answer to this question brings us at once to the heart of the subject.

It is the property, the ownership, that is unchanged, and thus the fortunes of individuals remain intact; the articles which are the subjects of that property,—which are owned, —and which, at any one time, constitute the wealth, are constantly changing; they are used up, and then renewed, without the owner's co-operation, and often even without his knowledge. Barring casualties, unlucky investments, and the like, (which, being comparatively few and infrequent, may be left out of the account,) no man's property is consumed without being replaced by the very act of consumption, unless he himself, consciously and wilfully, consumes or expends it unproductively; that is, upon the gratification of his own tastes and appetites, without looking for a return or replacement. To "invest" one's savings is to lend them. Not having time, inclination, or perhaps ability, to use them reproductively to advantage, that is, to superintend the constant changes of form which they must undergo, or quickly perish,—we lend them to others, who can and will direct their transformations, on condition of receiving a small portion of the profits of these changes. For it is also the nature of wealth, when well managed, to grow, or increase, by each change of form.

the

To make this clearer, we will analyze a single instance, simplest one that can be found. If the earnings of an artisan for a year have amounted to $300, he may expend them all upon food, clothing, and amusement. In this case, he spends them all unproductively, —that is, without expecting a return or replacement of them. At the year's end, all the advantage which remains to him from his year's labor is, that his strength, health, and spirits are renewed or replaced, so that he can now go to work and earn another year's wages.

But suppose that he is frugal, and ambitious to grow rich. He will then contract his daily expenses, drink nothing but water, give up all amusements, and thus, at the end of the year, he will find that his health and spirits are even greater than before, and that he has saved perhaps $100, or one third of his earnings. What will he do with this $100? In a rude state of society, among a half-civilized people, or under the government of a Turkish pacha, property being insecure, he would probably obtain it in

the form of gold or silver coin, and bury it in the corner of his cellar or garden. There, sure enough, it would remain without change, and therefore without income or increase. But in this country, in England, or France, he would probably put it in the Savings' Bank; that is, he would lend it to the bank, which, for shortness, we will suppose to be a bank both of savings and discount. In consequence of this loan, the bank will be able to lend or discount $100 more to one of its customers. Suppose a baker wishes to extend his business, but has not capital enough of his own to buy more flour with. He borrows this $100 of the bank for four months, and with it he immediately purchases twenty barrels of flour more than he could otherwise have purchased. What he borrows of the bank is not, in fact, the $100 bill which is handed to him across the counter, but the twenty barrels of flour which he buys with it; the bank-bill being only a ticket or certificate, in which the bank directors say to the flour-dealer, "Deliver this man twenty barrels of flour, and we will pay you for it." The flour-dealer complies, and immediately carries back the bill to the bank, and is paid for it either in hard specie, or in that amount carried to his credit, or in any other form that he may prefer. We may put aside, then, in future, any consideration of the bank-bills; for they are nothing but tickets of transfer, or orders from the bank to any merchant, asking him to deliver the bearer a certain amount of goods, and the bank will pay him for them.

But let us follow the laborer's $100 of savings. In what form do they now exist? Evidently they have become twenty barrels of flour, which the baker gradually transforms into many loaves of bread, and sells them to his customers. Before the four months expire, the bread is all sold and eaten; so that the $100 are now fairly consumed. But has their value disappeared? By no means. The baker's customers have paid him for this bread at least $120, so that he can now repay the bank the $100 that he borrowed, with the addition of two dollars for four months' interest, put eighteen dollars into his own pocket as the reward of his labor. The bank, being again in funds, can now lend, we will suppose, $102 worth of leather, for four months, to an enterprising cordwainer, who begins immediately to manufacture it into boots and shoes. Before his four months have expired, these are all sold, (half of them, perhaps, are half worn out,) and he has received,

and

it may be, $225 for them; so that he can now repay the bank its loan of $102, besides two dollars and a fraction for interest, pay his workmen probably $100, for a good deal of labor was needed for the consumption of that amount of leather, and put a little more than twenty dollars into his own pocket. At the end of eight months, then, the bank has a little over $ 104 to let out for another period of four months. A paper-maker borrows this, buys rags with it, makes paper out of them, sells it, and with the proceeds he pays the bank $ 106 and a fraction.

