£120 being exempted from the exception), pianos other than upright, gramophones, billiard tables, liqueurs, and so on. It would be easy to pick holes in this list, especially for its omissions, such as hire of domestic servants above a certain number, club subscriptions, etc. It would be still easier to criticize the schedules and prices of the articles that are only to be taxed above a certain price, and the omission from them of house rent, above a rate in proportion to members of the family. But all these questions will be raised, we may be very sure, if and when a bill is brought in to embody the committee's recommendations. The tax is a well-meant effort to take toll of those who spend money on superfluities or on unnecessarily costly articles. A happier age may perhaps one day marvel that we should regard pictures and objects of art as superfluities, but the commercial spirit which has converted them into investments which escape income tax justifies their inclusion. In the meantime, there can be no doubt that the Chancellor has lost much revenue and stimulated much bad spend ing by the method adopted of arriving at his object by means of this committee instead of making up his mind with the help of his expert advisers and then going ahead. Whether he has thereby helped the progress of the tax through Parliament remains to be seen. A general tax on all purchases above a certain level would evidently have caused much less confusion and irritation. All taxes on expenditure suffer from the impossibility of graduating them according to the circumstances of the taxpayer. Perhaps some day, with the growth of education and public honesty, it will be possible to trust every citizen to make a return of his income and of his expenditure, and to make him pay an income tax, graduated and differentiated according to

his circumstances, not on what he earns, but what he spends. Then, and not till then, will a really fair expenditure tax be possible. In the meantime, the committee has done its best with a difficult problem.

The Economist

ALLIES' FINANCE

THE importance of a financial union of the Allies is discussed by M. Alfred Neymarck in a recent issue of the New York Evening Post. As The Stock Exchange Gazette has repeatedly urged the vital necessity of the closest cooperation in financial as well as in military affairs between all the Powers now fighting Germany, we are much interested in the observations of this eminent writer, who since the death of Paul Leroy-Beaulieu is probably the leading French authority on international finance. M. Neymarck points out that since the war began his friend Luzzati (the veteran Italian statesman who established Italy's State finances on a sound footing many years ago) has never ceased to demand a financial and economic entente among all the Allies, and that it is largely in consequence of Luzzati's efforts that such unity of purpose and effort as exists to-day has been established. If such union had existed from the beginning of the war 'the wild race of American, English, and particularly neutral exchange,' to quote M. Neymarck's words would have been stopped. The Allies were compelled to make purchases in all those countries, and as they could pay only in gold or gold credits, the wild race for exchange proper began, and never at any time has there been such speculation in exchange. M. Neymarck next shows how completely the war has upset international finance. Before it broke out the great nations were

creditors, whereas now they are debtors, and it is the little countries that are the creditors of the great nations and are imposing on them onerous conditions after laborious negotiations. All this exchange speculation would have been cut short if the Allies from the beginning had opened credit and debit current accounts with each other, leaving the balance to be settled at the close of hostilities, instead of trying to settle at once in gold or gold equivalents. Ultimate balances between the Allies will be settled in gold or equivalents. So far some progress has been made in the direction desired, first, in respect of exchange, and secondly, with regard to treaties of commerce, which concern commercial exchange. And here we may point out incidentally that the recent improvements in Allied exchange rates, such as that of this country on New York and that of France and Italy on London, is wholly due to the steps already taken to effect unity of organization and control. But enough has not yet been done, and much more remains to be accomplished.

M. Neymarck advocates, as The Stock Exchange Gazette has frequently done, the setting up of 'Finance Councils,' with frequent meetings among the directing financiers of the Allies, just as there are meetings and conferences of the army chiefs. 'Such councils,' he claims, 'would be able to settle a great many questions that interest finance; for example, loans and securities, negotiation of securities lost stolen or destroyed (as in Belgium and the French depart

ments subjected to German invasion), commercial and industrial questions, credit of Allies.' In our issue of November 22, last, we advocated precisely the same proposal, remarking that:

If the Allies are to have a common War Council why should they not also possess a common Finance Council whose function it would be to direct and control all the financial operations in which they may be engaged?

M. Neymarck rightly observes that the credit of the United States, Great Britain, France, and Italy is much above that of enemy countries, and that this incomparable force ought to be utilized. He suggests for a start the flotation of a great international loan of the Allies. The same suggestion was made by us in the article already referred to. We then said that:

A joint loan guaranteed by Great Britain, the United States, France, and Italy, would appeal more powerfully to the inspirations, and, incidentally, to the pockets of investors in Allied countries than the separate State loans spasmodically floated in the past. Why should not the Grand Alliance float a common loan, the different Allied countries being allotted the proportions they were capable of subscribing?

The suggestion is especially worthy of consideration at the present time, as an Allied loan on the lines proposed would be sure to obtain substantial support, not only among the Allied peoples, but in prosperous neutral countries, particularly at a time when the ultimate triumph of the Allied cause is no longer in doubt.

The Stock Exchange Gazette

Simon Lake's The Submarine in War and Peace (J. B. Lippincott Co.), is the first comprehensive and authoritative volume upon this highly important subject. It embodies the fruits, not of mere inquiry and research, but of practical experiments extending over more than twenty years. When only a boy of fourteen, the author, whose attention had been called to submarine possibilities through reading Jules Verne's Twenty Thousand Leagues Under the Sea, made his first design for a submarine boat, which contained most of the elements now used in the Lake type of boat. In 1893, he submitted submarine designs and plans to the Navy Department, which won the approval of a majority of the Naval Board, but were not adopted, because the Government was not then ready to go ahead with construction. But, within a few years he had built and successfully operated the submarine boat Argonaut, to which Jules Verne himself, in a letter in 1898, pointed as evidence that what had been entirely a work of imagination in his story, had actually come to pass. This conspicuous success of submarine navigation in the United States' Jules Verne wrote, 'will push on under-water navigation all over the world.' So the brilliant Frenchman, whose story had given young Lake his first inspiration, gave him due credit for its realization. These facts, to which the author refers only casually, attest his qualifications as an expert for the treatment of all aspects of his subject. His aim

in this volume, as he defines it in his Foreword, is to present in a simple and interesting way the facts relating to the submarine; its mechanical principles; the history of its development; its actual operation; the difficulty of combating it; and its industrial possibilities. This last phase of the subject is one to which comparatively little attention has been given during the last four years, in which the submarine has been in most men's minds solely as an instrument of German 'frightfulness,' ruthlessly employed. But the submarine has also great possibilities in time of peace, and of these Mr. Lake writes fully, and with enthusiasm. The book is the fruit not only of the author's own inventions and experiences for more than twenty years and of his investigations in Russia, England, and Germany, but of a close study of the literature of the subject; and the more than seventy illustrations-doubletones and line cutswhich decorate it, serve to explain all details of submarine construction and management and present the different types of the submarine now in use. The book closes with the cheerful prediction that the development of the submarine will ultimately sweep battleships off of the ocean and put an end to offensive warfare; and that, 'instead of following a career of murder and of piracy, the submarine is destined to protect the weak, to strengthen the strong, and to serve humanity in general as an agent for prosperity and for peace.' If only this might prove to be a true prophecy.

BY ERIC CHAPPELOW

Ah, what avails the sculptured stone?

Ah, what the emblazoned monument?

Seeing the fiery spirit is now spent,
The beauty flown

Seeing no more, wind-kissed and radiant-eyed,

A Spirit compact of sunshine and bright air,

The chartered Spring's unbridled challenger,

He swings along the well-loved riverside

Seeing no more with rapture in his pen He makes the untroubled beauty of the skies,

The splendor of the fields, earth's harmonies,

A song to ring upon the lips of men