveholders, who had hither to found it a work of much difficulty to convince other southerners of the general wickedness of the north, had now a clear opening for the lever. An abolitionist rising had taken place, and the north, while condemning it, had failed to do so with the heat which was natural to southern men, whose homes, wives and babes were at stake in such a struggle. The charge of complicity in John Brown's undertaking was urged angrily and persistently against many persons and associations in the north who were identified with the abolition movement, and the desire for a separate commonwealth, separated by national lines from the abolitionists of the north, grew steadily stronger in the south until the election of 1860 offered a pretext for secession.

—See 1 Greeley's American Conflict, 280; Redpath's Life of John Brown; Webb's Life of John Brown; Report of Congressional Committee on Harper's Ferry Insurrection; and later authorities under SECESSION.

ALEXANDER JOHNSTON.

BUCHANAN

BUCHANAN, James, president of the United States 1857-61, was born in Stony Batter, Franklin county, Pa., April 23, 1791, and died at Wheatland, Pa., June 1, 1868. He was graduated at Dickinson college in 1809, and was admitted to the bar in 1812. He began political life as a moderate federalist, joining the democratic party in 1826-7. He was in the house of representatives 1820-30, in the senate 1833-45, secretary of state 1845-9, and minister to Great Britain 1852-6, (See OSTEND MANIFESTO.) Through all this period of public service he had maintained the character of a cautious and safe politician, who had made no slips or mistakes, and who was devoted to the favorite northern policy of ignoring the slavery question and stifling discussion about it. He was therefore chosen president in 1856. (The leading events of his administration are given under DRED SCOTT CASE; KANSAS; BROWN, JOHN; SECESSION; DEMOCRATIC-REPUBLICAN PARTY.) At the close of his term, having succeeded in keeping the peace until March 3, 1861, he retired to private life with the contempt of both sections, and devoted his leisure to the preparation of a defense of his administration. This book deserves the careful reading of any one who wishes to understand the history of the times, though public opinion in the north has become so fixed in attributing to Buchanan's cowardice and hesitation the disasters of 1860-61 that no defense of his administration will find any general attention for many years to come. His defense is, in brief, that both sectional parties, the republicans and the Breckenridge democracy, were determined on war, and were not to be baulked either by the president or by the Douglas democracy; that, while congress was in session, the inception of measures to suppress rebellion belonged to congress and their execution to the president; that congress, through the whole session of 1860-61, persistently and willfully refused to strengthen the army or navy, to fill the treasury, or to provide in any way for the common defense; and that all the blame for the first successes of secession and the development of a southern confederacy should fall upon congress and not upon the president. In the latter part of this there is undoubtedly more force than is commonly conceded; had Buchanan attempted to use, in December, 1860, the war powers which Lincoln used in April, 1861, he would perhaps have been impeached by a coalition of the anti-republican elements of the house and removed by the senate, and Breckenridge would have become president. But the effort was worth the risk. In 1832-3, congress being then also in session, Jackson "took the responsibility;" in 1860-61, Buchanan made no sign, and his memory must take the responsibility.

—See Buchanan's Administration on the Eve of the Rebellion; Horton's Life of Buchanan; 1 Atlantic Monthly, 745.

ALEXANDER JOHNSTON.

BUCKSHOT WAR

BUCKSHOT WAR, The (IN U. S. HISTORY). In 1838 the control of the Pennsylvania house of representatives, on which depended the choice of a United States senator, turned upon the election in Philadelphia, Oct 9. Here the democratic candidates for senators and representatives were elected by average majorities of about 350; but the democratic candidate for congress was defeated. Ascribing his defeat to whig frauds in the Northern Liberties district, he induced the ten democratic return judges to cast out the entire 5,000 votes of that polling place, and thus obtained a certificate of election. Hereupon the seven whig judges met separately and gave certificates not only to their party candidate for congress, but also to the whig candidates for the state legislature, through these had no claim to a majority with or without the Northern Liberties vote. The whig certificates, sent by rail, came first to the secretary of state, who was also chairman of the whig state committee. He at once accepted them as the true ones and issued an address to his party, calling on them, until investigation could be made, "to treat the election as if they had not been defeated, and abide the result." This was a signal for both parties to muster strong bodies of armed partisans at Harrisburg before the meeting of the legislature, "to see fair play."

—The legislature met Dec. 4, 1838, in the presence of riotous crowds. In both houses the secretary of state banded in the whig returns from Philadelphia, ignoring those of their opponents. The whig senate was organized without great difficulty, but adjourned because of the mob. In the house two organizations were formed in the same room, one (whig) recognizing the secretary's returns, the other (democratic) recognizing the election judges' returns. As speaker the former chose Thomas S. Cunningham, and the latter William Hopkins. The Hopkins house remained in session after the adjournment of the Cunningham house, and, having thus got possession of the hall, guarded it securely and compelled their opponents to meet elsewhere.

—The whig governor, Ritner, issued a proclamation during the day, declaring the capital to be in the hands of a lawless mob. and calling on the militia throughout the state to prepare for action. Dec. 5, he called on the commandant at Carlisle barracks, Capt Sumner, for United States dragoons, but was refused. He then, Dec. 7, called on president Van Buren for troops to protect the state from domestic violence. (See INSURRECTION, II.) This request was also refused, Dec. 11, on the ground that the trouble arose from no opposition to the laws, but from a political contest for the organization of the house; and that it was indelicate and improper for the federal government to interfere for the support of either party. (See KANSAS) In the meantime about 1,000 militia had been brought to Harrisburg, but, after a two weeks' stay, departed, as the mob violence had ceased, and the senate and the dual house were holding regular and quiet sessions.

—The senate stood 22 whigs to 11 democrats; but, when the excitement fell, it was found that many whigs disapproved the secretary's assumption of power to decide disputed returns. The feeling spread, and Dec. 17 three Cunningham members took seats in the Hopkins house, thus giving that body a majority of all the representatives. On motion of a whig senator, Dec. 23, the senate recognized the Hopkins house, and this ended the "Buckshot War." The other Cunningham members, during the next three weeks, took seats in the Hopkins house, with the single exception of their leader, Thaddeus Stevens, who absented himself during the rest of the session. May 7, 1839, at an extra session, he presented himself to take the oath, but the democratic majority, to punish him for his part in the struggle and for his strong and repeated expressions of contempt for the Hopkins house, declared his seat vacant. At the consequent special election he was again chosen, and took his seat in June. The popular name for the whole conflict was given from a reported threat of a whig member that the mob "should feel ball and buckshot before the day was over." The "Buckshot War" is interesting as throwing light upon the meaning of the term "domestic violence," and upon the power of the United States to protect the state governments therefrom. (See DORR REBELLION; INSURRECTION, II.)

—See Armor's Lives of the Governors of Pennsylvania (under Ritner); Harris' History of Lancaster County, and Political conflict in America; and authorities under PENNSYLVANIA.

ALEXANDER JOHNSTON.

BUCKTAILS

BUCKTAILS (IN U. S. HISTORY). A part of the insignia of the Tammany society in New York city was a buck's tail worn in the hat instead of a feather; hence "Bucktails" became a common name for the members of the society. The bill which committed the state of New York to Clinton's canal building policy was passed April 15, 1817, and the members most furiously opposed to it were the bucktail members from New York city. The name "Bucktail" then became for some years a common name for the opponents of the canal system throughout the state. Under Martin Van Buren the bucktails gained control of the state, and in 1824 Clinton was summarily ejected from his office of canal commissioner. At the election of 1824 Clinton was chosen governor by a popular majority of over 16,000, and again in 1826. After Clinton's death, in 1828, the bucktails became the democratic party of New York under the lead of the Albany Regency. (See NEW YORK.)

—See 1 Hammond's Political History of New York, from page 450.

A. J.

BUDDHISM

BUDDHISM is a religion which to-day has more adherents than any other on the face of the earth. Professed in China and Japan, in the islands of Ceylon and Java, in Cochin China and Laos, in Burmah and Pegu, in Nepaul and Thibet, in Kashmire, in Mongolia and Tartary, it has at least three hundred millions of adherents; and although in these countries, so remote from each other, it has assumed different forms, it has still preserved its individuality which neither time nor place has been able to modify in any essential degree. For this reason alone, Buddhism merits the greatest attention, since it holds so prominent a place in the religious history of mankind. What renders it besides no less worthy of interest is the fact that in reality it is a doctrine which seems to contradict in many regards the most natural instincts of the heart and mind. But it possesses the glory of having never been propagated by force and persecution, and of never having employed other than the mildest methods of persuasion to extend itself over so many peoples and lands. If we try to sound its special dogmas, an absolute ignorance of God is discovered, of whom Buddhism has never had the slightest notion, and a negation not less absolute of the immortality of the soul, which seeks external salvation only in annihilation, an unshaken belief in metempsychosis or the transmigration of souls, and a complete system of nihilism as its sole philosophy. Considered under these aspects, Buddhism is one of the most curious and afflicting phenomena which can be examined. It is only within the last half century that Buddhism has become known in an authentic manner, and it was only after the discovery of its sacred books that it was possible to find out anything definite about it. Up to that time, the only sources of information regarding it was faith in the most obscure and least certain traditions. It was Mr. Brian Houghton Hodgson, an English resident at Kathmandu, the capital of Nepaul, who first made this splendid discovery and revealed it to the learned world. Intimate with Buddhist priests, he gained their confidence and soon learned that in the convents of the country Sanskrit books were preserved which were the foundation of the whole Buddhist religion. These books contained the discourses and biography of Buddha, the rules of discipline which he had imposed on his monks, and the metaphysics of the whole Buddhistic doctrine. Mr. Hodgson procured copies of these books, which he gave to such learned societies as could make best use of them—the Asiatic societies at London and Paris, and the Asiatic society of Bengal at Calcutta. He repeated these generous gifts at various times, and the learned world was put in possession of 88 of the principal works which from the canon of the Buddhist scriptures. This took place in the interval between 1824 and 1834. Almost contemporary with Mr. Hodgson, a young Hungarian doctor, Cosma de Körös, entered Thibet and learned the language which no European before him knew, and was able to analyze two great collections of more than three hundred Thibetan volumes, faithful translations of the Sanskrit originals discovered by Mr. Hodgson. Mr. J. L. Schmidt, of St. Petersburg, established the fact, that the Thibetan translations of Buddhist Sanskrit books had in turn been translated into Mongolian, and that just as the Buddhistic faith had passed with the books containing it from India to Nepaul and from Nepaul to Thibet, it passed from Thibet to Mongolia. At the other extremity of India, in the island of Ceylon, treasures no less precious were discovered. Mr. George Turnour, a civil employé like Mr. Hodgson, discovered a second rendering of the Buddhist scriptures in a dialect derived from, and very nearly allied to the Sanskrit, the Pali, which has become the sacred language of the Singhalese; and he published a Pali work, the Mahavamsa, containing the annals of Ceylon after it was converted to Buddhism. About 1868, M. Grimblot, consul of France at Colombo, brought home with him a complete collection of the Buddhist canon, in Pali, according to the southern text, and this collection deposited in the national library invites the labor and knowledge of our Hindoo scholars, who will find in it unexpected treasures. Sinologues added the testimony of China to that already collected from so many sides. China, like Thibet and Mongolia, had translated the Buddhist scriptures in the early centuries of the Christian era, and M. Abel Remusat published, in 1836, the travels of Fa-hein, one of those courageous missionaries who went from the celestial empire into India, to search for the sacred books and bring them home. Later it was reserved for M. Stanislas Julien to complete information of this kind by a translation of the Biography and Memons of Hiouen-Thsang, the most instructive and illustrious of the Chinese pilgrims. In the seventh century of our era he traveled, for 16 years, through all the Buddhistic kingdoms of India and northern Asia. All these data on Buddhism were confirmed, 20 years ago, by the discovery of numerous inscriptions in every part of India, containing decrees of a Buddhist king Piyadasi or Asoka, who reigned in the third century before Christ (from 263 to 226).

