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rooms in use. His cooking must be earthly fire, take a man a little apart elementary, we gather, from the fact from the common toil of sun and earth. that he once confessed to having But in rare times of spiritual struggle stewed a pheasant in a casserole with the shadow of divinity, that may eight onions-and was unable to eat it, emerge in tears from any human soul, to his distressed astonishment. He meets something divine and divinely does up his own surplices, and they are tender in his. The rector has a few beyond cavil. He is shabby, but, unlike worshipers among the villagers who the anchorite of old, keeps to a fas- have met him, as it were, soul to soul. tidious personal regard. He has the They cannot say why they give him look of the particular man-good linen allegiance, cannot answer the comand well-kept hands.

mon murmur, but their worship is The village never ceases to hope unquestioning. that the rector may marry. It longs The two bachelor brothers who live for a conventional rectory to observe, in the tiny farmhouse that was once a and imitate, and gossip over. It hunting-box of a Stuart King see would welcome even a rector's wife something of the rector's less austere who was meddlesome. A dark and side. He will drop in at long intervals silent rectory with no one to answer to Sunday supper and discuss the bells or receive messages, a hermit crops, and the war, and hunting. On a parson of austere life, addicted to long Sunday night he is tired, and likes to hours of digging and planting in his stretch out luxuriously before the fields and garden, and the burning of blaze of apple-branches, smoking in many candles at night-these are silence. His friends understand and matters for perplexity. The cottagers respect his silence, but if visitors are half ashamed of the rector, half should come the rector is never unenvious of more normal parishes. couth or dull. He can rouse himself Their occasional moments of pride-- almost genially to the kind of converwhen some distinguished man sits in sation about the parish and the our little, ancient church and is whis- county that is expected of him. Only pered to be "a friend of parson's," his voice is odd and unmodulated in a or when they hear in some vague way room. It has become part of the that parson's scholarship is held to be church furniture, one might think, wonderful-are few in comparison and is incongruous away from the with their days of fretting discontent. pulpit or lectern. “Birth or death or a wedding, all you Another age-perhaps even another get out of the rector is, 'Quite so, faith in this age--might mould this quite so’!" Mrs. Parker complains, eremite to an anchorite fanaticism. with very little exaggeration. “And As things are, he will never go out into an infant with croup, he has no idea the wilderness, nor yet set fire in a what it means! He's too far off from market square to a heaped-up pyre of ordinary folks, having no family. vanities. He is an eremite born; Not that he hasn't beautiful words but born also of the English habit of at times. The things he said when the mind that is so suspicious of excess of last of my boys went with the colors zeal, of oddity, so worshipful of to vec v -I've five serving-made me dry my -the middle course. England allows eyes, I was that proud."

him to be something of a recluse for the Discipline and solitude, a mind that English are a recluse nation. But lives habitually in a lofty air and England pulls him back from going glows only in Alpine colors, without over the border towards a Stylites life.

Some day perhaps he will find himself more an Englishman than an eremite. The Spectator.

Then he will marry for duty's sake.

Marjorie Grant.

WARTIME FINANCE.

(The colossal expenditures of the war, and the pressing problems which confront the different Governments and the financiers and business interests of the different countries are of so profound national concern that THE Living AGE proposes to print for the present, from week to week, a department specially devoted to their

consideration.—Editor of THE LIVING AGE.)

CURRENCY INFLATIon AND HIGH PRICEs.

One of the most difficult problems in the whole range of political economy is the connection between the volume of currency and the range of prices. Yet, partly perhaps because this problem is so difficult, there are few questions upon which writers and speakers are more habitually dogmatic. Where the monetary system is comparatively simple, consisting either of coin or of officially printed paper, dogmatism is more or less excusable. For example, when the French Revolutionary Government in the eighteenth century, finding themselves short of money, proceeded to print assignats or assignments on the Church lands which they had confiscated, and to issue these assignats as the equivalent of money, the effect on prices soon became apparent. Tempted by this easy method of meeting their obligations, the Revolutionary Government proceeded to issue more and more assignats as fast as they could be printed, with the result that after a time prices of ordinary commodities expressed in assignats rose to ten, twenty, and even fifty times their previous figure. Here the relation between cause and effect is quite obvious. It is equally obvious in the case of the paper roubles now being issued by the Russian Government. The Russian rouble has fallen, as compared with the pound sterling, to about a quarter of its previous

