U.^ ..' rr.-h' 
 
 ^^M i a W Mtf W yHWWff i WWWl 
 
 
 >HtlNNn«M«H 
 
 LEMENTS 01' 
 
 Political B^^ovoM^ 
 
 James Bonar 
 
 iiiihnmm ^a m wntmim umi'^ A ■stMn 
 
 
^^-I^:U^-^t7^.^^^S^^^^i^^ 
 
 niDcrslt^ of dv 
 4 4 (California * 
 
 (gtaus jgi'prccfeels KTuttd- \^ 
 
Digitized by tine Internet Archive 
 
 in 2007 with funding from 
 
 IVIicrosoft Corporation 
 
 http://www.archive.org/details/elementsofpolitiOObonarich 
 
ELEMENTS OF POLITICAL 
 ECONOMY 
 
ELEMENTS OF 
 
 POLITICAL ECONOMY 
 
 BY JAMES BONAR, M.A., LL.D. 
 
 AUTHOR OF " MALTHUS AND HIS WORK," "PHILOSOPHY AND POLITICAL 
 ECONOMY," ETC. 
 
 LONDON 
 
 JOHN MURRAY, ALBEMARLE STREET 
 
 1903 
 

 SPRECKELS 
 
PREFACE 
 
 This book gives a general outline of the leading 
 principles of political economy as they are illus- 
 trated in the commercial life of modern peoples, 
 and of our own nation more particularly. 
 
 It is no more than the beginning of a study ; 
 but perhaps it may be sufficiently lucid to induce 
 some readers to carry out the study for them- 
 selves and help others to do the like. 
 
 J. B. 
 
 Hampstead, yrd March 1903. 
 
 vii 
 
 119960 
 
CONTENTS 
 
 CHAPTER I 
 
 GENERAL OUTLINE 
 
 PAGE 
 
 What Economy and Political Economy are. What Wealth is. 
 Economy of Societies not merely Economy of Individual " writ 
 large." Abstract consideration of Certain Motives desirable. 
 Craving for Comforts. Consumption and Final Utility. Divi- 
 sion of Labour. Extent of the Market. Value. Difficulties 
 of Barter. Money. Barter not Superseded. Main elements 
 of Modern Economy. Whence Differences in Value ? Abun- 
 dance and Scarcity partly dependent on Cost. Cost Varies 
 partly with the Market. Value not explainable by Cost — 
 involves Desire plus Limit. Why Value not simply equal to 
 Cost. With Division of Labour, not only Supply, and 
 Demand, and Labour, but Capital, Profits, Wages. Capital — 
 what it involves. Relation to Time — Phenomenon of Interest. 
 Profits. Rent. Separation of Functions not same as Distinc- 
 tion of them. The Separation perhaps not the Final Economy. 
 Technical Advance irrevocable and universal. Tendency, in 
 spite of Governments, of the whole world to become One 
 Country ....... . i 
 
 CHAPTER II 
 
 VALUE 
 
 Production, Distribution, and Consumption. The Two Senses of 
 Value. Value in Exchange the more Measurable. Analogy of 
 Statistical Data. Normal Price. Modern Goods, and Elastic 
 Response of Supply and Demand to Price. Relation to Price 
 of the Costliest Part of Supply. Does Price determine the 
 Margin, or vice versa f Marginal Products and Marginal 
 Sellers. Particular Cost in Relation to Price. Low Prices 
 and Extended Economies. Monopolies. Intermediate Cases . 31 
 ix 
 
X CONTENTS 
 
 CHAPTER III 
 
 CAPITAL 
 
 FAGS 
 
 Defined, Definition may include Land. Capital as a Tool, and as 
 Provision for the Future. Few things " obviously Capital," and 
 alternatives only too open in modern times for spending wealth. 
 Abstinence and Providence. Present and Future — how related 
 in Work done with Capital. Calculation of greater Gain. 
 Longer Ways the more profitable. But within Limits. 
 Capital in less abundance than other Wealth. Hence 
 Interest, Embodied in distinct Classes, Lenders, and Em- 
 ployers. Borrowed Capital and Cost. Renewal of Capital 
 probable. Conditions of the Renewal . . . .45 
 
 CHAPTER IV 
 
 WAGES AND RENT 
 
 Wages part of Cost, but Men never mere Instruments. In what 
 sense Wages more Flexible than other Items of Cost. Not 
 at least Inflexible (Wages Fund). Skilled in relation to 
 Unskilled Labour. Workmen's Minimum not of Bare Liv- 
 ing. A Market not in same sense for Labour as for Goods. 
 No part of Employer's Capital a fund for Wages. Wages not 
 directly paid out of Produce. Trades Societies. Labour not 
 Constant. Trades Unions and their Power to raise Wages. 
 Relation of Wages to Population. Relation of Population to 
 Rent. Wages as a Bare Living hardly ever exemplified. 
 Effects of the high or low price of Food. Improvements in 
 Agriculture. Present System perhaps Politically recommend- 
 able, but not therefore best Economically . , .60 
 
 CHAPTER V 
 
 PROFITS AND INCOME 
 
 Marginal producers. "Rent" in wide sense. Such wide uses of 
 Terms not Advisable. Income, Gross and Net, Wages of 
 Superintendence, All above the Marginal Extortionate Profits? 
 Modern Industry Essentially " Dynamical," Analogy of a Fair 
 Lottery Applicable ? Insurance against Risks. Tendency on 
 the Whole towards Free Trade, Protection, Differences in 
 Currency. Standards of Currency. Uses of a Bank ; Bank 
 of England. Trading in Debts. Bills. Lending on Land, etc. 
 On Shares. Money Market and Stock Exchange , , 78 
 
CONTENTS xi 
 
 CHAPTER VI 
 
 THE COMMERCIAL COMMONWEALTH 
 
 PAGE 
 
 A Commercial Commonwealth of Civilised Nations. Community 
 of Risks and Depression. Crises and the Telegraph. Propor- 
 tion of Foreign Trade to the Whole. Foreign Loans and In- 
 vestments, the Balance of Trade. Movements of Gold. Specie 
 Point. Effects of Defective Currencies on Distribution and 
 Production. Inconvertible Currency. Silver Question in 
 India. Effects of Government Interference . . . 107 
 
 CHAPTER VII 
 
 PRINCIPLES OF TAXATION 
 
 Equality and the other Canons of Taxation. " Ideal State " and 
 its Taxation. Military Expenditure. Services of Law and 
 Justice. Fees. Public Works, Debts, Grants in Aid. Sources 
 of Revenue. Post Office. Loans. Direct and Indirect Taxa- 
 tion. Taxes on Goods . . . . . .118 
 
 CHAPTER VIII 
 
 DIRECT TAXES 
 
 Direct Taxes not wholly Direct. Estate Duties. Legacy Duties. 
 Income Tax. Business Stamps. House Duty. Land Tax. 
 Advantage of a System of Taxation as opposed to a Single Tax. 
 Economic Sacrifice involved in Income and Estate Duty . 146 
 
 CHAPTER IX 
 
 RATES 
 
 Local Expenditure. Relief of the Poor. General Principles. 
 Local and Imperial — Distinction sometimes doubtful, witness 
 Transference and Proposals for such. Basis of Annual Value, 
 Difference of Rate from Tax. Incidence of the Rates. Scotch 
 Plan of Division. Rates for Special Services not really Rates. 
 House as Index of Fortune. Compounding Householders. 
 Municipal Housebuilding . . , ,156 
 
xii CONTENTS 
 
 CHAPTER X 
 
 THE FINAL ISSUE 
 
 PAGE 
 
 Does all point to Socialism ? Modern Socialism and Anarchism. 
 Do Trusts lead to Socialism ? The Social Question. The '* Sub- 
 merged Tenth," and the Unsatisfactory Relation of Employer 
 and Workman. Co-partnerships and Co-operation. Effects of 
 a Growth of Capital beyond Population. Friction in the Tran- 
 sition from Poverty to Comfort. Is there a Fallacy in Saving ? 169 
 
 Appendix ....... 189 
 
 Index ........ 203 
 
POLITICAL ECONOMY 
 
 CHAPTER I 
 
 GENERAL OUTLINE 
 
 What Economy and Political Economy are. What Wealth is. 
 Economy of Societies not merely Economy of Individual " writ 
 large." Abstract consideration of Certain Motives desirable. 
 Craving for Comforts. Consumption and Final Utility. 
 Division of Labour. Extent of the Market. Value. Diffi- 
 culties of Barter. Money. Barter not Superseded. Main 
 elements of Modern Economy. Whence Differences in 
 Value? Abundance and Scarcity partly dependent on Cost. 
 Cost Varies partly with the Market. Value not explainable 
 by Cost — involves Desire plus Limit. Why Value not simply 
 equal to Cost. With Division of Labour, not only Supply, 
 and Demand, and Labour, but Capital, Profits, Wages. 
 Capital — what it involves. Relation to Time — Phenomenon 
 of Interest. Profits. Rent. Separation of Functions not 
 same as Distinction of them. The Separation perhaps not 
 the Final Economy. Technical Advance irrevocacble and 
 universal. Tendency, in spite of Governments, of the whole 
 world to become One Country. 
 
 What Economy and Political Economy are. — 
 In its narrowest and earliest sense, economy is 
 housekeeping (CEconomy, oikovohxIo), the husband- 
 ing of the material resources of the family, what 
 
 A 
 
 r 
 
2 GENERAL OUTLINE [chap. 
 
 we now call domestic economy. In its widest 
 and latest sense, economy is the husbanding of 
 any and every kind of resources, material or 
 mental, warlike or peaceful. When this general 
 idea of the husbanding of resources is applied 
 to societies, we have political economy. 
 
 Political economy is the husbanding of the 
 ^ external resources of human societies ; and the 
 study of political economy, in spite of the 
 adjective political, concerns the whole body 
 politic — not only, or even mainly, the govern- 
 ment. It only deals with the government of a 
 country so far as the government influences 
 the economy of the nation. It deals with 
 separate citizens and households only so far as 
 they also affect the whole society of which they 
 are a part. As an endeavour after science, it 
 investigates the broad general causes that 
 determine the nature of a nation's material 
 resources, that tend to increase or lessen their 
 amount, and that tend towards an equal or un- 
 equal sharing of them among the citizens. It 
 must take account incidentally of such elements as 
 national character and personal talents, which are 
 not external or material ; but these elements are 
 only treated by it in their relation to the external 
 elements, or else the treatment is not merely 
 economic. It may be said here once for all, 
 that, when the context leaves the sense clear, 
 
I.] WHAT WEALTH IS 3 
 
 English political economists are in the habit 
 of calling themselves simply economists, and 
 their study economics, and of using economical 
 or economic as the corresponding adjective ; 
 but they are not thereby claiming all and 
 every economy as their province ; their study 
 remains confined to the economy of the external 
 resources of a society of men. 
 
 What Wealth is. — External resources are 
 desired as a means of living, or as a means 
 of well-being ; in either case as a means of 
 fulfilling human ends, and satisfying human 
 wants. When material objects are made sub- 
 servient to human purposes, they become 
 wealth to the man whose servants they are, 
 whether he has won them by his labour and 
 personal gifts, or owes them to good fortune 
 and circumstances. Collectively, they are his 
 wealth ; severally, the items of the collection 
 are mainly his goods or commodities ; but his 
 wealth also includes those external resources 
 which are not embodied in detached objects — 
 services of nature, or of fellow-men, not capable of 
 being stocked or stored. The essential notion 
 of wealth in economics is of a sum total of ex- 
 ternal means of satisfying human wants and \ ^ 
 fulfilling human purposes, whether the means be 
 commodities or services. Evidently, therefore, 
 wealth is great or small according to the wants 
 
4 GENERAL OUTLINE [chap. 
 
 of the possessor ; relatively to these wants, a 
 stock of goods means abundance, or means 
 scarcity. We usually judge of wealth in rela- 
 tion to the wants of the citizens of the society 
 where we live, presuming that we can tell what 
 the wants of ordinary men are, from our know- 
 ledge of ourselves and observation of others. 
 
 Plenty or scarcity, economy and waste, can 
 of course occur in a small household as well as 
 in a great society. One man may so use his 
 resources that they go far, while another with 
 the same resources may fall short of him. Where 
 the result depends on their own efforts, one man, 
 if he is skilful, may get a larger result than an 
 unskilful neighbour. The ideal economy would 
 be, to gain the greatest possible result with least 
 possible effort, to secure the end by the best 
 and best-used means, whether the end were the 
 getting of wealth, or the keeping of it, or the 
 spending of it. 
 
 Economy of Societies not si7nply a Magnified 
 Economy of Individuals. — All this is true where 
 we are dealing with societies instead of single 
 persons ; but experience shows that we do not 
 get the whole truth about the economy of 
 societies if we look only to the economy of 
 individuals, or even of families. There are 
 ways of economy possible for a society of men, 
 and not possible for the individual or even for 
 
I.] THE "ECONOMIC MAN" 5 
 
 the household, except in society. Division of 
 labour, for example, is possible for the separ- 
 ated man only by a metaphor. As in politics, 
 so in economics, the qualities of the whole body 
 are not simply the qualities of the parts ''writ 
 large." The larger characters are different in 
 much more than the size. Though the 
 economy of individuals is idyllically interest- 
 ing, and the study of it is suggested by the 
 very etymology of CEconomy, it is the study 
 of the economy of societies of men that is 
 suggested by the word economics in common 
 usage. The ''economic man" for good or 
 for evil, is the man living with his fellow- 
 men. To consider him stripped of all social 
 elements, would be a useless effort of abstrac- 
 tion. Detachment of man from society often 
 seems more decidedly impossible in thought 
 than in fact : a man may be sometimes found 
 away from his fellows, but cannot, it seems, be 
 thought of away from them ; no notion of 
 him would be quite bare of social elements. 
 Political economy, at least, makes no such 
 abstraction ; it is nothing if not social. But it 
 has an abstraction of its own : it considers 
 society only in relation to its wealth. Is this 
 abstraction possible and desirable ? 
 
 How far Political Economy requires Abstrac- 
 tions, — It is true that we cannot easily find, 
 
6 GENERAL OUTLINE [chap. 
 
 or even conceive, a society from which all the 
 elements are absent except the economical — a 
 society devoted entirely to the husbanding of 
 its material resources. But most things that 
 do not exist separately may quite well be con- 
 sidered separately ; or it would be hard to say 
 what in this world could be so considered at 
 all. There are certain features of the economy 
 of wealth that make a special study of that 
 subject more likely to be fruitful than a similar 
 abstraction made elsewhere among social facts. 
 
 There is first the feature of physical necessity : 
 no human life can dispense with the means of 
 living. Another feature is, that, even when the 
 means of living are secured, there are desires in 
 civilised men for the comforts of life — desires 
 which, as a matter of experience, lead to more 
 uniform and therefore more measurable courses 
 of action than almost all other classes of desires. 
 The nearest rival in this respect is the desire of 
 marriage ; and from its close connection with the 
 desire of wealth, and from their strong influence 
 on one another, the two desires, or rather the 
 general tendencies resulting from the two, have 
 been presented together by all recent political 
 economy. 
 
 If political economy had attempted to in- 
 clude the results of other human passions, 
 such as the love of honour or of knowledge, 
 
I.] THE CRAVING FOR COMFORTS 7 
 
 it would at once have discovered how little 
 uniformity can be traced in the data, and how 
 uncertain a forecast could be based on them 
 regarding the conduct of men and societies. 
 But, with those two selected passions, the 
 larger the field the greater the uniformity, and 
 the more trustworthy the estimate of general 
 tendencies. The effects of prudence are pro- 
 verbially more measurable than those of benevo- 
 lence. There is nothing, on the whole, of 
 which men have so much in common as a 
 regard for their own welfare. 
 
 The Craving for Comforts in Modern 
 Societies. — The person uninfluenced by econo- 
 mical motives is so exceptional in a large modern 
 civilised society, that he has no appreciable 
 influence on its general course of action, which 
 remains, at least in intention, economical. In 
 savage tribes now, and in some early civilisations 
 long ago, economy would be concerned mainly 
 with the means of living, hardly at all with the 
 comforts of life. Economical principles may be 
 discovered in ants and bees ; and some races 
 of men, left to themselves, remain as these 
 animals. But the larger economical develop- 
 ment of modern civilised men seems to be due 
 to the larger and later development of purely 
 human qualities, with their strength and weak- 
 ness, especially the insatiable craving for com- 
 
8 GENERAL OUTLINE [chap. 
 
 forts, together with an acute sense of the Hmited 
 means of procuring them. Psychology may be 
 left to decide whether we should speak of desires 
 themselves as infinite, or attach the quality to 
 the objects of desire. In either case, it is ordi- 
 nary experience that wants of one kind, or the 
 want of things of one kind, cannot be satisfied 
 without bringing forward an attendant train of 
 other claimants. When the point of satisfac- 
 tion is reached in one instance, there are further 
 aspirations in other directions. It is a feature 
 of civilised men to be satiable as regards any 
 particular species of the good things of life, 
 insatiable as regards the whole genus of them. 
 Perhaps in the fulness of time the predominant 
 desires of civilised men may be desires for what 
 is not external or material; the economy of the 
 world would then be altered ; what is given to 
 another would be still kept by the giver. But at 
 present there is no sign of the waning of the 
 desire for material goods. Each ordinary man 
 has a hierarchy of wants, beginning with physical 
 needs, and he satisfies the less urgent as soon 
 as the more urgent have received their pro- 
 vision. Since each man's wants, and their points 
 of satisfaction differ slightly from every other 
 man's, there is a basis here for exchange, just as 
 in the difference between one man's qualities and 
 another's there is a basis for the division of 
 
I.] FINAL UTILITY 9 
 
 labour, so closely connected with exchange in 
 modern 'industry. 
 
 Consumption of Goods and Final Utility, — 
 The actual application of goods to the satis- 
 faction of wants, is in a sense the end of 
 economy ; goods are desired for the sake of being 
 consumed, either in the present or in the future, 
 and, if not for their own sake, as a means of pro- 
 curing others that are desired for their own sake. 
 Economy has more to do with the social steps 
 that lead to this consummation than with the 
 consummation itself, which is less social than 
 individual. 
 
 But a study of consumption brings out at 
 least one characteristic that throws light on 
 economical movements over the whole field, 
 namely, that men judge stocks of goods not' 
 by the greatest but by the least or final utility 
 of the goods. Food, for example, is a neces- 
 sity, but a man's appetite for it decreases 
 with the successive quantities supplied to him. 
 Where particular goods, as in this case, are 
 divisible and measurable in fractions, the import- 
 ance a man attaches to a stock of the particular 
 goods will be determined, not by the usefulness 
 of the goods in the abstract, or by the usefulness 
 of one item invaluable if present alone, but by 
 the usefulness of the nearly superfluous last item 
 retained. You can see what his judgment on 
 
10 GENERAL OUTLINE [chap. 
 
 them is, by the use to which he puts the last 
 portion of the stock that he counts it worth his 
 while to get or use at all. According to what he 
 considers its abundance or its scarcity, he will put 
 this last portion of it to a base or a noble use ; 
 and if to a base, you may be sure he has reached 
 what he considers abundance of it. The descent, 
 of course, may be checked by the power of 
 exchange. What is not desired by one man 
 may be prized by another. Superfluous physical 
 necessaries, for example, may always find a 
 purchaser ; and the final utility to the first 
 possessor would be the utility of the thing as 
 a matter of sale. The phenomenon of exchange 
 is likely to occur, as we shall see, wherever the 
 lowest use of an article means a greater depth 
 with one man than with another. If the articles 
 are measurable in small quantities, the dividing 
 line between what is personally useful at all, 
 and what is only useful to procure something 
 else in exchange, may be very fine. With or 
 without exchange, a line of distinction exists ; 
 and the fact of its existence is of real economic 
 importance. Apart from exchange, goods cease 
 to be goods for me if they are present in abund- 
 ance beyond my wants for the future and my 
 wants for the present. They are ''things," but 
 not goods. I ** attach no value to them"; 
 and, in the case where the excess was due to my 
 
I.] DIVISION OF LABOUR 11 
 
 labour, I should cease to bestow the labour 
 beyond the point of satisfaction. 
 
 The virtues of Division of Labour, — 
 But it is precisely by creating such superabund- 
 ance that the division of labour makes social 
 economy more effective than private economy. 
 Division of labour is one of the vital processes of 
 the industrial body. When the labour of making 
 all the goods wanted by society, and not sup- 
 plied gratuitously by nature, is divided among 
 the members, so that, instead of making all of 
 them, each working member devotes himself to 
 the making of one kind of goods alone, the 
 result is greater dexterity in the making, saving 
 of time lost in passing from one employment to 
 another, more intimate knowledge of the nature 
 of the things, and therewith more ingenuity and 
 inventiveness in dealing with them. Also, in 
 proportion to their civilisation, societies of men 
 turn to account the inherited special apti- 
 tudes of their members. Variations amona 
 animals, though they may serve to the survival 
 or ruin of the possessors, do not seem to be 
 so utilised for the good of the animal com- 
 munity. But there is no human community 
 without some considerable development of divi- 
 sion of labour, and the progressive extension 
 of it is a leading characteristic of modern civili- 
 sation. 
 
12 GENERAL OUTLINE [chap. 
 
 Earlier and Later Forms of it. — In the 
 simpler forms of society, not only is the 
 economy of division of labour and separa- 
 tion of employments clear, but there is little or 
 no doubt possible as to the several authors of 
 the economy effected. Not only is the work 
 divided, but the parts are locally separated ; 
 and, though the whole process is social, there 
 is no risk of confusion between the contribu- 
 tions of one member of society and another. 
 There is little difficulty in saying who was the 
 producer and what he produced, in any given 
 case. To *' produce" is to bring forward what 
 was lying latent or behind the scenes in nature : 
 it consists in helping nature to help man — nature 
 meaning the physical world distinguished from 
 man. In the simpler forms of division of 
 labour, the precise contributions of particular 
 men to this united effort are almost unmistak- 
 able. The independent workmen of to - day, 
 such as the country blacksmith, village shoe- 
 maker, or city cobbler, are a near example of 
 what we may suppose to have been the begin- 
 ning of the industrial division of labour. But 
 large factories, where hundreds of workmen 
 work together, each making parts and no one a 
 whole article, are the characteristic form of the 
 division of labour now ; division is a misnomer, 
 or at least it is less striking than the union. 
 
I.] LIMITED BY THE MARKET 13 
 
 and even the undistinguishable blending, of 
 contributions to the final result. 
 
 Limited by the Market. — There is in another 
 sense union from the first. '' Division of labour 
 is limited by the extent of the market." Sup- 
 pose that division of labour had been introduced 
 by a common agreement of all severally to adopt 
 separate employments on condition that all did 
 so, and that the produce should be divided as 
 well as the labour. Even under those conditions, 
 unless the size of the community was large 
 enough, and the nature of the country was such 
 as to cause a need for the classes of goods pro- 
 duced, there would be no economy in separating 
 all employments ; a smith must have produced 
 more than horse-shoes if he lived in rocky 
 Ithaca, and even a maker of boats on that 
 little island must have made something else as 
 well, if he were not to be an unprofitable servant. 
 The need, or the absence of need, for a separate 
 trade would (where there was not a paternal or 
 despotic government, or else a fraternal agree- 
 ment of the kind described) be discovered by the 
 ease or difficulty each producer found in in- 
 ducing others to give him their goods for his. 
 It would appear in the process of exchange, 
 of which the essential nature is, what the primi- 
 tive form was, barter, — the giving of goods for 
 goods. 
 
14 GENERAL OUTLINE [chap. 
 
 Rise of Market Value. — Value in its com- 
 monest sense is the relation to each other, in 
 exchange, of two such goods, or sets of goods, 
 thus exchanged or bartered for one another. If 
 my goods are wanted, some one else will be 
 willing to give me their value, or goods of his, 
 in exchange for them. If there is no such person 
 found by me, then I have produced beyond the 
 needs of my fellows, and all the advantages 
 enumerated as belonging to division of labour 
 seem to have proved to that extent a delu- 
 sion, and the economy to be no economy, in 
 my case. 
 
 It is possible, however, that the extent of 
 the market may be quite great enough, while a 
 difficulty occurs in the nature of the goods held 
 on the two sides, and in the times when they are 
 respectively wanted. The baker may not want 
 boots at the time the shoemaker wants bread ; 
 the boatmaker wants bread, though the baker 
 may not want a boat at all, now or any 
 other time. The boatmaker, though he would 
 think his boat equal to many loaves of bread, 
 would be embarrassed if the whole equivalent 
 in bread were given to him for the boat. The 
 baker's article is divisible into small portions, 
 but for these there may not be so easily divisible 
 equivalents on the other side ; and it may be 
 hard to get such a part of another's article as 
 
I.] MONEY 15 
 
 would be reckoned by both to be fairly worth 
 the part of the batch or the single loaf. One 
 man, again, turns out his articles day by day, 
 and every day ; another spends weeks or months, 
 or even, like the farmer, a year in turning out 
 his. 
 
 The Purpose of Money. — Money may be con- 
 ceived to have been invented to overcome such 
 difficulties, and enable the economy of division 
 of labour to have its perfect work. Though the 
 baker and boatmaker may not want each other's 
 wares at the same time, it is possible to find 
 some third kind of ware that is wanted by 
 both, roughly speaking, at all times. Such a 
 kind of ware might become a means of effect- 
 ing exchange where otherwise the case seemed 
 hopeless. In Virginia, one hundred and fifty 
 years ago, tobacco was often such a means of 
 exchange ; and many different articles might 
 seem fit to answer the purpose, according to 
 circumstances. But to play the part of money 
 it is not enough for an article to be generally 
 wanted ; and there must be not only fitness 
 to serve as a measure of value, but fitness to 
 serve as a means of exchange. There must, for 
 example, be divisibility, in order that difference 
 of value may not cause things that are indi- 
 visible to be only exchangeable in rare coinci- 
 dences. The rare coincidences would occur 
 
16 GENERAL OUTLINE [chap. 
 
 when he who was anxious to get a particular 
 article, and had one of his own to offer for 
 it, found the possessor of the coveted article 
 willing or even anxious to secure the offered 
 article, when both were willing at one and 
 the same time, and when the one article, 
 without addition or subtraction, was deemed 
 equal to the other. But ''money answereth 
 all things." With money as a common third 
 to mediate between them and perform the 
 necessary addition or subtraction, the two men 
 need not wait for the rare coincidences. If 
 barter facilitates division of labour, money 
 facilitates barter. 
 
 It does not supersede Barter. — It is not 
 rightly described as enabling men to dispense 
 with barter. Goods are offered because goods 
 are wanted ; exchange, among all ordinary sane 
 men as an affair of business, is in intention 
 barter. This appears in the highest develop- 
 ments of international trade as well as in the 
 simplest forms of local industry. But money is 
 a necessary tool at a certain stage in the develop- 
 ment of division of labour ; and the precious 
 metals are the best materials for that tool. If 
 goods are to be given, not directly for the goods 
 wanted, but, in the first place, for a third article 
 which in due time will procure the goods wanted, 
 the giver (the seller) will need to be sure of the 
 
I.] COINS AND CURRENCY 17 
 
 trustworthiness of that third article, and sure 
 that he can count with reasonable probability 
 on finding a man who will give him in ex- 
 change for it the goods that he wants. Also, 
 he will be more willing to sell his article if 
 what he is to receive for it is something that 
 he can easily carry about with him from place 
 to place, to exchange again ; portability of 
 money will in this way multiply buyers and 
 sellers. Now, the precious metals in all civi- 
 lised times have been highly prized, even in 
 small quantities, and therefore they make a 
 money which is portable. They are also more 
 nearly alike, sample for sample, than most other 
 kinds of articles ; and they are more easily 
 distinguished for what they are, by ordinary 
 folk. In civilised countries, the stamp of the 
 government on the coin increases the general 
 confidence by certifying quality and quantity. 
 Precious stones, though possessing great value 
 in small bulk, are unsuited for money, be- 
 cause, to say nothing else, they are not divis- 
 ible. Gold and silver have become In almost all 
 civilised countries the tool of exchange and 
 measure of value. 
 
 Application to Modern Economy, — The case 
 now presents us with some of the main 
 elements of modern economy. Division of 
 labour which will make labour more effec- 
 
 15 
 
18 GENERAL OUTLINE [chap. 
 
 tive, depends upon a market and on a means 
 of exchange there. It involves a special 
 storing of materials and a delay in results, with 
 a view to greater results, than can be got 
 without the delay. It involves that some 
 rough-and-ready distinctions are recognised 
 between article and article. The exchange of 
 them is not a mere affair of quantity, but of 
 value. Similar quantities may be of unlike 
 value. One question, therefore, is, whence this 
 recognised difference arises ? 
 
 The Special Difficulty of Modern Division of 
 Labour. — It was implied (when the labour was 
 divided) that I gave up my useless privilege 
 of making everything for myself, in order that 
 both my neighbour and myself might do better 
 by the new plan. If I found myself no better 
 off by the new plan, in the case, say, of boots, 
 I should be tempted to relapse into the old 
 plan, and be my own shoemaker. One limit, 
 then, to the amount of one man's wares that 
 can be exacted by another in exchange for his 
 own, will be the point at which it will cease 
 to the second man to be profitable to leave 
 the making of the desired article in another 
 man's hands at all. In a small neighbourhood, 
 where the people all know each other and each 
 other's every action, the limit would be easily 
 seen from afar off. Not so in a large society 
 
I.J THE BASIS OF BARGAINS 19 
 
 where the exchangers are often strangers to 
 one another and out of each other's ken. The 
 alternative of making our own boots is in this 
 case out of the reckoning ; no industrial relapse 
 can carry us to that extremity. We guide 
 ourselves rather by observing the differences 
 between one maker and another, choosing 
 those makers who give us the most favourable 
 terms. In short, we guide ourselves by the 
 competition of sellers, the sellers representing 
 the makers. We are unable in a large society 
 to know exactly to what length the seller is 
 prepared to go rather than lose his bargain 
 with us ; and he, for his part, is probably un- 
 aware of our limits. Yet bargains are made ; 
 and, where there is not force or fraud, both 
 parties as a rule are satisfied. What are the 
 grounds of the satisfaction? To what equality 
 of conditions deemed reasonable do men settle 
 down, in such a case ? 
 
 The First Obvious Solution. — The first 
 answer would probably be, that the plentiful- 
 ness or scarcity of the article wanted is 
 what determines its value, or the quantity 
 of the other things for which it will be 
 exchanged ; and this is true, if we remember 
 that the plentifulness or scarcity of the other 
 article offered in exchange for it must be 
 equally brought into account. The seller is 
 
20 GENERAL OUTLINE [chap. 
 
 always a buyer, and the buyer is always a 
 seller. This is more evident in barter than 
 where the exchanges are made by means of 
 money. It is unusual to speak of the trades- 
 man who gives his goods for money as a 
 buyer ; but he is so — of money first, of other 
 articles at his leisure. Now, each seller will in 
 sane business only sell if what he parts with 
 has a lower final utility to him than the goods 
 he is to get by the sale ; and the buyer is in 
 exactly the same position. Each may be 
 expected to be willing to conclude the bargain 
 so long as that condition is fulfilled ; but, where 
 plenty prevails, on one side, of the things offered 
 by the seller, and scarcity on the other of the 
 things offered to him by the buyer, it is clear 
 that there may be much greater advantage from 
 the bargain on the one side than on the other, 
 without positive disadvantage on either. 
 
 Under division of labour, the abundance 
 and scarcity have more of man than of nature 
 in them. We may suppose that the develop- 
 ment has not gone so far that makers have 
 ceased to be sellers, nor so far that makers 
 have begun to employ hired labour in addition 
 to their own, or instead of it. Still, society is 
 so far sophisticated, that a man's production, 
 being the production of a surplus intended for 
 others, is dependent on others ; and what 
 
I.] COST AND VALUE 21 
 
 applies to the conditions of production applies 
 to the conditions of sale, the two being sup- 
 posed to be as yet unseparated. 
 
 The Question Largely but not Wholly one 
 of Cost. — It might be thought that the whole 
 question was one of cost ; in fully-developed 
 competition there is a levelling of gains till they 
 do little more than balance the sacrifices of the 
 producer. The statement is roughly true if 
 understood of a general tendency, or rather of 
 a general intention or calculation, on the part 
 of the producer, which is usually realised in 
 fact. He intends to keep up his production to 
 the point where the articles given for it will 
 be worth to him what he has spent In the 
 making of his own article, and a little more. 
 But the scale of the making depends partly on 
 the scale of the selling, as ''division of labour is 
 limited by the extent of the market." He might 
 conceivably get a sufficient equivalent in either of 
 two ways — either for a few articles in a small 
 market, or for a greater number in a large, the 
 larger market enabling him to introduce econo- 
 mies that would be unprofitable to him in the 
 smaller. He will have a strong motive for the 
 adoption of them In the large market, for other- 
 wise new producers will arise who will adopt them, 
 and tempt away even his first customers. Indeed, 
 unless the market shrinks from causes beyond 
 
22 GENERAL OUTLINE [chap. 
 
 control of producers, no new economy once 
 adopted will be abandoned. 
 
 Even at an early stage, therefore, of division 
 of labour, cost is affected by demand as well as 
 demand by cost. In a sense, these represent 
 two elements that are always present in value, 
 whether it be the value set upon an article by an 
 individual for himself, or the value (the equivalent) 
 offered for the said article in a market, or assem- 
 blage of sellers and buyers. The latter kind of 
 value is not simply the former from another 
 point of view. The market value of an article 
 results indeed from all the particular values set 
 privately on it by the several individuals for 
 themselves ; but it coincides only with one group 
 of the private values, namely, the values set on 
 the article by those individuals just able and no 
 more to afford to give a price that will buy it. 
 In both senses of value, however, there are im- 
 plied the two elements, of desire and of difficulty 
 (small or great) in satisfying it. Absence of desire 
 is fatal ; and absolute abundance, where the 
 difficulty is nil or nominal, is equally fatal to 
 both kinds of value. The difficulty may be 
 removable by human effort ; and the toil and 
 trouble of removing it are then in a sense the 
 condition of value, because the competition 
 of sellers may lead to more or less uniform 
 attempts to remove the difficulty in order that 
 
I.] VALUE APPROXIMATE TO COST 23 
 
 the market may not be lost. But the difficulty 
 is not seldom one irremovable by human 
 agency ; it may be a scarcity caused by a 
 convulsion of nature, or a sparsity of good 
 soils or climates, to say nothing of the rare- 
 ness of special talents, or other natural mono- 
 polies. 
 
 Why Value and Cost do not Coincide, — 
 Where division of labour has been, however, 
 so far extended that the makers and sellers 
 are beyond each other's ken, it may be assumed 
 that the commonest case of value in the market 
 is that of the value of articles produced in large 
 quantities by divided labour reduced by com- 
 petition nearly to cost. The next question is, 
 what is precisely meant by this cost, and why the 
 value should not be, not almost but altogether, 
 equivalent to it. 
 
 The Complications of Modem Economy, — 
 When we try to answer this question, it ap- 
 pears that in passing from the idea of a small 
 and simple society to a large and complicated 
 one, we have involved ourselves in much more 
 than labour, and supply and demand. We are 
 confronted with capital and profits, interest and 
 wages. 
 
 The articles prepared in large quantities for 
 the market under an extended division of labour 
 will be, more and more of them, such as cannot 
 
24 GENERAL OUTLINE [chap. 
 
 be ready at once, but need time and pains and 
 tools and materials ; the preparation of them 
 will employ many hands, and some of the hands 
 will be the hired hands of apprentices or 
 of artisans, who want either the inclination 
 or the opportunity to undertake the elaborate 
 task of bringing the whole to completion them- 
 selves. Finally, when they are finished they 
 may not find a purchaser at once. 
 
 Capital, — The meaning of all this is, that 
 the cost in muscular or even mental labour is far 
 from being the whole cost. Articles not taken 
 to the market at once, but used as means or 
 materials for the making of other articles, are 
 usually called capital. Even a rough wooden 
 plough would require as capital the wood and the 
 tools that worked it, and the making of it would 
 be slower than of a rough wooden spade, though 
 when made the plough would serve the purpose 
 better, and the work would be then done more 
 speedily. The making of an iron ploughshare, 
 and the rest of the fittings of the corresponding 
 plough, would require the digging out of the iron, 
 the smelting of it by charcoal or coal, and the 
 labours of the smithy. This process. Involving 
 more capital, would be longer still than in the 
 case of the wooden plough ; but, as before, the 
 result would be a better tool, doing work more 
 speedily and to better purpose. The cost 
 
I.] CAPITAL 25 
 
 would be not only the labour of the maker, 
 but the materials used, or used up, and the goods 
 the maker may have needed to give to others 
 who worked for him. Still he perseveres, having 
 calculated that his new tool, being rare and good, 
 will find purchasers at a price that will repay all 
 the outlay — indeed at first much more than repay 
 it. Most people are content with the bird in 
 the hand ; but the specially active man sees 
 that, by means of the bird in the hand he may 
 catch a much rarer bird in the bush, and he 
 '' makes capital out of" the first bird. 
 
 Once the new tool is no longer new, but 
 known to everybody, it will be a less rare article, 
 and will fetch less ; but still the making of it 
 takes time ; and the majority of men attach a 
 higher value to what they get at once, than to 
 what is only coming by and by. An article 
 made in the long way of capital will, therefore, 
 always tend to be, compared with others, rarer 
 and more valuable ; or, rather, the articles that 
 are turned into capital to make it, tend to be less 
 valued so long as they are capital than they are 
 when they are finished articles. The maker, if he 
 has common-sense and foresight, knows this, and 
 presumes on it ; he calculates (and as a rule 
 rightly) that the value of his finished article will 
 in fulness of time be more than that of the 
 goods devoted to the production of it. If it 
 
26 GENERAL OUTLINE [chap. 
 
 were not so, he would seldom deny himself 
 by turning the goods into capital ; he would 
 consume them, or sell them. As it is, he 
 makes them into materials or tools, or gives 
 them as wages to hired labourers, whose 
 services are as truly part of his- means of pro- 
 duction as the services of his furnace or his 
 hammers. The labourers, for their part, in 
 countries where there is a system of unequally- 
 divided private property, are not as a rule in a 
 position to wait for a future share in the value 
 of the finished article ; they are willing, there- 
 fore, to give their services for a present grant of 
 goods that will, if their employers' calculations 
 are right, be somewhat less than their full share 
 in the value of the finished article if they waited 
 for it, but will be available at once, being a 
 forestalling of that share. 
 
 This may be enough for the present about 
 the reasons why competition, however keen, 
 does not in an ordinary market reduce the 
 value of an article, or (what is the same thing) 
 increase the desired supply of it, so far as the 
 point where the cost is simply repaid and no 
 more. The difference due to the difference in 
 time between the first making and the final 
 finishing of an article, is the foundation of what 
 is called interest on capital ; capital, when it 
 has become the piece of goods ready for use, is 
 
I.] RENT 27 
 
 worth more than capital when it is only on 
 the way to its end. 
 
 The men of business who are not in the 
 van but in the rear, will gain little but this 
 interest. The pioneers will find themselves in 
 a position of greater advantage, and, from a 
 new economy of their own introducing, will 
 enjoy what is called profits, so long as they can 
 make their own economies keep a little in front 
 of those of their rivals. 
 
 Rent, — There is, however, a class of advan- 
 tages in production due rather to fortunate 
 possession than either to industry or to inven- 
 tiveness. Physical nearness to a great centre 
 of trading is an advantage of this class, though, 
 with improved communications and means of 
 carriage, it tends to become of less importance 
 for most goods. It is of most importance for the 
 gifts of the earth, and not for the most perish- 
 able merely. The occupier of a coal mine near 
 a large city will get his goods more cheaply to 
 market than another ; but, if the coals in the 
 market are a small supply in face of a large 
 demand, the price of all the coals will be high, 
 as high for the fortunate man in question as 
 for his rivals who are farther off. His gains 
 will accordingly be greater than theirs, for his 
 outlay is less. A similar unearned advantage 
 would belong to the fortunate farmer of good 
 
28 GENERAL OUTLINE [chap. 
 
 land as compared with the farmer of poor land, 
 or to the farmer of land no better than the rest 
 in the neighbourhood, but lying nearer to the 
 market town than any of the rest. There 
 would be extra profits due to a sort of natural 
 monopoly. 
 
 Now, in all such cases the advantage of situa- 
 tion and soil is unlike the advantage derived from 
 industry and inventiveness, that are in a very 
 great measure independent of locality. The 
 difference between the profits of men that have 
 no such special advantages and the extra profits 
 of the men that have them, is called rent. If the 
 occupier is also the owner, he gets this rent for 
 himself; but in many countries the lands are 
 owned by men who do not occupy them, but 
 who let them to others on condition of receiving 
 the rent. 
 
 Distinctness of Function need not mean Differ- 
 ence of Person. — We have become accustomed 
 to this separation of interests. In the modern 
 development of industry in certain European 
 countries, division of labour has been accom- 
 panied, not simply with a distinction of functions, 
 but with an actual separation of them in the 
 hands of distinct persons. In the infinite variety 
 of the phases of modern life, economic elements 
 have sometimes been detached without any con- 
 spicuous economic benefit arising from the 
 
I.] ADVANTAGES OF DIVISION OF LABOUR 29 
 
 detachment ; In other cases the detachment has 
 been only a middle stage towards a more 
 economical union of the detached elements. 
 The large store may be more economical than 
 the group of small shops, though at first the 
 shops were an economy as against the system 
 under which every man was his own shopkeeper. 
 The system of peasant owners may be a worse 
 economy than the system of farmers at a rent, 
 till the peasant owners are able so to act together 
 as to get the benefits of large production and 
 many inventions. There is no evident finality 
 in the separation of labourer, employer, and 
 capitalist, though at first the labourer would 
 starve without the employer, and the employer 
 would be hampered without the aid of the 
 capitalist. 
 
 Technical Advance Irrevocable. — But, apart 
 from a contraction of markets from causes 
 beyond human control, the technical advances 
 and advantages of division of labour seem to 
 be irrevocable. Once gained, they are kept. 
 They not only may become general, but in 
 the present age of easy communication and 
 rapid diffusion of news (themselves an illus- 
 tration of the very phenomenon in question), 
 they must become general. Markets now 
 extend beyond provinces to whole countries, 
 and beyond countries to the whole habitable 
 
30 GENERAL OUTLINE [chap. i. 
 
 world. Where the market is world-wide, the 
 production must be such as involves the use of 
 the best economies known to the world in general, 
 or the producer will lose his pains and find him- 
 self undersold. Efforts are made by govern- 
 ments as well as by combinations of individuals 
 to resist this levelling tendency of modern indus- 
 trial progress, but with no sign of permanent 
 success. Under universal free trade, the trade 
 of the world would realise the economies secured 
 in the much smaller scale by local and national 
 division of labour. Certain kinds of trading, such 
 as banking and stockbroking, escape all efforts 
 to confine them to one country ; and even in 
 other cases the attempts are never more than 
 partially successful. The tendency of modern 
 progress is to make the whole civilised world 
 industrially into one country. 
 
CHAPTER II 
 
 VALUE 
 
 Production, Distribution, and Consumption. The Two Senses of 
 Value. Value in Exchange the more Measurable. Analogy 
 of Statistical Data. Normal Price. Modern Goods, and 
 Elastic Response of Supply and Demand to Price. Relation 
 to Price of the Costliest Part of Supply. Does Price 
 determine the Margin, or vice versa? Marginal Products 
 and Marginal Sellers. Particular Cost in Relation to Price. 
 Low Prices and Extended Economies. Monopolies. Inter- 
 mediate Cases. 
 
 The time-honoured divisions of political economy, 
 as of domestic, are production, distribution, and 
 consumption. 
 
 In domestic economy, production is perhaps 
 the most important. Goods must be provided 
 for the wants of the household, and the goods 
 must not be so used that sufficiency becomes 
 poverty. In a normal or ordinary family, the 
 interests of the members are considered in 
 common ; the distribution is not made from 
 calculations of prudence, but from feelings and 
 instincts. In political economy, on the other 
 
 31 
 
32 VALUE [chap. 
 
 hand, the social bond is between different 
 persons possessing different interests. In a 
 civilised society the independent persons, roughly 
 corresponding in number to the families, are found 
 to be each seeking his own interest, but securing 
 it only in conjunction with the rest. How the 
 wealth so produced is distributed under these 
 conditions is of vital importance, for, amongst 
 other things, the sharing of the product affects 
 the motive of the producer to make more, and 
 affects even his capacity for so doing. Pro- 
 duction, consumption, and distribution, are three 
 phases of economic facts that hardly bear to 
 be separated, though they are usually quite 
 distinguishable. When capital is said to involve 
 saving, for example, this is its aspect as regards 
 consumption. Its aspect towards production is, 
 that it is one of the means to production. One 
 of its aspects towards distribution will appear 
 when we consider that by adding to production 
 it tends to reduce the value of goods already in 
 the market, and thereby, it may be, to reduce 
 the rewards of the producer. 
 
 Political economy considers the external 
 resources of social beings in all three aspects, 
 and tries to discover the most permanent and 
 measurable relations of all three. 
 
 The Two Senses of the word Value. — Little 
 can be gained by lingering over the vagaries 
 
II.] THE MEANING OF VALUE 33 
 
 of individual taste and choice in consumption. 
 In this connection we have already seen that the 
 notion of value has two distinct senses, rather 
 roughly joined together by the common presence 
 of a final utility in the articles valued. There 
 is a ** subjective," private, or personal value, 
 where the word denotes the attitude of a single 
 person to an article that he measures to him- 
 self alongside of the rest of his stock for his 
 own satisfaction. The measure of the value 
 he attaches to that article, or any article, is 
 the worst use to which he puts that article. 
 We measure its worth to him by this ''final 
 utility " of it to him. What causes the worth 
 to be high or low is the desire he has for the 
 article (or its kind), together with the scarcity 
 or abundance of it, in his private economy. If 
 such desired articles are few, this item will have 
 a high place ; if they are many, a low place. 
 But this valuation is almost wholly of private 
 interpretation ; once we go beyond necessaries, 
 we can hardly judge for another man ; we cannot 
 predict another man's desires ; we can only 
 accept the re'sults, and judge with fair certainty 
 that what he treats worst he values least, and 
 what he treats best he values most. 
 
 It is only when we pass to the results in 
 an aggregate of large masses of men, that we 
 come to something measurable from without, and 
 
 c 
 
34 VALUE [chap. 
 
 not simply from within. Though we can seldom 
 explain why one man's final utility should differ 
 from another's, we know from experience that 
 such is the case, and that one effect is to 
 make exchanges profitable on both sides, and, 
 even if often conspicuously more profitable on 
 one side than another, still without any hardship 
 on either side. Division of labour makes it pos- 
 sible for a society of men to procure not only 
 necessaries, about which on the whole they 
 agree, but comforts and luxuries about which 
 they differ widely. If desires were only of 
 necessaries, there might be little economy in 
 division of labour, and none in extending it. 
 The greater the difference between the personal 
 estimates of seller and buyer, the more advan- 
 tageous the exchange. The old assumption of 
 the first teachers of political economy was that 
 men might be presumed not to make an 
 exchange at all unless it were for their interest. 
 Recent studies, pursued on the borders of 
 political economy and psychology, and dealing 
 with subjective value, have served at least to 
 bring out more clearly how a gain on one side 
 is presumably a gain on the other, and yet a 
 gain of unequal character, owing to the varying 
 wants and resources of men. 
 
