Ne 
—— 
e.. 
| another. 
_ comparison through the medium of the metals, 
| pare their money prices in the two places. 
| this correction of the common measure is not 
‘ments; in short, in all those things which bear 
a value in the market. Provided the community 
owes no debts abroad, these will constitute its 
aggregate capital; and, if its members are in- 
debted abroad, we find its actual nett capital, as 
in the case of an individual, by deducting the 
amount of its debts from the value of its posses- 
sions, without regarding the debts due from 
some of its members to others—In comparing 
the capital or wealth of two communities, we 
may be led into an error by comparing the value 
of their possessions in gold and silver, since the 
value of these metals is well known to differ in 
, different countries, by whatever standard the 
comparison be made. If, for instance, we com- 
pare the value of the metals in reference to the 
wages of a common day-labourer, we find he has 
2 or 3 pence a-day in Egypt, and from 50 to 72 
pence in the United States. We shall find the 
same diversity in other things. If we take a 
| horse, of the same beauty and serviceable quali- 
ties, for an example, we shall find his price, in 
money, to be twice as great in one place as in 
In order, therefore, to make such a 
or by adopting them as a common measure, we 
should, in the first place, correct the measure it- 
| self, and ascertain whether an ounce of gold, in 
one of the places between which the comparison 
is to be made, is worth a half of an ounce or an 
ounce and a half in the other; and the way of 
correcting the standard would be, to take equal 
quantities of a great number of articles of the 
same quality, in the two places, or equivalent 
quantities of equivalent articles, as nearly as 
their equivalence can be ascertained, and com- 
But 
very easily made. The inhabitants are the great 
| agents of production in every country; and, 
though their productive efficiency will be influ- 
enced, very essentially, by the amount of capital, 
fertility of the soil, quality of its products, fa- 
cilities of transportation, and arrangements of 
industry, still the character, habits, and skill of 
the agents themselves, are the most important 
circumstances in estimating the productive re- 
sources of a community. Industry and skill will 
rapidly create capital. Mr. Phillips, in his Ma- 
nual of Political Economy, estimates that the 
whole value of the capital of a country is con- 
sumed 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 thousand causes, moral, physical, 
and political, too complicated to be disentangled, 
and so blended that the action of each cannot 
be distinctly traced. Economists have confined 
their views of production too much to consider- 
CAPITAL. 
ations of capital, and neglected, or, at least, not 
given sufficient weight to the other economical 
capacities and resources. 
Capital is distinguished into floating, or move- 
able,and fixed ; the former consisting of things that 
may be moved, and are susceptible of manual de- 
livery; 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 particu- 
lar 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 trans- 
ported, or to pass through the process, whatever 
it is, which constitutes the business conducted. 
Thus one carrying on a flour-mill wants a float- 
ing or disposable capital, over and above the 
cost of his works, to be invested in wheat and 
flour not yet disposed of. 
trates what is meant by the floating or dispos- 
able capital of a whole community being that 
moveable, exchangeable stock of things on hand, 
over and above the fixtures 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 reproduction. 
What remains over these is the disposable capi- 
tal, and, in a flourishing community, the dispos- 
able floating capital is constantly invested in 
new fixed capital, implements and apparatus of 
production. A declining community, on the con- 
trary, consumes a part of its implements and ap- 
paratus 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 community cannot 
have a surplus capital; that is, it cannot have 
more capital than it can make use of in its con- 
sumption and reproduction. Asno grounds what- 
ever are given for this doctrine, it seems to be 
hardly entitled to a consideration; for the posi- 
tion is certainly, at the first view, very impro- 
bable, since we know very well that men may 
accumulate; and why they may not, in any pos- 
sible case, accumulate a surplus, does not appear 
by any plausible reason; and whether such sur- 
plus accumulation may be useful or not, will de- 
pend entirely upon the kind of articles of which 
such accumulation consists. If it consist in ar- 
ticles 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 do- 
mestic demand. 
Fictitious capital generally means nothing more 
nor less than excessive credits, which throw the 
management 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 commu- 
This instance illus- | 
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