termination of the lease accrues to the landlord in an increase of his rent. If the improvement is fitted only to last a certain term of years, as the lime-manuring of land, temporary farm-buildings, and improved rotations of crops, the increased return must be sufficient to replace the capital expended at the end of the term, and pay the usual profit, or the farmer will not be induced to lay out his capital in effecting it. Capital expended in the latter way, is precisely on the footing of that laid out in perishable implements, or dead stock, except in the circumstance of its not being removeable. And a hundred pounds laid out in implements which may be expected to last ten years, ought to bring in the same gross return as a hundred pounds laid out in manuring a field in a mode of which the effect may be expected to last the same time.

It is clear that lasting improvements on land cannot be expected from farmers who have no leases; and hence where tenancy at will prevails, as it does at present over the greater part of England, the repairs as well as all permanent improvements have to be undertaken by the landlord, if at all. It is more than doubtful whether, under such a system, the land is cultivated so well, or rendered so productive, as under a system of leases. But the uncertain prices of late years have naturally indisposed landlords to put their land out of their own disposal for a long term; during which, if prices rise, the tenant reaps the entire benefit-whereas if they fall, the landlord finds himself obliged to remit the stipulated rent, lest his tenant ruin his farm by a deficiency

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of capital for its proper cultivation. Hence leases, in times of great fluctuation in the prices of agricultural produce, are a protection to the tenant, but not to the landlord. Why prices have fluctuated so injuriously, and how they may be steadied, is a question to which we shall recur hereafter.

7. Should A. prefer the business of a manufacturer, he, perhaps, lays out a part of his capital in buildings and machinery, fixed, more or less, to the soil, like some of those in the case last considered. Another part of his capital is employed in the occasional purchase of raw material, tools, &c., and another in the frequent payment of the wages of his workmen. Or he may rent the buildings, machinery, &c., and employ his whole capital in the latter forms. His returns must in this case, as in that of the farmer, be sufficient, besides recompensing his own trouble and skill, to replace his floating capital-that, namely, (as already explained,) which circulates within the year with the ordinary rate of profit; to replace his fixed or more durable capital at the end of the term which it is calculated to last, with the same profit; and moreover to cover all the risks peculiar to the business, such as that of the article he fabricates being superseded by a change in the taste, and consequently in the demand, of the public

-or the machinery he employs by a new and superior invention. The risks of these kinds attached to manufacturing operations are (for reasons we have, in part, already given) much greater than in agriculture; and hence the compensation or insurance against such risks must be proportionately large. It has not been uncommon, of

P

late, for buildings and machinery, on which thou→ sands of pounds had been expended, to fall in value in a very brief period, through changes in the demand of the market, the introduction of improved machinery,* or a general depression of trade-to little or nothing. In times of depression, indeed, (such as we have seen but too often, and may be said hardly yet to have emerged from,) it is not uncommon for manufacturers,— rather than shut up their factories or works (which would in that state rapidly go to decay), and give up business, to renounce the idea of getting any return from their fixed capital, and to work on, even under a loss upon their floating capital, in hopes of better times arriving to repay them for the sacrifice, by once more giving them a fair profit on their entire concern.

8. Persons who embark their capital in working mines, in building houses or ships, and in a variety of other productive investments, are circumstanced, in all essential points, like the farmer or manu

'The

*Machinery for producing any commodity in great demand seldom wears out; new improvements, by which the same operations can be executed either more quickly or better, generally superseding it long before that period ar rives: indeed, to make such an improved machine profitable, it is usually reckoned that in five years it ought to have paid itself, and in ten to be superseded by a better.' improvement which took place not long ago in frames for making patent net was so great, that a machine in good repair, which cost 1200., sold a few years after for 60%. During the great speculations in that trade, the improvements succeeded each other so rapidly, that machines which had never been finished were abandoned in the hands of their makers, because new improvements had superseded their utility.' Babbage, Economy of Manufactures, p. 233;

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facturer just described. A part of this capital is fixed in more or less durable objects, and ought to bring in a sufficient annual return to replace the wear and tear, and maintain the value of the ca pital; part is floating, or circulating within the year, in the purchase of materials and stocks of goods, and the payment of wages, taxes, rent, &c. None of these different modes of employing capital, it is quite evident, would be undertaken, if they did not hold out a fair expectation of such returns as will both pay the ordinary rate of profit upon the whole capital employed for the time required for its circulation, and enable its owner to replace it at the end of that term, as well as remunerate him for his skill and trouble, according to the standard of remuneration generally expected by his class. No business would be entered upon that did not fairly promise this. And, therefore, for a market to be habitually supplied with any commodity, the necessary condition is that it sell, on an average, for a sufficient price to repay these, the elementary costs of its production.

This

When the supply of any goods in any market is in excess over the demand, so as to reduce their selling price below the elementary costs of production, there is said to be a glut of them. glut may be partial, as when confined to one market;-in which the evil soon cures itself by a transfer of the goods to other markets, where the demand is brisker. Or it may be general, with respect to the markets, but confined to a single article. This, likewise, is for the most part speedily corrected, by a portion of the producers

transferring their labour and capital to some other more profitable occupation.

But can there be a general and simultaneous glut in all the markets of a country, not of one or a few articles only, but of a large majority, or the great mass of commodities? This is a question which has been much and hotly disputed by political economists. That goods of all kinds are frequently sold below their prime cost, is but too well known to commercial men. Forced sales, caused by the bankruptcy or temporary embarrassment of the owners requiring them to be instantly turned into money at any sacrifice, are continually occurring; and a certain proportion of goods thus constantly find their way into the consumer's hands at less than cost price. In times of general embarrassment and of a scarcity of money in circulation, (such as we have witnessed almost periodically for some years past,) still larger quantities of goods continue to be produced and sold for some time at a continual loss to their producers. This is chiefly owing to two circumstances: 1st. The impossibility of realizing fixed capital at such times, so that those who have a large proportion of their property embarked in buildings, machinery, stock, or implements, must continue to employ it in production, though at a tremendous loss, rather than let their fixed capital lay wholly idle, and their buildings, machinery, &c., go to decay for want of use and repairs. 2nd. The very distress caused by a want of remunerative prices in some trades tends to increase their production. Workmen, in consequence of the fall in their wages by the piece, work the