language used by Polética and Dashkov to the American State Department in Adams's day, and we see the "interest" of France as shown by her representatives at Geneva.

The cynic's view is the very last that can be taken in this discussion. The issue is too solemn, the threatening and insolent mood of the Old World far too clear. Therefore once more let us in the yellow dossiers of the past find a parallel to the present. We come to the year 1818, when Alexander's Foreign Office sent to the Powers a "confidential memoir". There is one sentence in it that we can read with some profit, although the rest is but a repetition of Alexander's main and familiar idea:

The wrongs under which all humanity groaned during the revolutionary struggle were the inevitable consequence of the errors of the past, viz., individualism and partial or exclusive political combinations.

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This word "individualism" tells us a good deal. The immigration policy of the United States is not only a domestic issue, but one of the historic examples of national individualism. America is fundamentally a growing political entity with much of its experience yet to gain. It has not a homogeneous population often redundant. America for the time being must have its population clothes more or less ready made and more or less mechanically shaped. Its problem literally is of "a" population, not "the" population. There was but one way to approach this problem, a way that many sought to avoid for years, the way of individualism. If we must wear ready made clothes we should at least get them where we choose and as we choose and after a while make them for ourselves. This was a manifestation of the individualism, marked at some periods, quiescent at others, which has always irritated the Old World, an individualism that is no more than a sign of the nation's instinct that its methods of growth must be its own.

To remove this individualism, to substitute therefor the orders of a European directorate, is what today is in the hearts of the signatories of the Peace Protocol. They may assert that such is farthest from their thoughts, but their assertions are worth nothing, no more than those of such Americans as found and find neutrality of opinion more agreeable than conviction. The whole

tendency of a concerted European movement with relation to the United States must be towards coercion, now as well as a century ago, and for the reason that I state above. Europe, especially what we know today as Europe, is not opposed by any means to individualism when practiced by itself, but the individualism of the United States is another matter. The Old World has changed its tone somewhat, and while its phrasing is about as bland as that of 1815, though less unctuous, the content of what it says in the Peace Protocol is much more openly a threat. The more we look at it and the more we ponder on some of the beautiful sentiments for America emitted in the roaring days of the Great War, the dirtier business seems this same Peace Protocol.

Before I close a paper that should have been briefer, let us consider one or two things. The first shapes itself in the question raised by the Abbé De Pradt in 1819, whether the world as a whole would not profit by an America that developed itself without interference from Europe. An American today as the American of Monroe's day would say that his continent was an organism by itself that must grow in its own way to be of any real use to the rest of the world. Of course, there are plenty of Europeans who argue that the United States is too young and too prosperous to be enlightened, but we must forego the pleasure of Europe's example. There have been too many fine words in the past. In the Peace Protocol we have at least the satisfaction of beholding a degree of candor hitherto denied us by Europe. If Americans cannot now understand the attitude of Europe towards the United States, they will never do so; but we are none of us perfect, not even the Council and Assembly of the League of Nations. Therefore let us cast aside international personalities and entertain the idea that the United States as it is at present can do more and has done more for the Old World than as the stepchild of a suzerainty whose mere existence is the contradiction of its professions.

Next, and supposing that the Peace Protocol ever is ratified, will the adhesion of its members become more than nominal? It is ill work to suggest that Allies under such a golden banner should fall out; but can they possibly stand together in this attack on the United States of America? As Metternich at Aix-la-Chapelle prophesied that constitutional government had become the issue

of that day, so now in 1924 the survival, practice and defense of the American system is the issue. It has been the hope, the noble aspiration, of many American statesmen that such issue should be for all time settled. Would to God that for the world's sake as much had been vouchsafed! But now it seems that Europe would attempt to balk the fore-ordained, majestic development of a nation whose crime is that it breathes a freer air. You cannot separate immigration from the American system. Do so and that system is forever mutilated.