 Value in Exchange the more Measurable 
 Value, — We need to keep in mind this notion of 
 
II.] VALUE IN EXCHANGE 35 
 
 final utility and its consequences when we turn 
 our attention from personal value to value in 
 the ordinary usage of the market. Value in 
 exchange is measurable to a far greater extent 
 than value in use, or subjective value. Price 
 is the value in exchange put in terms of money ; 
 and, instead of differing in each case according 
 to the final utility of the article to the buyer 
 or the seller of it, prices are uniform in given 
 periods of time for all sellers and buyers in a 
 given market. The phenomenon recalls the uni- 
 formity of statistical data in regard to births, 
 deaths, suicides, and crimes ; but is more 
 markedly connected than in these demo- 
 graphical cases with the deliberate will of 
 the parties concerned. In the higgling of 
 the ordinary market, there are causes over- 
 ruling the mere will of the individuals ; but the 
 will of the individuals is essential to the whole 
 result. The sellers intend to get a particular 
 price for their article ; in certain circumstances 
 they can even *'make" a price. But economics 
 must deal mainly with general rules ; and the 
 general rule is that, the men being what they 
 are, and the things as they are, the price could 
 not have been other than it was in a given day 
 and place. On the other hand, the fluctuations 
 from day to day in the price of articles in the 
 same market are so considerable, that the 
 
36 VALUE [chap. 
 
 uniformity is found to lie rather in a tendency 
 of the prices towards a point of rest, than in the 
 actual rest of them there. Economists therefore 
 distinguish the market price of the particular day 
 from the normal (or "natural") price towards 
 which they observe market prices to be con- 
 stantly tending, as the sea towards its level, 
 though seldom reaching it. 
 
 Normal Price. — This normal price may be 
 described in general terms as the price that 
 repays cost of production ; and the tendency 
 towards it is an observed fact, holding good for 
 all cases where articles are produced for sale 
 in large quantities and under fairly equal con- 
 ditions. There is sufficient uniformity here to 
 justify the general description. 
 
 Its Relation to Cost. — -But it would not be 
 quite exact to say that the cost itself is the 
 cause of the value or the price, though there 
 is clearly an influence, direct or indirect, of 
 the cost on the result following. The indirect- 
 ness of the influence appears when we look 
 at the attitude of the seller and buyer. What 
 the article has cost him, does undoubtedly 
 influence the seller in accepting or rejecting a 
 given price for it. What the article may have 
 cost the seller, is of no concern to the buyer. 
 As himself a seller, he looks closely to cost — the 
 cost to himself of his own article ; as a buyer, he 
 
II.] SUPPLY AND DEMAND 37 
 
 disregards cost — the cost of the seller. What the 
 buyers hope to give, is as low a price as possible ; 
 what they will actually need to give, will depend 
 mainly on the comparative abundance of it in 
 the market, and the comparative fewness and 
 eagerness of fellow-buyers. What the sellers 
 hope to get, is the highest price possible ; what 
 they will get, will depend on the number of 
 purchasers and on the stocks of other sellers, as 
 well as on the eagerness of both to conclude 
 a bargain. The part that cost plays is in act- 
 ing as a limit to the supply ; the suppliers will 
 not continue supplying if the price is below 
 their cost. What reduces supply (other things 
 being equal) will tend to raise value, and what 
 increases supply, to lower it. 
 
 Supply and Demand. — In the typical indus- 
 tries of the modern world, the uniformities are 
 more striking than would appear from this 
 general statement. Where both supply and 
 demand respond elastically to an increase, or 
 falling of prices, as in the case of iron goods 
 and cotton goods, we can see how a difference 
 in price may at once respond to a difference 
 in cost. The demand is elastic where with a 
 rising price it shrinks at once In proportion ; 
 and the supply Is elastic where when the price 
 is high the efforts of the producers to seize their 
 opportunity are at once visible, and where when 
 
38 VALUE [chap. 
 
 prices are low an extension of demand is courted 
 by an extension of economies in manufacture. 
 
 Marginal Cost, — In such industries it is also 
 more evident, though not perhaps more true, 
 than elsewhere, that (i), while the ruling price 
 is fixed by demand in relation to supply, the 
 ruling supply has its limit of price set for it by 
 the most costly part of the supply that is wanted 
 at all ; and (2), the ruling price is the price that 
 has been brought down to the point where it 
 catches the weakest buyers that are worth catch- 
 ing at all. Those who produce most cheaply are 
 farthest removed from the final or marginal sellers, 
 and are surest of their market ; those who can 
 offer the highest price are least likely to come 
 away with empty hands. These are common- 
 places ; but what is not always noticed by 
 common sense is the influence of the marginal 
 buyers and sellers. What is true of corn is 
 really, though not so strikingly and obviously, 
 true of all wares. The price depends especially 
 on the most costly part of the actually wanted 
 supply, the most costly that can find a purchaser 
 at all. If the demand is for 100,000 cheap pen- 
 knives in a few days, the old-fashioned makers 
 will be called on to supplement the supplies turned 
 out by the best new-fashioned makers. If with 
 all their efforts the latter can only produce 90,000 
 in the time, the price will probably then move to 
 
II.] PRICE 39 
 
 IS. 9d. from is. 6d., and reach the cost of the 
 old-fashioned makers. 
 
 Does the Price fix the Margin, or the Margin 
 the Price? — The proposition that the price is 
 determined by the marginal buyers and sellers 
 might justly be criticised on the ground that 
 the price itself is what determines who shall be 
 on the margin. In the same way it might be 
 argued that the price of corn cannot accurately 
 be said to depend on the marginal farmer, for it 
 is the price of corn itself which decides who is 
 to be the marginal farmer. In both cases the 
 margin would seem to be rather an effect than 
 a cause. 
 
 What decides the price is the need of 
 the last-supplied increment. If the need of 
 demanders, and also their resources, be just 
 great enough to raise the price high enough to 
 bring out that increment, the price will be so 
 raised till the increment appears ; it will not go 
 higher unless the demanders have really been 
 above and not on the margin before, or, in other 
 words, have been more rich and less needy than 
 was assumed. In a falling market, likewise, the 
 supplies will hardly come forward unless the 
 sellers had been really above the margin before. 
 But an exact equilibrium of supply and demand 
 can seldom exist under modern conditions of 
 business, though it seems to have often existed, 
 
40 VALUE [chap. 
 
 with the result of fixed prices, in periods when 
 the conditions were ** statical" or constant. 
 
 Marginal Products and Sellers. — In modern 
 trade, and where the characteristically modern 
 products are concerned, it is not so much 
 a question of marginal sellers, as of marginal 
 products. The additional increment proclaimed 
 by the rising price to be demanded by 
 the market, may be furnished by additional 
 efforts of a well-equipped factory, corresponding 
 to additional doses of capital on good land, as 
 opposed to an extension of cultivation on poorer 
 lands. The large producer, too, may calculate 
 that after a certain period he may reduce his 
 cost so that his additional increment may cost 
 him no more than the old ; and he is insured 
 against a future relapse of the prices. Under 
 modern conditions, a producer must be able 
 occasionally to sell under cost, and a buyer to 
 buy where the price is for the moment unprofit- 
 able. Otherwise he is not strong enough for 
 the higgling of the modern market. 
 
 This seems to be a fair interpretation of the 
 process of the balancing of supply and demand. 
 The quantitative adjustment described in the old 
 formula, ''Supply tends to be equal to demand," 
 was not a myth. But in this balancing, which 
 is the objective side of the higgling of the market, 
 we are not to expect an equal array of equally 
 
II.] COST AND PRICE 41 
 
 equipped combatants. There is rather a grada- 
 tion of ranks. All suppliers play their part in the 
 whole process ; all contribute to the whole result, 
 as all farmers contribute to the total crop. All 
 demanders, in like manner, affect the total amount 
 demanded. But, while the strongest decide 
 what the broad limits are to be, it is the weakest 
 who determine the narrow details. 
 
 Cost and Price. — For easier illustration we 
 may neglect the phenomenon of intensive pro- 
 duction, and suppose the margin to be not of 
 products merely, but of producers. All above 
 the border line are like the cultivating owners 
 of good land ; they gain much more than enough 
 to repay their cost. Their articles, if they are 
 sellers, come to market at a price much beyond 
 cost. If an article's price, then, depends on cost, 
 it is not the cost of all the supplied articles, or 
 even of the average of them, but their cost with 
 the weakest makers, or by the dearest processes 
 actually needed to complete the supply. Even so, 
 the statement needs not only the general qualifi- 
 cations given already, but the further reservation 
 that under modern conditions the particular cost 
 of one particular article could not determine its 
 price in any intelligible sense, for it is manufac- 
 tured with others on a great scale in a large factory, 
 as one item in a large aggregate. The cost of a 
 hat could not be estimated except by a minute 
 
42 VALUE [chap. 
 
 reckoning of the expenses of the hat factory, 
 and the proportionate share of this one item in 
 them. It is a question of joint cost of production, 
 where the attribution of a precise share is not 
 easy, though the total result is in practice quite 
 measurable. It is not impossible to measure the 
 expense of the whole business of manufacture, 
 though the fractional part belonging to the single 
 article becomes less and less as economies are 
 introduced and the market extended. It is one 
 of the paradoxes of economics that a falling 
 demand may result in an increased production, 
 carried out in order to create a larger market at 
 lower prices, but also at lower cost. This pro- 
 bably happens most often with the stronger 
 sellers, who can usually best submit to a short 
 period of low prices at the old cost, and labour 
 patiently to convert these low prices into rela- 
 tively high ones by lessening the cost per unit 
 produced. If they for their part thus retain 
 their market by widening it, the old ''marginal 
 producers " will probably no longer stand even on 
 the margin. 
 
 Place of Competition. — All this reasoning 
 depends on the assumption of effective com- 
 petition and comparatively perfect elasticity. 
 The opposite case would be that of a mono- 
 poly, where the article was supplied by a 
 limited group of sellers. Even they could not 
 
II.] COMPETITION 43 
 
 disregard either cost or demand. They aim at 
 such a price as will command the greatest 
 amount of net returns possible in the circum- 
 stances. It is not the same in all circumstances. 
 A gas company may charge no more than 2s. 6d. 
 per thousand feet for gas, because it has a 
 margin of profit then, and might lose in 
 demand and profit if it charged more ; whereas 
 if it could reduce its cost and charge less, it 
 might so gain in demand as to have larger 
 net returns. This is one of the instances 
 where the graphic method of illustration by 
 curves and diagrams sheds light on the matter. 
 Monopolies dealing with articles not multipli- 
 able in quantities, but always few in number 
 (as Stradivari violins, or First Folios of Shak- 
 spere), or even unique, are in a different 
 position. Every rare article has, in a special 
 sense, a monopoly price entirely unconnected 
 with cost, provided it is desired at all. 
 Where its narrow market is a market of strong 
 buyers, there is no limit assignable to the price 
 which their competition may cause the article 
 to reach, there being no competition of sellers. 
 Between such monopolies and articles ** freely 
 produced," there is a great variety of gradations, 
 where competition is modified by non-economical 
 causes, that is to say, by considerations other 
 than those of business. There are cases too 
 
44 VALUE [chap. ii. 
 
 where custom fixes the price, and the effects of 
 competition are seen entirely in the bulk and 
 quality supplied, as in the case of a penny news- 
 paper, or even a penny bun. 
 
 We have not yet considered what the cost 
 itself means in detail to the producer. In the 
 case of articles freely produced, it is usually said 
 to involve outlay of labour, and outlay of capital. 
 The maker, even if he employs other men's labour, 
 bestows also his own ; and this labour of his 
 own, together with his devotion of his material 
 resources to the building up of apparatus for 
 production and for impressment of workers in 
 utilising it, constitutes his cost. 
 
CHAPTER III 
 
 CAPITAL 
 
 Defined. Definition may include Land. Capital as a Tool, and 
 as Provision for the Future. Few things "obviously 
 Capital," and alternatives only too open in modern times 
 for spending wealth. Abstinence and Providence. Present 
 and Future — how related in Work done with Capital. Calcu- 
 lation of greater Gain. Longer Ways the more profitable. 
 But within Limits. Capital in less abundance than other 
 Wealth. Hence Interest. Embodied in distinct Classes, 
 Lenders, and Employers. Borrowed Capital and Cost. 
 Renewal of Capital probable. Conditions of the Renewal. 
 
 What is this capital, and what is its cost ? 
 What outlay is involved in the first formation, 
 and then in the full utilising of the capital 
 itself? 
 
 The definition of capital as wealth that is 
 used to produce more wealth, has the advantage 
 of simplicity ; but, like all such simple definitions, 
 suffers from the existence of apparent exceptions 
 on the border line. The exceptions usually 
 spring up on the change of purpose on the 
 part of the possessor of wealth ; his wealth may 
 
 45 
 
46 CAPITAL [chap. 
 
 be capital or not as he chooses, for *' capital" is 
 *'a notion of the second intention." In loose 
 popular discourse, capital means any source of 
 revenue, public or private, even a good name 
 or a persuasive tongue. Probably the com- 
 monest idea of all is that capital is money, and 
 all money is capital, or at least that all wealth 
 is capital. 
 
 The most fruitful Definition, — If, however, 
 we assume that the use of two different 
 terms both by vulgar and by learned, must 
 point to some real distinction, not always re- 
 spected by the learned, and not often discerned 
 by the vulgar, we should do well to seek for 
 the most fruitful and useful form of the distinc- 
 tion, and try to hold it clearly. Wealth used 
 to produce more wealth is such, if we take the 
 word ''produce" to mean create for the world, not 
 simply appropriate for the individual. Capital 
 in this sense contains in it more of production 
 than of distribution. The use of wealth to get 
 more wealth for the individual, is a kind of 
 capitalising that may have more in it of distribu- 
 tion than of production. Without capital in the 
 former sense, there would soon be little or nothing 
 for capital in the latter to deal with. 
 
 The definition (wealth used to produce more 
 wealth) seems to many to include too much, for it 
 would naturally include land and gifts of nature 
 
iii.J DEFINITION OF CAPITAL 47 
 
 in general, which have long been treated as a 
 class by themselves, and not on the same foot- 
 ing as other kinds of wealth. But if they are 
 wealth, and not simply possibilities or sources 
 of wealth, it seems more awkward to exclude 
 them from capital than to include them there ; 
 we can quite well distinguish the capital con- 
 sisting in the landed estate from the other 
 capital sunk in the land. Few who were land- 
 holders in reckoning up their capital would omit 
 their property in land. " Nature," it is true, 
 does more for us in land than elsewhere, without 
 our aid ; but nature does more for us in other 
 material possessions than we can easily reckon. 
 In production, so-called, we are simply persuad- 
 ing nature to work with us and for us. We have 
 no power of creation out of nothing. 
 
 Capital as a Tool, and as Provision for 
 the Future. — Even in private economy, and 
 before modern developments of division of 
 labour, there would be capital in the sense 
 defined. It is hard to think of a single work 
 of production that does not involve the use of 
 instruments ; man is a tool-making animal, 
 and the tool is the most naked and open 
 example of capital. Even the food of primi- 
 tive man would be capital when he was 
 cultivating the ground ; or at least (if it be 
 argued that he would have fed himself even if 
 
48 CAPITAL [chap. 
 
 he were not working) the additional food that 
 he would need for heavy labour would be so. 
 Such examples, it is true, do not help us very 
 far in our complicated modern problems of 
 production. But they point to two features of 
 capital : it is a tool, and it is provision for the 
 future. 
 
 In the factory, as in the spade, capital stands 
 confessed ; it is unfit for consumption ; it could 
 hardly be anything else than a means of pro- 
 duction. The intention of its maker is obvious, 
 to use it to bring more wealth to him by and 
 by ; it is not itself a means of satisfaction of 
 any want as it stands. 
 
 The difficulties begin when we deal with the 
 goods out of which the tools and the factory were 
 originally made ; they were not ear-marked by 
 nature for capital ; they had all of them alterna- 
 tive uses. Under division of labour, exchange, 
 and money, it is the variable rather than the 
 fixed character that is stamped on them. A 
 man may elect to consume them, or to make 
 them means of production, for their exchange- 
 ableness into money enables him to do either, 
 and either in many various ways. Suppose 
 that a man has ;^ 10,000, that is, that he 
 commands goods to the value of that amount of 
 money, and that he devotes this sum to the 
 establishment and working of a factory. What is 
 
III.] HOW CAPITAL IS FORMED 49 
 
 the connection between the revenue he gets and 
 the capital he has placed in this business — 
 how does the capital renew itself or perish — 
 how much of his revenue is due to it, and 
 how much to his own labour ? These are some 
 of the questions to be asked ; and there are 
 earlier questions to be sufficiently considered : 
 How has the capital grown up — what did it 
 cost him and the world generally ? Is it simply 
 the result of past labour, and what is its 
 relation to present labour ? 
 
 How is Capital Formed? — It is clear that to 
 devote wealth to production is at least to 
 defer our own consumption of it. In earlier 
 times this would not be either so apparent or 
 so real, for many things till made instruments 
 of production would hardly be goods at all.^ 
 
 What we call minerals, especially the metals, 
 are less suited to minister to our comfort directly 
 than to do so indirectly by becoming the means 
 of producing comforts. In their case the labour 
 of getting them is greater than any supposed 
 self-denial in refraining from consuming them ; 
 the abstinence would be from the luxury of 
 idleness, and the virtue would be in resisting 
 
 * " Glim truncus eram, ficulnus, inutile lignum, 
 Cum faber, incertus scamnum faceretne Priapum, 
 Maluit esse deum. Deus inde ego." 
 
 Horace, Satires^ I. viii. 
 D 
 
50 CAPITAL [chap. 
 
 the inclination to enjoy the present and make 
 no provision for the future. Capital always con- 
 templates the future, whether near or distant. 
 A man who is spending his time in turning his 
 present wealth into a means of future wealth, needs 
 to be supported in the interval ; and to that extent 
 capital in food is needed for the formation of 
 capital in other goods. To this extent, also, 
 primitive times and modern have both of them 
 witnessed the phenomenon of providence. It 
 seems needless, however, to dilate on the 
 economic significance of moral ideas, such as 
 prudence or abstinence, in connection with 
 capital. The positive element of invention is 
 the efficient cause, abstinence only a foregoing 
 condition. The abstinence, such as it is, is 
 brought home to us much more vividly now 
 than formerly. Under modern conditions 
 money has, as it were, liquidated or mobi- 
 lised all possessions, and the choice is really 
 open to us whether to spend in the present or 
 to provide for the future. The very idea 
 of economy implies continuance of time ; a 
 creature purely ephemeral would have no motive 
 for economy, but the longer we hope to live 
 (in our own persons, or in those with whom we 
 identify ourselves) the stronger the motives we 
 should have for economy. Provision for the long 
 distant future is almost a mark of civilisation, 
 
in.] PROVISION FOR THE FUTURE 51 
 
 though this need not mean an endeavour after 
 imperishable buildings and garments that wax 
 not old. Every economical man may therefore be 
 said to be provident and abstinent, the one usually 
 implying the other. Does it follow that absti- 
 nence, partaking of the nature of pain because 
 involving self-denial, is therefore to be reckoned 
 a kind of labour, or at least, along with labour, 
 a kind of cost ? The answer is that self-control, 
 or self-denial, or abstinence of some kind, is in- 
 volved in all human labour economic or other- 
 wise. In every choice, besides the thing chosen, 
 there is the thing rejected ; adoption of one plan 
 is "abstinence" from another. This is simply 
 the negative aspect of all positive action, and 
 in this sense the waverer is the only man to 
 escape abstinence. 
 
 We are not therefore much the wiser when 
 we are told that capital is the effect of absti- 
 nence ; in a sense labour is so also. There 
 is self-denial in both, and it is practised 
 (where matters economic are concerned) for 
 the same reason, to make wealth go as far 
 as possible. If there be toil and trouble in pre- 
 serving the capital, keeping it from injury till 
 its work comes to be done, this is cost in the 
 same sense as labour, for it is labour, and nothing 
 else. But, apart from actual efforts needed to 
 preserve it, the fact that it stands there spared 
 
52 CAPITAL [chap. 
 
 by us from consumption for a while, is not 
 itself an infliction of pain on us. We endure 
 the sparing of it in the present time because 
 we are deliberately causing it to bring to us a 
 greater wealth in the future. The tool once 
 made will be more productive than the bare 
 hands, and in preparing the tool we look for- 
 ward to the greater abundance and the larger 
 market. If men did not spend the present in 
 making the tools in order that in the future 
 there might be larger produce, it might be sup- 
 posed that those who haste to produce would 
 gain more than those who have waited patiently in 
 order to produce more abundantly. It is notori- 
 ously not so ; and the question is whether the 
 greater reward of the users of the new capital 
 is due to a special self-denial, for which they 
 successfully exact compensation, or simply to 
 a calculation, of profits about to come to them, 
 from a wider market, from buyers who are 
 quite indifferent to their sacrifices, but are 
 tempted by their lower prices. 
 
 The tendency under competition is that all 
 producers, or at least all who are on the margin, 
 should be able to make, roughly speaking, the 
 same gain, whether from their capital or from their 
 personal labour. The proportions of materials, 
 machinery, hired labour, and employer's personal 
 labour are very different in different forms of busi- 
 
III.] THE REWARD OF ABSTINENCE 53 
 
 ness ; but of all it holds true that unless men are 
 paid for their personal labour, including not only 
 patience and industry, but inventiveness and skill, 
 and unless they are paid for what they sacrifice in 
 the way of material goods already in their hands, 
 they will not and cannot go on producing ; — 
 sooner or later their capital is spent without 
 renewal. So far as abstinence is implied both 
 in this labour and in this capital, it may be said 
 to be rewarded in the price ; but it seems to be 
 only one out of many elements, and not one of 
 the most distinctive in the formation and employ- 
 ment of capital. 
 
 The Longer Ways often the fnore Profit- 
 able. — In turning wealth into capital, men are, 
 as it were, turning the present into the future, 
 and they know from experience that ''health 
 and a day" are not enough in most cases for 
 abundant production. The more they think 
 over their plans for production, the more they 
 turn their inventiveness to account, the more 
 fruitful the plans can be made, though under 
 penalty of a deferred result. The most pro- 
 ductive plans on the whole take the most time 
 to work out, though once executed they save 
 more time than was lost in the making of 
 them. Though we take long to make a railway, 
 once made it is our quickest means of 
 travelling. 
 
54 CAPITAL [chap. 
 
 Is it true absolutely that the longer the 
 way the more fruitful the way? We have to 
 think of the meaning of fruitfulness. It covers 
 value as well as abundance of goods. The 
 result may be deferred so long that no value 
 can be reasonably expected to repay the outlay, 
 and, as it were, fill the interval between 
 beginning and fulfilment. 
 
 Why not always so ? — We need to assume 
 that there will be a market, whatever the 
 abundance. No machine for boat-making on a 
 great scale would be certain of a market — 
 still less Giusti's steam-guillotine, for the whole- 
 sale execution of criminals. Even from this point 
 of view there seems to be a limit to the profit- 
 ableness of the longer way, in industry, as in 
 agriculture, though it is more patent and obvious 
 in the latter. There is a 'Mast dose" in manu- 
 facture, as there is a last dose in agriculture. 
 To reduce the cost and price of motor cars 
 and bicycles would certainly be to extend the 
 market for them almost in proportion to the 
 growth of population ; but we could hardly say 
 the same of Sanskrit dictionaries or of air- 
 pumps. The demand would fall off, and the 
 great production would not be profitable in 
 proportion to its greatness or to its cost in 
 time. Even where the market has no limit of 
 expansion, the distance in time may be greater 
 
iii.J INTEREST 55 
 
 than will allow of a profit from any Increase of 
 market whatever. Works that take centuries 
 to complete are works carried on not from 
 ordinary commercial motives, but (like Cologne 
 Cathedral) from motives unconcerned about cost 
 or profit. 
 
 Interest. — It needs a greater amount of 
 future profit to attract a man to forego 
 a present enjoyment or to forego a return 
 from capital at shorter interval ; and, the 
 farther off the returns are, the greater they 
 must be in order to put him on a level 
 with his fellow-producers. Goods ready-made 
 are, like ready money, more acceptable, other 
 things being equal, than goods and money 
 only coming by and by. The other things 
 are not equal, or else the only capitalists would 
 be the men to whom future wealth for special 
 reasons, including perhaps anticipation of old 
 age, is more valuable than present. The 
 present goods are more acceptable to the great 
 average of mankind almost in proportion to 
 their poverty, the final utility of present goods 
 tending to become higher as the stock of them 
 becomes smaller. Those who are willing to 
 stake the future against the present, and give 
 up present goods to make capital, are likely to 
 be always a minority ; or, rather, the amount 
 which men are willing to convert into capital 
 
56 CAPITAL [chap. 
 
 is likely to be always a lesser pile than the 
 rest of their wealth. Consequently, goods 
 sought for as capital will always be at a pre- 
 mium in value, and this premium of the present 
 goods is the price paid for borrowed capital ; 
 it is interest. 
 
 It is true that under modern conditions a 
 man can anticipate the future and get the 
 equivalent of his product now instead of then, 
 but it will have the defects of its provisional 
 quality. He will not get the whole, but a less 
 sum than the whole ; a deduction will be 
 made corresponding to the estimate prevailing, 
 among the average men, of the difference in 
 value between present and future ; there will be 
 a discount depending on the distance of time. 
 
 Lenders and Employers, — This nature of 
 interest appears perhaps most conspicuously 
 in the separation of the capitalist from the 
 actual organiser of production. The latter 
 may have to depend on borrowed capital, 
 and for this he pays interest, the difference 
 between the value of the goods placed at once 
 at his disposal and the same goods at time 
 of finished manufacture. It is not his profits. 
 It tends to be a fixed rate, where there is 
 equal security, for all businesses, however 
 these may differ in profitableness. The amount 
 of capital in a modern civilised country is made 
 
III.] BORROWED CAPITAL 57 
 
 up very largely of the savings of past pro- 
 ducers and past owners (owning, by whatever 
 title), savings sometimes formed for the express 
 purpose of catching the interest. The suppliers 
 and demanders of this capital compete with 
 each other just as the suppliers and demanders 
 of every other article ; it is the competition of 
 those who need the goods now and those who 
 can well afford to part with them for a while. 
 Interest represents this difference between 
 estimates of present and future ; the estimate 
 varies greatly in individual cases, but in a 
 given nation and period with a given profit- 
 ableness of industry, the lowest estimate of 
 such as have contributed at all towards the 
 total lent is the ** margin " that marks where the 
 price of loans will be fixed. There is a levelling 
 down and up of prices, just as in any other market. 
 Borrowed Capital and Cost. — The producer 
 includes in his cost the interest on capital if 
 borrowed, and, as a matter of book-keeping, 
 even where it is not borrowed. The producer 
 fortunate enough to need no borrowed capital 
 will be in a stronger position than others to face 
 low prices for the wares he is producing. Still 
 it may be assumed that most producers employ, 
 to some extent, borrowed capital ; the saving 
 classes are at present to a large extent distinct 
 from the employing classes. Competition, there- 
 
58 CAPITAL [chap. 
 
 fore, will not permanently depress prices below 
 the point where the interest could not be met. 
 This itself would tend to make very long and 
 roundabout ways of production unprofitable, 
 since such enterprises would probably, more 
 than others, stand in need of borrowed capital. 
 Indefinite Renewal of Capital P^^obable, — 
 That capital will, as a general rule, be renewed 
 and reinvested, saved wealth being continued as 
 capital from generation to generation, is not at 
 all self-evident, and would not have been true in 
 many stages of civilisation. But it is nearly true 
 now. It matters little, on principle, whether the 
 capital in question be such as used to be called 
 fixed, or such as was called circulating. 
 Whether, for the purpose of production, the 
 goods saved are thrown into a form where they 
 last long, or, it may be, remain in the employer's 
 hands, or whether they part from the employer 
 at once and are (productively) consumed at once, 
 — sooner or later the material capital (called by 
 some ''capital-goods") will all have disappeared, 
 as the particles of the human body are all 
 changed between youth and age. No form is 
 imperishable ; and the total capital materially 
 considered is no more imperishable than the 
 particular forms of it. But, as a matter of fact, 
 so long as human motives remain as they are 
 in civilised societies, capital will be renewed ; 
 
in.] RENEWAL OF CAPITAL 59 
 
 and ;^iooo, which have absolutely disappeared 
 in the process of producing another stock of 
 goods, will probably find their successors in an 
 equivalent which is again made into a capital of 
 ;^iooo or more. Capital therefore flows in a 
 stream, though in a stream that could be stopped 
 if men ceased to be in the widest sense econo- 
 mical. It is not a material stream, but depends 
 on human intention and action throughout. 
 
 Conditions of the Reneival. — The principal 
 conditions of the maintenance of it are, on the 
 part of the lending class, sufficient motives to 
 keep up accumulation, and, on the part of the 
 employers (who are the borrowers of it), 
 sufficient motives to develop economies in 
 production, negative and positive, further and 
 further. It may be repeated, that from the 
 nature of the economy presented in division of 
 labour and industrial society, no step taken for- 
 wards by industry and invention can ever be 
 retracted unless the society itself is shrinking 
 through some causes other than industrial. In 
 another sense than that of the fable, vestigia 
 nulla retrorsum; ''there is no going back." 
 This seems to make it very unlikely that 
 accumulation of capital can do more than keep 
 pace with the need for its employment ; indeed, 
 so long as the payment of interest goes on, it is 
 clear that there is less capital than is wanted. 
 
CHAPTER IV 
 
 WAGES AND RENT 
 
 Wages part of Cost, but Men never mere Instruments. In what 
 sense Wages more Flexible than other Items of Cost. Not 
 at least Inflexible (Wages Fund). Skilled in relation to 
 Unskilled Labour. Workman's Minimum not of Bare 
 Living. A Market not in same sense for Labour as for 
 Goods. No part of Employer's Capital a fund for Wages. 
 Wages not directly paid out of Produce. Trades Societies. 
 Labour not Constant. Trades Unions and their Power to 
 raise Wages. Relation of Wages to Population. Relation 
 of Population to Rent. Wages as a Bare Living hardly ever 
 exemplified. Effects of the high or low price of Food. Im- 
 provements in Agriculture. Present System perhaps Politically 
 recommendable, but not therefore the best Economically. 
 
 Without the lending classes the employer of 
 capital could seldom do all that he wanted ; — 
 without the working classes he could, in most 
 cases, do nothing at all. Under the modern 
 forms of division of labour, it is impossible for 
 great production to be carried on without the 
 labour of many hands ; and in the present state 
 of the distribution of wealth, such hands are 
 
 60 
 
CHAP. IV.] WAGES AND COST 61 
 
 usually employed for wages without having any 
 concern in the profits of the business. 
 
 On the surface, it would seem as if to the 
 employer the wages paid out to hired labourers 
 were part of his cost, in just the same sense as 
 his outlay on horses, steam-engines, or coals. 
 But wages have never been with a light heart 
 so regarded ; there has always been a feeling 
 that men should not be held mere instruments 
 for the ends of other men. At first, even after 
 the introduction of the division of labour, the 
 only form of dependent labour (if it were not 
 indeed slavery) would be that of appren- 
 tices, employed, but so taught by the employer 
 as to be in due time employers themselves. 
 Some remnants of such a system remain ; but 
 from the time of the full development of great 
 production and the factory system until nearly 
 our own time the position of the working 
 classes in manufacture was like that of instru- 
 ments of production, as from a much earlier 
 period it had been in agriculture. 
 
 Are Wages a flexible part of Cost ? — But, as 
 has been said, the relation of wages to cost, 
 even in those dismal days, was not reckoned 
 an entirely similar problem to the relation of 
 materials and machines and live stock to cost. 
 Wages were always in theory the result of an 
 arrangement freely made between free men, 
 
62 WAGES AND RENT [chap. 
 
 and therefore subject to the variations of 
 human caprice, pertinacity, strength of persist- 
 ence, and resistance, on one side or other. 
 This gave countenance to the notion, still pre- 
 vailing, that, while other parts of the cost are 
 fixed for the employer by far-away markets that 
 he cannot influence, the wages bill is flexible, 
 and a reduction in it is his best resource in 
 extremity, for averting a threatened loss. The 
 early economists represented wages and profits 
 as varying inversely the one to the other, so 
 that profits could not be great unless wages 
 were comparatively low. So far as this was 
 not an identical proposition (purporting simply 
 that where the one was a high proportion the 
 other was necessarily a low, without reference 
 to other factors or to absolute amounts earned 
 or divided), the natural conclusion was that the 
 employers and employed were necessarily in a 
 position of antagonism ; yet appeal was made 
 to the workmen not to press their claims, for 
 if they did not save their employers they would 
 perish with them. 
 
 Are Wages quite Inflexible ? — The same 
 appeal was made in the beginning of the 
 nineteenth century from a very different 
 ground, not of flexibility but of the opposite. 
 There was said to be a law of wages stronger 
 than human wills. Wages, it was said, de- 
 
IV.] THE WAGE FUND THEORY 63 
 
 pended on the market like any other set of 
 prices, and, like any other, in a given state of 
 the market could not be otherwise than they 
 were. And not simply because, like other goods, 
 the services of workmen depended for their price 
 on their quantity in proportion to the demand, 
 but from special reasons bearing on the demand 
 in this instance ; — the demand, it was said, could 
 not have been otherwise, because it was a certain 
 portion of the employer's capital, the wages fund ; 
 given the peculiarities of the industry, and given 
 the scale of industrial operations, the part of the 
 employer's capital devoted to wages was fixed 
 by the nature of the case ; it was implied that 
 for him to give more to wages would be to 
 take away from some other essential item of 
 his operations, and thereby do mischief to the 
 whole venture. 
 
 Is there a Market for Labour ? — But there 
 is not a market for labour in the same sense in 
 which there is so for goods freely produced and 
 freely movable. ''A man is of all sorts of lug- 
 gage the most difficult to be transported " ; even 
 unskilled labourers differ in different places, and 
 even in these days of locomotives (and the days 
 of the wages fund were those of stage-coaches) 
 it is not easy to replace a dear labourer by 
 a cheap one, or a bad employer by a good 
 one. What has been called economic friction, 
 
64 WAGES AND RENT [chap. 
 
 disturbing influences of a non-commercial char- 
 acter, can be neglected almost everywhere else, 
 but not in the case of labour. Skilled labour, 
 which is often regarded as a multiple of un- 
 skilled for many purposes, is often not of the 
 same human material, and often involves a train- 
 ing of many years. The furnishers of the supply 
 of skilled labour have much more control of 
 their market than the suppliers of unskilled ; they 
 are much fitter to do battle in the field of open 
 competition ; they have a first start, which 
 restricts competition in their favour. If the 
 price of labour were to be a cost price, and 
 cost price in the case of unskilled labourers 
 were to be counted the bare means of living, 
 then the multiple to be applied in order to reckon 
 the cost price of skilled labour would be very 
 hard to fix, in theory. In practice, among 
 working-men of average means, there is not 
 much uncertainty as to the desirableness of par- 
 ticular trades ; — the net advantages of a trade 
 are in practice recognised by them when they 
 choose for their sons ; and, when one trade 
 seems to have more than its share, lads will 
 be pushed into it by their parents, and there 
 will be a levelling down in the course of a 
 generation, or a little less than a generation. 
 It will take some such interval of time to make 
 the price of skilled labour in a particular 
 
lY.] STANDARD OF COMFORT 65 
 
 trade really correspond with that of skilled 
 labour in any other branch, if the correspond- 
 ence comes even then. The correspondence 
 is not with cost in the sense of the minimum of 
 physical necessaries, but rather with a standard 
 of comfort which tends to rise from genera- 
 tion to generation. It seems to be true that 
 competition of workmen with one another tends 
 on the whole to drive wages down to that second 
 minimum ; but even so, it is not the same mini- 
 mum for each class and grade, though it may 
 be reckoned the standard of efficiency for each. 
 Severe as it is, the competition could never be 
 severe enough to bring down all classes of work- 
 men to the same standard of comfort, so long 
 as differences in skill, risk, and responsibility, 
 created different classes of labour. The working- 
 classes are not a homogeneous body ; and there 
 is not a market for labour in the same sense 
 as for an article of a few known grades iden- 
 tical over the civilised world. Such an article 
 is wheat, but such is not labour. 
 
 From the side of supply, then, it seems 
 hardly reasonable to suppose that prices are as 
 inflexibly fixed in the ''market for labour" as 
 in the market for material goods, even when we 
 allow that all markets for goods are not so 
 perfect as those for wheat, cotton, and iron. 
 From the side of demand, it is not more reason- 
 
 E 
 
66 WAGES AND RENT [chap. 
 
 able. There is not a wages fund in the sense 
 of a part of capital more unalterably devoted 
 to this purpose than any other part to any 
 other purpose. There is only a wages fund in 
 the sense in which there is a plant fund, or 
 materials, or fuel fund. Higher wages might 
 convert a profit into a loss ; but so might dearer 
 coal. Wages are not, over the whole field, a 
 fixed amount, so that one class of workmen 
 could only have higher wages if another class 
 had correspondingly lower, any more than the 
 work to be done is a fixed amount which could 
 not have been increased with profit to all 
 parties. 
 
 Relation of Wages to Capital and to Prodttct, 
 — There remains the question, whether wages 
 are not at least limited by capital. Because 
 wages are not paid out of a special part of the 
 whole capital reserved thereunto, it does not 
 follow that they have not to do with the whole 
 capital. The contention of some modern econo- 
 mists, that wages are always paid out of the 
 produce of the labour rewarded by them, does 
 not seem justifiable, any more than the conten- 
 tion that the price of the product is the real 
 wages fund. We might almost as well contend 
 that the expenses of the steam-engine at a given 
 time are always paid out of what the steam- 
 engine produces at that time. It might be 
 
IV.] TRADES UNIONS 67 
 
 true of a process of production (like the grind- 
 ing of corn) completed in short periods, or 
 giving its returns day by day. In such cases 
 a worker paid by the piece has actually delivered 
 his work before he receives his payment. As 
 a rule, the contributions to the final product are 
 less clearly detached and less easily measurable. 
 What the employers strive to secure is, that the 
 cost of one particular instrument of production 
 shall not in practice exceed its contribution to 
 the production. They intend that in this sense 
 wages shall be paid out of product, even where 
 the production is (as in building of a ship) 
 carried on over a long period. But it is pre- 
 cisely the production over long periods that 
 is most characteristic of modern industry ; 
 and there especially the employer is often un- 
 aware whether at a given moment the labour 
 he is then employing, or even his business 
 as a whole, is profitable ; and it is not a simple 
 matter to decide what a single labourer may have 
 produced, any more than it is to know what a 
 single article may have cost to produce. If 
 workmen were to depend on the ascertained 
 product of their work, their livelihood would have 
 the precariousness which it is one of the main 
 advantages of the contract of wages to have 
 removed. 
 
 Trades Unions, — Over a great part of the 
 
68 WAGES AND RENT [chap. 
 
 field the higgling that precedes this contract 
 is conducted by trade societies. In 1900, there 
 were in the United Kingdom over 1,900,000 
 trade unionists. The total income of the 
 societies was nearly 2 millions of pounds, the 
 expenditure i^, and the accumulated funds 3f. 
 In spite of these large figures, it is supposed 
 that even now only one worker in seven is a 
 trade unionist, and, while some trades, like 
 boiler-making, have practically no workers 
 that are not unionists, others have few that 
 are so. Yet the power of the societies ex- 
 tends, it may fairly be said, to the whole 
 body of workers in the trades concerned. 
 Through example and through precept, and 
 through the superior power of an organisation, 
 they influence the fate and action of the un- 
 organised majority. In proportion to its power, 
 a trade's society is usually temperate in the use 
 of power. It is doubtful if the letter of the rules 
 of present societies can be shown to be contrary 
 to public interest. It is true, however, that the 
 societies have not always strenuously endeavoured 
 to prevent their members from getting private 
 advantage at public expense — at the expense, 
 namely, of unnecessary cost, and wastefulness of 
 time and materials. But the source of strength 
 in a union lies not in the opportunities secured 
 to its members for indulgence in caprice and 
 
IV.] LABOUR NOT CONSTANT 69 
 
 wastefulness, but in the protection it gives 
 against caprice of employers. Even with the 
 union to help him, the workman is seldom more 
 than just equal to the task of coping with the 
 natural advantages of the employer's position. 
 The unions have reinforced custom, and helped 
 to maintain for wages a comparative steadiness 
 never achieved by profits. 
 
 Labour not Constant, — We must not exag- 
 gerate this steadiness, or imagine that the value 
 of labour in real wages is always and every- 
 where the same. If they were so, then the 
 progress of the working classes would be a 
 monetary illusion, ''nominal wages" (or the 
 sum of money paid as wages) meaning little 
 if it is much, and much if it is little. The 
 distinction is perhaps most marked where the 
 causes affecting the supply of gold and silver 
 have been more prominently at work than the 
 causes affecting the demand for them, i.e., than 
 the causes affecting the things purchased by 
 them ; ;^i at the mine will mean much less 
 than £i in England; £i in England itself will 
 mean less after great discoveries of gold and 
 silver mines than before. Nominal wages would 
 vary in such a case much more than real. On 
 the other hand, high nominal wages may miss 
 being real wages by defects in the receivers of 
 the wages ; the Kaffirs will not work on the 
 
70 WAGES AND RENT [chap. 
 
 Rand unless they see what to spend their money 
 upon. If wages rise before the standard of 
 living has risen, they provide means of satis- 
 fying wants that are not felt, and they are in 
 a sense only ''nominal." They become "real" 
 when the market contains goods suited to the 
 actually felt wants of the workers, whether the 
 result is gained by the workers growing up to 
 the market, or by the market coming down to 
 the workers. 
 
 It would be nearly as easy to prove that the 
 value of everything but money Is constant, as 
 to prove that the value of labour is so. On 
 the contrary, for short periods In the same 
 country, the value of gold and silver money Is 
 more nearly constant than that of labour or of 
 anything else whatever. 
 
 The Raising of Wages. — The power of such 
 an agency as trade unions to raise wages need 
 not therefore be disputed on a priori grounds. 
 A rising of general wages would affect com- 
 petition less than of particular ; yet all rising 
 of real wages would at first be of particular 
 wages ; and the effect of It must almost In- 
 evitably be, unless in a time of rapid expan- 
 sion, that many employers who were before on 
 the margin, fall under the margin, or many 
 extra doses of capital which before were profit- 
 able, cease to be so. The suppression of the 
 
IV.] THE RATE OF WAGES 71 
 
 weaker traders is, like the disappearance of 
 small shops before great stores, or the lessened 
 importance of home wheat in face of foreign 
 imports under free trade, by no means an 
 unmixed evil to the community. 
 
 The raising of wages by trade societies is 
 like the raising of prices by combinations of 
 merchants ; it is effected by control of the 
 supply. Whether the higher price is maintained 
 or not depends on the power of trade unions ; 
 but the power of these bodies has always depended 
 largely on their moral influence on the working- 
 classes outside of their own membership. Now 
 the workmen, whether without or within a union, 
 may retain such an increase by restraining their 
 own numbers, thus lightening the pressure of 
 the possible competition of worker with worker 
 which redounds to the gain of the employer. 
 This was once regarded as the only way in 
 which wages could be raised. 
 
 Relation to Population, — It was once said that 
 the proportion of the working population to 
 the wages fund (or more loosely the propor- 
 tion of population to capital) determined the 
 rate of wages. This is not the whole matter, 
 for without the growth of population there 
 would not have been an extension of the 
 market allowing an indefinite increase of econo- 
 mies, and there would not have been choicq 
 
72 WAGES AND RENT [chap. 
 
 (whether by natural or artificial selection) of 
 men fit to carry them out. There is, how- 
 ever, a truth in the view ; fresh units of popu- 
 lation cannot, unless strong, bring a real 
 extension of the market : they simply hamper 
 those already present there. 
 
 Theory of Population, — The theory of popu- 
 lation is neither an empty truism nor a startling 
 paradox. Among civilised men we can hardly 
 conceive the tendency to multiply left entirely 
 unchecked on the human side. Yet the history 
 and descriptions of savages show us that this 
 might easily be so. 
 
 The proposition of Malthus (in his Essay, 
 1798, amended 1803) was, that population when 
 unchecked increases (that is, population tends to 
 increase) geometrically, while food can only be 
 increased arithmetically, if other conditions are 
 equal. There was perhaps an unwarranted 
 appearance of exactness in the use of the 
 mathematical ratios ; but in substance the pro- 
 position was unassailable. The tendency to 
 increase beyond the limits of the food is 
 checked, apart from human forethought, by 
 death and disease. In civilised times the ''large 
 discourse looking before and after," in provid- 
 ing for the future, is usually providing for 
 a family. Our notion of economy includes 
 economy in human lives ; and there is now in 
 
UNIVERSITY ) 
 
 IV.] EFFECT OF GROWTH OF POPULATION 73 
 
 almost all classes of society an effort amongst men 
 to preserve that measure of comfort which they 
 have reached, or which they have received from 
 their parents. The tendency now is not to 
 increase up to the limits of the food, but up to 
 the limits of the standard of comfort. It is where 
 these two are almost indistinguishable, as in 
 the very poorest of our large towns, that the 
 motive for restriction seems to cease to exist. 
 The very poorest can fare no worse when they 
 have children than when they have not, and 
 their children can fare no worse than they 
 themselves. 
 
 Population and Rent. — The effect of the 
 growth of population on wages was considered 
 by the early economists in close connection 
 with its effects on rent. Cultivation was 
 regarded mainly as extensive, and our country 
 as mainly dependent on itself for its supplies 
 of food. With the growth of our popu- 
 lation, the pressure on those supplies of food 
 became greater; their price rose, and with it 
 rose the rent of land, rent depending on price, 
 not price on rent. The margin of fertility (or, 
 briefly, the final fertility) was brought lower 
 down in order that the necessary food for the 
 greater population might be found. To put 
 the matters in order of time, the price rose till 
 it became profitable to cultivate lands that were 
 
74 WAGES AND RENT [chap. 
 
 hitherto out of the pale of cultivation, as being too 
 poor to repay the cost of It ; but the prices that 
 were enough to make those lands profitable, 
 though barely profitable, were more than enough 
 to repay the farmers on all lands of a higher 
 grade. With the growth of population, there- 
 fore, apart from invention, agricultural prices, 
 It was said, were bound to increase, and with 
 them, rents. It was sometimes added, with them, 
 wages, wages being often supposed to be no 
 more than a bare subsistence, and therefore 
 bound to rise with the rising price of food. In 
 other words, after every real rise In the price of 
 food, there was to be a nominal rise in wages. 
 At this distance of time it is hard to understand 
 how even the farm labourer's wages could be 
 thought to be all bread, or how bread bulked 
 so largely in them that for purposes of cal- 
 culation the other Items could be neglected. 
 The records of the worst years in later English 
 history, 1 799-1801, do not show that wages 
 rose in anything like a close proportion to the 
 price of bread. Years of scarcity did not leave 
 the labourer with a position nominally altered 
 for the better, and really not altered at all : 
 his position was distinctly altered for the 
 worse ; his wages were not merely food, and 
 therefore could be driven down, and actually 
 were so, — while the dearness of food to some 
 
IV.] IMPROVEMENTS OF AGRICULTURE 75 
 
 extent lessened the power of all employers to 
 pay wages and set on foot work of any kind, as 
 well as the power of ''the great body of the 
 public" to extend their consumption beyond 
 food, and extend the operations of trade gener- 
 ally. It is one of the well-worn observations 
 on which the demand for free trade is founded, 
 that, when a man pays sixpence for an article 
 instead of a shilling, he has the sixpence to 
 spend on something else. Moreover the circle of 
 buyers of that article at sixpence may be twice 
 the area of the circle of buyers at a shilling. 
 
 Improvements in Agriculture. — But an 
 increase of population need not lead to an 
 increase in the price of food where agriculture is 
 not stationary. Invention in the last hundred 
 years has not been idle in agriculture any more 
 than in manufacture ; and the intensive culti- 
 vation of land fitted for wheat has proved 
 to be more profitable than a continued exten- 
 sion of cultivation ; agriculture can seldom 
 advance, like manufacture, by leaps and bounds ; 
 it must go at a staid pace. In our own country, 
 the free admission of foreign grain has made 
 it easy for population to increase without our 
 feeling the need of such arduous efforts after 
 intensive agriculture as might be desirable in 
 extremity. But improvements at home have 
 not been wanting. Where a country depends 
 
76 WAGES AND RENT [chap. 
 
 on its own lands for food, the improvements in 
 agriculture may be the chief source of a reduc- 
 tion in prices. When first made by single 
 tenants, they will, of course, benefit these 
 tenants, if prices are unaltered ; but the land- 
 lords can exact an increased rent correspond- 
 ing to these increased profits, as soon as the lease 
 is renewed. When, however, the improvements 
 have become public property, they will tend to 
 keep prices from rising with population. On 
 the whole, in our own country, where prices 
 are so largely dependent on the supplies from 
 abroad (England now importing three-fourths 
 of her supply of corn), the improving tenant 
 will be more likely to keep the benefit. 
 A recourse to a different kind of produce, 
 say dairy instead of wheat, is, from the farmer's 
 point of view, equivalent to an improve- 
 ment in the cultivation of wheat. It is because 
 landlords and farmers are less agile in changing 
 their investments of capital than the manu- 
 facturers, that depression is a more frequent 
 grievance with the agricultural than with the 
 industrial interest. 
 
