creases the efficiency of either works a common benefit. When the representatives of these two natural partners in production are arrayed against each other, there must be something radically false and wrong in prevalent popular sentiment, or in the social organization.

Forms of Capital.-The products of previous labor appear as capital in four distinct forms.

1. In the form of Materials to which present labor is to be applied. The farmer must have seed, manure, breeding animals, etc., which by labor must be put into fit conditions for the processes of Transmutation to produce increase. The manufacturer must have lumber, cotton, iron, wool, leather, etc., which labor shall Transform into articles adapted to men's comfort and gratification. The merchant's materials are the goods which make up his stock, by Transportation to be brought, with increased value, within convenient reach of those who desire them. Obviously, all these things are the products of former labor, on which present labor works to increase value and

swell the sum of wealth.

2. Capital takes the form of Implements and Machinery by which present labor is made effective. A man's hands and limbs and muscles alone can do little or nothing with the materials just named. The farmer must have ploughs and carts, divers tools, machines, working animals, etc. In this category also must be included the land, which is his great instrument of production. The mechanic must have axes, ploughs, hammers, a full chest of tools, and the manufacturer, engines to create momentum and ingenious and complicated machines for directing it in adjustment to the materials employed and the articles to be produced. To this division belong also the teamster's wagon, the merchant's ship, the entire structure and rolling-stock of the railway company, and whatever facilitates the transporta

tion of goods, their exhibition for sale and the financial negotiations of every sort incident to the transfer of commodities from producers to consumers. All these are the

As the introduc

products of past labor, infinitely varied. tion of natural agents and division of labor to increase productiveness is extended, the amount of capital employed in this form is increased, and production in almost all departments is thrown into large establishments. The power-loom makes one man's labor equal to that of ten with the old hand-loom, and hence the independent weaver has no chance in competition with the great factory.

3. Capital takes the form of Means of Sustenance for laborers. Present labor does not yield immediately the food and clothing necessary to keep the laborer alive. The crops of last year must provide for the support of the farmer and his help, while this year's crops are maturing. Out of the proceeds of previous industry, both the manufacturer and the merchant must furnish present means of living for all in their employ. Under this head must be embraced therefore, the houses and all the various kinds of clothing and food necessary to protect and sustain men while at work, and to provide for the comfort of their families. We can suppose an establishment, set up complete in itself, so that tenements and rations of food and clothing are directly supplied to those who carry on its operations. But ordinarily these items are provided for in detail by the laborers themselves out of their wages. Nevertheless, the fund for the payment of wages is an essential part of the capital and comes always from the proceeds of previous labor. If, as is often the case, by the use of credit, the product of present labor is anticipated for these purposes, the fact is still the same. What is actually consumed to sustain the workmen is the fruit of previous labor borrowed for the time.

4. For a longer or shorter period, as the process of pro

duction goes on, more or less of Capital takes the form of Finished Products, waiting for a market. The process of production is not completed till the products pass out of the producer's hands. Commonly, the farmer will find it for his convenience or advantage not to dispose of his crop as soon as it is gathered. While he holds it back from sale, it is capital in his hands, just as truly as his barns and tools are. Sometimes business is so active that a manufacturer's orders will be in advance of his production, but oftener he must hold a portion of his products waiting orders. It would be bad economy to suspend operations and keep both labor and capital, in other forms, idle till a purchaser appears, when there is a tolerable certainty that the product will in due time find a market. Therefore, in estimating the amount of capital required to carry on any line of productive industry, some allowance must be made for the value of the products which must thus be carried for a time.

In some or all of these four forms, all actual capital exists; and in civilized society, no kind of production can go on without something in these forms as capital. Even the wood-chopper must have his axe, the clothes he wears and something to eat for the day, all the fruit of previous labor, before he can go forth to his simple work. The blacksmith who works alone, capitalist and laborer, both in one, must have some iron for material, forge and anvil, hammer and tongs for instruments, a home for his shelter, bread and meat for food, and a few finished horse-shoes hanging in his window ready for the first call. So likewise, the millions of capital invested in the great Pacific mills of Lawrence may be all resolved into these four forms, or temporarily, in small part, their money-representative.

Banking capital will be considered at length in another connection. Since much of it is directly concerned in production, however, it may relieve a question arising in

some mind, to say a few words concerning it here. A bank is simply a credit-agency. When a manufacturer is out of cotton, or wants a new engine, or lacks means for the sustenance of his employés, he might borrow whathe needs directly of the cotton-broker, or of the machinist or of the farmer, but it is often more convenient to borrow money of the bank and with it purchase those things. But the money is exchanged at once for the things wanted, and so its value really goes into production in one or other of the forms named. Then the note left at the bank means that so much of the capital as is thus borrowed, belongs not to the manufacturer but to the banking company. So far as the capital of the bank is represented by such notes, it is employed in production in the forms mentioned; and the bank as a credit-agency simply effects a partnership of different persons for producing certain articles. The act of borrowing and lending has added nothing to the sum total of capital. It has only served to distribute existing capital for profitable use. Banks, therefore, are store-houses for the safe keeping and ready distribution of money, the instrument of exchange. Their capital renders an important service to productive. industry through its entire range, and really comprises the greater part of the active productive capital of a community which exists in the form of money. Yet as money, it is a simple instrument, and belongs to our second division, just as a wagon or a plough does.

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The Consumption of Capital.- According to our definition, capital is wealth set apart to be destroyed for the production of more wealth. · Except a corn of wheat fall into the ground and die, it abideth alone, but if it die, it bringeth forth much fruit." So, the great teacher, Jesus, stated a fundamental principle of Political Economy. Labor applied to capital destroys value of one kind, ir

order to bring forth a superior value of another kind. In the process of production, this change passes upon capital in each of its forms. The materials are immediately consumed. The seed-corn dies and the cotton is destroyed as cotton-wool, when it enters into the fabric of cloth. By use, the instruments slowly but surely wear away and go to decay. Food is rapidly consumed, clothing more gradually, and more slowly still, the house which gives shelter; but on all, the changes are in one direction, toward destruction. The finished product too, is disposed of to others and so is lost to the producer, to appear again in new materials, new implements, new means of subsistence and new products.

Thus, under the application of labor, capital is undergoing perpetual changes which involve the destruction of value. But these changes are guided by the purpose, through that destruction, to bring forth products of greater value. If the labor be skillfully directed, the product will have a value sufficient to replace the capital, that is, all the materials destroyed, the implements worn out and the means of sustenance consumed, with a surplus, which is profit. This profit is measured always by the difference between the value consumed and the value produced. It is obvious, that it matters not in what form capital re-appears, if it only re-appear in a form bearing a greater value. The smith exchanges gold or silver for coal; he burns up his coal, and nothing is left but ashes. But it has produced an invisible substance, called caloric, by means of which he has been able to give such an increased value to iron, as will not only replace his gold and silver but also the iron itself, and will also pay him for his labor. The farmer exchanges his gold or silver for manure, but this manure will so increase his harvest, that he will be able to replace his gold and silver, and also be abundantly repaid for his labor. The principle is the same in all cases