not know what the profit is. But in that balancesheet the labourers and their wages will enter as one item-a great item-but still only one. The payment of wages preceded the sale of the goods, and not till that sale is effected does the capitalist know whether there is any profit, or how much it may be. He is sure about his cost. He is responsible for every item of it, whatever be its nature. What he does not know, till the final balance-sheet is made out, is the residuum. If it is on the good side it is profit, but it stands in no positive scientific ratio to the amount of wages paid. The labourers are one element, whether of production or of commercial business. That is their true character. Profit or loss is the final figure after all the proceeds of the sales have been added, and all the particulars of cost subtracted.

The amount of profit realised varies much both between individual traders and between employment and employment. As we have already seen, chance, habit, fashion, a particular street, often serve as a foundation. of higher and not natural price, bringing large gains to the fortunate trader. The profits of different employments, on the contrary, tend to equality. When the profits seem exceptionally great, it will be commonly found that they arise from unusual risks, or from special skill, difficult to obtain and so commanding a kind of monopoly price. Yet, generally, it will be gross profit which is swollen; the net residuum of clear gain will seldom be permanently greater.

Capital, too, it is said, tends to increase faster than the means of employing it, and consequently profits to sink to

a lower level. However much this may be true of the past world, it does not hold good of the present age. Steam, with the steamboat and the railway, has brought distant nations into close connection with one another. It has reduced distance and the time absorbed in communicating, intercourse has been marvellously developed, and the most distant regions have been brought into nearer relation with England than countries only a little way distant were wont to be in the past. The result has been that English trade ranges over all the countries of the world, almost as if they were only counties; and whilst enormous wealth is the result, with a corresponding accumulation of capital, profit has escaped the heavy depression which seemed to be almost unavoidable. And so vast are the regions still to be opened out, so immense the developments of every form of industry to be carried forward in each, that the expansion of English trade, with its field for the gathering up of profit may continue for a long period of years, probably for centuries. If such be the course of events, England may be far off from becoming an old country.

Public opinion and legislation have at times, on the ground of moral judgment, regarded with especial jealousy the profits of dealers, whether merchants or retailers, as distinguished from the rewards gathered by producers. It is thought natural that those who make commodities needed by society should be compensated for their efforts, but shopkeepers and merchants do not add a particle to the goods they handle; they sell them in the state in which they were received from the makers. Their gains thus wear the look of addition to

cost, of taxation, as it were, sometimes even of extortion. This feeling is apt to break out with peculiar violence against dealers and speculators in corn. Their action, when the harvest threatens to be bad, excites anger. They raise prices by their purchases; so they are branded with evil names, and the law has been often summoned to step in to protect the poor against their nefarious practices. "Parliament forbade men to buy and hold large stocks of corn and similar commodities (called Engrossers), or to buy them when on their way to market (Forestallers), or to buy and sell a thing on the same day (Regraters)." *

Such ideas are as unjust as they are mistaken. They strike at the root of all trade. Trade may be described as the putting of commodities in the right place, as the bringing of them to the consumers' doors. No sane man grudges his reward to the merchant who fetches his tea from China, or his tobacco from Virginia, nor the profits of the shipowner, without whose aid this work could not be done. He may, it is true, if he so chooses, order his tea from China direct; but he would be obliged to purchase a large quantity, to keep it long in store, with danger of deterioration, and a heavy prepayment in advance long before it came into consumption. The retail dealer confers on him the enormous advantage of supplying his wants at the moment he feels them, and not before. It may well be that the article supplied has become cheaper, whilst held in stock, and must be sold at a loss. Against such a risk the dealer must be protected by some addition of price, or he would not. engage in the business.

* Danson, "Lectures."

On the other hand the interest of the public and the consumers demand that these services and their rewards should be reduced to a minimum; and for effecting this object, competition is the force to be relied upon. These services are mere agency; they do not produce, although they be desirable and important. Retailers are often blind to this truth. They often conceive that their business exists as a matter of right; to curtail it is to be guilty of oppression. Thus the appearance of co-operative stores was resented by many shopkeepers as an iniquitous violation of natural right. As well might the broad-wheeled waggoners have denounced the iniquitous railway, with its rapid and cheap transport. Every service which ceases to be needed is superfluous, and its right to exist has come to an end.

With respect to Forestallers and Regraters, public opinion, at least in England, has changed. It has been perceived that the merchant who foresees a deficient harvest and an approaching scarcity, and sends out orders for the immediate purchase of corn abroad, in truth summons the foreigner to give help in the hour of need. He reduces the evil and averts the danger involved in the distance of foreign supplies. He may indeed raise the price in the market in which he buys abroad; nay, he may buy at home, and withhold what he has purchased from the market for a period, but this rise of price comes not in truth from the buyer himself but from the scarcity. His action is a direct averter of scarcity, or even possibly of starvation. By anticipating demand, and so acting on prices, he brings a force of great power into play. He checks consumption; he gives practical warning of the deficiency and its conse

quences; he diminishes waste and extravagance, and thereby enables the stock in store to hold out longer.

Mr Danson puts this very happily* :-" The world in such a case may be compared to a ship at sea, and (say) twenty days' sail from port, but with provisions for only fifteen days. To let the consumption go on unchecked would be to close the voyage with five days of famine. Put each man at once on three-quarters of his usual supply, and all may eat, as well as it is possible for them to eat, till the end of the voyage. Postpone your precaution for ten days, and nothing more than half rations can be allowed. A rise in the price of wheat means, for particular localities, a call for further supplies and for the world at large it means a reduction of rations till the next harvest. But the earlier and the more extensive the reduction the less the consequent suffering." And it must not be forgotten that the speculator is compelled to give excellent security against extortion.

He incurs a heavy risk of loss; he may have miscalculated the extent of the public need; he may meet the competition of unexpected supplies pouring from unthought-of quarters. If the service he renders is real and important, he is entitled to insurance against such a risk. Had he waited till starvation stared men in the face, the bound upwards would have been incomparably more violent. A Bengal famine and starving multitudes might have been the inevitable results.

INTEREST.

That form of profit which consists of interest received for money lent has been exposed to many attacks both

* "Lectures," p. 73.