antiquated and mismanaged properties. The opportunity was a great one; and, moreover, it had been so obvious for a number of years that it is incomprehensible why English energy and capital were not equal to handling it.

Our Growing Seaports.

The general development of our export trade has had the interesting

effect of increasing the relative activity of several of our seaports, and thus reducing somewhat the too heavy proportion of the foreign business cleared through the port of New York. We were doing a large export business in the spring and early summer of last year; but the gains of this year over last, as indicated in the statistics of the last few weeks, are nothing short of startling. The greatest gains have been in cotton and cattle, with a good gain also in breadstuffs. As the result especially of the great export business in cotton, aided by the increased movement of cereals through Southern ports, New Orleans has for the first time taken a place next to New York as respects the value of its export trade, thus displacing Boston. In the year 1900, New York was credited with only 47 per cent. of the total foreign commerce of the country, as against an average of more than 50 per cent. for several previous years. New York still continues to receive considerably more than 60 per cent. (in value) of the country's imports, but last year it handled only about 37 per cent. of the exports. Boston and Philadelphia have been comparatively stable in the volume of their foreign trade, while Baltimore, Newport News,

New Orleans, and Galveston have made great gains, -as also have the Pacific coast ports, owing to the progress of our Oriental trade.

Volume

Trade.

The fiscal year ending June 30 will of Our Foreign probably have shown a total export trade exceeding $1,500,000,000. The figures for eleven months of the year, as announced in the middle of June, showed nearly $100,000,000 gain over the corresponding period of the previous year, with every prospect that the remaining month of the year would show the same rate of gain. The imports for eleven months of the present fiscal year were valued, in round figures, at $755,000,000, this being $34,000,000 less than for the same period of the previous year. At this rate, the so-called balance of trade" in favor of the United States for the fiscal year now ending would have reached the colossal sum of about $700,000,000. No mistake should be made as to exactly what this implies. While it may justly be regarded as a mark of great prosperity on our part, it is also evidently enough an indication of vast purchasing power-that is to say, of great accumulated wealth-in the countries which take our meats and breadstuffs, our cotton and petroleum, and in increasing quantities our machinery and other manufactured goods. Colossal sums of European capital are still invested in the United States; and the amount of interest and dividend money that we are obliged to earn and pay over out of our gross product represents a large part of this great sum that we call the balance of trade in our favor. The real

balances as between nations can never be properly shown until some reasonably accurate estimate is made of what is due to invested capital.

Growth in Four

The

Enormous It is to be noted, on the other hand, Years of Amer-however, that the interest account of ican Capital. Europe against the United States is steadily diminishing, because Americans have been using their surplus wealth during recent years to buy back their own securities. process by which this comes about is, of course, indirect and not perceived by the average man. It represents, none the less, one of the strongest currents in the financial and business world, for four years past. The great railroad corporations in particular are observing the fact that, whereas their payments of interest on bonds and of dividends on shares of stock a few years ago went in large proportion to foreign holders, they now go in the main to people living in the United States. The absorption of our best American railway and other standard securities by American investors has been quite widely distributed, but it has been particularly noticeable in the case of great financial and fiduciary institutions like the principal insurance companies. Furthermore, the very process and policy of railway amalgamation has of itself created a large and determined demand for railway securities in this country on the part of the interests seeking to control specified properties for the sake of bring. ing about their absorption, or else their operation in harmony with other companies. Our trade balances for the past four years have ag.

gregated about $2,400,000,000.-a sum about equal to the total of the balances in our favor for the preceding twenty years. Nothing could better illustrate the almost revolutionary nature of the change in America's financial and economic relations to Europe.

The Supreme

The Supreme Court of the United Court and the States interprets the Constitution only Insular Cases. incidentally, as practical cases arise which involve constitutional questions. Thus, the recent decisions in the so-called insular cases have not by any means directly and finally settled all the various questions which have been raised respecting the status of Porto Rico, Hawaii, and the Philippines. Some of the cases that have been pending still remain in the hands of the court for future decision. Those that have now been decided, while sustaining what has always seemed to us the only reasonable and tenable position, have, unfortunately, lacked the full support of the court itself, five justices sustaining the main conclusions and four dissenting. The court has, after all, merely decided that the term United States has more than one meaning. So far as foreign countries are concerned, Ari. zona and New Mexico are a part of the United States, and so also now are Porto Rico and Hawaii; but so far as we ourselves are concerned in our own strictly domestic governmental organization, Arizona and Hawaii are not a part of the United States, because they have never been admitted to the union of States, but are merely territories subject to the jurisdiction of the United States, and to be governed by Congress as directed by the Constitution. The Constitution does not extend of itself to the possessions of the United States, but it extends over Congress, which must be controlled in its treatment of territory belonging to the United States by any directions or limitations contained in the Constitution. Thus, Congress may not authorize or permit slavery in the territories, because the Constitution expressly forbids it to do so, but it may make any tariff arrangements it likes between the United States and the territories.

