We were in the custom-house. The missionary's wife, thin, pale, shabby, quietly executive, and a lady, kept order among her children in a corner of the great bare, overlighted, ugly place, and beside her sat Teddy Catty with his hat pulled over his eyes.

I felt that I could not speak to him there,to do so would, it seemed, emphasize the cruel, bold publicity of the place,-so I went to where the missionary stood over his bags and boxesa queer lot-and asked him, if the worthlessness of the words did not choke him, to tell the boy good-by for us, and to say that we felt for him. I stopped short, shamed with the thought of how little we felt, realizing for once not only the powerlessness of human sympathy but its painfully absurd deficiency in quantity, the unnecessary thickness of our wadding of stupidity. Then I reflected, as I stood there, that this whole little episode of our acquaintance with the missionary and the clown, so slight, yet so dyed in the primary colors of life, its grotesqueness and comedy and inconsequence, its mystery and tragedy, was ending, or rather, as is the way of life, fading, wilting, passing, like a cloud, into something else, and that soon the quaint pair would exist for me no more; and I rebelled against the mutability of existence. I said to the missionary: "I shall be in London in a week or two. I don't suppose I'll ever be the least good to you or to Teddy Catty, and there is no reason in keeping up such an acquaintance as ours; but for no smaller reason than that we are all human beings-"The missionary's eyes responded so adequately with humor and a good deal beside that for a moment it did not occur to me to finish my sentence, and then I concluded, "let me come to see you or your wife a moment to hear how things are. You'll probably know something of Teddy Catty for as much as a fortnight longer." Yes, he thought his friendship with the clown might survive all-devouring time so long, and he said he would be glad to see me again.

Yet I had been in London a week, and had not looked up my fellow-passengers, when one day as Amy and I were going through the amazingly crowded rooms of the Royal Academy whom should we see but the clown! He was sitting on one of the divans, dressed in the conventional mourning of a law-loving Englishman, a frock coat and a crape-banded silk hat dignifying Teddy Catty's little figure. We saw him furtively wipe his eyes as he gazed at the gilt-and-canvas-covered wall before him, and we knew Emmy's picture was there. We soon found it; it was a little one, hung rather high, and, like several thousand others in that home

dull, conventional. Whatever had been in poor Emmy's heart when she painted it was concealed under a false, frigid method faithfully carried out.

Teddy's face worked convulsively for a moment when he saw us, then he pointed out the picture and gave us his place to sit in while we gazed. There was plainly no need of talking about it; he did not think of comment as becoming the occasion.

"It belonged to one of the dressers in the theater," he said softly after a time. "She had a lot of children, and her husband died, and— Emmy-Emmy helped her, and she was tremendously fond of that baby. She used to keep it at the house days and days to get chances to paint it." Teddy's voice failed him again.

After a while in the moving of the throng he got a seat beside us, and I noted as if it were something surprising that in taking it he arranged his coat-tails with the same little odd funniness of movement as of old; it did seem quite strange for a moment that his grief had not lifted him into ideal grace. He looked from one to the other of us and said, "I was going to try some way to see you ladies, but the missionary said you were going to come to see him. I wanted to tell you that I'm going back with him to China, and I 'd never have known him if it had n't been for you."

"Going with him?”

"Yes, Miss Milman; I'm going to see if I can help him-help him be a missionary, you know." Teddy's unfamiliarity with the phrases of the "work" pleased my ear. "I've got a little money," he went on, "and I feel as if I'd like to do something-something religious sometime, and it seems as if this was my chance. I fancy Emmy would like it. But I never could turn in with church or chapel people here at home, I know I could n't. They think a circus man ought to repent a lot, you know, and that I ought to throw over the show business for good, and I don't see how I can, and I don't know that I want to. Long as Emmy did n't cut it altogether I don't know as I want to." "But-what-how are you going to manage out in China?"