—Thus Indian inscriptions, Chinese translations and narratives of Chinese pilgrims, Pali texts, annals of Ceylon, Mongol and Thibetan translations, and especially the original Sanskrit, are the basis on which rests our knowledge of Buddhism to-day, to say nothing of a few less direct ideas which the Greeks have transmitted to us from the expedition of Alexander to the time of Clement of Alexandria. It is well to collect here all these details concerning the authenticity of Buddhism, so that there may be no doubt on such a subject; and as the doctrines of Buddhism are calculated to cause the most painful surprises, it is necessary that we should well understand that if they contain many errors, they no longer present any points of obscurity. They may be deplored, but it is clearly known what they are. The two most important Buddhistic works have been translated into French. The one is the Lalitavistára, translated from Thibetan and compared with the original Sanskrit by M. Ph. Ed. Foucaux, containing the biography of Buddha. The other is the Lotus of the Good Law, translated from the Sanskrit by the much to be regretted Eugène Burnouf, and containing one of the sutras or sermons of Buddha.

—We can now see the principal points in the history of Buddha and his doctrine. Buddha, that is to say, the Intelligent, the Wise, died 543 years before our era, at the age of 80. This is the most probable date despite striking divergences, and it is taken from the Singhalese annals. Buddha, son of a king of Kapilavastu, in the north of India, on the left bank of the Ganges, was called Siddhârtha, from his title of prince, and he took that of Buddha only when he had decided, after long meditation, on the basis of the new doctrines which he presented to mankind to save and instruct them. Married, at an early age, by his father who observed in him an unconquerable melancholy, he left the court and the world to adopt the life of a mendicant at the age of 29. Going first to the Brahman schools at Vaisali and Râdjagriha, the capital of Magadha, (the present Bihar), he soon convinced himself of the insufficiency of their systems and to strengthen himself better in his own, he shut himself up, for six years, in the most austere retreat near the village of Onrouvilva on the banks of the Nairandjanâ, the Phalgou of modern geography, not far from mount Gaya. Subjecting himself to mortifications which frightened the gods themselves, struggling inflexibly against his youth and his senses, the Bodhisattva remained five years in this rude hermitage, and after having many ecstacies, he had one at last in which he thought he had found, in all its fullness, the law which could lead men to salvation and eternal deliverance. Thanks to this beneficent law, man could save himself from the odious necessity of being perpetually born over again; he might issue out of the circle of successive existences; in a word, save himself from transmigration. Once in possession of this marvelous doctrine, Buddha, "perfectly accomplished," left his long retreat and went to Benares to preach his religion, or, as the Buddhists phrase it, "to make the wheel of the law turn round." During the remainder of his life, that is to say, during 45 years, he did nothing but teach, by word and persuasion, peoples and kings who were willing to believe in him. He resided chiefly at Râdjagriha, in Magadha, at Sravasti. in Kosala (Fizabad in Oude), and died near Kusinagara in the kingdom of that name, in the shade of a grove composed of trees called salas (shorea robusta). His disciples gave him a magnificent funeral and divided his sacred relics among themselves, some of which, if popular superstition is to be believed, exist to the present time. This life of Buddha, so simple and so probable, was disfigured later by the most extravagant legends, from under which, however, it may be rescued and written.

—Buddha dead, the devotees or bhikshus assembled in council under the protection of king Adjâtasatrou, and the most influential among them, Kâsyapa, Ananda and Upâli, drew up the works which were henceforth to form the orthodox canon. Kâsyapa, who as president of the council had directed all the deliberations, took charge of the metaphysics or Abhidharma; Ananda, first cousin of Buddha, revised his sermons or sutras; and Upâli compiled everything relating to discipline or Vinaya. The Abhidharma, the sutras and the Vinaya comprise what the Buddhists call the Triple Basket or Tripitaka, just as the Buddha, the Law and the Council, form the Three Pearls or the Three Precious Things, the Triratna. This first council, held under the patronage of Adjâtasatrou, who was converted by Buddha himself, was followed by two others, of uncertain date, one of which was held under king Asoka who extended his rule over the entire Indian peninsula, during the third century before our era. It was these three councils that settled the text of the Buddhist works such as they have come down to us and such as they were accepted by all the peoples who submitted to Buddhism.

—The following is the doctrine contained therein. Buddha sets out with the axiom accepted by all in India, and in a great part of Asia: Man has been condemned from all eternity to perpetual renewals of existence which succeed each other without end, and the present life, exposed to sickness, old age and death, is a terrible chain from which he should seek to free himself at any cost, and in such a manner as never to fall into the same abyss again. Brahmanism, with its complicated worship drawn from the Vedas, gave to men the means of salvation; but Buddha proclaimed these means to be ineffectual, and he wished to substitute better or rather infallible means for them. The first theory which he taught to lead man to the desire for deliverance, was that of the four sublime truths. These truths are the following: 1, pain is the inevitable heritage of man in life; 2, the cause of pain arises from acts, activity, desires, passions and faults; 3, pain for man may cease forever through Nirvâna; 4, the way to reach this final end of pain is that taught by Buddha. These four sublime truths were resumed in the sacramental verses adopted by all the Buddhists and repeated by them continually as a creed or act of faith.

—The four sublime truths are followed by ten prohibitions which form the Buddhist decalogue: Not to kill, not to steal, not to commit adultery, not to lie, not to get drunk, not to eat outside the appointed hours, not to attend dances or theatrical representations, not to use perfumes or dress with luxury, not to have rich beds, and not to accept either gold or silver. Of these commands some are addressed to all the faithful, others more particularly to the monks for whom moral discipline is more severe. Buddhist monks have special observances of extreme rigor. They are allowed to clothe themselves only in rags collected on the streets, in the dirt heaps or in cemeteries, as Buddha did; they can not have more than three of these wretched dresses, sewed with their own hands, and always covered with a yellow mantle obtained through the same means. Their food is more simple still than their dress. The monks can live only on alms, receiving food given them in the wooden vase which they hold out without saying the least word to ask for it, and without any sign of impatience. They eat but one meal a day and before noon. The woods are their only habitation. In sleeping they sit with the back against the trunk of a tree, and the rest of the body on a mat. Once a month, at least, they pass the night in a cemetery to meditate on the instability of human things. Moreover, the monk must remain in celibacy and the most complete chastity. The only mild provision in this fierce code is that in the rainy season, the winter of these climates, it is permitted to the bhikshous or mendicants to shelter themselves in viharas or convents, which the sympathy of the people or the munificence of kings had erected for their use in all the Buddhist countries.

—As to ordinary believers, Buddha recommended to them the practice of the six transcendent virtues: almsgiving, purity, patience, courage, contemplation, and knowledge. He added reserve in speech in order to avoid all grossness and all calumny, and humility which guarantees man against the evils of pride. He prescribed also to the monks and even to laymen, the public confession of their sins, and this institution has existed for a long time and under various forms, as may be seen from the moral edicts of Piyadasi and the memoirs of Hiouen-Thsang.

—Such is the code of Buddhist morals, exaggerated in some parts, excellent in nearly all, and in general worthy of Christianity itself. This code has exercised a salutary influence upon simple men, on kings, and even nations, as is shown by an array of facts to be found in the sutras, in the legends, and even in civil and political history of Buddhist nations. It is founded upon a metaphysical system of which only a few words can be said here, but which should not be passed over in silence. Transmigration of souls, accepted as a dogma not to be discussed, meant for Buddha that man before coming into this world and after leaving it, may have already appeared under millions and millions of different forms, from inert matter and stone, for example, up to living matter in the bodies of the most perfect animals, including man. The only cause for these transformations is the conduct of men in a previous existence. In the present the fate of the future life is determined. But what was the cause of man's first existence, and how did the series commence? Buddha neglected this impenetrable problem of the origin, and seemed to believe in the eternity of beings, or rather, in their eternal mutability. Accordingly he declared that everything in the world is void, that there are only appearances without reality, and that the only faith possible is to believe in nothing, or rather, to believe in nothing but Nirvâna.

