PRACTICAL PAPERS—LABOR AND CAPITAL. 275 
understanding of our subject that the terra capital be held 
strictly to its technical meaning and that it be conceived of as 
existing mainly in the instruments, the materials, the wages 
directly or indirectly provided for the employment of labor. 
Apprehending thus the nature of capital, I must content my¬ 
self with the bare statement of a few fundamental propositions 
laid down and illustrated at length by Mr. Mill. 
1. Industry is limited by capital. Every increase of capital may 
give additional employment to industry. Industry cannot go 
beyond the limit of capital: it may not through lack of labor¬ 
ers come up to it. This recognizes the material dependence of 
these two elements, labor and capital. It says simply that the 
most stalwart or skilled laborer can do nothing till he has tools 
and materials and something to live on while he is working, 
i. e. capital. If he has acquired these by former labor, then is 
he owner of the needed capital, and in a sense independent. If 
he has not these he must wait the will and pleasure of some one 
who can come into partnership with him by finding these 
things for him to begin with. 
2. Capital is the result of saving. To consume less than is 
produced is saving. Saving is simply laying up the difference 
between what one spends and what one earns—between wealth 
produced and wealth consumed. The amount saved and so 
added to capital may be increased by either consuming less or 
producing more, or both. There is no other source of capital, 
8. Yet capital , though the result of saving, is actually consumed 
in the very process of production. The wealth saved goes at 
once into implements, materials and provisions for the daily 
wants of laborers, and there is subjected to consumption quick 
or gradual. It is withdrawn from all other possible uses. In¬ 
vestment for production and spending for enjoyment coincide 
in the first stages of their operations. Both begin with des¬ 
truction of a portion of wealth. But in the spending the first 
is the final stage. In the productive investment a second stage 
is reached, when an equivalent of what has been consumed is 
returned with increase. Thus capital is kept in existence 
from age to age, not by preservation, but by perpeturd repro- 
