men of the detail work done by the modern German economists. It treats a very special problem. Its purpose is delineation, not argument, and every detail of the topic is treated with careful consideration, and the result is a model description. Our author finds the current conception of banking as the process of bringing into actual productive use momentarily unemployed capital, through the agency of deposits and discounts, too restricted. In Germany, at least, where the author had the benefit of practical observation, they perform another function of growing importance, namely, of placing permanent investments. German banks have peculiar facilities for this business, since their more important customers deposit with them their securities, thus enabling the banks to ascertain when money is free to seek investment, and when the reverse is the case. The process of placing loans, of operating conversions and of disposing of stock are discussed by our author in detail. The type of all these operations is the placing of loans of States or cities. The mode in which a syndicate is formed, the relations of the members, the mode of payment, the manner in which the bonds are sold and the means taken by the syndicate to sustain prices, form the material of his first division of the work. In the second and third the case of conversion of outstanding obligations, and of the new stocks of companies, are discussed in their slight variations from the type. Not to go further into the details of the work, it is enough to say that it gives us an instructive glimpse of the activity of German banks and exchanges. It furnishes us with information for Germany which is not attainable for the United States, and incidentally throws light upon some of the problems of corporations which we are preparing for the future, but which in Germany have already reached an acute stage.

In the appendix the author gives the regulations of the Berlin Exchange on the listing of new bonds and stocks, a list for the years 1888 and 1889 of the bonds, stocks and conversions entered in Berlin, with amounts, terms of

sale, etc., and a list of stock companies founded in Germany in the same years. An examination of these documents will be repaid by the discovery of curious divergencies from American banking practices. R. P. F.

PRINCIPLES OF ECONOMICS. By Alfred Marshall, Professor of Political Economy in the University of Cambridge. MacMillan & Co., London and New York, 1890. Vol. I, pp. xxviii, 754.

The publication of this book is a scientific event of the first magnitude. Announcement was made some time ago that Professor Marshall was preparing an extensive treatise on the Principles of Economics, and students were prepared to find it a well-thought-out and scholarly work. But it is safe to say that very few anticipated a work of such scope, of such fresh interest, of such exhaustive information, of such breadth and thoroughness of method as this proves to be in fact. To call it the greatest systematic work since Mill is to speak far within the truth, for the only other book to which it can be compared is "The Wealth of Nations." It does for political economy in the last decade of the nineteenth century what Smith did in the last quarter of the eighteenth, and what Mill did after the discussion of two generations had apparently fixed the fundamental lines. It gathers and sifts the store of economic knowledge. It reconstructs the whole body of doc. trine on broader grounds and in that new spirit, at once more liberal and more severely scientific, that has characterized every department of thought in these later years. It so marks the close of one scientific period and the beginning of another that in future advanced discussion must start from Marshall as hitherto from Mill.

To attempt a carefully critical review of such a book on the basis of a first reading would be absurd. Its merits and defects must be revealed by time, through much investigation and reflection. The most useful notice that can

be put before the Academy at this time is one merely describing the work in its more essential features.

There could hardly be a more interesting testimony to the radical change that scientific thought has undergone under the influence of evolutionary ideas than is offered in these pages. The principle of continuity has become cardinal in all interpretations of the phenomena of thought and affairs as of those of the physical world, and Professor Marshall has for the first time applied this principal thoroughly and consistently to economic theory. Two kinds of influences, he says, have most affected the substance of the views expressed in his book. These are modern biological conceptions as represented in the writings of Mr. Herbert Spencer, and conceptions of historical development, as represented, first, in Hegel's Philosophy of History, and, more recently, in ethico-historical studies on the continent and elsewhere. Professor Marshall's familiarity with the thought of the two authors named, Spencer and Hegel, appears often in his chapters, and gives a pleasant philosophical tone to his discussions, without any touch of pedantry.

Thus while Mill, writing in a spirit of the inflexible utilitarianism of Bentham, regarded economic theory as substantially complete and crystallized, Marshall, writing in the spirit of a philosophy that regards human society as organic, flexible and growing, views economic science as plastic, and holds all definitions incomplete or inexact save as they are modified by an interpretation clause in nearly every case of application. It goes with this that our author knows no "school" in economic science. He has no use for the shibboleths of "orthodox" and "historical." Deduction and induction, analysis and observation, are all alike good instruments to him. He neither breaks with the old economy nor accepts it as final. "Some of the best work of the present generation has indeed appeared at first sight to be antagonistic to that of earlier writers; but when it has had time to settle down into its proper

place, and its rough edges have been worn away, it has been found to involve no real breach of continuity in the development of science. The new doctrines have supplemented the older, have extended, developed, and sometimes corrected them, and often have given them a different tone by a new distribution of emphasis; but very seldom have subverted them." The treatise is therefore "an attempt to present a modern version of the old doctrines with the aid of the new work, and with reference to the new problems of our own age."

While these influences have determined the substance of Professor Marshall's views, their form has been most affected by mathematical conceptions of continuity as represented in Cournot's Principes Mathematiques de la Theorie des Richesses. Under the guidance of Cournot, and in a less degree of Von Thûnen, Professor Marshall says he was led to attach importance to the fact that observations of nature in the moral as in the physical world relate less to aggregate of quantities than to increments of quantities, and, in particular, that the demand for a thing is a continuous function, of which the marginal increment is, in stable equilibrium, balanced against the corresponding increment of its cost of production. Nevertheless the book is not written in mathematical symbolism. Diagrams, especially the interesting rectangular hyperbolas that Professor Marshall has long used with his students and which have been privately circulated among leading European economists, are freely used in the notes, and Professor Marshall thinks there are many problems of pure theory that no one who has learned to use diagrams will willingly handle in any other way, but he has taken pains not to make the argument of his text dependent upon them.

The influence of mathematical conceptions and of the work of Jevons and the Austrians, has extended to the partition of the science and the logical arrangement of topics. The theory of consumption, which in the older works was little more than an appendix, is brought into the fore

ground, and the theory of distribution is merged with that of exchange. The volume is divided into seven books. The first is a preliminary survey, including a historical review of the growth of free industry and enterprise, a review of the growth of economic science, and chapters on methods of study, economic motives and the nature of economic law. These chapters are characterized by great breadth of view and a certain fine accuracy of scientific instinct. For example, the controversy whether economics can regard man as influenced by other motives than those of self-interest is transcended in Professor Marshall's discussion, because he goes straight through to the more fundamental principle that economics does not regard man as merely selfish, but concerns itself chiefly with those motives that are measurable, and whose action can therefore be reduced to law and made the subject of scientific treatment. The range of economic measurement may gradually extend beyond the business work that has an accurate money measure to much philanthropic action, and already the motives to collective action are recognized as of great and growing importance to the economist. Again, the chapter on economic law may be commended equally to those who regard economic law as no less simple than physical law and those who deny altogether the reality of natural law in social phenomena.

The second book, on "Some Fundamental Notions," is devoted to a consideration of the terms "wealth," " "productive" and "unproductive," "necessaries," "capital" and "income." The principle of continuity is here used with results that are most admirable. Professor Marshall refuses either to draw hard and fast lines of definition about things that in fact shade imperceptibly into one another, or to invent new technical terms to express niceties of meaning. He would retain the old terms in their broad signification, and have writers form the habit of expressing gradations of thought by interpretation clauses. Thus, wealth should include, in economics as in popular thought,