—There has been much discussion among scholars as to the meaning to be attached to Nirvâna. Some have pretended that it is the absorption of the human soul in God, but it has been answered that Buddhism believes neither in God nor in the human soul; and it may be seen by the preceding that neither the one nor the other has a place in the Buddhist system. Nirvâna, therefore, had for Buddha no other meaning than nothingness from which man never returns because he no longer exists. This faith is an abominable one, but it forms unquestionably the basis itself of Buddhism. First of all, the sacred books attest it, and although a doctrine of this kind is necessarily very obscure, it is what the sutras set forth. Moreover this doctrine is perfectly in accord with the atheism of Buddhism; it is the same which the Brahmans who have a horror of it, attribute to their adversaries; it springs from the whole system of Buddhist metaphysics, and it is still in our day the faith of all the Buddhist priests, who have been consulted by Christian missionaries, as can be seen by reference to the works of Spence Hardy, Bigandet, Wassilief, Müllens, Grimblot, and many others. This interpretation of Nirvâna is adopted by Eugene Burnouf, the most competent judge in these questions, and his arguments may be found in his admirable work: Introduction à l'histoire du Boudhisme Indien.

—If it be a matter of surprise that nothingness should be the object of religious worship for so large a portion of humanity, we may answer, first of all, that these people are in this as in many other regards, very different from us, and that they seem to despise life at least as much as we love it. It may be added that nations generally understand little of the ultimate principles of the religions they profess, and it is not probable that among Christians there are many more who understand the admirable depths of the Christian faith than there are among Buddhists who can give an account of the true sense of Nirvâna. They adore Buddha, they pay a mild and simple worship to his virtues, they turn to him in their prayers without ever having thought of making him a god; they try to imitate his virtues and free themselves from transmigration by following his precepts. But for them, as well as for Christians, metaphysics are of little account, and it is only the ablest adepts who read the Pradjná páramitá, or the book of transcendental wisdom, a vast collection which we possess in three or four orthodox versions, and which-contain nothing but a system of absolute nihilism, as decided as it is absurd. In one word, it is no longer permitted to doubt the significance given by Buddha and his most intelligent disciples to Nirvâna. For them Nirvâna is nothingness; that is the most definite and deplorable assurance that man can give himself against every return to life under whatever form it may be.

—Although there are voluminous works on Buddhism it is impossible to write its history at present, and perhaps it will never be written. We can easily see that even with all the necessary material it would be very difficult to write, on account of its enormous extent and long duration, since it comprises 15 or 20 nations, at least, from Kashmire to China and Japan, and covers a period of 2,500 years. All that may be stated here is, that Buddhism had its birth in India, on the banks of the Ganges, and was able to grow and flourish there for about 1,200 years, since it was still very prosperous when the Chinese pilgrim, Hiouen-Thsang, visited the country (from 629 to 645 of our era). Brahmanism, long tolerant, apparently stopped being so at this epoch; and Buddhism, exiled forever from India, its birthplace, existed only in the neighboring countries. It had penetrated into Ceylon about two centuries after the death of Buddha. It entered China about the Christian era, and the zeal of the Chinese was so intense that they produced thousands of works of every kind on this pious subject. Buddhism was not introduced until somewhat later into Nepaul, Kashmire, Thibet and Mongolia, and the countries forming the so-called India beyond the Ganges. But in all these countries it has struck firm roots, and it is there that it must be studied to-day, if we wish to know what it has become and on what it subsists. Ceylon is one of its principal centres, though in this island itself the progress of Christianity, especially under the form of Catholicism, becomes more considerable and more menacing to Buddhism from day to day.

—It is not to be hoped that Christianity will ever replace Buddhism among the populations who have accepted that faith, and who find it on a level with their light and their needs. Christian missionaries undertake a most laudable work, but it is to be feared that this work will be as fruitless as it is beautiful, which does not. of course, prevent attempting it with persistence. There are hidden and all powerful reasons, no doubt, why these peoples should have accepted Buddhism and clung to it with so blind and sincere a devotion. Their turn of mind, their manners and habits, demand no more reasonable or complicated worship. Buddha, the man, is a sufficient ideal for them, and it is certain that this worship, deplorable though it appear to us, has formed some noble souls, such as Hiouen-Thsang, for example, who may be ranked among saints and sages. But as far as one may judge, the Buddhist faith has not greatly favored the advance of civilization among the peoples converted to it; they have never been able to organize in their midst regular and firm governments; and it is undoubted that when, in the concerns of life, such renunciation is practiced as Buddha recommends, and which those nations are instinctively ready for, men are ill prepared for all the labors and struggles demanded by civilization. The personality of man, destroyed by the idea of universal transmigration, has never cared for the liberty which it does not recognize in itself and which it seeks not to establish and cause to be respected by others. All Asia seems at all times devoted to despotism, but the Buddhistic peoples are particularly adapted thereto, and it would have been a marvel if Buddhism, which has never suspected that man is a free being, should have sought to maintain his freedom and dignity in the society in which he lived. But since the needs of society necessitate a governing power, whatever power has been established in Asia has been allowed to have its own way. It has never sought to control, limit or improve it in any way. The only attention paid to government there is to overthrow it with violence when it can no longer be endured.

—It is quite remarkable that the Buddhist monks, while distinct from the crowd, and having a species of hierarchy in their different schools, have never thought of forming a corporation properly speaking, and founding a spiritual power side by side with the temporal. It is only in Thibet that this has been attempted by Lamaism, and there it has not produced any of the results witnessed in Christian lands. The Buddhist priests make a vow of poverty and keep this vow strictly; those of Ceylon, for example, do not possess any property individually. Still, among the greater part of the Buddhist peoples, the piety of the faithful and of kings has erected for the use of devotees during the rainy season splendid convents, capable sometimes of receiving thousands of guests. To these convents temples have been joined, and to the temples estates have been added for the maintenance of worship. The Buddhist clergy do not appear generally to have abused this consideration, and conflicts have been rare between them and the civil power, which has always remained the master. In Brahmanism, on the contrary, the religious body, upheld by caste, became the veritable master of society, and the political power submitted as a matter of fact to the spiritual authority. The kshatriya had nothing except under the hand and with the tacit permission of the Brahman. After long and bloody struggles the kings were obliged to yield and remain forever obedient.

—Buddhism, born in the midst of Brahmanism, and perhaps 12 or 15 centuries later, tried to reform the latter, but failed in the undertaking, and India has not accepted it because she did not find it better than the ancient faith to which she has remained invincibly attached. For us, who are impartial in these debates, Buddhism must also seem very inferior to its rival, and although Vedic worship has not borne very good fruits, it was of much more value than that which sought to replace it. It has allowed the Indian genius to unfold with luxuriance in nearly every direction, while Buddhism, both puerile and sombre, has inclosed in a narrow and cheerless circle the people who embraced it. The Buddhist nations have absolutely no literature outside their sacred books; and as the human mind never loses its rights, rein has been given to the imagination in the orthodox books themselves with a license to reason that is truly wonderful. We may easily be convinced of this by reading the Lotus of the Good Law, or Lalitavistâra. If the Buddhist religion is the most widely spread among men, it is also the most singular and deplorable they have ever professed, though it has more than one apparent resemblance to Christianity; and among the founders of religions the figure of Buddha is the most pure and noble after that of Christ himself. Moreover the resemblances which men have sometimes tried to find between Christianity and Buddhism are altogether mistaken. The systems originated and were developed independently of each other, and Christianity would have to blush at being the child or the father of Buddhism as has sometimes been pretended through motives that were neither honorable nor well founded.

—To become acquainted with Buddhism, it is necessary to read the books cited above, and also the work on "Buddha and his Religion," in which the author of this article has collected all the results obtained by erudition up to the present day. Compare Alabaster, The Modern Buddhist, London, 1870; Beal, Outline of Buddhist from Chinese Sources, London, 1870; Eitel, Buddhism, its Historical, Theoretical and Popular Aspects, London, 1873. (See BRAHMANISM, LAMAISM).

BARTHÉLEMY SAINT-HILAIRE.

BUDGET

BUDGET. The word budget is immediately derived from the French bougette, a bag or purse, and is applied in modern times to the statement of receipts and expenditures of governments for the year. This use of the word had its origin in England, in applying the name of the bag containing the papers and documents laid before the house of commons by the chancellor of the exchequer, to the financial exhibit which the bag contained. France and other countries, which have borrowed so much of their parliamentary usages and terms from Great Britain, have adopted the word budget, which has a fixed meaning in the financial vocabulary.

—While the fiscal year varies widely in different countries, beginning and ending in France with the calendar year, or the 1st of January, in Great Britain with the 1st of April, and in the United States with the 1st of July, there is a uniform usage in all nations for the government to present a budget to the legislative body at the beginning of its sessions. The consideration and examination of these estimates are devolved upon committees, though the system of permanent committees upon the budget prevails only in Belgium, in Holland and in the United States. In other countries the legislature appoints commissioners or special committees upon financial matters. The finance ministers in different nations, sometimes orally, and sometimes by written reports, advance their views and estimates, and defend them before the standing or special committees or before the committee of the whole house, according to the established custom of each country, the legislative body reserving to itself (everywhere except in Russia and Turkey, where no representative government exists) the final power of voting upon all estimates submitted.

—Notwithstanding this general control by the representatives of the people of the expense of government, there is a constant tendency toward increased expenditure of the public money, in the multiplication of offices, in the advance of salaries, in the expense of administration, and in the erection of costly buildings and extensive systems of public works. That this increased costliness of government advances in a much greater ratio than population or public wealth, is manifest; and the rapid strides made in this direction during the last 25 years in three countries may be seen in the following:

—In the United States, a statement of the annual receipts and expenditures of the government has been laid before congress by the secretary of the treasury ever since 1790, and published as required by the constitution. A committee of ways and means, to consider and report upon estimates for supplies needed in the administration of the government, was first constituted in congress in 1789, at its earliest session, consisting of one member from each state. In 1795 this committee was made a standing or permanent committee of the house. Reduced to 7 members in 1802, it was increased to 9 in 1833, to 11 in 1873, and to 13 members in 1879. The functions of the ways and means committee, which once included all matters relating to the revenue, the public debt, and the expenditures of the government, were divided in 1865, on account of the very great amount and variety of public business pressing upon this one committee, and a distinct committee on appropriations was created. This has direct charge of all measures appropriating money for the support of the government, while to the committee on ways and means are referred all matters relating to the revenue and the bonded debt of the United States. Bills proposed by the committee on appropriations take precedence of other business in committee of the whole house, and the yeas and nays on the passage of such bills are required to be entered in detail on the journal of the house. But the house has repeatedly suspended this rule, and passed river and harbor appropriations without debate.

