property.' To complete our view of the organizing influence of exchange, another deduction must be drawn, which seems to follow naturally from the axiom above stated. It is, that if a man has a right of sale he has also a right of gift. Hence the jurisprudence of the civilized world, recognizing that economically as well as physiologically the life of the child is a continuation of the life of the parent, has sanctioned, what it is probably powerless to forbid, the right of inheritance and bequest, as being on the whole the simplest and most equitable method of passing property from one generation to another. Every man, then, has property in his own labour, his own mental efforts, and in the values which neighbours freely give him in exchange for these. Liberty and Property, or, as relatively to an industrial society it may more suggestively be stated, Free Exchange and Property are two inseparable ideas.

It is hardly necessary to depart from the precedent of our axiom, and to complicate the question by considering the case of property held in virtue of alleged acts of illegal appropriation in a prehistoric past. Practically speaking, at the present day all property rests on a title of labour bestowed, or on some legal act of exchange or bequest. The current controversy as to the unearned increment,' that is, as to the right of private ownership in an undertaking like the New River Company, or in ground-rents in the city of London, has nothing to do with the validity of the original title. The point raised is whether the State should not retain to itself any increment of value which may arise from a future concentration of demand on a particular water supply or a particular bit of land. Our answer to this will depend on our judgement as to the ability of the State to forecast the course of demand, and as to the wisdom of leaving speculation in land to private persons. If we admit that the State should be a speculator in land values, there is no reason why now or at any other time it should not, with a view of lightening future taxation, purchase at the market rate land which, its advisers think, is likely to rise in value. It is well, however, to remember that if by chance it finds itself in possession

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of a site of enhanced value, it can only do what the private owner does, namely, let it at a rack rent. To let it under its market value, as fixed by the intensity of the demand for it, is at once jobbery and favouritism, and has further the mischievous consequence of concentrating population where the high price of land, if left to itself, would tend to disperse it. This intense concentration of demand on particular articles is an unavoidable incident so long as men naturally or by fashion continue to desire the same thing. It has, however, this convenience, that the values which it creates are a kind of natural consols. This is appreciated by the poorer classes, as is evidenced by the fact that their own provident institutions invest a large amount of their funds in ground-rents. All this, however, has nothing to do with the question of title, and for the purpose of this discussion it is proposed to accept the proposition that the property which every man has in his own labour is the original foundation of all other property.

One assumption has been made, that a man has a monopoly in his own labour and in the values for which he exchanges his labour. If this be conceded, we have a justification of the principle on which, though there are many lets and hindrances to its full influence, the present basis of society mainly rests; we have also an acknowledgement that these lets and hindrances are contrary to justice; it remains to be shown that we have found a principle, which, if these lets and hindrances could be removed, is capable of 'moralizing' the whole organization of social life.

All things in process of evolution are of necessity imperfect, and if we are analyzing society with a view of discovering the principle of association most conducive to its welfare, we waste our time if we search for one which has attained a paramount ascendency. If there is any principle which at this moment has a complete and undisputed authority, the present imperfect condition of society will be its conclusive condemnation. If we are looking for a principle to which we can without misgiving entrust the progress of the race, it ought to have some of the following characteristics. It ought, in the first place, to be a force already at work. It ought to be a rule

of conduct which has already established some authority for good over human nature. It were hopeless to try to reorganize society by a force which in the past mankind has consistently ignored. Further, if we wish to recognize the influence which makes for social progress, we should look for one which has power to transform the lower and purely selfish motive into the higher and social motive. To adopt the epigrammatic phrase of Mr. Huxley's Romanes lecture, we must look for some principle which, in itself, is a 'pedagogue to virtue.'

All these conditions seem to be present in the principle of Free Exchange. Without doubt it has played, and is playing, a great part in the social economy of the civilized world. It has not permeated, it is true, to every corner of society. It has been restricted by the nature of things, and by human artifice. Still, to those who permit themselves to indulge in ideals, it is a principle capable of exorcising from human character the instincts of the tiger and the ape,' by making mutual interchange of service the all-pervading motive of our associated life.

