cern: still, he must be acknowledged to be indispensable as an agent of labour, and on that ground he feels-though perhaps he cannot put his feelings into words-that he should be handsomely paid for his services.

Smith.Mr Jackson, you speak almost as if employers generally were a set of wretches who tried to rob workmen of their labour. I will not say that there are not shabby employers, who would resort to mean tricks for the purpose of screwing down wages, and for these I beg to express my contempt. But we are now talking of universal principles, not of paltry and special cases of injustice. Let me, then, assure you, that nothing is more certain than that, taking the working-classes in the entire mass, they get a fair share of the proceeds of the national industry. We may take a few facts. To begin with my own mill. I spent, as I have said, £80,000 on the building and the apparatus. Now, nearly the whole of this was dispersed in wages to working-people. The clay from which the bricks were made; the limestone rock from which the lime was prepared by burning; the timber growing in its native forest; the iron in its condition of ore in the mines-all were of small value till labour was employed upon them, and that labour paid for in money. See what a number of men must have been employed in fashioning the raw materials into the house and its machinery-brickmakers, limeburners, coal-miners, wagoners, woodcutters, sailors, carpenters, builders, slaters, plasterers, glassmakers, glaziers, iron-smelters, engineers; and not only these, but the persons who supplied them with food and clothing. In short, if we were to go into a minute calculation, we should probably discover, that out of my £80,000 as much as £75,000 went to the working-classes, the remaining £5000 going to the proprietors of the raw materials, and to intermediate dealers. If people would reflect a little on such matters, they would perceive what an enormous share of the cost of almost every article goes to operatives. It is ascertained by careful calculations, that out of £100 worth of fine scissors, the workmen have £96 as wages; of £100 worth of razors, they have £90; of £100 worth of table-knives and forks, they have £65; of £100 worth of fine woollen cloth, they have £60; of £100 worth of linen yarn, they have £48; of £100 worth of ordinary earthenware, they have £40; and so on with most articles of manufacture. In the making of needles, pins, trinkets, watches, and other delicate articles in metal, the proportion of wages rises to within a trifle of the price of the article. In the working of collieries, the expenses are almost entirely resolvable into labour; there being few cases in which the coal-miners receive less than £90 out of every £100 of the current expenditure. I trust it is not necessary to dwell longer on the notion, that working-men do not get their fair share of the proceeds of the łabour on which they are engaged. They get by far the largest

share of all the money laid out on the fabrication of raw mate rials. Are you still unsatisfied?

Jackson. The facts you have stated are certainly very remarkable; yet the broad truth remains, that we are hard wrought, and have little to cheer us in our lot, while employers take things very easily.

Smith.-Easily, you say; you are forgetting what sort of a life I led to make my money. When other young men were enjoying themselves of an evening, or at a wake, or a race, I was at home, and always keeping little company. I gave up my native country for a number of years, and lived among a half-barbarous people. Once I was very nearly being shot, and twice I was nearly drowned. You married, as I am told, and had the comforts of a wife and family when you were twenty years of age. I did not marry till I was thirty-five. Suppose you had done all that I had done, would you not consider yourself entitled to have dressed better and lived better in the end of your days?

Jackson. Surely I should; but you are only one. There are hundreds of employers, and all cannot have gone through such a deal of troubles.

Smith. I am not acquainted with the history of all the manufacturers in Britain; but this I know, that a large proportion of the manufacturing and mercantile classes-ordinarily called. the middle classes-were originally working or poor men, who, by savings, diligence, and skill, have come to be what they are. The bulk of this wealthy order of individuals, then, are nothing more than working-men who have shot ahead of their fellows, and now give employment instead of receiving it. A higher compliment could not be paid the working-classes of England than to tell them, that from their body the higher classes are constantly recruited, and that nothing prevents their children from taking a place alongside the most honoured in the realm. Let such explanations disabuse your mind of any enmity to the middle class capitalists. Their capital, whatever it may amount to, has not been got without labour, and very hard and thoughtful, ay, and honourable labour too.

Jackson.-There you have got on that plaguy subject capital. But it is always so. When the workmen make any sort of complaints, they are always told about capital, and capital, and what are the rights of capital.

Smith. Since you imagine that there is some kind of mystery under this term capital, I will explain the meaning of it in a very few words. Capital is anything which is of value. It may consist of labour, of houses and lands so far as they are productive, of machinery, manufactured goods, or money. Everything is capital which possesses an exchangeable value, and can be made directly available either to the support of human existence, or to the facilitating of production. All these things are possessed as property; they belong either to the individuals who have made

or produced them, or to the representatives of these individuals. You can perceive that capital, or property, is a sheer result of labour, if not labour itself; and that it is the accumulated savings of years, nay, in some cases, of centuries. Had mankind never saved anything every man from the beginning of the world consuming daily what he laboured for daily-there would have been scarcely anything like capital or savings at all. By a course of saving, however, a wonderful amount of capital in cultivated lands, houses, roads, money, and other things, have been stored up. The stores of capital are not lost. They are alike the grand results and the grand causes of industry. He who possesses capital in the form of a large sum of money, for instance, can give employment to others. You know quite well that, before I planted my factory here, there was little work in the town. Now, see how many workmen and their families are supported. I was not, mark you, obliged to come here to set up a factory. I could have gone somewhere else. Then look at the sum which I distribute weekly in wages. I give employment to 100 men, 146 women and girls, and 70 boys-altogether, 316 individuals; and the entire sum paid on an average weekly for wages amounts to £290. I say I pay £290 to my work-people weekly in exchange for their labour. Surely you must now see that capital is a good thing; good for the working-classes. It is capital which hires and employs them; it is capital which pays their wages; it is capital which keeps them busy when often the market is glutted with goods; it gives them work till better times. Why has England larger and more numerous manufactories than any other country? Because it possesses a greater amount of capital greater accumulations of savings-than any other country. What is one of the main causes of so much poverty in Ireland? The smallness of its capital in proportion to its population. There are few wealthy men in it who will risk their money to set up factories; and the people, increasing beyond the means of subsistence, are in a state of deplorable wretchedness. The bulk of the people in England would be as badly off, if the capitalists were to withdraw their support. And yet, there are workmen so short-sighted, as to wage war on the very thing which supports them. They attack capital as an enemy. their best friend.