 Farmers and Landlords. — The separation of 
 functions between farmer and landlord is not so 
 successful economically as that between employers 
 and capitalists. We do not often hear of a stipu- 
 lation on the part of the lenders of industrial 
 
fv.] FARMER AND LANDLORD 77 
 
 capital for the adoption by their borrower of 
 a particular kind of machinery or particular 
 description of factory ; but landlords often pre- 
 scribe to their tenants the kind of crops and 
 mode of cultivation. Economically, there is no 
 difference between the two cases. If there 
 is political or social benefit derived from the 
 present English system, this may perhaps out- 
 weigh economic considerations. There is no 
 sign in England, though there are clear signs 
 in Ireland, of the disappearance of the old 
 system. 
 
CHAPTER V 
 
 PROFITS AND INCOME 
 
 Marginal producers. "Rent" in wide sense. Such wide uses 
 of Terms not Advisable. Income, Gross and Net. Wages 
 of Superintendence. All above the Marginal Extortionate 
 Profits ? Modern Industry Essentially " Dynamical." Analogy 
 of a Fair Lottery Applicable? Insurance against Risks. 
 Tendency on the Whole towards Free Trade. Protection. 
 Differences in Currency. Standards of Currency. Uses of 
 a Bank ; Bank of England. Trading in Debts. Bills. Lend- 
 ing on Land, etc. On Shares. Money Market and Stock 
 Exchange. 
 
 It was said that marginal producers are those 
 who find their business just barely profitable. 
 In the case of farmers, this means, in theory, 
 that the marginal farmer pays no rent, but 
 gains just enough from his crops to give him 
 the ordinary rate of profits. In practice it would 
 seldom have this meaning. There are, indeed, 
 cases where landlords have let their lands for a 
 nominal rent, or none at all, in order to save the 
 lands from lapsing into wilderness in a time 
 of exceptionally low prices. But as a rule, in 
 
CHAP, v.] PROFITS AND INCOME 79 
 
 practice, there are not farms held at no rent, but 
 only fields In farms. Particular fields thrown in 
 with others into one farm may be reckoned in 
 themselves worthless, and may so reduce the 
 rent per acre of the whole. 
 
 In the case of employers of industrial capital, 
 the marginal producer is the man who makes 
 what he calls a bare living. He is not able to 
 turn out his goods with such economy as to 
 make the market price yield him much more 
 than his cost, whether because his machinery 
 and plant are not of the most improved type, 
 or because he is not so good an organiser and 
 director of the labour employed by him as to 
 make it very efficient, — or finally, because he is 
 unable to push his wares well when they are 
 made, and make sure of his market. All that 
 are above this line of lowest profits are, of 
 course, receiving more than ordinary profits, and 
 this surplus is sometimes called the rent of 
 ability or opportunity. 
 
 Rent in ivide sense. — How far it is good 
 to use the word Rent in the general sense of 
 surplus profits may be doubted, though the 
 inclusion of land in capital might be made a 
 reason for it. The extension of the term rent 
 through analogy may hinder as well as help 
 the comprehension of the subject. Ideas may 
 be united under a general term only at the 
 
80 PROFITS AND INCOME [chap. 
 
 expense of ambiguity. It is possible, for 
 example, to widen the notion of Production 
 till it includes all stages of distribution except 
 the last, and includes exchange in all its 
 stages. It Is possible to widen the notion 
 of Capital till It Includes all wealth, viewed 
 statically or at rest in a possessor's hands, 
 and of Income till it includes all wealth, 
 viewed dynamically or In motion from one 
 possessor to another. But, when we have in 
 this way reduced all our general terms to a 
 few all-comprehensive ones, our case will be 
 like that of Berkeley in philosophy. "With- 
 out is within," said Berkeley. '' Be It so," was 
 the answer, '' Philosophy has still to begin." 
 The distinct notions swallowed up in the wide 
 abstractions must all appear again for expla- 
 nation. 
 
 Income y Gross and Net. — The gross income 
 is those material resources which a man 
 receives, and net income what of these is 
 left to him over and above what he has 
 spent in order to get the gross income. A 
 workman's wages are net income to him 
 when all his expenses as a working-tool — all he 
 spends on his trade — are reckoned. To the 
 farmer, the net income is all that is over of his 
 harvest when the expenses of cultivation and 
 gathering in are reckoned, together with the 
 
v.] EMPLOYER'S PROFITS 81 
 
 interest on capital he may have borrowed to 
 work his land. To the industrial employer, it 
 means what is over of his receipts from the 
 goods produced and sold after all his expenses 
 of production have been reckoned, including the 
 interest on capital borrowed, and outlay of 
 personal labour. It is easy to make the broad 
 distinction that wages are the net income from 
 personal service, profits the net income from 
 expenditure of capital, interest the net income 
 from the loan of capital. It is when the three 
 sources are blended that ordinary language 
 refuses to make the distinctions, or at least to 
 hold the notions strictly apart. 
 
 Employers Profits. — For example, much of 
 a skilled labourer s wages might be regarded as 
 interest on capital expended in learning his trade. 
 Much of the farmer's profits are really wages 
 of his personal labour. Much of the employer's 
 profits are wages of superintendence ; where 
 he is not his own manager, a great part of this 
 is set down in the form of a separate salary 
 to a hired manager. But common language 
 calls the first, without reserve, the wages 
 of the skilled workman, and the second and 
 the third the profits of the farmer and 
 employer. 
 
 In the case of wages of management or 
 superintendence, where there is a hired manager,. 
 
82 PROFITS AND INCOME [chap. 
 
 there is comparatively little difficulty. The 
 wages are fixed by contract, by the year it 
 may be, instead of the week or fortnight, but 
 still fixed definitely for a stated period, on the 
 same principle as the wages of labour. It is 
 different when we try to assign a share to a 
 general direction carried on by the employer in 
 his own business. As a matter of fact, in book- 
 keeping it is not reckoned separately, unless 
 in so far as the active partner may be treated 
 differently from the sleeping partner. But the 
 man of business, in his survey of the markets, 
 in his watch for new economies and new 
 inventions in his own business, is doing 
 services to himself which are difficult to estimate 
 by a fixed rate in money on the analogy of the 
 wages of hired labour. It is such unhired 
 services that usually make a business float on 
 the top of its rivals. Where a hired manager 
 does equally far-reaching services, the profits 
 he earns for his employer or employers may 
 often far exceed the amount of his own salary. 
 In a railway company the directors and the 
 general manager have fixed salaries that do 
 not prevent the existence of profits to be 
 divided among the shareholders, going in 
 many cases far beyond interest. 
 
 Are Profits due to Extortion ? — Do such 
 profits, or, generally speaking, the large 
 
v.] INEQUALITY OF PROFITS 83 
 
 profits of all above the '* marginal pro- 
 ducers" imply extortion or underpayment of 
 workmen or defrauding of the public? In con- 
 sidering the question, we must remember that 
 value does not in any case depend only, if ever, 
 strictly on cost ; and, even so, all cost is not 
 labour ; and all labour is not physical labour. 
 If we let ourselves be persuaded to take the 
 analogy of rent, there is no greater extortion in 
 a price above cost than in a price known as 
 "cost price," for it would be as with the 
 ''marginal farmer" when he is compared with 
 the man above the margin ; if a rent can be paid 
 by the latter, it is not at the expense of the 
 former. The man of business making great 
 profits does not rob the man on the margin. 
 
 It is true, at the same time, that the position 
 of the ground landlord seems more easily assail- 
 able than that of the employer, because the 
 landlord need not, as such, be a busy man, 
 while the employer as such can hardly avoid 
 being so. Moreover, the high gains of the 
 employer can seldom last long. New econo- 
 mies that bring gains to the first introducers, 
 rapidly become common property. 
 
 Inequality of Profits. — A perfect equality in 
 the division of gains would create a new kind 
 of economic man, if, indeed, it did not imply him 
 as a prior condition of its own appearance. 
 
84 PROFITS AND INCOME [chap. 
 
 The present inequality is serious, but it is 
 often exaggerated. By the theory of subjective 
 value (in this case obvious common sense), to 
 say nothing of the limits set by nature to a 
 man's powers of consumption, the very wealthy 
 man is not capable of spending his great wealth 
 on himself to its full extent ; he is willy nilly an 
 administrator. In the case of a great agri- 
 cultural estate (say Woburn or Eaton), the 
 present administration would be little altered 
 if the lands were put in commission and worked 
 for the general benefit under a hired manager. 
 The debateable matter in the present arrange- 
 ment is not unlike the doubt concerning benevo- 
 lent despotism ; the despot cannot guarantee the 
 wisdom and benevolence of his successors. 
 Popular control might provide better safeguards 
 than popular ownership, in the case of all large 
 fortunes. 
 
 The Making of Fortunes, — There might be 
 real danger in interference with such for- 
 tunes in the process of making. The great 
 surplus profits of industry depend very 
 largely on economies that are a much greater 
 source of public benefit than of private profit, 
 widening, as they do, the circle of buyers. 
 *' Speculation " of this kind means improvement, 
 and to arrest it would be to try to check the 
 movement essential to modern industry. Whether 
 
v.] SPECULATION 85 
 
 it be a power for good or for ill, modern industry 
 is seldom healthy when stationary. 
 
 Analogy of a Lottery doubtful. — We may 
 hold that interference is unwise without going 
 so far as to lay down as a general prin- 
 ciple that the analogy of a fair lottery should 
 hold in business, and, where there is risk or 
 speculation, the winners should gain all that 
 the losers miss or lose. Speculation includes 
 perhaps all attempts to anticipate a market, as 
 distinguished from the provision for a known 
 market, or a response to orders precedent. 
 From the nature of markets under modern 
 division of labour, there is very little trade 
 that is not more or less speculative. What 
 is there in this almost universal speculation 
 to make it either necessary or desirable that 
 those producers who succeed should be re- 
 warded with all that the losers, if they had 
 just barely succeeded, would have gained ? 
 
 The analogy of a perfectly fair lottery has 
 been applied both here and in the case of 
 professions. Lawyers, or electrical engineers, 
 who succeed, though they seem to have 
 great incomes, earn, it is said, no more 
 than the total number of aspirants would have 
 earned at low incomes. No doubt the failure 
 of the latter, meaning, as it does, their relative 
 incapacity, serves to keep up the gains of their 
 
86 PROFITS AND INCOME [chap. 
 
 successful rivals ; the supply of really skilled 
 men either is, or is believed to be, scanty. 
 The idea prompting the analogy may be 
 connected with the idea that cost needs to be 
 compensated, if not over the parts seriatim, over 
 the whole taken together. But it would be hard 
 to prove this for any trade, and in some lines 
 of business it is generally acknowledged to be 
 false. To produce lo or 12 million pounds 
 sterling of gold or silver, a great deal more 
 has been expended than 10 or 12 millions of 
 sovereigns. The cost has not been covered over 
 the whole field. The compensation may lie in 
 the adventurous hopes of the adventurers, as 
 the reward of some professions is rather glory 
 than gain. But to admit this, is to give up the 
 idea of a pre-established harmony on the prin- 
 ciples of a perfectly fair lottery. In the general 
 struggle for existence, it is by no means clear 
 that the survivors gain all that has been missed 
 by the rest. 
 
 Insurance, — It is not quite the same question 
 as that of risks in ordinary business. In insur- 
 ance, if all parties are alive to their own interest, 
 and to the nature of their case, the risk is 
 equally distributed, the sufferers, and those who 
 escape, being both benefited, the latter really 
 making good the losses of the former. Insur- 
 ance, instead of being a form of speculation, has 
 
v.] INSURANCE 87 
 
 been happily described as a way of ending 
 speculation. Risks of accident and fire may be 
 said to enter into the costs of a business ; but 
 the insurance which provides against them is 
 thereby lessening and not increasing the cost. 
 This would have its analogy in general business, 
 if those entering on general business could 
 mutually insure themselves against failure. In 
 such a case those who had not failed would be 
 supporting those who had. 
 
 Instead of making the postulate that the 
 successful should gain all that the losers have 
 missed, it seems as natural to demand that (as 
 indeed sometimes happens) those who succeed 
 should contribute to the support of those who 
 lose. There is no fixed sum to be gained by the 
 total number of traders, any more than there is a 
 fixed wages fund or a fixed amount of work to 
 be done, or a fixed amount of wealth to be 
 created, or distributed at a given time. It is 
 quite conceivable that a particular trade might 
 turn out ill, not only for some, but for all con- 
 cerned, leaving all the traders to fall close to 
 the margin, above or below. If the contention 
 is simply that in a condition of constant progress, 
 with perfect freedom of trade, without and within 
 the country concerned, the result would probably 
 be as in the fair lottery, this would be probably 
 nearer the truth. But, the more completely free 
 
88 PROFITS AND INCOME [chap. 
 
 the trade, and the less the economic friction, the 
 more the pubHc is Hkely to gain, even at the 
 expense of the most efficient producer. The 
 competing producers, to keep their markets, 
 must tempt the purchasers with lower prices, 
 and therefore by new economies in production. 
 Tendency toivards Free Trade. — In the 
 modern world, it is true, there is not yet free 
 trade everywhere, nor is there absence of fric- 
 tion. Still the features presented are those 
 of an industrial system where the interests of 
 the consumer are on the whole more carefully 
 consulted than those of the producer. One 
 hundred and fifty years ago it would have been 
 easy to point to interference on part of the 
 rulers of a country with the trade between one 
 part of that country and another. The south 
 of France must be "protected" against the 
 north, England against Ireland. The "protec- 
 tion " of a local trade always means an attack 
 on those who benefit most by the rivals of the 
 local trade, namely, the general public to whom 
 goods are supplied more cheaply by the rivals 
 than by their own neighbours. It has now been 
 found out in practice by all states in the civilised 
 world that to protect one part of their own 
 subjects in this way against another is bad 
 economy, involving the support of inefficient 
 producers and the discouragement of efificient, 
 
V,] PROTECTION 89 
 
 to the Increase of the cost and price of the 
 articles made, and the lessening thereby of the 
 purchasing power of the nominal income of 
 their subjects. This now seems self-evident ; 
 and protection Is abandoned even within a large 
 country like the United States. There is no 
 protection of State against State within the 
 Union. What is economy between parts of 
 a large State would not cease to be economy 
 if these parts were separated under different 
 governments. 
 
 Protection, — It is the fact, however, that 
 the great majority of governments adopt quite a 
 different commercial policy towards trade carried 
 on by their subjects with foreigners from what 
 they adopt where the trade is between subject 
 and subject within the range of their own 
 frontiers. Economy Is subordinated to policy. 
 Sometimes ''protection" is given on the 
 importunity of particular classes of traders 
 whose interests are threatened, and who are 
 able to persuade the government that their 
 cause is In some way that of the nation. 
 In our own country the agricultural classes 
 were long the most successful in so doing, 
 perhaps mainly by their use of the plausible 
 argument that England ought to be dependent 
 only on herself for her food lest war should cut 
 her off from her supplies. Various other trades 
 
90 PROFITS AND INCOME [chap. 
 
 were able to plead the example of agriculture, and 
 in 1842 the number of articles taxed ''protec- 
 tively " is said to have equalled the number of 
 millions in the national debt. Protection dis- 
 appeared in England on the Repeal of the Corn 
 Laws (1846) and the Navigation Acts (1849). 
 Even the Shilling Registration duty on Corn 
 was abolished in 1870, though it has since 
 been resumed (1901). Like other economies, 
 free trade, once adopted, is unlikely to be aban- 
 doned. On the whole there are few attempts 
 made now to defend Protection by purely 
 economic reasoning. The defence is founded 
 as a rule on political expediency ; and states- 
 men content themselves with affirming that, 
 though it may for the present be bad economy, 
 it is good policy, and therefore also in the end 
 good economy. 
 
 Even as matters now stand, the whole move- 
 ment of modern competitive trading is extending 
 the ramifications of division of labour so that 
 the most easily movable articles have already 
 an international market, and the tendency is for 
 merely local or even national markets to be 
 merely nominal sections of one great market. 
 The result is already achieved for capital as 
 such; ''money" may be invested all the world 
 over. It is achieved for wheat, cotton, iron, 
 and perhaps, above all, for gold and silver. 
 
v.] INTERNATIONAL TRADE 91 
 
 Differences in currency are indeed a kind of 
 economic friction which has some influence in 
 the contrary direction. 
 
 The Barter of International Trade. — Inter- 
 national differences, taken as a whole, prevent 
 competition from reducing value to cost with 
 as fair thoroughness as in the case of domestic 
 productions. Even if the whole world of men 
 were under one government, the interruption of 
 distance and different customs would long keep 
 up the separate character of foreign or inter- 
 national trade. Modern improvements, how- 
 ever, are bringing us gradually away from the 
 point of view of the older economists. These 
 would have it that foreign trade was unlike 
 domestic because the values were ruled by 
 demand for the imports rather than by cost of 
 the exports, or if by cost, then by comparative 
 cost at home of the two equivalents. It might 
 be that a country had an advantage over another 
 in more than one production ; not only its coal 
 but its boots might cost less in labour and 
 capital than in the rival country ; but, if the 
 advantage in the case of coal was very much 
 greater than in the case of boots, its interest 
 would be to export coal and import boots in 
 exchange. The principle is not indeed peculiar 
 to international trade, but might be illustrated 
 by the rational proceedings of districts, and 
 
92 PROFITS AND INCOME [chap. 
 
 even individuals at home. It is more profitable 
 to be absolute master of one trade than to have 
 only a slight superiority in several. This is, in 
 fact, the principle of division of labour ; and on 
 the whole, the theory of International Trade will 
 tend to approach the homelier theory of trade 
 in general the nearer the countries of the earth 
 are in practice brought to one another by new 
 means of swift movement and intercourse. The 
 essential nature of trade is barter of goods for 
 goods, and in international trade this essence is 
 naked and open to the eyes of all. 
 
 The great instrument for reducing trade to 
 its natural form of barter is credit, more especi- 
 ally banking ; the foundation of sound banking 
 and credit is a sound currency. 
 
 Currency. — It has been said (Chap. I.) that 
 the precious metals have been chosen by all 
 modern civilised nations as the fit materials for 
 currency. Unhappily, there has been a dis- 
 agreement as to the relative claims of gold 
 and silver for the first place, and sometimes the 
 solution has been found in the use of a double 
 standard, or, as it is now called, bimetallism. 
 Gold and silver, like other goods, vary in value 
 according to the supply and demand of them. 
 If the standard is a gold sovereign, or twenty 
 silver shillings, and gold is falling in value, so 
 that in the market eighteen silver shillings will 
 
v.] BIMETALLISM 93 
 
 purchase as much gold as is in a sovereign, 
 while a gold sovereign will only purchase as 
 much silver as is in eighteen shillings instead 
 of twenty, it will be economy for merchants 
 to pay their debts with the cheaper gold sove- 
 reigns, and the silver will tend to go out of 
 currency into the bullion market, where it will 
 fetch more sovereigns than it would as coin 
 in the currency. 
 
 Bimetallism. — Now, under bimetallism in 
 the full sense of the word, the government of 
 a country allows debts to be paid in either 
 gold coin or silver coin to any amount ; and 
 either metal, gold, or silver, can be brought to 
 the mint at pleasure of the merchant, to be 
 there coined for him into money at a fixed rate 
 of proportion between the two metals, whether 
 it be one ounce of gold to twelve of silver, or 
 one ounce of gold to fifteen and a half of silver. 
 The critics of this system say that there will 
 never really be two standards, but only alter- 
 nately one of gold, one of silver ; the metal which 
 is cheaper in the open market will be brought 
 to the mint to be coined, and will be the real 
 standard, no one paying in the dear metal 
 when he is allowed to pay in the cheaper. The 
 friends of the system reply that the variations 
 in value correct each other ; if the cheaper metal 
 be brought to the mint in great quantities, the 
 
94 PROFITS AND INCOME [chap. 
 
 supply outside Is thereby lessened in quantity, 
 and presumably increased in value ; moreover, 
 the variations in the value of an alternative 
 standard are less extreme than of a single 
 standard. This last contention seems to be 
 borne out by a diagram of Professor Jevons, 
 where the variations of the mean are much less 
 considerable than the variations of either standard 
 taken separately. 
 
 Modern bimetallism is not matter for ridicule. 
 If its assumptions were fulfilled, it would prob- 
 ably be quite practicable. If the world of men 
 were beginning anew, many schemes would be 
 reasonable which are hardly so now. If a new 
 colony were (as has been done to some extent 
 in New Zealand) to retain its lands in public 
 ownership, allowing individuals to be only 
 tenants and not landlords, the scheme might be 
 reasonable and wise, whereas the difficulties in the 
 way of ** nationalisation " in old countries may 
 well seem almost insuperable. So it seems to 
 be with bimetallism, with the single but all- 
 important difference that separate national action 
 is now useless ; the assumption is made that the 
 mints practically control the market for gold and 
 silver, and if all the mints were to act together 
 there would be no refuge for the dearer metal in 
 event of a withdrawal of it from currency with 
 a view to the sale of it as merchandise ; there 
 
v.] COINAGE 95 
 
 would therefore be no expulsion of it, but it 
 would remain beside the other metal unaffected. 
 But there is no sign that the governments 
 of the civilised world are drawing nearer to 
 an agreement of the kind described ; on the 
 contrary, gold has been adopted as the standard 
 by all the chief nations of the world. Fortu- 
 nately, large additions have been made to the 
 world's supplies of gold in the last twenty years ; 
 and the value of gold, which had before shown a 
 decided tendency to rise in relation to other 
 goods, is probably no more than sustained now. 
 There can be no change in the value of the 
 currency without hardship in one quarter or 
 another. In the last half century the statistics 
 of the subject have been carefully watched, and 
 it seems to be proved in the first twenty-five 
 years silver was fairly steady and gold sank ; 
 in the last, gold at first rose, and then steadied 
 itself ; silver has fallen, with only a faint tendency 
 in the later years to recover. In such statistical 
 inquiries, the difficulty is to make certain that 
 changes in prices, attributed to the standard, 
 are not due to changes in the cost of production. 
 The presumption is, however, that, if the change 
 in price upward or downward were shown to be 
 very nearly universal, while the change in cost 
 had been only partial, the source of the change 
 must lie in the standard. 
 
96 PROFITS AND INCOME [chap. 
 
 The Coinage. — The English Government 
 adopted a gold standard in 1816, reducing the 
 silver and copper coins to token-money, keeping 
 up their value by limiting the quantity and 
 refusing to coin to order. They are copper 
 or silver tickets representing a certain fraction 
 of a pound sterling, and not themselves 
 legal tender in payment of debt, except in 
 the smallest amounts (copper, is. in pennies, 
 or 6d. in farthings ; silver, £2). Gold, or 
 the pound sterling, is the real standard. The 
 metal gold will be coined into sovereigns 
 for any applicant at the fixed equivalent (called 
 the mint price) of £'^, 17s. \o\A. Such trans- 
 actions are almost invariably carried out through 
 the Bank of England, at ^3, 17s. gd. The 
 desire of the country for currency is thus 
 in the last resort satisfied by the Bank of 
 England. This bank, though not a depart- 
 ment of Government, partakes of the solidity 
 of the State ; its close relations with Govern- 
 ment from the time of its institution till now 
 (1694 to 1902) give it a unique place among 
 banks. But the general principles affecting the 
 business of banking are the same for great banks 
 and small. 
 
 Banks, — What is the use of a bank? It is 
 sometimes answered — to keep money, to lend 
 money, or to issue money. No doubt all these 
 
v.] BANKS 97 
 
 purposes have been answered by banks from 
 time to time ; and the purposes which banks 
 answer best, or most, have changed with the 
 needs of the times. Still the list does not in- 
 clude the most characteristic and essential purpose. 
 In the beginning, money was itself an 
 economy ; but, as division of labour developed, 
 there came to be an economy of money itself. 
 For hard money or cash there is not an infinite 
 or even an indefinite demand. The coins are a 
 tool of exchange, and no more of these tools 
 are wanted by the exchangers than will serve 
 to effect the exchanges on hand or in immedi- 
 ate prospect. What men wanted when they 
 resorted to money was what would command 
 material resources or the services of others ; 
 and the amount of coin that is indispensable 
 for their having this command will be enough 
 for them ; all beyond will be an excess, and, 
 if it remains with them, will tend to undergo 
 the usual fate of things in excess, namely, to 
 fall in value. Banks of deposit will keep the 
 money that is not wanted for immediate objects, 
 and the first banks were of deposit mainly. 
 They received and kept it safe, under obliga- 
 tion to return it. It was an economy to sub- 
 stitute one hoarder for several hoarders ; but 
 it was a greater economy to abolish hoarding 
 altogether ; and this is what the banks came 
 
98 PROFITS AND INCOME [chap. 
 
 to do in process of time. They retained the 
 obligation to return the amounts, though not 
 the actual pieces, deposited with them, and 
 meanwhile, having come to know by experience 
 the average amounts that were likely to be 
 called away from them by their depositors over 
 a given time, they traded with that portion of 
 the whole which experience showed them could 
 be safely taken for the purpose. They became 
 lenders, having in earliest times been not even 
 borrowers, but custodians, and therefore not pay- 
 ing, but being paid. They were thereafter, many 
 of them, able to extend their calculations of aver- 
 ages further, and perhaps more precariously ; 
 they began to issue notes, instead of actual 
 money itself, and thus really to utilise a part 
 of the deposits twice over. Bank notes are 
 promises on the part of the bank to pay a 
 certain sum to the holder of that note. The 
 convenience of paper money has led to the 
 extensive use of it in almost all civilised 
 countries, wherever the credit of the issuer 
 is believed to be sound. But as with coin, 
 so with paper ; only a certain limited quantity 
 is required by the needs of business in any 
 particular country. It is a large quantity in 
 some countries, and a small one in others, 
 according to the habits of the people and the 
 nature of their business ; but sooner or later 
 
v.] BANK NOTES 99 
 
 the limit is reached, and, as soon as there are 
 more notes than are needed, they will begin to 
 come back to the bank for payment, or will be 
 paid into it as deposits. 
 
 Bank Notes, — The select circle of banks in 
 Scotland, the Bank of Ireland, a gradually 
 dwindling number of country banks in England 
 and Ireland, and the great Bank of England, 
 issue bank notes. The privilege was once 
 regarded as a main source of revenue to a 
 bank, and perhaps, in the case of the Scotch 
 banks, success could hardly have been attained 
 without it. But in our times it is not what 
 it once was. The uncertainty of the limits 
 of safe issue has often proved a great tempta- 
 tion, and led to disastrous failures. During the 
 stormy period of the French War, the Bank of 
 England itself was allowed to suspend payment 
 of cash for its notes (1797), and the Act for 
 Resumption was not passed till 18 19. The 
 worst times for the country banks were pro- 
 bably the years from 1821 to 1825. In 1844 
 a change was made in the system of paper 
 currency. The privilege of issue, still preserved 
 outside of London to country banks with vested 
 interests, was denied to all new banks. The 
 great joint-stock banks of our time have flourished 
 without it. Even the old banks have been tied 
 down since 1844 as to the reserve of coin to be 
 
100 PROFITS AND INCOME [chap. 
 
 held by them against their notes ; and the Bank 
 of England, whose notes were then made legal 
 tender except for the bank itself, was restricted 
 more straitly still. It was divided into two 
 departments, to be managed quite apart from 
 each other ; in its banking department it had 
 the freedom of other banks, but in its issue 
 department it could issue only about 15 millions, 
 the bulk of which was an old debt due to it by 
 Government, and therefore sufficiently secured 
 without gold in reserve ; for all beyond this 
 amount, every note issued must have correspond- 
 ing gold in reserve. Whatever else this Bank 
 Charter Act may have done, it has kept the notes 
 of the Bank of England free of all suspicion. 
 
 The other banks found it best economy 
 to keep little gold reserve of their own, and 
 simply to trust to the reserve in the banking 
 department of the Bank of England. The 
 financial solidity, therefore, of the whole system 
 of banks in the United Kingdom depends on 
 the banking department of the Bank of England. 
 How great is the strain in times of crisis may 
 be judged from the fact that the limits set for 
 the issue department by the Act of 1844 have 
 been three or four times relaxed by Government 
 to relieve the strain on the banking department, 
 in deference to the general wish of the trading 
 community. 
 
v.] BILLS OF EXCHANGE 101 
 
 Trading in Debts, — The essence of modern 
 banking is not the issue of notes, nor the 
 keeping of deposits, still less the issue or keep- 
 ing of coin. The trade of a bank is in debts, 
 debts of its own (its deposits), and debts of 
 others. It is in this connection that banks have 
 so much importance in the life of modern business. 
 Capital is often saved by one group of people, 
 and used by another. The banks serve to bring 
 the two together. When it is said that saving 
 hurts society ■ by '* withdrawing wealth from 
 circulation," it is forgotten that what is saved 
 is not hoarded, but is either directly invested 
 by the saver, or is lent to a bank as a deposit. 
 The bank, if it is to prosper, cannot let all its 
 deposits lie idle. The amount of them, or part 
 of it, will be lent to men of business. It will 
 probably not be lent for permanent investment, 
 for a bank may be summoned by a depositor 
 to repay at short notice, and it must have suffi- 
 cient at hand to meet such calls. It will lend 
 at short notice, or for short periods, as, for 
 example, on bills of exchange, a characteristic 
 form of modern credit. 
 
 Bills of Exchange. — When goods are sold by 
 one trader to another, especially at a distance, 
 he will "draw" a bill on the other, directing 
 him to pay a specified sum of money on a 
 certain day (say three months after date), and 
 
102 PROFITS AND INCOME [chap. 
 
 it may be at a particular place and bank, value 
 having been received, — in other words, the goods 
 having been consigned. This '* order to pay" 
 becomes complete when the customer ** accepts" 
 the bill by writing his name on it. This bill, 
 the first merchant, say in Leith, will probably 
 hand to his banker, who can procure pay- 
 ment for him three months afterwards through 
 their agent, say in London. But, if the Leith 
 merchant is in need of ready money, he may 
 ask the bank to pay the amount of the bill at 
 once to him ; and, if the credit of the parties is 
 good, this payment will be made, not indeed of 
 the whole sum, say ^looo, but of that after 
 deduction of three months' interest, say ;^io. 
 ;^iooo now and ^looo three months hence 
 differ as ''present" from ''future goods," and 
 the "discount" of ;^io represents the difference. 
 As the bank can presumably wait, and the 
 merchant cannot, the bank will, in the course 
 of the bill's maturity, get back the ;^iooo 
 advanced, and, if this was part of a customer's 
 deposit, its position will, to that extent, be made 
 secure against the claims of its depositors. 
 
 A great part of the profitable work of a 
 bank consists in thus, as it were, enabling the 
 future to be turned into the present. 
 
 The Bank as a Lender. — Even when the 
 bank does not itself actually lend, advance, or 
 
v.] THE MONEY MARKET 103 
 
 discount, It is usually an assistant or instru- 
 ment in the transaction. It may lend on the 
 security of such property as is of known value, 
 and readily realisable. If it is wise, it will not 
 be ready to lend on the security of house pro- 
 perty or land, or where the loan is to be the 
 capital of an undertaking slow to mature. The 
 lenders in such cases must be those who are con- 
 tent to wait many years for the return of the 
 principal sum, and are satisfied with the yearly 
 interest. In the case of land, the owner, in 
 pledging it as security of his loan, is really 
 asking that the future incomes from it be 
 advanced to him now ; he is turning future into 
 present. Not only lands and houses, but any 
 and every kind of capital may have its revenue 
 thus anticipated, but, as the certainty of the 
 future income is very different in different 
 cases, the lenders on the securities may be 
 sometimes certain, sometimes very uncertain, of 
 recovering their principal. The greater the 
 risk, the greater will probably be the difference 
 between the future and the present value, the 
 ereater the interest on the advances. The class 
 of lenders who speculate on doubtfully certain 
 securities will be found in the money market in 
 the wide sense rather than in banks. 
 
 The Money Market. — ** Securities," in fact, 
 have come to mean shares in companies. The 
 
104 PROFITS AND INCOME [chap. 
 
 commercial enterprises of modern times need 
 large capital, and this large capital is seldom in 
 our time found by single or a few individuals ; 
 it is the combined savings of many. '' Many 
 a pickle mak's a mickle." By the Acts known 
 as the Companies Acts the contributors of 
 capital to companies registered under these 
 Acts become liable only to the extent of what 
 they contribute, not to the extent of their whole 
 fortune. 
 
 Limited Liability. — Poor people therefore 
 can, and do, so contribute without fear of total 
 failure. One such company is said to have 
 74,000 shareholders. Such conditions add to 
 the expansiveness of modern business, while 
 distinctly adding thereby to its speculative 
 character. Where persons are only venturing 
 a small part of their savings, they may be 
 willing to incur risks which they would other- 
 wise avoid ; and they may tolerate the existence 
 of long periods of low profits or no profits. 
 It is a fact that the accumulation of savings 
 has proceeded at an even faster rate than the 
 population, and the moderate incomes of the 
 middle classes have grown more than the 
 fortunes of the upper classes. There is no 
 sign that the mere desire of provision for the 
 future is greater now than the more sordid 
 desire of becoming rich by a lucky venture. 
 
v.] LIMITED LIABILITY 105 
 
 Industrial companies of every sort find support 
 only too easily. The growth of the wealth of 
 the working classes has been steady also ; and 
 part of that wealth has gone to the companies, 
 the upper ranks of the working classes having 
 in truth little to distinguish them from the 
 middle classes, and possessing the same com- 
 mercial ambition. Yet the working classes in 
 England have created, by joint stock of their 
 own, commercial undertakings more solid if less 
 pretentious, than the Joint-Stock Companies of 
 the middle classes. Under the Industrial 
 Societies Acts the workmen's co-operative 
 stores, and to a smaller extent industrial 
 co-partnerships of a productive nature, have 
 grown up, with little risk ; the severe limi- 
 tations of the Acts have prevented any 
 aggrandisement of the few at the expense of 
 the many, and also any speculation in the 
 unpleasant sense of the word. It is not the 
 shares of workmen's societies that are quoted 
 on the Stock Exchange. They represent a 
 trade that is not international, but almost 
 wholly national or even local. 
 
 It is different with all that reaches the 
 Money Market and Stock Exchange. The 
 Stock Exchange is a group of dealers in 
 shares ; it is a market for shares, as the 
 Cotton Exchange for cotton, *' Mark Lane" 
 
106 PROFITS AND INCOME [chap. v. 
 
 for corn, ''the Baltic" for traders with Russia. 
 The Money Market, though a looser aggre- 
 gate, is a market for loans on a large scale. 
 When we touch on these institutions, handling 
 every day wealth or the symbols of wealth on 
 the largest possible scale, we are looking 
 beyond the local trade of England to the 
 trade of the wide, wide world. We have here 
 one of the most unmistakable symptoms of the 
 international character of modern trade. It 
 was never less possible than now to construct 
 a Political Economy for one nation only ; but, 
 if ever conceivable anywhere else, it could not 
 be conceivable in England in face of such a 
 phenomenon as the City of London and its 
 great foreign markets. They are a conspicu- 
 ous sign that our wealth is now produced not 
 merely for exchange with the foreigner's wealth, 
 but in concert with the foreigner, by means, 
 for example, of the materials he sends, which 
 are turned into finished articles for his con- 
 sumption. They are a sign too that the 
 foreigner's wealth in its turn is produced not 
 only for us, but often by our help, by the tools 
 we send and the capital we lend. Not only is 
 the production international, but the distribution 
 follows suit ; and the significance of this '' inter- 
 national concert" tends every year to become 
 greater and greater, 
 
CHAPTER VI 
 
 THE COMMERCIAL COMMONWEALTH 
 
 A Commercial Commonwealth of Civilised Nations. Community 
 of Risks and Depression. Crises and the Telegraph. Propor- 
 tion of Foreign Trade to the Whole. Foreign Loans and 
 Investments, the Balance of Trade. Movements of Gold. 
 Specie Point. Effects of Defective Currencies on Distribution 
 and Production. Inconvertible Currency. Silver Question 
 in India. Effects of Government Interference. 
 
 The idea of a commonwealth of civilised 
 nations is not a new one ; but the progress of 
 commerce in the last century has made it much 
 less shadowy than formerly. As division of 
 labour implies (and creates) union step by step 
 with the division, and as not only division of 
 labour, but every improvement, depends for its 
 success on the extent of the market, so the 
 specialising of trades in particular countries has 
 impelled (and created) the more rapid and 
 frequent communications made possible by 
 steamships, railways, and the electric telegraph. 
 The result has been that economies in pro- 
 
 107 
 
108 COMMERCIAL COMMONWEALTH [chap. 
 
 duction cannot be confined to the first inventors 
 of them, but are shared sooner or later by the 
 whole civilised world. 
 
 It is true that this community of enjoyments 
 involves community of sufferings. A sense of 
 their common humanity has been impressed on 
 rich and poor by their common liability to epi- 
 demic diseases. The distress in Lancashire forty 
 years ago caused by a war taking place in a 
 foreign country 3000 miles away, was perhaps 
 the first revelation to the civilised world of its 
 own commercial unity. The failure of the cotton 
 crop in Georgia or Alabama, of the wheat crop 
 in Russia or Dakota, may bring the consumers 
 of wheat, all over the world, by many shillings 
 nearer to poverty. Commercial depression caused 
 by bad seasons can never be wholly prevented 
 by human agency till ''victorious analysis" has 
 given us control of the weather. Agricultural 
 production with its year of waiting for Its crops 
 cannot so easily adapt itself to changed demand 
 as manufacturing industry. 
 
 Coimnunzty of Sufferings, but also of Re- 
 sources, — But the telegraph, for example, while it 
 increases the sensitiveness of the common market 
 to local disturbances, increases our power to 
 find remedies. We are forewarned, perhaps, in 
 twenty-four hours. Instead of twenty-four weeks. 
 For the same reason, too, the crises due to wrong 
 
VI.] HOME AND FOREIGN TRADE 109 
 
 conceptions of the needs of remote localities 
 are made less, and not more, likely by the 
 telegraph, which quickly removes ignorance of 
 the true state of the local markets. Another 
 and less easily foreseen effect of these swift 
 communications by steam and telegraph has 
 been the tendency to substitute payment by 
 cheque or telegraphic transfer for payment by 
 bill of ei^change. 
 
 Similar Benefits of Home and Foreign 
 Trade. — What this foreign trade does, on the 
 side of importation, is to add to the intensity 
 of home competition by bringing the foreign 
 competitor to our doors. It is usually the 
 pleasant side of this operation, the resulting 
 cheapness of commodities, that is impressed 
 on us by economic writers, and the unpleasant 
 that is brought before us by our home pro- 
 ducers. Some have even feared that the 
 foreigner will eventually do all the work of 
 production for us. But traders are not likely 
 to work for nothing ; he who brings goods 
 will expect an equivalent. If he expects none, 
 the gain will be ours, and the loss his. But 
 we may feel sure that, whatever the excess of 
 imports may be, it is not a gift, but implies a 
 past or present equivalent in our own goods. 
 
 The proportion of the whole volume of 
 foreign trade to the rest of our trade seems 
 
110 COMMERCIAL COMMONWEALTH [chap. 
 
 greater than It really is, because it bulks largely 
 in the public eye ; we have public records of 
 exports and imports, and none such of the great 
 mass of goods produced at home for use at 
 home. Our own rural districts and cities are 
 a great market for each other's produce — 
 our first and greatest market. Our trade has 
 stretched beyond this market and beyond our 
 own country to others, just as reasonably as 
 the trade of our rural districts stretches beyond 
 them to our towns. In extending the markets 
 in both cases, we benefit both ourselves and 
 those with whom we trade. 
 
 We have stretched beyond our country not 
 only by sending goods for consumption, but 
 by sending goods for capital. 
 
 The Balance of Trade. — In common lan- 
 guage, we have ''lent money" to foreign 
 borrowers, who have invested it in foreign 
 enterprises ; but it rarely, if ever, happens that ^ 
 a loan or investment goes out in the form of 
 coin or even of bullion. In the mechanism 
 of exchange, what happens is that ;^iooo 
 of loan go out as ^looo worth of goods, for 
 which there need be no equivalent import. 
 By-and-by, when the interest falls due (say at 
 5 per cent), ;^50 worth of goods will be im- 
 ported without need of equivalent. As Great 
 Britain lends more than she borrows abroad, 
 
VI.] BALANCE OF TRADE 111 
 
 the stream of interest plays an important 
 part in swelling the volume of imports. 
 The value of British imports in 1899 was 
 ;^48 5,000,000, and of exports only ^329,000,000. 
 The inclusion of freight in valuation of the 
 imports, and its exclusion (as a rule) from 
 the valuation of the exports, must exaggerate 
 the real difference of the two amounts. Freight 
 represents not a repayment by the foreigner 
 without any present equivalent from us, but 
 an equivalent paid usually by the foreigner 
 for a present service rendered by British ship- 
 ping. The proportion of this cost of carriage 
 to the whole value of the imports (estimated 
 at II per cent.) may seem small; but so long 
 as this cost is included for imports and not 
 for exports, it would seem impossible for the 
 two sides of the national account to balance, 
 quite apart from payments of interest, and apart 
 from the expenditure of English travellers 
 abroad. 
 
 Our forefathers deplored an excess of imports, 
 and called it an unfavourable balance of trade ; 
 but no special pleading will in this case justify the 
 wisdom of our ancestors. It is true that they 
 were not under the delusion that a stream of 
 payments could be made to England without 
 an equivalent, or that such gifts would not be 
 acceptable if only they were made. But they 
 
112 COMMERCIAL COMMONWEALTH [chap. 
 
 fancied that where there was no discoverable 
 equivalent in goods there must be an equivalent 
 furtively paid in gold or silver, and they deplored 
 such ''tribute" to the foreigner. 
 
 The precious metals, however, as we have 
 seen, are not desired in unlimited quantities any 
 more than any other goods ; like the others, they 
 go when they are wanted and where they are 
 wanted. 
 
 Movements of Gold. — Our public records, at 
 least roughly accurate, show no permanent excess 
 of exported gold and silver to balance the excess 
 of imported goods, but an importation and ex- 
 portation of the precious metals varying quite 
 independently of the excess, and according to 
 special causes, perhaps better known than most 
 other elements in the whole trading account. 
 Governments may want gold as a military 
 treasure, or in order to carry out a change in 
 their currency. But the ordinary and economic 
 cause of an exportation of gold is the advance in 
 the price of foreign bills to the point where it is 
 cheaper to send gold than to buy a bill. If 
 French bills are scarce, and ;^ioo will not buy 
 me a bill of 2522 francs on Paris, but only one for 
 2500, it would be worth my while to send over 
 the actual coin, for the cost is about 10 centimes 
 in the £\, including the expense of insurance. 
 Broadly speaking, owing to the greater freedom 
 
VI.] DIFFERENT CURRENCIES 113 
 
 from restrictions in this country than elsewhere, 
 when this ^'specie point" is reached, gold will 
 begin to go, till the price of bills begins to fall 
 again. The movement is not so certain or 
 speedy on the side of France, where the bank 
 puts obstacles in the way of merchants who 
 purchase gold for exportation. 
 
 Different Currencies, — As different political 
 and social conditions disturb the comparison 
 between one country and another in the 
 matter of production, so different currencies 
 and different taxation disturb the exchange 
 and distribution. Of these two sources of dis- 
 turbance, different currencies are perhaps the 
 less serious. Most civilised countries have dis- 
 covered the evils of any change in the currency, 
 and their standard coins contain a known 
 amount and fineness of one or other of the 
 precious metals. Difficulties arise mainly in 
 two cases. The first is when (as In Italy and 
 Russia till recently) the standard was a paper 
 currency not convertible into coin at the will of 
 the holder, but having a forced circulation at the 
 will of the State. Such notes, having lost their 
 natural regulator, are usually issued in excess 
 of the needs of the people, and are at a dis- 
 count in relation to coin whenever the needs 
 of trade indispensably require coin, as is often 
 the case in foreign trade. The second case 
 
 H 
 
114 COMMERCIAL COMMONWEALTH [chap. 
 
 is rather of misfortune than of fault. Some 
 countries have a gold, some a silver, standard ; 
 and silver and gold are not of fixed value in 
 relation to each other. This was the cause of 
 trouble in the trade between India and England 
 in the last quarter of the nineteenth century. 
 
 Fall of Silver, — After the Franco- Prussian 
 War and the adoption of a gold standard by- 
 Germany, the value of gold in relation to 
 silver began to rise in the markets of the 
 civilised world. The standard in India was 
 the silver rupee. Merchants selling their 
 goods to India for the same rupee price as 
 before gained less than before, because with 
 the rupee at is. 8d. it needed twelve rupees to 
 buy a sovereign instead of, as formerly, ten. 
 On the contrary, merchants buying goods from 
 India found that their sovereigns went farther. 
 The vast Indian population is comparatively in- 
 different to external influences, and foreign trade 
 is an even smaller part of their life than it is of 
 our own. It was therefore a long time before 
 prices began to rise in India in proportion to 
 the fall of silver ; the adjustment usual in modern 
 commercial countries did not for a long time 
 show any signs of taking place there. The 
 Indian Government, receiving its revenue in 
 silver rupees, and having heavy payments to 
 make to English creditors in gold sovereigns, 
 
VI.] DEPRECIATION OF SILVER 115 
 
 suffered by the fall of the rupee, like the English 
 exporters. A bill for 100,000 rupees instead 
 of ;^ 10,000 might bring only ^S^fSS- Indeed, 
 in the first half of 1893 ^^e rupee was worth 
 less than is. 3d. At the end of June 1893 the 
 Indian Government took the first step towards 
 the introduction of a gold standard into India ; 
 it closed the mints to the free coinage of rupees, 
 and made known its intention of creating an 
 artificial scarcity in rupees till the value of them 
 (whatever the value of their silver in the markets) 
 should reach is. 4d., and be kept at that point. 
 In this attempt it has been fairly successful, 
 and it is now taking steps to introduce the 
 gold standard. It seems doubtful if the change 
 will be generally understood and accepted by 
 the people ; but the government and the foreign 
 traders will benefit. There could hardly be a 
 more striking instance of the complication of 
 political, social, and commercial interests enter- 
 ing into the question of currency. But India 
 is not, for commercial purposes, a civilised 
 country ; it does not belong to the republic of 
 competitive traders, by any choice of its own ; 
 and in all probability the modernising of its 
 currency will have little effect on its internal 
 trade. 
 
 Different Laws and Government. — Within 
 the republic of trading nations, however 
 
116 COMMERCIAL COMMONWEALTH [chap. 
 
 trifling the effects of differences in currency, 
 the differences in laws and government remain 
 to give character both to the production and to 
 the distribution of the several countries. The 
 law of inheritance in France, allowing freedom 
 of bequest to the head of a family only to the 
 extent of a share equal to one child's share, and 
 dividing the rest of his property equally among 
 the children, has probably helped the tendency 
 to have small families. The law in this country 
 enabling the formation of companies with limited 
 liability has helped trading enterprise, perhaps 
 to a wasteful extent ; it has enabled poor as well 
 as rich to share in the gains. Customs have 
 helped or hindered even more than laws, especially 
 in agriculture. Where long leases are the rule, 
 there is usually better farming than where the 
 tenure is annual. Occupier's ownership might 
 be supposed to be better still, and in certain 
 countries (as in France) it intensifies thrift and 
 industry. In certain other countries (as in 
 England) it is a rare luxury, and its effects where 
 it is found are not usually of the same kind. 
 It might very plausibly be contended that over 
 the whole range of countries included in the 
 Commercial Republic, the producers are nearly 
 on an equality as regards interference of laws ; 
 everywhere manufacture and trade are left free 
 within each country to nearly the same extent ; 
 
VI.] FRANCE AND ENGLAND 117 
 
 factory legislation is becoming common to all ; 
 and even in agriculture differences of tenure cause 
 little or no perceptible inequality in powers of 
 production. It is quite otherwise with the 
 interference of government, whether central or 
 local, in exacting those compulsory payments for 
 public purposes known as rates and taxes. 
 Hindrances of this kind cannot exist without 
 being perceived ; and the differences between 
 nation and nation in respect of them may be 
 said to be, in comparison with other sorts, well- 
 defined, and even measurable. 
 
