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unsuited to our publication. Let it suffice to remark, that the increase in the issues of the metropolitan and private banks during the three years preceding the reaction of 1825, amounted to less than ten millions; whereas it appears from the returns of stamps issued for bills of exchange, that the simultaneous increase in that description of commercial paper alone, amounted to between ninety and one hundred millions!

The fall in prices and a deficiency in the circulation for the purposes of trade and industry have been ascribed to the withdrawal of the small-note currency. But this cause is quite inadequate to the production of the effect assigned. The place of the one-pound note was supplied by an issue of specie, so that no diminution of currency could ensue from this transition. The mercantile depression, experienced since the crisis of 1825, has resulted, I apprehend, more from the contraction of credit by bill and open account than the contraction of bank paper, and this, for the best of all reasons, the salutary warnings of experience. The check on commercial activity and enterprise will disappear with the progress of consumption, and such improvements in our mercantile system as shall afford more safe and profitable channels for the employment of capital: it will be then seen that the stagnation of trade originated in a want of remunerative returns, not of commercial currency, which last mercantile men have a ready way of producing

among themselves when not deterred by the aspect of the times.

I shall conclude with remarking, that it appears to me, from long and attentive consideration of the subject, that the national currency can never attain the stability it ought to possess, till the trade of banking is confined to its old and legitimate functions, and the state resumes its ancient prerogative of guaranteeing and issuing both the real and representative money of the kingdom.



Capital and its productive Power-How it tends to economize, abridge, and augment the Efficiency of Industry--Conflicting Claims of Capital and Labour-Utility of the Middle Classes, of Bankers, Merchants, Wholesale Dealers, and Retailers-Advantages of Middlemen in equalizing Prices and the Supply of Commodities-Claims of Labour to share in the Profits of Capital-Classification of Society into Productive and Unproductive Consumers-Luxuries stimulate Industry-Utility of Authors, Actors, and Domestic Servants -All classes co-operate for the general good-Recapitulation.

CAPITAL is that portion of the wealth, property, or money of the community, which is productively employed.

Labour is the agency by which capital is made productive of wages, profit, or revenue,

Labour is the parent of capital, and capital cannot be made productive without the co-operation of labour; but labour may be productive without the aid of capital; and this is the only superiority the former possesses over the latter; though it is probable this superiority never practically existed in the world since it is impossible to conceive mankind in that rude state in which labour is exerted unaccompanied with capital. The implement used by a savage in hunting or fishing, and the food he consumes while so occupied, are his capital, and it is only when the bare hands or teeth have been employed that labour has been unassociated with capital.

It may then be premised at the outset, that it would be a futile inquiry to institute any comparison on the relative claims of capital and industry; as much so as on the relative claims of the ploughshare and ploughman in husbandry. They are alike valuable and indispensable in ministering to human subsistence and enjoyment.

Without capital labour could not be efficiently exerted. The Indian would with difficulty procure the means of subsistence unaided by his huntingspear and fishing-hook. The power of money, which is capital, need not be insisted upon; it is felt by every one in every pursuit and undertaking to be all but omnipotent: it reclaims the waste, digs the canal, constructs the road, puts ships in motion; it


is the sinew of war, and the spring of improvement in peace; it is at once the seed and fruit of national opulence; the soul of commercial and manufacturing enterprise and without its agency even the bounties of nature would be stagnant and unproductive.

Capital has been called a "giant labourer;" it has certainly long arms and powerful tendons, which connect the ends of the earth, fill up valleys, and level mountains.

A grown-up person, capable of useful exertion, is considered by political economists a portion of accumulated capital: all the sums expended in his maintenance, nurture, and instruction, may be repaid by future labour, and the capital expended in infancy replaced in maturity. Thus capital is stored up industry, provided to develop itself in new and equivalent forms; it is collective force, which, like the momentum in bodies, is exhausted by reproducing itself in others.

Capital operates like the application of machinery in economizing, abridging and augmenting the efficiency of industry.

This it does, first, by facilitating the division of labour. Before labour can be divided, a stock of goods must be previously accumulated sufficient to maintain the labourer, and to supply him with materials and tools. A workman could not devote himself to his business unless provided beforehand with the means of support till his work is completed, either by himself or employer. A farmer, possessed

of capital to pay wages and maintain his servants, may employ them in tilling the ground, in the several occupations for which they are best qualified, till the harvest is reaped.

Secondly, capital saves labour in the production of commodities, and thus by rendering them cheaper, brings them within the reach of a greater number of consumers. This it does chiefly by the intervention of machinery. There could be obviously no machines made without a previous store of money to defray the cost of their erection, of the material of which they are composed, and of the maintenance of those employed in inventing and perfecting them. The advantages derived from this source are so universally diffused, and have been so frequently set forth, that it is unnecessary to dwell upon them. Every thing is now a machine, from a spinning-jenny to a toothpick, and the comforts and luxuries derived from mechanical invention are felt by every individual in his habitation, food, clothing, and mental culture.

Thirdly, it enables work to be executed better as well as cheaper. This is strikingly exemplified in printing. Compare the clearness, precision and intelligibility of a printed volume with the like qualities in the best-written manuscript, and we at once see the superiority of typography to penmanship. The same truth is exemplified in the cotton manufacture. A single pound of raw cotton may be drawn into an even thread 132 miles long-a wonder which the human hand alone could never have accomplished.

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