—The constitution provides that no money shall ever be drawn from the treasury but in consequence of appropriations made by law, and the checks upon unnecessary or extravagant expenditure are all in the hands of congress. That body has provided apparent safeguards to the treasury by adopting rules that no appropriation shall be reported in any bill or admitted as an amendment, unless previously authorized by law, or in continuation of such public works and objects as are already in progress, also prohibiting any provision in such bills or amendments to change existing laws, except such as shall retrench expenditures.

—The senate, like the house of representatives, has a committee on appropriations, but its committee to consider revenue measures is styled the committee on finance.

—The treasury estimates for appropriations are prepared by the various departments and bureaus of the public service in the autumn, and are required to be sent by the secretary of the treasury to the speaker of the house on its annual meeting in December. They set forth: 1, the authority in previous legislation for the expenditure estimated for; 2, the estimated amount required under each item of expenditure for the service of the fiscal year ensuring; 3, the same estimate for the fiscal year then current; and 4, the amount actually appropriated for the fiscal year preceding. These estimates, with the annual report of receipts and expenditures of the United States for the fiscal year ended on the 30th of June prior to the assembling of congress in December, form the basis upon which the secretary of the treasury makes up his annual report to congress, which embraces a careful review of the working of the revenue system, and an estimate of the probable receipts of the government from all sources for the remainder of the current fiscal year, as well as for the ensuing one, for which congress is asked to appropriate. At the same time, or by special communications at a later period of the session, estimates for deficiencies in the appropriations of the current year to meet expenditures, are laid before congress, which is asked to grant the amount necessary to defray them. These deficiency bills are occasioned sometimes by unforeseen sources of expenditure, sometimes by careless accounting or extravagance, but more frequently by the failure of congress to incorporate in the regular advance appropriation bills a sufficient sum to defray the whole expenditure for a year of certain branches of the public service.

—The original estimates submitted by the departments usually undergo considerable reductions by the house of representatives (as reported by its committee on appropriations) and while the tendency to restore the full amount in the senate, which is the less popular body, is very strong and prevails to a considerable extent, the net result is a compromise between the two houses, in which the aggregate appropriations are made less than the senate passes them, but larger than limited by the house, while still much below the estimates as submitted by the several departments. It is usual for the committees on appropriations of both houses to receive, orally or in writing, statements from the officials seeking appropriations, pertaining to the amount and the necessity for the public service of the sums asked for. As none of the heads of departments have seats in either branch of congress, where they could make public statements or answer inquiries relating to appropriations under consideration, letters from these officers are frequently read in open house, although addressed only to the chairman of the appropriations committee.

—Besides the sums specifically asked for in the annual budget, and appropriated by congress with or without amendment, there are what are known as "permanent annual appropriations," which are expended by the treasury in pursuance of acts continuously operating, without annual re-enactment. These permanent appropriations are of two kinds: 1. Specific, including only three items of expenditure—1, the cost of collection of the customs revenues, $5,500,000 per annum; 2, the arming and equipment of the militia of the United States, $200,000 per annum; 3, the payment of 6 per cent. interest on the bequest to the Smithsonian institution, held by the government of the United States, $39,000 per annum. II. Indefinite annual appropriations, which include the interest on the public debt, the amount annually paid into the sinking fund, the interest on bonds issued to the Pacific railways, and a great variety of refundings, indemnities, etc., liable to be paid out under obligation of existing laws, but the amount of which is indeterminate, or varying from year to year. The aggregate of all these permanent specific and indefinite appropriations for the year 1880 was $145,939,438. Of this sum, no less than $134,000,000 was on account of the sinking fund, and interest on the public debt. The aggregate of the annual appropriations specifically made by congress for 1880 was $162,404,647, while the actual expenditure, as rendered by the treasury report for the same year, was $171,885,383. The appropriations "to supply deficiencies" have ranged in the past 10 years from $1,000,000 to $15,213,259 per annum. The following shows the various heads of expenditure under which the appropriations were made for the fiscal year 1881:

Legislative, executive and judicial expenses...	$16,785,309
Sundry civil expenses...	24,216,137
Support of the army...	26,425,800
Naval service...	14,405,797
Indian service...	4,657,263
Rivers and harbors...	8,976,500
Forts and fortifications...	550,000
Military academy...	316,234
Post office department...	3,883,420
Invalid and other pensions...	41,644,000
Consular and diplomatic service...	1,189,335
Miscelianeous...	4,939,332
To supply deficiencies...	6,118,085
Total...	$154,118,212

Under a general law, all unexpended balances of appropriations are covered into the treasury after two years.

—In Great Britain the budget is annually prepared and printed by the officers of the treasury. It is carefully and minutely classified, each head of expenditure under the different departments of government being subdivided in detail. It makes three folio volumes, one devoted to estimates for the civil service, one to the army, and one to the navy. Indefinite expenditure or extravagance is almost impossible under the strict system of the British budget. The speech of the sovereign at the beginning of each session asks the commons for supplies of revenue, and that body appoints a day when it will resolve itself into a committee of the whole house to consider the supply bill. The member of the government representing each department explains to the committee the estimates, answers questions, and proceeds to propose each grant in succession. This comes after the set speech on the budget delivered by the chancellor of the exchequer, who has the duty of proposing to the house of commons any increase of taxation rendered necessary by deficient revenues, or any abolition or reduction of the customs or excise taxes which a surplus of revenue may justify. Very rarely does the British budget entail the necessity of an increase of taxes; it is much more common for the chancellor of the exchequer to have the pleasing duty of proposing a reduction. This is in part owing to the careful accounting which prevails in all departments, as well as to the great resources of a people occupying a front rank among commercial and manufacturing nations. The rarity of a deficit is also owing in part to the fact that the budget, in place of being voted a whole year in advance, as in many countries, is adopted usually about the time when the expenditure of the fiscal year it provides for begins. Thus the wants and the resources of the treasury can be estimated with greater precision, while the ministry can avail itself of the fluctuations in receipts and expenditures to a late period of the session of parliament, thus avoiding the miscalculations that lead to deficits.

—There is in the British budget what is termed the consolidated fund, made up of the receipts from customs and internal revenue. This fund is specially set apart to the expenses of the public debt, the civil list, pensions and allowances, (including the royal family), and salaries of government officers. These expenses are not submitted to an annual vote in parliament, but the surplus of the consolidated fund over and above these necessary charges can not be expended without appropriations voted in the usual form of a supply bill. A similar feature is found in the expenditure under what are known as "permanent appropriations" in the United States. In both cases, the provisions of law on the faith of which the various public loans have been contracted constitute a special and inalienable guarantee of their payment, so that neither parliament nor congress can disturb the public faith by refusing to appropriate money to pay the interest as it falls due. In France, on the other hand, no pledge of a special revenue is attached to the public debt, the interest being paid out of the treasury funds without distinction of source.

—All the other expenditures of the British government have to be provided for by annual vote. No expenditure is permitted in the course of any financial year beyond the sums voted, and if the whole amount appropriated has not been expended, the surplus has to be turned into the treasury.

—In time of war, to provide for unforeseen expenses during the recess of parliament, a vote of confidence for so many million pounds sterling has been customary. These funds can be employed for no other than military objects, and if they are exhausted, the government must summon parliament and lay before it its demands for additional credits.

—In France, where order and method were introduced into the management of finances early in the middle ages, we find a classification of ordinary and extraordinary expenses as early as 1314. There were then general administrators of the finances, with a receiver-general, who administered the treasury, and apportioned the revenue and expenditure to the wants of each succeeding year. Each deficit was provided for by a general tax, which in case of war frequently amounted to very large sums. In the reign of Francis I. the financial operations of the government were further concentrated in the hands of a treasurer general, charged with the disbursements and collections of the state, while the management of the public debt was placed in the hands of a special agent. The treasurer presented the budget to the king at the beginning of each year, but no publication of it was made. Not until 1789 was any requirement made for annual publication of the statement of receipts and expenditures. The constitution of the republic of 1795 re-affirmed this provision, and gave the sole power of levying taxes to the corps législatif, limiting the operation of each tax law to one year. By the same constitution the government was for the first time required to submit a statement of expenses to the corps législatif. From this time dates the use of the term "budget" in French finance. During the whole period of the French revolution there was great looseness of control as to the expenses of the government, and, under the first empire, the annual accounts of revenue and expenditure were published in a very inexact and imperfect form. Sometimes, even, the government forgot to have the budget voted by the corps législatif. A simple imperial decree sufficed for the most enormous taxation, and no thought was given to the legitimacy of any expenditure ordered by the same authority.

—On the establishment of the constitutional government in 1814 great changes were made. The budget became the faithful balance-sheet of the debits and credits of the state. Every item of expenditure and of revenue had to be reported to the two chambers. In 1818 parliament returned to the rule of fixing the expenditure of the government, which had been for years determined by the administration. The functions of the receiver charged with the revenues, and the treasurer charged with the expenditures, were consolidated in a single minister. By degrees the budgets were systematized, and in 1831 all their statements were required to be specific, and divided into separate heads. This secured the immense advantage of concentrating any reduction or increase of expenditure upon a definite object or of throwing out any item by refusing to appropriate at all. In 1833 the control of the chambers was extended by ordering the distribution of printed reports of the cour des comptes among the members, and requiring a special act for every expenditure on public works or buildings. In 1850 the payment of any expenditure not directly authorized by law was prohibited, but this restriction was repealed in 1852, and the budget was required to be voted in mass, the law of special divisions being abolished. Much extravagance and increased expenditure resulted.

—In 1862 a reform in the budget, proposed by M. Fould, was legalized, dividing the public expenditures into three categories: 1, the ordinary budget, providing for the necessary and permanent expenses, the execution of the laws, the collection of the revenue, etc.; 2, the departmental budget, or expenditures discharged by taxes imposed by localities; 3, the extraordinary expenses which, without being of absolute necessity, are of public utility. To these has been added by a later act the budget of redemption (sinking fund).

—The court of accounts, under the present French system, is a branch of the civil service charged with reducing to order and system the whole of the public accounts, and submitting them to the legislative chambers with an elaborate report. The minute completeness with which everything is stated in the budget prevents misappropriation of the public moneys, supplies exact information for checking any needless expenditure, and brings the revenue and expenses of successive years into parallel view. showing how far the anticipated income and outgo have been realized. But the French republic has inherited a most expensive system from the second empire; government without control and constant extravagance have entailed the costliest government in Europe, which the enormous debt, the indemnity of a thousand million dollars to Germany, and the military disease which is eating out the substance of so many European peoples, have contributed to maintain.

