

CAPITAL. 



37 



that of Mr Evelyn, published in the Transactions of 

 the Royal Society of London for 1798, and corrected, 

 since, by Mr Colquhoun. But suppose the compara- 

 tive value of money, in two states or kingdoms, to be 

 ascertained, and then a valuation of all the property 

 in each, of every description, to be made, the capital 

 of each and the comparative capital of the two are 

 thus ascertained. But tliis comparison would not 

 show the comparative resources of the two, either 

 for war or for production. This will appear from the 

 obvious fact, that a river like the Hudson is a greater 

 facility to transportation than the Languedoc canal ; 

 yet, hi making a return of the property, or the esti- 

 mation of the capital of France, the Languedoc canal 

 would be a great item, whereas the Hudson river, 

 though of equal or greater utility, would not appear 

 as constituting a part of the capital of New York. 

 The inhabitants are the great agents of production in 

 every country ; and, though their productive efficiency 

 will be influenced, very essentially, by the amount of 

 capital, fertility of the soil, quality of its products, 

 facilities of transportation, and arrangements of in- 

 dustry, still the character, habits, and skill of the 

 agents themselves are the most important circum- 

 stances in estimating the productive resources of a 

 community. Industry and skill will rapidly create 

 capital. Mr Phillips, in his Manual of Political Eco- 

 nomy, estimates that the whole value of the capital 

 of a country is consumed and reproduced every three 

 or four years. But the training of a population, and 

 forming its character and habits, is a work of many 

 years. The most important ingredient in the national 

 resources is, therefore, not only no part of its capital, 

 but is a thing of very slow growth, and results from 

 the combined and long-continued influence of a thou- 

 sand causes, moral, physical, and political, too com- 

 plicated to be disentangled, and so blended that the 

 action of each cannot be distinctly traced. Econo- 

 mists have confined their views of production too 

 much to considerations of capital, and neglected, or, 

 at least, not given sufficient weight to, the other eco- 

 nomical capacities and resources. 



Capital is distinguished into floating, or moveable, 

 Bodjumf j the former consisting of tilings that may 

 be moved, and are susceptible of manual delivery ; 

 the latter, of those confined to one place, as a house 

 or piece of land. We use the terms in a different 

 sense when applied to any particular establishment, 

 by the floating capital of which is meant that which 

 remains after payment is made for all their apparatus 

 and the implements of their business, and which is 

 usually invested in the materials to be manufactured 

 or transported, or to pass through the process, what- 

 ever it is, which constitutes the business conducted. 

 Thus one carrying on a flouring-riiill wants a floating 

 or disposable capital, over and above the cost of Ids 

 works, to be invested in wheat to be floured, and 

 flour not yet disposed of. This instance illustrates 

 what is meant by the floating or disposable capital of 

 a whole community being that movable, exchangea- 

 ble stock of tilings on hand, over and above the fix- 

 tures and apparatus of production, including lands, 

 buildings, ships, working animals, all the implements 

 of the arts, with necessary food, clothing, and a stock 

 of seed sufficient for the time requisite for reproduc- 

 tion. What remains over these is the disposable capi- 

 tal, and, in a flourishing community, the disposable 

 floating capital is constantly invested in new fixed 

 capital, implements and apparatus of production. A 

 declining community, on the contrary, consumes a 

 part of its implements and apparatus of industry ; or, 

 what is, in effect, the same thing, it does not repair 

 and replace the damage of use and decay. The idea 

 is held out in many economical treatises, that a com- 

 munity cannot have a surplus capital ; that is, it can- 



not have more capital than it can make use of in its 

 consumption and reproduction. As no grounds what- 

 ever are given for this doctrine, it seems to be hardly 

 entitled to a consideration ; for the position is cer- 

 tainly, at the first view, very improbable, since we 

 know very well that men may accumulate ; and why 

 they may not, in any possible case, accumulate a sur- 

 plus, does not appear by any plausible reason ; and 

 whether such surplus accumulation may be useful or 

 not, will depend entirely upon the kind of articles of 

 which such accumulation consists. If it consist in 

 articles the value of which depends on the prices in 

 foreign markets, the excess may be of no value at 

 all ; for it may so depress the foreign prices as to 

 countervail all the indirect advantage arising from 

 the cheaper supply, for a time, of the domestic de- 

 mand. 



Fictitious capital generally means nothing more 

 nor less than excessive credits, which throw the ma- 

 nagement and disposition of a great deal of property 

 into the hands of persons who are not able to answer 

 for the risks of loss from its bad management, or other 

 causes. A whole community, in the aggregate, can 

 have fictitious capital only hi case of its members 

 having an excessive credit in a foreign country. But 

 the members may, among themselves, have a fictitious 

 capital, by too great facility of credits in their deal- 

 Lugs with each other, and the fiction, in tins case, is 

 hi their false promises of payment. 



CAPITAL, in geography ; a city in which reside 

 the highest authorities of a district, province, country. 

 &c. Capitals, in the modern meaning of the word, 

 can hardly be said to have existed in ancient times ; 

 at least, they were then only the seat of the sove- 

 reign, but not the centre of all the national activity, 

 Rome only, perhaps, excepted ; but this city was, 

 for a very long time, the state itself, and, at a 

 later period, the tyrant of the whole empire, rather 

 than the head of a well-organized body. In Asia 

 there existed, indeed, in ancient times, capitals of 

 very large empires ; but they are not to be com- 

 pared to the capitals of large modern empires, since 

 the channels of communication and intercourse had 

 not then reached that degree of perfection which 

 enables them, hi our days, to bring into close con- 

 nexion all parts of a country. Each province was, 

 therefore, left much more to itself. It would be diffi- 

 cult to determine whether the good or evil conse- 

 quences of large capitals, hi modern tunes, are 

 greater, and such an examination would far exceed 

 our limits ; otherwise, it would be very easy to point 

 out, in every department of civilization, in science, 

 social intercourse, politics, arts, &c., both salutary 

 and pernicious effects, resulting from the influence 

 of capitals. It seems to ns a matter of little doubt 

 that it must be regarded as disadvantageous to any 

 country, if the capital ceases to be the concentration 

 of the skill, genius, and strength of a nation, for the 

 benefit of the whole, and by a disproportionate su- 

 periority destroys the importance of the rest of the 

 country, as we find to be the case with Paris, which, 

 as has been often observed, contains France. In 

 Germany, the state of things is quite the reverse. 

 There is no city which may boast of being the point 

 of national concentration. The consequences have 

 been very advantageous to science, and somewhat 

 disadvantageous to literature. In politics, this want 

 of a central point has had melancholy consequences 

 for Germany. London never exercised that degree 

 of influence over England which Paris has over 

 France ; one reason 01 which may be, tliat the two 

 most extensive institutions for the diffusion of know- 

 ledge are not seated in the metropolis. The system 

 of concentration has, there is littjf. doubt, been car- 

 ried to an extreme in Europe;: the best of every 



