in vain? Another idea came to her; and while breakfast was preparing and the children were being dressed, she carried it swiftly into execution. Slashing a great cross out of a scarlet cape, she sewed it firmly to the white ground. That she might hang to the dove-cot, after breakfasting.

She carried it martially with her into the great kitchen, and placed it in a corner. The sun itself was hardly up, but the children brought the flag out into the firelight and old Marie was jubilant. The wonderful idea! The great brain of mademoiselle! She fussed almost happily over the simmering skillet of milk. But the great brain was pondering apart in the lessening shadows. Better the American flag, if she could manage it. She would beg an old blue smock of Théophile's, for she had nothing herself. Those wretched stars! It would take her a long morning; and she felt convinced that this day's sun would not rise peacefully to the zenith. This thing she had made was a lie. Incalculable harm could be done by assuming a badge you had no right to incalculable harm to those who had the right. She was mortally afraid; but she would not do anything in pure panic. That would make it worse for every one in the end.

An American flag: it must be made. How many states were there? She had no notion, but she fancied they were as the sands of the sea. It would take a woman all day to cut out those stars and sew them to a blue field hacked out of Théophile's smock. And what a makeshift banner, in the end! Even if the enemy politely waited for her to finish it, would they not detect it at once? Was not that the kind of thing every German knew better than she - how many little silly stars there were, safe and far away, sending senators to Washington? A sullen tide of mirth was let loose in her far below the surface. Here

she was, quivering with terror, with a lot of foolish livestock on her hands livestock that she could not give up to slaughter as if they had been the sheep that they really were.

Miss Stanley caught up one of the children to her lap and fed it great spoonfuls of warm milk-choking it hopelessly. Luckily the mother was too apathetic to reproach her. She could not even feed a child without wetting it all over! Disgusted, she put the child down again. It whimpered, and the mother, roused, moved over to it. Miss Stanley looked at her cup. Chocolate no coffee, for the coffee was gone. Coffee might have cleared her brain, but this mess would do nothing for her. Still, she drank it. And gradually, as their hunger was appeased, they crept about her. Even those who did not move their chairs turned and faced her. She could not meet so many eyes. She had nothing to do with them—these tellers of old wives' tales, who expected her to deliver them from the horrors their own lips had fabricated. Why did they stare at her as if she might have an idol's power over events? Whispering, almost inaudibly, their strung and beaded prayers, yet blasphemously looking to her!

The shadows still lessened in the great kitchen. The sun lay in level streaks on the centre of the stone floor, and even the twilight in the corners was big with noon. The women sat in a helpless huddle, not knowing how to go about the abnormal tasks of the abnormal day. The far-off thunders of the plain began again: vibrations as of earthquake first, then explicit sounds, unmistakable and portentous. To-day, you could distinguish among those clamors. Miss Stanley, with the first sounds, expected to have a tiny mob to quell; but their apathy did not leave them. Even the children turned that steady, hypnotized stare on her. And

For one moment, Miss Stanley stood irresolute. She had never dreamed of such a tyranny of irrelevant fact. She must, for life or death, for honor, at all events, respond to a situation for which nothing, since her birth, had prepared her. Peace had been to her as air and sunlight- the natural condition of life. This was like being flung into a vacuum; it was death to her whole organism. Yet, somehow, she was still alive.

Irony took her by the throat; and then the thought of Edmund Layelinked, himself, with events like these, riding or marching beneath just such skies, on just such a planet, under just such a law. Never had there been,

really, immunity like that which she had fancied to be the very condition of human existence. It was all human, with a wild inclusiveness that took her breath. And, whatever happened, paralysis like that which even now crept slowly up her limbs, was of the devil. Against that last ignominy she braced herself.

