national banking law as it now stands. An "acceptance" may be explained in this way, by supposing that Smith, the department store man, needed his credit at the bank to pay for an invoice of toys "made in Germany." Instead of taking book credit and arranging for the transfer of that credit to the foreign seller, he would have told the seller to draw a draft on him for the stipulated sum. He would then have arranged with his local bank to accept the draft, or, in other words, to become the primary debtor in the transaction. For this service he would have paid a commission similar to the discount that would have been charged on his note. The Kansas bank, in turn, would have been able, under the new system, to discount the acceptance at the regional bank and get credit for the proceeds on the books.

It is clear how, by means of these systems of rediscount and acceptance, bona fide trade debts, possessing the power of selfsettlement, can be used, as one authority expresses it, "through the agency of the banks in the settlement of similar debts, without locking up cash reserve."

But there is another important part, which these self-adjusting debts - these notes and bills accepted for rediscount. may play in our commercial life. And this is where we come to the idea underlying the "elastic currency" about which so much has been said these last few years. Under the plan of banking and currency reform proposed in the measure now receiving the attention of Congress, these bills may become the basis for an entirely new kind of currency. That is, the banks that make up the new system, instead of being compelled as now to allow such bills to repose quietly in their portfolios as unliquid assets, impounding their reserves, will have the further choice of turning in to the regional banks all bills that are of proper maturity and, after setting aside a certain amount of gold as additional security, receiving for them a supply of new currency. The total supply of these new circulating notes will, in the very nature of the case, be large or small, according as the trade and commerce of the nation giving rise to the bills is at high or low tide.

T

HREE years ago Mexico celebrated the centenary of its independence from Spain, the eightieth year of Porfirio Diaz's

life, and the thirtieth year of his reign. There was a wonderful celebration of these events, but even while the celebration was in progres people were asking "After Diaz, What?" The answer was almost invariably the expressive LatinAmerican shrug of the shoulders. If your informant was very communicative he answered, "Who can tell? Another dictator? Revolutions?"

Many rightly feared the revolutions. Some hoped for another dictator. Practically no one looked forward to an era of real democracy.

The standard of living of the mass of its people is the one fundamental basis of judgment of a nation. By this criterion Mexico is a failure. The great majority of its citizens are illiterate, extremely poor, lamentably immoral, practically without political power, and not even safe in their personal rights. In the hundred years of the Mexican Republic, the Mexican people have learned little or nothing about selfgovernment or right living.

A clear and vivid picture of the state of these people comes to the WORLD'S WORK in a letter from a long-time resident of that country:

I have lived in this country continuously for many years. During this time my

relations with the people have been both harmonious and intimate, and it should not be too much to say that this opportunity has brought to me a knowledge of their character, their sorrows, and their attitude toward constituted authority which could have been gained in no other way. I have been with them in their humble palm huts when their children have first opened their eyes upon the indifference of their Fatherland toward them; I have been with them and given them material assistance in their struggles to get the plainest food and the scantiest clothing; I have again been with them at the supreme moment and helped them to close the eyes of their loved ones upon the continuing indifference of their Fatherland; and I have joined their straggling processions to the "Campo Santo," and there helped them to lay their dead away into hospitable graves, the first and only peaceful rest they have ever known. I have heard from their own lips the story of their ancient wrongs; I have seen with my own eyes their brutal punishment for trivial offenses; I have witnessed the despoilment of their small, hard-earned savings of years; in common with them I have myself been a victim of the "gentleman" with a handkerchief over his face, and also of his cousin who operates from the offices without need of the handkerchief - who counts upon and receives protection from higher sources.

It may, therefore, be readily understood that my viewpoint is the viewpoint of the common people - eleven million human beings of a total of fifteen million — who for generations have been forced by their grasping superiors to remain in abject poverty surrounded by social conditions that would be a blot upon the civilization of any country. Neither the fact of their poverty nor that of their dense illiteracy has appealed to the governing class. If criminals everywhere are recruited from these conditions and if Mexico in criminal statistics heads the list, as criminologists have stated, there still is nothing in the story of these unhappy people that has yet awakened the interest of the Mexican Government in their behalf.

But some one rises to remark that the Huerta provisional Government has taken

note of these things and has promised reform. Nothing is ever gained in the long run by trying to deceive one's self. Beelzebub has not acquired a reputation for casting out Beelzebub. Both General Huerta and Felix Diaz have long been identified with the dominant class through their sympathies and material interests. Both are said to be wealthy, as are most of those who clung to Porfirio Diaz during his multiplied terms of maladministration, and nothing has yet been done to justify a belief that either one of them will ever initiate an effort to revolutionize human nature. Caciquismo (boss rule) is as much the rule in 1913 as it was in 1910. Article 16 of the Federal Constitution reads (in part):

No one can be molested in his person, household, domicile, papers, and possessions, save by virtue of a written order emanating from a competent authority and setting forth the legal ground for the proceeding.

