comes out in the Huntington canvases is the note of sentiment, of charm. If there is a weakness anywhere in the eighteenth-century English school, a weakness half suggesting that academic dryness from which I have maintained that the masters are in essence free, it discloses itself in respect to the physiognomies. The typical face in a portrait of that period is not very rich in character. But if there is not pronounced character, there is always a certain witchery in a head by Romney. When I think of his Mrs. Ralph Willett in the Huntington Collection, or the Mrs. Penelope Lee Acton, or The Beckford Children, or the two different studies of Lady Hamilton, or the Mrs. Francis Burton, I think of so many images of delicate beauty, made that much more delicate and alluring by their envelopment in Romney's spirit.

There are two captivating Hoppners in the gallery, one a great full-length of Mrs. Bedford and her Son, the other a bust portrait of Lady Beauchamp, in which the very fragrance of his art seems to reside. There are three thoroughly

The Hon. Mrs. Cunliffe Offley. From the painting by Sir Thomas Lawrence.

representative Lawrences, including that glittering Pinkie which in technical bravura is rivalled only by the same paint

er's Miss Farren in the Morgan Collection. A good Raeburn is present, and there are two fine pictures by Turner and Constable. On the Constable, A View on the Stour, near Dedham, I am tempted to pause. It is a glorious landscape, one of his masterpieces. But it is not for landscape art that our hypothetical student will turn to the Huntington Collection. He will turn to that collection for the tradition of eighteenth-century British portraiture in its purest estate. In the contemplation of it he will drink deep draughts of pleasure, and if he happens to be a portraitpainter himself he will derive also substantial profit from the encounter. A noble tradition never dies. It is a living, continuing force. There are elements in the portraits at which I have glanced which must always be inspiring, elements of dignity in design, honesty in the construction of

O

In a Changing Economic World

judgment of the financial situation of to-day, and no forecast of the conditions likely to prevail to-morrow, can be framed intelligently if it does not take account of the change which has been steadily going on, not only from the pre-war economic dispensation but from the earlier postwar period. The rapidity and completeness with which the position of such foreign states as Germany and France has altered in the course of reconstruction appeal to imagination because of the contrasts presented in the process. American financial history since the peace provides no such vivid contrasts. Its course has been such as mostly to emphasize in the popular mind the fact that this is not the financial and industrial America of pre-war days. Yet nothing is more certain than that the United States of 1927 is no longer the United States of 1919, of 1920, or even of 1923. Not only the actual events of those comparatively recent years, but the financial conceptions then prevalent in America, seem almost as far away nowadays as the experiences of 1913.

The shape which the new era of American trade and finance has taken is that of a very real but highly conservative prosperity. But the mere existence of such prosperity has brought about the somewhat curious situation of a business community occupying itself much less with studying the real and permanent causes and their probable influence in prolonging the good times than with discussing whether production in a given season is to be greater or less than before; whether retail

buying will increase or decrease, and why; whether next season's business profits will be larger than a year ago or smaller. The trade reviews are now pointing out that less freight has been moving over the railways this season than in 1926. Sales of motor-cars had come to be taken as a measure both of the people's prosperity and of trade activity; thus far in 1927 such sales have decreased 11 per cent from last year. Production of steel is accepted as an index to industrial conditions, and the output is now reduced as compared with a year ago.

THE changes are not very great; but,

Notable Comparisons

being in the opposite direction from the trend of the last two years, they are frequently emphasized in business circles as possible evidence of an unpropitious outlook. Yet it is hardly safe to draw confident in- Some ferences from them, except in the light of the facts that last year's American steel output was 3,300,000 tons greater even than the maximum of war-time; that, despite the reduction from 1926, nearly a million more automobiles were purchased by our people in the first five months of the present year than in the similar period of 1922; that freight loaded for distribution on the railways during the same months called for two million more cars than in 1925 and five million more than in 1920. The real question is, what circumstances caused so astonishing an increase in the market for such goods at a moment when the rest of the world was impoverished as a result of the war, and whether those cir

cumstances are or are not such as to insure continuance of the increased trade. These considerations have lately received much more attention than heretofore in Europe's discussion of the prolonged and uninterrupted era of American prosperity. The windfall of war profits, the transformation from a debtor to a creditor nation, the accumulation in American vaults of half the world's gold, are all familiar explanations. But other considerations have begun to impress the foreign imagination. Perhaps because of the deadlock in trade between half a dozen European states, as a consequence of virtually prohibitive tariffs, the effort of European financiers to explain the international contrasts has taken more account of the position here; of the fact that, in a country with 100,000,000 population, a diversified climate, extremely varied sources of natural production, a physical area larger than all Europe, and forty-eight political subdivisions in which the distribution of productive activities corresponds roughly with their distribution among the European states, trade is entirely free and the flow of both merchandise and capital absolutely unimpeded.

MUCH was heard regarding this aspect

of American prosperity during the past season's Industrial Conference at

Position of

Geneva, whose avowed but not achieved purpose was to obtain for Europe something of the advantage enUnusual joyed in that regard by the America United States. But it was recognized as only part of the story. The country which produces all the foodstuffs, cotton, iron, and copper needed for its own purposes, whose raw material is grown and mined and turned into manufactured shape within its own boundaries, and the requirements of whose consumers are by themselves great enough to keep at a high pitch of activity the home industries engaged in production or manufacture, occupies a highly exceptional position in the postwar world. No other country presents a picture of the kind. Quite apart from the economic power acquired during the war period, the necessary result of such conditions is the occupying of an alto

gether peculiar place by the United States in this period of economic dislocation. Its own people provide by far the best market for its own products; it is to-day in no respect dependent economically on other countries, even to the extent of being directly affected by their prosperity or adversity.

It is quite true that this self-sustaining condition existed before the war, when the economic fortunes of the United States were constantly determined by the vicissitudes of Europe; but the circumstances which arose as a consequence of the war had made its full significance understood. Prior to 1914, the one economic requirement in which the United States was not independent of the rest of the world was capital to conduct its industries. That was not at all because of slow accumulation of American capital at home. It was because the opportunity for profitable use of capital in American enterprise increased with far greater rapidity than the growth of available home resources for the purpose. To offset the necessary foreign borrowings of the day, in addition to interest payments on the mass of foreign indebtedness accumulated when the country was poorer, a very large surplus of exports over imports in our foreign trade

was imperatively necessary.

HARD times, political apprehension,

and trade reaction in Europe had therefore immediate and severe effect on

our

When We

Relied on Europe

own pre-war industrial position. People who had lived through the older period found it difficult to understand after 1920 why the American market should display entire unconcern at the news of such economic disasters in Europe as Germany's national bankruptcy in 1923 or the industrial paralysis of England during the labor deadlock of 1926. But what had happened in the twelve years after 1914 was, first, that the United States had paid off its foreign debt, thus making a yearly tribute in the shape of surplus export trade no longer necessary; second, that the growth of population and purchasing power in America itself, together with the wealth created during our period of neutrality, had so greatly enlarged the domestic