THE PRACTICAL APPLICATION OF ECONOMICS. 891 
are invested in plant in the United States, and that the industry 
gives employment to an army of industrial workers no less than 
b] 
A similar result must attend the construction and maintenance 
of the telephone. 
It may be stated, as an economic axiom, that the progress of 
invention furnishing a new utility for which there will be a 
demand, increases the wealth of the community to the value of 
the earnings derived from the production of that utility (except 
so far as other industries may be displaced), without any decreased 
expenditure in the aggregate by the purchases made for the new 
utility in the country in which the same is produced. 
It will be noted that, for the operations incident to a new pro- 
duction of 100, a circulating capital of 100 is required. The 
aggregate amount which has represented circulating capital 
throughout the year, in the illustration given by one of the 
diagrams, is 600, and the total production in connection with the 
industry is 1,200. A circulating capital of 100, therefore, suftices 
for the two productions—the original one and the additional pro- 
duction stimulated. This circulation enables us to ascertain 
precisely the circulating capital which is in existence in the 
country, or which must be available in case of a new industry. 
The amount which represents the total of the circulating capital 
in use throughout the year must be the sum to represent one half 
of the balance of all production, after deducting the increased 
value—that is to say, the profits, less an amount representing the 
approximate expenditure of the employers. 
The whole amount of circulating capital required may not of 
course be in existence at the same time, its production and repro- 
duction is constantly going on. 
Total production in New South Wales for the year 1892 was 
ascertained at £35,289,000. The table of private wealth for the 
year shows the value of merchandise at £15,585,000. Quoting 
from Coghlan, ‘this represents the value of the goods and stocks 
of all kinds, whether in store or shops, or at the place of pro- 
duction, and averages in value half the imports and exports taken 
together.” The value of stock for the year slaughtered was 
£4,450,000, a total of £20,035,000. Allowing for savings as 
stated for other years approximately £3,000,000, a little more or 
less, the balance approximating £17,000,000 would represent the 
amount of circulating capital which would be employed through- 
out the year. Commencing any of the diagrams presented show- 
ing production, with capital £17,500,000, the same would result 
in a total production of £35,000,000. 
When works of construction have taken place in a country by 
means of borrowed capital, upon which interest has to be paid, 
preducts being sent away annually in payment of the interest ; if 