—The German empire exhibited a budget of 539,252,640 marks for 1880-81 of ordinary expenses, and 72,962,921 marks extraordinary, or a total of only $135,000,000, in which, however, the military expenditure figures for over 90 millions of dollars. Each member of the German confederation has its own separate budget also. The revenue for federal administration is voted by the reichstag under similar general regulations as those which prevail in Prussia. A finance commission is selected from among the members of the reichstag, having charge of the budget in its details.

—The Prussian budget is voted for a calendar year beginning the 1st of January. Amendments to it can be proposed only by the representative body of the diet, where its items are first discussed, before being sent to the house of lords, which can only accept or reject it in mass. In case of disagreement on the budget, the two chambers propose to each other financial bills until they come into accord. This direct agency of the people's representatives in voting on revenue and expenditure dates only from 1848, before which the lower chamber had no control over the finances. But it has sometimes happened that when the diet would not pass the financial bills of the government as offered by the ministry, no account has been made of their refusal. The budgets which were rejected have been published as ordinances, and the people have acquiesced.

—In Austria the second chamber of the reichsrath has the power of fixing the receipts and expenditures. The public debt has grown heavily, especially since the war of 1866, the result of which obliged Austria to cede her rich Italian provinces. A commission of finance, embracing 36 members of the lower house (or one-tenth of the entire chamber), examines the estimates of the budget, and has charge of the bills of supply.

—The budget of the Russian empire was, up to 1863, an unknown quantity. In that year a balance sheet of receipts and expenditures was published, showing a deficit of about 15,000,000 roubles. The financial statements since published have been neither regular nor exact. There being no legislative control whatever (for Russia has no parliament), the enormous expenditure goes on at a rate which strains even the prodigious resources of an empire of 90,000,000 of inhabitants. The Russian budget is prepared by the minister of finance, then subjected to the scrutiny of the committee of council of the empire, and finally it is submitted to the emperor's approval.

—The unification of Italy as a kingdom, while greatly increasing its power and resources, has obliged the new government to expend vast sums in maintaining a great military force. At the same time the development of public works has been entered upon on a grand scale. Notwithstanding numerous and heavy loans, the demands of the treasury have been such that it has been impossible to balance the receipts and expenditures. The annual budget of the ministry is referred in parliament to a commission composed of 30 members of the chamber of deputies and 15 from the senate.

—The Spanish budget must, by the constitution, be voted by the cortes. The ordinary budget represents the produce of the taxes; the extraordinary budget is derived largely from the alienation of the ecclesiastical benefices. The total expenditure for 1880 was $181,647,000.

—The budget of Portugal sets forth continual deficits, the state maintaining its regular expenses only by means of loans and financial expedients.

—In Switzerland there is a federal budget for the whole republic, and as many local budgets as there are cantons. The federal treasury has in its hands the customs, postoffice, the telegraphs, and special imposts. These yield an annual revenue of about $8,000,000. The heaviest charge of the federal budget is that of the military, which amounts to $2,600,000. The general expenses of the government amount to only about $8,000,000 annually, showing Switzerland to be, perhaps, the most economical government in the world. The salaries of the principal officers vary from $800 to $1,200, and every officer is required to be faithful and intelligent. In the cantons of Switzerland the larger part of the budget goes to education and public works, the roads absorbing about 40 per cent. of the taxes raised.

—The Turkish budget has only been made public since 1864, and then only through the persistent demand of the English and French governments. The necessity of continual loans to keep the Ottoman porte going as a government, has also precipitated this publication. The budgets, however, have been denounced as deceitful, all of them exhibiting an excess of receipts over expenditures, while the actual condition of the treasury was a continual deficit.

—In Belgium the budget is voted in the year preceding the expenditure provided for. Deficiencies are met by supplementary credits. Expenses have risen from 87 million francs in 1835, to 386 million francs in 1880. Public works are not provided for in the regular budget, but by special taxes, or more frequently by loans. The budget, when submitted to the chamber of deputies, is distributed among six sections of the members, each corresponding to one of the six ministerial departments, viz., of justice, of foreign affairs, of the interior, of finance, of war and of public works.

—The system of the Netherlands is similar, the upper and lower chambers of the legislature being each divided into five permanent committees, each of which has charge of a specific portion of the budget.

—In Denmark the budget is voted for two years in advance by the diet. Indirect taxes bring in the greater part of the revenue. The very democratic constitution throws the power of appropriations into the hands of the peasants, who form the majority of the lower house. The expenses of education, public communication, etc., are readily voted, but the folksthing keeps a firm hand on the salaries of public functionaries, and rejects many proposed expenditures for fortifications and the increase of the army.

—In Sweden the right of the nation to tax itself is exercised exclusively by the diet. The king is required to submit annually a detailed report on the condition of the finances. The diet appoints three commissioners of finance: the first reports on the financial administration and the public debt; the second brings in the necessary bills for raising revenue, and the third is charged with the regulation of the national bank. Besides the regular appropriations, the diet places at the disposal of the king an extraordinary credit, to be used in the interval of its sessions, only for great emergencies like the national defense, under advice of the council of state.

—Sweden and Norway have each their separate budget, that of the former amounting to about $25,000,000, and that of Norway to about $18,000,000.

A. R. SPOFFORD.

BULL

BULL, Papal, authentic acts issued by the court of Rome. A bull—the name of which comes from the Latin word bullare, to seal—in written on parchment in gothic letters, sealed with lead and signed by the pope; it always relates to very important matters; it is drawn up in Latin, and generally named after the first words of the introduction. A brief is concerned with less important subjects. It is sealed with red wax, and signed by the secretary of briefs.

—The collection of bulls is called the bullarium. Several have appeared since 1727, and their importance, from a political point of view as well as from that of the Catholic religion can not be doubted. The changes in the influence of the holy see can be traced in them. Confining themselves at first to the regulation of religious matters, the bulls after Gregory VII. had scarcely any other object than the exercise of political supremacy, religious decisions being given under the form of decrees, constitutions, rescripts, etc. After the reformation the bulls were brought back gradually to their ancient province, and at present the political manifestations of the pope take another form.

—On account of the peculiar constitution of the Catholic church which gives so great an influence to its chiefs, making it almost a state within a state, the reception of bulls is in most countries subjected to a special authorization by the government. In France no bull or any act of general interest can be published without having been examined by the council of state.

MAURICE BLOCK.

BUNDESRATH

BUNDESRATH. The bundesrath is, we may say, the highest executive and administrative power in the German empire. Its principal features had been defined by the constitution of the Nord-Deutsche Bund (the North German Federation) of 1867, whose provisions on this head were, in the main, incorporated into the constitution of 1871. As forming an essential part in the government of the empire, the bundesrath is, as far as its powers and its relation to the other branches of the government are concerned, a peculiar body. It can neither be likened to our senate nor to the upper house of a bi-cameral legislative assembly; nor is it a purely executive body, although it is not altogether unlike the latter, and may, in some respects, be likened to a state council. A better idea of the bundesrath than any definition can give, is furnished by simply describing its organization and enumerating its several powers.

—1. The bundesrath is now composed of 59 members, the delegates of the several states which under the headship of Prussia compose the German empire. Prussia is represented by 17 delegates or votes, Bavaria by 6, Wirtemberg by 4, Saxony by 4, Baden by 3, Hesse by 3, Mecklenburg-Schwerin and Braunschweig by 2 each, and the rest by 1 delegate or vote.

—Each state may send as many delegates as it has votes, or it may send fewer, but in all proceedings the entire vote of each state is counted, and, when cast, must be a unit vote. The principal feature which marks the distinction between the bundesrath of the North German federation and of the German empire is, that none of its members or delegation can hamper or delay its proceedings, or force an adjournment for want of special instructions, touching the matters at issue, from the state they may represent. The bundesrath may, however, pass on a question by common consent, or by permission of its presiding officer. The presidency of the bundesrath is vested in the emperor, who has the power of appointing the chancellor of the empire the acting chairman of the bundesrath and controller of its business.

—2. The bundesrath has power to decide on the legislative measures to be proposed to the imperial diet, on the rules, regulations, and means to be adopted in the administration and execution of the laws of the empire, (const. of 1871, art. 7). As far as the proposing of legislative measures is concerned, the bundesrath resembles a council of state, while in other respects it has more of the powers of an executive. It has, also, the power of deciding on the ways and means of removing defects apparent in the execution of the laws of the empire or in the rules and regulations which govern, and the institutions which aid in the administration and execution of those laws. It is thus invested with a species of supervisory power.

—3. The several members of the bundesrath have the privilege of being present at the proceedings of the imperial diet, of expressing their opinions on the questions pending, and of otherwise taking part in the deliberations of this body. They may take the floor at any time. In case the delegates of a certain state are unable to carry a measure, in the interest of their government, in the bundesrath, they may still submit the question to the imperial diet, and claim the right to be heard before that body. The bundesrath advises on the adoption or rejection of the legislation resolved upon by the imperial diet. Again, each of the governments forming part of the empire has the right, through its delegates, to propose and advocate any measure in the bundesrath which may come within the province of the latter. In deciding a question of legislation an absolute majority is held sufficient while on questions touching constitutional amendments, or any change in the organic law of the empire, a two-thirds' majority is required. It is in the president of the bundesrath (the emperor) that the authority is vested to convene it, to adjourn it from time to time, or without day. It is also he who represents the empire in its relation to foreign governments, determines its diplomatic relations, appoints consular and other officers, etc., and enforces the execution of its laws in the several states coming within its jurisdiction.

MAX EBERHARDT.

BUREAUCRACY

BUREAUCRACY. The word bureaucracy indicates a deep-seated infirmity which very generally characterizes the political administration of modern times in Europe. The more the principle prevailed that the state should look after all public interests which could be cared for only by its concentrated strength, the greater and more difficult became the task of administration, and the more dangerous, at the same time, the erroneous conception of that principle. If, formerly, care for certain interests was left too exclusively to persons and corporations, the tendency now was to undervalue these individual powers and carry the interference of the state too far. Conscious design was here added to error. since it seemed to those in power that the rule of the whole was best assured when every movement was regulated from above. This was the starting point of a system of over-government from which, among all civilized states of the old world, only Switzerland and England have kept themselves entirely free.