"Why, you know the missionary 's different from most religious folks; he just takes things naturally; and I 've some money by me, and Emmy left me a little-" He stopped a moment and stared fixedly into space, then, shifting his position a little, went on in a different tone: "I can go out there, and then he says he can give me things to do for him as a lay worker,- that's what he calls it,—and that I can be some use to him, and that it 'll be easier for me to be in good standing there than here. I don't care

how it is, but I'd like to stay with him awhile and do something some way for religion, you know, the real thing. Yes," in answer to a question, "I suppose I'll come back and go in the circus after my money 's all gone. They 'd never want to support me as if I was a real missionary. I would n't be worth it; but they'll let me be a Christian there."

We shook hands with Teddy Catty at the door of Burlington House, and I saw him no more; but when I called on the missionary he confirmed the story of these queer plans.

"Yes," he said; "Teddy seems so little capable of the ordinary ways of entering into and feeling about the religious life that I don't know what channel of usefulness would be open to him here. He wants to come with me, and it seems to me it is a good step; things are simpler out there. About his coming back-I don't think he 'll come back. I think in time

he can be taken fully into the work. If he does return, why, he 'll have a fuller religious experience than he has now to fall back on."

And so, thanks somewhat to two highly modern young women professing grave philosophical doubts of the wisdom of foreign missions, this curious transaction came actually to pass, and the only circus clown I ever knew, without renouncing what I shall call his art, sailed away to China as a Christian missionary.

No philosophical doubts could stop us from bidding him God-speed, nor have they quenched, since that day, a high degree of interest in Chinese missions.

Teddy Catty has not yet returned. We feel it would be piquant to see him again fill his place in the ring, but, withal, other than artistic sentiments will make us contented if the missionary's prediction comes true, and the circus knows him no more.

Viola Roseboro'.

Ν

The Argentine Cheap Money Paradise.

could go to the bank and secure a loan for half its value, which was to be fixed by the bank's appraisers. The

Argentine Republic is passing, in an attempt to increase the general prosperity by making money cheap and plentiful, comes closer to the American people than any of the similar efforts in other countries which have been described in previous numbers of THE CENTURY. The government of the Argentine Republic is closely modeled upon that of the United States. It is a country of almost boundless natural resources, whose development has been so rapid as to be almost without parallel in history, and whose growth in wealth, prosperity, and commercial importance has been so nearly approached by no other country in the world as by America. Its people are an energetic, buoyant, selfconfident race, full of pride in their country and inclined to the belief that it is capable of withstanding any strain that may be put upon it. Yet, rich and prosperous as they were, these people conceived the idea, when a slight check to their development was felt a few years ago, that what they needed in order to attain the full measure of their prosperity was to make money "cheap and plenty." Perceiving the importance of their experience as an object-lesson for our own country, bearing as it does directly upon discussion and propositions current here, we have gone thoroughly into the matter, examining all available sources of information, and have thus been able to prepare for our readers what we believe to be the most complete as well as accurate account yet published.

In 1873 there was established in the capital city of the Argentine Republic, Buenos Ayres, the Hypothecary or Mortgage Bank, whose main object was to make loans on all kinds of landed property. The principles upon which these loans were to be made were much the same as Senator Stanford is advocating as a basis for similar loans by the United States Government. Any person owning landed property in the province

was to run for twenty-four years, at from six to eight per cent. interest, two per cent. amortization, and one per cent. commission. The interest was payable quarterly, and there were coupons attached for the twentyfour years. The cédulas were issued in alphabetical series, beginning with A and running to P. They were bought and sold on the Bolsa or Stock Exchange, and from their first issue became an important element in speculation. The first issue of series A was between $13,000,000 and $14,000,000, the Argentine dollar being about ninety-six cents of our money, being based upon the unit of the French monetary system. These remained at par for only a short time after issue. They were quickly followed by others, until series A closed with a total issue of $27,394,000. Then came series B with an issue of $1,092,000, series C with $813,000, series D with $288,000, all at seven per cent. Then came series E with a total issue of $15,830,000 at six per cent., and F with a total issue of $6,100,000 at seven per cent. Ten years after the bank's establishment over $100,000,000 of these cédulas had been issued, all based, be it remembered, upon the landed property of a single province. They had from the outset been used for speculative purposes, and every year this use became more wild and reckless. A ring was formed between directors of the bank and certain favored brokers for the absolute control of the successive issues. No one could obtain concession for a loan who did not make application through these brokers, and in order that all the members of the ring might reap their share of the profit, the value of the property upon which the loans were placed was raised to extravagant figures.