Her muscles responded miraculously to her call for help, and she felt her feet moving across the floor. If feet could move, hands could. She rolled up the little banner and threw it in the very centre of the fire. It occurred to her as a last insult that she did not know enough German even to proclaim her nationality; but she did not falter again. Some residuum of human courage out of the past kept her body loyal, some archaic fashion of the flesh that dominated the newness of the mind. Past generations squared her shoulders for her, and gave her lips a phrase to practise.

As she passed down the corridor, she flung each door wide open. She paused, a mere fraction of an instant, in the big front door of the house; but from there she could see only a confusion of helmets, and horses nosing at the grille. Almost immediately she passed through the door and walked, hatless, her arms hanging stiffly at her sides, across the innumerable cobblestones, to the gate.

I

THE American people display a remarkable aversion to thought on matters pertaining to the income and outgo of the public treasury. Customs and internal revenue, income and corporation taxes, are types of the subjects we prefer to have discussed out of our hearing. It is enough that we must pay the taxes. Among the immunities and privileges guaranteed to us by the Constitution are surely to be found freedom from the din of financial debate, and the right of ignorance concerning public ways and means.

It is true that at various periods in our history great popular interest has been aroused by proposed reforms which were essentially financial. Such interest was excited by Alexander Hamilton's project for a revenue system upon which national unity might be based; by Henry Clay's plan of a tariff that would establish the economic independence of the nation; by Henry George's scheme for extirpating poverty and privilege at a single stroke. It was not, however, the financial logic with which these plans were wrought out that commanded the popular attention. When have we ever heard of popular enthusiasm for that most logical of all financial projects, a 'tariff for revenue only'? Hamilton and Clay and George wrought their miracles through a common device: the translation of their proposals into moral terms. And we may be assured that no financial programme of the future will excite

great zeal in the American people unless it is subject to moral translation. However practical we may be in our private lives, in our public concerns we require the support of an ideal.

To the casual observer the present financial situation in the United States appears to be ethically colorless. One who reads the signs of the times must, however, foresee that the subject of public revenue will, in the near future, assume the vestments of a moral issue. The spirit of social justice is abroad. At present, to be sure, this spirit concerns itself with ends, not with means. The children of the poor must be fed and clothed and trained for life and work; the sick and the maimed must be nursed and solaced; and the aged must be restored to the serene dignity of old time, when gray hairs and pauperism were not, as now, substance and shadOw. Such claims upon society were indeed made generations ago, but only by isolated reformers and philanthropists, whose sanity was questioned by their contemporaries. To-day they are presented by legions of men, among whom are numbered those who are accounted the sanest and most practical of us all.

The social demands upon government have already found partial recognition in the legislation of almost all the countries of Europe: Germany, France, England, the lesser nations, and even Russia, are taking up their social burdens one by one; and there is no record of such obligations as repudiated, after they have once been assumed. We are

not more cynical than the nations of Europe; if we lag behind at present, we shall none the less, in another generation, be found in the forefront of the

movement.

a curse

Social justice, however, is not to be had without cost. We have never attempted to number our destitute children, the sick and the wounded in our industrial army, our aged workingmen and workingwomen who, after a life of toil and sacrifice, are forced to eat the gritty bread of charity. If we did number them and did no more of God would perhaps fall upon us, and deservedly. But when once we realize the gravity of the problem, we shall not be slow to assume the moral obligations which rest upon us. What the financial burden of these obligations will be we do not know, but it is a cautious surmise that it may overbalance all the other costs of our federal government combined. Within a third of a century, then, the nation will probably be confronted with the task of doubling its

revenues.

It is not an easy matter, even at present, to procure adequate public revenues. Until recently the federal government appeared to enjoy inexhaustible financial resources. But four years ago we found it necessary to supplement the customs and excises with the somewhat onerous corporation tax; and now we have a still more onerous income tax. Further development of federal taxation is likely to impair, in some measure, the sources of state and local

revenues.

