will, in the words of Secretary Root, "close the door to temptation." Each consular officer is now provided with official adhesive stamps of various denominations. Whenever he is required to perform an official act for which a fee is charged, stamps to the amount of the fee must be attached to the document and cancelled. Without such procedure the consular or notorial act is invalid.

The law of April 5 contains other features of reform of less importance than those here mentioned. On the whole, the provisions it makes for reorganizing the service are satisfactory as far as they go. The act itself is not sufficiently far-reaching in its application, however, to eliminate certain specific evils. This is due, as already suggested, to the action of the Senate in striking out from the original bill those sections which related to the method which should govern first appointments to the lower grades and promotions to the higher ones. The avowed ground for omitting these clauses was that they infringed upon the President's power to appoint consuls, as provided by the Constitution. It is well known, however, that the real cause of the Senate's action was the fear that any disturbance of the long-standing spoils system of appointment would interfere with the political patronage of the senators. Secretary Root, who had given his valuable support to the reform movement, and who, with Senator Lodge, had framed the original bill, was not satisfied to allow the Senate thus to hamper the desired reforms. Accordingly, an executive order was drafted, embodying the principal features of the bill which had been dropped out by the Senate. This order was issued by the president on June 27, 1906.

It provided that vacancies in the office of consul-general, and of consul above class eight shall be filled by promoting those officials in the lower grades of the service who have satisfactorily demonstrated their ability and efficiency. Moreover, employees in the Department of State drawing at least $2,000 yearly salary are eligible for promotion to any grade of the consular service above the eighth class of consuls. Such advancement is conditioned upon faithful and meritorious work already performed in the department. Original appointments to the higher and better paid classes of consulates are now made impossible. These positions are reserved for those who have been recognized as val

uable public servants in the lower grades. Thus an incentive is given to the faithful performance of duty on the part of every consular officer occupying any position from the lowest to the highest.

The conditions underlying appointments to the two lowest grades of consuls, viz., the eighth and ninth, are as follows:1. Vacancies shall be filled by the appointment of candidates who have satisfactorily passed an examination for a position in these grades. 2. Consular clerks, vice-consuls, deputy-consuls, student-interpreters and consular agents who have entered the service upon examination, may be promoted to the rank of consul on the merit basis.

The board of examiners for admission to the two lowest grades must be composed of an officer from the Department of State, the Chief of the Consular Bureau, and the head examiner of the Civil Service Commission or an appointee of the latter.1 The examination is non-competitive in that it is open only to those candidates who have been approved by the president. The scope and method of the examination as well as the rules which govern it are determined by the board. It is imperative, however, that among the subjects prescribed there shall be included at least one modern language (French, German or Spanish); the natural and industrial resources of the United States; commerce, especially with reference to the possibility of increasing the trade of this country with foreign nations; political economy; and the elements of international, commercial, and maritime law. Moreover, those candidates who wish to qualify for appointment to consulates in countries where the United States exercises extraterritorial jurisdiction, must also pass an examination in the fundamental principles of the common law, the rules of evidence, and the trial of civil and criminal cases.2

The regulations which are to govern these examinations were

1 The present board of examiners consists of Huntington Wilson, Third Assistant Secretary of State; Wilbur J. Carr, Chief, Consular Bureau, and F. M. Kiggins, Chief Examiner, Civil Service Commission..

For the full text of the Executive Order of June 27, 1906, see pp. 7-8 of Diplomatic and Consular Service of the United States (corrected to January 21, 1907), published by the Department of State, Washington, D.C.

first published on December 13, 1906. The questions requiring written answers are the same for all candidates whether their authorization to be examined be for an appointment in the eighth or the ninth class of consuls. Furthermore, the written test is supplemented by an oral one-each counting equally. This is certainly commendable, for in order to choose the best available men for the service, a written examination alone is inadequate. The object of the oral test is "to determine the candidate's business ability, alertness, general contemporary information and natural. fitness for the service, including moral, mental and physical qualifications, character, address, general education and good command of English." The board of examiners, in accordance with the power vested in them by the President's executive order of June 27, 1906, have supplemented the examination subjects specified therein as imperative by four others, viz., American history, government and institutions; political and commercial geography; arithmetic; and modern history (since 1850) of Europe, South America and the Far East.