value, which means that everything which the Russians buy from abroad is four times as dear as it was before, expressed in roubles. We are glad to note that this question is now being discussed in Labor circles, and the Russian example of currency inflation is utilized by the Federationist, the organ of the General Federation of Trade Unions, to impress upon its readers the importance of the currency question as affecting prices. The crude view which so many Socialists put forward, that the rise in prices is entirely due to “profiteering,” is politically pernicious, and absolutely unsupported either by current facts or by economic theory. The difficulty of estimating the results of currency inflation under modern conditions arises from the fact that our currency no longer possesses the sweet simplicity of metallic coins and officially printed pieces of paper. In substance the greater part of the currency of the United Kingdom consists of bankers' checks. At the back of these checks are the deposits entrusted to the bankers by their customers. But the banker knows by experience that he need retain only a portion of these deposits to meet calls upon them. The rest he invests, and it is from those investments that he gains a living for himself and his staff. Nor is the proportion of cash that he holds ready to meet his obligations a fixed one. He has it at his option to invest or lend a larger proportion of his deposits if he thinks that the general state of trade, or the business prospects of a particular customer, justify him in doing so. Consequently bankers by lending freely are able to increase the effective currency of the country by increasing the amount which their customers can draw in checks. Stress is laid upon this point because it has a very direct bearing on the allegation that there is an inflation of currency at the present time due to Government borrowing. We do not for a moment dispute that allegation, but we do wish to emphasize the fact that the amount of currency in the country is a fluctuating quantity, dependent to a considerable extent upon the option of individual bankers, and that that option is in normal times utilized either to meet the growing demands of trading, or to stimulate trade by enabling an enterprising individual to embark on expenditure which would be impossible for him without the use of ready cash in the shape of a well-backed checkbook. Bearing this in mind, it will be seen that it is theoretically possible that the large increase in check currency now existing in the country might have been due to purely business considerations, and in that case probably would have had no effect on prices. As a matter of fact, however, all the evidence available shows that there has been, owing to the methods of borrowing adopted by the Government, an artificial increase in the volume of bankers' credits, and that an appreciable part of the present increase in prices is due to that cause.

How the matter operates can best be made clear by looking at the problem, not in any abstract manner from the point of view of the total volume of money and the total volume of goods, which may lead us into endless difficulty, but from the direct

and concrete point of view of the individual demand for goods or services. We all of us know perfectly well that if we have more money in our pockets we tend to spend more freely. That is a factor in human nature which will never disappear. But spending more freely means increasing the demand for goods and services, and if that increased demand is unaccompanied by an increased supply of goods it is absolutely inevitable that prices should rise. In the present circumstances, not only has there been no increased supply of goods, generally speaking, but in the case of many of the most important commodities we consume there has been avery greatly diminished supply. Thus, while our means for making purchases have expanded, the supply of the goods we demand has declined.

Stated in this way, the proposition is indisputable that the increase in prices is partly due to the increased currency. People who have not followed the controversy on this question in the financial papers will naturally ask what exactly it is that the Government have done in the matter of borrowing that has artificially increased the currency. The answer is that the Government, instead of relying upon individual savings to provide the money for War Loans, have themselves appealed to bankers to provide that money either by lending to their customers or by taking up floating securities such as Treasury Bills. Without going into details, it is sufficiently clear that if Jones lends the Government £50 out of his own savings which he withdraws from his bank balance, he thereby transfers his power of spending from himself to the Government, and there is consequently no increased purchasing power in the country, and therefore no general increase in the demand for goods, and therefore no pressure to raise prices. If, on the other hand, Jones borrows money from his bank in order to lend the same to the Government, fresh credit is created by the bank in order to make the advance to Jones, and that fresh credit means additional purchasing power, and consequently an additional pressure upon prices. It is true that there are limitations to the amount which bankers can thus advance without taking too great risks, but it is notorious that, largely under pressure from the Government, they have increased the credits given to their customers, and have thus effectively increased the currency. It is necessary to add that this consideration also affects the purchases of the working classes, even though they are not directly made by checks. For the manufacturer, having a larger credit with his banker, is able to use that to draw a larger weekly sum to pay in wages. The bank supplies the notes and coin on Friday to the manufacturer, and by Monday most of it has come back again to the bank through the local shopkeepers. A comparatively moderate addition to our note and silver currency has sufficed for this rapid movement. The really important addition to our effective currency is the expansion of bankers' credits. Our Government have indeed, through the agency of the bankers, manufactured currency in effectively the same way as the French Government in the eighteenth century manufactured assignats and the Russian Government are now

manufacturing paper roubles. The Spectator.