The year has now expired, and our frugal laborer, having occasion to make a different use of his savings, goes to the bank for them, and receives $ 104.50, the bank retaining nearly two dollars as compensation for its agency in the affair. Thus the laborer finds that, by some process incomprehensible to him, the $100 which he deposited in the bank for a year has hatched $ 4.50, which it certainly would not have done if it had been simply locked up in the vault for safe-keeping. Could he have followed that process, he would have seen his $100 successively becoming, or assuming the shape of, flour, bread, leather, shoes, rags, and paper; and in each of these forms, in turn, he would have seen it entirely consumed or used up. The flour, leather, and rags have been manufactured into corresponding articles, the bread has been eaten, the shoes are half worn out, and the paper is covered with writing and printing, so that a new supply of each is called for. There has been a net gain at each stage of the transaction, and the total gain has been fairly distributed among all the parties to it, compensating each for his labor or frugality.

If any one thinks the instance here analyzed is a trivial or exceptional one, so that it throws little light on the general theory of wealth, let him look at the returns made to the Legislature by all the Savings' Banks in Massachusetts in 1862, which show that the amount deposited in those institutions exceeded $ 50,400,000; that it yielded an annual average dividend of over six per cent; and that the number of depositors was 248,900, so that the average amount to the credit of each depositor was a fraction over $202. This aggregate of savings-made up, be it remembered, by the labor and frugality of Irish domestics, small mechanics, day-laborers in the country, and the like—is more than enough to build and keep in motion all the cotton and woollen factories in Massa

chusetts; as the aggregate capital of all these establishments in that State, in 1865, fell short of forty-nine millions. Observe, also, that large sums are annually withdrawn from these institutions, for productive investment in other ways, and the deficit thus made is immediately supplied by fresh deposits; so that these Savings' Banks resemble great lakes, in which the water ever remains at the same level, though they are constantly supplying running streams, which bear a fertilizing influence with them all their way towards

the ocean.

We now go back to the principle first enunciated, and which seems to be firmly established, that the whole wealth of a civilized nation is in a state of constant flux and renovation, the apparent stability and unchangeableness of the fortunes of individuals offering no exception to this principle. The instance analyzed also proves that a profit, an addition to the national stock, is made only at and by these successive changes of form. What is inconsumable is also necessarily unproductive. We consume in order that we may produce, and we must consume before we can produce. The wealth which is literally locked up or buried only rots or rusts; and we might just as well bury only stones or sand in its place. But money or wealth is not locked up when placed in banks, institutions for savings, moneyed corporations, as they are called,

and the like. These institutions are nothing but contrivances for collecting it, setting it in motion, and making it circulate around us, like the atmosphere which we breathe. The wealth which would otherwise be scattered in many little hoards, remaining idle because owned by those whose circumstances would not allow them to use it to advantage, or because the separate sums were too small to admit of a profitable application, is, by these means, brought together and made as efficient as the vast accumulations of great capitalists. The aggregate thus formed is made to do its full part in supplying the lungs of industry, keeping it alive and active, and making all the parts of the body politic and social contribute to the sustenance and growth of the whole. The fifty millions in the Savings' Banks, and the sixty-seven millions of capital in the banks of deposit and circulation, (I speak only of Massachusetts,) do not rest there, but are, at this moment, circulating around us, driving the wheels of our factories, supplying our mechanics with tools and our tradesmen with goods, building and freighting our ships,

bringing to us the productions of all habitable climes, hurrying from one task to another with indefatigable ardor, and assuming a thousand different forms and hues, according to our necessities and desires.

"What is annually saved," says Adam Smith, "is as regularly consumed as what is annually spent, and nearly in the same time too; but it is consumed by a different set of people. That portion of his revenue which a rich man annually spends is, in most cases, consumed by idle guests and menial servants, who leave nothing behind them in return for their consumption. That portion which he annually saves (as, for the sake of the profit, it is immediately employed as a capital) is consumed in the same manner, and nearly in the same time too, but by a different set of people, — by laborers, manufacturers, and artificers, who reproduce, with a profit, the value of their annual consumption."

We are now entitled to assume that the theory of wealth is a large and complicated one, embracing many curious and difficult problems, and resting upon many general principles or laws, the discovery and development of which constitute a distinct and important science. One of these laws or general facts -the transmutations of capital has been pointed out and briefly elucidated. And we perceive that it is a fruitful one, pregnant with important conclusions and inferences respecting the institution of property and the modes of favoring industry and increasing national wealth. If the science has been successfully cultivated, many more such general laws must have been discovered in it, a knowledge of which is important to the statesman, the merchant, and the philanthropist. As Political Economy is expounded in the books, whether by Adam Smith, Ricardo, Sismondi, or Mill, it may, or may not, be well founded and trustworthy in all its parts. Authorities differ on many points. But these men have not been studying a mere chimera, or wasting their energies in a vain pursuit. There are general laws affecting the production and distribution of wealth, whether they have been discovered or not; and a knowledge of these laws is a very different thing from the practical knowledge, the acquaintance with details, and the natural shrewdness, which enable a man to acquire property, and to take good care of it when acquired.