Even under our present subdivision of effort, no activity of the economic man is entirely self-regarding. Men labour and exchange their labour, or the products of their labour, for the labour or products of other men. The man, therefore, who wishes to receive much in exchange, must strive to perfect his capacity for the service of his fellows. This influence affects not only manual labour, but every act of capitalization, for the application of capital to production can only bring reward to its author, so long as it ministers to the requirements of the public. Capitalization, as we shall presently see, is essentially a process of exchange. In this blending of the private with the public motive, we may perceive the birth of a new sentiment and a new rule of conduct awakened, as it were, by this elementary lesson of the 'cosmic pedagogue.'

On the other hand, it is acknowledged that this process of evolution is incomplete, that the lower nature of the 'tiger and the ape' is by no means eradicated. Is it not conceivable, however, that the slowness of our progress is due to the inherent difficulty of the subject, to the dullness and obstinacy

of the pupil, rather than to any defect in the teaching of the pedagogue?

It is the purpose of the following pages to trace the development of the principle of Free Exchange, more especially as it has affected the property and savings of the working class. How far has it already been the foundation of social welfare? To what further heights of prosperity does it seem to beckon us? To what extent is it a 'pedagogy' creating competent social habits and character in the beings that live within its organizing influence ?

To the poor man, his most important, as well as his most sacred, possession must ever be his own labour. His savings are in all probability of small amount, and their rise upon the original foundation of his labour has been of recent date. The labour market, therefore, is to him of the highest importance. To the man who has anything to sell, more especially to the man who deals in a commodity, which, like labour, will not keep, it is an advantage to be brought into contact with the largest possible number of buyers. This is the function of a market or exchange. In a great organized market, prices are fixed in an automatic fashion, into which no personal element can enter. In the general extension of the open market which has been going on for many years under the influence of free trade, some things tend to rise in value, others to fall in value. To which of these classes does labour belong?

A sovereign will exchange for a greater quantity of wheat or for a greater quantity of clothing than fifty years ago. On the other hand, it will purchase a less quantity of labour. The rule would seem to be, that those things which can be produced practically at will, tend to depreciate in value; while those things of which the supply is more or less incapable of being immediately increased, tend to appreciate in value. There would seem to be reason for thinking that in the past, at all events, the value of labour has been enhanced.

We are hearing a good deal nowadays of the alleged appreciation of gold. It is argued that the value of gold has

risen because the number of exchanges in which it has to serve as a measure has increased far more rapidly than the production of gold. This, of course, is denied by some who are of opinion that the annual production, and the economies in the use of bullion effected by various expedients of credit, have kept pace with the public requirement for this precious metal. No opinion is here offered on the question, it is cited only to bring out the general admission, that if an article of universal demand is supplied in limited quantities, its value relatively to other exchangeable commodities, which increase less rapidly, must be enhanced. The universal demand for gold consists largely in the right of mintage afforded by the governments of the gold-using countries of the world. By means of the mint, gold bullion is assured of its market, and passed into the currency of the country. It is the object of civilization to organize a similar market for labour.

Let us pursue the comparison a little further. Labour even more than gold is a necessary element in most operations of industry and exchange. Credit can serve as a substitute for gold, but no substitute can be found for labour. Improved machinery does not dispense with labour, on the contrary, it makes a higher demand for skill and trustworthiness and for the higher forms of labour. Labour, moreover, unlike gold, can be applied to an infinite variety of purposes. Every increase of the labour population ought, and to a certain extent does, create a demand for its own employment. Given a number of employable but unemployed labourers, a well-organized market ought to afford them an opportunity for a profitable exchange of services. A glut of gold in the bullion market, owing to fresh discoveries, is a conceivable thing, and indeed has happened before now, bringing with it a depreciation in the value of gold. No operation of the mint could prevent this. On the other hand, with a really effective labour exchange, and a real mintage for labour, an excessive supply of labour is impossible.

I argue that this certain market for labour can be organized, not by a recognition of any droit au travail, but by the operation of the principle of Free Exchange, and by that only.