CHAPTER VII 
 
 PRINCIPLES OF TAXATION 
 
 Equality and the other Canons of Taxation. "Ideal State" and 
 its Taxation. Military Expenditure. Services of Law and 
 Justice. Fees. Public Works, Debts, Grants in Aid. Sources 
 of Revenue. Post Office. Loans. Direct and Indirect Taxa- 
 tion. Taxes on Goods. 
 
 Popular devotion to any cause or to any amuse- 
 ment might cause a drain comparable in amount 
 with the drains of taxation ; and nations differing 
 from each other in their ruHng passions will pro- 
 bably differ in their ways of accumulation and 
 dispersion of material resources. So far from 
 consumption being absolutely separate from pro- 
 duction, every form of consumption or spending 
 has probably a distinct effect of its own on the 
 making of wealth. In our own time, among 
 most civilised nations, taxation is a less drain 
 on the people's resources than their own ex- 
 cesses, say in drinking or gambling. What, 
 then, is the reason for treating taxation rather 
 than the other drains on income as of special 
 
 118 
 
CHAP. VII.] TAXATION 119 
 
 importance in an economic inquiry ? The reason 
 is that taxation yields more measurable data than 
 other expenditure. It is a compulsory payment 
 made by subjects to governors, and in our times 
 the subjects will demand a more or less exact 
 account of the money taken and the way it is 
 spent. It is not so easy to bring the other pay- 
 ments to a common reckoning. 
 
 Taxation is the levying of a compulsory pay- 
 ment by government for public purposes. The 
 purposes are seldom economic, and the chief 
 economic interest in the matter is usually the 
 negative aspect, the withdrawal from production 
 (from the command of individual possessors who 
 are often producers) of the wealth levied in the 
 tax. Assume that the withdrawal is a necessity. 
 In what way may it be so contrived as to cause 
 least injury to the country's wealth and pro- 
 gress? We cannot disregard the question of 
 injury to individuals. It might be that the 
 country might gain as a whole by inequality 
 of taxation ; but, even if economic reasoning were 
 in favour of such a conclusion, it would not 
 recommend itself to civilised men whose political 
 philosophy is not determined entirely by their 
 economics. Free competition does not mean 
 the struggle for success among human animals 
 without rules or restraint, but of peaceful citizens 
 under the laws of a well-ordered society. As 
 
120 TAXATION [chap. 
 
 the competitors are members of a society, they 
 are Hmited, by the implied, as well as by the 
 express, rules of civilised societies, and are thus 
 warned against fraud, violence, and crime. To 
 this extent, even if no farther, modern political 
 economy stands on a basis of law and morality. 
 In the same spirit, when judging of any inter- 
 ference with the economy of a nation, we are 
 bound to consider how the interference may be 
 so managed as to occasion not only the least 
 economic mischief, but the least injustice. 
 
 Equality in Taxation. — Justice is nothing 
 if not impartial or even-handed ; and imparti- 
 ality means equality. Even if equality did 
 not yield the maximum of economic benefit 
 to the nation, it would be supported by 
 the nation. It is, therefore, one of the first 
 maxims of the economic policy of a civilised 
 state that there should be equality of burden 
 in taxation. This does not necessarily mean 
 an identity of amount, or even of rate levied 
 from each citizen. A pound taken from each 
 would not be an equal burden on each ; it would 
 be little or nothing to a rich man, a real burden 
 to the poor man. A rate again of sixpence in 
 the pound would be a greater burden to the poor, 
 even though it meant only 50s. to him with 
 his ;^ioo of income, and ^50 to his rich neigh- 
 bour with his ;/^2000 of income. The ''final 
 
VII.] CANONS OF TAXATION 121 
 
 utility " of 50s. to him might be more than that 
 of ;^5o to his neighbour. Hence equality of 
 burden is not destroyed, but created, by a gradu- 
 ated scale, in which the rate rises with the 
 income. 
 
 When all has been done to secure equality of 
 burden, there will always be cases where special 
 circumstances may make the burden heavier 
 to one man than to another ; for example, 
 the possessor of a large income with the claims 
 of a large family may be less capable of 
 bearing a tax than the possessor of a smaller 
 with fewer claims. But to adhere to a general 
 rule will usually cause fewer hardships than to 
 abandon all rules, or (what is practically the same 
 thing) to try to adapt our rules to each indi- 
 vidual case. 
 
 Certainty and Convenience in Taxation. — 
 After equality comes the group of maxims 
 of taxation, sometimes called in brief by the 
 names of certainty, convenience, and economy. 
 They are really in effect all of them maxims of 
 economy. They concern the best, or at least the 
 most economical, manner of carrying into effect 
 the levying of such a tax as we may have dis- 
 covered to be not contrary to the general maxim 
 of equality. The maxim of certainty, for example, 
 requires that there be nothing arbitrary, or un- 
 certain in the levying of a tax, but that every one 
 
122 TAXATION [chap. 
 
 shall know what it is he has to pay, so that he 
 may arrange accordingly. It is not good that 
 the speculative element which enters unavoidably 
 into almost all modern trade should enter also 
 into taxation, from which the most ordinary pains 
 can exclude it. A doubtful taxation caused, for 
 example, by powers given to tax-gatherers to 
 exact as much as they can, is almost as mis- 
 chievous as a doubtful currency. Wherever it 
 occurs, it adds a new obstacle to continuous 
 and persevering industry and provision for the 
 future. But even if a tax is not unfair and not 
 uncertain, it may be levied at such a time as 
 is more inconvenient than another for the tax- 
 payer, without being to the same extent more 
 profitable to the State. If the time chosen be the 
 time most convenient to the tax-payer, consist- 
 ently with his paying the impost at all, then there 
 is least waste of time, and therefore of resources. 
 Economy in Taxation. — Analogous to this 
 third maxim is the fourth or maxim of 
 economy. A tax should not be levied in 
 such a manner that what is paid by the 
 tax-payer is not gained by the State, but is 
 spent largely in expenses of collection, or is 
 otherwise diverted into the hands of a third 
 party. In fact, the tax should be so levied that 
 it is received by those for whom it was intended, 
 with the least possible cost of collection, and least 
 
VII.] IDEAL STATE -*'*==Sii::^=:i:^>- 123 
 
 possible detriment to the tax-payer. A tax on 
 raw materials, e.g., would be worse than on the 
 finished article, because it would increase the 
 price of the latter at every stage of its manu- 
 facture without benefiting the State, and with 
 great detriment to the buyers of the article. 
 The various middlemen would require a profit 
 on the tax they have paid, as well as on the 
 trading capital they have invested. 
 
 Ideal State. — An ideal state might have 
 no need for taxation, raising all its revenue 
 from public property. But the economist 
 may not at present contemplate an ideal state 
 of the far future, dealing with men too good 
 for any government ; neither may he deal 
 with a primitive society not ripe for any govern- 
 ment at all. He is confronted now with a 
 form of state which is very imperfect, but of 
 which an ideal can be framed, in rough outline, 
 on the basis of our knowledge of men as they 
 are at present. If the remote ideal may be 
 cherished of a state where provision for self- 
 defence is among the least, and not the most, 
 pressing of public requirements, the proximate 
 ideal is of a state thoroughly equipped for self- 
 defence. In the far future, nations may have 
 agreed not to learn war any more ; in the 
 present, no nation can feel sure that it will not be 
 attacked by a neighbouring or even by a distant 
 
124 TAXATION [chap. 
 
 nation, however friendly at the present moment. 
 It therefore requires, according to its geographical 
 situation, a navy, or an army, or both of these, 
 strong enough to resist the strongest forces that 
 in human probability might be brought to bear 
 against it. 
 
 The Budget, — England is no exception to this 
 rule ; and, accordingly, we find the expense of 
 army and navy is the largest item in the national 
 budget. We may take lOO millions of pounds as 
 the figure for the whole annual budget, in reality 
 very near the actual figure for the last two or 
 three years of the nineteenth century. Out of the 
 lOO millions, about 35 millions are for the army, 
 20 millions for the navy, 15 millions for law 
 and internal administration, 9 millions for public 
 works, I million for the monarch, and 20 millions 
 for public debt. 
 
 Services of the State. — In so far as the 
 service rendered by the monarchy is not analo- 
 gous to ordinary civil service, it is ceremony, 
 which seems as necessary to the State for the 
 sake of impressiveness as dress (in distinction 
 from clothing) to the private person. The 
 benefit received is perhaps the least easily 
 measurable of all connected with the State, 
 being largely a matter of feeling ; and such a 
 service may become of less and less import- 
 ance in successive generations ; but we cannot 
 
vn.] SERVICES OF THE STATE 125 
 
 dispose of it with the remark that the trappings 
 of a monarchy would be an outfit for a number 
 of small republics. Human weakness cannot be 
 disregarded. In any case the measurable element 
 in connection with taxation is the sum exacted, 
 and not the equivalent received for it. 
 
 Protection. — Protection of life, for example, 
 may be conceived to be a service of very 
 different value from different points of 
 view. From the point of view of society it 
 might seem to be most important in propor- 
 tion to the powers and the character of the 
 life protected. But the protection is meant to 
 be given equally to the life and property of all ; 
 and it is so given, so far as the ends of the State 
 are really attained. The sense of security thus 
 engendered is a much greater public benefit than 
 can be estimated in figures. But, if it cannot 
 be estimated from the side of the State, 
 neither can it from the side of the individual. 
 No one can say that the benefits he receives 
 from the State are exactly measured by the 
 amount of the taxes paid by him. The 
 benefits are large and only in part analysable ; 
 and his own estimate of their value would 
 vary with the vicissitudes of his life and 
 experience. Of all the best of the good things 
 of life the same remark could be made ; literature, 
 art, philosophy, and religion confer advantages 
 
126 TAXATION [chap. 
 
 that cannot well be measured by the salaries of 
 their teachers or by the expenditure lavished 
 on the institutions devoted to them. The 
 benefit of the protection of the State is not to 
 be measured separately for each individual, but 
 generally for the whole community, though 
 it ought to be procured at the smallest 
 cost to the individuals that is consistent 
 with equality of treatment. If the payment 
 for the benefits furnished by the State is 
 not a voluntary payment, neither is the enjoy- 
 ment of them voluntary. The individual 
 citizen gets not only the drawbacks but the 
 blessings of civilisation ''against or with his 
 will." 
 
 Justice. — The same may be said, though per- 
 haps with rougher accuracy, of the provisions for 
 the administration of justice, and with rougher 
 still of public works. A good system of laws and 
 a pure administration of the laws produce their 
 intangible as well as their tangible effects, and 
 the general arrangements for maintaining the 
 system should undoubtedly be a public charge. 
 It might be contended that all legal proceed- 
 ings, civil as well as criminal, should be a 
 public charge, and the law courts in a true 
 sense open to all. But considerations of policy 
 seem to be against this. The possible tempta- 
 tion to unnecessary litigation might be a public 
 
VII.] PUBLIC WORKS AND DEBT 127 
 
 danger. Perhaps we err at present in a 
 contrary direction by making litigation a 
 privilege of the rich. As it is, the litigants, 
 in addition to their share of the general burden 
 of maintaining courts of justice, bear the parti- 
 cular expenses of their cases. Where there is 
 a particular benefit, distinctly measurable, in 
 addition to the less tangible benefit to the 
 community, it seems desirable that it should 
 be measured and reckoned to the beneficiary, 
 in the shape of " fees " which are the price of 
 the particular benefit. 
 
 Public Works, — With public works, under 
 which might be reckoned much that is classed 
 under the head of justice, the case is similar. 
 There is, indeed, as in the case of the Post 
 Office, more that seems to be an individual's 
 benefit and less that is matter of common 
 concern. It is matter for the State only on the 
 assumption that no private persons or companies 
 of private persons could or would do the work 
 so well, and that the work is really of public 
 concern and must be carried out under public 
 control if not public management. The Post 
 Office, it will appear, is a source not of ex- 
 pense but of revenue to the State. It is other- 
 wise with the Civil Service generally. 
 
 Public Debt. — As the expenses have not 
 always been met by compulsory taxation in the 
 
128 TAXATION 
 
 CHAP. 
 
 year in which they have been incurred, but 
 sometimes by a voluntary loan, the repayment 
 of the loan involves future taxation, and the 
 payment of the interest requires present taxa- 
 tion. If the classification of the objects of 
 public expenditure had been rigorously logical, 
 the debt would have come under the head of 
 Army and Navy, nearly the whole of it having 
 been incurred for military or naval purposes. 
 
 Grants in aid of Rates, — Certain payments 
 made to local authorities from the proceeds 
 of certain taxes are on a footing by them- 
 selves. The State in this case is collecting 
 sums by means of general taxation, and hand- 
 ing them over for the relief of local rates, 
 rather an apparent than a substantial service 
 to the ratepayers, and a decided derangement 
 of the book-keeping, and injury to the re- 
 sources of the State itself. Where grants 
 are made directly in aid of rates, relief is more 
 obviously given by one part of the body of 
 tax-payers to another. But the same reproach 
 might be brought against both proceedings. 
 They are anomalies which no statesmen of 
 either party have made any serious effort to 
 remove, although leading statesmen of both 
 parties have admitted the need for the 
 removal. 
 
 To meet these various expenses we have an 
 
VII.] POST OFFICE 129 
 
 imperial revenue (in 1900) derived from sources 
 which may be classified as follows : — 
 
 1. Taxes on goods, 56 millions : including 
 nearly 24 millions from customs, and 32 millions 
 from excise. 
 
 2. Taxes on property and income, 35 millions : 
 including nearly 19 millions from property and 
 income tax, 14 millions from death duties, above 
 i|- millions from house duty, and f million from 
 land tax. 
 
 3. Fees, including stamps and receipts from 
 civil departments, lof millions. 
 
 4. Public works, including postal and tele- 
 graphic service, i6|- millions. 
 
 5. Government property i^ millions, including 
 Crown lands (barely ^ a million) and interest on 
 loans and shares (above f million). 
 
 The first two sources are obviously taxation, 
 the last is as clearly not taxation. It might be 
 thought that fees and public works were equally 
 outside of taxation, both involving simply a pay- 
 ment for distinct services rendered to the indi- 
 vidual citizens, when and according as the citizens 
 had need for such services. 
 
 But the matter is not so simple. The element 
 of monopoly enters into the matter of some fees ; 
 and it enters into nearly the whole of the work of 
 the Post Office — the leading exceptions being the 
 forwarding of parcels and the management of the 
 
 I 
 
130 TAXATION [chap. 
 
 Post Office Savings Bank and money orders. In 
 the case of the Post Office, the Government has 
 secured the monopoly of paid letter - carrying 
 because Government is proved by experience to 
 be able to do this work in the best and cheapest 
 manner, by the economy of the largest scale. 
 So long, however, as there is a net revenue of 
 over 12 millions from the postal service, it is 
 clear that the charges to the public are not as 
 low as the cost of the services rendered. All 
 that is over that cost is in a sense a tax, levied 
 from those who have occasion to use the postal 
 services, those who do not use them escaping. 
 The reply made to this contention is that the 
 use of the postal facilities is universal, and 
 therefore the tax, being universal, is not unequal. 
 But a tax may be unequal in its pressure just 
 because of its universality, for the resources of 
 the tax-payers are not equal. Similar objections 
 may be brought against the fees for the taking 
 out of patents. Perhaps the strongest defence 
 is that the scale of charges, at least for the 
 postal services, is calculated for small incomes 
 rather than for large, and the inequality consists 
 rather in the extreme lightness of the burden 
 on the rich than in the heaviness of the burden 
 on the poor. But no one can tell whether or 
 not the burden lies heavily on the poor till the 
 experiment has been made of reducing the 
 
VII.] PUBLIC DEBT 131 
 
 charges in order to discover whether the use 
 of the postal facilities will become perceptibly- 
 greater or not. This experiment would be 
 simply an application of the general principle, 
 that cheapness extends the market till all desire 
 has been translated into demand, and elasticity 
 ceases. 
 
 But, whether an equal tax or not, the postal 
 charges beyond cost seem to be clearly a tax ; 
 as far as cost, they are only fees. 
 
 Similar doubts might arise as to a source of 
 revenue of a very different kind, and hardly to 
 be included in the five classes without explana- 
 tion — namely, the revenue procured by loans, or 
 government debt. Temporary advances procured 
 by exchequer bills are really an anticipation of 
 revenue from taxes, and need not have a class 
 to themselves ; but the contracting of permanent 
 debt seems within the last two years to have again 
 become a standing resource of Government. The 
 money thus raised satisfies present obligations by 
 the incurring of new future obligations in the 
 shape of repayment, and new present obligations 
 in the shape of interest. It is not strictly revenue 
 at all. 
 
 Greater clearness seems to exist in regard 
 to the first and second classes of revenue. The 
 first consists of taxes on goods, the second of 
 taxes on property ; the first is indirect taxation 
 
132 TAXATION [chap. 
 
 par excellence, the second direct par excellence. 
 The two together form by far the largest source 
 of the public income, more than fths of the 
 whole (about 91 out of 120 millions). 
 
 Direct and Indirect Taxes. — Though the 
 terms direct and indirect taxation have been 
 differently defined by financial writers, their 
 ordinary meaning is sufficiently clear for our 
 present purpose. A direct tax is conceived 
 to be a tax of which the pressure, stress, or 
 ** incidence" really lies on the person on whom 
 the State levies it. Thus a tax on rent is paid 
 by the landlord ; he cannot shift it to any one 
 else, for his tenant is already presumably pay- 
 ing all that he is willing and able to pay to 
 him, and the tenant is not made able to pay 
 more rent by the fact that the landlord is com- 
 pelled to pay higher taxes ; on the contrary, if 
 the same tax were transferred from landlord to 
 tenant, the tenant would be the less able to 
 pay his present rent. The incidence of the tax 
 remains on him who pays it ; it is therefore a 
 direct tax. But a tax on sugar, if imposed on 
 the refiner, can, as a rule, be shifted by him to 
 the broker, and by the broker to his customers. 
 If imposed on the retailers, it can be shifted 
 by them to their customers. It is an indirect 
 tax. As the shifting is more evident in the 
 case of goods than in most other cases, taxes 
 
VII.] EVASION 133 
 
 on goods have become the leading type of in- 
 direct taxes. 
 
 But, though the shifting when it occurs is 
 more evident than in other cases, it does not 
 always occur. The effects of a tax on goods 
 are usually more complicated, because of the 
 indirectness, than the effects of the land tax, 
 income tax, or licence duties. The taxes on 
 goods may be, of course, in some cases, not 
 shifted, but in a good sense of the word evaded. 
 Knowing that the demand for his goods will 
 probably fall off if he raises the price of them, 
 the manufacturer, instead of trying to get the 
 higher price, may strive to increase and improve 
 his production so that even though taxed he may 
 produce at the same profit as before. In this 
 case the tax has the same effect upon enterpris- 
 ing men as the keen competition of their fellow- 
 manufacturers at home or abroad, or as the occur- 
 rence of any unexpected natural obstacles which 
 must be cured or endured. Happy the land 
 where all taxes could be thus ** evaded." But 
 it must not be inferred that taxation is a positive 
 blessing • because it may lead to this kind of 
 evasion. Difficulties stimulate talents, but there 
 will always be difficulties enough provided by 
 nature ; and to create them without necessity 
 will eventually depress more than it will excite. 
 The majority of men are incapable of heroic 
 
134 TAXATION [chap. 
 
 effort. As a rule, a tax, even when known to 
 be necessary, tends to discourage the production 
 of the article on which it is laid ; and the legis- 
 lator must see to it that the discouragement is 
 not great enough to balance the inducements to 
 extend manufacture, and thus great enough to 
 defeat his attempt to raise a revenue. Where- 
 ever by the taxation of an article the cost of it 
 is increased, the demand tends to suffer as well 
 as the supply, and the tax in this way falls partly 
 on the producer, and not only on the consumer. 
 Taxes on goods, therefore, are more correctly 
 described as mainly indirect than as simply in- 
 direct. Part of them will stay where they are 
 put. 
 
 A government proceeding under the canons 
 above mentioned would not simply select for 
 taxation the article that yielded the most 
 revenue, but the article that would yield the 
 most together with least disturbance and dis- 
 comfort to the traders and to the public. Hence 
 a tax on food is best avoided, as oppressive out 
 of all proportion to the revenue derived from it. 
 Not only is the statesman thus confined in his 
 choice of articles ; he is limited as to the 
 lengths to which he can allow taxation to go, 
 even in the case of a suitable article. A light 
 tax may be hardly felt, and will usually excite 
 little discontent. On the other hand, a tax 
 
VII. 
 
 TAXES ON GOODS 135 
 
 on necessaries is never felt to be a light tax, 
 and is (as has been said already) not necessarily 
 equal because it is universal. The statesman is 
 always in a strait betwixt two evils : an unprofit- 
 able light tax, and one that will be a source 
 of profit but also a real grievance. 
 
 The canon of Equality would forbid us to 
 put one class of producers on a different footing 
 from others in the race for a living ; the burdens 
 must be equitably distributed so far as this is 
 within human powers of contrivance. If certain 
 selected goods are taxed, the production of 
 them is hampered as compared with the pro- 
 duction of the untaxed remainder. Yet, in all 
 countries, we have taxes on goods. How are 
 the difficulties overcome? 
 
 Our own Taxes. — In our own country, the 
 net receipts of the customs in order of the 
 productiveness of the items were roughly as 
 follows, for the year ending on 31st March 
 1 901 : — 
 
 From tobacco, 1 2f millions ; tea, 6|- millions ; 
 spirits, 4f millions ; wine, \\ millions ; currants 
 and dried fruits, less than \ a million ; minor 
 articles, more than J of a million ; coffee, less 
 than \ oi 2, million : out of a total of 26 
 millions. 
 
 The corresponding net receipts from the 
 excise were : — From beer and spirits, 32J 
 
136 TAXATION [chap. 
 
 millions ; from the other duties {e.g., on chicories 
 and coffee mixtures), about ;^2 5oo. 
 
 In addition, i\ millions were collected by 
 the excise and customs for the local authorities 
 under the Acts of 1888, etc. In 1901 sugar 
 duties (of 2S. to 4s. 2d. per cwt.) have been 
 revived, and an export duty of is. a ton has 
 been imposed on coal. In 1902 the registration, 
 duty on imported corn has been revived. 
 
 If we compare this list with that of the 
 early years of the nineteenth century, we find 
 many differences. In 1827, for example, there 
 were over 500 articles on the list instead of the 
 present 20. Imported wheat was taxed by 
 sliding scale (going up as the home price went 
 down, and vice versa) from 25s. to is. per 
 quarter. The duties were largely on imports, 
 without corresponding excise duties on similar 
 articles produced in this country. The chief 
 revenue was derived from wine and spirits 
 (5 millions) ; sugar (4j- millions) ; tea and 
 coffee (3I- millions) ; tobacco (not quite 3 
 millions). There were 510 articles which pro- 
 duced each less than ^10,000, and together 
 a little more than |- a million (;^585,ooo). There 
 were excise duties on starch, stone bottles, sweet- 
 meats, and vinegar. The total of both excise 
 and customs was a little over 6 millions, apart 
 from the wheat and other grain duties, which in 
 
vii.] FREE TRADE 137 
 
 1827 produced ;^78 1,032. This last sum varied 
 in different years with the seasons : it was 
 ;^437,ooo in 1826, ^193,228 in 1828, but 
 £^g6,j20 in 1829. The abolition of the corn 
 duties (all but a registration duty of is. a 
 quarter, which lasted till 1870) was passed 
 in 1846, and took full effect in 1849. 1842 
 and 1846 mark an epoch in English financial 
 history. English statesmen had been brought 
 at last to the conviction that taxation should 
 be not for the protection of particular industries, 
 but for the revenue of the State. There 
 cannot be a rich treasury in a free country 
 without a rich people ; and the way to increase 
 the general wealth is to put as few obstacles as 
 possible in the way of the general trade. To 
 cause prices to be higher by taxing imports, 
 is to narrow the circle of possible buyers, and 
 thus to increase poverty. The corn duties were 
 only the worst instance of this very policy ; 
 by narrowing the circle of buyers of food, they 
 were really bringing not merely poverty but star- 
 vation nearer. 
 
 The lesson seems to have been learned once 
 for all by this country sixty years ago. First, 
 in 1842, the manufacturers were deprived of 
 all the chief duties protecting their trade against 
 foreign competition. Then, in 1846, the landlords 
 were deprived of the same privilege. The reform 
 
138 TAXATION [chap. 
 
 was not effected quietly and without suffering. 
 Actual famine in one part of the country was 
 the crowning argument. Once taken, the step 
 was final. The growth of our manufacturing 
 industries was such as to weaken the political 
 power of the agricultural interest ; but, as there 
 is no other equally large body of producers on 
 the whole so united in their interests as the 
 farming class, protection of any other produc- 
 tion could not be revived, in face of the jealousy 
 of the agriculturists. 
 
 What happened here half a century ago seems 
 to be happening in Germany at the present time ; 
 and from English experience there is every reason 
 to believe that Germany will be a stronger country 
 under free trade than she is now under protec- 
 tion. 
 
 Free Trade. — Under free trade, if the term 
 were not ambiguous, there would be no taxation 
 of goods ; and that has been the ideal of some 
 free traders. The term, however, has almost a 
 technical sense ; it means a trade where no com- 
 petitor is favoured or hindered above another. 
 In the case of certain articles both the home 
 producer and the foreign are equally hindered. 
 There is a customs tax on imported spirits, and 
 an excise tax on spirits made in the country. 
 The aim of the treasury is so to administer 
 the tax that the article selected for taxation 
 
VII.] TAXES ON LUXURIES 139 
 
 shall not escape it by being made abroad or 
 escape it by being made at home. 
 
 Taxes on Luxuries. — It will be noted that 
 the articles taxed are few in number, and 
 differ as a rule very greatly from one another 
 in character. With the exception of coffee, 
 cocoa, patent medicines, and dried fruits (which 
 yielded in 1901 only \ a million altogether), 
 they agree in giving a substantial revenue 
 (of about 25 millions in 1901). In the heavy 
 taxation of spirits, wine, and tobacco, the 
 Government are undoubtedly influenced by the 
 popular feeling that these articles are luxuries, 
 and that a great abundance of them is rather 
 hurtful than wholesome. Tea, though not hurt- 
 ful, is still in the category of luxuries, and in 
 extremity may bear a heavy tax. In April 1901 
 the duty on it was raised to 6d. per lb. There 
 is probably no tax that so nearly approaches a 
 poll tax as this, and, like other poll taxes, it is 
 levied in entire disregard of the real inequity of 
 levying an equal amount from persons unequally 
 endowed with wealth ; the tax is 6d. per lb. of 
 the poor man's tea and the rich man's, without 
 respect of quality and price. Still, as the amount 
 is not great, there is no general revolt against 
 the duty ; and successive governments have 
 retained it without fear of the electorate. In 
 fiscal matters there is in England more con- 
 
140 TAXATION [chap. 
 
 tinuity of policy on the whole than in matters of 
 general politics. Officially, the Chancellor of the 
 Exchequer is far from wishing to keep down the 
 consumption of articles when he taxes them at 
 a high figure ; he is rather bound to desire that 
 the consumption may expand in spite of the 
 tax. He may, of course, think too much of his 
 revenue ; but the ordinary elector is disposed 
 to think too little of the gain or loss to the 
 Exchequer. The selection of this or that 
 article for special taxation is therefore affected 
 by public sentiment about the goodness or bad- 
 ness of the article itself, and the desirableness 
 of making it cheap or dear. Temperance re- 
 formers desire high taxation of spirits, in order 
 that the consumption may be discouraged ; 
 they would welcome a smaller consumption and 
 smaller revenue. As a matter of experience, 
 there is a point beyond which it ceases to be 
 profitable to increase taxation : in some cases 
 because consumption declines too far, in others 
 because smuggling, adulteration, and evasion 
 become speculations too tempting to be resisted. 
 This point seems to have been already reached 
 in the case of spirits ; and temperance reformers 
 must be fain to discourage consumption by other 
 means than taxation. 
 
 It may be said that the tax on spirits, from 
 which more is raised by excise and customs 
 
VII.] TAXES ON SUGAR 141 
 
 together than from any other single source, Is 
 a tax on the luxuries of the poor, the wine of 
 the rich escaping with a tenth of the taxation. 
 It is true that in this way a large section of the 
 poor feel the burden of imperial taxation ; but the 
 direct taxes are not levied on the poor at all, and 
 yet the political undertakings which occasion high 
 taxation in all its forms are all conducted under 
 the sanction of the electors under household 
 suffrage. 
 
 The tax on patent medicines has also the 
 support of popular prejudice ; these are articles 
 of uncertain utility, and, as patented, they have 
 an element of monopoly. The taxes on dried 
 currants, coffee, and cocoa, all articles of foreign 
 production, could not be defended on sentimental 
 grounds. Popular sentiment is in no way 
 hurt by the tax of 3d. a pack on playing 
 cards. 
 
 The tax on sugar, revived in 1901, was 
 defended partly on the ground that the limit of 
 profitable taxation had been reached elsewhere. 
 Yet the article is not only everywhere a necessary, 
 it is a material of manufacture ; and the fiscal 
 policy of this country since 1842 and 1846 had 
 been to avoid the taxation of raw material, when 
 the finished article could be reached at all. 
 To tax a material is necessarily to multiply 
 the burden of the taxes beyond the gains of 
 
142 TAXATION [chap. 
 
 the treasury, for the increased clearness of the 
 material causes an increased dearness of the 
 finished article by burdening the successive 
 intermediate producers. Something similar 
 might be contended in the case of the coal 
 tax. A tax on exports seems out of keeping 
 with the financial policy prevailing since 1846; 
 England was to be the emporium of the world. 
 That we should of ourselves take any steps to 
 hinder her from being so, would seem to be a 
 needless anticipation of a remote, if perhaps 
 inevitable, destiny. 
 
 Export Duties. — Only a very large gain to 
 the treasury in times of very great pressure might 
 be thought to justify the revival of export duties. 
 Economically, the same defence has been made 
 for them as for import duties, that they will be 
 paid by the foreigner. This would be most 
 nearly true when {a) the taxed export is indis- 
 pensable to the foreigner, or not easily replace- 
 able by a substitute ; and when (b) the sellers 
 of the taxed import cannot dispense with our 
 market, and must either keep the old prices, 
 in spite of the tax, or lose our custom. 
 Modern casuistry has pointed out that, in 
 both cases, if the assumptions are correct, the 
 foreigner pays the tax. The principle is really 
 the same as between private dealers ; the most 
 urgent demander will make the most concessions. 
 
vir.] EXPORT DUTIES 143 
 
 and therefore the price will move against him. 
 If a community can be quite sure that the 
 demand for a given article of its production is 
 necessarily more urgent on the side of the 
 foreigner than its own demand for the equivalent, 
 then it may lay a tax up to the limits of the 
 greater urgency without abating its prices in 
 proportion. What the limits are, will be a 
 matter of precarious calculation. The export, 
 till the limits are reached, can be sold at the 
 old prices increased by the amount of the tax, 
 the foreigner being willing to pay the higher 
 price. He is supposed, in fact, to be in the 
 position described above of a producer stimulated 
 to better methods of production by a new 
 obstacle. In the case of the taxed imports, 
 the articles, being supposed to be in sore need 
 of our market, will be reduced in price by the 
 exporting foreigner in order that, along with the 
 tax, they may cost no more to us than before. 
 Such a defence can be made of the revived 
 registration duty of is. on imported corn. 
 But, apart from the danger of mistake in our 
 calculations of the limits of urgency, there is an 
 objection in the nature of the article taxed ; it 
 is a necessary of life. When the registration 
 duty was abolished in 1870, the arguments for 
 abolition were that, though a very small duty, 
 and not intended for protection, it had really 
 
U4 TAXATION [chap. 
 
 told for protection, and it had hindered our 
 large ports, especially London, from becoming 
 emporia for the grain trade. If we really 
 desire to facilitate registration, we ought to 
 impose a nominal registration duty on all 
 goods whatsoever imported from abroad, and 
 not on one class of goods only, and a class 
 which is a necessary of life. 
 
 In practice, the calculation of the limits of 
 urgency can never be exact ; and, in countries 
 where export and import duties are more 
 familiar than with us, they are not defended on 
 purely economical grounds. It is often admitted 
 that import duties in particular cost the country 
 a sacrifice, namely the sacrifice, to the con- 
 sumers, involved in higher prices ; but the cost 
 is represented as worth incurring on political 
 or social grounds. It may, in fact, be thought 
 desirable that certain weak industries should 
 be supported at the expense of the other 
 strong industries. All protection is a con- 
 fession of weakness. But after many years 
 the protected industries may, it is thought, 
 become stronger. It is conceivable that this 
 may happen. A country like the United 
 States, which has many strong industries, can 
 well afford to support a few weak ones. But 
 our own experience would rather show that to 
 be once protected is to be always in need of 
 
VII.] IMPORT DUTIES U5 
 
 protection ; and to protect a few is to be called 
 upon, in equity, to show cause why we do not 
 extend the same charity to all who suffer from 
 competition. On the other hand, it is a signifi- 
 cant fact that, within the limits of a state, 
 perfect freedom of trade and removal of all 
 difficulties in the way of intercourse and 
 exchange between district and district are con- 
 sidered a better charity than protective duties. 
 The difference in fact between foreign trade 
 and trade between districts of one country is 
 mainly due to this greater freedom from 
 unnecessary obstacles in the case of the latter. 
 As the world is now constituted, politically and 
 socially, competition could perhaps never be so 
 full and free between foreigners as between 
 members of the same state. But to add to the 
 obstacles already existing to traffic between 
 country and country, would seem to be a wilful 
 rejection of such economies as have been found 
 by experience to be possible between district and 
 district. 
 
 K 
 
CHAPTER VIII 
 
 DIRECT TAXES 
 
 Direct Taxes not wholly Direct. Estate Duties. Legacy Duties. 
 Income Tax. Business Stamps. House Duty. Land Tax. 
 Advantage of a System of Taxation as opposed to a Single 
 Tax. Economic Sacrifice involved in Income and Estate 
 Duty. 
 
 In a sense no tax Is wholly direct or wholly 
 indirect. Even the income tax, by lessening 
 the Income received by the tax-payer, lessens 
 his power of productive or unproductive action. 
 A shifted indirect tax like that on tobacco 
 lessens the power of the consumer, who 
 pays more for his tobacco, to make pur- 
 chases of other luxuries out of what he would 
 have saved by the cheapness of tobacco. It 
 also probably lessens his will to consume so 
 much of the tobacco itself; and thereby affects 
 the demand, and thereby the dealers, and the 
 merchant who has shifted the tax In the first 
 instance. 
 
 But some taxes are mainly Indirect, others 
 
CHAP. VIII.] DEATH DUTIES 147 
 
 mainly direct ; and the direct taxes of our 
 budget are: — (i) The estate duties (yielding 
 13 millions in 1901); (2) business stamps 
 (nearly 8 millions) ; (3) land tax (f of a 
 million); (4) house duty (if millions); (5) 
 property and income tax (nearly 27 millions at 
 IS. in the £ ; (6) personal services, on juries 
 in this country, as in the army in most other 
 countries. 
 
 We may neglect the last as hardly measur- 
 able in money. Such requirements as registra- 
 tion of births and vaccination might be included, 
 and even the requirement of elementary education 
 in the case of parents for their children. But 
 in most of such cases the public benefit is also 
 a private one, and the distressfulness of taxation 
 is hardly felt ; in technical language, it is not 
 ''onerous." 
 
 Of the remainder, the estate duties, with 
 the death duties generally, have become an 
 important source of revenue, especially since 
 1894. 
 
 Death Duties. — Since 1894 there have been 
 ( I ) the estate duty imposed on the sum total 
 of all property passing on the death of the 
 owner, whether property in land or property 
 in movables, and whether settled or not, in 
 place of the probate, estate, account, and suc- 
 cession duties prevailing before that date ; (2) 
 
148 DIRECT TAXES [chap. 
 
 the legacy duty on the amounts received sever- 
 ally by the individual successors, according to 
 their kinship with the deceased owner. 
 
 Taxation, as we saw, is seldom guided by 
 purely economic motives ; and it is not so 
 guided in the legacy duties, which are lightest 
 for the nearest relatives, and heaviest for com- 
 plete strangers. The distinction is of old stand- 
 ing, and shows perhaps that the legislator re- 
 members the political value of family affection. 
 The duties run from i per cent, on legacies to 
 children, to lo per cent, on legacies to strangers. 
 There is exemption of husbands and wives, and 
 of recipients out of an estate which is under 
 ;^iooo, the said estate paying only estate duty. 
 The first exemption is the nearest approach we 
 venture to make in England to the French pro- 
 hibition of the complete disinheriting of children. 
 Fiscal severity, in the case of the estate duty is 
 not tempered by sentiment. The estate duties 
 since 1894 are distinctly and avowedly progres- 
 sive, that is to say, they are higher for the largest 
 estates, lower for the smaller. Small estates are 
 almost exempted ; under ;^ioo entirely so ; from 
 ;^ 1 00 to ;^200 the duty is ;^i ; between ;^ioo and 
 £306, 30s. or I per cent, at choice ; from ;^300 
 to ;^500, 50s. or the same alternative ; from 
 ;^iooo to ;if 10,000, 2 per cent. ; ;^io,ooo to 
 ^25,000, 4 per cent. ; and so on, by an increase 
 
VIII.] INCOME TAX 149 
 
 of ^ per cent, for every ;^2 5,ock) to ^100,000, 
 and from ^icx),ooo to ^1,000,000 by similar 
 leaps, fortunes of ;^ 1,000, 000 and upwards being 
 taxed at 8 per cent. Even settled property is 
 brought under taxation ; and the line formerly 
 drawn between personal property and property 
 in land has been for fiscal purposes finally 
 cancelled. 
 
 Income Tax. — This progression cannot be 
 said to have been an entirely new thing in 
 English budgets. Even in 1853 incomes under 
 ;^ioo paid nothing to income tax; in 1861 for 
 incomes under ;if200 there was a deduction of 
 £to\ in 1 87 1 of ;^8o for incomes under ^300. 
 The free limit was raised to ;^i50 in 1876, 
 and ;^I20 was deducted from incomes under 
 ^400. This ^120 became ;^i6o in 1894, 
 when the free limit was raised to £\6q. 
 Under the present system (of 1899) ;^i6o is 
 the free limit; ;^i6o is deducted from incomes 
 not reaching ;^400 ; ;^i50, from those not 
 reaching ;^500 ; ^120 from those not reaching 
 ;^6oo ; and ^70, from those not reaching ^700. 
 
 In spite of these and other exemptions and 
 allowances, a penny in the £ of income tax 
 realises twice as much as it did sixty years ago 
 when Sir Robert Peel revived the tax. A penny 
 now produces rather more than ;^2, 000,000, as 
 against ;^ 1,000, 000 in the middle of last century. 
 
150 DIRECT TAXES [chap. 
 
 It is a tax which no English Chancellor of the 
 Exchequer could afford to give up. No attempt 
 has yet been made here (as in Switzerland and 
 Holland) to make the income tax positively 
 progressive ; it remains negatively so, if the 
 phrase be permitted, by virtue of the exemptions 
 and allowances ; it is what has been called a 
 degressive tax, becoming less in proportion with 
 the smaller incomes, rather than greater with 
 the larger. The theories on which the pro- 
 gression of the estate duty and the degression 
 of the income tax both depend, are essentially 
 one. The rate of the first rises because, the 
 greater a property, the more can be kept back 
 by the State as a condition of bequest, without 
 excessive suffering to the recipients. The rate 
 of the second falls, because the smaller the 
 income the more valuable to the possessor is 
 any portion of it, however small. The result of 
 the exemptions is to leave untaxed the sum 
 supposed to provide the necessaries of a vigorous 
 life among the poor, and to tax only slightly the 
 wider necessaries of struggling professional men. 
 
 It is impossible, as a rule, for the taxing 
 power to deal with refined distinctions, and 
 distinguish, for example, between precarious in- 
 comes depending on personal efforts, and those 
 that are in the nature of salary or interest. A 
 certain mechanical equality, with all its draw- 
 
VIII.] INCOME TAX 151 
 
 backs, probably comes nearer to equity than 
 an unsuccessful attempt to make minute dis- 
 tinctions between incomes of one and the same 
 amount received under different conditions. The 
 machinery required for such distinctions might 
 for effectiveness be so costly as to reduce the 
 productiveness of the tax, and to render neces- 
 sary a supplementary tax that would fall on 
 other citizens. It is a similar reason that pre- 
 vents systematic and positive progression in the 
 case of the income tax. At present a great 
 part of the taxed income is taxed long before it 
 reaches the final recipients, and taxed without 
 any odious inquisition into their resources. The 
 income tax deducted in this way from shares 
 and dividends and mortgages, landlords' rents, 
 etc., is about three-fourths of the whole proceeds 
 of the tax. Both in this case and in the case 
 of business stamps (on cheques, receipts above 
 £2, bills of exchange, stocks and shares and 
 transfers of them, title deeds and other legal 
 documents, carriage and marriage licenses, etc.) ; 
 the taxation seems to conform to the canons 
 of convenience and economy. 
 
 House Duty, — The incidence of the tax on 
 business stamps is not, however, so clearly 
 direct as in the other case ; and, as for the 
 house duty (dating from 1778), which is de- 
 gressive, like the income tax, but, unlike the 
 
152 DIRECT TAXES [chap. 
 
 latter, seldom varies from year to year, it seems 
 clearly indirect. It is levied (i) on the occupiers 
 of business premises, at 2d., 4d., and 6d. in the 
 £ of annual value, according as the said value is 
 over ;!^20 and under £\o, between £\o and ^60, 
 and over £60 ; (2) on dwelling-houses, at 3d., 
 6d., and 9d., according as they are of the annual 
 value of ^20 to £^0, £\q to £60, and over £60. 
 On the principles of rent already explained, it 
 seems clear that the removal of the house duty 
 would enable the occupier to pay a correspond- 
 ingly higher rent, and would therefore, in all 
 probability, induce the landlord to exact it. It 
 is therefore to the landlord's detriment rather 
 than to the tenant's. 
 
 Land Tax. — The land tax is certainly direct ; 
 but it is usually of very trifling amount. It 
 depends on a fixed sum assigned to each 
 parish, and raised in the same by contribu- 
 tions not exceeding is. in the £, from each 
 proprietor. Begun in 1692 at a rate of 4s. in 
 the £ on all property, personal and real, it 
 soon became a land tax only ; and, as it con- 
 tinued to be levied on the old valuation of 1692, 
 it yielded less and less in proportion to the 
 growth of the national wealth. When Pitt 
 allowed the redemption of it (1798), redemption 
 became common, and half of the whole liabilities 
 have now been redeemed. A redeenied tajc or 
 
VIII.] DISTRIBUTION OF TAXES 153 
 
 even an unredeemed, if long unchanged, cannot 
 be said to be more than an old rent charge on 
 an estate ; but, where it is not redeemed, it 
 lessens so far as it goes the price which the 
 owners can get for their land. 
 
 This whole system of taxation has grown 
 up, like most English institutions, gradually, 
 tentatively, and irregularly, but with the under- 
 stood idea that government must meet its ex- 
 penses with the least possible oppression — in 
 other words, by such pressure as can best be 
 borne and least felt. This idea seems, by our 
 English experience, to be better secured by a 
 number of taxes pressing on different indi- 
 viduals at different points than by a single 
 tax pressing hard on every one or on a few 
 at one point only. We distribute the weight 
 on the body so that it does not weary out 
 one set of muscles, or weary out the whole 
 frame for future efforts. To drop the metaphor, 
 taxation must not, if possible, be allowed to dis- 
 courage and diminish trade and manufacture. 
 Some discouragement cannot be avoided. If a 
 nation has deliberately incurred great expense 
 in a cause which it believes to be worthy of the 
 sacrifice, the means of payment must not be 
 grudged ; but we need not pretend that there 
 is no sacrifice. The income tax, which may 
 be said to vary with the a,bnorma,l or e^tra.- 
 
154 DIRECT TAXES [chap. 
 
 ordinary expenditure, represents a sacrifice of 
 that nature. Is something similar to be said 
 of the estate duty as regards the normal or 
 ordinary expenditure? It has apparently been 
 settled at fixed rates for an Indefinite time ; and 
 the produce has been greater than was expected. 
 It might conceivably represent the permanent 
 increase of expenditure caused by the modern 
 extension of the State's functions, especially the 
 assistance of education and the regulation of 
 industry and traffic. On the other hand, the 
 estate duty undoubtedly cuts down the capital 
 sum of an estate. Is this equivalent to a diminu- 
 tion of production by a lessening of available 
 capital? It seems clear that it may be so, for 
 the use made of the appropriated resources Is 
 seldom a productive one in the hands of the 
 State. It seems also clear that there is an 
 arriere pensde, a double meaning or ** deep 
 design " in the heavy taxation of great estates. 
 Not only does it furnish money to the Ex- 
 chequer, but it tends, however slowly, to cut 
 down the size of the estates ; and there is a 
 general feeling that, whether production thereby 
 benefits or not, it is not desirable that one man, 
 or only a few men, should be placed in the posi- 
 tion of power implied in the administration of 
 great wealth. From this point of view, certain 
 ways of evading the estate duty may be held 
 
VIII.] ESTATE DUTY 155 
 
 to be to some extent a public benefit, for they 
 involve the distribution of wealth before the 
 owner's death, and, it may be, the more active 
 employment of the owner's talents (such as they 
 are) for utilising it in his lifetime. There is also 
 a widespread feeling that what a man inherits is 
 not in the same sense his own as what he has 
 helped to produce. Both of these prejudices are 
 reinforced by the appeal to the part played by 
 the State in protecting all property, and securing 
 the transfer of it to inheritors. It is felt that 
 the State may well demand payment for its 
 services in those two particulars. 
 
CHAPTER IX 
 
 RATES 
 
 Local Expenditure. Relief of the Poor. General Principles. 
 Local and Imperial — Distinction sometimes doubtful, witness 
 Transference and Proposals for such. Basis of Annual Value, 
 Difference of Rate from Tax. Incidence of the Rates. Scotch 
 Plan of Division. Rates for Special Services not really Rates. 
 House as Index of Fortune. Compounding Householders. 
 Municipal Housebuilding. 
 
 Imperial taxes are not the only compulsory 
 payments made by citizens towards the public 
 service. The various municipal, rural, and 
 parochial bodies, with their delegated authority, 
 exact payment for their services to the groups 
 of inhabitants they govern. 
 
 Local Expenditure. — If the cost of defence 
 is the most important item in the imperial budget, 
 relief of the poor is hardly less so in the local 
 budgets. There was spent on this in England 
 iO;|- millions in 1898. Police cost 5 millions ; 
 education, 7|- millions ; roads and streets, and 
 the lighting of them, 9! millions ; sewers. 
 
CHAP. IX.] LOCAL EXPENDITURE 157 
 
 markets, cemeteries, fire stations, and public 
 works of the kind, g^ millions ; gas and water 
 works and tramways, 5|- millions ; harbours 
 and docks, if millions ; improvements, i million ; 
 and official salaries and similar charges, 3f 
 millions ; charges of local debt, 14J millions : 
 total, ;^67,75o,ooo. 
 
