We have already noticed the manner in which a revenue is obtained from manufactures; what further observations we have to make on this branch of industry we shall defer till we enter on the subject of trade, with which it is so naturally connected. CAROLINE. And will that be the subject of our next conversation? MRS. B. No; we have yet many general remarks to make upon revenue. And it will be necessary also, before we turn our attention to trade or commerce, that you should understand the nature and use of money, without a knowledge of which it would be extremely difficult to render the subject perspi cuous. CONVERSATION XIV. ON THE REVENUE OF THOSE WHO DO NOT EMPLOY THEIR CAPITAL THEMSELVES. RENT, OR INCOME DERIVED FROM LETTING LAND. INTEREST OF MONEY, OR INCOME DERIVED FROM LOANS. CAUSES OF THE DIFFERENT RATE OF INTEREST YIELDED BY LAND OR BY MONEY. - CAUSES OF THE FLUCTUATIONS OF INTEREST. RATE OF INTEREST IN INDIA, IN CHINA, AND IN AMERICA. ―― OF USURY. GOVERNMENT LOANS, OR INCOME DERIVED FROM THE FUNds. OF UNPRODUCTIVE LABOURERS, OR THOSE WHO DERIVE AN INCOME FROM THE EXPENDITURE OF OTHERS. CAROLINE. I THINK I now understand very well how an income is derived from agriculture and manufactures; and also how it is produced by trade; but there are many men of property who follow none of these occupations; how, therefore, can their capital yield an income? MRS. B. When a man possesses a very large property, he frequently will not be at the trouble of employing it himself; but will engage some other person to do it for him. You have seen, that a landed proprietor, who does not farm his own estate, derives a revenue from the farmer in the form of rent. CAROLINE. But I allude to men of fortune without landed property, who live upon their income, although their capital is not employed. MRS. B. Reflect a moment, and you will be convinced that no capital can yield an income without being employed. If, therefore, the owner does not invest it in some branch of industry himself, another person must do it for him. A capitalist under such circumstances may be supposed to say, "I "am possessed of an ample stock of subsistence "for labourers, and of materials for workmanship, “but I will engage some other person to take charge of so troublesome an undertaking as that "of setting the people to work, and collecting the "profits derived from their labours." CAROLINE. This person must be handsomely remunerated for the time and pains he bestows on the management of a capital which is not his own. MRS. B. No doubt; a considerable share of the profits derived from the use of capital must go to him who takes 'charge of it; but when a man's property is very large, he would rather lose that share than be at the trouble of managing it himself. Thus you see that the employer and the proprietor of capital are frequently different persons. CAROLINE. Yet I do not recollect ever to have heard of a man of fortune making use of an agent to employ his capital. MRS. B. He does not engage an agent on his own account, but he lends his capital to some person who invests it either in agriculture, manufactures, or trade, and who pays him so much per cent. for the use of it. This is called lending money at interest. CAROLINE. Is it then simply money that is lent; or capital consisting of produce? MRS. B. It is eventually the same; for money gives the borrower a command over a proportional share of the produce of the country. If the money would not purchase the things which the borrower wanted, it would not answer his purpose; but it will procure him either materials- or implements for work, maintenance for labourers, stock for farming, or merchandise for trade. In a word, it will enable him to exert his industry in whatever way he chooses. CAROLINE. I should have imagined that it would have been more advantageous to the capitalist to have engaged an agent at a stipulated salary, for the purpose of undertaking the use of his capital? MRS. B. Your plan would probably not answer so well; for if, instead of lending his capital at interest, a man of property paid an agent to employ it for him, the agent would be less cautious what risks he engaged in, as he would not be a sufferer by losses. CAROLINE. But is not the loan of capital at interest liable to the same objection? If the employer of capital be ruined, the proprietor of it must share the same fate. |