trade, it can and will pay a dividend, exceeding that of the average dividend of any of our eastern roads, where all the stocks are above par?— If this is not so, we should like to know why from some of those in that section of the country which is most experienced in railroad transportation, and where the subject is so well understood.

In 1847, Massachusetts expended for 698 miles of railway, $34,461,513, which in the aggregate paid a net income of 7.71 per cent., and enjoyed a tonnage of 1,769,332 tons; whilst the Reading railroad has cost only $12,000,000, and transported last year 1,770,906 tons, and paid a dividend of twelve per cent.,-a greater tonnage than all the roads of Massachusetts, and this tonnage increasing in coal alone, at a rate exceeding twenty per cent. per annum.

It is impossible for the mind to picture a more exhaustless fountain of traffic, than is enjoyed by this road if we look to coal alone; but when we consider that it is located along the beautiful, rich and populous valley of the Schuylkill, in the midst of wealthy and flourishing agricultural villages and manufacturing towns, skirted by mountains full of iron ores, and which latter is manufactured upon its line by the several processes from the ore into the finished bar or nail, what sane mind can doubt, that every year will show a larger and better income for every dollar's increased expenditure!

But independent of this trade, which actually exists equal to all its present capacity, there is no other improvement which so soon creates trade, by bringing within certain limits and concentrating the manufacturing business of the country. It places the fuel, the ore, the flax, the furnace, the rolling mill, the nail factory, almost together, by furnishing between each a cheaper, speedier, and easier communication. Indeed, so great is this advantage that the coal mountains are made literally to pour out their mineral treasures into the very lap of commerce, for the cars which receive the coal at Schuylkill county are passed with great rapidity along the road, until they reach the border of the Delaware. Here their precious contents are speedily swallowed up, from the opened bottom of the coal cars, in which it left the mouth of the mine, by the fleet of vessels that are ready to receive them and transport them to meet the wants of our populous and vast cities.

But what is the iron business alone to effect upon the line of this work? The manufacture of iron from mineral coal has only commenced in this country, and since its commencement, like the coal trade, has greatly outrun the expectations of its most sanguine friends, and is rapidly adapting itself to European prices. Indeed, the day of protection is gone, and an article of prime necessity must be furnished at the lowest price. It is therefore the command of fuel at the lowest price, that gives to any state or nation the chief source of its industrial prosperity. Iron, tin, and copper are nothing without fuel and steam, also the great agents of civilized life. Possessing, therefore, throughout the entire length of this road, fuel at so cheap a rate, and all the other elements of manufacturing wants, where can manufactures be established, unless within the coal field, with equal advantages for fuel, for subsistence, for climate, for distribution and sale.

CAPITAL AND LABOR.

From the Monthly Art-Journal, London, July, 1848.

THE basis of the economic errors, which we have exposed in the papers, on the relations between employers and employed, is that capital means money. But any fund industrially accumulated, which can be employed to facilitate or extend production is capital in the fullest sense of the word. Skill, which is a fund of knowledge accumulated by industry, which is applicable to the increase and extension of production, which, when industrially invested, returns interest proportioned to its amount in the shape of increased wages or profits, is as much capital as bullion or consols. The same may be said of taste, of mechanical facility acquired by practice, of every advantage arising from education, and even of moral character; each of these are funds accumulated industrially, and in a normal state of things, paying interest to their possessor, when productively invested. The old aphorism—

"When land is gone and money spent,

Then learning is most excellent,"

if expressed in economic language, would state that learning will serve as a capital to him who does not possess capital in the form of an estate or a balance at his banker's.

No economist, save Jean Baptiste Say, has treated what we may call intellectual and moral capital, with the fullness and precision which the importance of the subject demands, and it is to this neglect that we may ascribe the neglect of that industrial training either in special manufactures or in the sciences applicable to varied forms of industrial pursuit, for which Great Britain is unfortunately remarkable. Passing over this for the present, we come to the important consideration that there can be no natural hostility between capital and labor, because nearly every laborer is, to a certain extent, a capitalist. It is for this reason that the French system of solidarity is essentially false and unjust; it proposes an association in profits between capitalists and operatives; whereas the only possible association is a co-parcenary of capitalists.

