curiosity. For our own part, so far as any comment upon our own taste might be made from the act, we would prefer to be known as an auditor at this theatre, above all others; and we have never entered it without feeling that those around us were guided by a similar taste a love for the finest exhibition of pictorial art, wedded to action and thought which merit a perpetual remembrance. If the drama truly live in London, it is here.

We have not seen a performance for several weeks, and must defer any farther notice till next month.

We do

Covent Garden Theatre.-Madame Vestris has done well, but should have done better, in engaging the musical talent for the operas which have been produced since Miss Kemble's engagement commenced. There has been nothing wanting in the operas, except a fairer treatment to the composers, by the conductor and the vocalists. "Elena Uberti" has been murdered by consummate rashness. not know the adviser, but whoever induced Miss Kemble to cut out the music of the composer, and substitute the composition of another, was foolish in the extreme. He ought to be branded as a bad adviser, and an enemy to the prima-donna, unless the music so unmanfully made way with is beyond the reach of the lady. Mr. Benedict, too, merits no little censure for beating out of time frequently, as he does, forcing Miss Kemble upon a sostenuto, which the author never dreamed of, and which is only suited to the "ears of the groundlings." If this has been resorted to as a trick, it is reprehensible-and, without it is exploded, we may soon anticipate that the science of composers will be wholly disregarded. Mr. Benedict is a composer himself, and could Bellini and Mercadante witness his innovations upon their works, they would have no terms to express their indignation. The conductor owes it to his reputation to take the hint which we have given.

On the fifteenth of last month, Mozart's "Marriage of Figaro" was performed for the first appearance of Miss Kemble in comic opera. The success was not what might have been expected. Madame Vestris was the feature of the evening, although Miss Kemble and Miss Rainforth sang with much effect. Miss Rainforth sings with so much trueness that we trust she will be an example to others in the profession. Haymarket Theatre. This establishment was advertised to open soon after Easter. The last season was one of great length, extending to two hundred and eighty nights; and although we cannot speak in the highest terms of gratification of some of the new plays produced during the period, yet we may cordially congratulate their authors, generally, upon their success with the public at the same time, believing that their productions will lead to a better class of comedies, of which the stage is now sadly in need. It is but a miserable compliment to an author to say that his success is attributable to the beautiful appointments of the stage, not to the terseness of his language or the excellence of his plot. At this theatre, the authors at least may congratulate themselves, though fairly treated by the manager, on not resting their reputation solely upon upholsterers and scene-painters.

We have good reasons for believing that Mr. Webster has an excellent farce in his possession; whether it will be produced early in the season or at a late period we are not informed-but of one thing we are certain, that he guards the MS. with the watchfulness of the dragon over the Hesperian fruit, for the author himself is not allowed even to touch it!

St. James's Theatre. This elegant theatre was opened under the management of Mr. Mitchell, by a company of French comedians so well selected that the establishment has been attended by the most fashionable and crowded audiences-tributes to the meritorious and worthy manager which every one of his friends must rejoice in. Mr. Mitchell opened the theatre with Mons. Perlet, in "Le Bourgeois Gentilhomme," a comedy too well known to require any notice at our hands. In this play we could not help admiring the strength of the cast, and the excellent style in which the piece was performed; Mons. Cartigny, as the Mâitre de Philosophie, performed in excellent style on the first representation, but over-acted at a subsequent performance-his exertions bordering upon buffoonery. The cavatina introduced by Miss Alicia Nunn, in the first scene, though little calculated to exhibit her astonishing power of voice, and her capability of vocalization, was warmly received by the audience, while the facetious interruptions of Perlet, and the completion of the scene, were ludicrous in the extreme-exciting volleys of laughter from every part of the house.

Mons. Perlet's engagement terminated on the 18th of last month; an engagement which has been highly successful in every sense, and the termination of which is much to be regretted. He has performed several difficult characters, besides Mons Jourdain, which have added to his already well established fame.

Mons. Oudinot is a performer, also, of no ordinary kind, and the charming Mademoiselle Eliza Forgeot is, in addition to an excellent directrice, a lady of no inconsiderable pretensions. Her naïveté is truly delightful in the several performances which we have seen, and we trust that her engagement will only terminate with the season.

The "stars" now in the ascendant are no less attractive than has been the light of the vanished, and it is with sincere feeling that we commend the exertions of Mr. Mitchell to the favourable regard of every lover of literature and the drama. Miss Alicia Nunn's Concert.-This young lady, whose tour with Pasta in this country first established her reputation as an eminent English singer, and whose success at the principal theatres in Italy in 1838 and 39 confirmed the good opinion of her admirers, after a lapse of about four years, has lately reappeared before the public, highly finished in her art. Her concert at the St. James's Theatre on the 10th of last month gave a fashionable, though not very large audience, an opportunity of refreshing their memories of her pure style and general excellence. The compass of her voice, we believe, embraces three octaves, and has puzzled many good judges, some asserting it to be a pure contralto-others a mezzo soprano-and others still a soprano. Without pretending to decide, from what we have heard, we are satisfied that the young lady has only to feel herself "at home," to be esteemed as much in England as she has been abroad.

