tar problem

I like to make life easy so I wrote a one-line script
for extracting the contents of a tar file. I copied it
into the /bin directory so I can run it from anywhere.
I tried it out in a test directory where I had it, and
where there is a small test tar file. Here is the dialogue
from running it, using  both the local script and the one
in /bin:

~/tartest> ls
tarx  test.tar.gz
~/tartest> cat tarx
tar -xf $1.tar.gz
~/tartest> cat ~/bin/tarx
tar -xf $1.tar.gz
~/tartest> ./tarx test
~/tartest> ls
tarx  test  test.tar.gz
~/tartest> del -r test
~/tartest> tarx test
tar (child): test: Cannot open: No such file or directory
tar (child): Error is not recoverable: exiting now
tar: Child returned status 2
tar: Error is not recoverable: exiting now

Why doesn't it work from bin/ ?

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db