 These expenses are met (i) by rates, to the 
 amount of 2>7i millions in 1898 ; (2) by a share 
 in the proceeds of imperial taxation, to the 
 amount of 1 1 millions ; (3) by the profits of 
 municipal enterprises to the amount of i if 
 millions ; (4) by loans, either raised in the 
 locality under surveillance of Government or 
 advanced by Government itself, to the amount 
 of i3f millions, added to a total local debt of 
 262 millions. This local debt is not likely 
 to decrease ; but, like the colonial debts, and 
 unlike the national debt, it has been incurred 
 in most cases for productive purposes, or 
 permanent sources of public benefit, such as 
 schools, markets, harbour works, artisans' dwell- 
 ings, to say nothing of gasworks and water 
 supply, tramways and electric lighting — in fact, 
 the municipal enterprises that bring in a 
 moderate return or are permanent means of 
 satisfying the primary wants of a civilised 
 people. The returns fall short, however, of pro- 
 viding even the full interest on the debt, and 
 
158 RATES [chap. 
 
 the charges of the latter accordingly are met, 
 like the ordinary local expenses, by the rates 
 and grants. 
 
 Local and Imperial Taxation. — Usage 
 makes us associate rates with local govern- 
 ment and taxes with imperial ; and there are 
 differences in the nature of the two imposts 
 corresponding to the difference in names. But 
 the general principles of taxation are those of 
 all imposts ; indeed they could hardly differ 
 because of less or greater scale, or because of 
 absolute or delegated sovereignty, any more than 
 general principles of economy can be otherwise 
 for a county than they are for a country. As 
 in the State, so in the municipality, there are 
 benefits secured to the citizen which are not to 
 be definitely measured for each citizen separ- 
 ately ; the cases of special benefit and such 
 as can be measured by **fees" are perhaps more 
 common in local than in imperial government, 
 and more of the services rendered seem near 
 and tangible, an increasing number (in the last 
 generation) being of the nature of productive 
 industrial work. The growth of the functions 
 of the local authorities, combined with the narrow- 
 ness of their basis of taxation, must be held as 
 in part at least excusing the transference of 
 burdens from the localities to the central body 
 that has taken place in recent years. But there 
 
IX.] LOCAL AND IMPERIAL IMPOSTS 159 
 
 has also been a real uncertainty as to the line 
 of distinction between a local and an imperial 
 concern. Offers have been made by the central 
 government to part with the land tax or the 
 house duty (1871), and certain State taxes 
 have been devoted to the assistance of the rate- 
 payers. The reasons advanced for transference 
 of local burdens to the State are various. Some- 
 times it is pleaded that the management of the 
 State will be better than that of the smaller 
 body, as in the case of prisons (transferred 1877). 
 In the case of the London Metropolitan Police 
 the charge is local, but the management imperial, 
 from a reason which has little to do with economy. 
 Sometimes it is argued that the subject of the 
 charge is of general concern to the nation, and 
 should therefore be in charge of the State. This 
 reasoning would prove too much, for good local 
 government (it might be said) is undoubtedly 
 of general concern to the whole nation, yet 
 few would deny that the State does better in 
 exercising a general regulative influence on 
 local governments than it would do by taking 
 the whole work of local government on itself. 
 Again, it is pleaded that particular classes of 
 citizens are unfairly burdened by the present 
 system of rates. The natural remedy would 
 surely be to alter that system rather than to 
 apply for relief to the central government. The 
 
160 RATES [chap. 
 
 practice of allotting large portions of the money 
 raised by taxes to the local authorities in relief 
 of the rates seems to be very unfortunate. It 
 complicates (if not confuses) the national 
 accounts. It leaves the local bodies freedom 
 to spend (it may be to waste) what they escape 
 the odium of exacting in their own neighbour- 
 hoods. It leaves governments open to the 
 temptation of bribing the localities into acqui- 
 escence in existing financial arrangements. 
 
 The desire to shift a burden from local rates 
 to imperial taxes springs probably in the main 
 from the desire to avoid an obvious burden for 
 the sake of one that seems certainly less when 
 considered by itself, being a fraction of a greater 
 total. But the more widely this shifting is 
 done, the more certainly will the resulting share 
 of imperial taxes approach in amount the rates 
 which they replace. The taxes, it is true, are 
 on a different basis from the rates ; and perhaps 
 there may be ground for the impression that the 
 transference is effected with a deliberate view to 
 the reaching of personality, which has been, since 
 1840, legally exempted from rating. At present, 
 and in most places long before 1840, the rates 
 have been confined to lands, houses, and mines 
 as the most visible and tangible property. There 
 were practical difficulties in assessing stock- 
 in-trade and movable effects ; except in the 
 
IX.] BURDEN OF THE RATES 161 
 
 doubtful case of machinery, there has been no 
 attempt to rate these. The rating has fallen 
 on the annual value of houses, lands, and mines. 
 Local taxation proceeds by a levy pro rata on 
 the amount of this annual value, which roughly 
 corresponds to the rent. 
 
 Burden of the Rates, — Where there is occu- 
 pation at a rent, in Scotland the rates are 
 divided between landlord and tenant ; in Eng- 
 land, the tenant or occupier bears nominally 
 the whole burden, the owner doing so 
 only when he is an occupying owner. The 
 local governing bodies estimate their expendi- 
 ture like the Chancellor of the Exchequer : 
 but they have the great advantage over 
 him that they know what their rates will yield, 
 and can impose them according to their re- 
 quirements with the certainty of getting the 
 amount calculated ; whereas, except in case of 
 the land tax and (with reservations) in the 
 case of the income tax, the Chancellor of the 
 Exchequer feels no such certainty. This is 
 partly because in form the local imposts are 
 now all direct ; if octrois, like the London coal 
 and wine duty abolished in 1889, were to 
 become as common again in this country as 
 they are in France or Italy, they would bring 
 with them all the uncertainty of indirect taxes 
 as regards their productiveness to the public 
 
 L 
 
162 RATES [chap. 
 
 exchequer, and (it might be) as regards their 
 incidence. 
 
 The incidence of the rates can be esti- 
 mated with fair probability. Where a house 
 of £120 of annual value pays /^^ in house 
 duty and jCs^ in local rates it might seem 
 that the house duty, being a fixed charge 
 on all houses according to the rent, would 
 not affect the demand for houses, and would 
 therefore stay where it was put ; but the local 
 rates, being different in different localities, 
 might affect the demand by driving tenants 
 from districts of high rates to districts of low. 
 The truth probably is, that in large towns we 
 are so accustomed to the phenomenon of a 
 growing demand for houses that we allow this 
 phenomenon to conceal the virtual influence of 
 both house duty and local rates on the demand 
 for houses at a given rent. The rent of houses 
 is in this respect exactly like the rent of land, 
 that it is in proportion not to what the landlord 
 would like to get but to what it is worth while 
 (or even what it is possible) for the tenant 
 to pay. If the house duty were removed and 
 no substitute imposed, the tenant could afford, 
 in the case supposed, to pay ^5 more rent ; 
 if local rates disappeared, he could afford to 
 pay ^36 more rent. If the rates have risen 
 during his lease, he must bear the burden of 
 
IX.] THE SCOTCH SYSTEM 163 
 
 them. At the end of his lease, unless he has 
 been paying less than the highest possible rent 
 before or unless his resources have been increas- 
 ing in the interval, he must have his rent reduced 
 or cannot renew his lease. It seems clear that 
 (i) on entering on his lease he undertook to pay 
 a certain rent, with knowledge that the rates must 
 be added to it, to an amount estimated ; (2) on 
 renewing his lease he would demand a lower 
 rent if his estimate of the rates on the former 
 occasion had fallen short of the truth. In both 
 cases allowance would be made by him for the 
 burdens of the house before he offered ;^i20 a 
 year for the right to occupy it. Without these 
 burdens the rent might have been ;^I25 or 
 £161. At the beginning of a lease and at the 
 end of it, the incidence would seem to be on 
 the landlord. 
 
 TAe Scotch System, — Where an increase of 
 rates has happened during a lease, the pressure 
 undoubtedly falls on the tenant, except on the 
 Scotch system, which divides the burden. It 
 might prevent much heart-btirning if the rates 
 were levied directly on the landlords, on whom 
 it seems clear they ultimately fall ; and in this 
 case they should of course have a representa- 
 tion on the rating body. The Scotch plan may 
 imply recognition of a distinction between rates 
 that are so spent as to give immediate benefits 
 
164 RATES [chap. 
 
 to the tenants, and rates which tend rather to 
 improve the circumstances of the property and 
 therefore the future income of the landlord from 
 it. The latter rates have been variously esti- 
 mated from a third to a fifth of the whole. The 
 Scotch division is only a rough approximation 
 to the true proportion which might in fact differ 
 from district to district ; but it enables the tenant 
 whose rates have risen in the middle of a lease 
 to bear with greater patience the remainder of 
 the burden that he cannot throw off till the end 
 of the lease. Economically, the importance of 
 the immediate incidence is much greater now 
 than in former times ; the need of seiz- 
 ing the advantage of present opportunities 
 is better recognised ; and just for that reason 
 the weight of immediate burdens is more 
 keenly felt. 
 
 This reasoning applies to rates in the strict 
 sense of the word, compulsory payments for 
 public purposes exacted on the basis of the 
 annual value of lands and houses. The case is 
 somewhat different where the local authorities 
 own the gas, water, or electric lighting works, 
 and charge what is often called a rate for services 
 of the kind. The payment is really made for 
 particular services rendered to the particular 
 ratepayer, and the incidence of such charges 
 falls rightly on the receivers of the services. 
 
IX.] COMPOUND HOUSEHOLDERS 165 
 
 If the charges were higher, however, in one 
 locality than in another, this unusual costliness 
 might affect the demand for houses by affecting 
 the tenants' power to pay as high a rent as 
 elsewhere. It is the more easy to detect the 
 operation of such a cause, because, at least in 
 the case of gas and electric lighting, the basis 
 of charge is not the narrow basis of annual 
 value but the ordinary commercial basis of 
 identical payments for identical services. The 
 basis of annual value is retained for rates 
 proper, partly from the notion that a man's 
 house is the best index of his wealth, partly 
 from the long experience of local taxing-bodies, 
 showing them that this basis gives the 
 surest and easiest machinery for reaching the 
 resources of the inhabitants whether in town 
 or country. It is really on the whole a faithful 
 index for the middle classes, who are the great 
 bulk of the ratepayers ; it is less so for the 
 very rich, and hardly so at all for the 
 very poor. 
 
 Compound Householders. — The very poor in 
 our great towns seldom feel the direct burden 
 of the rates. Landlords of industrial dwellings, 
 tenement houses, and, generally speaking, 
 blocks of houses accommodating many families 
 under one roof, have generally charged them- 
 selves with the rates ; and their tenants are 
 
166 RATES [chap. 
 
 supposed to "compound" for the rates in 
 the rent they pay for their rooms. Since 
 1867 these tenants possess a vote, and yet 
 have no obvious interest in reducing rates, 
 and no direct burden from them. We should 
 naturally expect, therefore, that municipal enter- 
 prises involving increase of rates should be more 
 cordially supported by such tenants than by 
 ordinary ratepayers ; and as a rule this is so. 
 From time to time the cry is raised, as a rule 
 without reason, that the landlords will raise 
 the rents of tenements if the rates are raised ; 
 but, if the landlords could have got the additional 
 rent by simply proposing to raise the rent, in 
 most cases they would have made the proposal 
 without the pretext of the rates. In most cases, 
 it may be assumed that the tenants are giving 
 at present as much as they can afford to give. 
 At the same time, it is true that, in the case 
 of the lowest classes of houses, the landlords 
 have the greatest ease in exacting a rack rent, 
 because the tenants are often so placed that 
 they must have houses close to their work, 
 and cannot lightly seek other lodgings. Any 
 pressure put on the landlord to induce him to 
 raise rent is thus at once translated into a 
 pressure on the tenant ; and the tenant in such 
 cases has seldom the protection of any agreement 
 or lease, a protection almost inconsistent with 
 
IX.] MUNICIPAL DWELLINGS 167 
 
 the system of compounding. If municipal house- 
 building were to afford him this protection, it 
 might be desirable because of the peculiar needs 
 of extreme poverty, and its special claims on the 
 wealthier members of society. But it must be 
 clearly acknowledged that, if the builders of muni- 
 cipal dwellings are, however rightly, to be deprived 
 of the powers of exaction possessed by ordinary 
 landlords, their houses cannot be expected to yield 
 the profits of ordinary house -properties of the 
 kind. If a community comes to the conclusion 
 that the sacrifice of such profits is more than 
 repaid to them in the improved conditions of life 
 thereby secured for the poor, it will continue to 
 incur the sacrifice. But we piust remember that 
 only a rich community could afford such self- 
 denial. Though the proverb of the goose and 
 the golden eggs, like other proverbs, is only half 
 a truth, it is a half of the truth. Taxation and 
 rating may reach the undefined point where the 
 disadvantages of them exceed the advantages 
 secured by them ; and, even if all communities 
 were equally extravagant in this matter, and 
 competition seemed unaffected, still there would 
 be a temptation to a very undesirable kind of 
 evasion of imposts, the dispersion or dissipation 
 of private resources. 
 
 It might be argued that we escape the 
 difficulty by going on unto perfect socialism 
 
168 RATES [chap. ix. 
 
 or even to communism. But to advance to this 
 point is to advance into an unknown world. It 
 seems at present the safer course for the demo- 
 cracy, that it should allow the growth of private 
 wealth by private enterprise, and continue to tax 
 it nearly but not quite up to the point where the 
 productiveness of taxation would begin to fall off. 
 
CHAPTER X 
 
 THE FINAL ISSUE 
 
 Does all point to Socialism ? Modem Socialism and Anarchism. 
 Do Trusts lead to Socialism ? The Social Question, the " Sub- 
 merged Tenth," and the Unsatisfactory Relation of Employer 
 and Workman. Co-partnerships and Co-operation. Effects 
 of a Growth of Capital beyond Population. Friction in the 
 Transition from Poverty to Comfort. Is there a Fallacy in 
 Saving ? 
 
 It has often been thought that the many 
 ways of modern economy all point in the direc- 
 tion of central management. Action in indus- 
 trial matters seems to tend nowadays to become 
 joint action. Interests are more and more inter- 
 twined ; and, as we have seen, the labours of 
 production are more and more intertwined also, 
 so that it is difficult to say what is the pro- 
 duct of an individual, or even what is his 
 contribution towards a product. 
 
 It might be answered, of course, that to be 
 social is not to be socialistic, and that deliberate 
 attempts to bring about a result in matters of 
 
170 THE FINAL ISSUE [chap. 
 
 industry have been less happy than *' fortuitous 
 concourse" of separate endeavours. On the 
 other hand, it is plausible to rejoin that 
 not only in politics and law, but in industry, 
 the tendency has been to quit ** status" or 
 custom for ''contract" or deliberate arrange- 
 ment ; much that was at first instinctive and 
 customary has been reduced to deliberate con- 
 vention ; there is less drifting and more steering ; 
 — if, therefore (it is argued), we know what we 
 are doing, we should be frankly socialists. 
 
 Modern Socialism. — But modern socialism 
 means more than a clear consciousness of 
 what we are doing when we combine. It 
 means an attempt (a), by means of a central 
 governing power, to secure such a distribution 
 of wealth as will bring the most widely 
 extended benefit ; (b) with a view to this 
 better distribution, to secure a better organisa- 
 tion of production. Collective wisdom (Tesprit 
 de la ruche) is no fancy. As Aristotle long ago 
 remarked, there is a wisdom in a body of men 
 that is not to be found even in the best of the 
 units taken separately. The principle has been 
 applied in industrial economy long ago, though 
 unconsciously. The various developments of 
 division of labour have not, as a rule, been 
 deliberate, but rather analogous to the growth 
 of a custom. If the collective wisdom is now 
 
X.] THE PROBLEM OF SOCIALISM 171 
 
 to try to bring about the development of industry- 
 del iberately, and if the community is to be itself 
 the capitalist projector and employer, will the 
 result be better? 
 
 The doctrine of the first founders of social 
 democratic or scientific socialism was professedly 
 inconsistent with a preliminary constructive 
 policy ; according to them, events were bound 
 to bring socialism, and human efforts availed 
 little or nothing. It seems curious that, after 
 the great change, we should be bound, after all, 
 to pass into a policy of deliberate construction, 
 for a socialistic government could hardly, by 
 definition, content itself with regulation. But 
 many of the supposed essential doctrines of 
 socialism have proved to be accidental ; and we 
 do not refute socialism by proving that its leaders 
 have made mistakes. Whether humanity could 
 have checked the growth of the modern industrial 
 system or not, the question remains : — Would that 
 system be better replaced by a socialistic system ? 
 
 Analogy Helps us Little. — The answer is 
 that, in adopting the latter, we are passing 
 from the known world to what may fairly be 
 described as the unknown. We have had no 
 socialism, in the full sense of the word, yet 
 realised either in England or elsewhere, on the 
 scale of modern states and modern industry. 
 We find something analogous to a central 
 
172 THE FINAL ISSUE [chap. 
 
 government in an ordinary family, it may or 
 may not be for industrial purposes. We have 
 had central government within the ordinary 
 factory, but in very few cases democratic, and 
 therefore, except in these few, not really socialistic 
 in principle. Where the democratic element is 
 absent there is no proper analogue of modern 
 socialism. 
 
 Municipal Socialism, — We have had, how- 
 ever, central government of particular industries 
 within towns or districts, for the benefit of 
 all, and therefore in true analogy with socialism. 
 But the conclusion to which we are pointed 
 by the success of municipal socialism is 
 no more than this, that in a certain number 
 of selected industries a direction by the sub- 
 ordinate local government is possible and 
 often profitable. Whether or not the direction 
 of all industries could be undertaken with 
 advantage by municipalities is still uncertain ; 
 and it is still more uncertain whether, on the 
 analogy of municipal socialism, we could rightly 
 press for a direction of all industries, municipal 
 or otherwise, by the sovereign central body. As 
 events have gone, it would seem (i) that only 
 a small number of industries can come under 
 municipal socialism, and (2) that the sovereign 
 central body is better employed in watching the 
 municipalities than in rivalling or superseding 
 
X.] THE SOLUTION BY ANARCHISM 173 
 
 their activities. Its care may detect and prevent 
 inequalities of treatment and tyranny over 
 minorities or individuals. The sovereign body 
 itself would have none to control it if it did the 
 work of construction ill, and we have still to 
 wait experience of its constructive powers. It 
 seems better to confine it to the work of regula- 
 tion, which long-standing experience tells us 
 it can accomplish with very fair success. 
 
 A Rival of Socialism. — The present condition 
 of industry and distribution is not ideal. But 
 socialism is not the only way of amendment. 
 Socialism itself is confronted in our time with 
 Anarchism as its nearest rival. The anarchists 
 agree with the socialists in despairing of things 
 as they are. But, instead of desiring to remove 
 evils by means of an altered government made 
 omnipotent and directed democratically, the anar- 
 chists regard government itself as the arch-enemy 
 and the root of all evil. The ideal society is a 
 society without government, or at least (for some 
 of them) with the least possible government. 
 There are three classes of anarchists. There is 
 (i), the party of violence, who, from hatred of the 
 bad consequences inseparable (as they think) from 
 all government, would destroy all government and 
 simply accept the unknown issue. There are 
 (2), the extreme individualists, or (as we might 
 call them) philosophical anarchists, like Mr 
 
174 THE FINAL ISSUE [chap. 
 
 Herbert Spencer, who would confine govern- 
 ment to the function of keeping order, and 
 securing a free course and fair field for com- 
 mercial competition. There are (3), the mod- 
 erate anarchists, like Prince Krapotkin and 
 Count Leo Tolstoi, who have nothing to do 
 with violence, but equally have nothing to do 
 with the individualism of Mr Spencer. 
 
 The Moderate Anarchists. — The moderate 
 anarchists look forward to a time when the 
 world will dispense with central governments, 
 perhaps even with the smaller governing bodies 
 of the towns and districts. They allow that, 
 till the times are ripe for the disappearance of 
 all governments, we may be content with small 
 autonomous communities, where by and by the 
 governments will gradually make themselves 
 superfluous, and leave society organised of itself 
 without a head. 
 
 This third class of anarchists are the really 
 formidable critics and rivals of socialism. They 
 point out that socialism might too easily become 
 tyrannous, with the tyranny of the majority over 
 the minority, and also that the officials of the 
 socialistic government would be as likely as 
 other officials to be an obstacle to progress and 
 new ideas ; they might also be tempted by 
 large powers into an abuse of their power ; the 
 incidental evils of every representative system 
 
 ^ 
 
X.] SOCIALISM AND ANARCHISM 175 
 
 would not necessarily disappear, because the 
 professional politicians or trusted leaders were 
 servants of democracy. 
 
 On the other hand, the socialists seem to be 
 right in maintaining that the tendency of human 
 progress has been towards large communities, 
 governed by great central authorities, with com- 
 mand of fleets and armies. Their grievance is 
 that the command has not been in the right 
 hands, the hands of all the people governed. 
 Under the representative system, defective as 
 it is, a remedy will be found. The rule of 
 democracy will come. 
 
 In comparing the claims of the two rivals, 
 we must remember that actual experiments of 
 anarchistic no less than of socialistic govern- 
 ment are wanting. Where communities of either 
 sect have occurred (as in the United States), 
 they have pursued their career under the toler- 
 ance and protection of great States. Without 
 the protection of great armies and fleets under 
 powerful central governments, there would, at 
 present at least, be no security for the life of 
 such communities ; to dispense with such pro- 
 tection would be suicide. If we are asked to 
 assume that men will cease to desire aggression, 
 we are asked to believe in a change of which 
 there is little sign at present in human nature. 
 If men were wise and good, even the present 
 
176 THE FINAL ISSUE [chap. 
 
 system might be tolerable. Because they are not 
 so, the present system is hardly tolerable ; but, 
 equally, because they are not so, the new world 
 of anarchism is hardly possible. 
 
 Socialism, therefore, though less flattering to 
 the vanity of the race, is more in keeping with 
 human nature than anarchism. But it does not 
 follow that socialism itself is inevitable. Socialists 
 may point to the persistent growth of trusts and 
 large industrial combinations over the civilised 
 world in the last quarter of a century. When 
 industries are at last all combined in the hands 
 of a few individuals or companies, it will be easy 
 (we are told) for the central government to take 
 the final step, and establish one government trust 
 for them all. But, as the combinations are often 
 international, or are at least formed in disregard 
 of the distinctions of nations, they could not be 
 easily superseded by anything short of a com- 
 bination of governments ; and the political diffi- 
 culties of such a combination, or even of joint 
 action with any permanency in it, seem almost in- 
 superable. If the action be of one nation only, 
 the difficulties are sufficiently serious. At present, 
 the joint enterprises have the energy and initi- 
 ative of private commercial ambition ; we have 
 no experience to show that government would 
 possess these qualities. Moreover, at present, 
 even the largest trusts are controlled by the 
 
X.] THE SOCIAL QUESTION 177 
 
 known possibility of private rivals. A govern- 
 ment trust would have no rivals, and the 
 temptations to misuse of power or to neglect 
 of opportunities would be overwhelming, even 
 in a democratic state. 
 
 The power of regulation, as distinguished from 
 construction, has never been abdicated by modern 
 states ; and it seems sufficient for the occasion, 
 if trusts should become a public danger. 
 
 The Social Question, — Yet we must not be 
 content with a negative conclusion, or imagine 
 that because the roads are not leading either 
 to socialism or to anarchism they are not lead- 
 ing in any new direction at all. Socialism and 
 anarchism arise out of the fact that there is 
 a ** social question," or, in other words, certain 
 standing difficulties in the present organisation 
 of industrial society. It is enough to mention 
 two of these difficulties. 
 
 Unskilled Labourer. — In the first place, the 
 industrial progress of the last century, which 
 has improved the real as well as the nominal 
 earnings of the skilled artisan, seems to have 
 done very little for the unskilled labourer, whether 
 in manufacture or in agriculture. A large pro- 
 portion of our unskilled labourers earn no more 
 than enough for themselves and families to 
 keep them in bare life, not enough to keep 
 them in full vigour of mind and body. In the 
 
178 THE FINAL ISSUE [chap. 
 
 cases where the most elaborate and careful in- 
 quiry has been made, it seems true that such 
 labourers are not underpaid in consideration of 
 the work they can do ; they earn little because 
 they are only fit to earn little. Till they are fit 
 to do better work, can they hope to receive larger 
 recompense ? Till they receive larger recompense, 
 can they be fit to do better work ? Such is the 
 dilemma. If it were only a question of wages, 
 the experiment of anticipating the fitness would 
 probably be ventured, and the fitness presently 
 secured. But it is a question of skill as well as 
 strength, for no labour is entirely unskilled, or 
 rather, no labour becomes so without injury both 
 to the workman and the work. It is a question 
 of mental nourishment as well as physical. There 
 must be education ministering to the mind as 
 well as a larger supply of food to the body. 
 At all hazards, for the public advantage, we 
 ought to secure these benefits to the rising and 
 even to the older generation. 
 
 Employer and Employed. — One difficulty 
 would then tend to disappear. There remains 
 another, the relation of working men to 
 their employers. We need not exaggerate 
 the drawbacks of the workman's position. 
 Exaggeration is a permissible form of rhetoric, 
 but not of logic, and we only deceive ourselves 
 and others by speaking of labour for wages as 
 
X.] THE TWO NATIONS 179 
 
 a kind of slavery. But, though the workman 
 is no slave, he is not free from hardships, and 
 hardships not inseparable from the lot of man, 
 but traceable to conditions that seem transitory. 
 The old idea that every nation was in reality 
 " two nations," the poor and the rich, is not of 
 much use even as a partial truth. Each of the 
 two is much subdivided ; and it is hard to say 
 on which side the fractions would be found in 
 event of a struggle between rich and poor. The 
 sense of inferiority of caste is often more galling 
 than that of poverty, and it exists quite as much 
 between certain strata of the wealthier classes as 
 between poor and rich generally. The wisdom 
 which will ignore caste is not to be produced by 
 any economic change, and the folly which harps 
 on it admits only of a spiritual cure. But the 
 present position of the British workman has more 
 substantial drawbacks ; the employer can be very 
 poor without escaping the odium of an employer's 
 position ; and the employed [can be well off with- 
 out losing repugnance to the position of a hired 
 servant. There is in both of them a latent con- 
 sciousness that men cannot be used as mere 
 machines or tools for serving another man's 
 ends without losing some of their dignity as 
 human beings. So long as men have no interest 
 in the business where they are employed, and no 
 concern in the direction of it, perhaps not even 
 
180 THE FINAL ISSUE [chap. 
 
 any comprehension of the nature of it, it is not 
 unnatural that they should feel as if it were no 
 affair of theirs, and they were under masters, not 
 leaders. It is otherwise under the best employers, 
 but only because the best employers choose to 
 make it otherwise. The men have seldom any 
 security that the work of the benevolent despot 
 will not be undone by his successor. It would 
 seem desirable they should have that security. It 
 is possible in ordinary private businesses, and still 
 more easily in the business of public companies, 
 to introduce a system of partnership between 
 employer and employed, in virtue of which 
 partnership the workman acquires both a 
 pecuniary interest in the business, and (there- 
 by) a voice in the direction of it. There are 
 even a few instances, especially in the Midlands 
 and North of England, where working men have 
 themselves organised and successfully carried out 
 a manufacturing business, preserving such con- 
 ditions. There are instances both in this country 
 and abroad where private employers have secured 
 this result. For the better harmony between all 
 classes of the nation, it is desirable that such 
 partnerships should become the rule and not 
 the exception ; and, though such a time is 
 distant, some progress has been made in this 
 direction. 
 
 Progress of the Working-Classes. — Nearly 
 
X.] THE CO-OPERATORS 181 
 
 every scheme that has been devised for 
 reforming our industrial system on a great scale, 
 involves the assumption that the working-classes 
 shall possess at least as much self-restraint, 
 instruction, and intelligence as is supposed to be 
 characteristic of the middle classes, especially of 
 the employers, at present. There seems reason to 
 believe that in these respects the working-classes 
 have been gaining ground. The phenomenon 
 of a Co-operative Union, including 1500 work- 
 men's co-operative societies, successfully managed 
 by working men, is an unmistakable proof that 
 the latter have already the qualities necessary for 
 the conduct of a shopkeeping business. The 
 English Co-operative Wholesale Society, with its 
 large factories, is a proof that they have shrewd- 
 ness enough to conduct even a manufacturing 
 business with hired help on the ordinary princi- 
 ples of a joint-stock company. Something more 
 is wanted if the said manufacturing business is to 
 possess the features of partnership in the sense 
 above-described. This has been recognised by 
 the Scottish Co-operative Wholesale Society ; 
 but the idea of such a ''co-partnership" has 
 not yet become familiar. Yet something of 
 the kind would seem to be a needful preparation 
 for the ''co-operative commonwealth" desired 
 by socialists. 
 
 Malthus Notwithstanding. — If the end of 
 
182 THE FINAL ISSUE [chap. 
 
 our difficulties is to be either socialism or 
 some system that will give us the same 
 results as are desired by socialists, are we to 
 be confronted with the argument used against 
 Utopias a hundred years ago so effectively by 
 Malthus ? Some economists, even in our genera- 
 tion, have regarded the increase or decrease of 
 population as the determining factor in the 
 prosperity of the poorer classes. They have 
 anticipated a stationary state of population in 
 which the growth of capital beyond population 
 will raise wages and make the employed the 
 real masters of the situation. 
 
 It is true that the increase of population can 
 at times be excessive. It has been supposed by 
 some writers that such an excess actually serves 
 the interest of the employing classes. But against 
 this we must remember that it is the lowest class 
 of labourers that increases most recklessly, and 
 the excess thus tends to be an excess of the most 
 useless hands. If we extricated ourselves from the 
 dilemma already described in regard to the ''sub- 
 merged tenth," we should probably have freed 
 ourselves from the tendency to excess altogether. 
 Mere restriction of numbers, apart from increase 
 of skill in those left behind could hardly be a 
 clear benefit ; but, if both proceeded together, as 
 they would probably do, the advantage would be 
 evident. Excessive increase of population is now 
 
X.] MALTHUS 183 
 
 perhaps more often an effect of degradation than 
 a cause of it. 
 
 There has been a notable slackening in the 
 rate of increase among civilised nations ; and, 
 from all the circumstances, it seems clear that 
 this is not owing to any sterilising effect of 
 civilisation itself on the physical man, but to a 
 deliberate will impelled by regard to standard of 
 well-being. Meanwhile, as the productiveness 
 of the sources of material wealth has more than 
 kept pace with the population, there can hardly 
 fail to be a mitigation of the intensity of com- 
 petition. There need be no slackening of the 
 spirit of enterprise, for a workman better rewarded 
 is a human being with presumably more hope 
 before him, and therefore with stronger induce- 
 ment to strenuous exertion, as well as more 
 opportunity for acquisition of spiritual wealth. 
 
 Misspent Wages. — If, from whatever cause, 
 the working-classes are really on the way to 
 obtain a larger share in the wealth which they 
 play a large part in producing, we need not 
 be surprised that there should be friction in the 
 time of their transition from their old state to 
 their new. It is a commonplace remark that 
 many workmen do not know how to use a time 
 of prosperity, but spend their earnings lavishly on 
 that which is neither bread nor the means of 
 satisfying the nobler wants of civilised man. 
 
184 THE FINAL ISSUE [chap. 
 
 The usual explanation is that the prosperity is 
 almost always transient, and gives no time for the 
 alteration of habits ; and it is probably true that 
 a continued prosperity is less liable to abuse than 
 a temporary. But, even if the men could at 
 once adapt their habits to new conditions, the 
 market could not at once adapt itself to their 
 new needs. If high nominal wages are to be 
 high real wages, there must be abundance of 
 such goods as can satisfy not the wants of a 
 comparatively small body of rich men, but the 
 wants of the multitudes of workmen in question. 
 The great factories and other means of large 
 production must be occupied even more than 
 at present with provision for the masses ; or 
 else high wages will not mean to the masses 
 correspondingly large resources. 
 
 No Fallacy in Saving. — The alternative of 
 saving would seem to be a counsel of perfection ; 
 and the practice of saving has been indeed 
 condemned or discouraged by some modern 
 writers who are haunted by a fear that it will 
 cause over-production. Over-production seldom 
 means more than miscalculation and maladjust- 
 ment. Perhaps, in this case, the co-operative 
 societies give us guidance how to avoid it in the 
 case of working men. Whether in the hands 
 of the wholesale societies of England and 
 Scotland, or in the hands of the small co- 
 
X.] NO FALLACY IN SAVING 185 
 
 partnerships, the savings invested by the work- 
 ing men in co-operative production are chiefly 
 employed to provide goods wanted by working 
 men and their families, whether it be shoes and 
 stockings, biscuits, bicycles, clothes, or furniture. 
 The producer is in such close touch with the 
 consumer that mistakes are not likely to occur 
 on a serious scale. That it would be unwise 
 to save in order to speculate on the Stock 
 Exchange does not prove that it is unwise 
 to save in order, by investments, to provide 
 for the known wants of a known market. 
 It is a truism that, if all did nothing but save, 
 interest would disappear and no one would have 
 a motive for saving. Saving is hardly an end 
 in itself. We save now in order that we or ours 
 may spend by and by, at a time when the thing 
 saved will be more needed or can be used to 
 better purpose. Judicious spending is, of course, 
 as real an economy as judicious saving ; but 
 the saving will to all time be an essential con- 
 dition of all economy, and, as the harder condition 
 of the two, can never safely be discouraged. 
 
 That particular form of saving which con- 
 sists in provision for the future vicissitudes of 
 our own lives or the future needs of a growing 
 family, can hardly be carried to excess over the 
 whole field. In the case of the individual, it 
 rQsts with the sober judgment of the individua,l 
 
186 THE FINAL ISSUE [chap. 
 
 to make a fair balance of present and future 
 needs which no one can estimate so well for 
 him as he for himself. That a man should 
 stint himself and his too much in the present 
 for the sake of the unknown future, is exceptional. 
 It is unlikely that, over the whole field, the error of 
 calculation should be at the expense of the present. 
 In looking at the consequences of over-parsi- 
 mony, we must remember (i) that saving in 
 our time means not hoarding, but investment, 
 investment carried out by our banker if not 
 by ourselves ; (2) that men are not all of one 
 age, and even on the bold assumption of a too 
 provident generation of youths, there would 
 always be alongside of them a generation of older 
 men who had reached the time for spending. 
 
 Rate of Interest. — For like reasons, the rate 
 of interest, which has beyond doubt some effect 
 even on the saving against a rainy day and old 
 age, is not likely to be brought down simply 
 by the largeness of the sums saved for this 
 purpose. It may fall so far as it depends on 
 profits, for it is probable that from time to 
 time the new discoveries and inventions that 
 keep up profits will have their ebb-tide. 
 But it is not likely that the desire for making 
 provision against the future will ever out-run 
 **the passion for present enjoyment," in the 
 great body of citizens. It is perhaps more 
 
X.] THE FUTURE 187 
 
 likely, and certainly more desirable, that the 
 idea of present enjoyment should include so many 
 more of the means of spiritual enjoyment, say 
 in art, science, and literature, that a new direction 
 would be given to production for present wants, 
 and perhaps an increasing number of individuals 
 would find out for themselves that spiritual 
 wealth is ''accumulated" to better purpose than 
 such material resources as in no way minister 
 to it. 
 
APPENDIX 
 
 CHAPTER I 
 Note I 
 
 The fact of Division of Labour has been noticed in the litera- 
 ture of all nations. It is treated, for example, in Plato's Republic^ 
 Book II. Man carries it further than bees or ants, though these 
 creatures have often been held up as an example for his imitation. 
 Maeterlinck {LAbeille) has shown us how near an approach to 
 human ingenuity has been made by the bees in their social 
 organisation. It is he who speaks oi esprit de la ruche. 
 
 Adam Smith {Wealth of Nations^ Book I., chap. i. seq^ has 
 been most successful in drawing attention to the many economic 
 aspects of division of labour. He has even been (wrongfully) 
 accused of absolutely identifying division of labour with capital 
 (K. F. Rosier, Grundlehren der von Ad. Smith begriindeten Volks- 
 wirthschaftstheorie^ 1867). 
 
 Note II 
 
 That technical advance is irrevocable is implied in what Prof. 
 Marshall calls the Law of Substitution (^Principles of Economics^ 
 1890, Book v., chap, iii.), which might perhaps be called simply 
 the law of Economy. 
 
 CHAPTER II 
 
 Note I 
 
 Value is one of those subjects in regard to which economic 
 theory has left not only Ricardo but J. S Mill behind. Jevons 
 
190 APPENDIX 
 
 (^Political Economy^ ist edition, 1871) first made the economists of 
 this country listen to the doctrine of Final Utility ; and they have 
 had to reckon with the doctrine ever since. 
 
 The theory of Rent is not essentially changed since Mill. 
 
 Economists are not quite at one on the subject of Interest. The 
 view in the text is in the main that of Prof. Bohm Bawerk {Positive 
 Theory of Interest^ English translation, Smart, Macmillan, 1891). 
 His difference from Prof. Marshall {see the latter's Principles^ 
 3rd edition, pp. 141 seq^ is often more apparent than real. 
 
 Note II 
 
 The effects of a lowering of prices in extending the market may 
 be illustrated by concentric circles. A good novel at 5s. may have 
 5000 purchasers ; at 3s., 10,000 ; at 2S., 50,000 ; at is., 200,000. 
 
 Note III 
 
 Few would dispute the remark of Jevons {Political Economy^ 
 chap, v., pp. 197 seq. of 3rd edition, 1888), that the phenomenon of 
 Joint Cost of Production, thought by Mill to be the exception, is 
 really the rule. It might even be held that joint-producing is a 
 rule to which there is no exception. 
 
 Perhaps the most patient attempt to determine theoretically 
 the several shares of the several factors in the value of the product, 
 is that of Prof. Wieser {Natural Value, English translation by 
 Malloch, Macmillan, 1893, pp. 69 j^^.)j who follows on the whole 
 
APPENDIX 
 
 191 
 
 the path of Jevons and Prof. Karl Menger. 
 the subject refuses to lift. 
 
 Note IV 
 
 But the mist round 
 
 Demand and Supply have been a favourite field for the graphic 
 method of illustration. The usefulness of this kind of illustration 
 in the presenting of statistics is a matter of long experience, and 
 Mr Bowley's recent book, Elements of Statistics^ King & Son, 1901, 
 gives justification as well as examples of the method in that field. 
 
 6 U)S. 
 
 Whether mathematical symbols, (fxavavra (tvu^toktiv^ can ever be 
 so useful in economics as in statistics is still debated. But the 
 simpler curves of the graphic method are now part of the necessary 
 equipment of a teacher of economics. 
 
 Prof. Edgeworth (in Palgrave's Dictionary of Economics^ 
 article, Curves) has remarked that curves seem specially fitted to 
 illustrate the phenomenon of increase at a decreasing rate, as in 
 Final Utility, or in Diminishing Returns from Land. The pheno- 
 "menon of a changing rate is, like joint cost, rather the rule than the 
 exception, partly because economical phenomena depend so much 
 on the guiding principle of final utility. But, on the other hand, 
 the complication is usually too great to be represented accurately 
 
192 
 
 APPENDIX 
 
 by a curve of only two variables ; and, as Prof. Edgeworth admits, 
 when we go beyond two variables in our curves, our illustration 
 loses its vivid simplicity, becoming (he might have added) quite 
 as difficult to many of us as the subject illustrated. 
 
 The Curve of Demand might be thus simply presented. Let 
 the price of a pound of sugar be measured along the axis OY, and 
 
 10 IS 20 
 
 the quantity of sugar per week demanded by an individual be 
 measured along OX. 
 
 The quantity (6 lbs.) demanded when the price is 2d. is repre- 
 sented by the rectangle ab OX, the quantity (5 lbs.) at 2|d. by cdae^ 
 etc. The curve connecting the extremities of the abscisses presents 
 a picture of the tendency of the rising prices to diminish demand. 
 But the application to an individual is of small fruitfulness, for 
 reasons %\vt.vi passim in the text. It is better to take the Curve of 
 Demand for a nation or a group, where economic tendencies are 
 more easily discernible in their generality. 
 
APPENDIX 
 
 193 
 
 In this case let YO represent the consumption of sugar in 
 England per inhabitant in the year, when the price is at the respec- 
 tive figures of the curve already given. 
 
 Prof Edgevvorth describes the collective demand as the average 
 demand multiplied by the number of persons. The stages of 
 variation would not necessarily correspond to the stages in any one 
 individual's curve ; though the variation would be less sudden, it 
 might still (owing to imperfection of statistical data) seem 
 occasionally abrupt. Moreover, when the price increased, e.g.^ 
 to 8d., the demand would not necessarily fall off to the vanishing 
 point. As a necessary of life the article might still be demanded, 
 unless (as might well be) substitutes were found. At the other end, 
 the demand might not increase in proportion to the decrease in 
 price, but say only to 62 lbs., unless (as might well be) manufac- 
 turers found new employment for the article (in confectionery and 
 jam, etc.). Finally, if such a table extends over a series of years 
 it is unlikely that 6d. at the beginning of the series was of exactly 
 the value of 6d. at the end. Even the " collective curve " is to 
 be interpreted with many reservations (given at large by Prof. 
 Edgeworth in Palgrave's Dictionary^ article : Demand Curves).* 
 
 The principle of Rent for intensive cultivation under diminishing 
 returns may be thus illustrated : — 
 
 Let equal " doses " of capital applied to an acre of land be 
 measured along OY, and the yield of each successive dose along 
 OX. The first yields say 25 bushels of wheat, the second perhaps 
 another 25, but the third 20, and the fourth 16, the fifth 12. If the 
 
 * Prof. Marshall, Principles^ III., iii., gives many examples. 
 
 N 
 
194 
 
 APPENDIX 
 
 price has so risen that the fifth dose yielding only 12 is profitable 
 to the farmer, all the other doses yielding from 16 to 25 must 
 much more than repay him ordinary profits. 
 
 An ingenious method of illustrating the effect of higher and 
 lower prices on consumers of great and small resources has been 
 adopted by Prof. Marshall. Following a hint of Dupuit and others, 
 but really with much greater clearness than they, he uses the 
 analogy of Rent ; and traces what he calls a Consumer's rent. 
 
 When the purchaser of an article pays less for it than he could 
 and would have afforded to pay, the difference may be regarded as 
 analogous to rent. A reduction in price may be regarded as an 
 increase of his income, for it is a lessening of his expenditure in 
 regard to one item. 
 
 The following curve is an illustration of what happens when a 
 reduction occurs : — 
 
 Let the parallelogram AB OC represent the quantity of sugar sold 
 in a year at BC or 2d. per lb., the purchasers of the last pounds 
 sold being unable to give more than exactly BC. All above them 
 could have given a little, some a great deal, more. The marginal 
 purchaser who could just have afforded the price 3d., for the quantity 
 OE, now finds himself above the margin by a distance represented 
 by GF — his consumer's rent. Similarly, the purchaser, who could 
 
APPENDIX 195 
 
 just have afforded MK or 4id., for the quantity OM, now gains LK 
 or 2jd. as consumer's rent. Rather than go without the first pounds 
 the consumers would have paid NQ or even OY. The total area 
 YOCB would then represent the total amount of satisfaction derived 
 from the consumption of sugar ; but all above AB would be con- 
 sumer's rent. {See Prof. Marshall, Principles, III., vi., p. 204, 3rd 
 edition.) 
 
 CHAPTER III 
 
 For the distinction of Machine from Tool (power other than 
 human muscles being employed in the former), see Marx, Kapital, 
 Book I., sect. 4, Division of Labour and Manufacture. 
 
 The various phases, through which the theory of Capital and 
 Interest has passed may be traced in Prof. Bohm Bawerk's 
 Criticism and History of Theories of Interest, 1889, English trans- 
 lation. Smart, 1890. 
 
 Bastiat's great skill in illustrating the doctrines of free trade 
 must not blind us to his defects as a general theorist on capital and 
 other economic ideas. "Service for service" seems to him to 
 explain every difficulty. See Cairnes, Essays in Political Economy 
 
 (1873). 
 
 Senior's view, that interest is the reward of abstinence, has a 
 plausibility that will always gain it some supporters. The extreme 
 opposite view is that of the school of Marx, mentioned in another 
 place. 
 
 The last section of this chapter owes something to Prof. 
 Taussig's Wages and Capital (New York, 1896), especially Part I., 
 chapters iii., iv., v., e.g., 121. 
 
 That capital is not a fund but a " flow," that the distinction 
 between wealth and capital is really between a continuous time and a 
 point of time, has been argued with new force by Prof. Irving Fisher 
 in the Economic Journal, December 1896, June and December 1897. 
 
 CHAPTER IV 
 
 Note I 
 
 The classical statement of the causes that make for a balance 
 of advantages and disadvantages, a rough equality of net advantages, 
 in one trade as compared with another, is to be found in the 
 
196 APPENDIX 
 
 Wealth of Nations^ Book I., chap. x. : Of Wages and Profit in the 
 Different Employments of Labour and Stock. In considering 
 whether wages are high or low, we must take account of the dis- 
 agreeableness of a trade, or the long apprenticeship it requires, or 
 the fitfulness of employment in it, or the special moral qualities it 
 involves!(especially honesty), or the chances of failure in it. 
 
 John Mill points out {Political Economy^ 5th edition, II., xiv., 
 sect, i) that the most disagreeable trades, instead of being the 
 best rewarded in wages, are thrust on the most helpless of the poor, 
 who accept the lowest wages. Unless training and^trustworthiness 
 enter into the matter, mere dirtiness or danger or even unsteadiness 
 of employment will not prevent hungry crowds from accepting 
 employment with little higgling, for wages on the lowest scale. 
 {See also Marshall, Economics of Industry^ 1892, VI., iii., sect. 4.) 
 
 Cairnes {Leading Principles of Political Economy^ 1874) showed 
 that the need of training for what we call the skilled trades practi- 
 cally obstructs competition between one group of skilled workmen 
 and another such group of a different trade, and the industrial 
 hierarchy consists of "non-competing groups" (Part I., chap.UT, 
 71 seq.). 
 
 Cairnes' restatement of the theory of a Wages Fund {Leading 
 Principles^ Part II., chap, i., e.g.^ 217, sect. 8) makes it simply 
 mean that in a given state of industry and national character a 
 prospect of profit will necessarily lead to a given amount of pro- 
 ductive investment. It might almost have been accepted by Mr 
 Longe and by Thornton, who converted John Mill to his view. 
 Professor Taussig ( Wages and Capital) gives a good history and 
 criticism of the theory and its amendments. His own amendment 
 takes out its sting by removing nearly its whole body. " The share 
 of real income which shall go to wages in general, or to wages of 
 the great mass of manual labourers, is to a certain extent pre- 
 determined by the character of the commodities on hand or in the 
 making " (93). 
 
 The theory that wages are paid out of product and are large in 
 proportion to the product, is represented by Francis Walker 
 {Wages Question, \%^Z). 
 
 Wages, no one will dispute, depend in some vital sense on 
 product, and product on capital ; but wages depend also on con- 
 tract, and contract on the strength of the contracting parties. 
 
 The fine point that real wages will depend on the equipment 
 of the market with goods suitable for workmen is Prof. Taussig's 
 {loc. cit.). 
 
APPENDIX 197 
 
 The reference in the text to the Kaffirs is to the Blue Book on 
 Rand Labour, August 1902, evidence of Sir M. Clarke. The 
 description by Mr Roberts of the social effects of the American 
 Coal Strike (in the Economic Journal^ March 1903) enables us to see 
 the same truth on its converse side ; we see in detail the effects of 
 an almost total extinction of wages upon the market for the usual 
 articles of workmen's consumption. 
 
 Note II 
 
 For the relation of the theory of population to this and kindred 
 subjects, see the articles Population and Malthus in Palgrave's 
 Dictionary of Political Economy. 
 
 CHAPTER V 
 Note I 
 
 The analogy of the perfectly fair lottery is Adam Smith's 
 {Wealth of Nations^ I., x.), but the admission that the lottery of 
 many professions is not a fair one, is Adam Smith's also. 
 
 Besides the objections in the text, there might be adduced the 
 arguments brought against the idea of Marx, that the grand total 
 of profits is determined and distributed in a different way from the 
 separate profits of separate employers. See Prof. Bohm Bawerk, 
 Karl Marx and the Close of his Systefn^ English translation, 
 Macdonald, 1898, chaps, ii. and iii. 
 