might arise to extend their territorial jurisdic tion. The primary object of the American Constitution was to arrange an effective and permanent scheme of partnership and union for a group of associated States which were not suitably organized under the old Articles of Confederation. It was taken as a matter of course from the very beginning that this partnership should constitute an authority capable of acquiring and governing outside territory. If, indeed, the great expanses of territory that were acquired one after another were for the most part somewhat rapidly formed into States which in quick order were accepted as members of the partnership, this course of proceeding was not in the least due to any constitutional obligations, but solely to the fact that it accorded with the interests and inclination of the American people to follow just that line of action. In other words, the United States, quite apart from any obligations incurred by treaty, or agreements of any other sort, rested under no temptation whatever to hold the great Northwestern Territory or the lands of the Louisiana Purchase in political subjection and bondage. The gentlemen who have been using the word empire so freely as a term of reproach to the present administration, and to the Supreme Court on account of its recent decisions, do not seem to have kept in mind the essential nature of governmental and political institutions.

The people of the United States are Questions of Policy, Not of not aware of the slightest temptation Organic Law. to hold any other people in subjection. They have not hitherto kept Arizona and New Mexico out of the Union through any pleasure or profit they can obtain from the existing status of those territories, but simply because Arizona and New Mexico have not as yet become sufficiently developed in population, resources, or stable institutions to entitle them to an equal place in the Senate with the great States of the Union. Meanwhile, for all practical purposes, they exercise self-government as unrestrainedly as their people could in reason desire. They are not separated by tariff walls from the United States, for the plain reason that it would be in every way inconvenient and useless thus to separate them, and no sane person could advance any common-sense argument for doing anything of the kind. According to the prevailing views of the people of the United States, the burden of proof must rest altogether with those who would interpose any kind of obstacles to freedom of commerce between different parts of the territories under the jurisdiction of the United States. Because, therefore, the Supreme Court has now sustained the view that there may be tariff

All

charges upon commerce between Porto Rico and the United States proper, it does not follow that the natural policy of the country will be affected in the slightest degree. the arguments of a more general sort remain, as heretofore, in favor of the policy that had already been decided upon-namely, that of unrestricted trade relations. As to the Philippine Islands, the commercial policy will simply have to be worked out on its merits as the situation develops. One of the infirmities of the American mind is its unbridled eagerness to rush to ultimate conclusions. While, on the one hand, there can be no common sense in advocating the present admission of Porto Rico to the Union, there could, on the other hand, be small common sense in attempting to prove that at some future time under changed conditions Porto Rico ought not to be admitted and given its due quota of representation at Washington. Several of the cases before the Supreme Court dealt with questions of a temporary nature, having to do with the status of Porto Rico before the treaty of peace with Spain was signed and its status after the treaty, but before Congress had acted. These questions have only a slight importance. The main thing that has been decided thus far is that the Constitution of the United States is not a document that is going to interfere with the people of the United States in their proposal to do the very best thing that they can from time to time in providing for the government, develop. ment, and true progress of the territories that they have acquired by recent annexation.

nounced the decision of the court on the main question, were Justices Gray, White, McKenna, and Shiras, while dissenting were Chief Justice Fuller, and Justices Harlan, Brewer, and Peckham.

In the decision that the President had no right to maintain the tariff with Porto Rico in the brief period between the treaty of peace and the passage of the Foraker act, Justice Brown was sustained by the four who had not agreed with him in the other case, that is to say, the view that had been presented by Attorney-General Griggs on behalf of the Administration was steadily supported by Justices Gray, White, McKenna, and Shiras, Justice Brown being with them on the main issue. Chief Justice Fuller's dissenting argument was highly ingenious, and it was strengthened by some of the early decisions. of the Supreme Court. The fact is that the precedents have not been consistent, although the general trend of things has been toward the position that has now become completely established as the result of the Spanish War. The conflict of theories was really settled a generation ago, not by the arguments of constitutional lawyers, or the interpretations of the Supreme judiciary, but by the arbitrament of civil war. It may be true that Mr. Calhoun's views of the Constitution be

