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Refers to Sidgwick's work on Political Economy, and reports that, on his first perusal of it, he had somehow overlooked 'the remarkable passage on p: 527. para: 4', the subject of which has a bearing on his current study. Ventures to ask several question in relation to the ideas contained therein. Refers to Sidgwick's assumption that the State 'would [contract] industrial operations more profitably than private persons'; Mallet presumes that existing interests would be bought out for a sum of £5000 to £6000 million, and that the interest would be in the region of £150 to £180 million. The difference between the sum and the profits 'would be the income of the State.' Asks how Sidgwick prepares to deal with this sum, which would be 'not much less than the [ ] taxation both imperial and local', and which applied in relief of taxes 'could not fail to stimulate population and increase the demand for work - with no additional [supply] to meet it.' Queries Sidgwick's supposition that the profits would be much greater, and asks how he would divide the sum among the members of the community. Suggests that the production cost involved would inevitably lead to 'a gradual absorption of all net profits in gross.' Asserts that there would be a class 'with an income of 150 or 180 millions living without work', which would, by saving and investing its money in the United States and Australia, 'might still escape the doom which [Sidgwick] propose[s] for them [sic]'. This money, Mallet predicts, 'would be gradually supplemented by the savings of the salaried officials, who would also invest them abroad', and there would again be a rich class in being. Asks whether, if an international agreement and the internationalisation of the land and instruments of production all over the world are contemplated, there is any way by which the net product could be decided. Refers also to 'literary men and artists' and 'Bankers and Merchants'. Confesses to being 'hopelessly bewildered', and wonders if he has totally misunderstood Sidgwick's meaning in the matter.

Believes that their points of view are so different that he doubts whether anything he could say would have any effect. Expresses his view by quoting Sir Henry Maine's Popular Government, beginning with a statement with regard to the two systems in existence by which material '"of human subsistence and comfort"' are produced. One is economic and industrial competition, and the other '"consists in the daily task...enforced by the prison and the scourge."' Maine maintained that one system had to be adopted in order that society not '"pass through penury to starvation."'

States that his remarks mainly apply to Sidgwick's two chapters on Distributive Justice and Economic Distribution. In relation to Distributive Justice, he 'cannot conceive any possible system which can promote it to an equal degree with that of "the free exchange of services" - with all its inevitable shortcomings.' Believes it to be unlikely that anyone would propose that Governments should be burdened with the task of dispensing distributive justice, on top of their other duties. Refers to an argument on page 514 of Sidgwick's work, in relation to the question of interest on capital. Refers also to the second chapter [Economic Distribution], on which, he claims, discussion is easier, because all questions of assumed rights and justice are discarded. Claims to found his view 'solely on grounds of expediency - i.e., the promotion of the well-being of society as a whole.' Disputes Sidgwick's statement that under the current system of partial economic competition, there is a growing inequality in the incomes of men. Refers to statistics compiled by [ ] and Atkinson, which demonstrate that in Great Britain and the United States 'there is constant progress towards greater equality.' This fact Mallet believes to be neither important nor desirable.

Proceeds to discuss the 'main question' treated in that chapter. Remarks on the absence of the 'international point of view, which was the central consideration of the Free Trade School' in the speculations of the 'present generation of economists.' Refers to the question of the nationalisation of the land, which, he claims, from a free trade point of view, 'cannot even be discussed'. Refers to the opinions of Mill and Maine on this question. On Sidgwick's speculation about capital, he remarks that if there were no field for private capital at home, [ ] would send it abroad.' Questions the likelihood of the success of 'any possible experiment in the direction of State conducted industiral and commercial enterprise'. Doubts that any government in a free country could devise any system of reward and penalties which would enable it to work. States that based on his experience of [Government Departments] he believes that nine out of ten men work in such a way that they do not contibute their fair share to society, and doubts whether the majority even do a day's full work.' Does not believe in government superintendence, nor in the efficiency of the Post Office or the Telegraph services. Thinks that if the latter two should be '[formed] on the principle of Competition for the field', the population would be 'better and cheaper served.' In his opinion there is no system except that of free exchange 'by which the equilibrium of supply and demand can be preserved without [ ].' Returns to the theme of the absence of the international view in the thinking of the current generation of economists 'beginning with Mill.' Refers to Sidgwick's remarks on this subject, which were contained in his paper that was discussed at the Political Econ[omy] Club a few days previously. Claims that the inevitable result of state subsidies would be national isolation. States that if the principle of free trade between nations is adopted, the disadvantages of such a move must also be accepted.

Thanks Sidgwick for sending him a copy of the new edition of his work [The Principles of Political Economy], which he predicts will be of much value to him. Declares that he is at present engaged in work on the [ ] [ ] Commission. Reports that he has just been looking at Sidgwick's comments on Bimetallism, with which he agrees, but disagrees with Sidgwick's contention that a tabular standard 'would supercede the [ ] for bimetallism.' Claims to see no mode, except that of bimetallism, of which there can be a common standard of value throughout the world, and states that 'a metallic basis of a stable [ ] is essential to the tabular system.' Congratulates Sidgwick on the completion of his work.

Refers to a conversation he had with Henry Sidgwick shortly before his death. Recalls that they discussed various matters of general interest, including disestablishment. They also began to discuss Psychical Research, and he reminded Sidgwick of some reports on alleged cases of tuberculosis being cured at Lourdes. Claims to have been deeply impressed to hear Sidgwick say that 'if one could live one's life over again there would be much one would not devote so much of [ones] time to', but that he did not say what he referred to. Louis assumes that he was talking about Psychical Research.