in the form of money, supposing no losses in business to occur, or it is exchanged for something, which can be reconverted into money, as bills of exchange, the funds, &c. If the business of the bank, or insurance company, should not succeed, and therefore the profits be worth nothing, the capital may still be invested in something else, and remains intact. Here it is quite evident that the original money paid in as capital, and the profits arising from trading, are two distinct properties.

So in a Shipping Company. The original capital in money is converted into ships. If the company should not succeed and make no profits, still the actual ships have value and may be sold, and succeed in another trade. And here it is quite clear that the ships are separate and independent property, distinct from the profits.

Hence we obtain this general law,

That the Capital, or instrument, or the source of profit, is a distinct and separate property, from the profits made by it.

In some cases the value of the capital may remain, and the value of the profits may remain.

In other cases the value of the profits may remain, while the value of the capital vanishes.

In other cases the value of the capital may remain, while the value of the profits vanishes.

In other cases the value of the profits and the value of the capital may vanish together.

No one accustomed to mathematical reasoning will have the slightest difficulty in comprehending this.

Now, the point we have been aiming at all this time, and we think it is satisfactorily shewn, is this, that shares in public companies are separate and independent property. And they are purely of an incorporeal nature. For we need hardly say that the actual piece of paper on which the writing or certificate is, is merely the evidence of the right, which might exist without any material evidence at all.

Here then is incorporeal property, which is not embodied in any matter, which may be transferred from person to person just as much as material property, and it is really existing property as much as gold and silver, and is a portion of public wealth.

Even those Economists who have admitted the existence of incorporeal elements in Economics, have, with few exceptions,

confined their remarks to qualities of the person, or mind, which produce a revenue, but which are fixed and inherent in the person, and of which he cannot divest himself. These are the only immaterial products which M. Baudrillart, for example, contemplates, when he denies the admission of immaterial products into Economics, and remarks as one reason for doing so that they cannot be exchanged. Moreover, it is commonly said, that incorporeal elements perish in the using. But here we have shewn the existence of a stupendous mass of incorporeal property of a wholly different nature from that contemplated by Malthus, or M. Baudrillert. The incorporeal property we have been considering is as permanent, and enduring, as capable of perpetual existence, as the land itself, or any material product. What is there to prevent the Bank of England, or the London and Westminster Bank, enduring as long as the land of England itself? Why should not shares in them, a purely incorporeal property, exist as well 1,000 years hence, as well as to-day? There is no principle of decay in them. Still more, is there not every probability of the shares in the London and North Western Railway enduring as long as this country itself? No doubt there is the contingency even of the Bank of England failing, or being destroyed, but that is only an accident, and not necessary. Moreover, this incorporeal property is capable of being transferred from hand to hand, or from person to person, just as easily as any material product. A man can denude himself of the property in these shares, or in a copyright, just as easily as of the property in a watch. And Economists, in treating of property, and in framing a definition of wealth, have wholly omitted all notice of this enormous mass of property. One of the objections against admitting incorporeal elements into Economics is that it cannot be valued. We reply that they not only can, but are, valued with as great a precision as material products.

These considerations also confirm the necessity of expelling the limitation of "the result of past human labour" from the definition of capital, as we have already shewn. When a man invests money in the shares of the Bank of England, those shares become his capital. The money he bought them with may have been the result of past labour, but are the shares he purchased the result of past labour? Certainly not; they are the expectation of profits to be derived from future labour, or industry. Yet, as

anything which produces a revenue is capital, they become capital to him.

The consideration of the constitution of these commercial Companies throws a clear light on the nature of the Funds. When a man buys an estate in land he has in himself the right to the land and the right to the profits of the land. When a single person is a banker or makes a railroad the case is similar; but when a Company founds a bank, or makes a railroad, the case is different: though the operations are the same, the interests are separated between the Company and its individual members.

When the members pay their contributions to the Company, they lose all individual property in them, which is gone to the Company in its corporate character.

The Company states the amount it receives as a Debt or Liability to its individual members, and gives them certificates called shares, which entitles each one to share in the profits earned by the Company in the proportion of the quota he has contributed to the capital.

But the Company must invest the sums it receives from its members in buildings, furniture, &c., or, in the case of a railway, in land, and the embankments, tunnels, rails, &c., necessary for carrying on its business.