What part can a people saturated with the constitutional system, fiercely individual and proclaiming justice to be the keystone of its house, what part can the people of England play when this Peace Protocol is offered it for ratification? Will the French of today, whatever their ideas about the United States, proceed to treat immigration in Italy's favor as not a "domestic issue"? What will our neighbor, Mexico, have to say about a problem that looms upon her horizon? The New World can thank the Japanese for defining its situation and its policy. This, however, takes us too far away from the subject that I have tried a little to open. It is no more than that the Peace Protocol of 1924 is so closely joined in spirit with the Act of 1815, so clearly aims at the United States, and so plainly depends on the same sophistry and the same selfishness costumed as altruism, that Americans can learn and should learn from the Holy Alliance what the Peace Protocol may become. On November 19, 1823, Adams had an interview with the British Minister Addington of a very friendly and candid nature. This matter of European assemblages and their pretensions occupied him, as shown by words of his quoted by Mr. Cresson: "The very atmosphere of such an assembly must be considered by this Government as infected—and unfit for their plenipotentiary to breathe in." From the spirit of Adams a century ago, there has been no declension in the hearts of the American people.

JOHN HUNTER SEDGWICK.

FOREIGN EFFECTS OF AMERICAN

INFLATION

BY SHEPARD MORGAN

THIS essay deals with something that does not exist, but is looked for. According to the usual conception of what manifests inflation, there is little or none of it now in America. Business in its output and exchange of goods is perhaps not far from where it ought to be, allowing for year-to-year growth; the volume of credit is large but on the whole its use is marked by self-restraint; our banks owe very little to the banks of issue, and the general level of commodity prices has varied little for three years. These are not marks of inflation but of its absence; and beneath our structure of credit is a mass of gold such as no nation ever accumulated before, the very fundamental of business confidence. But it is this volume of gold, capable as it is of immense expansion through the processes of banking machinery, that is expected to lead us into inflation. Observers in Europe watch day by day for the first sign that marks it, for if it comes they hope to find relief, partial or complete, for their own underlying financial problem.

This is the problem of how to get back to the gold standard. In spite of recent proposals which would substitute a currency managed by banking authorities for one indissolubly locked with gold, there seems to be every disposition in Europe to return to the gold standard as it used to be understood. The conditions, however, which a nation must impose upon itself in returning to the gold standard are heroic, and the measures involved are always unpalatable. A nation bringing its currency back to a level with gold must rid itself of such part of its credit and currency as is not readily interchangeable with gold at face value, which is deflation; or else it must cut down the amount of gold that the face value of its currency represents, which is devaluation. In both cases the result is to reestablish a free interchange between credit

and currency on the one hand and gold on the other. But the implications of deflation, real or supposed, are dull trade, falling prices, diminished production and unemployment; of devaluation, that all obligations payable in the national currency are scaled down to a fraction of their former nominal value. There is, however, another possible way out; instead of bringing the currency back to an even interchange with gold, the value of gold itself may fall until it reaches the level of the currency. It might appear that the latter is the more convenient process, for it implies standing still while conditions develop elsewhere. As matters stand, these developments can take place only in the United States.

So it is that the European press, particularly that of Great Britain, is observing current American finance with an interest not unmixed with hope. One reads, for instance, that our accumulation of gold, now nearly half the world's monetary stock, is likely to force inflation upon us whether we will or no, and that our inflation will bring with it a rise in the level of our commodity prices. That is another way of saying that the value of gold will fall, because at this time the price of commodities in America determines the value of gold, and the higher our prices rise, the lower the value of gold falls. Such a fall in the value of gold would tend immediately to benefit those nations, it is believed, whose currencies are only slightly depreciated in terms of gold and the dollar, such as Great Britain, Holland and Switzerland. The new inflation here, counterbalancing the old inflation there, would absolve them from undergoing further deflation. The dollar in falling to the level of the pound, the florin and the Swiss franc, would save the pound, the florin and the Swiss franc from coming up to the dollar. In this way the old parities would be restored, and with them would come a reversion to the gold standard. The time might then be appropriate for other countries, such perhaps as France and Italy, to reëstablish their currencies on a gold basis by devaluation or otherwise, and the world's commerce could resume its accustomed courses.

It is a simple and attractive solution, deduced from old processes which formerly worked inexorably and with precision. It commends itself to Europe not only because it appears to min