The fictitious prosperity which the Hypothecary Bank brought to Buenos Ayres infected the entire republic, and in 1884 Congress passed a law annexing a National Hypothecary Bank to the National Bank,

which was the fiscal agent of the government and of all the provinces except Buenos Ayres. The issue of cédulas on the landed property of the nation was authorized, for fifty per cent. of its value, at interest from six to eight per cent., with two per cent. amortization and one per cent. commission, no single loan to exceed $250,000, and all payable at the end of twelve years. The issue of cédulas was at first limited to $40,000,000, but this was extended from time to time so that in November, 1890, six years after the National Bank began the experiment, it had out no less than $204,000,000 in gold, all bearing interest. The Buenos Ayres Bank had increased its issue of cédulas so that at the same date it had out no less than $330,000,000, but these were in paper, making the grand total of money which had been loaned upon land in the republic during seventeen years, $534,000,000, or over $140 for every man, woman, and child.

When the National Bank went into the hypothecary business in 1884 paper money was at par with gold. Several severe checks to the national prosperity were felt during that year. Cholera made necessary a rigorous quarantine against Mediterranean steamers and checked immigration. Heavy floods during the fall delayed the shipment of crops from the interior to the seaboard. A new government loan of $90,000,000 was to be placed, but the European market which was expected to take $10,000,000 of it was so nearly sated with Argentine investments of one kind or another that it declined to take more than $3,500,000.

In January, 1885, a run began upon the Provincial Bank of Buenos Ayres, and compelled it to suspend specie payments. Whereupon the President of the republic declared the national currency a legal tender. Gold rose at once to 17 per cent. premium, and then to 20 per cent. In February it had reached 33 per cent., and it continued to rise steadily till at one time it was at 300 per cent. That is to say, $400 in paper was worth only $100 in gold. From the moment that the gold standard was abandoned, the demand for more paper money began to be heard, and it was poured out by the government in almost unlimited volume. Under the pretense of creating a sounder financial system and securing a more stable currency, a law was passed in November, 1887, establishing a system of State Banks, forty in number, similar to our National Banks. These started with a capital of $350,000,000, and began to issue paper money, not being required, as our banks are, to be able at all times to redeem their notes with gold. When the premium on gold had reached 40 per cent. the government took the position that the increase was a trick of the brokers, and not in any way an outcome of currency inflation, and issued a decree allowing the banks to issue currency practically without limit. At the same time the government, to satisfy the demand for gold, and prove its belief in its own contentions, threw $30,000,000 of its gold reserves on the market. The gold premium continued to rise with no perceptible check, and as it rose the banks poured out more and more paper money in a frenzied attempt to check its upward flight.

It was discovered after a time that, through trickery, there were several millions more of this irredeemable paper money in circulation than had been supposed. A provision of the national banking law required that all banks reorganizing under it should withdraw and cancel

their old notes when they put their new ones in circulation. Several banks, in collusion with dishonest officials, violated this requirement, and kept a large part of their old issue in circulation with the new. At one time the amount of this fraudulent money, based on nothing whatever, amounted to $60,000,000. Some of this was afterward destroyed, but the latest official estimate put the amount still in circulation at over $35,000,000. As the latest attainable total of the regular paper issue of the banks places it at $345,000,000, the grand total of paper money in circulation in March of the present year, worth about 25 cents on a dollar, was $380,000,000, all irredeemable, and decreasing in value every day. This was a per capita circulation of $100 for every man, woman, and child in the republic. That ought certainly to have put "plenty of money in the pockets of the people,” for $100 is the highest sum per capita our wildest cheap money advocates have ever demanded.

