Capital, currency, and banking; being a collection of a series of articles pub. in the Economist in 1845, on the principles of the Bank act of 1844, ... concluding with a plan for a secure and econo

This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1847 edition. Excerpt: ... Thus, if a man employs a capital of 20,000£ in making cloth, or importing sugar, the whole of his capital, in addition to the profit, which constitutes his income, is repaid from the annual income of the country, and is available at once to repeat similar operations, and to continue to give employment to the same amount of labour; while another man, who employs a capital of 20,000/. in the construction of a railway, even though his income from the latter may be as great as from the former, yet he receives no part of his capital back, with which he could repeat the same operation, or continue to employ the same quantity of labour, and, therefore, except to the extent of the dividend received, the fund is wholly withdrawn from active employment. We shall afterwards find, as we proceed, that this distinction entirely forms the basis of what are, and what are not, proper banking securities. From what we have already said, it is evident that capital existed long before any system of money was introduced. Before the introduction of the use of money, the capital of a country consisted, as it does now, of the portion of commodities which the community produced more than they consumed; and the exchange of those commodities between the different producers was accomplished altogether by direct barter, instead of, as it is now, by indirect barter, through the use of money. The introduction of money was, therefore, only a scheme for making the exchanges of commodities more convenient and easy. These commodities consisted of everything produced by labour, including food of all kinds, clothing of all kinds, implements of all kinds, gold, silver, iron, and, in short, everything to which a value had been given by labour; and the relative exchangeable value wh...