It is singular that the error which we have pointed out should have misled such able men as M. Charles Duveyrier, Mr. Robert Chambers, and the latest writer on Political Economy, Mr. John Mill. They all represent the co-operative experiment tried in M. Leclaire's experiment as an instance "in which the whole capital belongs to an individual capitalist." Had not Charles Duveyrier contrived to infect Mr. John Mill with his fourrierist notions, this able logician could not have fallen into a blunder so gross and palpable as to deprive him of all pretentions to rank as an authority in economic science. We shall state this boasted case of solidarity as nearly as possible in Mr. Mill's own words.

M. Leclaire, an eminent house painter in Paris, who resided at No. 11, rue St. George, employed on an average two hundred workmen, whom he paid in the usual manner, by fixed salaries or wages. Those who

are acquainted with the great and rapid progress of building in Paris, both in the erection of new edifices and in the decoration of ancient houses, will readily believe that M. Leclaire's business enjoyed the benefit of steady demand and assured profit. He found what, every employer under such circumstances more or less finds, that "there were workmen whose indifference to his wishes were such that they did not perform two thirds of the work of which they were capable." Like many other masters he was continually fretted by seeing his interests neglected and he believed himself entitled to suppose that workmen are continually conspiring to ruin those from whom they derive their livelihood. He tried the effect of giving higher wages, and by this means he managed to obtain a body of excellent workmen, who would not quit his service for that of any other employer, but who nevertheless were not free from those vices of waste and negligence which he had found so injurious to his property.

To remedy this state of things he resolved to establish a yearly division of whatever surplus profits remained, after paying the wages of the op erative, the interest on invested capital, and a fair sala y to himself as manager. The result was stated to be a vast improvement in the habits and the demeanor of his workmen, the assurance to M. Leclaire himself of a fixed salary fully equal to the average of his yearly profits, and a bonus at the end of the year to each workinan, of three hundred francs, (above £12,) in addition to his regular wgaes.

When our attention was called to this statement by Mr. Charles Duveyrier, we deemed the plan excellent, equitable, and capable of indefinite extension. Mr. Charles Duveyrier, as many of our readers know, is a gentleman of the most warm and generous feelings, possessing a ready wit, an eloquence of simple earnestness, and a most intense desire to consecrate his life to the service of humanity. The narrative as given by him, was so fascinating and delightful as to produce that instinctive desire to believe, which very often becomes the foundation of implicit faith, if not absolute credulity. We resolved at his request, to prepare a work on the subject, but previous to doing so, we resolved when we next visited Paris, to examine for ourselves the nature and the working of the system. It proved to be as complete an Utopia as ever entered the head of a fantastic visionary.

Of course we never could have regarded such an experiment as an instance "in which the whole capital belongs to an individual capitalist;" Mr. John Stuart Mill is probably the only person who ever bestowed a thought upon the subject, that could have fallen into so perverse and ludicrous an absurdity. We regarded it as obviously and plainly a partnership between capital and capital-between capital in money and capital in skill-and we found on examination that this partnership was greatly facilitated; we should, perhaps, rather say, rendered possible, by this being a case in which the capital in money approximated to a minimum, and the capital in skill to a maximum. When this was once established, there was an end to all hopes of an indefinite extension and application of the system.

Every body knows that a very large stock of paints, brushes, scaffolding, and other implements, may be had for a very small sum. Properly

speaking, M. Leclaire was neither a capitalist nor a manufacturer; he was what the French call an entrepreneur, or contractor, who furnished designs and received orders for decorating houses, and then engaged operatives to perform the work. We see, therefore, that the person brought forward to establish a strong case in favor of solidarity, belongs to a class which in all systems of solidarity it is proposed to abolish. This, to be sure, may appear a very trifling objection, or a mere cavil to Fourrierists and Communists. We shall not dwell upon the inconsistency, but leave them to expound it as best they may; the important matter for us is to show the gross fallacy of asserting, as Mr. Mill does, that "the whole capital belongs to an individual capitalist." There was no such disposition as that between everything and nothing in the partnership; on the contrary, we have shown that the capital of the head of the firm was as small as it well could be in such a concern. Let us now examine the case of the other partners.

