of water but not with any degree of success. The doctrine that was accepted at that time about territorial rights in the high seas is clearly stated by Mr. Fish the American Secretary of State in the following words: "There was reason to hope that the practice, which formerly prevailed with powerful nations, of regarding seas and bays usually of large extent near their coast as closed to any foreign commerce or fishery not specially licensed by them, was, without exception, a pretention of the past, and that no nation would claim exemption from the General Rule of Public Law which limits maritime jurisdiction to Marine League from the coast." Towards the close of the nineteenth century the United States after acquiring possession of the Russian territories in America' endeavoured to separate the Behring Sea in its legal aspect from the Pacific Ocean' and claimed two thirds of its waters-a space 1,500 miles long and 600 miles wide, as attached to Alaska. Britain naturally objected to this and the result was the Behring sea arbitration. In the early stages of the arbitration itself America tacitly dropped the proprietary or territorial claim and claimed juris dictional rights of control for certain purposes resting on a totally different basis. From the above historical summary it will appear that in theory at least freedom of navigation for vessels other than battle ships during peace time has been firmly established so far as the high seas are concerned. The treaties of the eighteenth century show unmistakable signs of the tendency to narrow the range of maritime occupation. When international law came into existence the common European practice with respect to the sea was founded on the possibility of the acquisition of property in it and it was customary to look upon most seas as being in fact appropriat ed. The exorbitant pretentions of Spain and Portugal tended to set in a reaction against this view. Grotius in his Mare Liberum' declared the sea to be incapable of appropriation. The English international jurists naturally combated the views of Grotius. Except Holland no other nation cared to claim the benefit of the doctrine propounded by Grotius. The continental jurists also agreed with the English jurists. The views of all these jurists is summarised as follows by Holland : "Fluidity itself is not a bar to property as is proved by the case of rivers. Though the sea is inexhaustible for some purposes, its fish, the pearls, the coral and the amber that it yields are not "inexhaustible. There is no reason why the borderers should not rather challenge to themselves the happiness of a wealthy shore or sea than those who are seated at a distance from it. Sea is a defence and it must be a disadvantage to any people that other nations should have free access to their shores with ships of war without asking their leave or without giving security for their peaceful and inoffensive passage." The treaties on international law in the eighteenth century all affirm the principle that the sea can be occupied in so far as it is used and guarded. The extent over which dominion exists in any particular case is to be determined from the the facts of effective protection or from treaties. In cases which, after the application of these tests are doubtful, it is to be presumed that the sea belongs to the states bordering on it so far as may be necessary for their defence, and that they also own all gulfs and arms. All the jurists were agreed that while the right of appropriation of seas may be maintained in principle and as a customary fact, a State could not forbid the navigation of its seas by other peoples without being wanting in the duties of humanity. The Marine League prescribed by International Law for territorial jurisdiction along the open coast owes its origin perhaps to the old theory that the range of a canon shot was a Marine League. If this hypothesis is accepted the area of territorial maritime jurisdiction should now be extended to about 20 miles or more, on account of the longer range of canon shot from modern guns land as well as naval. At a meeting of the Institute de Droit Internationale held in Paris in 1894 it was resolved by a large majority that a Zone of six marine miles from low water mark ought to be considered territorial for all purposes and that in time of war a neutral state should have the right to extend this zone, by declaration of neutrality or by notification, for all purposes, of neutrality, to a distance from the shore corresponding to the extreme range of cannon. The decision of the Behring Sea Arbitral Tribunal recognised "the ordinary three mile limit'; but the tribunal refused to legislate in that matter as beyond its province, and refused to affirm that it found the three mile limit to be, as a matter of fact, universally accepted. According to Hall 'a State has theoretically the right to extend its territorial waters from time to time at its will with the increased range of guns.' Hall thus sums up the state of the Law: 'In any case the custom of regarding a line three miles from land as defining the boundary of marginal territorial waters is so far fixed that a State must be supposed to accept it in the absence of express notice that a larger extent is claimed.' The question relating to the zone of territorial waters having not yet been authoritatively settled the coming Peace Conference will have to settle it. WHAT IS THE BEST ECONOMIC POLICY BY MR. A. S. BANDHARKAR, A. B. (HARVARD) HE solution of the Indian economic problem is contained in the answer to the larger question, What is the best economic policy for any country at any age?' The best economic ideal for all, would be, of course, that of Free-trade without any restriction throughout the world where every country is following a geographical division of labour after attaining the maximum industrial effeciency. Everybody can then buy the best goods at the cheapest market, granting the presence of free competetion. But this is an international ideal of the future when there will reign "Peace on Earth, good will to men." The present is an age of nationalities. This sense of nationality, the willing sacrifice of the individual for the nation has evolved from the home and the community sense; then we find two or more nations combining together politically and