capital he has not the option of withholding it from the use of others.' capital in ture. Is it an advantage or a disadvantage to the working Use of classes that large fortunes should be amassed? This agricul problem will be most easily elucidated by taking some simple illustration of the use of capital in the development of industry, and in furnishing employment to the wage-earning classes. The process has been traced, in its application to agriculture, by M. Turgot, in his essay 'On the Formation of Wealth.' Advances are required to enable every kind of work, whether agricultural, industrial, or commercial, to be carried on. The man who tills his own land must sow before he reaps. He must live until the harvest is gathered. The more extensive and perfect the system of cultivation, the larger are the advances required. Cattle, implements, buildings to shelter the cattle and store up the grain, become necessary. Until the harvest is gathered in, a number of labourers, proportionate to the extent of the operations, must be paid and fed. It is only by means of a proportionate expenditure that large returns can be obtained. In every trade the workman must be furnished in advance with tools, and with a sufficient quantity of the raw materials of the industry in which he is engaged. He must be provided with the means of subsistence, until a market can be found for the produce of his labour. In new countries, where a virgin soil is being brought for the first time into cultivation, and the settler is not burdened with heavy charges for rent, Amount of capital absorbed in British industry. Profits on capital commands a higher rate of interest than in a country of older civilisation. In his recent lectures, Mr. Leone Levi has given some remarkable figures showing the amount of capital required to carry on the industry of our own country. 'He estimates the number of acres under cultivation in the United Kingdom at 20,000,000, which, taken at 8l. per acre, would give a total of 160,000,0007. The very existence of a large number of industries depends on the constant flow of capital. No less than 80,000,000l. was required for the cotton trade, 30,000,000l. for the wool trade, 30,000,000l. for the iron trade, 70,000,000l. for the merchant marine. The vast total of 609,000,000l. was invested in railways; and he could not say how much more had been invested in the numerous other public undertakings, such as water-works, gas-works, docks, banks, and insurance companies both at home and abroad.' In an economical point of view, the larger the store of capital, the more prosperous will be the condition of the population. It is doubtless to be desired that the accumulated wealth of a country should be in the hands of many, rather than in the possession of a few, but in each case the acquisition of wealth is a question of the opportunities afforded to individuals. I do no injustice to my neighbour when I deny myself an indulgence; and if I employ my resources, be they small or be they large, in industrial or commercial operations, I create employment and benefit the working man. If, then, it be a benefit to the masses that capital capital. should be accumulated, and if the process, by which these accumulations are formed, involves more or less of self-denial, it is obvious, as Mr. Ricardo puts it, that no one will accumulate but with a view to make that accumulation productive. The farmer and the manufacturer can no more live without profit, than the labourer without wages. In proportion as you diminish profits you lessen the motive for accumulation; in proportion as you increase profits you increase the desire to accumulate. tions in rate. If the command of capital at a low rate of interest Fluctuais a source of wealth to a nation, it is certain that the the Bank use of money on moderate terms will be most easily obtained in a country where the supply of money is abundant, and the security afforded by the law, and by the high tone of the commercial classes, is most complete. These conditions have been combined in the United Kingdom in a higher degree than in any other country, and the average rate charged for interest at the Bank of England would have been considerably lower than elsewhere, but for the impetuous enterprise of the British nation, which leads to overtrading and over-production, and to ever recurring fluctuations from a state of inflation to one of depression, from a mania for speculation to a commercial crisis. We are more subject to these changes than other nations; and when credit is falling low, and the supply of capital is less copious, we are called upon to pay very high rates for the use of money. Mr. Palgrave has recently published a careful analysis, showing the alterations in the Bank rate between January 1, 1844, and December 31, 1877. The result has been to show that the vast capital, which has been absorbed in the development of our colonies, in loans to foreign countries, and in enterprise of every kind at home, has been supplied at lower rates than those charged in the same period in any of the great monetary exchanges of Europe. We have seen more frequent changes, and the highest rates have been reached oftener, and maintained longer, in London than in Paris. On the other hand, low rates of interest are much more constant in London. A period of 12,170 days is included in Mr. Palgrave's tables. During a quarter of this period the rate of interest in England varied from 2 to 24 and 2 per cent. These low rates were not maintained in France for half the number of days, during which they were charged in England. In London 3 per cent. has been the usual rate of interest. During half of the whole period under review the rate has stood at 2, 24, 2, and 3 per cent. In France 4 per cent. has been the ordinary rate; and it was maintained during the half of the whole period. Before 1877, the Bank of France had never reduced the rate of interest so low as 2 per cent. When the rate stands at or over 5 per cent., money can no longer be said to be cheap. If the rate rises above 6 per cent., it is an indication of commercial distress and famine. In France, in consequence chiefly of the financial pressure caused by the disastrous struggle with Germany, six per cent. has been demanded during a much longer period than with us. On the other hand, we have had a more frequent experience than our neighbours of the panic rates of eight, nine, and ten per cent. M. Leroy Beaulieu attributes these exceptional rates to two causes: (I.) To the rigorous restriction imposed by the law of 1844 on the issue of notes. (II.) The insufficiency of the reserves of bullion maintained in England. No less than 80,000,000l. of bullion are stored up in the cellars of the Bank of France. But the money is not idle. In the form of bank notes it is in constant circulation, and the ample store, which it is thought expedient to keep in reserve, is a guarantee against the sudden and frequent fluctuations of the rates of interest experienced in England. The explanations suggested by M. Leroy Beaulieu do not, in my opinion, wholly account for the recurrence of panic rates more frequently in London than in Paris. Our rash spirit of adventure manifests itself in trade, as it does in other things, and is the cause of periodical crises. Abundant capital a supplies of benefit to the whole tion. Viewed as a working man's question, and with reference to the well-being of the masses, accumulations of capital, whether formed by profitable enter prise, or by the thrift of the wage-paying and populawage-earning classes, have furnished a comfortable maintenance to multitudes, whose existence, even had they been content with the lowest standard of living, would have been impossible within the narrow limits of the United Kingdom, but for the creation of those great industries, in which so much of the national |