Justice McKenna. Justice Brown.

fore the Civil War were more strictly justifiable in pure logic than those of the opposing nationalistic school; but the Civil War forever destroyed the strict and narrow theory of the Constitution and the Government, and made us in the full sense a modern nation. In connection with the very instructive and readably presented opinions of the court in these latest cases, we beg to suggest the reading of two new books. of these is Mr. Winston Churchill's masterly novel The Crisis," in which one finds a true setting forth of the culmination of the struggle between the rival theories. The other is Dr. Curry's little volume on the "Civil History of the Confeder acy," which begins with an authoritative account of the old Southern view.

Our

Horizons.

One

Now it was inevitable that after a Extended period of two or three decades spent in readjusting ourselves in our domestic political life to the new order of things, and in acquiring, moreover, the full mastery of our own industrial markets, we should begin to extend our horizons, both of politics and of trade. Thus, the decision of the Supreme Court, which means that we are not to be hampered in our serious policies by the ingenious use of logic in

interpretation of an ancient document that was never intended to hamper posterity, has had a reassuring effect upon trade and industry, and has lent its influence to the steadying of agricultural prices and the encouragement of all kinds of business enterprises. It means that our prestige in Europe is not weakened by the disclosure of embarrassing limitations upon the nature and scope of our Government that would put us at a disadvantage in the legitimate rivalry for commerce and world-wide influence.

Improvement

to compel-first, the attention of all intelligent men; second, their respect; third, their confidence; and, finally, their allegiance and coöperation. Among other important things, the commission has completed a new code of laws, has arranged a judiciary system, and has appointed the judges and law officers. While the intention has been, in appointing judges, to give the preference to Filipinos, it has also been decided that efficiency must be the first consideration; and thus, while the Chief Justice, Arellano, is a native, four out of six of the associate justices are Americans. The Attorney-General is an American, while his assistant is a Filipino, as also is the SolicitorGeneral. Five out of eleven judges of the socalled Courts of First Instance are Filipinos.

On the strength of these decisions the in the Administration has felt encouraged Philippines. to redouble its efforts to establish normal conditions in the Philippines. Even while men were continuing to ask one another how we were ever to get out of our desperate predicament in those islands,-with its prospect of ten years more of dreary warfare, and the certainty of an ever-growing hatred on the part of the Filipinos toward the very name of America,the terrors of the problem had been disappearing like a morning mist before the rising sun. work of the Taft Commission is probably unprecedented in the entire history of public administration. In the face of what seemed the most discouraging conditions, this commission composed of men of unimpeachable honesty and high-mindedness, well qualified to deal both with men and with difficult questions of government and civil society-proceeded to the islands and laid hold of its work in a manner that was bound

The

It is reported that the promptness Other Philip and directness with which American pine Notes. legal procedure dealt with the persons guilty of frauds in the commissary service of the United States has had a favorable impression upon the intelligent natives. Some of the former insurgent leaders have been appointed to responsible posts, and thus General Trias is now Governor of the Province of Cavite, while Flores is Governor of the Province of Rizal, this name having been given to a jurisdiction composed of Manila and Morong. A modern American fire department is about to be established for Manila; and this item is merely an illustration of the spirit of progress that the Americans are introducing with the establishment of peace. One of the most important things to be noted is the sending of several hundreds of American teachers, who are to reach Manila by the middle of August, the great majority of these being men. They are all of approved qualifications, and they will be used for a widespread reorganization of elementary education. Several Congressmen, including Mr. Hull, the chairman of the House Committee on Military Affairs, are visiting the Philippines, and a number of officials connected with the War Department or staff bureaus at Washington are to make the journey this summer, these including Adjutant-General Corbin, Surgeon-General Sternberg, General Greely (Chief Signal Offi cer), and Inspector-General Breckenridge. Secretary Root has been obliged to give up his plan of accompanying these officers. General Chaffee, who is to assume command, arrived at Manila last month, and General MacArthur was announced as expecting to sail for home by way of Japan on July 1. Few casualties to the American troops have been reported, while on the other hand the insurgent bodies have continued to surrender and give up their arms. The policy of releasing insurgent prisoners has been con

DECISIONS

FOGGY WEATHER IN PHILIPPINE WATERS TRUST THE

PILOT.--From the Inquirer (Philadelphia).