With the entry of the National Bank into the business of loaning money on land, the whole country plunged into a wild debauch of speculation, which closely resembled that through which France passed when the same financial experiment was made under John Law's inspiration, as described in the preceding number of THE CENTURY. All kinds of property acquired a fictitious value, and were made the basis for loans at that valuation. The government, departing with complete abandon from all the limitations of legitimate government, helped on the popular furor by giving its aid and sanction to all kinds of mushroom banking, building, and colonization enterprises designed to "boom" the value of property and increase its loanable capacity. The country was sprinkled all over with banks pouring out millions of paper money which could never be redeemed, and thickly studded with inflated joint-stock companies with millions of capital on paper, whose business it was to get from the banks loans for many times the real value of the property upon which they were based. When the banks had exhausted all their capital in loans, the government, assuming their indebtedness, gave them millions of gold with which to continue the issue of cédulas. The business of speculating in gold became enormously profitable, and private banks made fortunes. Men made 10 per cent. per week in the business, and 20 to 24 per cent. per annum was the usual profit. A Bank of Construction was conceived and put in operation by a German Jew, which, in collusion with dishonest government officials, bought vast amounts of property, improved it, obtained exaggerated loans upon it, and sold it in such dishonest ways that the interest on the loans could never be collected. The Jew made a colossal fortune; the stock of his bank went to enormous figures on the Bolsa but, when the tide turned, fell 100 points in a single day, carrying ruin to hundreds of men who fancied themselves rich.

Many of the early cédulas had been sent abroad, and their ready sale in London, Paris and Berlin had encouraged their further issue. About $15,000,000 in all were taken abroad, and more would have been bought had not the European market been flooded with Argentine loans between 1881 and 1890. These were instituted or backed by the Argentine government, and consisted chiefly of loans either to the gov ernment or to provinces or to cities. They were for nearly every conceivable purpose, railways, harbors,

street paving, public buildings, school-houses, markets, tenement-houses, bridges, theaters, hospitals, boulevards, public squares, and drainage. In December, 1889, the aggregate of these loans, taken largely in England, was over $122,000,000 for the republic and over $193,500,000 for the provinces, and the total amount of gold which had to be exported annually from the Argentine Republic to pay the interest on its foreign indebtedness, and dividends on railway, bank, and other stocks held abroad, was over $75,000,000. With a foreign debt of $315,500,000, there had been accumulated at the close of 1889 an internal national debt of $207,000,000, and an internal provincial debt of $44,000,000, making at the close of that year a grand total debt of $566,500,000. This has since been increased to $772, 500,000. As the population of the republic is about 3,800,000, the debt is over $203 for every inhabitant. It is small wonder that under this mountain of debt the national government is bankrupt, having neither money nor credit, and that it anticipates a deficit for the current year of over $17,000,000. The provincial deficit for the current year is estimated at between $4,000,000 and $5,000,000, making a probable deficit in the whole republic of nearly or quite $22,000,000. Affairs have been going from bad to worse since the crisis of 1890. Credit practically collapsed in the spring of that year. After that time the provincial banks were not able to meet their obligations. The lands upon which loans were based became unsalable, cédulas dropped to 50 and even 35 cents on the dollar, which was equivalent to 13 and 9 cents respectively in gold. The paper dollar was worth about 25 cents. The Provincial Bank of Buenos Ayres, which was the savings bank of the working classes, stopped paying its obligations in 1890, and the National Bank passed its dividend. A revolution broke out, and though the government quelled it the President was forced to resign.

Investigations instituted by the new government into the condition of the banks revealed astounding rottenness and corruption. The whole power of the government was exerted for several months to prevent the National Bank and the Provincial Bank of Buenos Ayres from being publicly declared insolvent, but on April 8, 1891, the President gave up the struggle and issued a formal decree for the liquidation of both, all payments being suspended till June 1. The time was subsequently extended twenty days by Congress, and then extended indefinitely. This was the end, and the wreck of the banks was complete. In 1886 the National Bank had a capital of £10,000,000 sterling, and the Provincial Bank one of £8,000,000 sterling. Not a penny of the latter remained. The National Bank had lost £8,800,000 of its £10,000,000, and owed the gov ernment £14,000,000. These two banks had lost, therefore, during five years' experience with cheap money based on landed property, about £30,000,000 sterling, a sum more than double the capital of the Bank of England.

