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 a very 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

nation.

The Saturday Review.

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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

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 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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"The Dwelling Houses of Charleston, South Carolina." Its preparation must have been a labor of love, for every page bears testimony to the intimate knowledge and painstaking research of the authors. The opening chapters review briefly the early history of the city, beginning with the first settlement in 1670, at which time and for a century after, it was known as Charles Town, and describing the earliest buildings. Then follow chapters describing and picturing houses of the pre-Revolutionary period, and of the last century, the most characteristic houses of each period and of each style of architecture being chosen, and interior as well as exterior views presented. Of the 128 illustrations, some are from photographs, some from old prints and engravings, but the most delicate and charming of all are from drawings by Alice R. Huger Smith.

Down at the heart of the great reading public there remains forever a love of fairy tales; no story has been so often repeated or with such unvarying success as Cinderella's. Every season sees it emerge triumphant from the press, the situation, the nationality changed; but Cinderella and her Prince nevertheless. Alice Hegan Rice has added a truly American thrill to this romance in "Calvary Alley"; Cinderella throws the Prince over and marries the honest workingman, who has ever loved her. Mrs. Rice has gained a profound understanding of the poor, of the merry-hearted poor. In this Chronicle of Nance Malloy, who opens the first chapter, a barelegged, torn-frocked, very dirty little girl, throwing mud at The PrinceMac whose father owns the great shop where she later works-and helping Dan Lewis, the son of an outcast woman, in his battle; who passes through experiences as a stage-dancer, mill-worker, trained nurse; until she ends by promising to "wait" for Dan;

the author shows her customary skill in bringing out the lovely side of ugliness. The minor characters are the best and Mrs. Snawdor, the stepmother of Nance, is the equal of the redoubtable and never-to-beforgotten Mrs. Wiggs. The Century Co.

The scene of J. C. Snaith's new novel, "The Coming," is an English village, and its central figure is a carpenter approaching thirty, considered by the vicar, "a free-thinker, a socialist, and a generally undesirable person," thought by the squire to be a genius, and believed by his mother -the widow of a soldier who died many months before the child's birthto be a second Messiah. The growing exasperation of the vicar at the healing powers ascribed by some of his parishioners to John Smith, and at the vaguely pacifist movement of which he is the center, culminates in an effort to have him committed as a dangerous lunatic. In this he meets opposition from the local doctor-a warm-hearted Irishman, and from the squire a man of keen intellect, but half-paralyzed now as a result of shellshock at Gallipoli-but he is successful at last, and John Smith is sent, at the squire's expense, to the best private asylum available. There his mystical personality gives him an ascendency even more remarkable than in his native village, and attendants and doctors admit his unusual power; to the squire, brought laboriously to visit. him he restores the use of his limbs; and he writes a play which is produced in several languages and wins the Nobel peace prize. Worn out with fasting and prayer, he dies just as the prize is to be presented. D. Appleton & Co.

More than half a century after his tragic death, the figure of Abraham Lincoln stands by itself in American history, and every study of his life and character, from whatever point of view, enhances the respect in which

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not his own country only, but the whole world, holds him. The latest contribution to Lincoln literature is Alonzo Rothschild's "Honest Abe" (Houghton Mifflin Co.). This book is described by the author as a study of integrity based on the early life of Lincoln. As such, it supplements Mr. Rothschild's earlier volume "Lincoln: Master of Men" which was a study of his career as President. The present volume carries the story of Lincoln's life from his boyhood to his election to Congress, and it chiefly emphasizes the unflinching honesty and unselfishness which marked every stage of his professional career. chapter on "Dollars and Cents" is especially illuminating in its collection of such incidents as the Scott case, when Lincoln gave back half of the stipulated fee, because the case had been won in less time than was anticipated, and by this highly unprofessional conduct incurred the censure of the judge, and a fine imposed by the local bar association. Lovers of Lincoln will read every page of this memoir with interest, because it covers the least familiar passages of Lincoln's life, and is the fruit of eager and sympathetic study, pursued for more than twenty years, down to the author's sudden death, in September, 1915, soon after the last paragraph was written. An affectionate memoir of the author, by his son, John Rothschild, follows the chapters on Lincoln, and a list of authorities cited, notes, and an index complete the book. portrait of Lincoln, from an old daguerreotype, and a portrait of Mr. Rothschild illustrate the volume.

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Travel on foot through little known and dangerous countries seems to be an obsession with Harry A. Franck, author of "Vagabonding Down the Andes" (The Century Co.). In earlier volumes he has told the story of "A

Vagabond Journey Around the World," of tramps through Mexico, Guatemala and Honduras, and of four months afoot in Spain; and, when he planned the journey recorded in the present volume, he intended only to follow the old military highway of the Incas from Quito to Cuzco, and to devote not more than eight months to the enterprise. But the passion for vagabond travel possessed him, and he spent four full years in covering, not merely the ancient Inca Empire, but all the ten republics and three colonies of South America. Of course, he took his camera with him, and the fruit of his wanderings is a substantial and extremely attractive volume of more than six hundred pages, illustrated with one hundred and seventysix photographs and a map. He endured many hardships, of which he writes modestly; passed unharmed through the fringes of revolutions and war; lived on intimate terms with the natives; and became familiar with Latin-American habits, conditions and aspirations, studied at close quarters, all the way from Panama to Buenos Aires. He has a most engaging way of describing his experiences, without the faintest suggestion of superiority or condescension, with abundant, yet not too much detail; and with unfailing cheerfulness and humor. There are no dull pages. The reader follows the story of his wanderings with unflagging pleasure, with much the same sensation as if he were listening to the travel-story of a friend, and turning over his snap-shots of the regions traversed and the people met upon his way. The book will not only yield immediate pleasure to all who turn its pages, but it is of permanent value as the freshest, most intimate and most comprehensive description of countries and people whose future is likely to be more and more closely linked with our own.