volving with unusual rapidity, fling off considerable additions to the aggregate of the national income, which draws out, as before, some additional circulation.

Successive Rise of Incomes.

The manufacturing incomes thus arising constitute an increase of demand, the play of which against existing stocks and services, heightens their value, and thus is generated an increase in a new and miscellaneous class of incomes, extending in a long and irregular line through a variety of trading and professional persons, from the little grocer whose tea is in double demand, to the fashionable music-master, who unfortunately can neither divide nor extend his supply, so as to give two guinea-lessons at the same time to two different manufacturers' daughters. The production of income out of income may be illustrated by a connection which competent judges have believed to exist between the outlay in railway salaries and wages in 1845, and other phenomena near that period. The enormous personal expenditure of that year in London was followed by most unusual gains to the jewellers through the sale of trinkets and gold watches. It was the impulse, no doubt unknown to themselves, behind the backs of those who set up a second Italian Opera; and, in conjunction with other circumstances, it contributed not slightly to the undertaking of what is the most difficult of all commercial enterprises in England, namely, a new London morning newspaper. At every step new incomes, or additions to old ones, were the necessary consequences. In this manner, step by step, an upward impulse would be given to one series after another of the more variable incomes; but still with slight effect on the large mass of salaried employés, and with none at all on that wide-spread agricultural interest, which for a time might see the golden tide swelling and surging over the scorched and blasted plains of northern and central England, and through the populous towns towards the metropolis, without once turn

ing to visit the valleys of Devonshire, the pleasant downs of Kent and Sussex, or the well-stocked pastures of Lincoln.

First Rise of Agricultural Incomes.

"But land and trade are twins," as Sir Josiah Child says, and the sympathy would be felt. First, the market gardeners, dairymen, and graziers near great towns, would find greater returns. Next, and very quickly, the effect would reach all agriculturists connected with the rearing and fattening of stock; for, while foreign competition in this matter is of no account, the railways are tending to spread out and bring close down over the whole kingdom, the demand of Smithfield and the great towns, growing in intensity at least under the first growth of money incomes. The men of the Lothians, as distinctly in the front rank of agricultural industry as Lancashire is in manufactures, contrive to pay rents almost as high as if their lands yielded two crops in the year; and they do this by skill, vigilance, and untiring energy, which, amongst other things, makes Scotch meat come more easily and cheaply to the hand of a London butcher, than if it were fed on the meadows of the Lea or the hills of Berkshire. Receipts from corn growing, of course, with free trade, would do scarcely more than keep at the point determined by the natural protection of the home grower above the foreign level.

New Capital drawn to Manufactures.

But here we are brought again to Mr. Senior's theory, which, simple as it seems, involves a process of the utmost possible complexity, and in which only the first line of changes has been traced. We have supposed the general elevations of income to commence with the great manufacturing groups, the change being by them successively imparted to other classes, solely in consequence of their demand. But Mr. Senior's

theory now requires of us to look for the action of a new set of forces, lying deeper in the social organization.

The supposed high profits in Lancashire and similar places must needs attract a great deal of new capital. After our survey of the money market, there can be no doubt that new capital previously unemployed would be ready in great masses to meet the demand. But Mr. Senior's theory takes a far wider sweep than one which would merely clear out the supply from the London money market. It requires of us to contemplate a period when the manufacturing incomes, rising enormously, would not only draw to the north and central districts all unemployed capital, but would actually cause a transfer of capital actively employed, from those employments in which profits were least, to those in which they were greatest, until profits of all kinds reached the same level. Nor is this all; the range of the theory includes a still greater revolution— a change in the habits of man himself, or, in other words, a considerable transfer of labour from employments of the lowest wages to those most powerfully affected by the bullion influx. Then, and then only, the chain of causation would exhaust itself, and a new equilibrium be established; when the flood, heaving up class after class of the variable incomes, loosening as it were the moorings of the most stable industries, and floating them all up, raising the wages of the ploughman, and the salary of the bank-clerk, even the disgracefully poor stipends of the parish surgeon and the parish schoolmaster, should cease its fluctuations, as the last faint wave of change, after communicating, through some unwonted generosity of the House of Commons, its final impulse to the salaries of the servants of the State, died away at the embankment of the funded incomes.

