treaty and 'the unequal value of the stipulated equivalents.' The report relies mainly upon the former to support the conclusions. Upon this single ground' it advises that it be rejected. The report states that 'the control of trade and the function of taxing belong, without abridgment or participation, to Congress'; and concludes that the treaty is unconstitutional and ought to be rejected.

"With all due deference, I must think that the report greatly errs as to a part of its premises and wholly as to its conclusions."

After referring to past treaties the letter continues:

"There is an entire and numerous class-I refer to reciprocity treaties -which almost invariably contain changes in existing laws regulating commerce and navigation, and duties laid by law. So well is the practice settled that it is believed it has never before been questioned. The only question, it is believed, that was ever made was, whether an act of Congress was not necessary to sanction and carry the stipulations, making the change, into effect.

"It is true that the Constitution delegates to Congress the power of regulating commerce and laying duties. But does the delegation of a power to Congress exclude it from being the subject of the treaty-making power? If so, then all powers appertaining to our foreign relations are excluded from the treaty power.

“The treaty-making power has been regarded to be so comprehensive as to embrace, with few exceptions, all questions which can possibly arise between us and other nations, and which can only be adjusted by mutual consent."

William Pinkney, the great statesman, lawyer and diplomat of the day, who made the other notable address, with Mr. Calhoun, was a member of the conventions ratifying constitutions, and was equally earnest in insisting that the treaty of commerce is selfexecuting. Aside from its lucid opinions, however, there is a paragraph bordering on prophecy, which suggests the reason, not only of the continual renewal of this question in Congress, but why the public at large should be thoroughly informed in this vital matter, and be able to render intelligent judgment, without relying upon some, possibly prejudiced, mentor. Mr. Pinkney said:

"By what process of reasoning will you be able to extract from the wide field of that general provision, giving the President and Senate power over treaties, the obnoxious case of a commercial treaty, without forcing along with it the case of a treaty of peace, and along with that again the case of every possible treaty?

"Nay, the whole treaty-making power will be blotted from the Con

stitution, and a new one, alien to its theory and practice, be made to supplant it, if sanction and scope be given to the principles of this bill. The bill may indeed be considered as the first of many assaults, not now considered as assaults perhaps, but not therefore the less likely to happen, by which the treaty-making power, as created and lodged by the Constitution, will be pushed from its place and compelled to abide with the power of ordinary legislation. The example of this bill is beyond its ostensible limits.

"The pernicious principle, of which it is at once the child and apostle, must work onward and to the right and left until it has exhausted itself, and it never can exhaust itself until it has gathered into the vortex of the legislative powers by Congress the whole treaty-making capacity of the Government."

The suggested possibility has thus far proven true, and the matter is still under discussion, with no new features; and still as far from final settlement, apparently, as ever. Mr. Pinkney's fear that it might become a matter of policy seems not to have been without foundation. In many more modern instances than these that have been referred to, the ground has been gone over and over. Masses of the ablest opinions have been collecting, but all to no purpose. Volumes of later quotations might be made, in line with those already given; meanwhile, we have been continuously negotiating treaties, through the Executive, ratified by the Senate, which have, therefore, been sustained as the supreme law of the land.

The Constitution gives to Congress powers over specific subjects; but that has never prevented the treaty-making power from regulating the same subjects by convention. Congress is given power to establish a uniform rule of naturalization, for example; yet, in our treaty acquiring Louisiana, it was expressly stated that the residents of the territory should become citizens of the United States. Congress is given power to make rules for the government of the army and navy, but the Hague Convention stipulated rules which would govern our armies in case of war.