—Besides this, the problem rightly understood had become greater and more difficult. If governments are to satisfy the demands increased tenfold that are made on the modern state, then their conduct demands a greater amount of ability, insight and patriotic devotion. Where this ability, insight and devotion were not found, administration became superficial in proportion as it extended its action. It failed to control the infinite amount of material which it sought to rule, and dropped into a senseless and selfish formalism. Finally the bureaucratic body in the modern state takes another position, through its centralization, its multiplied numbers and its consciousness of increased power. It feels itself, under this system of over government, absolutely the ruling centre in all public life, and forms a class outside of and above the people.

—Under the pressure of an over-governing and formally-governing bureaucratic body imbued with this spirit, the governed have to suffer in three ways: 1, those affairs in which they need the intervention of public authority are more frequently ill managed than well managed; 2, they have to put up with this intervention and its harmful results in a thousand cases in which they might have done without it; 3, they seldom come into personal contact with the agents of authority without going away with a feeling of personal humiliation.

—These three closely connected evils, in their combination, are designated by the expression bureaucracy. An ignorant, indolent or corruptible administration with humane forms, or an administration under rude forms but which does its duty with intelligence and real zeal, or a government which leaves things to take their course and interferes only at intervals with strong measures, is not bureaucracy in the sense which a precise and proper use of language connects with the word.

—Bureaucracy wherever established has its seat in the organs of the government, but first of all in the police power; from this point it easily extends to the whole body of officials and still further to kindred circles. It is then found at the counters of the postoffice, in the departments of communal administration, and in the courts of law. In constitutional states, in which public officials, municipal employés and lawyers have a preponderant part in legislation, as well as in the absolutist state, where the work of legislation proceeds entirely from state officials, legislation itself bears the stamp of the bureaucratic spirit, in proportion as the administration is ruled by it.

—The error that bureaucracy and absolutism are inseparable was corrected to some extent by the experience of 1848. It was then shown that radicalism, too, when it comes to the helm, finds bureaucracy essentially consonant with its nature. It was also shown that radicalism had had a great number of silent adherents among the most zealous servants of absolute government; and they now followed its victorious banners. Since this inability to sacrifice his means of livlihood and official position to an idea, always makes the bureaucrat a willing servant of the power which furnishes him with both, it is always seen in reactionary times to be a mistake that the ruling power has in him the most reliable tool.

—Bureaucracy is not exclusively connected with any particular constitutional form; it appears in republican as well as monarchic states, in constitutional as well as in absolute monarchies. But in absolute monarchies or in democratic republics, where the official depends either upon the monarch or on repeated elections, the spirit of caste from which bureaucracy receives its oppressive force can not develop itself.

—In order to estimate the action of a bureaucracy rightly it is necessary to examine its characteristic qualities, formalism and spirit of caste more closely.

—The observance of certain forms is indispensable in all complicated private business; and so it is in public administration. These forms must increase with the extent of the work, and the endless "red-tapeism" of modern administration is so far an unavoidable attendant of a more highly developed political life. But the bureaucratic condition differs from a healthy condition in this, that in the latter form is observed for the sake of the substance, and in case of necessity is sacrificed to it, while a bureaucracy cultivates form for its own sake and sacrifices substance to it. Bureaucracy, in the lowest rank, performs its official work not to be useful in its appointed sphere, but to carry out the orders received from above; that is, it observes a series of prescribed formalities for the satisfaction of superiors. Those stand higher who seek to satisfy their sense of duty, by the same formal service, not without a certain devotion to their calling, but without any intelligent understanding of the task to be accomplished and the means to be used in accomplishing it. Under a bureaucratic régime, the fault of the careless official consists in his want of familiarity with, and skill in forms, and, conversely, it is the merit of the zealous official that he knows how to dispatch business quickly and in a manner with which no fault can be found.

—When a bureaucratic government feels the resistance which its over-government awakens, it seeks to break that resistance by governing still more. When it strives to improve its machinery the improvement consists in an increase of formalism in the public service. When its officials break down under these increased demands made upon them, it makes still higher demands to secure the execution of its will. Formerly the substance was sacrificed to the form; now, the form loses even its relative value. Pressed by the excess of demands which can not be met, the most conscientious public servants have recourse to the falsifying of forms, as their make-shift. When, for example, more value is placed on the formal correctness of tables and reports of the condition of a district than on that condition itself, a bureaucratic régime must renounce the intrinsic value of such representations; it must satisfy itself with reports and tables determined by the power of invention and combination possessed by their author, and which correspond to the actual condition only when the truth is as easily discovered as untruth.

—The second mark of bureaucracy is its caste-like separation from civil society. The state selects its officials from all classes. It brings together the sons of noble families, citizens and peasants in the same departments. Under healthy conditions this facilitates for officials the understanding of their calling. They have been collected from all classes in order to serve the interests of all classes with equal devotion. In states governed by a bureaucracy, the official rather feels himself placed outside of all classes, and this position is not capriciously chosen. For while, on the one band, he shares his life calling with none of these classes, he, on the other hand, is not filled with the impulse to serve and the consciousness of serving their common interests. Thus there exists between them and him no natural bond. As a participant in the positive power which is exercised by the state over all, he consistently claims his isolated place above all other classes.

—Since this claim, in a bureaucratic state more than in any other, is not supported by superior education, political intelligence and services rendered the whole community, it does not appear in the worthy forms in which real moral and intellectual superiority assert themselves. In official intercourse the middle classes are treated harshly, the lower classes rudely; and the nobility and clergy are made to feel that their former power has passed over to the bureaucrats. In social intercourse we find either complete exclusion on the part of the bureaucrats, or a condescension to other classes of citizens humiliating to the latter.

—This expression of the bureaucratic spirit of caste which only the sturdiest natures are able to avoid, acts deeply and destructively on the relations of the masses to the state. When the masses see, as the visible representatives of the state, officials who rise above them in such isolation, and, when the necessity of meeting them is considered an impending misfortune, the state itself becomes a foreign and hostile being in the eyes of the people. Men submit to its superior force when it takes from them, and overlook its good deeds when it bestows anything upon them. The consciousness of belonging to the state, of forming a living part of the great organism, the political sense, the power and desire of sacrifice are lost. But it is this political sense which strengthens the state in time of peace and maintains it in time of danger.

—Bureaucratic officials excite a prince who puts himself in their hands to an abuse of his power. On the other hand, they cripple the power of a prince who is not inclined to rule to their liking, and still does not dare to break their power. In reality such a prince is more limited in the exercise of the rights of sovereignty, by the hampering influence of a bureaucracy, than he could be by constitutional provisions. For every useful measure of government originating with him is deformed and rendered worthless by the bureaucratic carrying out of it, or it will be set aside and not carried out at all by tacit agreement of the bureaucratic body who oppose it. His rule is only an apparent one because effect can not be given to his will. The greatest posthumous fame he can hope for finds expression in the familiar saying: his intentions were good, but his officials were to blame.

—Bureaucracy can reach complete power only when at the head of affairs there are personages who belong to it, or at least officials with no statesmanlike endowments and who endure it. In like manner the rule of bureaucracy can only be broken when statesmen are at the head of the government.37 It would be vain to expect that any impulse from below should have power enough to compel the internal reform of bureaucracy. This impulse would have to reach to the highest point, that is, produce a revolution; and if the revolution succeeded in changing all the institutions of the state but not in placing statesmen at the head of affairs, a new bureaucracy would simply take the place of the old.

—It is possible to free the state from bureaucracy entirely—and in this case it is possible in every form of government to the same degree—only through the intervention of leading personages filled with the spirit of statesmanship, the very opposite of the spirit of bureaucracy. "Under the rule of statesmen, bureaucracy is annihilated and the official body elevated. The official now receives what bureaucracy could never give him, the guarantee that ability of any kind will be put in the place belonging to it, and the certainty that he can lay the truth before the powers above him without fear, and that he may reckon on its being understood. The official knows then that he is of real use; he knows that his work is no longer condemned like that of the Danaids, and that his labor is no longer forced to pour endless floods of ink through the sieve of desperate circumstances, but that it as a means in a higher hand accomplishes the sacred life object toward which it strives."

—The case of Stein at the head of the Prussian administration has shown how the most elaborate bureaucracy may be metamorphosed at a blow by the power of a single statesman. But from the course of affairs under his successors the further lesson may be drawn that the evil develops fresh germs from below as soon as the statesman element has disappeared from above.

—See v. Mohl, Staatsrecht, V8otilde;lkerrecht und Politik, v. ii., p. 138, etc., 1862. 38

K. BRATER.

BURGESSES

BURGESSES (IN U. S. HISTORY). I. In New England the supreme legislative body in each colony was The Great and General Court, so called because it exercised judicial functions also. As settlers spread further from the radiant centre of population, they were expected to form township governments, whose deputies were admitted to the general court by vote. At a later period new townships were formally incorporated. Townships were therefore the basis of the New England states; counties were afterward formed, but were always formal divisions of territory, mainly for choice of members to the upper house of the legislature, or for judicial convenience. The active exercise of local government was, and is, altogether in the hands of the town meetings. In Maine the name "plantation" is still retained.

—If in any part of a township the population grows denser, so as to create special interests, such as the lighting or paving of streets, to the care of which the general town meeting, controlled by the agricultural vote, would be incompetent, the legislature of the state will, on application, erect such territory into a borough. The borough is governed, as to the objects and privileges specifically named in the charter, by a warden and a board of burgesses; in all other respects it is still a part of the township. The warden is the executive officer, answering to the mayor of a city, as the burgesses do to the common council. Boroughs are also chartered in Pennsylvania.

—II. In Virginia the lower house of the legislature was known as the house of burgesses until 1776, when it became the house of delegates. (See ASSEMBLY.)

ALEXANDER JOHNSTON.

BURLINGAME

BURLINGAME, Anson, was born at New Berlin, N. Y., Nov. 14, 1822, and died at St. Petersburg, Russia, Feb. 23, 1873. He was graduated at Harvard in 1846, was admitted to the bar in 1849, was a representative in congress (at first American, and afterward republican) 1855-61, and minister to China 1861-7. He then became the Chinese government's embassador to negotiate treaties with foreign powers.