When the collapse came the nation gave itself over, as France had done two centuries earlier, to rage and despair. Men who were believed to be worth millions found themselves paupers. One man who had been worth $20,000,000, which he had accumulated during a lifetime's devotion to honest industry, but who had been tempted to venture it in speculation, lost every

dollar. He had just completed the building of a house of palatial magnificence, costing $180,000, but had never entered it, when the crisis came and it was taken to pay his debts. A United States minister to a South American government, who was in Buenos Ayres at the time, thus describes the condition of the nation :

cial activity and enthusiasm to depression; from happiIn six months the people have passed from commer

ness to misery; from confidence to despair. They have taken a Niagara plunge, from which they will not recover in a generation. The worst of the scheme was it possible for any man who owned real estate to get that it offered irresistible temptation to bribery. It made almost any quantity of money, if he would only swear falsely. An acquaintance of mine had a nice farm there which he valued at $15,000. The law would give him a loan to one-half of the value-that value to be fixed by the official appraisers. He " saw" the appraisers, and he obtained a loan of government money - cédula amounting to $250,000, the maximum loan permitted by law to one person. Think of it! And the money was indorsed by the Barings, the great London bankers! Of course the appraisers got half of it, but the people $100 for every, man, woman, and child-hopelessly have it to pay. And they are now in debt more than bankrupt.

Mr. E. L. Baker, the United States consul at Buenos Ayres, to whose valuable reports we are indebted for much of the information contained in this article, says under date of Nov. 17, 1890:

The collapse has come, and come with a vengeance. Lands unsalable at any price; national banks gutted and left without a cent in their strong boxes; stock companies with fraudulent entries in their records and without anything to show for the pretensions they set up; merchants unable to meet their liabilities in bank; notes protested and extensions granted; the general business at a standto say whom it is safe to trust - such is the picture which still; the banks hesitating to discount; and nobody able the country presents to-day. Every business, every industry, every new enterprise feels and suffers from the tremendous reaction which has taken place. Everybody is confounded and stands aghast, looking at the stick which but yesterday, as it were, was a flaming rocket.... The truth is the Argentine Republic is suffering from a paralysis of credit... The fool's paradise" in which the Argentine people have been living for the last few years must be wiped out of existence. Inflation must give place to "hard pan." It has been the general boast among those who were pushing on the "boom" that this was an " exceptional country," and that the ordinary laws of trade, currency, and banking, however requisite to be followed in such countries as England or the United States, had no significance or applicability in the Argentine Republic. Here, it was insisted, all manner of violations of economic principles could be practised with impunity, and the country would flourish by the outrage. The present prostrate condition of both public and private credit shows the inherent fallacy of such an assumption. I only fear that the country will for a long time have to walk in the valley of humiliation and endure a protracted period of business and financial depression before it will again be able to hold up its head and present that buoyant and triumphant look which it has heretofore so proudly worn.

This is the experiment which men imbued with Senator Stanford's ideas are seeking to have the United States undertake. They are advocating it with precisely the same kind of talk which Mr. Baker quotes as having been heard in the Argentine Republic. They are calling the United States an “exceptional country which is so great and prosperous that it can defy not merely economic laws but the teaching of all human experience. The consequences of the Argentine experiment were felt not only in that republic, but they convulsed the financial centers of three great European countries and virtually ruined the first banking house

of England. The effect was so severely felt in this country that a panic was imminent nearly every day for several weeks, while all branches of trade suffered a mysterious and numbing paralysis.

In the gain or loss of one race all the rest have equal claim,

says Lowell, and of nothing is this more true than of the observance by a nation of the great laws of common honesty and fair dealing which lie at the foundation of all economic science.

The Lottery's Last Ditch.

THE determined fight which Governor Nichols of Louisiana is making against the proposal to give a new lease of life to the lottery in that State deserves the moral support of the whole country. It is a fight for the rescue of the State and its people from the clutches of an evil which has been driven from every other American State, and which the American Government has by formal legislative enactment declared to be so pernicious that the mails cannot be used in any manner in its behalf. Kentucky, which for some time shared with Louisiana the bad distinction in being the only other State in which lotteries were permitted, has abolished them and put into her new constitution a prohibition against their reëstablishment. An effort was made in 1890 to introduce them into the new State of North Dakota, but was defeated by the vigorous opposition of the Governor.

