cannot yet have taken place in England, since manufactures and trade are here allowed to yield greater profits than agriculture.

Mrs B. You are mistaken in that opinion. It is true that it is more common to see merchants and manufacturers accumulate large and rapid fortunes than farmers. They are a class who generally employ capital upon a much larger scale, hence their riches make a greater show. Yet, upon the whole, trade and manufactures do not yield greater profits than agriculture.

Caroline. I cannot understand why the merchant and manufacturer should grow richer than the farmer, unless they make larger profits.

Mr B. You must observe that though a farmer does not so frequently and rapidly amass wealth as a merchant, neither is he so often ruined. The risks a man encounters in trade are much greater than in farming. The merchant is liable to severe losses arising from contingencies in trade, such as war, changes of fashion, bad debts, which scarcely affect the farmer; he must therefore have a chance of making proportionally greater profits.

Caroline. That is to say, that the chances of gain must balance the chances of loss?

Mrs B. Yes; the merchant plays for larger stake. If therefore he be so skilful or so fortunate as to make more than his average share of gains, he will accumulate wealth with greater rapidity than a farmer; but should either a deficiency of talents or of fortunate circumstances occasion an uncommon share of losses, he may become a bankrupt.

Caroline. But, Mrs B. you should, on the other hand, consider that the farmer is exposed to the risk

473. How does Mrs B. reply to her?--474. Why should a merchant make larger profits than a farmer?- -475. On what does a merchant's success depend?-476. To what risks is the farmer exposed?

attending the uncertainty of the seasons, a cause which is continually operating, and over which we have no control.

Mrs B. Yet, in these climates, the losses occasioned by such causes are seldom attended with ruinous consequences; for seasons which prove unfavorable to one kind of produce are often advantageous to another. And besides, the produce of agriculture consisting chiefly of the necessaries of life, the demand for it cannot well be diminished; the price, therefore, will rise in proportion to the scarcity. Farmers, you know, are sometimes accused of making the greatest gains in a bad harvest; though I do not believe that to be the case.

We may then conclude that though agriculture, manufactures, and trade, do upon the whole afford similar profits, these profits are amongst farmers more equally shared than amongst merchants and manufacturers, some of whom amass immense wealth whilst others become bankrupts.

The rate of profits, therefore, upon any employment of capital is proportioned to the risks with which it is attended; but if calculated during a sufficient period of time, and upon a sufficient number of instances to afford an average, all these different modes of employing capital will be found to yield similar profits.

It is thus that the distribution of capital to the several branches of agriculture, manufactures, and trade, preserve a due equilibrium, which, though it may be accidentally disturbed, cannot, whilst allowed to pursue its natural course, be permanently deranged. If you are well convinced of this, you will never wish to interfere with the natural distribution of capital.

477. What does Mrs B. say of these risks of the farmer?————478. What security has the farmer against losses in this way, from the rise of provisions? --479. How are the profits of agriculture shared among farmers, as to equality? -480. When will all the different modes of employing capital, be found to yield similar profits?

You must not, however, consider this general equality of profits as being fixed and invariable, even in countries where government does not interfere with the direction of capital. A variety of circumstances occasion a temporary derangement of it. The invention of any new branch of industry, or the improvement of an old one, will raise the profits of capital invested in it; but no sooner is this discovered, than others, who have capital that can be diverted to the new employment, engage in this advantageous concern, and competition reduces the profits to their due proportion. A remarkably abundant harvest may occasionally raise the rate of agricultural profits, or a very bad season reduce them below their level. The opening of a trade with a new country, or the breaking out of a war which impedes foreign commerce, will affect the profits of the merchant: but these accidents disturb the equal rate of profits, as the winds disturb the sea; and when they cease, it returns to its natural level.

-eco

CONVERSATION XII.

ON REVENUE DERIVED FROM PROPERTY IN LAND.

On rent.-High price of agricultural produce the effect, not the cause of rent.-Causes of rent; 1. The fertility of the earth; 2. Diversity of soil and situation requiring different degrees of expense to raise similar produce.-Origin of rent.-Rent increases posi tively in a progressive country, and diminishes relatively. High price of raw produce necessary to proportion the demand to the supply.-Monopoly of land.-Monopoly defined.

CAROLINE.

I HAVE been reflecting much upon the subject of re

481. Is this equality of profits fixed and invariable?What circumstances cause variation?

-482.

venue, Mrs B.; but I cannot comprehend how fariners can afford to pay their rent if they do not make more than the usual profits of capital. I had imagined that they began by raising greater produce from the same capital than merchants or manufacturers, but that the deduction of their rent eventually reduced their profits below those of other branches of industry.

Mrs B. You were right in the first part of your conjecture, but how did you account for the folly of farmers in choosing a mode of employing their capital which after payment of their rent yielded them less than the usual rate of profit?

Caroline. I believe that I did not consider that point. I had some vague idea of the superior security of landed property; and then I thought they might be influenced by the pleasures of a country life.

Mrs B. Vague ideas will not enable us to trace inferences with accuracy, and to guard against them we should avoid the use of vague and indeterminate expressions. For instance-when you speak of the security of landed property being advantageous to a farmer, you do not consider that in the capacity of farmer a man possesses no landed property; he rents his farm; if he purchases it, he is a landed proprietor as well as a farmer. It is not therefore the security of landed property which is beneficial to a farmer, but the security or small risk in the raising and disposing of his crops.

A farmer when he reckons his profits, takes his rent into consideration; he calculates to make so much by the produce of his farm as will enable him to pay his rent besides the usual profits of his capital; he must expect therefore to sell his crops so as to afford that

483. What difficulty has Caroline suggested as to farmers paying their rent?--484. What distinction is made between a farmer and a landed proprietor?- -485. What is the principal security of the farmer against loss?- -486. What is said of the relative profits produced by farmers?

profit, otherwise he would not engage in the concern. Farmers then really produce more by the cultivation of land than the usual rate of profit; but they are not great gainers by it, because the surplus is paid to the landlord in the form of rent.

Caroline. So then they are obliged to sell their produce at a higher price than they would otherwise do, in order to pay their rent: and every poor laborer who eats bread contributes towards the maintenance of an idle landlord!

Mrs B. You may spare your censure, for rent does not increase the price of the produce of land. It is because agricultural produce sells for more than it costs to produce, that the farmer pays a rent. Rent is therefore the effect and not the cause of the high price of agricultural produce.

Caroline. That is very extraordinary! If landed proprietors exact a rent for their farms, how can farmers. afford to pay it, unless they sell their crops at a higher price for that purpose?

Mrs B. A landlord cannot exact what a tenant is not willing to give; the contract between them is voluntary on both sides. If the produce of a farm can he sold for such a price as will repay the farmer the usual rate of profit on the capital employed, and yet leave a surplus, farmers will be found who will willingly pay that surplus to the landlord for the use of his land.

Caroline. But if the profits of agriculture are not the effect of rent, why are they not reduced by competition, and brought down to the usual rate of profit? Why does not addittonal capital flow into that channel,

487. Are farmers enriched by these profits?- -488. Does Mrs B. suppose that rent increases the price of land?- -489. Why not?490. What does Mrs B. say of the contract between the landlord and the tenant?---491. What question does Caroline ask in relation to the profits of agriculture?