 Note II 
 
 Jevons, Money ^ p. 138 : — 
 
 " If we represent by the line A the variation of the value of 
 gold as estimated in terms of some third commodity, say copper, 
 and by the line B the corresponding variations of the value of 
 silver, then superposing these curves, the line C would be the curve 
 expressing the extreme fluctuations of both metals. Now the 
 standard of value always follows the metal which falls in value ; 
 
198 
 
 APPENDIX 
 
 hence the curve D really shows the course of variation of the 
 standard of value." 
 
 Note III 
 
 Bagehot's Lombard Street^ and Viscount Goschen's Foreign 
 Exchanges^ should be supplemented by Mr George Clare's Money 
 Market Primer ( 1 89 1 ). 
 
 Bonamy Price on Currency and Banking gives some of the 
 elementary principles clearly and with characteristic confidence. 
 
 CHAPTER VI 
 
 Note I 
 
 Adam Smith says that bullion acts as " the money of the great 
 mercantile republic of nations " ( Wealth of Nations^ Book IV., chap, 
 i., p. 194, M'Culloch's edition). He says also : "Were all nations 
 to follow the liberal system of free exportation and free importation, 
 the different states into which a great continent was divided would 
 so far resemble the different provinces of a great empire " {ibid.^ 
 chap, v., p. 240). The fancy has become a fact in the case of the 
 United States of America at present. 
 
APPENDIX 199 
 
 Note II 
 
 Estimates of the proportion of the cost of carriage to the value 
 of the imports are presented by Sir Robert Giffen, Statistical 
 Journal^ xlv. (1882), pp. 209 seq. 
 
 Note III 
 
 For the difference between England and France in responsive- 
 ness to specie point, see Mr Clare, Money Market^ pp. 1 10 seq. 
 
 Note IV 
 
 As to the effects of the depreciation of silver on the trade with 
 British India, see Walter Bagehot's Depreciation of Silver (1877), 
 and (for the later phases) Sir David Barbour^s Bimetallism (1886), 
 Prof. J. S. Nicholson's Silver Question (1886), and Report of Indian 
 Currency Committee, with Appendices and Evidence, C. 9390, C. 
 9376 (Blue Books), 1899. 
 
 CHAPTER VII 
 Note I 
 
 For the Canons of Taxation, see Adam Smith, Wealth of 
 Nations^ Book V. ; and for general discussion of the whole subject, 
 see Prof. Bastable's Public Finance^ and Prof. Seligman's Essays 
 on Taxation, 
 
 For Rates, see Mr Edwin Cannan's History of Local Rates in 
 England {i%()6). 
 
 Note II 
 
 For the figures of Excise and Customs, see the Statistical 
 Abstract for the United Kingdom^ 1901 (pub. 1902). 
 
 Note III 
 
 For the Revenue of the Customs in 1827, etc., see Sir Henry 
 Parnell's Financial Reform^ 3rd edition, 1831, p. 114, compared 
 with J. Marshall's Digest of all the Accounts of Population^ Pro- 
 ductions^ Revenues^ etc.^ of the United Kingdom.^ Part II., Finances, 
 Navigation, and Commerce, page 7 (1833). 
 
200 APPENDIX 
 
 Note IV 
 
 All the subtleties of the controversy, whether the foreigner pays 
 our import duties for us or not, can be read in Henry Sidgwick's 
 Political Economy^ Book III., chap. v. (Protection). 
 
 Note V 
 
 The abolition of the Registration Duty on Corn in 1870 is said to 
 have been suggested to the Government by Prof Jevons. Prof. 
 Foxwell calls attention to the official memorandum (23857, 1869) 
 on the Pressure of Taxation, in which Jevons - gave his views 
 on the subject. 
 
 CHAPTER VIII 
 
 Note I 
 
 For the Estate and Legacy Duties, see Sir William Harcourt's 
 Budget Speech of i6th April 1894, pp. 489 seq. 
 
 Note II 
 
 Degressive Taxation is described by Prof. Bastable, Public 
 Fina?tce^ Book III., chap, iii., p. 292 (1892 edition). Compare Dr 
 Cassel's article on Progressive Taxation in Economic Journal, 
 December 1901, p. 488. 
 
 Note III 
 
 That the deducted income tax is about three-fourths of the 
 whole, is stated in the Budget Speech of 1894, p. 502. 
 
 Note IV 
 
 Will the Estate Duty lessen capital or diminish production ? 
 See Sidgwick's Memorandum to Commission on Local Taxation, 
 Blue Book, C. 9528, 1899, pp. 105-6. 
 
 CHAPTER IX 
 For the figures of Local Taxation, see Sir H. Fowler's address on 
 
APPENDIX 201 
 
 Municipal Finance and Municipal Enterprise, Statistical Journal^ 
 vol. Ixiii., September 1900, p. 384. 
 
 For the loans of localities, see Statistical Abstract^ 1901, p. 39. 
 
 CHAPTER X 
 
 Note I 
 
 Most of the arguments of this chapter will be found (along with 
 a history) in the article Socialism, in the Supplement to the Ency- 
 clopadia Britannica (1902). 
 
 Note II 
 
 For a description of the condition of the unskilled labourer in 
 our large towns, see Mr Rowntree's Study of Poverty (1901), and 
 Mr Charles Booth's volumes on Life and Labour in London. 
 
 Note III 
 
 The idea of two nations in every nation is that of Disraeli's 
 Sybil ; but it is as old as Plato, Republic^ viii., 552 : rh iiy] fdav dXXA 
 56o dvayKT] elpai ttjv Tocavrrjv irbXiv, rrjy fikv TrevfjTOJV^ ttjv 8i rrXovaiuv, 
 oUovvTas iv rep aur* del ivi^ovXeiJovTai dXXiJXots. 
 
 Note IV 
 
 The great crux in the doctrine of Marx as laid down in the 
 first two volumes of Capital was the relation of surplus value to 
 surplus labour. If profits were in proportion to unpaid labour, it 
 would seem to follow that the more hands were employed in a 
 business the higher should be the profits, and the fewer the hands, 
 the lower the profits. In actual business it is not so ; but the profit 
 is in proportion to the total capital handled, whether devoted largely 
 to labour or largely to machinery and plant. Competition levels 
 the profits down. Marx admitted the facts ; and in place of the 
 easy but false theory that profits in each case depended on unpaid 
 labour, we have in his third (and posthumous) volume the theory 
 that profits in the mass or grand total depend on unpaid labour, 
 but in detail are distributed by the machinery of competition 
 between trade and trade, business and business, as they are now. 
 See Karl Marx and the Close of his System (above, p. 197). 
 
202 
 
 APPENDIX 
 
 Note V 
 
 For labour co-partnership, see the publications of the Labour 
 Co-partnership Association. For the operations of the Enghsh 
 Co-operative Wholesale Society, see the Annuals of that Society. 
 It is curious that in the little world of the Co-operative Union the 
 tendency to centralisation should be confronted with the opposite 
 tendency, as in the larger world of national and international trade. 
 In the small scale, as in the large, the forces of centralisation create 
 a deeper impression of strength ; but, in both cases, there is as yet 
 no reason to expect the disappearance of " individualism." 
 
 Note VI 
 
 Municipal house - building and municipal trading in general 
 are at present surrounded by controversy. There is useful infor- 
 mation in Dr J. F. J. Sykes' Howard Medal Prize Essay {Statistical 
 Journal^ June 1901). See also the returns drawn up by the Local 
 Government Board for the House of Commons : " Municipal 
 Corporations (Reproductive Undertakings)," 1899 and 1902. 
 
 Note VII 
 
 The slackening of the birth-rate is shown by the following 
 extract from the 63rd Annual Report of the Registrar General of 
 Births, Marriages, and Deaths in England (1900) pub. 1902, 
 (p. cxxiii.). 
 
 Births per iooo Living 
 
 
 it 
 
 ^3 
 
 c 
 Q 
 
 
 
 g 
 1 
 
 .2 
 < 
 
 c 
 
 a 
 
 c 
 
 C4 
 
 B 
 
 
 
 (^ 
 
 2 
 
 1880 
 1900 
 
 32.7 
 28.2 
 
 31.8 
 29.8 
 
 30.7 
 30.1 
 
 29.4 
 26.9 
 
 38.0 
 37.1* 
 
 42.8 
 39.3 
 
 37.6 
 35.6 
 
 35.5 
 31.5 
 
 31.1 
 28.9 
 
 24.6 
 21.4 
 
 33.9 
 32.9 
 
 [899. 
 
 In all these cases the death-rate has also fallen. 
 
INDEX 
 
 Abstinence and capital, 49 seq. 
 Abstraction in economics, 5, 6 
 Abundance and scarcity in rela- 
 tion to exchange, etc., 11, 19, 
 
 20,33 
 Anarchism, 173 seq. 
 Annual value of a house as 
 
 basis of rating, 164, 165 
 
 Bagehot (Walter), Appendix, 
 
 198, 199 
 
 Balance of trade, 1 10 ; of 
 advantages and disadvan- 
 tages in professions, etc, 64 ; 
 Appendix, 195, 196 
 
 Banks, 92 ; Bank of England, 
 96, 99, 100 ; use of banks, 96 
 seq. J bank-notes, 98 seq.j 
 Scotch banks, 99 ; bankers' 
 securities, 103 ; Bank Charter 
 Act, 99, 100 
 
 Barbour (Sir D.), Appendix, 
 199 
 
 Bargains, 19, 61 
 
 Barter, 13, 16 ; in international 
 trade, 91, 92 
 
 Bastable.(Prof. C. F.), Appendix, 
 
 199, 200 
 
 Bastiat (F.), Appendix, 195 
 Bills of Exchange, loi, 109 ; 
 
 Exchequer Bills, 131 
 Bimetallism, 93 ; Appendix, 
 
 197 ; and diagram ; 199 
 Birth-rate declining, 183 ; 
 
 Appendix, 202 
 Bohm Bawerk (Prof.), Appendix, 
 
 passim 
 
 203 
 
 Booth (C), Appendix, 201 
 Bowley (A. L.), Appendix, 191 
 Budget, the English, 124 seq. 
 Business-stamps, taxes on, 151 
 
 Cairnes (Prof. J. E.), Appendix, 
 
 195, 196 
 Cannan (E.), Appendix, 199 
 Cassel (Dr), Appendix, 200 
 Capital, 23, 24, 32, 44 ; defined 
 and described, 45 seq.; 
 origin, 49 ; relation to absti- 
 nence, 49 seq. J indefinite 
 renewal probable, 58 seq.j 
 fixed and circulating, 58 ; in 
 relation to wages, 61 seq.; 
 wide sense, 80 ; Appendix, 
 
 195 
 
 Certainty in taxation, 121 
 
 Clarke (Sir M.), Appendix, 197 
 
 Clare (G.), Appendix, 198, 199 
 
 Coinage, English, 96 
 
 Comfort and standard of com- 
 fort, 7, 65, 73 
 
 Commercial Commonwealth, 
 107 seq.; Co-operative, 181 
 
 Communism, 168 
 
 Companies Acts, 104 
 
 Competition, 42 seq.^ 52, 65, 119, 
 133, 183 
 
 Compound householders, 165 
 
 Consumption, 31 seq.^ 51, 52, 
 119 
 
 Convenience in taxation, 121, 
 
 Co-operative Societies, 105, 181, 
 184 ; Appendix, 202 
 
2(H 
 
 INDEX 
 
 Corn Supply, 76 ; laws, 89, 90, 
 136, 140 ; registration duty, 
 136, 143 ; Appendix, 200 
 
 Cost, 21, 36 ; marginal, 38, 41 ; 
 joint, 42 ; Appendix, 190 ; 
 cost to the producer, 44 ; of 
 carriage. Appendix, 199 
 
 Customs, 135 seq.^ 138 
 
 Credit, 92 
 
 Currency, 91 seq.; currencies, 
 113; doubtful, 122. Cf. 
 Money 
 
 Curves, 43 ; Appendix, passim 
 
 Death duties, 147 seq.j double 
 motive, 154, 155 ; death-rates. 
 Appendix, 202 
 
 Debts, loi ; public, 127, 131 
 
 Degressive taxation, 1 50, 151 
 
 Deposits, 97, 98 
 
 Direct taxes, 146 ; cf. 132 
 
 Distinction not separation, 28, 
 32 ; cf. 76, 81 
 
 Distribution, 31 seq.^ 61 
 
 Division of Labour, 11 seq.j 
 special difficulty, 18 seq.; 
 leading to separation of em- 
 ployments, 28, 76 ; inter- 
 national, 92, 107 ; showing 
 collective wisdom, 170; 
 Appendix, 189 
 
 Dupuit (A. J.), Appendix, 194 
 
 Economy, meaning, i, 2, 4 ; 
 political economy and domes- 
 tic, 2, 31 ; as social, 5 ; ideal 
 economy, 4; of animals, 7, 
 II, 50; cf. Appendix, 189; 
 its end consumption, 9 ; 
 relation to division of labour, 
 14; modern economy, 17; 
 economies irrevocable, 21, 22, 
 27, 29, 59 ; Appendix, 189 ; 
 complications of modern 
 economy, 23 ; no economy 
 of ephemeral creatures, 50 ; 
 economy in human lives, 72 ; 
 economies soon common 
 
 property, 83 ; economy of 
 currency, 93, 97 
 
 Economics, 2, 3 ; its divisions, 
 31; its abstractions, 5, 6; 
 its general rules, 35 
 
 Economic man, 5, 83 
 
 Economy in taxation, 122, 151 
 
 Economic friction, 63, 88, 91 
 
 Edgeworth (Prof. E.), Appen- 
 dix, 191, 192 
 
 Employers, 44, 56, 60 seq.^ 79 ; 
 and wages, 81 ; relation to 
 workmen, 178, 179 
 
 Equality in taxation, 120, 135 
 
 Exchange and final utility, 10, 
 34 ; and producers, 13 ; and 
 money, 15 ; and value, 16, 34 
 seq.^ 48 ; Stock Exchange, 105 
 
 Excise and Customs, 135 seq.^ 
 138 ; Appendix, 199 
 
 Export duties, 142 ; by whom 
 paid, 142, 143 ; Appendix, 200 
 
 Farmers and landlords, 76, 
 
 116 
 Fees, 127, 129, 131, 158, 159 
 Fmal utility, 9 seq., 20, 33, 55, 
 84 ; ^. 150; Appendix, 189, 
 190, 191 ; final fertility, 73 
 Fisher (Prof. I.), Appendix, 195 
 Fowler (Sir H.), Appendix, 200 
 Foxwell (Prof. H. S.), Appen- 
 dix, 200 
 France, 112, 116, 148, 161 ; 
 
 Appendix, 199, 202 
 Free Trade, 30, 75, 88 seq., 
 137, 138, 144, 145 
 
 Germany, 114, 138 ; Appendix, 
 202 
 
 Giffen (Sir R.), Appendix, 199 
 
 Gold and silver as money, 17 ; 
 mining profits, 86 ; in Eng- 
 lish currency, 96 ; no unlimited 
 demand for, 112; move- 
 ments of gold in foreign 
 exchanges, 112 ; fall of silver, 
 114; Bimetallism, j^^ above 
 
 Goods, 3, 4, 10 ; capital goods, 
 
INDEX 
 
 205 
 
 58 ; taxes on goods, 129, 131, 
 
 13s seg'. 
 Goschen (Viscount), Appendix, 
 
 198 
 Grants in aid of rates, 128, 160 
 
 Harcourt (Sir W.), Appendix, 
 
 200 
 Hoarding, 97, 186 
 Holland, 1 50 ; Appendix, 202 
 Home and foreign trade, 109, 
 
 no 
 House-duty, 151, 159 
 
 Ideal economy, 4 ; ideal State, 
 123 
 
 Improvements soon shared, 
 108 ; continue, 29, 59 (see 
 Economy) ; in agriculture, 74, 
 
 75 
 Income gross and net, 80 ; 
 
 taxes on, 129, 149, 161 
 Independent workmen, 12, 18, 
 
 20, 61 
 India and silver, 114, 115 ; 
 
 Appendix, 199 
 Insurance, 86 
 Interest on capital, 26, 55, 59; 
 
 fall of, 186 
 International trade, 91 seg.y 
 
 international character of 
 
 modern trade, 106 seg'. 
 Invention and capital, 50, 59 
 Ireland, 77 
 Italy, 161 ; Appendix, 202 
 
 JEVONS (Prof.), 94 ; Appendix, 
 passim 
 
 Krapotkin (Prince), 174 
 
 Labour and division of labour, 
 II seq.j skilled and unskilled, 
 63 seq.^ 177; Appendix, 201 ; 
 constant or inconstant in 
 value, 69 
 
 Labour Copartnerships, 105, 
 180, 181, 185 ; Appendix, 202 
 
 Land and capital, 46, 47, 54 ; 
 
 and population, 73 ; land tax, 
 
 147, 149,152, 153, 159, 161 
 Law and government, 115 seq.^ 
 
 119, 126, 127 
 Legacy duties, 148 
 Lenders, 58, 59, 60, 76 ; banks 
 
 as, 98, 102 
 Local taxation versus Imperial, 
 
 \^%seq. 
 Longe (F. D.), 196 
 
 Machine and tool. Appendix, 
 
 195 
 Maeterlinck, Appendix, 189 
 Malthus (T. R.), 72, 181, 182, 
 
 183 ; Appendix, 197 
 Management, wages of, 81 
 Manufacture, modern, its com- 
 plications, 41, 48, 61 
 Marginal utility, see Final utility, 
 cost, etc., 38, 39 ; product and 
 producers, 78 seq.j traders, 87 ; 
 
 fertility, 73 
 Market and division of labour, 
 13 seq.^ 21 ; higgling of the 
 market, 40 ; widening of it, 
 52, 54, no, 131 ; market for 
 labour, 63 ; growth in relation 
 to population, 72 ; inter- 
 national market, 90 ; money 
 market, 103 seq. 
 Marriage, desire of, 6, 72 
 Marshall (Prof. A.), Appendix, 
 
 passim 
 Marshall (J.), Appendix, 199 
 Marx (K.), Appendix, 195, 197, 
 
 201 
 
 Measureableness as a condition 
 
 of economic reasoning, 6, 7, 
 
 yiseq., 67, 117, 125 seq., 147 
 
 Menger (Prof. K.), Appendix, 191 
 
 Mill (J. S.), Appendix, passim 
 
 Money, 14, 15 seq., 69, 122 ; in 
 
 sense of loans, 90 ; gold or 
 
 silver, 92 seq.j and banks, 96, 
 
 97 ; no unlimited demand for, 
 
 97 ; or for notes, 98 ; money 
 
 market, 105. {See also Price) 
 
 Monopoly, 42 seq.j by govern- 
 
206 
 
 INDEX 
 
 ment, 129, 130 ; patent 
 medicines, 141 
 Municipal enterprises, 1^6 seq.j 
 Appendix, 202 j Socialism, 
 172 
 
 Nature, land and capital, 47 
 
 Navigation Acts, 90 
 
 New Zealand, 94 
 
 Nominal and real wages, 69, 
 184 ; income, 89 
 
 Nicholson (Prof. J. S.), Appen- 
 dix, 199 
 
 Octrois, 161 
 
 Parnell (Sir H.), Appendix, 
 199 
 
 Peel (Sir R.), I49 
 
 Personal property, rating of, 160 
 
 Poor Relief, 156 
 
 Population and wages, 71 ; 
 Malthus, 72 ; cf. 116 ; Appen- 
 dix, 197 
 
 Post Office, 127, 129, 130, 131 
 
 Price, 35 ; normal, 36 ; and cost, 
 36, 41 ; marginal buyers and 
 sellers, 38 seq. 
 
 Price (Prof. Bonamy), Appen- 
 dix, 198 
 
 Producers, 13, 14, 30 ; strong 
 and weak, 40 ; marginal, 76 
 seq. J taxed, 119 
 
 Production, 31 seq.^ 46, 52 ; long 
 and short, 67 ; wide sense, 80 
 
 Professions, lottery of, 85 ; 
 Appendix, 197 
 
 Profits, 27, 52 seq.^ 78 seq.j if 
 due to extortion, 82 ; inequal- 
 ity of, 83 ; Appendix, 201 
 
 Progressive taxation, 121, 150, 
 151 ; Appendix, 200 
 
 Property taxes, 131 
 
 Protection, 88 seq.^ 138 ; a con- 
 fession of weakness, 144 
 
 Public debt, 127, 128 ; public 
 works, 127; ownership or con- 
 trol, 84 
 
 Rates, 117, 156 seq.\ direct, 
 161 ; Appendix, 199 
 
 Rent, 27 ; ^. 39 ; and population, 
 73 seq. J nominal, 78 ; of 
 abiHty, 79 ; taxes on, 151, 152, 
 how affected by rates, 162 ; 
 urban rents, 166, 167 ; curve 
 to show law of rent. Appen- 
 dix, 193 
 
 Reserves of Banks, 99 
 
 Ricardo (D.), 189 
 
 Roberts (P.), Appendix, 197 
 
 Saving, 52 seq., 56, loi ; no 
 fallacy in, 184, 185 
 
 Scotch division of rates, 161, 
 163 
 
 Security of person and property, 
 125 
 
 Seligman (Prof. R. A.), Appen- 
 dix, 199 
 
 Senior (W. N.), Appendix, 195 
 
 Sidgwick (Prof. H.), Appendix, 
 200 
 
 Smith (Adam), Appendix, 189, 
 195, 196 
 
 Social question, 177 
 
 Socialism, 167, i6() seq.; Appen- 
 dix, 201 ; Municipal, 172 
 
 Speculation, 84 seq., 105 
 
 Spencer (Mr Herbert), 174 
 
 Standard of comfort, 65, 73 ; of 
 currency, 93 
 
 State,servicesof the, 124, 125, 155 
 
 Supply, and demand, 37 ; 
 balance, 39, 40 ; curves. 
 Appendix, 191, 192 
 
 Sugar tax, 141 
 
 Sykes (Dr), Appendix, 202 
 
 Taxation, 117, 118 seq.; de- 
 fined, 119; other drains than 
 taxation, 118; canons, 120 
 seq.; direct and indirect, 131, 
 132 ; shifting and incidence, 
 132 ; taxation of food, 134 ; 
 of raw materials, 141 ; of 
 luxuries, 139 ; of exports, 142 ; 
 secured by deductions, 151, 
 
 I 
 
INDEX 
 
 207 
 
 Appendix, 200 ; English widely 
 spread, 153; limit of its 
 productiveness, 167 ; cf. 140 
 
 Taussig (Prof.), Appendix, 195, 
 196 
 
 Thornton (W. H.), Appendix, 
 196 
 
 Tolstoi (Count Leo), 174 
 
 Tools, 47 ; Appendix, 195 
 
 Trades Unions, 67 
 
 Trusts, 176, 177 
 
 Uniformities in economics, 
 
 35,36 
 United States, 89, 108, 144, 175 ; 
 
 Appendix, 198 
 
 Value, 14 ; causes, 22, 23 ; 
 relation to cost, 23 seq.^ 36, 
 37 ; two senses, 32 ; when and 
 
 how measurable, 33 seq.; as 
 affected by long ways of pro- 
 duction, 54 ; value of currency 
 in nineteenth century, 95 ; 
 affected by excess, 97 ; Appen- 
 dix, 189 
 
 Wages as forestalment of pro- 
 duct, 26 ; part of cost, 61 
 seq.; relation to capital and 
 product, 66 seq.j nominal and 
 real, 69 ; affected by Trades 
 Unions, 70, 71 ; relation to 
 population, 71, 182 ; mini- 
 mum, 74 ; of superintendence, 
 81 ; misspent, 183 
 
 Wages Fund, 62 ; Appendix, 196 
 
 Walker (Pres.), Appendix, 196 
 
 War, 123 
 
 Working classes, 60 seq.^ 1 78 seq. 
 
Printed by 
 
 Oliver and Boyd 
 
 Edinburgh 
 
Telegraphic Address— 
 
 GUIDEBOOK, LONDON. 
 
 MR. MURRAY'S 
 
 CATALOGUE OF 
 
 EDUCATIONAL 
 
 WORKS 
 
 LONDON 
 
 JOHN MURRAY, 50A, ALBEMARLE STREET. W. 
 
 1903 
 
BOYLE, SON & WATCHURST, 
 
 PRINTERS, 
 
 3, 4 AND 5, WARWICK SQUARE E.G. 
 
MR. MURRAY'S 
 
 CATALOGUE OF 
 
 Educational Works, 
 
 Mr. MURRAY'S 
 
 HOME AND School Library. 
 
 Edited by LAURIE MAGNUS, M.A„ 
 
 MAGDALEN COLLEGE, OXFORD. 
 
 This Library, which will ultimately cover, in convenient and attractive 
 volumes, a wide field of human knowledge, is intended " A " for the general 
 reader " B " for the special student of Literature or Technology. The line 
 of demarcation is not absolutely rigid, for all the volumes in the Library 
 have an educational aim, and many are adapted to definite examinations. 
 But while the " A " Series will be found of service to the general reader, 
 for the purpose of self-information, as well as to the special student of the 
 subject which it treats, the "B" Series is designed more strictly for use 
 in schools and classes. 
 
 The volumes are illustrated by maps, diagrams, &c. The following are 
 now ready : — 
 
 "A" SERIES. 
 
 FIRST MAKERS OP ENGLAND. Julius Caesar, King 
 Arthur, Alfred the Great. By Lady MAGNUS, Author of 
 " Boys of the Bible," etc. With Illustrations. F'cap 8vo. is. 6d. 
 
 This volume is based on the recommendations for history teaching made by 
 Professor Withers at the invitation of the School Board for London. 
 
 " In her hands the (^d legends lose nothing of their beauty in force or power ot 
 inspiration. . . . Caiyipt fail to interest both the children for whom it is 
 primarily intended and children of a larger growth. The moral teaching which 
 forms the basis of the work, though not obtruded, is beyond praise."— 
 
 Edttcational Tinus. 
 
MR. MURRAY'S CATALOGUE 
 
 HOME AND SCHOOL -LIBRARY— continued. 
 
 A SHORT HISTORY OP COINS AND CURRENCY. 
 
 By Lord AVEBURY, F.R.S., &c. With many Illustrations. 
 F'cap 8vo. 2S. 
 
 "... a treatise as fascinating as a romance." — Outlook. 
 
 PLATO'S 'REPUBLIC By Prof. LEWIS CAMPBELL, Hon. 
 Fellow of Balliol College, Oxford. With Illustrations. F'cap 8vo. 2s. 
 
 " Professor Campbell has done good service in writing this excellent book." — 
 Spectator. 
 
 " An excellent addition to the Home and School Library. . . . The sketch 
 of the purpose and development of Plato's work is admirable." — Morning Post. 
 
 INTRODUCTION TO POETRY. (Poetic Expression, Poetic 
 
 Truth, the Progress of Poetry.) By LAURIE MAGNUS, 
 
 M.A. F'cap 8vo. 2s. 
 
 from beginning to end it is excellent, and the delightful style, the 
 ■ ■ ■ lif 
 
 breadth and incisiveness of view, the sidelights which it opens upon life and 
 
 thought, and the frequently deep philosophy which is attrac 
 
 Author's persuasive rhetoric, make it at times fascinating,"— Si 
 
 " He has brought to the task a critical taste and judgment 
 
 and often as illuminating as that of 'Ruskm."— Yorkshire Post. 
 
 HEROES OP THE WEST, A Biographical Sketch of 
 Modern History, by the Rev. A. J. and Mrs. CARLYLE and 
 F. S. MARVIN, M.A. 2 vols. 
 Vol. I. With four Illustrations. F'cap 8vo. 2S. 
 
 THE PACE OP NATURE. Popular Readings in Elementary 
 Science. By the Rev. C. T. OVENDEN, D.D., Canon of St. 
 Patrick's, Rector of Enniskillen. With numerous Illustrations. 
 F'cap 8vo. 25. 
 
 IN ACTIVE PREPARATION. 
 
 MUSIC. By A. KALISCH, B.A. 
 
 INTRODUCTION TO PHILOSOPHY. By S. RAPPOPORT, 
 Ph.D. 
 
 TENNYSON'S * CBNONE.' By LAURIE MAGNUS, M.A. 
 
 ANIMAL LIFE. By W. B. BOTTOMLEY, Professor of Botany at 
 King's College, London University, and Professor of Biology at the 
 Royal Veterinary College. 
 
 PLANT LIPE. By W. B. BOTTOMLEY. 
 
 ARCHITECTURE. By CECIL HEADLAM, Author of "Nuremberg" 
 and "Chartres,' in the Medieval Towns Series, etc. 
 
OF EDUCATIONAL WORKS. 
 
 HOME AND SCHOOL I^IBRARY— continued. 
 
 '<B" SERIES. 
 
 ALGEBRA. Part I. By E. M. LANGLEY, M.A., Senior Mathe- 
 matical Master, Modern School, Bedford, and S. R. N. BRADLY, 
 M.A., Mathematical Master, Modern School, Bedford. F'cap 8vo. 
 IS. 6d. 
 
 This volume is specially adapted to the requirements of the First Stage of the 
 Directory of the Board of Education, South Kensington. 
 
 Professor John Perry, of the Royal College of Science, South Kensington, 
 writes: — " I never do praise a book unless I believe it to be good. Your Algebra 
 (regarded as a book for beginners) pleases me very much indeed. 1 cannot 
 imagine an Algebra prepared for schools in genereil, and especially for use by 
 teachers in general, which would come nearer to my notion of what an Algebra 
 ought to be, than yours." 
 
 A FIRST COURSE OF PRACTICAL SCIENCE, with full 
 directions for experiments and numerous Exercises. By J. H. 
 LEONARD. B.Sc. Lond. With a Preface by the late Dr. 
 GLADSTONE, F.R.S. F'cap 8vo. is. 6d. 
 
 " This is an admirable little book. . . . The great point of Mr. Leonard's 
 book is that he writes, as do too few instructors, for the absolutely ignorant pupil, 
 and that unfortunate being is the ure who is too often not considered. In all the 
 experiments he gives the reason why. . . . Such books as the one before us 
 should be scattered broadcast."— The Lancet. 
 
 "The author evidently understands the difficulties which assail a young boy 
 who is starting on a course of experimental Science."— yo«r;<a/ of Education. 
 
 A FIRST COURSE OF CHEMISTRY. By J. H. LEONARD, 
 
 Author of " A First Course of Practical Science." With numerous 
 Diagrams. F'cap 8vo. is. bd, 
 
 "... An excellent little book for young students . . . expounded with 
 admirable simplicity and good order . . a valuable introduction to experi- 
 mental knowledge of the constitutioa oi \.\\m.^s."—Scotstna7i. 
 
 ELECTRIC "WIRING. A Primer for the use of Wiremen and 
 Students. By W. C. CLINTON, B.Sc. (Lond.), Demonstrator in 
 the Pender Laboratory, University College, London. With 80 
 Illustrations and a selection of worked examples. F'cap 8vo. is.6d. 
 
 Written with particular reference to the requirements of the examinations of 
 the City and Guilds of London Institute. 
 
 " It is written in simple and compreliensive language, free from technicalities, 
 except such as are dulv explained in the course of the text . . . the section on 
 jointmg being exceptionally good . . . this little work is replete with useful 
 information to those engaged in electrical wiring." — Electricity. 
 
 GEOMETRY. An Elementary Treatise on the Theory and Practice 
 of Euclid. Having in view the New regulations of the Oxford and 
 Cambridge Local, the Lond jn Matriculation, The Board of Educa- 
 tion, and other Examinations. By S. O. ANDREW, M.A., Head 
 . Master of Whitgift Grammar School, Croydpn. F'cap 8vo. 2s. 
 
 IN A C TI VE PRE PA RATION. 
 
 TELEGRAPHS AND TELEPHONES. By Sir W. H. 
 
 PREECE, K.C.B., etc., sometime President of the Institute of 
 Civil Engineers. 
 
 THE CALCULUS FOR ARTISANS. By Prof. O. HENRICI. 
 F.R.S., etc. 
 
 ALGEBRA. Part II. By E. M. LANGLEY audS. R. N. BRADLY. 
 
MR. MURRAY'S CATALOGUE 
 
 Mr. MURRAY'S New Series 
 
 OF 
 
 Secondary Education 
 Text-Books. 
 
 Edited by LAURIE MAGNUS, 
 Magdalen College, Oxford. 
 
 COMMERCIAL FRENCH. In Two Parts. By W. MANSFIELD 
 POOLE, M.A., Instructor in French to the Channel Squadron, 
 formerly Assistant-Master at Merchant Taylors' School, and 
 MICHEL BECKER, Professor at the Ecole Alsacienne, Paris; 
 Author of " L'Allemand Commercial," and "Lectures Pratiques 
 d'Allemand Moderne." With a Map in each Volume. Crown 8vo. 
 2s, 6d. each. 
 
 "... a most careful piece of work ... an excellent book ... we 
 warmly recommend to all who have to teach Commercial French." 
 
 — Educational Times. 
 
 " The good opinion formed by us on seeing Part I. is confirmed by the second 
 
 instalment, really an admirable piece of work. We know of no better book to 
 
 serve as an introduction to the more strictly technical study of Commercial 
 
 \-xGW^\\:'— School World. 
 
 BRITAIN OVER THE SEA. A Reader for Schools. Compiled 
 and edited by ELIZABETH LEE, Author of " A School History of 
 English Literature," etc. ; Editor of " Cowper's Task and Minor 
 Poems," etc. With Four Maps of the British Empire at different 
 periods. Crown 8vo. 2S. 6d. 
 
 Mr. p. a. BARNETT (H.M. Inspector ot Training Colleges).— "I congratulate 
 you on the production of a very excellent piece of work. I hope the schools will 
 use it ; but it is almost too good for them." 
 
 COMMERCIAL. KNOWLEDGE. A Manual of Business Methods 
 and Transactions. By ALGERNON WARREN. Crown 8vo. 
 2S. ^d. 
 
 " The book should be used in every senior class both of our board and private 
 schools, and as an introduction to business life it should prove of great value."— 
 
 Statist. 
 
 INTERMEDIATE FRENCH GRAMMAR AND OUT- 
 LINES OP SYNTAX, with Historical Notes. By G. H. CLARKE, 
 M.A., of Hymers College, Hull, and L. R. TANQUEREY, B.es.L. 
 Crown 8vo. 3s. 6d. 
 
 "... In short, we like it much, for it is full without confusion, correct without 
 pedantry, and modern without vulgarity."— Guardiaft. 
 
 ARITHMETIC MADE EASY. Lectures on method, with 
 Illustrations for Teachers and Pupils. By MABEL A. MARSH. 
 Crown 8vo. 2s. 
 
 This manual applies the heuristic method to arithmetic-teaching, and is 
 especially recommended for use in Training Colleges and for all members of the 
 teaching profession. 
 
OF EDUCATIONAL WORKS. 
 
 SECONDARY EDUCATION TEXT-BOOKS— 
 
 continued. 
 
 OOMMBRCIAL GERMAN. In Two Parts. By GUSTAV HEIN, 
 
 University of Berlin, and Lecturer in German (Honours) to the 
 
 University of Aberdeen, and MICHEL BECKER, Professor of 
 
 Modern Languages in the Ecole Alsacienne, Paris. 
 
 PART I. v^rith a Map. Crown 8vo. 3s. 6d. 
 
 This manual is uniform with the first part of Commercial French bv Poole and 
 Becker, and is specially adapted for the use of students in commercial classes and 
 continuation schools. 
 PART II. In the Press. 
 
 FRENCH OOMMBRCIAIi CORRESPONDENCE. By 
 
 Professor CHARLES GLAUSER, and W. MANSFIELD POOLE, 
 M.A. Crown 8vo. 4s. 64. 
 
 " Both as a handbook and as a work of reference, the work'seems well calcu- 
 lated to supply the needs of advanced students, and to be of extreme utility to 
 persons already engaged in the practice of commercial pursuits."— Gteardiafu 
 
 CHRONIQUE DU RBGNE DB CHARLES IX. By 
 
 PROSPER MERIMEE. Prepared and Edited for the use of 
 Schools by Professor Eknest Weekley, M.A., University College, 
 Nottingham. With Historical and brief Grammatical Notes, and a 
 Critical Essay. Crown 8vo. 2S. 6d. 
 
 This volume which will be followed by a School edition of Le Gendre de M. 
 Poirier, by the same editor, and by other French and German texts, is pretjared 
 according to the most approved methods of modern language-teaching, and may 
 confidently be recommended to the attention of masters and mistresses 
 
 GRAMMAIRB FRANOAISB. A French Grammar, with 
 Exercises. For the use of the Middle Classes in Schools. By W. 
 MANSFIELD POOLE, M.A., Instructor in French to the Channel 
 Squadron, formerly Assistant Master at Merchant Taylor's School, 
 and , MICHEL BECKER, Professor of Modern Languages in 
 the Ecole Alsacienne at Paris. Crown 8vo. 2S. 6d. 
 
 THE SOIL. An Introduction to the Scientific Study of the 
 Growth of Crops. By A. D. HALL, M.A. (Oxon.), Director of 
 the Rothamsted Station (Lawes Agricultural Trust), formerly 
 Principal of the South-Eastern Agricultural College. Crown 8vo. 
 3s. 6d. 
 
 ENGLISH COMPOSITION AND ESSAY WRITING. 
 
 By L. Cope Cornford. [In the Press. 
 
 ELEMENTS OP POLITICAL ECONOMY. By JAMES 
 BONAR, M.A., LL.D., Author of " Malthus and his Work," 
 " Philosophy and Political Economy," &c. [/» the Press. 
 
 THEORIES OF TAXATION. By G. ARMITAGE SMITH, 
 M.A., Principal of the Birkbeck Institute. [In the Press. 
 
 MERCANTILE LAW. By SIDNEY HUMPHRIES, B.A., 
 LL.D.. Principal of the City of London College. [In the Press. 
 
 OTHER VOLUMES TO FOLLOW. 
 
MURRAY'S 
 
 Handy Classical Maps 
 
 A NEW SYSTEM. 
 Edited by G. B. GRUNDY, M.A., 
 
 BRASENOSE COLLEGE, OXFORD. 
 
 These Maps have been recognised as the best and most convenient in 
 existence for the use of scholars and students at the universities and 
 upper classes of schools. 
 
 The old method of engraving and hatching the mountain ranges has been 
 exchanged for that of colouring the contours with flat brown and green 
 tmts, which is now recognised as the best and most intelligible way of 
 denoting the configuration of the land. A separate Index is included 
 with each Map. 
 
 List of Maps in the Series: 
 
 I Northern Qreece ) „ , . ■ ,\, 
 
 GRAEOIA South and Pelo- i Two sheets m one case, 3s. cloth ; 
 { ponnesus j is.6d.net, paper, [now ready. 
 
 G-ALLIA One sheet, 2S. cloth; is.net, paper. 
 
 [now ready. 
 BRITANNIA - - - . One sheet, 2s. cloth; is. net, paper. 
 
 [now ready 
 HISPANIA ----- One sheet, 2s. cloth; is. net, paper. 
 
 [now ready. 
 
 ITALIA \ ^°^^^^^ Italy ) J^wo sheets in one case, 3s. cloth ; 
 
 ^■°' \ South and Sicily. j" is.6d.net, paper, [now ready. 
 
 <*='fr??.-^\t ^^tS??^.:.„ \ Ones,.e,as.M,.:.s..a.pap.r. 
 
 [now ready. 
 
 ILLYRIA, MOBSIA, etc. 
 PALESTINE, SYRIA, and 
 
 part of MESOPOTAMIA, ! Three Maps on one sheet, 2s. cloth ; 
 and a Map showing St. [ is. net, paper. [now ready. 
 Paul's Voyages f 
 
 THE ROMAN EMPIRE ) Two Maps on one sheet, 2s. cloth ; 
 
 (at different epochs) j is. net, paper. [just ol't. 
 
 The EASTERN EMPIRES ) Two Maps on one sheet, 2s. cloth; 
 including EGYPT I is. net. paper. [just out. 
 
 *ASIA MINOR and MARiil t 2'wo Maps on one sheet, 2s. cloth; 
 AEGAEUM j IS. net, paper, [nearly ready. 
 
 An Index is bound in each case. 
 
 ". . . are admirable, and will prove of great assistance to students of ancient 
 history. We have before warmly praised the colour-system of the maps and we 
 need only say of this one (Graecia) that it will help those that use it to realize the 
 relations and circumstances of the Ancient Greek States far better than any other 
 map with which we are acquainted." — Educational Times. 
 
 * The preparation of this Map has been undertaken by Mr. J. G, C. Anderson, 
 Christ Church, Oxford. 
 
OF EDUCATIONAL WORKS. 
 
 THE 
 
 PROGRESSIVE SCIENCE SERIES. 
 
 Large 8vo, cloth extra, 6s. per vohime. 
 
 NOW READY. 
 THE STUDY OF MAN: An Introduction to Ethnology. By 
 Professor A. C. HADDON, D.Sc, M.A., M.R.I. A. Illustrated. 
 
 THE GROUNDWORK OF SCIENCE. By ST. GEORGE 
 MIVART, M.D., Ph.D., F.R.S. 
 
 EARTH SCULPTURE, By Professor GEIKIE, LL.D., F.R.S. 
 Illustrated. 
 
 RIVER DEVELOPMENT. As Illustrated by the Rivers of North 
 America. By Professor I. C. RUSSELL. Illustrated. 
 
 VOLCANOES. ByPROFESsoRBONNEY, D.Sc, F.R.S. Illustrated. 
 
 BACTERIA. Especially as they are related to the Economy 
 OF Nature, to Industrial Processes, and to the Public 
 Health. By GEORGE NEWMAN, M.D., F.R.S.E., D.P.H., 
 Demonstrator of Bacteriology in King's College, London. With 
 over 90 other Illustrations. 
 Corrected (2nd) Edition, and with an added Chapter on Tropical 
 
 Diseases, an Account of Malarial Infection by Mosquitoes, and other 
 
 Subjects. 
 
 A BOOK OF "WHALES. By the Editor of the Series, F. E. 
 BEDDARD, M.A., F.R.S. With 40 Illustrations by Sidney 
 Berridge. 
 
 THE COMPARATIVE PHYSIOLOGY of the BRAIN 
 AND COMPARATIVE PSYCHOLOGY. By Professor 
 JACQUES LOEB, M.D., Professor of Physiology in the University 
 of Chicago. 
 
 THE STARS: A Study of the Universe, By Professor 
 NEWCOMB. Illustrated. 
 
 EXPERIMENTS ON ANIMALS. By STEPHEN PAGET, 
 F.R.C.S. 
 
 IN COURSE OF PRODUCTION. 
 
 HEREDITY. By J. ARTHUR THOMSON, M.A., F.R.S.E. Illus- 
 trated. Author of " The Study of Animal Life," and co-Author of 
 "The Evolution of Sex." With numerous Diagrams and 
 Illustrations. 
 
MR. MURRAY'S CATALOGUE 
 
 PROGRESSIVE SCIENCE SERlES-continued. 
 
 IN COURSE OF PRODUCTION. 
 
 THE ANIMAL OVUM. By F. E. BEDDARD, MA., F.R.S. (the 
 Editor). Illustrated. 
 
 THE REPRODUCTION OP LIVING BEINGS : A Com- 
 parative Study. By MARCUS HARTOG, M.A., D.Sc, Professor 
 of Natural History in Queen's College, Cork. Illustrated. 
 
 METEORS AND COMETS. By Professor C. A. YOUNG. 
 
 THE MEASUREMENT OF THE EARTH. By President 
 MENDENHALL. 
 
 EARTHQUAKES. By Major BUTTON. 
 
 PHYSIOGRAPHY; or, The Forms of Land. By Professor 
 DAVIS. 
 
 THE HISTORY OP SCIENCE. By C. J. PIERCE. 
 
 RECENT THEORIES OP EVOLUTION. By Professor 
 BALDWIN. 
 
 LIPE AREAS OP NORTH AMERICA: A Study in the 
 Distribution of Animals and Plants. By Dr. C. HART 
 MERRIAM. 
 
 PLANETARY MOTION. By G. W. HILL, Ph.D. 
 
 INFECTION AND IMMUNITY. By GEORGE S. STERN- 
 BERG, M.D., Surgeon-General of the U.S. Army. 
 
 AGE, GROWTH, SEX, AND DEATH. By Professor 
 CHARLES S. MINOT, Harvard Medical School. 
 
 Other Volumes will shortly be announced, and the Series in its 
 entirety will comprise volumes on every branch of Science. 
 
OF EDUCATIONAL WORKS. ii 
 
 MR. MURRAY'S 
 STUDENT'S MANUALS. 
 
 Several years have passed since the death of Sir William 
 Smith, and the publisher of his famous dictionaries, manuals, 
 and educational works of all kinds is now engaged in the 
 necessary task of revision and republication. Modern scholar- 
 ship has reinforced the results of previous research, and 
 modern methods of teaching have improved the old tradition. 
 In accordance with these new requirements, the services of 
 competent teachers and writers have been requisitioned in 
 order to maintain the high level of accuracy, attractiveness, 
 and usefulness which has already raised these books to the 
 rank of standard school classics. No pains are spared to 
 preserve for the name of Sir William Smith the place which 
 it has held unchallenged throughout the schools of Great 
 Britain for more than a generation ; and the publisher is 
 confident that masters and pupils, and the general reader too, 
 will continue to recognise the unique position which it 
 occupies in the educational world. 
 
 The series of Student's Manuals, Ancient and Modern, 
 issued by Mr. Murray, and most of them edited by Dr. 
 William Smith, possess several distinctive features which 
 render them singularly valuable as Educational Works. They 
 incorporate, with judicious comments, the researches of the 
 most recent historical investigators, not only into the more 
 modern, but into the most remote periods of the history of 
 the countries to which they refer. While each volume is 
 
MR. MURRAY'S CATALOGUE 
 
 thus, for ordinary purposes, a complete history of the country 
 to which it refers, it also contains a guide to such further and 
 more detailed information as the advanced student may desire 
 on particular events or periods. At the end of each book, 
 sometimes of each chapter, there are given copious lists of 
 standard works which constitute the "Authorities" for a 
 particular period or reign. 
 
 Before the publication of these Student's Manuals there 
 had been established, by the claims of middle class and 
 competitive examiners, a large annual demand for text-books 
 that should rise above the level of mere schoolboys' epitomes, 
 and give to those who would master them some shadow of 
 a scholarly knowledge of their subjects. Such books were 
 very hard to find. Mr. Murray's Manuals, however, are the 
 most suited for this purpose. They are most fit for use in 
 the higher classes of good schools, where they may be 
 deliberately studied through with the help of a teacher 
 competent to expand their range of argument, to diversify 
 their views by the strength of his own reading and reflection, 
 and to elicit thought from the boys themselves upon events 
 and the political changes to which they have led. The 
 mature scholar also may be glad to have on his shelves these 
 volumes, from which he can at a glance refresh his memory 
 as to a name or date. And he will not use them for reference 
 alone : he will assuredly be tempted to read them for the 
 clearness of statement and the just proportion with which 
 there is traced in each of them the story of a nation. 
 
OF EDUCATIONAL WORKS. 13 
 
 MURRAY'S Students Manuals. 
 
 y4 Series of Class-books for Advanced Scholars. 
 
 Forming a Chain of History from the Earliest Ages 
 DOWN to Modern Times. 
 
 English History and Literature. 
 
 THEi STUDENT'S HUME: A History of England, from 
 THE Earliest Times to the Revolution in 1688. By DAVID 
 HUME. Incorporating the Researches of recent Historians. 
 Revised, corrected, and continued to the Treaty of Berlin in 1878, 
 by J. S. BREWER, M.A. With Notes, Illustrations, and 7 Coloured 
 Maps and Woodcuts. Crown 8vo. 7s. 6d. 
 
 *** Also in Three Parts. 2s. 6d. each. 
 I. From b.c. 55 to the Death of Richard III., a.d. 1485 
 II. Henry VII. to the Revolution, 1688. 
 III. The Revolution to the Treaty of Berlin, 1878. 
 
