being permanently joined to, or blended with, the natural properties of the soil, become, as respects their value, subject to the same circumstances as regulate the value of natural properties: the latter partakes of the character of all other moveable capital, and is subject to the circumstances which determine the rate of profit. While, therefore, Adam Smith has properly confounded things which are essentially the same, Professor McCulloch not only separates those things, but confounds things which are essentially distinct.

BOOK II.

Of the Nature, Accumulation, and Employment of

Stock.

INTRODUCTION.

IN that rude state of society in which there is no division of labour [employments], in which exchanges are seldom made, and in which every man provides every thing for himself, it is not necessary that any stock should be accumulated or stored up beforehand in order to carry on the business of the society. Every man endeavours to supply by his own industry his own occasional wants as they occur. When he is hungry, he goes to the forest to hunt; when his coat is worn out, he clothes himself with the skin of the first large animal he kills; and when his hut begins to go to ruin, he repairs it, as well as he can, with the trees and the turf that are nearest it.

But when the division of labour [employments] has once been thoroughly introduced, the produce of a man's own labour can supply but a very small part of his occasional wants. The far greater part of them are supplied by the produce of other men's labour, which he purchases with the produce, or, what is the same thing, with the price of the produce of his own. But this purchase cannot be

made till such time as the produce of his own labour has not only been completed, but sold. A stock of goods of different kinds, therefore, must be stored up somewhere sufficient to maintain him, and to supply him with the materials and tools of his work till such time, at least, as both these events can be brought about. A weaver cannot apply himself entirely to his peculiar business, unless there is beforehand stored up somewhere, either in his own possession or in that of some other person, a stock sufficient to maintain him, and to supply him with the materials and tools of his work, till he has not only completed, but sold his web. This accumulation must, evidently, be previous to his applying his industry for so long a time to such a peculiar business.

As the accumulation of stock must, in the nature of things, be previous to the division of labour [employments], so labour [employments] can be more and more subdivided in proportion only as stock is previously more and more accumulated. The quantity of materials which the same number of people can work up, increases in a great proportion as labour comes [employments come] to be more and more subdivided; and as the operations of each workman are gradually reduced to a greater degree of simplicity, a variety of new machines come to be invented for facilitating and abridging those operations. As the division of labour [employments] advances, therefore, in order to give constant employment to an equal number of workmen, an equal

stock of provisions, and a greater stock of materials and tools than what would have been necessary in a ruder state of things, must be accumulated beforehand. But the number of workmen in every branch of business generally increases with the division of Jabour [employments] in that branch, or rather it is the increase of their number which enables them to class and subdivide themselves in this manner*.

As the accumulation of stock is previously necessary for carrying on this great improvement in the productive powers of labour, so that accumulation. naturally leads to this improvement. The person who employs his stock in maintaining labour, necessarily wishes to employ it in such a manner as to produce as great a quantity of work as possible. He endeavours, therefore, both to make among his workmen the most proper distribution of employment, and to furnish them with the best machines which he can either invent or afford to purchase.

The first and most important division of employments seems to be that which takes place, when by means of concert or combination, some men work, and some superintend; when some use the capital of others, receiving a portion of the produce as wages. Before this can happen, capital must, of course, have been accumulated; but this division of employments does not necessarily follow the accumulation of capital. In the infancy of new colonies, for example, before any kind of slavery has been established, capital taken from the mother country generally perishes for want of hired labourers to use it. And in every country, whether of ancient or modern times, while land was so cheap that every freeman could easily obtain a piece for himself, the only means of maintaining the first and most important division of employments has been some sort of slavery.

His abilities in both these respects are generally in proportion to the extent of his stock, or to the number of people whom it can employ. The quantity of industry, therefore, not only increases in every country with the increase of the stock which employs it, but, in consequence of that increase, the same quantity of industry produces a much greater quantity of work.

Such are in general the effects of the increase of stock upon industry and its productive powers.

In the following book I have endeavoured to explain the nature of stock, the effects of its accumulation into capitals of different kinds, and the effects of the different employments of those capitals. This book is divided into five chapters. In the first chapter, I have endeavoured to show what are the different parts or branches into which the stock, either of an individual, or of a great society, naturally divides itself. In the second, I have endeavoured to explain the nature and operation of money considered as a particular branch of the general stock of the society. The stock which is accumulated into a capital, may either be employed by the person to whom it belongs, or it may be lent to some other person. In the third and fourth chapters, I have endeavoured to examine the manner in which it operates in both these situations. The fifth and last chapter treats of the different effects which the different employments of capital immediately produce upon the quantity both of national industry, and of the annual produce of land and labour.