manufacturers, some of whom amass immense wealth, whilst others become bankrupts.

The rate of profit, therefore, upon any employment of capital is proportioned to the risks with which it is attended; but if calculated during a sufficient period of time, and upon a sufficient number of instances to afford an average, all these different modes of employing capital will be found to yield similar profits.

It is thus that the distribution of capital to the several branches of agriculture, manufactures, and trade, preserve a due equilibrium, which, though it may be accidentally disturbed, cannot, whilst allowed to pursue its natural course, be permanently deranged. If you are well convinced of this, you will never wish to interfere with the natural distribution of capital.

You must not, however, consider this general equality of profits as being fixed and invariable, even in countries where government does not interfere with the direction of capital. A variety of circumstances occasion a temporary derangement of it. The invention of any new branch of industry, or the improvement of an old one, will raise the profits of capital invested in it; but no sooner is this discovered than others, who have capital that can be diverted to the new employment, engage in this advantageous concern, and competition reduces the profits to their due pro

portion. A remarkably bad harvest may occasionally raise the rate of agricultural profits, or a very abundant season reduce them below their level. The opening of a trade witha new country, or the breaking out of a war which impedes foreign commerce, will affect the profits of the merchant: but these accidents disturb the equal rate of profits, as the winds disturb the sea; and when they cease, it returns to its natural level.

CONVERSATION XII.

ON REVENUE DERIVED FROM PROPERTY IN LAND.

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RENT THE EFFECT, NOT THE CAUSE, OF THE HIGH PRICE OF AGRICULTURAL PRODUCE. CAUSES OF RENT; 1. THE FERTILITY OF THE EARTH; 2. DIVERSITY OF SOIL AND SITUATION REQUIRING DIFFERENT DEGREES OF EXPENSE TO RAISE SIMILAR PRODUCE. ORIGIN OF RENT. RENT INCREASES POSITIVELY IN A PROGRESSIVE COUNTRY, AND DIMINISHES RELATIVELY.-HIGH PRICE OF RAW PRODUCE NECESSARY TO PROPORTION THE DEMAND TO THE SUPPLY.

I

CAROLINE.

HAVE been reflecting much upon the subject of revenue, Mrs. B.; but I cannot comprehend how farmers can afford to pay their rent if they do not make more than the usual profits of capital. I had imagined that they began by raising greater produce from the same capital than merchants or

manufacturers, but that the deduction of their rent eventually reduced their profits below those of other branches of industry.

MRS. B.

You were right in the first part of your conjecture; but how did you account for the folly of farmers in choosing a mode of employing their capital which after payment of their rent yielded them less than the usual rate of profit?

CAROLINE.

I believe that I did not consider that point. I had some vague idea of the superior security of landed property; and then I thought they might be influenced by the pleasures of a country life.

MRS. B.

Vague ideas will not enable us to trace inferences with accuracy, and to guard against them we should avoid the use of vague and indeterminate expressions. For instance-when you speak of the security of landed property being advantageous to a farmer, you do not consider that in the capacity of farmer a man possesses no landed property; he rents his farm; if he purchases it, he is a landed proprietor as well as a farmer. It is not therefore the security of landed property which is beneficial to a

farmer, but the security or small risk in the raising and disposing of his crops.

A farmer, when he reckons his profits, takes his rent into consideration; he calculates upon making so much by the produce of his farm as will enable him to pay his rent besides the usual profits of his capital; he must expect therefore to sell his crops so as to afford that profit, otherwise he would not engage in the concern. Farmers then really produce more by the cultivation of land than the usual rate of profit; but they are not greater gainers by it, because the surplus is paid to the landlord in the form of rent.

CAROLINE.

So then they are obliged to sell their produce at a higher price than they would otherwise do, in order to pay their rent; and every poor labourer who eats bread contributes towards the maintenance of an idle landlord?

MRS. B.

You may spare your censure, for rent does not increase the price of the produce of land. It is because agricultural produce sells for more than it cost to produce, that the farmer pays a rent. Rent is therefore the effect and not the cause of the high price of agricultural produce.