THE OIL QUESTIon.

There is a great deal of interest in Oil at the present moment. The Production of Petroleum Bill, which has been read a second time, makes the nation the owner of all petroleum found in Great Britain after this date, subject to a royalty to be paid to the owners of the surface. Of course, the Radicals object to the payment of the royalty, preferring to simply confiscate the oil; and it may come to that. Oil there undoubtedly is in these islands; that is to say, there are plenty of lands that are petroliferous, which is not the same thing as oil-bearing. That is to say, there are many districts which show traces of oil; but no lands have yet been discovered where there was an oil stratum that it would pay to bore to. Still, there is no reason why the Government should not amuse themselves by looking for oil in the fields of England and Scotland. A far more important step has been taken by the Government, in their search for oil, by buying a controlling interest in the Anglo-Persian Oilfields, in which the Burmah Oil Company has also a large interest. This purchase was recommended by Mr. Winston Churchill, when he was First Lord of the Admiralty, in order to make sure of a supply of oil as fuel for the Navy; and it may turn out to be as important a deal as Lord Beaconsfield's purchase of the Suez Canal shares, quite one of the best investments ever made by an individual or a

BOOKS AND AUTHORS.

Arthur Sherburne Hardy's new novel “No. 13 Rue du Bon Diable,” reverses the usual order of detective stories, giving first the details of the death of a blameless old gentleman who

nation.
The Saturday Review.

has just drawn from his bank thirty thousand francs for a pearl necklace for his niece's eighteenth birthday, and then describing the process by which the murderer is detected. The charm

ing Corinne herself, and Achille, the bank-messenger who is in love with her, the butler, the cook, the housemaid and the porter—each individualized with the deft touches that have so often delighted Mr. Hardy's readers—fall under suspicion, and justice moves on halting feet till the reappearance from an earlier story, “Diane and Her Friends,” of M. Joly, retired inspector of police. Beautiful typography and clever drawings in the text add to the attractiveness of the slender volume. Houghton Mifflin Co.

Of uneven quality, like the work of most humorists, but decidedly above their average level, is Edward Burke's “My Wife.” Under such chapter headings as “How Wives Encourage Undesirables,” “How Wives Make Explanations Very Difficult,” “How Wives Train Daughters Disgracefully,” and “How Wives Aren't So Easily Found,” a substantial middle-class Englishman describes what seem to him the eccentricities of his very pleasant and capable wife, whom he constantly compares to her disadvantage with the “Dark Rosaleen.” of his boyish fancy; his up-to-date daughter. Pam; his school-boy son, Rupert; the young aviator who lands in his pear-tree; the lady gardener, and the Vicar. There are several threads of interwoven romance, and the appearance of Rosaleen, now widowed, complicates the later chapters amusingly. Thoroughly wholesome in temper, and full of whimsical satire, the story will be to many readers a welcome relief from the prevailing sadness of current fiction. E. P. Dutton & Co.

Sir Arthur Conan Doyle's “A History of the Great War” (George H. Doran Co.) is not only of intense present interest, but will certainly hold a commanding position among

war histories. The author describes the first year of the war as the year of defense, the second as the year of equilibrium, and the third as the year of attack. The present volume, the second of the series, has to do with the second year; and the author promises the third volume, which will cover the series of battles on the Somme and will carry the story up to the end of 1916, within a few weeks. The gift of vivid narrative, which characterizes the author's fiction, is equally marked in the present work. He has just the right sense of proportion and the art of correlating incidents. He has made a painstaking study of all official reports and personal narratives, and draws upon them without overloading his story with too many details. It is rare that a contemporary historian achieves detachment and historical perspective to such an extent. His story of the surprise of Neuve Chapelle, the taking and the loss of Hill 60, the German gas attacks, the second battle of Ypres, the battle of Richebourg, the fighting in the trenches of Hooge, and the battle of Loos is graphic and intensely real. Eight maps and plans illustrate the volume.

The J. B. Lippincott Co. has signalized the present season by the publication of three sumptuous volumes of local history and description, in limited editions, beautifully printed and illustrated. John T. Faris's “Old Roads Out of Philadelphia,” and Horace Mather Lippincott's “Early Philadelphia,” both of which have been reviewed in these columns, are in a sense, companion volumes, one supplementing the other, and both making a strong appeal to all who are interested in the past and present of that city. The third volume is the joint work of Alice R. Huger Smith and D. E. Huger Smith and is devoted to

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