economically. The German Empire and Austria Hungary are examples of such a double combination, while the union of Germany and Austria-Hungary is purely an economic one. The members of the British Empire can be successfully bound together only by economic ties since they are geographically scattered over the surface of the globe. This process of evolution bids fair to end in a world-commonwealth and it is then that the international economic ideal will probably be reached. That glorious moment is not, however, yet in sight. Nations cannot yet give up the idea of conquest and domination. They are suspicious of their neighbours as is seen from their foreign policy of alliances, ententes, balance of power and buffer-states. Besides, in order to reach the maximum industrial effeciency, a necessary condition for the international ideal, each nation must develop first as an individual economic unit; it must know what it is best fitted for. This is only possible under Protection. Again, let us picture ourselves in a newly settled colony. The first thing we must do is to supply us with the necessaries of life. It is not impossible to imagine an extreme case where we could get these from other countries and be able to pay for them in gold and silver, for some length of time at least, by devoting ourselves to mining and minting of these metals. But this makes us wholly dependent on others and we are sure to die of starvation if a sudden crisis such as the present war disturbs or puts an end to our commerce. Thus we can see how badly we needed encouragement, support and protection for industries like paper, matches and glass-ware from a consideration of the dearth and consequent dearness of these necessary articles at present. We also see how Germany, being self-sufficing, has been able to stand the economic strair of the war almost single-handed and understand how England regretted, as a result of the submarine blockade, that she did not pay enough attention to her agriculture and raw products. The other extreme of hedging ourselves round with an impregnable tariff-wall at the outset is also equally dangerous, for, the development of indusries is slow and takes time. Granting, then, that under existing circumstances the primary concern of every nation should be to raise itself to an economically self-supporting state or to achieve the national economic ideal, let us turn to the general method how this may be done. A protective wall should be built gradually. At first, private industrial enterprises and free competition should be encouraged, This will tend to heighten the quality of goods and lower their prices-a desirable thing. State control and support should be extended only to those industries which are necessary to rich and poor alike. Support is necessary to protect these important industries from foreign competition; control, to protect the poor from the industrial manufacturer and the capitalist by regulating prices. I said 'only' because state control by doing away with competetion removes the chief impetus for improvement. It is said that competition sometimes ruins modest concerns to the advantage of the bigger ones; these being better capitalized can produce and sell goods at a cheaper rate with the result that the former are either compelled to sell themselves off or stop working, There are even instances, notably in America, where the bigger concerns are found selling goods at a loss to put their rivals out of their way. Again, monopolies so formed can make their own prices for any adulterated or inferior quality of goods they might produce in the absence of competition. This is no doubt largely true of some monopolies in America and to a smaller extent in England. But the evil is not in the nature of things as is seen from an examination of the prices and quality of goods turned out by French or German monopolies. In France it is prevented by a strong public opinion and popular sense of justice; in Germany, by a strict supervision or control by the State which identifies itself with the interests of its subjects. In both these countries, moreover, wealth is not honored for its own sake which does not encourage business men to make money by fair means or foul at their disposal. If then monopolies can sell goods at a cheaper rate and if these goods are such as are consumed by a majority of a people, the interest of the smaller industrial concerns, who are a minority must give way before those of the majority. This is the fundamental law which ought to underlie all human activities as it is the safer and lesser of the two alternative evils. Thus did the guilds disappear to make way for the more advantageous steam-manipulated industries. Hence, when the stage of large scale production is reached where a larger concern can buy over the smaller ones to the advantage of the majority who purchase the goods, the state should not interfere but keep a strict watch over the monopolies so formed to see whether the quality of goods produced is good and the wages are advancing correspondingly with the increase in the cost of living; no colossal profits should be allowed. Employers as well as employees should be made to contribute certain amounts to pensions, insurances etc. for the benefit of the latter. Employment agencies and co-operative institutions may also be advantageously established for these working classes. There should be duties on articles of necessity going out of the country in case there is scarcity at home like wheat in the present war. In short, the State or Government should have full right to interfere with private industries when they think it necessary for the welfare of the nation as a whole and take charge of them in time of crisis. When every possible industry is developed to its fullest extent and the country is as self-sufficing as it can be, the tariff wall should be gradually pulled down and the internal industries exposed to the stimulating action of foreign competition. Those industries, unessential for satisfying the primary wants, for which the country is not at all fitted should be allowed to die out leaving the majority at liberty to buy at the cheapest market; for, that country is the most prosperous where the inhabitants can satisfy their economic wants as cheaply as possible. The country is now ready, if other