It is claimed that reciprocity treaties, unlike other treaties, do not become fully effective without Congress, because the Constitution provides that bills for raising revenue shall originate in the House; but there is less reason for saying that a reciprocity treaty is unconstitutional because of that provision, than that a commercial treaty is unconstitutional because of the commerce clause. The provision was not intended as a limit to the treaty

making power. It was Justice Story's opinion that the term revenue bill" implies those bills which levy taxes, in the strict sense of the word, and not bills for other purposes which may incidentally deal with revenue. As a matter of fact, the legislative and treaty-making powers are absolutely separate and distinct. Whenever there is to be an agreement between two independent nations, there the treaty power must make the laws that shall govern; and the very fact that they are to govern two nations renders it obviously necessary that they must be supreme and immutable. It is true that the Supreme Court has held that an act of Congress may repeal a treaty; but such a repeal would only be effective so far as our own domestic law is concerned. The other nation would still have a right to consider us bound, by our contract; and, if the contract was broken on our part, it might lead to a declaration of war. The two powers do not conflict. The whole controversy is an effort to crowd another element, a very large and divided element, to-day-the House of Representatives-into the treaty-making power, with the result which Pinkney so pointedly suggested. It requires no extended vision to see the complications and delays which would result, increasing the already hampered conditions of international intercourse and contact, and the absurdities to which it would lead.

The powers are distinct. The framers of the Constitution intended that they should be distinct. They must remain distinct. A reciprocity treaty is as much a part of the supreme law of the land as any other treaty, and, if it contains no provision for Congressional action, of its own force it repeals a revenue or tariff law the moment it is made by the President and ratified by the Senate.

The recent claim that the "favored nation clause" in our treaties precludes us from making reciprocity conventions, has already been determined by the Supreme Court, in its statement that other nations cannot ever claim the same concessions as are given by means of reciprocity, as they are obviously an exchange of valuable considerations.

The strongest argument and authority which have been used against the validity of reciprocity treaties appeared in a speech which the late Senator Morrill made, in the Senate, when the Mexican treaty was pending for ratification. He is reported in the "Record" as saying, on the authority of Senator Hoar, that

Daniel Webster said: "I hope I know the history of my country better than to think a reciprocity treaty is constitutional."

Since that time, this has often been referred to; and it has been made the most of, in many ways. It may possibly be the case; but, without expressing a personal opinion, I can say that I have made a most thorough examination without being able to find any such statement, or indication of where it was made. In a speech in Baltimore, in 1845, Daniel Webster declared his opinion that the principle of reciprocity was wrong; but he did not say that a reciprocity treaty was unconstitutional. There is also a letter of instruction which Webster wrote to our Minister in England, in reference to the proposed Oregon boundary treaty, in which he said: "Any attempt to regulate duties by treaties must be well considered, before it is entered upon." Such a statement does not indicate that Webster considered reciprocity treaties unconstitutional.

Retracing the steps, it is difficult, I think, for any one who is unprejudiced to understand how our treaties can be considered unconstitutional or can require Congressional action before becoming effective. The treaty-making power must rest where the Constitution so plainly vests it, in the President, with and by the advice and consent of the Senate; and, for the best interests of the country and the facility of international intercourse, I hope it may always remain so.

S. M. CULLOM.

HOW THE STOCK-MARKET REFLECTS VALUES.

BY CHARLES A. CONANT.

Ir is a truism that changes in the value of corporate properties are reflected by changes in quotations for their shares in the stockmarket. It is not so well understood, perhaps, outside of economic circles just how far values in the stock-market also reflect the values of other forms of property, and determine the direction of the employment of capital. It is sometimes assumed that the stock-market is a thing apart from other markets, and that such persons as the manufacturer, the merchant, and the dealer in real estate need not give attention to its vagaries as having any bearing on their own transactions. It is proposed here to show that quotations on the stock-market, while more sensitive than those for other forms of property, in the long run reflect all values which are influenced by the supply of capital and determine the direction in which new capital shall be applied.

The stock-market is the barometer of the supply of uninvested capital and the demand for it. The fluctuations in the different classes of securities on the stock-market afford an index to the owners of free capital in what direction it can be most profitably invested. If Western railway stocks, for instance, are high, it is an indication that they are earning large dividends, and is an encouragement to float new enterprises of a similar character. Similarly, if the earnings of steel companies are poor, their securities decline in value, and this is a convincing warning to capitalists not to buy the securities of new steel enterprises. Mistakes, miscalculations, over-sanguine estimates of the future, too rapid discounting of prospective benefits, are, of course, constantly taking place, but they are mistakes which are quickly corrected when the sensitive indications of earning power and stock-market values give clear warning.