A. J.

BURR

BURR, Aaron, vice-president of the United States 1801-5, was born at Newark, N. J., Feb. 6, 1756, and died at New York, Sept. 14, 1836. He was graduated at the college of New Jersey in 1772, and began the study of law, but gave it up to enter the continental army, in which he reached the rank of colonel. He was admitted to the bar in Albany in 1782, and in 1783 removed to New York city. In 1791 he was chosen United States senator, and almost immediately began to be prominent as an anti-federalist. Until his time the politics of New York, 1776-91, had really been a triangular contest between the three great families of the state, the Livingstons, Clintons and Schuylers. (See NEW YORK). To an unsurpassed genius for political intrigue, Burr joined very considerable ability as a soldier, and abundance of that pseudo-democratic spirit which consists in a willingness to use popular force for personal advancement. To fight the three great clans he contrived a union of the popular interest by introducing semi-military discipline among the anti-federalists of New York city. He himself was commander-in-chief; a knot of young disciples, Van Ness, the Swartwouts, and others (called by the federalists the "Little Band") were the aides; and at the word of command, given through the aides, the popular rank and file were to move forward with the rigid discipline of an army and the pitiless precision of a machine. Under this species of Cæsarism the masses, by yielding a temporary headship to Burr, the creature of their will, were to free themselves from the domination of the great families. (See TAMMANY SOCIETY; VAN BUREN, MARTIN; NOMINATING CONVENTIONS.) In the spring of 1800 Burr thus secured the electoral vote of New York and the national success of his party. In the following winter he was chosen vice-president. (See DISPUTED ELECTIONS, I.) Here his advancement stopped, for in national politics he had become dangerous to the Virginia interest, and in the state the great families united actively against him. In the spring of 1804 many New England federalists, despairing of success in the south, were disposed to unite with the Burrites in the middle states. As a preliminary Burr was nominated against Morgan Lewis, the Livingston and Clinton candidate for governor of New York, but through Hamilton's active personal exertions against Burr, the New York federalists did not support him heartily, and he was defeated. He therefore forced a duel upon Hamilton, and shot him fatally, July 11, 1804. In the resulting excitement Burr disappeared from polities. After engaging in a mysterious expedition down the Mississippi, he spent several years in Europe, and then, returning, practiced law in New York city until his death.

—BURR CONSPIRACY. In the spring of 1805, Burr, indicted for murder in New York and New Jersey, a homeless and bankrupt man, made an extensive tour in the west, ostensibly for the purpose of securing a nomination as congressman from Tennessee. The Mississippi valley, separated by distance and difficulty of communication from the states east of the Alleghanies, was apparently very loosely attached to the Union, and many of its prominent citizens, including the commander of the federal army at New Orleans, had been for years pensioned by the Spanish government. Whether Burr's design was to found a new Union, or perhaps a republican empire like that of Napoleon, in the Mississippi valley, or to press on and invade Mexico, is an impenetrable mystery. The people of the eastern states, dreading that east and west division of the Union which was only eliminated from political calculation at last by the introduction of the railroad (see ANNEXATIONS, I.; UNITED STATES), charged Burr with the former design, and it is certain that some of the reckless spirits who sought him during his tour, would not have shrunk from any enterprise in which he offered to head them. During the next year Burr completed his preparations for that which, on the surface was a colonizing expedition to the river Washita, in Texas. He had interested many of his former party associates in this expedition, as well as ex-senator Jonathan Dayton, of New Jersey, and general Wilkinson, commanding at New Orleans; and had good grounds to expect aid from Great Britain and from Mexicans disaffected to Spain; but from his first entrance into Kentucky he found that any attempt upon the unity of the nation would be resisted by the great mass of the western people. He succeeded in breaking away from legal proceedings, which were at once begun against him in Kentucky, by protesting that his real design was land speculation, by hinting at his aim against the Spaniards in Mexico, and by private assurances that he was acting under the direct sanction of the administration. While on his way down the Mississippi he found that Wilkinson had abandoned the undertaking, and made a merit of betraying it; that president Jefferson, on Wilkinson's information, had issued a proclamation, Nov. 27, 1806, cautioning all good citizens against joining the expedition; and that the whole design was a failure. He therefore left his boats at Natchez, in January, 1807, was arrested by the president's order, at Fort Stoddart, and conveyed in March to Richmond for trial, his expedition having been begun in Virginia. In May his examination began before chief justice Marshall and justice Cyrus Griffin. June 24, the United States grand jury brought in two indictments against him, one for treason and one for misdemeanor, both based on his action in levying war within the United States against a friendly nation, but with the further intention, if possible, of proving him guilty of an attempt to divide the Union. He was defended by able counsel and supported by the federal party, who considered his arrest, by the president's order and without a warrant, an act of usurpation, while the president, anxious that the result should justify his action, took almost a personal oversight of the management of the case. His correspondence contains nine long letters to the district attorney, June-September, 1807, filled with legal hints and directions, criticisms on chief justice Marshall's action, and denunciation of Luther Martin, Burr's leading lawyer, as an "unprincipled and impudent federal bull-dog." Nor did Burr shun the appearance of a contest. He even subpœnaed the president as a witness, though the demand for personal attendance was not pressed, and allowed the trial to take the form of a pitched battle between the federal party and the president, the head of the republican party. Consequently, his acquittal of the charge of treason, Sept. 1, for want of jurisdiction, made him the enemy of every supporter of president Jefferson, and ended his political career forever. The acquittal was given only because no overt act of war had been proved by two witnesses, and for this reason the jury at first endeavored to give a Scotch verdict of "not proven," but the court directed it to be entered "not guilty." Burr was then tried and acquitted for misdemeanor, and bound over to appear for trial in Ohio, but the further prosecution was dropped. A few of Burr's confederates came to public view, but the secretiveness and caution of the leader has made the full extent of the conspiracy a matter of conjecture only. (See HABEAS CORPUS.)

—Sec 1 Hammond's Political History of New York; 4 Randolph's Works of Jefferson, 70-103; Davis' Life of Burr; Parton's Life of Burr; Monette's History of the Mississippi Valley; Robertson's Trial of Aaron Burr; Carpenter's Trial of Aaron Burr; Van Ness' Examination of the Charges against Burr; Memoirs by General Wilkinson.

ALEXANDER JOHNSTON.

BUTLER, Benj. F.

BUTLER, Benj. F., was born at Deerfield, N. H., Nov. 5, 1818, was graduated at Waterville college in 1838, and practiced law in Lowell, Mass. Until 1860 he was a democrat. He served through the rebellion as major general, and was a representative in congress (republican) 1867-75 and 1877-9. In 1878 and 1879 he was the candidate of the greenback party for governor, and in both years was supported by the mass of the democrats.

—See Parton's Butler in New Orleans.

A. J.

BUTLER, William Orlando

BUTLER, William Orlando, was born in Jessamine county, Ky., in 1793; was admitted to the bar of Kentucky; entered the army and reached the grade of lieutenant colonel in 1812 and that of major general in the Mexican war; was a representative in congress 1839-43; and was nominated for the vice-presidency in 1848 as a democrat. (See DEMOCRATIC-REPUBLICAN PARTY).

—See Blair's Life and Writings of Wm. O. Butler.

A. J.

[20.]An Historical Account of Massachusetts Currency, by Joseph B. Felt, Boston, 1839, p. 103.

[21.]The History of Massachusetts Bay, by Lieut. Governor Hutchinson, vol. 2, p. 396. Boston, 1767.

[22.]A Short History of Paper Money and Banking in the United States, by Wm. M. Gouge, Phila., 1833, p. 10.

[23.]American State Papers—Finance, vol. 2, pp. 352 and 470.

[24.]Finance Report, vol. 12, page 59.

[25.]Benton's Thirty Years in the United States Senate, vol. 2, p. 24.

[26.]Report of the Comptroller of the Currency, 1876, p. 13.

[27.]Hildreth's History of the U. S., vol. 5, pp. 548-50.

[28.]Hammond's Political History of New York, vol. 1, p. 309, Buffalo, 1850.

[29.]Report of the Comptroller of the Currency, 1876, pp. 39-42.

[30.]Address of Comptroller Knox before the Merchants' Association of Boston; Banker's Magazine, vol. 15, p. 545.

[31.]Report of Comptroller of Currency, 1876, p. 92.

[32.]Report of Comptroller of Currency, 1878, p. 33.

Footnotes for BAVARIA

[33.]As a supplement to the foregoing article we may add the latest statistics which are comprised in the tables that follow:

Revenue and Expenditure for the financial year 1880-81.

REVENUE
	Marks.
Direct taxes...	35,725,510
Indirect...	52,882,580
State railways, postal telegraphs, mines, etc...	100,706,574
State forests...	24,586,580
Domains...	9,059,110
Miscellaneous receipts...	1,911,838
Total...	221,872,192
In dollar...	$57,218,045

EXPENDITURE
	Marks
Public debt...	46,692,817
Civil list and appanages...	5,348,188
Council of state...	46,800
Diet...	635,710
Ministry of foreign affairs...	568,284
Ministry of justice...	12,782,326
Ministry of interior...	17,757,238
Ministry of finance...	3,438,607
Worship and education...	19,634,144
Pensions and allowances...	7,549,987
Reserve and guarantee fund...	3,926,074
Contribution to imperial expenditure...	16,329,370
Total...	134,709,545
Charges of collection of revenue...	90,162,647
Grand total...	224,872,192
In dollars...	$57,218,045

The Public Debt, comprising the Ordinary and the Railway Debts.

lf0216_figure_044 The public debt results partly from the deficit of former years and partly from the construction of public works, particularly railroads, which latter have cost 650 million marks ($162,500,000), and are the property of the state. In 1879 the expense of railroad management exceeded the receipts by 5,785,789 marks; this deficit had to be covered by other sources during the next financial year. Footnotes for BILL OF RIGHTS

