sumers, the labour of many thousands of different men has contributed to bring his tea to the poorest man. To construct the mere machinery of exchange, to make the railway and the steamship, still more to provide the tools employed in their construction as well as the materials, requires labourers whose numbers are incalculable. The tendency to engage ever-expanding multitudes of combined workers in effecting the simplest exchanges, the commonest buying of daily life, is the most marked and the most wonderful feature of progressive civilisation.

The mighty instrument which exchange employs in accomplishing these marvellous results is the great economical principle of division of employments. This must be distinguished from division of labour. This latter phrase refers to many distinct operations combined to produce a single result, one commodity ; division of employments tells on the simultaneous production of all commodities. Next to actual labour there is no process so prolific in producing wealth for mankind as the division of employments. It brings an enormous power to bear on the efficiency of labour, on the quantity and quality of the work done in proportion to the effort, on the amount of the things made. The secret of this power lies in the advantage which separation of employments takes of the endless variety of faculties and qualities with which nature has endowed individual men and animals, as well as different countries and climates. To China and India is allotted the production of tea, to America cotton and corn, to France wine and silks, to England clothing and iron. In the same country the several districts divide

amongst themselves the various manufactures. Manchester undertakes cotton-spinning, Bradford woollen goods, Sheffield cutlery, Birmingham guns and nails. In the same town the distribution gains further expansion. Cotton-spinning is made up of many processes each allotted to a special body of labourers. The village follows the same rule; the blacksmith provides for the local wants for iron, the carpenter for wood.

The advantage derived from each man or group of men taking up particular work is great all round. Skill is developed rapidly in the workmen. Each group of men learns how to do the thing well, far better than if they tried to make for themselves everything they wanted. If the blacksmith tried to make a table, he would have a worse table, and would spend a vast deal more time upon it than the carpenter. The difficulties which arise in each field of labour are more effectually dealt with when the intelligence of men who do nothing else is brought to bear upon them. Ingenious contrivances for saving labour, improving quality, and cheapening products incessantly occur to the concentrated skill of specialised workmen. All these advantages are immensely increased, as society advances, and the circle supplied by each workshop and factory becomes larger. The tendency to assign the production of commodities of a single kind to particular workmen gathers strength; and not only so, but the manufacture of each single article is broken up into parts. Division of labour comes into full play. The high skill of the workmen, the number and power of the inventions of machinery, the amount, delicacy, and excellence of the products, above all their wonderful cheapness, which Birmingham, Manchester,

and Bradford now exhibit, would never have been realised if each English county had supplied its wants within its own limits, instead of England undertaking particular manufactures for the whole world. Thus every superiority of mind and body, every advantage of climate, soil, mineral gifts, and local power, which multiplies the wealth gained by labour, improves its quality and cheapens its cost, is turned to account by exchange for raising the condition of man on earth. Exchange is a contrivance, a particular machinery for getting each commodity made by special men. It enables this process to be carried on, and thereby becomes the greatest benefactor of mankind, the true foundation of all civilisation.

Exchange is the action of two parties. Each of them finds an advantage in obtaining from the other a service or a thing for which he gives another in return. Both gain. However great may be the pressure weighing on one, however painful the sacrifice he suffers in parting with an object he is attached to, still, by the very fact that he is willing to give it away, he makes it plain that he regards what he obtains on the exchange as something which he values more. He acts under the conviction that he gains-even if he knows that the other party is taking unfair advantage of his circumstances, and is extorting from him his article against a return which violates justice and conscience.

The process of exchanging raises questions of great importance, some of which involve no small difficulty in determining.

There are two different methods by which exchange is accomplished. In the division of employments, a

maker of a commodity may produce it on an order given to him by the man who is in want of it—as a pair of shoes or a building, or he may manufacture it for sale in the expectation of a purchaser coming forward to buy it when made. It is thus that articles of all kinds are piled up in warehouses, shops, and other markets waiting for the appearance of buyers. The former is the simpler process. The supply is strictly accommodated to the demand; it is free from speculation: it is exempt from the risk of loss from want of buyers. In the earlier stages of society this method of exchange predominates; but as civilisation, with its complications and its range of operations progresses, the second method of making without orders, under the expectation of being able to sell on reasonable terms, to an immense extent

takes its place. The tendency of modern commercial usage runs powerfully in this direction. A nation like England, which manufactures for countries without number, cannot exchange on the principle of previous orders given. Within England itself centres for making particular goods increase every day, so great is the advantage gained, and so large the cheapness realised by the skill, machinery, and gain of time in production developed in particular localities for special kinds of manufactures. A Sheffield knife and a Coventry ribbon are bought all over the nation. Hence the conjectural supply of goods, by first making them without a previous order and bringing them to market in the expectation of their finding purchasers, has grown to enormous dimensions; and it generates situations and complications not easy to analyse and reduce to rule.

At the dawn of its civilisation every country made the

discovery that the great function of exchanging required a tool wherewith to perform its work. All exchange is barter, and barter was the obvious and earliest method of settling exchanges. But direct barter would have kept society in an infantine state. It lay under the insuperable difficulty that whilst both the exchangers might desire to part with his article in exchange for another, yet neither of them wanted the precise thing offered to be bartered by the other; the carpenter might be in no want of a sheep, nor the tailor of a pair of shoes. So civilisation burst the bonds of barter and sought help of an invention which is employed in every land. A particular commodity was selected by agreement, for which all others should be first exchanged before they came into the hands of those who needed them for consumption. The selection of this intermediate commodity settled down into the adoption of one or more of the precious metals, in specified quantities, under the form of coin or money. Money was made the tool of exchange. Thus a sale became half an exchange by means of double barter. The seller of a plough who did not want a bullock, bartered it to a farmer for money, and then again in turn bartered this money for iron, wherewith to make fresh ploughs. It is obvious that if all articles have the quantity of money fixed for which they can be bartered, the market value of each is determined, and they can all be measured one against another. They can be compared with one another through their prices, whilst direct barter fails wholly in the measurement of all relative market values.

And now on what principle are prices affixed? Ultimately by feeling—and by feeling alone-by that feeling