Lotteries have at one time or another been employed by all modern governments as a source of revenue, but though they have proved to be a ready and sure means for replenishing a depleted treasury, they have in all cases been found to exercise a mischievous and demoralizing influence upon the people, and to do harm especially to the poor. Between 1816 and 1828 they were in use by the French Government and yielded an annual income of 14,000,000 francs. They were suppressed in May, 1836, and in January following it was found that 525,000 francs more were on deposit in the savings banks of Paris alone than had been there in the same month of the previous year. Parliamentary lotteries existed in England from 1709 till 1823. Their harmful influence began to attract attention in 1819, but so strong were they that it took four years of agitation to secure their suppression. They appeared in the United States very early in its history, and were used for the aid of all kinds of enterprises. Through their agency colleges, hospitals, and churches were built, and roads and bridges and other public works constructed. The first movement for their suppression began in Pennsylvania in 1833, and extended so rapidly to other States that by 1875 no fewer than twentysix States had adopted laws suppressing them and making the advertisement of them or of foreign lotteries a penal offense. At the present time, as we have said, Louisiana is the only State in which they are allowed. A general law was at one time on the statute-books of Louisiana forbidding lotteries, but during the "carpet-bag" régime in 1868 this was superseded by an act granting a charter to the Louisiana State Lottery for a term of twenty-five years at an annual license fee of $10,000. In 1879 a bill for the repeal of the charter was passed by both houses of the legislature, but as part of the license fee for that year had been

paid the company raised the point that the repeal was invalid, since it was a violation of a contract with the State. The question was carried into the constitutional convention which was sitting in that year, and as a result the new constitution which that body adopted had two curiously conflicting clauses, one declaratory, to the effect that the repeal legislation was invalid because violating a contract between the State and the lottery company, and the other prohibitory, ordering that all lotteries should cease after January 1, 1895. This same constitution, while declaring gambling to be a vice and ordering the legislature to enact laws for its suppression, authorized the granting of other lottery privileges and charters in addition to perpetuating the charter of the Louisiana State Lottery. Various explanations are given for these contradictory provisions of the constitution, but students of the pernicious character of lottery influences think there is no mistaking the real cause.

This action of the convention destroyed all hope of repeal of the charter before its expiration, for it implanted it firmly in the constitution of the State. The company was secure till 1893, at which time its charter would expire. In the spring of 1890, when the waters of the Mississippi were most seriously threatening the levees, the lottery company made its first move for a new lease of life by sending to Governor Nichols an offer of $100,000 to be used for levee purposes. The Governor returned the money on the same day on which he received it, saying that as it was generally known that the company would seek a new charter at the approaching session of the legislature in May, he would not consent to place the State under any sort of obligation to the company. When the legislature met, the Governor, in anticipation of the application for a new charter, gave up a large portion of his annual address to an earnest and eloquent protest against granting it. We quote some of the more striking passages:

A legalized lottery is forced into taking a constant, active interest in the movements of not only one, but all political parties, sending its paid agents among the masses to corrupt and deceive them, buying up, throtthing, silencing, and muzzling the press whenever and wherever it can be done, in the cities and in the country, breeding treason and dissension among friends and among leaders, fomenting faction and independent movements when faction suits its purposes, using all expedients and halting at nothing necessary to compass its ends.

I have already alluded to an appeal to be made to the members of the General Assembly to avoid responsibility by permitting the people of Louisiana to vote themselves for the adoption or rejection of the proposed amendment. Such an appeal will be nothing more or less than an appeal to give the lottery company the opportunity to go into the next campaign (fortified, as it bly), and by and through an immense corruption fund will claim to be, by the approval of this General Assemmass all the bad elements in the State, white and black, and by their united vote endeavor to ride rough-shod over the respectable and worthy people of this State. Let no man deceive himself, and let no man be deceived by others in this matter. This is precisely what this appeal means. The occasion is too serious to mince matters. I am addressing men of Louisiana, who know as well as I do the value of my words, when I say to them that, should this lottery get firmly planted in this State, it will own and hold the purchasable vote solidly in the hollow of its hands, forever, and through it and by it the liberties, the property, and the honor of the people of Louisiana are at its feet. It would make and unmake governors, judges, senators, representatives, commis