 *** Questions on the " Student's Hume." izmo. 2S. 
 
 STUDENT'S CONSTITUTIONAL HISTORY OP BNG- 
 LAND. From the Accession of Henry VII. to the Death of 
 George II. By HENRY HALLAM, LL.D. Crown 8vo. 7s. 6d. 
 
 STUDENT'S MANUAL OP ENGLISH LITERATURE. 
 
 A History of English Literature of the chief English Writers 
 founded upon the Manual of THOMAS B. SHAW. Anew Edition 
 thoroughly revised. By A. HAMILTON THOMPSON, B.A., ot 
 St. John's Coll., Cambridge, and Univ. Extension Lecturer in 
 English Literature. With Notes, etc. Crown 8vo. 7s. 6d. 
 
 STUDENT'S SPECIMENS OP ENGLISH LITERA- 
 TURE. Selected from the Best Writers, and arranged Chrono- 
 logically. By T. B. SHAW, M.A. Crown 8vo. 5s. 
 
14 MR. MURRAY'S CATALOGUE 
 
 MURRAY'S STUDENT'S MANUALS— contmued. 
 Scripture and Church History . 
 
 STUDENT'S OLD TESTAMENT HISTORY. From the 
 Creation of the World to the Return of the Jews from 
 Captivity. With an Introduction to the Books of the Old Testa- 
 ment. By PHILIP SMITH, B.A. With 40 Maps and Woodcuts. 
 Crown 8vo. 7s. 6d. 
 
 STUDENT'S NEW TESTAMENT HISTORY. With an 
 Introduction, containing the Connection of the Old and 
 New Testaments. By PHILIP SMITH, B.A. With 30 Maps 
 and Woodcuts. Crown 8vo. ys. 6d. 
 
 STUDENT'S MANUAL OP ECCLESIASTICAL HIS- 
 TORY. A History of the Christian Church to the Reformation. 
 By PHILIP SMITH, B.A. 2 Vols. Crown 8vo. 75. 6d. each. 
 
 Part I. — a.d. 30—1003. With Woodcuts. 
 
 Part II.— a.d. 1003— 1614. With Woodcuts. 
 
 STUDENT'S MANUAL OP ENGLISH CHURCH 
 HISTORY. By G. G. PERRY, M.A., Canon of Lincoln. 3 Vols. 
 7s. 6d. each. 
 
 ist Period. From the Planting of the Church in Britain to the 
 Accession of Henry VIII. a.d. 596—1509. 
 
 2nd Period. From the Accession of Henry VIII. to the 
 Silencing of Convocation in the Eighteenth Century, a.d. 1509 
 —1717- 
 
 ^rd Period. From the Accession of the House of Hanover to the 
 Present Time. a.d. 1717— 1884. 
 
 Ancient History, 
 
 STUDENT'S ANCIENT HISTORY OP THE EAST. 
 
 From the Earliest Times to the Conquests of Alexander 
 THE Great, including Egypt, Assyria, Babylonia Media, Persia, 
 Asia Minor, and Phcsnicia. By PHILIP SMITH, B.A With 70 
 Woodcuts. Crown 8vo. ys, 6d. 
 
 STUDENT'S HISTORY OP GREECE. From the 
 Earliest Times to the Roman Conquest. With Chapters on 
 the History of Literature and Art. By Sir WM. SMITH, D.C.L. 
 Thoroughly revised and in part rewritten by G. E. Marindin, M.A. 
 With many new Maps and Illustrations. Crown 8vo. 7s. 6d. 
 
 STUDENT'S HISTORY OP ROME. From the Earliest 
 Times to the Establishment of the Empire. With Chapters 
 on the History of Literature and Art. By Dean LIDDELL. 
 New and Revised Edition, incorporating the results of Modern 
 Research, by P. V. M. BENECKE, M.A., Fellow of Magdalen 
 College, Oxford. With Coloured and other Maps and numerous 
 Illustrations nearly all prepared specially for this Edition. 
 Crown 8vo. 7s. 6d. 
 
OF EDUCATIONAL WORKS. 15 
 
 MURRAY'S STUDENT'S HlhUM h-LS.— continued. 
 Ancient History — continued, 
 
 STUDEJNT'S HISTORY OF THE ROMAN EMPIRE. 
 
 From the Establishment of the Empire to the Accession of 
 CoMMODUS, A.D. i8o. With Coloured Maps and Numerous Illustra- 
 tions. By J. B. BURY, Regius Professor of Modern History at 
 Cambridge. Crown 8vo. 7s. 6d. 
 
 STUDENTS GIBBON. A History of the Decline and Fall 
 OF THE Roman Empire. Abridged from the Original Work by 
 Sir WM. SMITH, D.C.L., LL.D. A New and Revised Edition 
 in Two Parts. Crown 8vo. 5s. each. 
 
 PART I.— From the Accession of Commodus to the Death 
 OF Justinian. By A. H. J. GREENIDGE, M.A., Lecturer and 
 Late Fellow of Hertford College, Lecturer in Ancient History at 
 Brasenose College, Oxford. 
 
 PART IL— From A.D. 565 to the Capture of Constantinople 
 BY the Turks. By J. G. C. ANDERSON, M.A., late Fellow of 
 Lincoln College, Student and Tutor of Christ Church, Oxford. 
 With Maps and Illustrations. 
 
 Europe, 
 
 STUDENT'S HISTORY OP MODERN EUROPE. 
 
 From the Capture of Constantinople by the Turks, 1453, 
 TO the Treaty of Berlin, 1878. By RICHARD LODGE, M.A., 
 Brasenose College, Oxford, Professor of Modern History, University 
 of Edinburgh. 4th Edition, thoroughly revised. Crown 8vo. 7S. 6d. 
 
 STUDENT'S HISTORY OP EUROPE DURING THE 
 MIDDLE AGES. By HENRY HALLAM, LL.D. Crown Svo. 
 7s. 6d. 
 
 France. 
 
 STUDENTS HISTORY OP PRANCE. From the Earliest 
 Times to the Fall of the Second Empire. By W. H. JERVIS, 
 M.A. A New Edition, thoroughly revised, and in great part re- 
 written, by ARTHUR HASSALL, M.A., Censor of Christ Church, 
 Oxford. With a Chapter on Ancient Gaul by F. HAVERFIELD, 
 M.A., Student of Christ Church, Oxford. Coloured Maps, and 
 many new Woodcuts. Crown Svo. 7s. 6d. 
 
 Geography. 
 
 STUDENT'S MANUAL OP ANCIENT GEOGRAPHY. 
 
 By Canon BEVAN, M.A. 150 Woodcuts. Crown Svo, 7s. 6d. 
 
 STUDENT'S GEOGRAPHY OP BRITISH INDIA 
 
 Political and Physical. By GEORGE SMITH, LL.D. With 
 Maps. Crown Svo. 7s. 6d. 
 
i6 MR. MURRAY'S CATALOGUE 
 
 Sir Wm. SMITH'S 
 Smaller Manuals. 
 
 These "Works have been dra-wrn up for the Lower Forms, at the 
 request of several teachers, -who require more elementary books 
 than the STUDENT'S HISTORICAL MANUALS. 
 
 SMALLER HISTORY OP ENGLAND. From the Earliest 
 Times to the Year 1887. Revised and enlarged. By Prof. 
 RICHARD LODGE, M.A. With Coloured Maps and 68 Woodcuts. 
 Crown 8vo. 3s, 6d. 
 
 SMALLER HISTORY OP GREECE. From the Earliest 
 Times to the Roman Conquest. With Coloured Maps, Plans, 
 and Illustrations. Thoroughly revised by G. E. Marindin, M.A. 
 Crown 8vo. 3s. 6d. 
 
 " Most excellently suited to its purpose ; distinguished above all things by its 
 lucidity. Altogether the book is excGllent."— Guardian. 
 
 SMALLER HISTORY OP ROME. From the Earliest 
 Times to the Establishment of the Empire. Thoroughly 
 revised by A. H. J. Greenidge, M.A., Fellow of Hertford College, 
 Oxford. With a Supplementary Chapter on the Empire to 117 A. D., 
 by G. Middleton, M.A., under the Direction of Prof. W. M. 
 Ramsay, M.A., D.C.L. With Coloured Map, Plans, and Illus- 
 trations. Crown 8vo. 3s. 6d. 
 
 The " Smaller History of Rome " has been written and arranged on the same 
 plan, and with the same object, as the "Smaller History of Greece." Like that 
 work it comprises separate chapters on the institutions and literature of the coun. 
 tries with which it deals. 
 
 SMALLER HISTORY OP ENGLISH LITERATURE. 
 
 Giving a Sketch of the Lives of our Chief Writers. By JAMES 
 ROWLEY. Small Crown 8vo. 3s. 6d. 
 
 SMALLER SPECIMENS OP ENGLISH LITERATURE. 
 
 Selected from the Chief Authors and arranged chronologically. By 
 JAMES ROWLEY. With Notes. Small Crown 8vo. 3s. 6d. 
 
 While the "Smaller History of English Literature" supplies a rapid but trust- 
 worthy sketch of the lives of our chief writers, and of the successive influences 
 which imparted to their writings their peculiar character, the present work supplies 
 choice examples of the works themselves, accompanied by all the explanations 
 required for their perfect explanation. The two works are thus especially designed 
 to be used together. 
 
 SMALLER CLASSICAL MYTHOLOGY. With Translations 
 from the Ancient Poets, and Questions on the Work. With 90 
 Woodcuts. Small Crown 8vo. 3s. 6d. 
 
 This work has been prepared by a lady for the use of schools, and young persons 
 of both sexes. In common with many other teachers, she has long felt the want 
 of a consecutive account of the heathen deities, which might safely be placed in 
 the hands of the young, and yet contain all that is generally necessary to enable 
 them to understand the classical allusions they may meet with in prose or poetry, 
 and to appreciate the meanings of works of art. 
 
 A carefully prepared set of QUESTIONS is appended, the answers to which will 
 be found in the corresponding pages of the volume. 
 
SIR WM. SMITH'S SMALLER MANUALS 
 
 — contmued. 
 
 SMALLER SCRIPTURE HISTORY OP THE OLD 
 
 AND THE NEW TESTAMENT. In Three Divisions:—!. Old 
 Testament History. II. Connection of Old and New Testaments. 
 III. New Testament History to A. D. 70. Edited by Sir WM. SMITH. 
 With Coloured Maps and 40 Illustrations. Small Crown 8vo. 3s. 6d. 
 " This book is intended to be used with, and not in place of, the Bible. The 
 result is most satisfactory,"— 2 A« Standard. 
 
 SMALLER ANCIENT HISTORY OF THE EAST, 
 
 From the Earliest Times to the Conquest of Alexander the 
 Great. By PHILIP SMITH, B.A. With 70 Woodcuts. Small 
 Crown 8vo. 3s. 6d. 
 
 SMALLER MANUAL OP ANCIENT GEOGRAPH"S 
 
 By Canon BEVAN, M.A. With Woodcuts. Small Crown 8vo. 
 3S. 6rf. 
 
 Mrs. Markham's Histories. 
 
 HISTORY OP ENGLAND. From the First Invasion by the 
 Romans to 1878. With Conversations at the end of each Chapter. 
 100 Woodcuts. 3s. 6rf. 
 
 HISTORY OP PRANCE. From the Conquest of Gaul by 
 Julius Cesar to 1878. Conversations at the end of each Chapter. 
 70 Woodcuts. 3s. 6d. 
 
 HISTORY OP GERMANY. From its Invasion by Marius 
 to 1880. 50 Woodcuts. 3s. 6d. 
 
 Little Arthur's Histories. 
 
 HISTORY OP ENGLAND. By LADY CALLCOTT. From the 
 
 Roman Invasion down to 1878. With 36 Woodcuts. i6mo. is. 6rf. 
 
 " I never met with a history so well adapted to the capacities of children 
 
 or their entertainment, so philosophical, and written with such simplicity."— Mrs. 
 
 Marcett. 
 
 HISTORY OP PRANCE. From the Earliest Times to the 
 Fall of the Second Empire. With Map and Illustrations. 
 i6mo. 2S. td. 
 
 " The jaded schoolboy, surfeited with tales and the ' over-pressure ' arising from 
 long attention to lives and adventures, will, towards the latter part of his holiday, 
 turn with some relief to this book, and begin feasting afresh. Those who know 
 what ' Little Arthur's England ' did to popularise the subject among little folks, 
 will know what to expect in this ' France.' The book is capitally illustrated, and 
 very wisely the compiler does not reject the exciting jmd legendary parts of the 
 subject. " — Schoolmaster. 
 
 HISTORY OP GREECE. By A. S. WALPOLE, M.A. With 
 Map, Plans and Illustrations. Fcap 8vo. 2s. 6d. 
 
i8 MR. MURRAY'S CATALOGUE ■ 
 
 Sir Wm. SMITH'S 
 Biblical Dictionaries. 
 
 DICTIONARY OP THE BIBLE : comprising its Antiquities, 
 Biography, Geography, and Natural History. By Various 
 Writers. With Illustrations. 3 vols. Enlarged and revised 
 Edition. Medium 8vo. £4 4s. 
 
 Complete sets 0/ the above work may be purchased through any Book- 
 seller at reduced rates.. 
 
 CONCISE DICTIONARY OP THE BIBLE. Condensed 
 from the larger Work. For Families and Students. With Maps 
 and 300 Illustrations. Medium 8vo. 21s. 
 
 A Dictionary of tlie Bible, in some form ot another, is indispensable for every 
 family. To students in the Universities, and in the Upper Forms at Schools, to 
 private families, and to that numerous class of persons who desire to arrive at 
 results simply, this CONCISE DICTIONARY will, it is believed, supply all that is 
 necessary for the elucidation and explanation of the Bible. 
 
 SMALLER DICTIONARY OP THE BIBLE. Abridged 
 from the larger Work. For Schools and Young Persons. With 
 Maps and Illustrations. Crown 8vo. ys. 6d. 
 
 "An invaluable service has been rendered to students in the condensation of 
 Dr. Wm. Smith's Bible Dictionary. The work has been done as only a careful and 
 intelligent scholar could do it, which preserves to us the essential scholarship and 
 value of each SLrticle."— British Quarterly Review. 
 
 The two following Works are intended to furnish a complete account 
 of the leading Personages, the Institutions, Art, Social Life, 
 Writings, and Controversies of the Christian Chtirch from the 
 time of the Apostles to the Age of Charlemagne. They commence 
 at the period at which the " Dictionary of the Bible " leaves off, 
 and form a continuation of it. 
 
 DICTIONARY OP CHRISTIAN ANTIQUITIES. The 
 
 History, Institutions, and Antiquities of the Christian Church. 
 
 Edited by Sir WM. SMITH, D.C. L., and Archdeacon 
 
 CHEETHAM, D.D. With Illustrations. 2 Vols. Medium 8vo. 
 
 £3 13s. 6d. 
 
 "The work before us is unusually well done. A more acceptable present for a 
 candidate for holy orders, or a more valuable book for any library, than the 
 'Dictionary of Christian Antiquities' could not easily be to\ind."—Saturday 
 Review. 
 
 DICTIONARY OP CHRISTIAN BIOGRAPHY, LITERA- 
 TURE, SECTS, AND DOCTRINES. Edited by Sir WM. 
 SMITH, D.C.L., and HENRY WACE, D.D. 4 Vols. Medium 8vo. 
 £6 Ids. 6d. 
 
 " The value of the work arises, in the first place, from the fact that the contri- 
 butors to these volumes have diligently eschewed mere compilation. In these 
 volumes we welcome the most important addition that has been made for a century 
 to the historical library of the English theological student."— Times. 
 
OF EDUCATIONAL WORKS. 19 
 
 Sir Wm. SMITH'S 
 Classical Dictionaries. 
 
 "I am extremely glad of the opportunity of expressing to you 
 the strong sense of obligation -which I, in common -vrith. all teachers 
 and lovers of classical literature, feel to you for your admirable 
 Dictionaries." — Rev. Dr. HAWTREY, late Head Master of Eton 
 College. 
 
 DICTIONARY OP GREEK AND ROMAN ANTI- 
 QUITIES. Including the Laws, Institutions, Domestic 
 Usages, Painting, Sculpture, Music, the Drama, etc. 
 Edited by Sir WM. SMITH, LL.D., Hon. D.C.L., Oxford, Hon. 
 Ph.D., Leipzig ; WILLIAM WAYTE, M.A., Late Fellow of King's 
 College, Cambridge; G. E. MARINDIN, M.A., Late Fellow of 
 King's College, Cambridge. Third Revised and Enlarged Edition. 
 With 900 Illustrations. 2 Vols. Medium 8vo. 31s. 6d. each. 
 
 CONCISE DICTIONARY OP GREEK AND ROMAN 
 ANTIQUITIES. Based on Sir Wm. Smith's larger Dictionary, 
 and Incorporating the Results of Modern Research. Edited by 
 F. WARRE CORNISH, M.A., Vice-Provost of Eton College. 
 With over 1,100 Illustrations taken from the best examples of 
 Ancient Art. Medium 8vo. 21s. 
 
 SMALLER DICTIONARY OP ANTIQUITIES. Abridged 
 from Sir Wm. Smith's larger Dictionary. With 200 Woodcuts. 
 Crown 8vo. 7s, 6d. 
 
 DICTIONARY OP GREEK AND ROMAN BIO- 
 ORAPHY AND MYTHOLOGY. By Various Writers. Edited 
 by Sir WILLIAM SMITH, D.C.L., LL.D. Illustrated by 564 
 Engravings on Wood. In 3 Vols. Medium 8vo. 84s. 
 
 CLASSICAL DICTIONARY OP MYTHOLOGY, BIO- 
 GRAPHY, AND GEOGRAPHY, compiled rom Sir Wm- 
 Smith's larger Dictionaries. In great part re-written by G. E. 
 MARINDIN, M.A., late Fellow ot King's College, Cambridge, some 
 time Assistant Master at Eton College. With over 800 Woodcuts. 
 Thoroughly Revised Edition. 8vo. i8s. 
 
 SMALLER CLASSICAL DICTIONARY. Abridged from 
 the above Work. With 200 Woodcuts. In great part re-written 
 by G. E. MARINDIN, M.A., some time Assistant Master at Eton 
 College. Crown 8vo, 7s. 6d. 
 
 DICTIONARY OP GREEK AND ROMAN GEO- 
 GRAPHY. Illustrated by 534 Engravings on Wood. 2 Vols. 
 Medium 8vo. 56s. 
 
MR. MURRAY'S CATALOGUE 
 
 Sir Wm. Smith's 
 Latin Dictionaries. 
 
 " I consider Dr, "Wm. Smith's Dictionaries to have conferred a 
 great and lasting service on the cause of classical learning in this 
 country."— Dean LIDDELI.. 
 
 "1 have found Dr. "Wm. Smith's Latin Dictionary a great 
 convenience to me. I think that he has been very judicious in 
 what he has omitted, as well as what he has inserted."— Dr. SCOTT. 
 
 OOMPLBTB LATIN-ENGLISH DICTIONARY. Based on 
 THE Works of Forcellini and Freund. With Tables of the 
 Roman Calendar, Measures, Weights, Money, and a Dictionary 
 of Proper Names. By Sir WM. SMITH, D.C.L., LL.D. Medium' 
 8vo. 22nd Edition. i6s. 
 
 "This work aims at {serforming the same service for the Latin language as 
 Liddell and Scott's Lexicon has done for the Greek. Great attention has been 
 paid to Etymology, in which department especially this work is admitted to 
 maintain a superiority over all existing Latin Dictionaries. 
 
 SMALLER LATIN -ENGLISH DICTIONARY. With a 
 Separate Dictionary of Proper Names, Tables of Roman 
 Moneys, &c. Thoroughly revised and in great part re-written. 
 Edited by Sir WM. SMITH and T. D. HALL, M.A. The 
 Etymological portion by JOHN K; INGRAM, LL.D. Square 
 lamo. 7s. 6d. 
 
 This edition of Dr. Smith's ' Smaller Latin-English Dictionary ' is to a great 
 extent a new and original Work. Every article has been carefully revised. 
 
 COPIOUS AND CRITICAL ENGLISH - LATIN DIC- 
 TIONARY. Compiled from Original Sources. By Sir WM. 
 SMITH, D.C.L., and T. D. HALL, M.A. Medium 8vo. i6s. 
 
 It has been the object of the Authors of this Work to produce a more complete 
 and more perfect English-Latin DICTIONARY than yet exists, and every 
 article has been the result of original and independent research. 
 
 Each meaning is illustrated by examples from the classical writers ; and those 
 phrases are as a general rule given in both English and Latin. 
 
 SMALLER ENGLISH-LATIN DICTIONARY. Abridged 
 from the above Work, by Sir WM. SMITH and T. D. HALL.M.A., 
 for the use of Junior Classes, Square i2mo. ys. 6d. 
 
 "An English-Latin Dictionary worthy of the scholarship of our age and country. 
 It will take absolutely the first rank, and be the standard English-Latin Dictionary 
 as long as either tongue endures. Even a general examination of the pages will 
 serve to reveal the minute pains taken to ensure its fulness and philological value, 
 and the ' work is to a large extent a dictionary of the English language, as well as 
 an English-Latin Dictionary.' "—English Churchman. 
 
OF EDUCATIONAL WORKS. 
 
 Mr. MURRAY'S Class Books. 
 
 Languages. 
 
 FRENCH STUMBLING BLOCKS AND ENGLISH 
 STEPPING STONES. By FRANCIS TARVER, M.A., late 
 Senior French Master at Eton College. Fcap. 8vo. zs. 6d. 
 
 Mr. Francis Tarver's skill as a teacher of French to Englishmen is well known. 
 His thorough knowledge of 6oih languages, and his thirty years' experience as a 
 master at Eton, have afforded him exceptional opportunities of judging what are 
 the difficulties, pitfalls, and stumblng-blocks which beset the path of an English- 
 man in his study o( French. 
 
 THE TECHNICAL SCHOOL FRENCH GRAMMAR. 
 
 By Dr. W. KRISCH, sometime Teacher of Latin and Greek at the 
 Birmingham Midland Institute, Examiner in Modern Languages to 
 the Midland Counties' Union of Educational Institutions. Crown 
 8vo. 2S. 6d. 
 
 A CHILD'S FIRST LATIN BOOK. Comprising Nouns, 
 Pronouns, AND Adjectives, with the Verbs. With ample and 
 varied Practice of the easiest kind. Both old and new order of 
 Cases given. By T. D. HALL, M.A. Enlarged Edition, including 
 the Passive Verb. i6mo. 2s. 
 
 TRANSLATION AT SIGHT; or. Aids to Facility in the 
 Translation of Latin. Passages of Graduated DiflBculty, carefully 
 selected from Latin Authors, with Explanations, Notes, &c. By 
 Professor T. D. HALL, M.A. Crown 8vo. 2S. 
 
 GREEK GRAMMAR ACCIDENCE AND SYNTAX 
 FOR SCHOOLS AND COLLEOES. By JOHN THOMPSON, 
 M.A., late Scholar of Christ's College, Cambridge ; Senior Classical 
 Master, High School, Dublin. Crown 8vo. 6s. 
 
 One of the chief objects of this book is to bring within the reach of the younger 
 generation of students and schoolboys some of the results of the linguistic dis- 
 coveries of the present day. It is therefore written in accordance with the philo- 
 logical views of the Grttttdriss der VergUichettden Gramtnatik of Professors 
 ijrugmann and Delbriick, of P. Giles' Manual of Comparatwe Philology, of G. 
 Meyer's Griechische Grarntnatik and of other scholars. Use has also been made 
 of the Third Edition, revised by Drs. Blass and Gerth, of Kiihner's Aus/iihrliche 
 Gratnntatik der Griechischen Sprache, and of several school Greek Grammars in 
 use in Germany. 
 
 The Grammar consists of two parts in one volume, Part I. containing the Acci- 
 dence, and Part II. the Syntax. The forms and spelling in use in Attic Greek are 
 given according to the latest authorities, and there are special notes on Homeric 
 peculiarities. There are also tables of Greek verbs arranged on a new plan, in- 
 cluding (a) a list of the chief types of verbs, (b) a list of common Attic verbs regu- 
 lar according to the types in (a), and (c) a list of the irregular verbs with the irregular 
 forms printed in special type. This arrangement is intended to remove many 
 misconceptions about Greek verbs. Brief notes on syntax, ik.c., are given with 
 each verb stating the ordinary constructions and any special uses. There will also 
 be Appendices on (i) Greek Weights, Measures, and Dates, (2) Accents, and 
 (3) Sound Changes. Particular attention has been given to the type, so that the 
 essential part of Greek Grammar may be made specialljr clear, and that the 
 beginner may have no difficulty in distmguishing the more important sections. 
 
MR. MURRAY'S CATALOGUE 
 
 MR. MURRAY'S CLASS BOOKS -contmued. 
 
 L anguages — con tin ued. 
 
 PRINCIPIA GR-^CA. An Introduction to the Study of Greek, 
 comprehending Grammar Delectus, and Exercise Book with 
 Vocabularies. By H. E. HUTTON, M.A. Balliol College, 
 Oxford. For the use of the Lower Forms in Public and Private 
 Schools. Crown 8vo. 3s. 6d. 
 
 ELUCIDATIONS OP THE STUDENT'S GREEK 
 GRAMMAR. By Prof. CURTIUS. From the German, with the 
 Author's sanction. By EVELYN ABBOTT, M.A. 2nd Edition. 
 Crown 8vo. ys. 6d. 
 
 A SHORT PRACTICAL HEBREW GRAMMAR; with 
 AN Appendix. Containing the Hebrew Text of Genesis I — VI, and 
 Psalms I— VI. Grammatical Analysis Vocabulary. By the Rev. 
 STANLEY LEATHES, D.D. Crown 8vo. 7s. 6d. 
 
 PRACTICAL SPANISH. A Grammar of the Spanish Language. 
 With Exercises, Vocabularies, and Materials for Conversation. 
 
 Part I. : Nouns, Adjectives, Pronouns, etc. 
 
 Part II.: Verbs, etc., with Copious Vocabularies. 
 By Don FERNANDO DE ARTEAGA, Taylorian Teacher of 
 Spanish in the University of Oxford. 2 Parts. Crown 8vo. 7s. 6d. 
 
 This book has in the main been formed on the plan of Sir William Smith's well- 
 known and deservedly popular " Principia Latina, Part I." It possesses, however, 
 one new feature which is as novel as it is likely to prove valuable to the student 
 who uses the book. English people, for the most part, who set themselves to 
 learn Spanish, are not children, but either would-be travellers in the country, 
 students of its literature, or persons engaged in commerce with Spain or Spanish- 
 speaking countries. It has therefore been the aim of the Editor throughout to 
 avoid the old-fashioned OUendorfen sentences in illustration of the grammar, and 
 instead to make use of phrases and expressions which are likely to prove of prac- 
 tical use to tlie traveller and the man of business. 
 
 Gradus. 
 
 AN ENGLISH-LATIN GRADUS, OR VERSE DIC- 
 TIONARY, for Schools. By A. C. AINGER, Trinity Coll., Cam- 
 bridge, Assistant-Master at Eton College, and the late H. G. 
 WINTLE, M.A., Christ Church, Oxford. This Gradus is on a new 
 plan, intended to simplify the Composition of Latin Verses by 
 Classical Meanings, selected Epithets and Synonyms, etc. Crown 
 8vo. 9s. 
 
OF EDUCATIONAL WORKS. 23 
 
 MR. MURRAY'S CLASS BOOKS— continued. 
 Geography. 
 
 PREPARATORY GEOGRAPHY for IRISH SCHOOLS. 
 
 With numerous Coloured Maps, Relief Maps, Plans, and Views of 
 
 well-known Places in Illustration of Geographical Terms. By 
 
 JOHN COOKE, M.A., Lecturer in Geography, Church of Ireland 
 
 Training College; and Examiner to the Board of Intermediate 
 
 Education. Small Crown 8vo. is. 6d. 
 
 "Mr. Cooke's eminent services to the literature of education have seldom been 
 better illustrated than in this Geography for Irish Schools. . . . Mr. Cooke 
 * claims that his Geography is suggestive rather than exhaustive. He might 
 
 reasonably have gone a step further, and claimed the high merit of charm of 
 attractiveness. With such a wealth of apt illustration drawn from our own 
 country, no child could for a moment fail to comprehend what he sees and hears." 
 
 — The J risk Times. 
 
 History and Literature. 
 
 THE GROWTH OP THE EMPIRE. By A. W. JOSE. 
 
 With many Coloured and other Maps and Diagrams. Cr. 8vo. 6s. 
 " .... an eminently useful book .... as serviceable as it is readable. 
 It is systematic in method and accurate in stitement." — The Globe. 
 
 HALLAM'S CONSTITUTIONAL HISTORY OP ENG- 
 LAND, Chapters I. to IX. Bound together in i Volume for the 
 special use of candidates for the London University Examinations. 
 Crown 8vo. 5s. 
 
 EUROPE IN THE MIDDLE AGES. By OLIVER J. 
 THATCHER, Ph.D., and FERDINAND SCHWILL, Ph.D. 
 Large Crown Svo. 9s. 
 
 This work has been written by men who have had long experience in teaching, 
 to supply the want of a compendious History of Mediseval Europe, from the 
 middle of the Fourth to the close of the Fifteenth Century, which has been long 
 felt in the universities and schools. A distinguished Professor of Modern History 
 in one of our leading universities, to whom a copy has been sent, writes : 
 
 " The book covers ground on which it has always been hard to get a suitable 
 book for educational purposes, and, so far as I can judge — I have a^ yet only 
 examined the German History of the loth Century — it is thoroughly sound and 
 clear 
 
 A GENERAL HISTORY OP EUROPE, 850-1900. 
 
 By OLIVER J. THATCHER and FERDINAND SCHWILL, 
 Authors of "Europe in the Middle Ages." Revised and adapted to 
 the requirements of English Colleges and Schools, by Arthur 
 Hassall, M.A., Christ Church, Oxford. With Bibliographies at the 
 end of each section. With Maps, Genealogical Tables. Crown Svo. gs. 
 ". . . a model of condensation, omitting no essential facts. , . . The 
 volume is greatly enhanced by a wealth of maps and chronological and genealogical 
 tables. Among general histories this will take a leading place."— 
 
 Dunaee Advertiser . 
 
24 MR. MURRAY'S CATALOGUE 
 
 MR. MURRAY'S CLASS BOOKS— conttnued. 
 History and Literature — continued. 
 
 POPULAR HISTORY OP THE CHURCH OF 
 ENGLAND. From the Earliest Times to the Present Day. 
 By the Rt. Rev. WILLIAM BOYD CARPENTER, The Lord 
 Bishop of Ripon. Illustrated. Crown 8vo. 6s. 
 
 "The title is, perhaps, hardly wide enough for the contents ; one would almost 
 call the book a history of Christianity in England. ... He has the true 
 judicial spirit, and is passionately eager to be entirely fair to every one. His 
 history is impartial to the last degree. . . . His book should have a very wide 
 circulation, and can do nothing but good wherever it is read." — Mornhtg Post. 
 
 THE PUBLIC SCHOOL SPEAKER. Compiled by F. 
 WARRE CORNISH, M.A., Vice-Provost of Eton College. 
 Large 8vo. 7s. 6d. 
 
 This work, as its name implies, is a collection of pieces suitable for recitation at 
 school " speeches." The Editor has made his selection in the widest manner and 
 from various languages— Greek, Latin, English, German, French and Italian. He 
 has included drama, general poetry, orations and other prose pieces, ancient and 
 modern. The Editor is in hopes that no serious omissions can be found, unless it 
 be those intentional ones from classics that are at everyone's command, which he 
 has left out to make room for those more difficult of access. 
 
 It will be noticed that he has in many cases given an extract longer than is 
 sufficient for a single recitation — he has done this advisedlj' with a view to afford- 
 ing greater scope for individual requirements and individual taste. 
 
 The publisher is of opinion that the Speaker will be found the most complete 
 extant. 
 
 " No such comprehensive work has hitherto been issued, and in our opinion 
 ' The Public School Speaker ' has leaped at a single bound into the very foremost 
 rank, and has become the classic of its kind." — The Bookseller. 
 
 ELEMENTARY TEACHERS' CERTIFICATE EDITION. 
 
 STANLEY'S LIFE OF ARNOLD. With a Preface by Sir 
 JOSHUA FITCH, LL.D., formerly H.M. Chief Inspector of 
 Training Colleges. Large type, 800 pages, in i volume. With 
 Photogravure Portrait and 16 half-tone Illustrations. Crown 
 8vo. 6s. 
 
 " Stanley's Life of Arnold has been selected by the Board of Education as a 
 subject of examination for intending teachers, so that this edition will be 
 heartily welcomed." — Educational Times. 
 
 .^SOP'S FABLES. A New Version. Chiefly from the Original 
 
 Sources. By Rev. THOMAS JAMES. With 100 Woodcuts. 
 
 Illustrations by John Tenniel. Crown 8vo. 2s. 6rf. 
 
 "This work is remarkable for the clearness and conciseness with which each 
 tale is narrated ; and the book has been relieved of those tedious and unprofitable 
 appendages called 'morals,' which used to obscure and disfigure the ancient 
 editions of the work." — The ExaTniner. 
 
OF EDUCATIONAL WORKS. 25 
 
 MR. MURRAY'S CLASS BOOKS -continued. 
 Classical Study. 
 
 CHAPTERS PROM ARISTOTLE'S ETHICS. By J. H. 
 
 MUIRHEAD, M.A., Professor of Mental and Moral Philosophy, 
 Mason University College, Birmingham. Author of '-The Ele- 
 ments of Ethics." Large crown 8 vo. 7s. 6d. 
 
 " We cannot commend these ' chapters' too highly, not only to teachers, but 
 to all students ot Aristotle or of moral philosophy who feel that the problems of 
 the Old Greeks are in any way unreal in these later days, or their solutions out of 
 dale."— Pilot. 
 
 HERODOTUS. The Text of Canon Rawlinson's Translation. 
 With the Notes abridged for the use of Students. By A. J. 
 GRANT, M.A., of King's College, Cambridge ; Professor of History, 
 Yorkshire College, Leeds; Author of "Greece in the Age 01 
 Pericles." With Map and Plans. 2 Vols. Crown 8vo. 12s. 
 
 " The delightful pages of the old Greek whose flavour has been so admirably 
 presented by Canon Rawliiison, will thus be made accessible to a far wider circle 
 than heretofore. There is no better introduction to Greek history and literature 
 than Herodotus, and the English reader gets him here under the best possible 
 conditions." — Literary World. 
 
 THE STORY OP THE PERSIAN W^ARS AS TOLD 
 
 BY HERODOTUS. In English. Selected, arranged and edited, 
 
 so as to form a History Reading Book for Schools. By the Rev. 
 
 C. C. TANCOCK, D.D., Head Master of Tonbridge School. With 
 
 Uustrations, Map and Plans. Crown 8vo. 2s. 6d. 
 
 BMcal Study. 
 
 GREEK TESTAMENT READER. For Use in Schools, 
 comprising consecutive Extracts from the Synoptic Gospel and 
 Passages from the Epistles of St. Paul. By THEOPHILUS D. 
 HALL, M.A. Crown 8vo. 2s. 6d. 
 THE SUNRISE OP REVELATION. New Testament 
 Teachings for Secondary Schools. A Sequel to "The Dawn of 
 Revelation." By Miss M. BRAMSTON, Author of "The Dawn 
 of Revelation," "Judaea and her Rulers," etc. Crown 8vo. 5s. net. 
 "We do not think that any good judge will get far in the book without 
 discovering that it is one of rare merit and exceptionally well suited to the class 
 to whom it is addressed. We do not know of any book likely to be more useful 
 to the teachers of secondary schools in the preparation of their Scripture lessons 
 than this. It is clear, accurate, and full ot instruction and suggestiveness. Miss 
 Bramston shows a competent knowledge of the present position of criticism as to 
 the Gospels and Acts, but she wisely keeps her learning in the background, and 
 it only betrays itself by an occassional sentence or epithet. It is a great deal to 
 say of any book deahng with the Scripture history that it is scholarly without 
 being dry, and reverent without any trace of ' preaching.' Yet Miss Bramston 
 has succeeded in all this and more. We do not often praise a book so 
 unreservedly, but we shall be surprised if she does not attract a circle of readers 
 far larger than that to which she has addressed herself in the first instance."— 
 
 The Guardian. 
 
26 MR. MURRAY'S CATALOGUE. 
 
 MR. MURRAY'S CLASS BOOKS— continued. 
 Biblical Study— continued . 
 
 THE STUDENT'S COMMENTARY ON THE BIBLE. 
 
 Abridged from the " Speaker's Commentary." Edited by John M. 
 Fuller, M.A., Vicar of Bexley, and formerly Fellow of St. John's 
 College, Cambridge. Crown 8vo. ys. 6d. each. 
 
 Old Testament.— Fo/. /.—Genesis to Deuteronomy. Vol. II.— 
 Joshua to Esther. FoL ///.—Job to Song of Solomon. Vol. IV.— 
 Isaiah to Malachi. 
 
 New Testament.— Foi. /.—Gospels to Acts. Vol. //.—Epistles 
 to Revelation. 
 
 THE BIBLE IN THE HOLY LAND. Extracted from 
 Dean Stanley's work on Sinai and Palestine. With Woodcuts. 
 Crown 8vo. 3s. 6d. 
 
 Science (Elementary & General). 
 
 STUDENT'S ELEMENTS OP GEOLOGY. By Sir 
 
 CHARLES LYELL. Thoroughly revised by Prof. J. W. JUDD. 
 Crown 8vo. With 600 Woodcuts. 9s. 
 
 ELEMENTS OF AGRICULTURE, A Text-Book. Prepared 
 under the authority of the Royal Agricultural Society of England. 
 By W. FREAM, LL.D. New Edition (Seventh). Crown 8vo. 
 3S. 6d. 
 
 A HANDY BOOK OP HORTICULTURE . An Introduction 
 TO THE Theory and Practice of Gardening. With Illustrations 
 and Diagrams. By F. C. Hayes, M.A., Rector of Raheny ; Lecturer 
 in Practical Horticulture in Alexandra College, Dublin, Crown 8vo. 
 25. 6d. net. 
 
 ". . . Just the book to place in the hands of young amateurs and Students, 
 and should find a place on the shelves of every Village and County Council 
 Library."— 7"/«^ Fieid. 
 
 THE INVISIBLE POWERS OP NATURE ; some Elemen- 
 tary Lessons in Physical Science, Heat, Light, Sound, 
 Gravitation, Solids, Fluids, Electricity, Magnetism, etc. 
 By E. M. CAILLARD. Post 8vo. 6s. 
 
 " We have rarely met with a work of the kind in which so much information is 
 so clearly and so accurately set forth."— Gardener's Chronicle. 
 
 COLOUR IN NATURE : A Study in Biology. By MARION 
 NEWBIGIN. Crown 8vo. 7s. 6d. 
 
 " All who seek for well sifted results, and not merely superficictl information, 
 will thank her for this book, and congratulate her on a very timely contribution to 
 biological literatme."— journal 0/ hducation. 
 
OF EDUCATIONAL WORKS. 27 
 
 MR. MURRAY'S CLASS BOOKS— continued. 
 Science — continued. 
 
 BARLY CHAPTERS IN SCIENCE. A First Book of 
 Knowledge of Natural History, Botany, Physiology, 
 Physics and Chemistry for Young People. By Mrs. W. 
 AWDRY (Wife of the Bishop of South Tokyo, Japan). Edited by 
 W. F. Barrett, F.R.S., Professor of Experimental Physics in the 
 Royal College of Science for Ireland. With nearly 200 Illustrations. 
 Crown 8vo. 6s. 
 
 " Deserves a warm welcome from all teachers of the young. . . . The 
 illustrations are models of clear, careful, and unconventional work."— Literature. 
 
 " It can be confidently recommended to the young as a sound and pleasantly 
 written introduction to seieQce."—Giutrcltan. 
 
 ELECTRICITY. The Science of the Nineteenth Century. A 
 Sketch for General Readers. By E. M. CAILLARD. With Illus- 
 trations. Crown 8vo. 7s. 6d. 
 
 THE FIVE "WINDO"WS OP THE SOUL: A Popular 
 Account of the Human Senses. By EDWARD HAMILTON 
 AITKEN, author of "The Tribes on my Frontier," "Behind the 
 Bungalow," " A Naturalist on the Prowl." Crown 8vo. 6s. 
 
 •'There is probably nothing in recent literature which will so surely lead to a 
 thirst for further ancf more technical knowledge than the author's treatment oi 
 these diflficult subjects. . , . It is admirably written and cannot fail to give 
 pleasure. It is so seldom that such a really good book as this is published that 
 the hope may be expressed that it will meet with the success it deserves, and find 
 a place in every good public and private lihTary. "—Manc/tesier Guardian. 
 
 Jurisprudence. 
 
 AN ANALYSIS OP AUSTIN'S JURISPRUDENCE. 
 
 By GORDON CAMPBELL. Crown 8vo. 6s. 
 
 STUDENT'S EDITION OP AUSTIN'S JURISPRU- 
 DENCE. Compiled from the larger work. By ROBERT 
 CAMPBELL. Crown Svo. 12s. 
 
28 MR. MURRAY'S CATALOGUE 
 
 Sir Wm. SMITH'S 
 Educational Series. 
 
 English Course. 
 
 PRIMARY ENGLISH GRAMMAR for Elementary Schools. 
 With 134 Exercises and carefully graduated passing lessons. By 
 T. D. HALL, M.A. i6mo. is. 
 
 SCHOOL MANUAL OF ENGLISH GRAMMAR. With 
 
 Historical Introduction and copious Exercises. By Sir WM. 
 SMITH, D.C.L., and T. D. HALL, M.A. With Appendices. 
 Crown 8vo. 3s. 6d. 
 
 MANUAL OF ENGLISH COMPOSITION. With Copious 
 Illustrations and Practical Exercises. Suited equally for Schools 
 and for Private Students of English. By T. D. HALL, M.A. 
 Crown 8vo. 3s. 6d. 
 
 French Course. 
 
 FRENCH PRINCIPIA, Part I. A First French Course. 
 containing Grammar, Delectus and Exercises, with Vocabularies 
 and Materials for French Conversation. Crown 8vo. 3s. 6d. 
 
 APPENDIX TO FRENCH PRINCIPIA, Part I. Containing 
 Additional Exercises and Examination Papers. Cr. 8vo. 2s. 6d. 
 
 FRENCH PRINCIPIA, Part II. A Reading Book. Containing 
 Fables, Stories, and Anecdotes, Natural History, and Scenes from 
 the History of France. With Grammatical Questions, Notes, and 
 copious Etymological Dictionary. Crown 8vo. 4s. 6d. 
 
 FRENCH PRINCIPIA, Part III. Prose Composition. Con- 
 taining a Systematic Course of Exercises on the Syntax, with the 
 Principal Rules of Syntax. Crown 8vo. 4s. 6d. 
 
 THE STUDENT'S FRENCH GRAMMAR; Practical and 
 Historical. For the Higher Forms. By C. HERON-WALL 
 with Introduction by M. Littre. Crown 8vo. 6s. 
 
 A SMALLER FRENCH GRAMMAR. For the Middle and 
 Lower Forms. Abridged from the above Work. Crown 8vo. 
 3s. 6rf. 
 
OF EDUCATIONAL WORKS. 
 
 29 
 
 SIR WM. SMITH'S EDUCATIONAL SERIES 
 
 — continued. 
 
 German Course 
 
 GERMAN PRINOIPIA, Part I. A First German Course. 
 Containing Grammar, Delectus, Exercises, Vocabularies and 
 materials for German Conversation. Cr. 8vo. 3s. 6d. 
 
 GERMAN PRINOIPIA, Part II. A Reading Book. Containing 
 Fables, Stories, and Anecdotes, Natural History, and Scenes from 
 the History of Germany. With Grammatical Questions, Notes and 
 Dictionary. Cr. 8vo. 3s. 6d. 
 
 Ifalian Course , 
 
 ITALIAN PRINOIPIA, Part I. A First Italian Course. 
 Containing a Grammar, Delectus, Exercise Book, with Vocabu- 
 laries, &c. Thoroughly revised and in part re-written by C. F. 
 COSCIA, Professor of Italian in the University of Oxford. 
 Crown 8vo. 3s. 6d. 
 
 ITALIAN PRINOIPIA, Part II. A First Italian Reading- 
 Book, containing Fables, Anecdotes, History, and Passages from the 
 best Italian Authors, with Questions, Notes, and an Etymological 
 Dictionary, Crown 8vo. 3s. 6d. 
 
 Spanish Course. 
 
 SPANISH PRINOIPIA, Part L A First Spanish Course. 
 Containing Grammar, Delectus and Exercise Book, with Vocabu- 
 laries, on the Plan of Sir Wm. Smith's " Principia Latina." By 
 H. J. WEINTZ. Crown 8vo. [/n the Press. 
 
 Laiin Course. 
 
 THE YOUNG BEGINNERS COURSE. 
 
 I. FIRST LATIN BOOK.-Gram- 
 
 mar, Easy Questions, Exercises 
 and Vocabularies. F'cap 8vo. 
 
 25. 
 
 II. SECOND LATIN BOOK.-An 
 
 easy Latin Reading Book with 
 Analysis of Sentences. F'cap 
 8vo. zs. 
 
 III. THIRD LATIN BOOK.-Ex- 
 
 ercises on the Syntax, with 
 Vocabularies. F'cap 8vo. 2s. 
 
 lY. FOURTH LATIN BOOK.— A 
 
 Latin Vocabulary for Begin- 
 ners, arranged according to 
 Subjects and Etymologies. 
 F'cap 8vo. 2S. 
 
 PRINOIPIA LATINA, Part I. First Latin Course, 
 Grammar, Delectus, Exercises, and Vocabularies. 38th Edition, 
 Thoroughly revised so as to meet the requirements of Modern 
 Teachers and Scholars. Crown 8vo. 3s. 6d. 
 
 APPENDIX TO PRINOIPIA LATINA, Part I. Containing 
 Additional Exercises, with Examination Papers. Crown 8vo. 2S. fid. 
 
30 MR. MURRAY'S CATALOGUE 
 
 SIR WM. SMITH'S EDUCATIONAL SERIES 
 
 — continued. 
 
 Latin Course — continued. 
 
 PRINCIPIA LATINA, Part II. Reading Book. An Intro- 
 duction to Ancient Mythology, Geography. Roman Antiquities, and 
 History. With Notes and a Dictionary. Crown 8vo. 3s. 6d. 
 
 PRINCIPIA LATINA, Part III. Poetry. I. Easy Hexameters, 
 and Pentameters. 2. Eclogae Ovidianje. 3. Prosody and Metre. 
 4. First Latin Verse Book. Crown 8vo. 3s, 6d. 
 
 PRINCIPIA LATINA, Part IV. Prose Composition. Rules 
 of Syntax, with Examples, Explanations of Synonyms, and Exer- 
 cises on the Syntax. Crown 8vo. 3s. 6d. 
 
 PRINCIPIA LATINA, Part V. Short Tales and Anecdotes 
 FROM Ancient History for Translation into Latin Prose. 
 With an English-Latin Vocabulary. By Sir WM. SMITH, LL.D. 
 Revised and considerably enlarged. By T. D. HALL, M.A. 3s. 6d 
 
 THE STUDENT'S LATIN GRAMMAR. For the Use of 
 
 Colleges and the Higher Forms in Schools. By Sir WM. 
 SMITH, LL.D., and T.D.HALL. Crown Bvo, 6s. 
 
 SMALLER LATIN GRAMMAR. For the Middle and 
 Lower Forms. Crown 8vo. 3s. 6d. 
 
 Gree/( Course . 
 
 INITIA GR-^CA, Part I. A First Greek Course, containing 
 Grammar, Delectus, Exercise Book, and Vocabularies. 26th 
 Edition. Edited and carefully revised by Francis Brooks, M.A., 
 Professor of Classics at University College, Bristol, and formerly 
 Classical Scholar of Balliol College, Oxford. Crown 8vo. 3s. 6d. 
 
 APPENDIX TO INITIA GR-ffiCA, Part I. Containing 
 Additional Exercises, with Examination Papers and Easy Reading 
 Lessons with the Sentences Analysed, serving as an Introduction to 
 Initia GRiECA, Part II. Crown 8vo. 2s. 6d. 
 