It is true that very extraordinary changes in income did take place during the war, from a somewhat similar cause, namely, the enormous addition artificially made to the aggregate of income-and therefore of demand and prices-by the vast and

I

continued expenditure of the Government. But I pause, without the least ability to see my way through that interminable vista of confusion, uncertainty, and suffering, which is presented by the thought of such a continued action of the gold influx, as would cause an actual transfer of capital from the less profitable to the more profitable employments, to a sufficient extent to restore the equilibrium.

Transfer of Capital.

The regular flow of capital from the less to the more profitable employments, is one of the familiar postulates of political economy, so frequently assumed in its reasonings as to cause most of those who use it to forget habitually that it is only a postulate, admissible as applied to long periods, but utterly contradicting experience, when it is assumed as taking place either rapidly or without the most calamitous reverses of individual fortune. I know the self-rectifying principle in the social organization which draws new capital to the most profitable employments, and also borrowed capital even from active but less profitable exercise; but our concern here is with a vast mass of capital, neither new nor borrowed, upon which profits are low, which therefore ought to have its condition mended by transfer, but for which the word transfer can have no possible meaning but that of destruction.

Suppose, for a moment, which I do not believe, that free, trade were really to inflict permanent injury on the shipping interest'. I do not believe it, though doubtless the personnel

1 At Newcastle, last year, I greatly admired the spirit of an eminent Protectionist ship-owner, who, grumbling like a true John Bull at the policy which he disliked, spent no time in praying to Jupiter, but was erecting in his dockyard a lofty and beautiful structure in the style of the Crystal Palace, simply to protect from the weather the hulls while on the stocks. Let me add, as more immediately illustrating the above argument, that I saw, at the same time, the iron-works of the firm in which Mr. Armstrong is the acting partner-one of those perfect industrial organizations in which man seems to rival the processes of Nature herself. Every varied

of our mercantile marine will require some improvement before it can hold its own with the intelligent supercargoes and captains of North America. But suppose the case of a ship-owner having really to transfer his capital, what is the meaning of the process? It means and can mean nothing but total ruin, a simple abandonment of the ships which are the capital to rot in the docks or at the river side. Of course a sale of the ships, though a transfer for the individual seller, is none in the sense of the argument, as it would still leave the same amount of capital in the unprofitable employment.

So of agricultural capital; what is the meaning of its transfer? It is true that crops, live stock, and draught cattle are always saleable, but what is to be done with the expensive manures or the drainage? How would Mr. Mechi transform his costly and admirable apparatus into something which could be applied to the extended manufacture of calico, or to the production of that which is now most of all in demand at the goldmines, namely, bitter ale and bottled porter? But we may suppose, in an ordinary case, that a farmer can extricate most part of his capital from his holding. When the fields are swept bare, and the auction of the old ancestral furniture is at an end— when he has taken his last look at those bare walls which rang with the joy of his bridal and witnessed the birth of his children, and after the mournful equipage has lingered by the gate of the old familiar churchyard where the bones of the elders repose-where is he to go for his new investment? To the cotton mills! To join in that fierce race of competition, in which the keenest man in England, without a Lancashire education or Lancashire blood in him, has not the remotest chance of holding his ground! In such a contest, the farmer's prospect of improving his profits would be slender indeed. For a man bred to. agriculture, there is no transfer possible but a transfer out of

operation, from the most vast to the most delicate, was performed exactly in its place and in its time, without one wasteful movement of a muscle, and all by the aid of a judiciously invested capital. What would have been the meaning of transferring that capital? To fling it into the Tyne or sell it for old iron.