The first examinations for admission into the consular service since the recent reorganization were held, under the above regulations, at the Department of State on March 14 and 15 last.2 On this occasion eighteen candidates, who previously had been authorized by the President, presented themselves. Of these, ten fulfilled the requirements, having made at least 80 per cent. on the combined written and oral examinations. Seven already have received appointments.3 The next examinations will be held July 9.

It seems hardly possible as yet to determine just what inducements there are for young men desirous of following a consular career to prepare to enter the service. A reasonable probability of retention and promotion as a reward for good service should be assured. As matters stand at present, there is no guarantee

1 These regulations are contained in a pamphlet entitled, Information regarding appointments and promotions in the consular service of the United States, published by the Department of State, Washington, D.C.

* For a complete list of the examination questions in each subject prescribed for the written test, and for the relative weights of the various subjects, see Daily Consular and Trade Reports, No. 2834, April 3, 1907, pp. 12-14, and Information Regarding Appointments and Promotions in the Consular Service of the United States, published (1907) by the Department of State, Washington, D. C. * April 29.

that this system will continue to prevail. So long as the present administration is in power, however, there is every assurance that the merit system, as provided for in the executive order of June 27, will govern not only original appointments, but promotions as well. This was declared by Secretary Root, at the recent National Foreign Commerce Convention, to be the fixed policy at least until March 4, 1909. It is to be remembered, however, that the successor of President Roosevelt will not necessarily be bound to follow out the provisions of the latter's executive order. It is for this reason that a large faction of those who have worked most ardently to effect the recent reforms is now anxious that Congress should at least pass a resolution endorsing the President's action. Some such understanding between the Executive and Congress would, with reasonable certainty, provide for a continuation of the much needed reforms which have at last been brought about, and assure prospective candidates for consulships that a career in the service is an established fact. It is believed that the President himself would very much like to see the substance of his order at once enacted into law. That this is the feeling of the business and commercial interests is shown by the unanimous adoption of the following resolution at the National Foreign Commerce Convention at Washington, D. C., on January 16, 1907:

"Resolved, That Congress be strongly urged to enact into law the substance of the President's executive order of June 27, 1906, applying the merit system of appointment and promotion in the consular service, to the end that the approval of all branches of the government may thus be stamped upon the measure, and that it may become a permanent feature of the foreign service of the nation."

If some action is now taken so as to secure a perpetuation of the provisions of President Roosevelt's order, it seems but reasonable to expect that a wise application of its principles, coupled with the reforms effected by the Act of April 5, 1906, may soon result in the improvement of the personnel of the consular service, give it a permanence hitherto unknown, and make it an active ally of the great commercial and industrial interests of this country in the expansion of foreign commerce.

Yale University.

AVARD L. BISHOP.

OUR CURRENCY REFORM PROBLEM.

CONTENTS.

Inelasticity of national bank note currency, p. 56; its cause, p. 58; need for extra currency to handle the crops, p. 59; serious results of inelasticity, p. 60; contraction and inflation of the currency on account of its relation to the public debt, p. 61; danger of inflation in connection with the Panama Canal borrowing, p. 63; lessons from the experience of New England before the Civil War and of Canada, p. 65; artificial value of United States bonds and necessity of maintaining this value, p. 70; examination of the plans of reform proposed by the New York State Chamber of Commerce and the American Bankers' Association, p. 73; some objections answered, p. 75.

THE

HE present is a fitting time for a review of our currency situation, on account of the growing interest in the subject, the gradual realization of the evils, and a somewhat general agreement as to the main lines of the remedy required. It is proposed in this paper to describe the present situation in the United States, to show the defects in our system, and to point out the lines along which remedy should and probably will come.

One of the most important qualities of a good monetary system is that its volume should automatically correspond to the demand for a medium of exchange. This demand is subject to wide fluctuations on account of the varying volume of business to be transacted. In addition to the extraordinary causes of business expansion or depression, there are the regular payments of salaries, bills, etc., coming usually on the first of each month, the quarterly payments of interest, dividends, etc., and most important of all in the United States, the regular seasonal changes involved in the harvesting and moving of the crops every fall and early winter.

The monetary system of the United States may be divided into three groups: gold and silver coin; gold and silver certificates; and credit money, the latter including the United States notes, the treasury notes of 1890, and the national bank notes. In round. numbers we have in circulation about a billion dollars of each of these three kinds of money. Over long periods of time the volume