the construction of roads, railways, shipping, docks, harbours, and the like. In the estimate of public wealth, every investment of capital which is destined to be used productively, and is so used, must be included, whether it be represented in the skill of the labourer, the goods, tools, and money of the capitalist, the improvement of the natural capacities of the soil, or any other object from which profit is derived, besides accumulations of unremunerative wealth, as plate, pictures, &c. But the rent of land, the interest on public debts, and the reserves which are held against emergencies, are not part of the capital of a country. Rent in the sense of a licence to use the natural capacity of the soil does not differ from the interest on public debt, except in the fact that it arises from natural causes, or has been allowed to be appropriated; while the dividends on stock are so much annually deducted from the profits of capital invested in various directions. A reserve is, by the meaning of the term, property or wealth which might be productively employed, but is now withheld from production. It is equally an error to treat rents and dividends as part of public wealth, and to deny the name of wealth to those immaterial properties which bestow on objects or persons the faculty of fulfilling purposes, or effecting services which are in demand.

Capital and Labour. These two elements, reciprocally necessary to each other's existence, are not at variance except by error or mismanagement. It is true that the remuneration which the labour takes under the name of wages, is naturally determined by the competition of labourers; the profit which the capitalist appropriates is equally determined by the competition of capital. But there is one cause which gives the possessor of capital a

great advantage over the labourer, the comparative ease with which his capital may be transferred from one object to another, from one centre of industry to another, from one country to another, when compared with the facilities with which labour can seek a better market. In order to sustain or succour this weakness of labour, combinations have, as we know, been entered into among labourers, which seek to fix the price, and regulate the process of labour. These practices are an interference with economical laws, and it may be doubted whether labour has been really benefited by the expedient. The true processes by which the problem of the remuneration of labour can be interpreted, are the development of those means by which labour can seek its own market, and the union of capital and labour in the same persons, under the system of cooperation.

Profits of Capital. Profit is used popularly, and even by economists, in a somewhat loose way, and the usage tends to confuse the relations between capital and labour. The real rate of profit is the average rate of interest, and whatever advantage the employment of capital can bestow on its possessor beyond this rate, is not due to profit, but as we shall see, to some other cause. Interest on advances supposes that the principal sum or value is permanent, and not liable to any diminution. When, therefore, the person who is engaged in the employment of capital has satisfied this portion of his return on capital, he requires that the wear and loss of capital should be replaced. This constitutes another portion of his so-called profits. Then as he bestows labour, sometimes of the most arduous and exhausting character, in the management of his business, he obtains, just as any other labourer

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does, wages for his care and superintendence. lastly, in case his occupation involves any risk of loss, he requires, again in the aggregate of his so-called profits, to insure himself against such contingencies, and he does so by the natural competition of trade, even when his prudence and foresight enable him to reduce these contingencies to a minimum.

Accumulation of Capital. The capital of a country may be stationary, progressive, or retrograde. The first state is of course, like a mathematical point, wholly hypothetical. The last is, unfortunately for mankind, too frequently witnessed when the government of any country is negligent or rapacious, or the moral character of the community is discredited. It may also ensue from any great change in the conditions of commerce. Thus the decline of the trading republics of Italy, and of the Hanse Towns, is to be chiefly ascribed to the discovery of other commercial routes than those of which the ancient centres of commercial enterprise almost possessed the monopoly. But when the energies of any country are untrammelled, and the disposition to save is general, (even though the rate of interest may be low), and investments may be made which satisfy the community, capital will be enormously accumulated.

The accumulation of capital in this and other countries can of course only be guessed at. The elements of the calculation however, are to be found, (1) in the investments of a permanent character which have been made, as in new shares, stocks, and similar employments of industrial capital; (2) in loans to foreign governments and foreign enterprises; (3) in buildings and in permanent improvements of the soil; (4) in the increase of foreign and

home trade. But though the elements of the calculation are intelligible and easily distinguished, the calculation itself must be vague, because we have no precise information on some of these heads, in this country.

In the United States the accumulation of capital is still more rapid. In this community almost all persons are engaged in business. There is no merely spending class, for very few persons live on realized property. The habits of society do not encourage or indeed permit great personal expenditure; the rate of profit is high, and accumulations are therefore encouraged; and the country affords boundless fields for industrial enterprise, while the raw produce of the States finds a ready market over the whole civilized world.

Capital, as has been stated, is antecedent to the employment of labour, and is devoted to its maintenance. It will not be accumulated except with a view to profit; it must be employed in the sustentation of labour. Hence it is the interest of the capitalist to discover the most productive labour, because this gives him the largest advantage in the use of his capital; and it is the interest of those who live by wages to protect and foster capital, because the greater the capital, the larger is the rate of wages, the fuller and more continuous is the employment. Unfortunately however labourers have not always seen the function which capital fulfils, nor have capitalists always interpreted the productiveness of labour sagaciously. Like some married people, they have been at cross purposes when they should have been at one. Nay, the relation is closer; for labour and capital, as long as they are not reciprocally benefiting each other, are paralysed and powerless. The two blades of a good pair of scissors are not more useless

when separate, and more effectual, when united, than labour and capital are when disjoined and combined. is idle then for labourers to talk of the tyranny of capitalists in the mass. Capitalists have a common purposethe attainment of profit. But unless they were united in a vast partnership, a thing manifestly impossible, they have diverse and competing interests; in fact, no competition is more active than the competition which regulates profits: there is none, I may add, which is more beneficent to the general community. Employers may be individually harsh, but it is to their own detriment; for the labourer will always, if he be free to choose, seek the best market, and the best market is that in which he can earn the most, and in the least onerous fashion. So again capitalists will employ their capital most readily where the risks are the least and the mutual confidence of employer and employed are most fully sustained. It is wholly unreasonable to suppose that men prefer an atmosphere of vexation and risk and suspicion to one of ease, security, and good faith. Everything in short, which facilitates the relations of labour and capital, tends to raise the wages of the former, and to moderate the profits of the latter, because it eliminates risk, encourages accumulation, and suggests the employment of capital at home.

On the other hand it is an error for capitalists to overlook the efficiency or productiveness of the labour which they employ. Of course they require competent skill, and are ready judges of such skill as is required. But this is by no means the only condition of efficiency. A man may be a skilful but a worthless workman. He may be underfed, and incapable of that muscular exertion which