It is

Jackson. I must allow there is reason in what you say. I know very well that if you did not give employment, and that others, also, did not give employment, the working-classes would be poorly off. I am obliged to you for your explanations, so far as they have gone. I see that the working-classes, in the mass, receive a large share of all ordinary outlays in manufactures. But I am still at a loss to discover why employers, taking them in the mass also, give the present rate of wages, and no more.

Smith.-Have a little patience. I am coming to that point. You know what the article is I produce?

Jackson.-Yes; it is cotton twist.

Smith.-Right. This article, produced by a course of manufacture from raw cotton, I send abroad. You have seen the bales going off, I daresay. They are sent to foreign countries, chiefly Germany, where the twist is made into cloth. There are cottonspinning establishments in these countries as well as in England, but they cannot produce the yarn so cheaply. We beat them by our superior skill and machinery; but this may not always be the case, and at present there is a great competition in the trade of supplying them. Besides myself, perhaps five hundred English and Scotch manufacturers are making cotton twist for the foreign market. Each is struggling to have as much of the trade to himself as possible, by offering his goods at a low price. Some persons have said why not combine to keep up the prices to the foreigner? But this is impossible, for two reasons. First, each manufacturer is impelled by his necessities to secure as much of the trade as he can; he has bills and accounts to pay, and he must try to get returns at all hazards. There may be a few who could unite to refuse selling their goods unless at a higher price; but there are many others, less scrupulous or more necessitous, who would break through all such regulations. In every trade there are undersellers. Second, if, by any contrivance, the whole cotton-yarn manufacturers of Great Britain could be brought to unite to keep up prices, it would be useless, for our foreign customers would immediately draw their supplies from Switzerland, the United States of America, or perhaps be able to supply themselves. You see we are placed in a very ticklish position. We are all, both in England and abroad, competing against each other. And this is not true alone of the cotton trade; it is the same in every branch of business. The iron trade, the silk trade, and all other large trades, are each pushed to their utmost in competing with the same trades abroad. And so much have foreigners improved lately in their manufactures, that they are now only a shade behind us in certain articles. The cutlery of Belgium, for example, is gradually taking the place of the cutlery of Sheffield in the continental market.

Jackson-Well, I see there is a competition among you, and all fair too. When I wish to buy a pair of shoes, of course I get them where they are cheapest; and let every man do the same. But you have not shown what the competition among you masters has to do with the rate of wages.

Smith.-I will come to that. What I have wished to show you is, that there is a vast competition to produce goods cheaply; that this competition cannot, in the present state of things, be avoided; and that, therefore, it is every man's interest to manufacture at the lowest possible cost. Now, a manufacturer can only do so by buying on advantageous terms, by using the best kinds of machinery, and by giving his workmen the common rate of wages. Upon the whole, the manufacturer's

chief reliance is on his machinery and his labourers. Let us first speak of machinery. As long as all factory owners have much the same kind of machinery, they may be said to be on a level; but if one gets machines which will do more work at less expense, he has a great advantage over his neighbours, and in self-defence they must all get machines like his. Improvements are thus constantly going on, and therefore the buying of new machines causes a great outlay. You formerly spoke of manufacturers leading an easy life; you see only the outside; if you could look into their minds, you would observe anxieties without number. Next as to wages. The obligation to keep his place in the market, causes the manufacturer to give as little as he can. His feelings probably would induce him to give every one a high wage; but this is a matter of business, not of feeling. He can only give the wages which his neighboursthat is, his competitors give. If all other manufacturers offer a workman, such as yourself, 20s. a-week, then I cannot give more. If I were to give you more, and another more, and so on, I could not manufacture so cheaply. My profits, and probably more than my profits, would be all given away. No man in his senses will do such a thing.

Jackson. But why may not all masters give more?

Smith. Don't you see they are all competing against each other. They try to save off every item of expenditure, and wages among the rest.

Jackson. And how have they all come to an understanding on the subject? What is it that regulates their offer to me of 20s. weekly?

Smith. The thing which governs them is the general supply of hands—the supply according to the demand. There is a certain quantity of work to be done here and elsewhere, and a certain quantity of hands to do it. If there be much work, and comparatively few hands, wages will rise; if little work, and an excess of hands, wages will fall. Without any mutual arrangement, the manufacturers come to a uniformity of wages. Indeed, it is not the masters, but the labourers, who settle the rate of wages. They settle it by competing against each other. In the same way that manufacturers compete against one another, so do the labouring classes compete against one another. All find it necessary to work, in order to live; and to get work, they accept of what wages are to be had. If they, however, hear that higher wages are going elsewhere, they carry their labour thither. They there compete with those who are already settled, and perhaps bring down wages to a lower level. Thus, without any mutual understanding among either masters or men, but just by a universal competition, wages get settled down at particular rates.

Jackson.-I think you are forgetting the power of combination among workmen to keep up or to raise wages. We can