The local governments are in worse case; many of them are now levying taxes very nearly up to the limit of tolerance of the tax-paying public. By readjustment of burdens, to be sure, some increase in the tax revenues of the local governments is possible, but it is doubtful whether by such readjustment we can do much more than make

provision for the expansion of ordinary governmental expenditures. Legally, the power of taxation is unlimited; but practically its limits are very narrow indeed. This is why every one who anticipates a great development of expenditures for the purposes of social welfare, is seeking new sources of public revenue. And such a search must inevitably result in a criticism of our system of distribution, from a moral as well as from an economic point of view.

II

In periods of serious and unfavorable environmental changes, every organism tends to revert to an ancestral type. To this rule, human institutions are not exceptions. The hardships of early-nineteenth-century industrialism aroused in the minds of men an eager zeal for the establishment of communal institutions resembling the social organization of primitive man. Similarly the growing burden of taxation has resulted in a sentiment in favor of the creation of revenue sources practically identical with those of the mediæval state.

The medieval financial system, it is well known, was based upon the revenues from landed domains. The royal estates provided for the private expenditures of the prince and his household, including many of the high officers of the state; the landed domains of the vassals of the prince supported the expense of the military organization and the administration of justice; other landed revenues were assigned to the Church and to public charity, to universities and hospitals. In Russia the public domain is still an important element of finance; but west of Russia only vestiges of it remain, in the national forests and wastes, and in various communal landed holdings. Such holdings are insignificant as elements in the

financial system of progressive states; but under the pressure of the growing burden of taxation they are beginning to exert a powerful influence upon the popular imagination. They seem to point to a solution of our problems. Let us revert to the medieval financial order and reconstitute our public domain. This is the impulse which, in last analysis, gives strength to the movement for land nationalization.

Such tendencies to reversion are a natural accompaniment of the spontaneous efforts of the organism toward a new adjustment. They never can be fully realized, but they can aid in shaping the new order. The nineteenth-century experiments in communism were failures; primitive communism will never return to the world. But they helped to deliver humanity from the moral doctrine of laissez-faire, a doctrine branded ages ago as the philosophy of Cain.

The assumption by the group of responsibility for the welfare of its members is approaching realization, but in a way not dreamed of by the Communists. There are excellent reasons for believing that a state with its revenue system based upon a landed domain would be a failure. It does not, however, follow that a policy of state endowment is fundamentally unsound. What does follow is that the modern state, in seeking an endowment, must choose from among the numerous current sources of income those which are most appropriate to its purposes.

III

One of the most remarkable tendencies in modern economic life is the segregation of productive property into two classes: that which yields a fixed income, and that which gives claim to an income that is uncertain, contingent. Thus the property right in a piece of

land is often divided between the mortgagee and the owner of the equity. The mortgagee receives his income, whatever the ups and downs of the enterprise, while the owner of the equity must content himself with an income that is dependent upon the success of the year's operations. Where real estate is let under long leases to persons who are financially responsible, the rent assumes a stability not unlike the income of the mortgagee, and the tenant's interest in the property assimilates itself, economically, to that of the owner of a real-estate equity. The distinction appears most clearly of all in the division of income rights in corporate earnings into interest on bonds and dividends on stocks. Even the rights to the public revenue are divided between the state and the holder of public obligations. The sovereign state itself is forced to bestow upon its creditors the most certain part of its income, and content itself with income that is in some measure contingent.

This process of differentiating a productive property into its kernel of certain income and a husk of contingent income is of comparatively recent origin. In the late Middle Ages there were certain money charges settled upon land, but their volume was insignificant. The process first gained head with the formation of public debts, in the seventeenth and eighteenth centuries. Since that time the differentiation has proceeded apace. In some fields of enterprise, the tendency is held in check by law, as in banking; in other fields, by reactionary traditions and the survival of cumbersome institutions of an earlier epoch, as in agriculture. In spite of all restrictions, however, the mass of rights to certain income appears to gain steadily upon the mass of rights to contingent in

come.

It would be difficult to estimate the