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416 forms the debt may take, floating debts should be but sparingly used; voluntary loans appeal to the only reliable motive on which to rest a credit policy; bonds are preferable to annuities; and while Government may use its discretion in fixing times of payment, loans should be placed at par rather than at discount. At the close of a war, floating debts should receive immediate attention, and a policy of contraction should be set on foot to meet the case of irredeemable paper notes. In peace management, the financier should have regard to the need of investors in giving shape to the public debt; should be able to work wisely when he comes in contact with the money market, and harmoniously with all laws affecting or affected by his securities; and "should have clear views respecting the policy of conversion." The policy of debt-payment—as opposed to holding on till the indebtedness is overtaken by the growth of the country in wealth—is defended, but it should not be pushed so rapidly as to force the rate of business profit below the rate necessary to sustain industrial hopefulness. The best method of payment is that of making permanent appropriation to the service of the debt, leaving the administration large discretion in its application.

In the third part—"Local Deficit Financiering"—a review of the past experiences and present condition of the States and municipalities in financial management leads up to inquiries into the causes of municipal corruption, and the expediency of limiting the power of cities and States to borrow money. Municipal corruption is regarded as merely a symptom of deep-seated disorder in the body politic, and not a distinct and independent evil. The final explanation of the phenomena is to be found in the fact that the present organization of society does not properly correlate public and private activity. Private business and the service of corporations offer more attractive careers than municipal office, and secure the service of the best men. The remedy for corruption is, then, to enlarge the scope and legitimate emolument of municipal life, so that the best men may also be attracted to it; and this should be supplemented by the enforcement of personal responsibility. While the evils against which the restrictions of the freedom of States and municipalities in financial and industrial matters have been directed, are acknowledged to have been real evils, the method that has been adopted of curing them is believed to have brought great danger to society. In this sphere regard must be had (or our institutions are imperiled) to the two fundamental principles of republicanism: that all concentration of power should be held to strict accountability; and that the exercise of all responsible power should lie as closely as possible to the people upon whom it is to fall. The present standing of private corporations before the law contradicts the first rule; for "these corporations are practically irresponsible to the people by whose favor they exist, and whom they pretend to serve. Popular liberty could be menaced by no greater danger." The growing importance of the Federal Government threatens to disregard the second rule, that responsible power should lie as closely as possible to those upon whom it is exercised. Yet "the financial disabilities under which the States rest have placed them hors de combat; and, without some radical modification of existing relations between the various centers of government, the pressure of coming events will inevitably lead to an extension of administrative functions under the direct control of Congress." Moreover, as the country becomes more populous, and its various relations more complex, the functions of government must necessarily extend to continually new objects. The States are the proper center for their exercise, but they are considered as being in no position for performing the duty, having been deprived of the facilities for undertaking it by a series of mistakes. Hence, we have reason to regard with solicitude the next step in the development of the industrial constitution of the United States.

The author has evidently endeavored to view judicially the various questions he has raised, and has given a book full of thoughts which it was well to have presented.

author in this paper, which was read before the Illinois Engineers' and Surveyors' Association, discusses the probability