Notwithstanding this plain, emphatic guaranty of freedom from tyrannical molestation, I have seen, during the last month. four men of this small settlement arrested and thrust into jail, without any sort of warrant of authority, high or low, without complaint of any nature, and without being given any hearing in defense. After being in jail three days two of the men were released by paying fifty dollars each, and the other two were also let out by paying, one of them forty dollars and the other ninety, but the forty-dollar man had to buy two cases of beer.

If the Mexican Beelzebub is ever going to cast himself out, the common people of this country would very much like to know when the show is due to begin. History does not point to an example of a reformation achieved through the instrumentality of those who have created, maintained, and profited by the unfortunate conditions that make the reform necessary.

In the face of the military situation as it exists to-day, in the face of the pess mistic tone of the more enlightened public sentiment based upon the military situation, and especially in the face of the economic conditions of the common people. and of their intense bitterness toward the

governing authorities, there seems to be nothing to justify the hope that there can be an early pacification of the country. The masses of the people have inherited from their grandfathers a deep-seated feeling of resentment, their grievances have been accumulating throughout the years, but the iron hand of Diaz closed down upon them and crushed their spirit and so prevented open revolt so long as he remained in power. When, however, a weak but well intentioned Madero pressed the button and opened Pandora's Box, out flew the ancient wrongs and the thirst for revenge, and now neither military dictator nor civil tyrant can gather them up and put them back into the box.

"Is there no balm in Gilead; is there no physician there? Why then is not the health of the daughter of my people recovered?" One American magazine writer of some note says feudalism is the disease, and the remedy is to break up the large land-holdings and distribute the land among the people. But he is mistaken in his diagnosis. A mere landholding population composed of illiterate, immoral, thieving owners is not a valuable asset in the possessions of any nation. The agrarian problem here is indeed of grand importance and calls for a prompt and radical solution, but in reality it is nothing more than one of the elements in the main question, which is justice in its completest sense. This implies much more than the mere right to own, occupy, and cultivate a few acres. Every humblest citizen of this fair land must be instructed in the rights, duties, and obligations attached to his citizenship. He must be made to understand that for the good of society his liberty must end where the rights of his neighbor begin. He must be brought to realize that the prevailing system of shuffling concubinage that has taken the place of lawful marriage throughout rural Mexico is subversive of the foundations of the social order. He must learn that industrious, sober, frugal living is essential to the contented home life of the people. And he must have learned at last that all these things taken together mark the degree of civilization to which any nation has developed. The Mexican people

do not at present know any of these things. Their thoughts have never been pointed in those directions. On the contrary, whether logically or not, perhaps through the influence of example more than anything else, they have come to believe that if it is not wrong for others to steal from them it cannot be very wrong for them to steal from others. A very simple conclusion.

Here, then, is the Mexican ulcer. "Is there no physician there?" Nothing has ever occurred in the history of the country, neither before nor since the Independence of 1810, to indicate that the governing class is animated by any ideals that lead along and through the path I have pointed out. It may be asserted without fear of contradiction that the lot of the indigenous people of Mexico is no better to-day than it was thirty, fifty, seventy-five years ago, and in many places the tendency has been steadily downward. There was undoubtedly a fine development of Mexico along some lines during the rule of Diaz, but the lines all terminated in the haciendas and bank accounts of a few wealthy families — nothing inured to the benefit of the common people. Was brigandage stopped? Yes, in the camino, but it was permitted to flourish in other places. What difference to one can it make who relieves him of his money so long as the separation is definitely accomplished? Recognizing the imperative necessity of educating the common people, the legislature has commanded the establishment of schools throughout all the rural districts, and for their support has authorized an appropriate tax. The schools are not established but the tax is collected annually and whisked off to some bourn from which no dollar ever returns.

There is but one way to accomplish the permanent pacification of Mexico, or of any other country for that matter, and that is through the elevation of the masses to a higher plane of living. The remedy is necessarily slow in its effect, but it is sure. It has been tried. Sixty-five years. ago New Mexico, Arizona, and California exchanged their Mexican ideals for a new set. They turned their backs upon their antique past of disorder, brigandage, and

revolutions, and entered at once the serenely peaceful path that leads to intellectual, moral, and material prosperity. They have resolutely continued in that path, have already become a wealthy, contented people. What New Mexico, Arizona, and California once did, Sonora, Chihuahua, Durango, and all the rest of the Mexican states may do for themselves through the same instrumentalities.