 INITIA GRiECA, Part II. A Reading Book. Containing 
 short Tales, Anecdotes, Fables, Mythology, and Grecian History. 
 With a Lexicon. Crown 8vo, 3s. 6d. 
 
 INITIA GRiECA, Part III. Prose Composition. Containing 
 the Rules of Syntax, with copious Examples and Exercises. 
 Crown 8vo. 3s. 6d. 
 
 THE STUDENT'S GREEK GRAMMAR. For the Higher 
 Forms. By Professor CURTIUS. Edited by Sir WM. SMITH, 
 D.C.L. Crown Svo. 6s. 
 
 A SMALLER GREEK GRAMMAR. For the Middle and 
 Lower Forms. Abridged from the above Work. Crown 8vo. 
 3s. 6d. 
 
OF EDUCATIONAL WORKS. 31 
 
 Eton College Books. 
 
 ETON LATIN GRAMMAR. For use in the Higher Forms. 
 By FRANCIS HAY RAWLINS, M.A., Fellow of King's Coll., 
 Cambridge, and Assistant Master at Eton College, and Rev. 
 W. R. INGE, M.A., Fellow of Hertford Coll., Oxford. Revised 
 Edition. Crown 8vo. 6s. 
 
 " The Syntax has the merit of compressing^ a great deal of matter into a short 
 space, and of avoiding much of the technical terminology which afflicts some of the 
 readers of the Public School Grammar. It is also lucid in arrangement, and clear 
 in its presentation of facts."— Prof. NETTLESHIP in the Classical RevieTv. 
 
 ETON ELEMENTARY LATIN GRAMMAR. For use in 
 
 the Lower Forms. Compiled with the sanction of the Head 
 Master, by A. C. AINGER, M.A., Trinity College, Cambridge, and 
 H. G. WINTLE, M.A., Christ Church, Oxford, Assistant Masters at 
 Eton College. Crown 8vo. ^s. 6rf. 
 
 PREPARATORY ETON LATIN GRAMMAR. Containing 
 the Accidence and the Syntax Rules with the sanction of the Head 
 Master. By A. C. AINGER, M. A., Trinity College, Cambridge, and 
 H. G. WINTLE, M.A., Christ Church, Oxford, Assistant Masters at 
 Eton College. Crown 8vo. 2s. 
 
 ETON LATIN SYNTAX AND EXERCISE BOOK. Con- 
 sisting of pages 97-127 and 152-306 from the Eton Klementary Latin 
 Grammar, together with the First Latin Exercise Book. Compiled, 
 with sanction of the Head Master, by A. C. AINGER, M.A., 
 Trinity College, Cambridge, and H. G. WINTLE, M.A., Christ 
 Church, Oxford, Assistant Masters at Eton College. Crown 8vo. 5s. 
 
 A FIRST LATIN EXERCISE BOOK. Adapted to the Eton 
 ci Latin Grammar. By A. C. AINGER, M.A., and H. G. WINTLE, 
 M.A. Crown 8vo. zs. 6d. 
 
 OVID LESSONS : being Easy Passages selected from the Elegiac 
 Poems of Ovid, with Explanatory Notes by A. C. AINGER, M.A., 
 and H. F. W. TATHAM, M.A., of Trinity College, Cambridge, 
 Assistant Masters at Eton College. Crown 8vo. 2s. 6rf. 
 
 ETON HORACE. The Odes, Epodes, and Carmen Saeculare. 
 
 With Notes. By F. W. CORNISH, M.A. In Two Parts. With 
 
 Maps. Crown 8vo. 6s. 
 
 As it is considered desirable that the notes should be used only in the 
 
 preparation of the lesson, and not in the class, they are bound up separate 
 
 from the text. 
 
 "One good feature is that the notes are printed entirely separate from the text 
 in a separate volume. They are just those that are suited to boys at that stage." 
 —Schoolmaster. 
 
 ETON EXERCISES IN ALGEBRA. By E. P. ROUSE 
 and A. COCKSHOTT, Assistant Masters at Eton College. Crown 
 Svo. 3s. 
 
 ETON EXERCISES IN ARITHMETIC. By Rev. T. 
 DALTON, M.A., Assistant Master at Eton College. Crown Svo. 3s. 
 
32 MR. MURRAY'S CATALOGUE 
 
 University Manuals. 
 
 Edited by Professor KNIGHT, of St. Andrew's University. 
 
 A HISTORY OP ASTRONOMY. By ARTHUR BERRY, M.A., 
 Fellow of King's College, Cambridge With over loo Illustrations. 
 Crown 8vo. 6s. 
 
 Primitive Astronomy — Greek Astronomy — The Middle Ages — 
 Copernicus — The Reception of the Copernican Theory and the 
 Progress of Observation— Galileo— Kepler — From Galilei to Newton 
 — Universal Gravitation — Observational Astronomy in the i8th 
 Century— Gravitational Astronomy in the i8th Century — Herschel — 
 The 19th Century — List of Authorities and of Books for Students — 
 Index. 
 
 THE STUDY OP ANIMAL LIPB. By J. ARTHUR 
 
 THOMSON, Regius Professor of Natural Science in the University 
 of Aberdeen; Joint Author of the "Evolution of Sex"; Author of 
 "Outlines of Zoology." With many Illustrations. Crown 8vo. 5s. 
 Part I. — The Everyday Life of Animals. Part II. — The Powers 
 of Life. Part III.— The Forms of Animal Life. Part IV.— The 
 Evolution of Animal Life. 
 
 THE ELEMENTS OP ETHICS. By JOHN R. MUIRHEAD, 
 Balliol ICollege, Oxford, Lecturer on Moral Science, Royal 
 Holloway College, Examiner in Philosophy to the University of 
 Glasgow. Crown 8vo. 3s, 
 
 Book /.—The Science of Ethics. Book //.—Moral Judgement. 
 Book ///.—Theories of the End. Book IV.— The End as Good. 
 Book F.— Moral Progress. 
 
 THE REALM OP NATURE: A Manual of Physiography. 
 By Dr. HUGH ROBERT MILL, Director of British Rainfall 
 Organization. With 19 Coloured Maps and 68 Illustrations. Crown 
 8vo. 5s. 
 
 The Study of Nature— The Substance of Nature : Energy, the 
 Power of Nature— The Earth a Spinning Ball— The Earth a Planet 
 —The Solar System Universe — The Atmosphere — Atmospheric 
 Phenomena— Climates of the World— The Hydrosphere— The Bed 
 of the Oceans — The Crust of the Earth— Action of Water on the 
 Land— The Record of the Rocks— The Continental' Area— Life and 
 Living Creatures— Man in Nature. 
 
OF EDUCATIONAL WORKS. 33 
 
 UNIVERSITY lliKl^\3 KLS— continued. 
 
 ENGLISH COLONIZATION AND EMPIRE. By A. 
 
 CALDECOTT, Fellow and Dean of St. John's College, Cambridge; 
 and Professor of Philosophy, King's College, London. Coloured 
 Maps and Plans. Crown 8vo. 3s. 6d. 
 
 Introduction— Pioneer Period— International Struggle --Develop- 
 ment and Separation ot America — The English in India — Recon- 
 struction and Fresh Development— Government of the Empire — 
 Trade and Trade Policy — Supply of Labour — Native Races — 
 Education and Religion — Genial Reflections — Appendix : Books 
 of Reference. 
 
 FRENCH LITERATURE. By H. G. KEENE, Wadham 
 College, Oxford, Fellow of the University of Calcutta. Crown 8vo. 
 3S. 
 
 The Age of Infancy (a. Birth) — The Age of Infancy {b. Growth)— 
 The Age of Adolescence (XVIth Cent.)— The Age of Glory (Poetry) 
 —The Age of Glory (Prose)— The Age of Reason— The Age of 
 ' Nature ' — Source of Modern French Literary Art : Poetry— Sources 
 of Prose Fiction, 
 
 THE PHILOSOPHY OP THE BEAUTIFUL, Part L 
 
 By Professor KNIGHT, University of St. Andrew's. Crown 8vo. 
 3s. 6d. 
 
 Introductory — Prehistoric Origins— Oriental Art and Speculation 
 — The Philosophy of Greece — The Neoplatonists — The Graeco- 
 Roman Period — Mediaevalism — The Philosophy of Germany — 
 The Philosophy of France — The Philosophy of Italy — The Philosophy 
 of Holland — The Philosophy of Britain — The Philosophy of America. 
 
 THE PHILOSOPHY OF THE BEAUTIFUL, Part II. 
 
 By Professor KNIGHT, University of St. Andrew's. Crown 8vo. 
 3S. 6d. 
 
 Prolegomena— The Nature of Beauty— The Ideal and the Real — 
 Inadequate or Partial Theories — Suggestions towards a more com- 
 plete Theory of Beauty — Art, its Nature and Functions — The 
 Correlation of the Arts — Poetry— Musie — Architecture — Sculpture — 
 Painting — Dancing— Appendix . 
 
34 MR. MURRAY'S CATALOGUE 
 
 UNIVERSITY MANVALS— continued. 
 
 THE USB AND ABUSE OP MONEY. By W. CUNNING- 
 HAM, D.D., Fellow of Trinity College, Cambridge, Professor of 
 Economic Science, King's College, London. Crown 8vo. 3s. 
 
 Part /.—Social Problems. Part //.—Practical Questions. Part III. 
 — Personal Duty. 
 
 THE JACOBEAN POETS. By EDMUND GOSSE. Crown 8vo. 
 3s. 6d. 
 
 Preface; The Last Elizabethans; Ben Jonson— Chapman ; John 
 Dome; Beaumont and Fletcher; Campion — Drayton— Sir John 
 Beaumont ; Heywood — Middleton — Powley ; Giles and Phineas 
 Fletcher — Browne ; Tourneur — Webster — Day — Darorne ; Wither 
 — Quarles — Lord Brooke ; Philip Massingen ; Index. 
 
 THE RISE OP THE BRITISH DOMINION IN INDIA, 
 
 From the Early Days of the East India Company to the 
 Conquest ok the Panjab. By Sir ALFRED LYALL, K.C.B. 
 With Coloured Maps. Crown 8vo. 4s. 6d. 
 
 " No student should be without this excellent instructor into the technicalities 
 of the many phases through which our Empire has passed." — Daily Telesraph. 
 
 THE ENGLISH NOVEL, PROM ITS ORIGIN TO SIR 
 W. SCOTT. By WALTER RALEIGH, Professor of English 
 Literature in Glasgow University. Crown Svo. 3s. 6d. 
 
 The Romance and the Novel— The Elizabethan Age : Euphues : 
 Sydney and Nash — The Romances of the 17th Century— The 
 Beginnings of the Modern Novel — Richardson and Fielding — The 
 Novels of the 18th Century— The Revival of Romance— The Novel 
 of Domestic Satire : Miss Burney ; Miss Austen ; Miss Edgeworth— 
 Sir Walter Scott. 
 
 THE PRENCH REVOLUTION. By C. E. MALLET, Balliol 
 College, Oxford. Crown 8vo. 3s. 6d. 
 
 The Condition of France in the Eighteenth Century — The Last 
 Years of the Ancien Regime — The Early Days of the Revolution — 
 The Labours of the Constituent Assembly — Parties and Politicians 
 under the Constituent Assembly — The Rise of the Jacobin Party — 
 The Influence of the War upon the Revolution — The Fall of the 
 Gironde — The Jacobins in Power — The Struggles of Parties and the 
 Ascendancy of Robespierre — The Reaction. 
 
OF EDUCATIONAL WORKS. 35 
 
 UNIVERSITY MANUALS— co«<tnM^i. 
 
 AN INTRODUCTION TO MODERN GEOLOGY. By 
 
 R. D. ROBERTS, sometime Fellow of Clare College, Cambridge ; 
 Fellow of University College, London ; Secretary to the Cambridge 
 and London University Extension Syndicate. With Coloured Maps 
 and Illustrations. Crown 8vo. 5s, 
 
 Part /.—Progress of Geological Thought. 
 
 Part //.—Destruction of Land. 
 
 Part ///.—Construction of Land. 
 
 Part IV. — Evolution of Land Areas. 
 
 OUTLINES OP ENGLISH LITERATURE. By WILLIAM 
 RENTON. With Illustrative Diagrams. Crown 8vo. 3s. 6^/. 
 
 First Period. — The Old English Metric Chronicle, 600-1350 — The 
 Renascence, 1350-1500 — The Reformation, 1500-1600 — The Romantic 
 Drama, 1 550-1650. 
 
 Second Period.— The Serious Age, 1600-1700 — The Age of Gaiety, 
 1650-1750 — The Sententious Age, 1700-1800— The Sympathetic Age, 
 1800-1900 — The Literature of America. 
 
 THE PHYSIOLOGY OP THE SENSES. By JOHN 
 
 McKENDRICK, Professor of Physiology in the University ot 
 Glasgow, and Dr. SNODGRASS, Physiological Laboratory, 
 Glasgow. With Illustrations. Crown Svo. 4s. 6d. 
 
 I. Touch, Taste, and Smell— 2. The Sense of Sight — 3. Sound 
 and Hearing. 
 
 CHAPTERS IN MODERN BOTANY. By PATRICK 
 GEDDES, Professor of Botany, University College, Dundee. 
 With Illustrations. Crown Svo. 3s. 6d. 
 
 Pitcher Plants — Other Insectivorous Plants. DiflSculties and 
 Criticisms — Movement and Nervous Action in Plants — The Web of 
 Life — Relations between Plants and Animals — Spring and its Studies ; 
 Geographical Distribution and World-Landscapes ; Seedling and 
 Bud — Leaves— Suggestions for Further Study. 
 
 GREECE IN THE AGE OP PERICLES. By A. J. 
 
 GRANT, King's College, Cambridge, and Staff Lecturer in History 
 to the University of Cambridge. With Illustrations. Crown 8vo. 
 3s.6d. 
 
 The Essentials of Greek CiviHzation— The Religion of the Greeks 
 —Sparta, Argos, Corinth, Thebes— The Earlier History of Athens— 
 The Rivalry of Athens and Sparta— Civil Wars in Greece— The 
 Athenian Democracy — Pericles : his Policy and his Friends — 
 Society in Greece — From the Outbreak of the Peloponnesians to the 
 Death of Pericles— The Peloponnesian War. 
 
36 MR. MURRAY'S CATALOGUE 
 
 UNIVERSITY MANVALS— continued. 
 
 LOGIC, INDUCTIVE AND DEDUCTIVE. By WILLIAM 
 MINTO, late Professor of Logic and Literature, University of 
 Aberdeen. With Diagrams. Crown 8vo. 4s. 6d. 
 
 Introduction— The Logic Consisting ; Syllogism and Definition— 
 The Element of Propositions — Definition — The Interpretation of 
 Propositions — The Interdependence of Propositions — Inductive 
 Logic or the Logic of Science. 
 
 HISTORY OF RELIGION. A Sketch of Primitive Beliefs 
 AND Practices, and of the Origin and Character of the 
 Great Systems. By ALLAN MENZIES, D.D., Professor of 
 Biblical Criticism in the University of St. Andrew's. Crown 8vo. 5s. 
 
 The Religion of the Early World— Isolated National Religions— 
 The Semitic Group— The Aryan Group— Universal Religion. 
 
 LATIN LITERATURE. By J. W. MAC KAIL, Balliol College, 
 Oxford. Crown 8vo. 3s. 6d. 
 
 The Republic — The Augustan Age— The Empire— Index of 
 Authors. 
 
 ELEMENTS OF PHILOSOPHY. By GEORGE CROOM 
 ROBERTSON, late Grote Professor, University College, London, 
 Edited from Notes of Lectures delivered at the College, 1870— 1892, 
 by (Mrs.) C. A. FOLEY RHYS DAVIDS, M.A. Crown 8vo. 3s. 6d. 
 
 ELEMENTS OF PSYCHOLOGY. By GEORGE CROOM 
 ROBERTSON, late Grote Professor, University College, London. 
 Edited from Notes of Lectures delivered at the College, 1870— 1892, 
 by (Mrs.) C. A. FOLEY RHYS DAVIDS, M.A. Crown 8vo. 3s. 6d. 
 
 SHAKSPERE AND HIS PREDECESSORS IN THE 
 KNGLISH DRAMA. By F. S. BOAS, Professor of English 
 Literature, Queen's College, Belfast. Crown 8vo. 6s. Library 
 Edition, on larger paper. 7s. 6d. 
 
 " It is impossibln to part with this work without a word of cordial congratulation 
 to the author on the vigour of his style, the originality of some of his views and 
 theories, and the painstaking appreciation he has brought to bear on his subject 
 — Morning Post. 
 
 *** The Volumes in this Series may be obtained in the ordinary 
 Red binding or in Library binding with uncut edges. 
 
OF EDUCATIONAL WORKS. 37 
 
 WORKS FOR Advanced Students 
 
 Art 
 
 THE PINE ARTS. The Origin, Aims and Condition of 
 Artistic Work as Applied to Painting, Sculpture and 
 Architecture. By G. BALDWIN BROWN, M.A., Professor of 
 Fine Art in the University of Edinburgh; Formerly Fellow of 
 Brasenose College, Oxford. New Edition. With many new 
 Illustrations. Crown 8vo. 65. net. 
 
 " It is a work that ought to be in the library ot all thoughtful students of Art." 
 —Literary World. 
 
 Banking. 
 
 THE COUNTRY BANKER. His Clients, Cares, and Work. 
 From an Experience of Forty Years. By GEORGE RAE, Author 
 of "Bullion's Letters to a Bank Manager." With Portrait of the 
 Author. A Cheap Edition. Crown 8vo. 2s. 6d. net. 
 
 Education. 
 
 NATIONAL EDUCATION. Essays Towards a Constructive 
 
 Policy. By the Rev. Bernard Reynolds, M.A. ; Francis Storr, 
 
 B.A. ; Sir Joshua G. Fitch, LL.D. ; Prof. H. E. Armstrong, 
 
 LL.D., Ph.D., F.R.S. ; A. D. Provand, formerly M. P. for Glasgow ; 
 
 T. A. Organ, B.A., L.C.C. ; Prof. W. A. S. Hewins, Director of 
 
 the London School of Economics and Political Science; John C. 
 
 Medd, M.A. ; H. W. Eve, formerly Headmaster of University 
 
 College School. Edited, with an Introductory Chapter and a 
 
 Bibliography, by LAURIE MAGNUS, M.A., Magdalen College, 
 
 Oxford. 8vo. 7s. 6d. net. 
 
 " Professor ARMSTRONG writes vigorously on the need for 'drastic reform ' in 
 the schools in which our sroveming classes are educated, as the most important 
 feature in the reorganization of a national educational programme."— Times. 
 
 EDUCATION AND EMPIRE. Address on Topics of the 
 Day. By the Right Hon. R. B. HALDANE, K.C., M.P., LL.D. 
 Crown 8vo. 5s. net, 
 
 THE SCHOOLMASTER. A Commentary upon the Aims and 
 Methods of an Assistant-Master in a Public School. By 
 A. C. BENSON, Eton College. Crown 8vo. 5s. net. 
 
38 MR. MURRAY'S CATALOGUE 
 
 WORKS FOR ADVANCED STUDENTS-continued. 
 Geography. 
 
 A HISTORY OP ANCIENT GEOGRAPHY AMONG 
 
 THE QRESKS AND ROMANS FROM THE EARLIEST AQES 
 TIIjIj the fall of the ROMAN EMPIRE. By Sir E. H 
 BUNBURY. With Twenty Illustrative Maps. 2 Vols. 8vo. 21s! 
 
 THE DAVTN OP MODERN GEOGRAPHY. By C. 
 
 RAYMOND BEAZLEY, M.A., F.R.G.S., late Fellow of Merton 
 College, Oxford. A History of Exploration and Geographical 
 Science. 
 
 VOL. I. — From the Conversion of the Roman Empire to A.D. 900, 
 with an account of the achievements and writings of the early 
 Christian, Arab and Chinese Travellers and Students. With 
 Reproductions of the Principal Maps of the Time. 8vo. i8s. 
 
 " Mr. Beazley is only at the threshold of his great subject, and the manner in 
 which he has dealt with the obscurest part of his theme causes us to look forward 
 with pleasant anticipations to its contmuation. It is gratifying to think that the 
 best extant account of the dawn of Geography should emanate from an English- 
 man. ' ' — ^ thenceum. 
 
 VOL. IL— From the Opening of the Tenth to the Middle of the 
 Thirteenth Century (A.D. 900 — 1260). With Maps and Illustrations. 
 Demy 8vo. i8s. 
 
 ". . . Marked by the same admirable qualities which characterised the first 
 volume — scholarship, immense research, ancl exhaustiveness ... on the method 
 he has adopted he has rendered an immense service to geograj>hy of the mitldle 
 ages, which is accessible in no other single work."— 7'/?? Times. 
 
 Greek. 
 
 A, — Texts, Commentaries, etc. 
 
 PRINCIPLES OP GREEK ETYMOLOGY. By Professor G. 
 CURTIUS, of the University of Leipzig. Translated into English, 
 with the Author's sanction, by A. S. Wilkins, Litt.D., LL.D., and 
 E. B. England, M.A., Owens College, Manchester. Fifth Edition, 
 thoroughly revised. 2 vols. 8vc. 28s. 
 
 SOPHOCLES. The Seven Plays in English Verse. By LEWIS 
 CAMPBELL, M.A., LL.D., Emeritus Professor of Greek in the 
 University of St. Andrews. Demy 8vo. 10s. 6d. 
 
 THE GREEK VERB; its Structure and Development. By 
 Professor CURTIUS. Translated by A. S. Wilkins, M.A., and 
 E. B. England, M.A. 8vo. 12s. 
 
 THE GREEK THINKERS. A History of Ancient 
 Philosophy. By Professor THEODOR GOMPERZ, of Vienna 
 University. Hon. LL.D., Dublin, Ph.D. Konigsberg, &c. 
 
 VOL. I.— Translated by LAURIE MAGNUS, M.A., Magdalen 
 College, Oxford. Demy 8vo. 14s. net. 
 
 " We are glad to welcome the first instalment of the authorised translation of 
 Professor Gomperz's great history of ancient philosophy. . . . The translation 
 is excellently done and the translator has had the benefit of untiring help from 
 the author. Such an excellent reproduction of so important a foreign work on 
 one of the greatest of themes is an event in its way. . . . We shall look forward 
 with great pleasure to the appearance of the next \/o\\ime."—Spectator. 
 
 VOL. II.— Socrates, The Socratics and Plato. Translated 
 by G. G. BERRY, M.A., Balliol College, Oxford. [In the Press. 
 
OF EDUCATIONAL WORKS. 39 
 
 WORKS FOR ADVANCED STUDENTS— ro«^«w^rf. 
 Greek — con fin ued. 
 
 A. — Texts, Commentaries, etc. 
 
 PLATO AND THE OTHER COMPANIONS OP 
 
 SOCRATES. By GEORGE GROTE, Author of "The History of 
 Greece." 4 vols. Crown 8vo. 5s. each. 
 
 SELECT PASSAGES PROM THE INTRODUCTIONS 
 TO PLATO. By BENJAMIN JOWETT, M.A. Edited by Lewis 
 Campbell, M.A., LL.D. With a Portrait. F'cap 8vo. 2s. 6d. net. 
 
 THE ILIAD OP HOMER, rendered into English Blank Verse. 
 By the EARL OF DERBY. Portrait. 2 vols. Crown 8vo. los, 
 
 THE ODYSSEY OP HOMER. Books L— VII L Translated 
 into English Verse by J. W. MACKAIL, Formerly Fellow of Balliol 
 College, Oxford. Crown 8vo. 
 
 CONCISE DICTIONARY OP THE ENGLISH AND THE 
 MODERN GREEK LANQUAGES, AS Actually Written and 
 Spoken. Being a Copious Vocabulary of all Words and Expressions 
 Current in Ordinary Reading and in Everyday Talk, for the 
 Guidance of Students and Travellers through Greece and the East. 
 Compiled by Prof. A. N. Jannaris, Ph.D., St. Andrew's University. 
 Crown 8vo. los. 6d. 
 
 B. — History. 
 
 A HISTORY OP GREECE, from the Earliest Period to the close 
 of Alexander the Great. By GEORGE GROTE. With Portrait, 
 Maps, and Plans. 10 vols. 5s. each. 
 
 THE GREAT PERSIAN WAR and its Preliminaries. 
 
 A Study of the Evidence, Literary and Topographical. 
 By G. B. GRUNDY, M.A., Lecturer at Brasenose College, and 
 University Lecturer in Classical Geography. With Maps and 
 Illustrations. Demy 8vo. 21s. net. 
 
 ' It is but seldom that we have the priviledge of reviewing so excellent a work 
 in Greek history. This book on the great war which freed Greece from the 
 attacks of Persia will long remain the standard work on the subject." — 
 
 The Athejiciiim. 
 
 THE TOPOGRAPHY OP THE BATTLE OP PLATiEA 
 
 THE CITY OP PliAT^A, THE FIELD OP I.EUCTRA. By 
 
 G. B. GRUNDY, M.A. With Maps and Plans. Demy 8vo. 
 js. 6d. ; sewed, 5s. 
 
 PHILIP AND ALEXANDER OP MACEDON, Two 
 
 Essays in Biography. With Maps and Illustrations. By D. G. 
 HOGARTH, M.A,, Fellow of Magdalen College, Oxford. 14s. 
 
40 MR. MURRAY'S CATALOGUE 
 
 WORKS FOR ADVANCED STUDENTS— continued. 
 History. 
 
 Church and Scripture. 
 THE HISTORY OP THE CHRISTIAN CHURCH 
 
 PROM THE APOSTOLIC AQE TO THE REPORMATION, 
 A.D. 64—1517. By JAMES C. ROBERTSON, M.A., Canon of 
 Canterbury, Professor of Ecclesiastical History in King's College, 
 London. 8 vols. Crown 8vo. 6s. each. 
 
 THE HISTORY OP CHRISTIANITY PROM THE 
 
 BIRTH OP CHRIST TO THE ABOLITION OP PAGANISM 
 IN THE ROMAN EMPIRE. By HENRY HART MILMAN. 
 3 vols. Post 8vo. 4S. each. 
 
 THE HISTORY OP LATIN CHRISTIANITY 
 
 INCLUDING THAT OP THE POPES TO THE PONTIFICATE 
 OP NICHOLAS V. By HENRY HART MILMAN. 9 vols. 
 Post 8vo. 4s. each. 
 
 THE HISTORY OP THE JEWS PROM THE 
 
 EARLIEST PERIOD DO^WN TO MODERN TIMES. By 
 
 HENRY HART MILMAN, D.D., late Dean of St. Paul's. 3 vols. 
 Post 8vo. 4s. each. 
 
 LECTURES ON THE HISTORY OP THE JEWISH 
 
 CHURCH PROM THE EARLIEST TIMES TO THE 
 CHRISTIAN ERA. By the Late DEAN STANLEY. With 
 Portrait and Maps. 3 vols. Crown 8vo. 6s. each. 
 
 THE EVOLUTION OP THE ENGLISH BIBLE. Being 
 AN Historical Sketch of the Successive Versions from 
 1382— 1885. By H. W. HOARE, late of Balliol College, Oxford, 
 now an Assistant Secretary to the Board of Education, Whitehall. 
 With Portraits and Specimen-pages from Old Bibles. Second 
 and Cheaper Edition, Revised. Crown 8vo. 7s. 6d. net. 
 
 THE REPORMATION. A Religious and Historical Sketch. 
 By the Rev. J. A. BABINGTON, M.A., Assistant Master at 
 Tonbridge School, formerly Scholar of New College, Oxford. 
 Demy 8vo. 12s. net. 
 
 "This masterly essay . . . gives evidence on every page of wide reading 
 and of a remarkable power of condensation. . . . It is a notable piece of 
 work, one that deserves to be widely read."— Daily Chronicle. 
 
 AN INTRODUCTION TO THE STUDY OP THE 
 NE'W TESTAMENT, and an Investigation into Modern Biblical 
 Criticism, based on the most Recent Sources of Information. By the 
 Rev. GEO. SALMON, D.D., D.C.L., etc., Provost of Trinity 
 College, Dublin. Crown 8vo. 9s. 
 
OF EDUCATIONAL WORKS. 
 
 WORKS FOR ADVANCED STUDENTS-continued. 
 History — con fin ued. 
 
 Egypt. 
 
 AN ACCOUNT OF THE MANNERS AND CUSTOMS 
 OP THE MODERN EGYPTIANS. Written in Egypt during the 
 Years, 1833-34 and 35. Partly from Notes made during a former 
 visit to that country in the Years 1825-26-27 and 28. By EDWARD 
 WILLIAM LANE. Fifth Edition, with numerous additions and 
 improvements from a copy annotated by the Author. Edited by his 
 Nephew Edward Stanley Poole. 2 Vols. Crown Svo. 12s. 
 
 EGYPT UNDER THE PHARAOHS. By HEINRICH 
 BRUGSCH-BEY. Condensed and Revised by M. Brodrick. 
 With Maps, Plans and Illustrations. Demy 8vo. i8s. 
 
 OUTLINES OF ANCIENT EGYPTIAN HISTORY. By 
 
 AUGUSTE MARIETTE. Translated and Edited with Notes by 
 Mary Brodrick. Second Edition. With Maps. Crown Svo. 5s. 
 
 POPULAR ACCOUNT OF THE ANCIENT EGYPTIANS. 
 
 By Sir J. GARDNER WILKINSON, F.R.S. Revised and abridged 
 from his larger work. Illustrated with five hundred Woodcuts. 2 Vols. 
 
 Post Svo. I2S. 
 
 England. 
 THE CONSTITUTIONAL HISTORY OP ENGLAND 
 
 PROM THE ACCESSION OP HENRY VII. TO THE DEATH 
 OP GEORGE II. By HENRY HALLAM, LL.D. Cabinet 
 Edition. 3 vols. Post 8vo. 12s. 
 
 HISTORY OP ENGLAND, Comprising the Reign of Queen 
 Anne to the Peace of Versailles, 1701— 17S3. By Lord 
 MAHON (Earl Stanhope). Fifth Edition, Revised. Post Svo. 
 9 vols. 5s. each. 
 
 Europe. 
 
 HISTORY OP EUROPE DURING THE MIDDLE AGES. 
 
 By HENRY HALLAM, LL.D. Cabinet Edition. 3 vols. Post Svo. 
 
 I2S. 
 
 LITERARY HISTORY OP EUROPE DURING THE 
 15th, 16th and 17th CENTURIES. By HENRY HALLAM, 
 LL.D. Cabinet Edition. 4 vols. Post Svo. i6s. 
 
WORKS FOR ADVANCED STVDENTS-continued. 
 History— con finued. 
 
 France. 
 THE STATE OP SOCIETY IN PRANCE BEPORB 
 
 THE REVOLUTION OP 1789 AND THE CAUSES "WHICH 
 LED TO THAT EVENT. By ALEXIS DE TOCQUEVILLE, 
 Member of the French Academy. Translated by Henry Reeve, 
 D.C.L. Third Edition. Demy 8vo. 12s. 
 
 India and the East. 
 
 THE HISTORY OP INDIA. The Hindu and Mahometan 
 Periods. By the Hon. MOUNTSTUART ELPHINSTONE. 
 Seventh Edition. With Notes and Additions by E. B. Cowell, 
 M.A., late Principal of Sanskrit College, Calcutta. With Map. 
 DemySvo. i8s. 
 
 THE RISE OP THE BRITISH POWER IN THE EAST. 
 
 By the late Hon. MOUNTSTUART ELPHINSTONE. Being a 
 Continuation of his " History of India." Edited by Sir Edward 
 CoLEBROOKE, Bart. With Maps. Medium 8vo. i6s. 
 
 THE RISE AND EXPANSION OP THE BRITISH 
 DOMINION IN INDIA. By Sir ALFRED LYALL, K.C.B., 
 D.C.L. Third and Enlarged Edition. With Maps. 8vo. 12s. net. 
 
 CHINA: Her History, Diplomacy and Commerce, from the 
 Earliest Times to the Present Day. By E. H. PARKER, 
 Professor of Chinese at the Owens College ; Acting-Consul-General 
 in Corea, Nov., 1886 — Jan., 1887; Consul in Hainan, 1891-2, 1893-4; 
 and in 1892-3, Adviser in Chinese Affairs to the Burma Government. 
 With ig Maps, &c. Large Crown 8vo. 8s. net. 
 
 Netherlands. 
 
 HISTORY OP THE UNITED NETHERLANDS. From 
 THE Death of William the Great to the Twelve Years 
 Truce, 1609. By JOHN LOTHORP MOTLEY, D.C.L., LL.D, 
 With Portraits. 4 Vols. Post 8vo. 6s. each. 
 
 Vol. /.— 1584-86. Vol. //.— 1586-89. Vol. ///. — 1590-1600. 
 Vol. IV. — 1600-1609. 
 
 LIPE AND DEATH OP JOHN OP BARNEVELD 
 
 (Advocate of Holland). With a View of the Primary Causes 
 and Movements of the Thirty Years' War. By JOHN 
 LOTHORP MOTLEY, D.C.L., LL.D. With Illustrations. 2 Vols. 
 Post 8vo. 6s. each. 
 
OF EDUCATIONAL WORKS. 43 
 
 WORKS FOR ADVANCED STUDENTS— co»rt«M<?i. 
 History — con tin ued. 
 
 Rome. 
 
 THE HISTORY OP THE DECLINE AND PALL 
 OP THE ROMAN ElttPIRE. By EDWARD GIBBON. With 
 Notes by Dean Milman, M. Guizot, and Sir William Smith. 
 With Portrait and Maps. Demy 8vo. 8 vols. 60s. 
 
 Complete sets of the above work may be purchased through any 
 Bookseller at reduced rates. 
 
 Latin. 
 
 THE ANNALS OP TACITUS. For English Readers. 
 Books I. — VI. An English Translation with Introduction and 
 Notes. By GEORGE G. RAMSAY Litt.D., LL.D., Professor of 
 Humanity in the University of Glasgow ; Editor of Selections from 
 Tibullus and Propertius, Latin Prose Composition, etc. With 
 Maps. Demy 8vo. 
 
 The .lim of the translator is to produce a version, which while beinjj exact in 
 scholarship and faithful to the original, shall be such as may be read with pleasure 
 and profit by those who are unacquainted with Latin. The notes will be mainly 
 historical, and designed to put the Knglish reader in possession of all infonnatton 
 essential to the understanding of the text, and to enable him to compare the 
 narrative and the judgments of Tacitus with those of other authorities for the 
 period. 
 
 VIRGIL. In English Verse. Eclogues and ^Eneid, Books I — VI. 
 By the Rt. Hon Sir CHARLES BOWEN. 8vo. 12s. 
 
 Law and Politics. 
 
 LECTURES ON JURISPRUDENCE OR THE PHI- 
 LOSOPHY OP POSITIVE LA-W. By the late JOHN AUSTIN. 
 Fifth Edition, Revised and Edited by Robert Campbell, Advocate 
 (Scotch Bar), and of Lincoln's Inn, Barrister-at-Law. 2 vols. 
 8vo. 32s. 
 
 FIRST PRINCIPLES IN POLITICS. By WILLIAM 
 SAMUEL LILLY. Demy 8vo. 14s. 
 
 LAW AND POLITICS IN THE MIDDLE AGES. By 
 EDWARD JENKS, Reader in English Law in the University of 
 Oxford. Demy 8vo. 12s. 
 
 'By far the most important and original book relating to jurisprudence 
 published for some years in England is Mr. - • ■ - • - 
 
 Middle Ages.' "—Times. 
 
 published for some years in England is Mr. Jenks's ' Law and Politics in the 
 
44 MR. MURRAY'S CATALOGUE 
 
 WORKS FOR ADVANCED STUDENTS— cow^mw^^. 
 Law and Politics — continued. 
 
 Works by Sir Henry S. Maine, K.C S.I. 
 
 ANCIENT LAW ; its Connection with the Early History of Society, 
 and its Relation to Modern Ideas. Sixteenth Edition. 8vo. gs. 
 
 LECTURES ON THE EARLY HISTORY OP INSTITU- 
 TIONS, in continuation of the above work. 8vo. 9s. 
 
 VILLAGE - COMMUNITIES IN THE EAST AND 
 ■WEST, with other Lectures, Addresses, and Essays. Seventh 
 Edition. 8vo. gs. 
 
 DISSERTATIONS ON EARLY LAW AND CUSTOM. 
 
 8vo. gs. 
 
 POPULAR GOVERNMENT. Four Essays. I. Prospects of 
 Popular Government. — II. Nature of Democracy. — III. Age of 
 Progress. — IV. Constitution of the United States. Fifth Edition. 
 8vo. 7s. 6d. 
 
 INTERNATIONAL LAW. The Whewell Lectures delivered at 
 Cambridge in 1887. 8vo. 7s. 6d. 
 
 Medical. 
 
 HANDBOOK OP PHYSIOLOGY. By W. D. HALLIBURTON, 
 M.D., F.R.S., Professor of Physiology, King's College, London. 
 Fourth Edition, being the Seventeenth of Kirkes' (see Note below). 
 Again thoroughly revised, with the addition of new matter and 
 new illustrations, and certain alteration of the arrangement in 
 deference to the wishes and advice of numerous teachers. With 
 upwards of Six Hundred Illustrations, including some Coloured 
 Plates. Large Cr. 8vo. 14s. 
 
 Extract from publisher's Note to this Edition. 
 Three completely revised editions of KIRKHS' HANDBOOK have now been 
 
 Cublished since the editorship was first undertaken by Professor W. D. Halli- 
 urton in 1896. So extensive have been the changes made in these years, that 
 but little remains of the original work, and the manual has now obtained a higher 
 reputation and a wider popularity than at any time before. 
 
 In these circumstances it has been suggested by several professional men and 
 other readers of the book that it would be well to drop the time-honoured name 
 of "Kirkes'," and to substitute for it that ot the real author of the present volume 
 — Professor Halliburton. Whatever prestige attached to the old title has now 
 been rightly transferred to the new, and we have accordingly decided to adopt 
 this suggestion, and to call the book in future " HALLIBURTON'S PHYSIOLOGY." 
 
OF EDUCATIONAL WORKS. 45 
 
 WORKS FOR ADVANCED ST\5I>n^TS~continued 
 
 Medical — continued. 
 
 MANUAIj op pathology, a Handbook for Students. 
 By SIDNEY MARTIN, B.Sc, M.D., M.R.C.S., Professor of 
 Pathology, University College. With numerous Woodcuts from 
 Micro-Photographs. Medium 8vo. 
 
 A TREATISE ON MEDICAL JURISPRUDENCE. 
 
 Based on Lectures delivered at University College, London. By 
 
 G. VIVIAN POORE, M.D. With Illustrations. 8vo. i28. net. 
 
 ". . . Admirable and interesting treatise . . . the reader can almost hear 
 Dr. Poore's genial and witty voice as he turns these instructive pages. They are 
 marked by a kind of ' golden common-sense,' which is the most valuable lesson 
 that any medical or legal student can lay to heart ... an ideal handbook of 
 the subject for the young student."— 7"A« SJ>ectator. 
 
 Sociology. 
 
 THE BASIS OP SOCIAL RELATIONS. A Study in 
 Ethnic Psychology. By the late DANIEL G. BRINTON, 
 A.M., M.D., LL.D., D.Sc, Author of "A History of Primitive 
 Religions," " Races and Peoples,* &c. Edited by Livingston 
 Farrand. 8vo. 8s. net. 
 
 *,* The above is the work upon which Professor Brinton was engaged at the 
 time of his death. 
 
 Tides, 
 
 THE TIDES AND KINDRED PHENOMENA IN THE 
 SOIiAR SVSTEM. The substance of Lectures delivered at the 
 Lowell Tnstitute, Boston, Massachusetts, in 1897, By GEORGE 
 HOWARD DARWIN, Plumian Professor and Fellow of Trinity 
 College, in the University of Cambridge. With Illustrations. 
 Crown 8vo. 7s. 6d. 
 
 " Professor Darwin has succeeded in giving a very clear and lucid account of 
 the matters of which he treats."— Times. 
 
46 MR. MURRAY'S CATALOGUE 
 
 Charles Darwin's Works. 
 
 THE ORIGIN OP SPECIES BY MEANS OP NATURAL 
 SELECTION. Library Edition. 2 vols. 12s. — Popular Edition. 
 6s.— Cheaper Edition. With a Photogravure Portrait of the Author. 
 Large crown 8vo. 2S. 6d. net. — Also in Paper Covers, is. net. 
 
 Mr. Murray desires to inform the public that the edition which has just lost 
 copyright is the imperfect edition which was subsequently thoroughly revised by 
 Mr. Darwin. This imperfect edition has been reprinted by other publishers 
 without the consent or authority of Mr. Darwin's representatives. 
 
 The only authorised and complete editions are those published by Mr. Murray, 
 and these do not lose copyright for several years to come. 
 
 DESCENT OP MAN, AND SELECTION IN RELA- 
 TION TO SEX. Woodcuts. Library Edition. 2 vols. 15s.— 
 I Vol. Popular Edition. 7s.6d.— Cheaper Edition. With Illustrations. 
 Large crown 8vo. 2S. 6d. net. 
 
 VARIATION OP ANIMALS AND PLANTS UNDER 
 DOMESTICATION. Woodcuts. 2 vols. 15s. 
 
 EXPRESSION OP THE EMOTIONS IN MAN AND 
 ANIMALS. With Illustrations. 12s. 
 
 VARIOUS CONTRIVANCES BY "WHICH ORCHIDS 
 
 ARE FERTILIZED BY INSECTS. Woodcuts. 7s. 6d. 
 
 MOVEMENTS AND HABITS OP CLIMBING PLANTS. 
 
 Woodcuts. 6s. 
 
 INSECTIVOROUS PLANTS. Woodcuts. 9s. 
 
 CROSS AND SBLP-PERTILIZATION IN THE VEGE- 
 TABLE KINGDOM, gs. 
 
 DIPPERENT PORMS OP PLOWERS ON PLANTS 
 
 OF THE SAME SPECIES. 7s. 6d. 
 
 PORMATION OP VEGETABLE MOULD THROUGH 
 THE ACTION OF "WORMS. Illustrations. 6s. 
 
 JOURNAL OP A NATURALIST DURING A VOYAGE 
 
 ROUND THE XHTORLD IN H.M.S. " BEAGLE." With 100 
 
 tustrations. Medium 8vo. 21s.— Popular Edition. With Portrait. 
 6d.— Cheaper Edition. With 16 full-page Plates. Large crown 
 Svo. 2S. 6d. net. 
 
OF EDUCATIONAL WORKS. 47 
 
 MR. MURRAY'S Musical Series. 
 
 Crown 8vo. 5s. net each. 
 
 SONGS AND SONG WRITERS. By HENRY T. FINCK, 
 Author of "Wagner and his Works," "Chopin and other Musical 
 Essays," etc., etc. With 8 Portraits. 
 
 THE ORCHESTRA AND ORCHESTRAL MUSIC. 
 
 By W. J. HENDERSON, Author of "What is Good Music," 
 etc., etc. With 8 Portraits and other Illustrations. 
 
 THE OPERA, PAST AND PRESENT. An Historical 
 Sketch. By WILLIAM FOSTER APTHORP, Author of 
 " Musicians and Music Lovers," etc, With Portraits. 
 
 CHOIRS AND CHORAL MUSIC. By ARTHUR MEES. 
 With Portraits. 
 
 MUSIC: How It Came to be What It Is. By HANNAH 
 SMITH. With Illustrations. 
 
 HOW MUSIC DEVELOPED. By W. J. HENDERSON, 
 Author of " What is Good Music." 
 
 HOW TO LISTEN TO MUSIC. Hints and Suggestions 
 
 TO Untaught Lovers of the Art. By HENRY EDWARD 
 
 KREHBIEL, Author of " Studies in the Wagnerian Drama," 
 etc., etc. With 11 Portraits. 
 
 WHAT IS GOOD MUSIC? Suggestions to Persons 
 Desiring to Cultivate a Taste in Musical Art. By W. J. 
 HENDERSON. 
 
 A BOOK OF BRITISH SONG. 
 
 For Home and School 
 Edited by CECIL J. SHARP, Principal of the Hampstead Conserva- 
 toire. With Pianoforte Score and Words. Large 4to. 7s. 6d, net. 
 Also a Small Crown 8vo. Edition with Words and Airs only. Cloth, 2S. ; 
 paper, is. 6d. 
 
48 
 
 MR. MURRAY'S CATALOGUE 
 
 List of Keys. 
 
 These Keys are not sold to the Public, and care is taken that they do 
 7iot get into the hands of boys at school. They can only be obtained 
 by authenticated Teachers on iiritten application to the 
 Publisher, and their prices are strictly net, post free. 
 
 ETON COLLEGE SERIES. 
 
 s. d. s. d. 
 
 First Latin Exercise Book 2 i I Eton Exercises in Arith- 
 Eton Exercises in Algebra metic (Answers only) ... 2 i 
 
 (Answers only) ... ... 2 1 | 
 
 HALL, Professor T. D. 
 
 Translation at Siglit ... ... ... ... ... ... i 1 
 
 HOME AND SCHOOL LIBRARY. 
 
 Algebra, Part I. (Answers only) ... ... ... ...11 
 
 SECONDARY EDUCATION TEXT-BOOKS. 
 
 Commercial German, Part I. ... 
 SIR WM. SMITH'S EDUCATIONAL SERIES. 
 ENGLISH. 
 
 I Primary English Grammar o 7 
 
 a 7 I 
 
 FRENCH. 
 
 French Principia, Part II. 17 
 
 School Manual of English 
 Grammar 
 
 French Principia, Part I. ... 
 Appendix to French 
 
 Principia, Part I. 
 
 German Principia, Part I. 
 
 Italian Principia, Part I. ... 
 
 Spanish Principia 
 
 Principia Latina, Part I. ... 
 Appendix to Principia 
 
 Latina, Part I. 
 Principia Latina, Part II. 
 Principia Latina, Part III. 
 
 Initia Graeca, Part I. For 
 use with the 26th or any 
 later Editions. Keys to 
 all previous Editions are 
 quite out of print 
 
 French Principia, Part III. i 
 
 GERMAN. 
 
 I I I German Principia, Part II. 
 
 ITALIAN. 
 
 I I I Italian Principia, Part II. 
 
 SPANISH. 
 
 LATIN. 
 
 Principia Latina, Part IV. 
 Principia Latina, Part V. 
 Young Beginner's Latin 
 Course, Part III. 
 
 o 7 
 
 3 7 
 2 7 
 t 7 
 GREEK. 
 
 Appendix to Initia Graeca, 
 Part I. 
 
 Initia Graeca, Part II. ... 
 
 Initia Graeca, Part III. ... 
 
 London: JOHN MURRAY, Albemarle Street, W. 
 
THIS BOOK IS DUE ON THE LAST DATE 
 STAMPED BELOW 
 
 AN INITIAL FINE OF 25 CENTS 
 
 WILL BE ASSESSED FOR FAILURE TO RETURN 
 THIS BOOK ON THE DATE DUE. THE PENALTY 
 WILL INCREASE TO SO CENTS ON THE FOURTH 
 DAY AND TO $1.00 ON THE SEVENTH DAY 
 OVERDUE. 
 
 HE? 6 1934 
 
 
 
 
 
 
 ■^f^. 2b 193 
 
 ) 
 
 
 
 
 
 ti^/' (:^ f,. ,,. 
 
 
 Off*: PI IIVIAM 
 
 
 WbV H^4r liWV^ 
 
 
 2S%5S.'T 
 
 
 
 
 iitP2 r^yc. 
 
 1 
 
 
 
 
 
 fiAY 2 31ySb 
 
 
 RECEIVED 
 
 
 ccD 4 iqqg 
 
 
 iLu t T i»^^u 
 
 
 CIRCULATION DEPT 
 
 
 \ 
 
 LD21-100m-7,'33 
 
YB 6076! 
 
 U. C. BERKELEY LIBRARIES 
 
 I 
 
 CDSbDfiEM3T 
 
 A 
 
 9 Of-;!)