The house decorators of Paris are a very superior set of artisans: they possess frequently a cultivated taste, great cleverness in design, much skill in managing the harmonies and contrasts of colors, and unrivalled tact in the mixing, grinding, and the laying on of color, so as to produce, at once, the most brilliant tints and the most delicate shades. Some of the men in M. Leclaire's employment had no slight pretensions, as we happen to know, to rank as artists. We should be glad to know from Mr. Mill why he throws all those qualifications out of view, and sets down those decorators as men of no capital?

Finally, the experiment, though made under the most unexceptionable and favorable circumstances, has signally failed. The time came when M. Leclaire met losses, and of these the operatives neither could norw ould bear apart; the profits of past years instead of being accumulated into a reserve fund, to meet the contingencies of a reverse, had been divided and dispersed; the whole concern we have been informed, is either bankrupt or broken up. And yet this is the instance which one of the most recent, and certainly one of the most dogmatic, of writers on Political Economy, holds forth as an interesting and instructive example for general imitation. We sincerely trust that "the probable future of the laboring classes" will lead to a very different system from that propounded by Mr. Charles Duveyrier or Mr. John Stuart Mill.

The proper remedy for M. Leclaire to have adopted was to pay by the piece instead of by the day, for he would thus have enabled the capitalist-laborer to derive a fair rate of interest from the capital which he had invested in skill. There was an obvious injustice in an equal division of profits at the end of the year, for equal bonusses were thus necessarily given to different degrees of merit, and the motive to exertion and improvement was so far destroyed.

Finally M. Leclaire's system, instead of being a novelty, pointing to a future, was a revival of an antiquated custom, which we find lingering in all localities and employments belonging to the rudest stages of industry. The co-operative system, and equal division of profits, is common in agriculture, where there are pauper peasants, in fisheries, where there are pauper fishermen, and in manufactories, where jobs are undertaken by pauper contractors. Mr. Mill must have neglected the most essential

of all studies for a political economist, the history of the industrial progress of nations, when he mistakes a past that has been abandoned, for a future to which we are tending. The co-operative system and the division of profits, was that of the early trading companies and the buccaneers; the story of Whittington might have reminded him of a time when every clerk and servant in a merchant's employment sent out his venture to swell the exported cargo, and received his share of the imported returns. The system is still practiced by the poor peasants of Auvergne, when they unite to till their ground in common; by the Indians of North America when they combine to chase the buffalo; by the fishermen on the west coast of Ireland, who have not yet obtained capitalist employers; by the backwoodsmen in North America, and by the countless associations of beggars, as is abundantly shown in the records of the Mendicity Institution.

We look for progress from the cause which all experience shows to have been the only source of national or individual advancement, the substitution of skilled for unskilled labor. We wish to see operatives raised more and more to the rank of capitalists by the development of their tastes, the increase of their knowledge, and the enlargement of their minds. It is not the least cause of our preference for the competitive system, that it stimulates to improvement by the most powerful of all human motives, that of self-interest. If evils have arisen from the existence of large capitals, counteract them by creating a number of small capitals; raise the operative, but do not depress the employer; strengthen the poor, but do not weaken the rich; increase the capital of the employed, but do not strike at the capital of the employer.

In all these discussions we have felt that the theories of the Communists, and the more numerous and more dangerous class, the Semi-Communists, perilous as they are to all classes of capitalist-laborers, are most of all so to the designers and the decorators, who have most largely invested their capital in skill and taste, and whose labors in acquiring that capital are least known to the generality of mankind. The ignorant masses are utterly unable to appreciate mental labor, and they therefore exclaim with bitterness against what they believe to be its disproportionate remuneration. M. Leclaire's profits as an entrepreneur, doubtless, did appear disproportionate to his journeymen, and they only tried to equalize the distribution by giving as little work as they could possibly help for their four francs per day. In their view he led a very pleasant life, merely walking about from the house of one nobleman or gentleman to another, listening to hints of ornament suggested by the titled, the wealthy and the beautiful. They took not into account the long labors of training by which he was enabled to estimate the effects, and the practicability of such suggestions; and as little did they think of the mental toil necessary to form all the combinations necessary to their realization and execution.

There is a school of economists too much disposed to fall into the vulgar error of confining their attention to the physical agencies of production, and neglecting the intellectual. It must, however, be confessed, that the physical agencies are gross and palpable, while the intellectual escape human ken. Men are too apt to give an unwarrantable extension