This is not to be taken as meaning that our people should hasten to pick up "The White Man's Burden," or in any other manner intervene in the present disturbed affairs of this country. Except Except in the single element of distance in one case and contiguity in the other, the burden of the Philippines would fall to third or fourth

place when compared with the burden of Mexico, and only in the very last extremity should the American people take upon themselves this fifty to seventy-five year responsibility.

This is a picture which it would be well for every American to ponder seriously when he talks of our duty toward Mexico. There are eleven million people in desperate need of political tutelage, a tutelage that would last for generations. Yet above everything else they do not want American guidance. If we should help them it would be against their will and our every move would be viewed with hostility and suspicion. And Mexico is a vast and difficult country in which to maintain order.

WAS once fortunate enough to spend a hot January afternoon in Manila with a distinguished Filipino citizen, who has held high office under the Spanish Government, under Aguinaldo, and under the American administration. He had traveled far, read much, and acquired that rare ability of detached and impartial discussion of his own country. We were talking of patriotism.

"I have the highest patriotism," he said, "because I love my country, though it has little of which I can be proud. We are We are still a dependent people. Spain brought us our religion, to which we have added nothing, nor have Filipinos attained high place in the Church. We have been devout Christians for almost three centuries, but have sent no missionaries to our heathen neighbors. Instead, we are a part of the great mission field. We have in Manila Spanish universities older than

either Harvard or Yale. We have contributed nothing to education and no graduates are able to hold better than intermediate positions in the educational system America has introduced here. We have invented nothing, nor have we improved any of the foreign inventions we use. We build no ships. There is no Filipino merchant and no Filipino bank. The world has yet to know the Filipino painter, sculptor, or musician. We have produced one painter, Juan Luna, and a few distinguished lawyers, but we have no railroad builders, no engineers, no architects. chitects. Foreigners have done everything to develop art and literature here, and to give us a standard of ideals, ard they must continue to do so, for some time at least, if we are to continue to make progress in civilization."

More than three hundred years ago, Spain, incident to the rule of the Islands

It

began pouring her talent into them. It was not always the best Spain had, but in the long list of officials, priests, merchants, and travelers there were many of more than ordinary ability. Later, rich Filipinos sent their sons to study in Europe and these returned to their native land after years of contact with the best thought of Europe. Still later, America took the place of Spain as a civilizing agent, and sent her thousands to the Philippines. For two hundred years longer than the existence of the United States the progress of the Philippines has been initiated and

aided by forces from without. It is a good time, because of the somewhat insistent demands for political independence, to cast up the account: to see what Filipinos have accomplished for themselves; what they have contributed to the progress of the world in payment for the debt they owe; how far they have achieved other than political independence.

It is peculiarly appropriate, in this measure of achievement, to give first consideration to religion, the most powerful and usually the first motive for the development of individual thought. Europeans had their wars for religious freedom long

before they began to fight for personal rights. The Filipinos occupy a peculiar position in the religious world, for they are the only Christian Orientals, the only Christian Malays, as the result of one of the most successful missionary enterprises ever undertaken. All who count in the affairs of the Islands are Christian, and almost as completely Roman Catholic. In few other countries can Christians be found who are so punctilious in observing the forms of their religion, and so apparently devout. But three centuries have failed to produce a Filipino churchman of note and, to the present time, the affairs of the Catholic Church and of other denominations are administered by foreigners, with Filipinos occupying only minor positions as parish priests. The striking fact is that they should have remained so loyal without attaining any position of importance in the Church.

A similar domination by foreigners is found in the field of business. In the import and export trade of the Islands, the Filipino is a force of no importance what

The rapidly growing foreign commerce of the Islands is entirely in the hands of Americans, English, Germans, Spaniards, and Chinese, who face no Filipino competition present or prospective. It is not extraordinary that the bulk of this trade should be in the hands of foreigners. Even in China, the natives have a minor share of the foreign trade which was developed by foreigners and has naturally remained in their hands. The Chinese are now preparing to take a larger share of this trade, following the example of the Japanese who are gradually crowding out the foreign exporters. In no other civilized country do the natives occupy such a negligible position as in the Philippines.

In the domestic retail trade the dependence of the Filipino is more strikingly shown, for the 50,000 Chinese in the Islands control 90 per cent. of its entire volume. There are practically no Filipino stores except the few small places conducted by Filipino women for the sale of nativemade hats and cloth. There is no Filipino bank; the development of no one of the many industries of the Islands can be attri