nations are prepared and willing to join her in harmony to act her part on the world's stage in the drama of universal free-trade. It will be seen from what has been said above that a State should not rest content with remaining purely political in its functions. It has its economic duties to fulfil as well. It cannot afford to leave wilful economic instinct to run wild and create a havoc among its people. Just as it protects the life and property of its subjects from murderers and thieves, by means of legislation, it must protect their economic rights from the economic criminal, the capitalist or the industrial monopolist. The ' let alone' policy may be alright in the presence of competition but it is positively pernicious in the absence of it. Individual liberty of action or anarchy whether social, political or economic is the goal of mankind and is sure to prove harmful if admitted before its time. The liberal school of economists and the Anglo-Saxon countries failed to see this--and one wonders ་ whether this war with its insufficient wages and high-soaring prices will ever open their eyes-and connived at the selfish human instinct which badly needs to be purged of its dross until its possessor learns to respect others' lives as his own. The ever-recurring labor strikes in England and America bear witness to inequalities of distribution and consequently to the existence of this narrow instinct at large. The spiritual progress of man consists in the broadening of self until it embraces the whole human race and Christ's moral precept, Love thy neighbour as thyself' becomes a habit. An economic problem must not be abstracted, like a problem in mathematics, from its political or social aspects with which it is inextricably interwoven. A nation cannot aspire to be great unless its moral and social progress keeps pace with its material progress. Let us take one instance where wealth comflicts with welfare. It is argued that in the manufacture of alcoholic drinks so many labourers are employed who otherwise would be begging about in the streets, starving in their homes or else be a burden on the publie being supported by charitable institutions for the poor. This argument does not hold water because it assumes that the labour or capital engaged in drink industries cannot be utilized elsewhere for the betterment of mankind. We shall see what happens in an individualistic country in the absence of home and foreign competition by making a careful study of America (I mean the eastern manufacturing states which practically represent the whole of America.) The evils of capitalism are seen there at their best because the tariff wall of America is the most impregnable in the economic world. There, they have not hesitated even to place a duty on books with the purpose, perhaps, of protesting native intellect (!) and public goods such as telegraphs, telephones and tramways are under private management. Let us first confine our attention solely to America's economic position. It is said by some English and American economists, particularly the latter, that dearness or high cost of living is a sign of national prosperity when it is due to the excess of circulating money, as in their countries, and shows a favourable international trade. This has been so often dinned into our ears, by these economists and Anglo-Indian journalists, that it is not surprising to find even some section of the Indian public unable to divest themselves of this shop-keeper's point of view. They believe that India is getting prosperous as a result of this war notwithstanding the rising cost of living for the masses. Their contention savours of the old long exploded mercantile theory that gold and silver make wealth. In the first place, let the elementary fact be pointed out, once for all, that money as such has no economic value; it cannot satisfy human wants. Theoretically there is no need of species whatsoever in an independent self-supporting country where exchange can otherwise be effected. Even internationl trade is nowadays carried on by means of paper like bills of exchange and other modern credit devices, which have no intrinsic value. It is convention pure and simple that has given value to money, be it paper or metal-the latter merely satisfying an aesthetic, want-and it is international agreement that has fixed gold and silver as the standards. Secondly, dearness of living does not always show a favourable international trade since it might be due to scarcity of products at home; in this case the country may be on the verge of famine. On a careful analysis of the subject one finds that the cost of living varies the ratio of circulating money to the quantity of products at home. It increases with the increase in the first factor and decrease in, the second. Thirdly, granting that this excess of circulating money, in as much as it shows an increase Fourthly, a country cannot rightly be said to be internally prosperous where the balance of international trade is mainly in the hands of a few capitalists in the form of interest or excess profits while wages have not correspondingly increased. This is exactly the case in America where it will not be an exaggeration to say that more than half the wealth of the country is in not more than ten hands. The internal prosperity of a country, as I have said above, must be measured by the material condition of the majority and the evenness in the level of distribution. In this case the cost of living is no longer high for the masses though the absolute prices of things may have risen; for, dearness and cheapness are comparative, the value of anything being dependent only on the ratio of the intensity of one's desire to possess it to one's ability to pay for it. A rise in prices lessens this ability only to regain its former value with a corresponding rise in wages. So much for America's economic position. Let us how she fares morally and socially. see now In that country internal competition is silenced by the big trusts buying out the smaller concerns or under-selling and ruining them if they refuse to be sold; the external competetion is kept away by the tariff wall with the result that the big manufacturers ask their own prices for adulterated goods and make enormous profits of monopoly. This coupled with their foreign trade which is |