[34.]In the constitution of a state of the American Union, says Judge Cooley, in his "Constitutional Limitations," we shall expect a declaration of rights for the protection of individuals and minorities. This declaration usually contains the following classes of provisions: "1. Those declaratory of the general principles of republican government; such as, that all freedmen, when they form a social compact, are equal, and no man, or set of men, is entitled to exclusive, separate public emoluments or privileges from the community, but in consideration of public services; that absolute, arbitrary power over the lives, liberty and property of freemen exists now here is a republic, not even in the largest majority; that all power is inherent in the people, and all free governments are founded on their authority, and instituted for their peace, safety, happiness, security, and the protection of property; that for the advancement of these ends they have at all times in inalienable and indefeasible right to alter, reform, or abolish their government in such manner as they may think proper; that all elections shall be free and equal; that no power of suspending the laws shall be exercised except by the legislature or its authority; that standing armies are not to be maintained in time of peace; that representation shall be in proportion to population; that the people shall have the right freely to assemble to consult of the common good, to instruct their representatives, and petition for redress of grievances; and the like 2. Those declaratory of the fundamental rights of the citizen: as that all men are by nature free and independent and have certain inalienable rights, among which are those of enjoying and defending life and liberty, acquiring, possessing and protecting property, and pursuing and obtaining safety and happiness; that the right to property is before and higher than any constitutional sanction; that the free exercise and enjoyment of religious profession and worship, without discrimination of preference, shall forever be allowed; that every man may freely speak, write and publish his sentiments on all subjects, being responsible for the abuse of that right; that every man may bear arms for the defense of himself and of the state; that the right of the people to be secure in their persons, houses, papers and effects against unreasonable searches and seizures, shall not be violated, nor shall soldiers be quartered upon citizens in time of peace; and the like. 3. Those declaratory of the principles which ensure to the citizen an impartial trial, and protect him in his life, liberty and property against the arbitrary action of those in authority: as that no bill of attainder or ex post facto law shall be passed; that the right to trial by jury shall be preserved; that excessive bail shall not be required, nor excessive punishments inflicted; that no person shall be subject to be twice put in jeopardy for the same offense, nor be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty or property without due process of law; that private property shall not be taken for public use without compensation; and the like."

—Our author, writing of bills of attainder, says: "Bills of attainder were prohibited to be passed, either by the congress or by the legislatures of the several states. Attainder, in a strict sense, means an extinction of civil and political rights and capacities; and at the common law it followed, as of course, on conviction and sentence to death for treason; and, in greater or less degree, on conviction and sentence for the different classes of felony.

—A bill of attainder was a legislative conviction for alleged crime, with judgment of death. Such convictions have not been uncommon under other governments, and the power to pass these bills has been exercised by the parliament of England at some periods in its history, under the most oppressive and unjustifiable circumstances, greatly aggravated by an arbitrary course of procedure, which had few of the incidents of a judicial investigation into alleged crime. For some time before the American revolution, however, no one had attempted to defend it as a legitimate exercise of power; and if it would be unjustifiable anywhere, there were many reasons why it would be specially obnoxious under a free government, and why consequently its prohibition, under the existing circumstances of our country, would be a matter of more than ordinary importance. Every one must concede that a legislative body, from its numbers and organization, and from the very intimate dependence of its members upon the people, which renders them liable to be peculiarly susceptible to popular clamor, is not properly constituted to try with coolness, caution and impartiality a criminal charge, especially those cases in which the popular feeling is strongly excited,—the very class of cases most likely to be prosecuted by this mode. And although it would be conceded that, if such bills were allowable, they should properly be presented only for offenses against the general laws of the land, and be proceeded with on the same full opportunity for investigation and defense which is afforded in the courts of the common law, yet it was remembered that in practice they were often resorted to because an obnoxious person was not subject to punishment under the general law, or because, in proceeding against him by this mode, some rule of the common law requiring a particular species or degree of evidence might be evaded, and a conviction secured on proofs that a jury would not be suffered to accept as overcoming the legal presumption of innocence. Whether the accused should necessarily be served with process; what degree or species of evidence should be required; whether the rules of law should be followed, either in determining what constituted a crime, or in dealing with the accused after conviction,—were all questions which would necessarily address themselves to the legislative discretion and sense of justice; and the very qualities which are essential in a court to protect individuals on that before them against popular clamor, or the hate of those in power, were precisely those which were likely to prove weak or wanting in the legislative body at such a time. And what could be more obnoxious in a free government that the exercise of such a power by a popular body, controlled by a mere majority, fresh from the contests of exciting elections, and quite too apt, under the most favorable circumstances, to suspect the motives of their adversaries, and to resort to measures of doubtful propriety to secure party ends?

—Nor were legislative punishments of this severe character the only ones known to parliamentary history; there were others of a milder form, which were only less obnoxious in that the consequences were less terrible. Those legislative convictions which imposed punishments less than that of death were called bills of pains and penalties, as distinguished from bills of attainder; but the constitutional provisions we have referred to were undoubtedly aimed at any and every species of legislative punishment for criminal or supposed criminal offenses; and the term 'bill of attainder' is used in a generic sense, which would include bills of pains and penalties also.

—The thoughtful reader will not fail to discover, in the acts of the American states during the revolutionary period, sufficient reason for this constitutional provision, even if the still more monitory history of the English attainders had not been so freshly remembered. Some of these acts provided for the forfeiture of the estates, within the commonwealth, of those British subjects who had withdrawn from the jurisdiction because not satisfied that grievances existed sufficiently serious to justify the last resort of an oppressed people, or because of other reasons not satisfactory to the existing authorities; and the only investigation provided for was an inquiry into the desertion. Others mentioned particular persons by name, adjudged them guilty of adhering to the enemies of the state, and proceeded to inflict punishment upon them, so far as the presence of property within the commonwealth would enable the government to do so. These were the resorts of a time of extreme peril; and if possible to justify them in a period of revolution, when everything was staked on success, and when the public safety would not permit too much weight to scruples concerning the private rights of those who were not aiding the popular cause, the power to repeat such acts under any conceivable circumstances in which the country could be placed again was felt to be too dangerous to be left in the legislative hands. So far as proceedings had been completed under those acts, before the treaty of 1783, by the actual transfer of property, they remained valid and effectual afterward; but so far as they were then incomplete, they were put an end to by that treaty.

—The conviction of the propriety of this constitutional provision has been so universal, that it has never been questioned, either in legislative bodies or elsewhere. Nevertheless, cases have recently arisen, growing out of the attempt to break up and destroy the government of the United States, in which the supreme court of the United States has adjudged certain action of congress to be in violation of this provision and consequently void. The action referred to was designed to exclude from practice in the United States courts all persons who had taken up arms against the government during the recent rebellion, or who had voluntarily given aid and encouragement to its enemies; and the mode adopted to effect the exclusion was to require of all persons, before they should be admitted to the bar or allowed to practice, an oath negativing any such disloyal action. This decision was not at first universally accepted as sound; and the supreme courts of West Virginia and of the District of Columbia declined to follow it, insisting that permission to practice in the courts is not a right, but a privilege, and that the withholding it for any reason of state policy or personal unfitness could not be regarded as the infliction of criminal punishment.

—The supreme court of the United States have also, upon the same reasoning, held a clause in the constitution of Missouri, which, among other things, excluded all priests and clergymen from practicing or teaching unless they should first take a similar oath of loyalty, to be void, overruling in so doing a decision of the supreme court of that state."

Footnotes for BLOCKADE

[35.]The Bermuda, 3 Wall, 514; The Springbok, 5 Wall, 1.

Footnotes for BRAZIL

[36.]The following figures are taken from the Statesman's Year Book, 1881: In the budget for the financial year 1879-80, the revenue of Brazil was set down at 117,273,800 milreis, and the expenditure at 116,675,690 milreis.

—In April, 1879, the total national debt, home and foreign, amounted to 786,116,837 milreis. In the same year the internal debt amounted to 565,000,000 milreis.

—There were actually under arms, according to official reports, at the end of the year 1878, 16,000 troops. But the nominal strength of the standing army is fixed at 20,000 on the peace footing. At the end of June, 1879, the navy consisted of 57 steamers.

—The area of the empire is estimated at 8,515,848 geographical square kilomètres, or 8,275,326 English square miles, with a population, in 1872, of 9,448,233, besides 1,000,000 aborigines.

Footnotes for BUREAUCRACY

[37.]Compare Fr. Rohmer's work, "Deutschlands alte und neue Büreaukratie," (Munich, 1848), from which the above is in part literally taken.

[38.]Bureaucracy was the creature of that so-called enlightened absolutism which enunciated the principle: "Everything for the people, nothing through the people," and which supposed that it could best serve the interest of the state and of citizens by regulating and controlling not only the affairs of state, but those of municipalities and even of private persons, leaving nothing for the individual himself to do. Bureaucracy placed all interests under the supervision and guardianship of the state. Officials came to form a class or caste, distinct from the rest of the community, and standing above it. This bureaucratic rule was opposed by the nobility and by the liberals. Its influence is not yet everywhere entirely at an end, but it can not long survive the opposition of a free press, of the general participat on of the citizens in public affairs, and the general extension of constitutional government. See the article "Büreaukratie" in Brockhau's "Conversations lexikon." ED.

Footnotes for CAPITAL

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B

BADEN

BALANCE OF POWER

BALANCE OF TRADE

BALLOT

BANK CONTROVERSIES

BANKING

BANK NOTES.

BANKRUPTCY.

BANKRUPTCY, National.

BANKS.

BANKS, Functions of.

BANKS OF ISSUE

BANKS, Advantages of Savings.

BANKS, History and Management of Savings,

BAR

BARNBURNERS

BARRICADE

BARTER.

BASTILLE

BAVARIA

BELGIUM

BELL

BELLIGERENTS

BENTON

BERLIN DECREE

BILL

BILL OF EXCHANGE

BILL OF RIGHTS

BILLION

BILLS

BI-METALLISM.

BIRNEY

BLACK COCKADE

BLACK CODE.

BLACK REPUBLICAN.

BLAINE

BLAIR

BLOCKADE

BLOODY BILL

BLUE LAWS

BLUE LIGHT

BOARD OF TRADE.

BOLIVIA

BOOTY

BORDER RUFFIANS

BORDER STATES

BOURGEOISIE

BOUTWELL

BRAHMANISM.

BRAZIL

BRECKENRIDGE

BROAD SEAL WAR

BROKERS

BROOKS

BROWN

BUCHANAN

BUCKSHOT WAR

BUCKTAILS

BUDDHISM

BUDGET

BULL

BUNDESRATH