Hence it states the amount it receives from its members as a Debt or Liability, which is called Capital, and the building, the furniture, the railway, and the actual cash it has, as assets; as any one may see on looking at the accounts of any Joint Stock Bank or Railway Company.

What appears then as "Capital" in their accounts is nothing more than a Debt upon which the Company pays as interest to its members the profits earned by its business.

Hence the Shares in a Commercial Company are nothing but an abstract Right to a certain portion of the profits; they are thus exactly similar to a Bill of Exchange or the Funds; only in these latter two cases there is a person who is bound to make the payment, therefore they are Rights of Obligation in the case of the Shares, there are no particular persons who are bound to use the Railway or to deal with the Bank; it is only expected that some persons will do so hence the Shares are Rights of Expectation.

:

Now it is easily seen that the Funds are property precisely

analogous to the Share Capital of a Joint Stock Bank or a Railway.

The nation in its corporate capacity wants some great public work done. It therefore borrows contributions from its individual members, for which it agrees to pay a fixed annual interest. This constitutes the Capital of the debt; and the fundholders are exactly analogous to the Shareholders of a Company. The nation then with the money subscribed, builds ships, hires soldiers, makes a railway or what not, and these are the national assets: and as the nation is supposed to be benefited by the expenditure it pays a fixed sum in taxation.

Those, therefore, who admit the Share Capital of a Joint Stock Bank or Railway to be wealth, must equally admit the Funds to be wealth, because they are exactly analogous in their nature.

We have already observed that as there is a corn market, a meat market, a fish market, a poultry market, and many others, so there is a great Debt market, which is the Royal Exchange. So also there is a great market for the sale and exchange of the species of Incorporeal Property consisting of the public funds and shares in Commercial Companies, which is called the Stock Exchange. This is a market exclusively for the buying and selling Stocks and Shares, British and Foreign, a species of property which now amounts to many thousands of millions of money and yet which is entirely ignored in books which profess to treat of Economics.

The value of this species of property is an excellent example to shew the fallacy of the doctrine that Value depends upon cost of production. The Value of these shares has absolutely nothing whatever to do with cost of production; it depends upon the annual profits payable on the shares: and whether the value of the shares exceed or falls below par, entirely depends upon the annual profits and the general average rate of interest. The most striking instance that we are aware of, of the difference between the cost of the capital and the value of the shares is the New River Company. When Sir Hugh Middleton and his sagacious co-adventurers, in the reign of James I. constructed this canal, so little were the blessings of pure water understood by the citizens of London, that the patriotic projector was ruined, and obliged to sell his shares. However, the demand for water gradually grew, and with

it the value of the shares, till ultimately a single share of £100 was at one time worth £20,000, and was considered a good dowry for the daughter of a wealthy city merchant. The value of all property of the form of an Annuity is also greatly influenced by the average rate of interest: for if the average rate of interest be three per cent. an annuity will sell for thirty-three years' purchase if the average rate of interest were ten per cent. the same annuity would only sell for ten years' purchase. And what has the value of such an Annuity to do with "quantity of labour" or "cost of production"?

25. We must now consider some other species of Incorporeal Property.

In former ages, when people had scarcely emerged from barbarism, nothing was considered as property but land, which was solid and immoveable. As they became more civilized, and their ideas more refined, moveables were admitted to take rank as property but still no property was held in regard but what was sensible to the eye and tangible to the hand. In process of time, as refinement increased, men began to reflect that they had minds, and that their minds might be improved. Accordingly services rendered to the mind began to have value, and to be capable of being estimated in money. The way to render service to the mind is by communicating to it ideas, which convey to it perceptions of what is noble, and just, and true, and elevate the nature of what is really and truly the MAN. When men saw this in its proper aspect, they saw that a person who was capable of rendering services to them in this way should be allowed to have property in his own productions, as well as the producers of material wealth. Hence, they recognised the right of man to have property in IDEAS. The law which gives men property in their own ideas is called the law of Copyright or of Patents.

Just as the mind of man is admitted to be of a much higher nature than his body, so is the service rendered to his mind of a much higher nature than one rendered to his body. Hence, ideas are a much loftier species of property than material wealth. True ideas are the foundation of good government, and of the happiness and welfare of the whole human race, both here and hereafter; and it should be the object of every man to gather true ideas wherever and whenever he can, and follow them in practice. True ideas