The concert was badly managed in many respects, but the efforts of Signor G. Rubini, Miss Spence, Mr. Morley, Mr. Russell, and Mr. Richardson, with several other distinguished artists, afforded a rich treat to the company present.

Mr. Russell's Concerts.-The success of Mr. Russell in America has been of a very satisfactory kind to the vocalist. He has always been heard there with much pleasure. To say that his concerts here are equally well attended and admired will be gratifying to his many friends on the other side of the Atlantic. Mr. Russell has sung four times in public in London since his arrival, and has created no ordinary sensation. It was a critical business to attempt a concert here alone, where this system has been seldom adopted, but Mr. R. has succeeded in spite of all obstacles, and promises to reap a rich harvest from his exertions.

Mr. Huerta's Concert.-Mr. Huerta gave an excellent concert at the Hanover Square Rooms on the 11th of last month. He is the most finished master of the guitar that we have heard. Indeed, we think it impossible for any one to produce more powerful effects with this instrument. Our only regret was that his own performances were so few during the entertainment, although no part of it failed to gratify us.

Signor Piccaluga's Concert. This concert took place at the Hanover Square Rooms on the 21st of last month. Signor Piccaluga is an astonishing performer on the violin, and we are certain that the more he becomes known, the more will his merits be appreciated. The Misses Piccaluga played upon the harp and violin with considerable taste and judgment. The vocal part of the entertainment was chiefly sustained by Miss Taylor, Mlle. E. Grisi, and Miss Nunn, who was encored in Russell's favourite ballad "The Old Oak Tree."

Lilley, Printer, 3, Queen's Head Passage, Paternoster Row.

THE

GREAT WESTERN MAGAZINE.

MAY, 1842.

THEORY OF PROFITS.-No. II.

HAVING seen that Mr. Ricardo and his followers have erred in their analysis of rent, and that, by mistaking a common accompaniment for one of its elements, they have needlessly embarrassed a subject which admits of an explanation as simple as it is just, let us now see how they have connected it with the theory of profits.

Their reasoning on this part of the subject is briefly this: The price of raw produce consists of that portion of the labour and capital expended on the soil which pays no rent. This portion, commonly that which is last expended, is therefore divided between the wages of labour and the profits of capital, and determines the rate of each. Now, as in the progress of society it is necessary to resort to soils of less and less fertility, and as the returns made to equal portions of capital applied to the same soil must also gradually diminish, it follows, that the fund which is thus divided between wages and profits, must, in like manner, experience a gradual decrease when estimated in the quantity of raw produce. But as the labourer must receive as much raw produce as is "sufficient to subsist, and perpetuate his race," when this, the natural price of his labour, is deducted from a constantly decreasing fund, the necessary consequence is, that his proportional part of that fund is continually increasing, and that the residue, which constitutes the profits of capital, is continually diminishing. In this way, the gradual fall of profits, as exhibited in the market rate of interest, which had taken place in England and some other parts of Europe, was accounted for, contrary to the explanation of Adam Smith, who referred it to the increasing competition of capitalists, in consequence of the growing accumulation of wealth.

There is more than one error involved in the preceding rationale of profit. In the first place, it assumes that the labourer must always receive the same amount of raw produce; but this supposition is contradicted by the past history of society. We know that it greatly varies in different countries; that it is in general more than twice as much in the United States as it is in England, twice as much in that country as in Ireland, and more than four times as much as in India. We know, too, that it has greatly varied in the same country; that the daily wages of ordinary labour in England, for example, which are now but about a peck of wheat a day, have once been as much as two pecks. We know that in the progress of society the real wages of the labourer, that is, the value of the raw produce received by him, has generally diminished with the increase of numbers, and that he is able to accommodate himself to the reduction by resorting to a cheaper food-as by the substitution of bread for meat, and of potatoes for bread. It is, indeed, by reason of these substitutions, that landlords are able to command more and more labour for the same amount of raw produce; and thus they constitute, as we have seen, a main source of

rent.

Secondly: But if the wages and consumption of the labourer were an invariable quantity, it would not follow that profits would necessarily continue to fall. That inference assumes that capital has no other means of profitable employment than in

agriculture; in which case, the gradual decline of profits would be merely the affirmance of the simple arithmetical proposition, that if the same number be subtracted from a decreasing series of numbers, the residues will also decrease. Nay, farther, profits must gradually decline if the labourer bore only his proportion of loss arising from the diminution of the common fund, instead of receiving, as has been supposed, the same actual amount of wages.

But the assumption that is thus made is altogether unwarranted. Every branch of industry furnishes a field for the profitable employment of capital, and the profits afforded by any one branch cannot be permanently more or less than those afforded by the other branches. Each one, then, which would avail itself of the beneficial aid of capital, whether it be the farmer, the manufacturer, or the merchant, must pay the market price of such capital, that is, the current rate of profits.

That current rate, we shall find, does not depend on the rise or fall of wages or rent, as the Ricardo school have assumed, but is governed by its own separate laws; and though it tends, like wages, to fall with the progress of society, yet this tendency may be, and actually is, sometimes counteracted, so as to continue high when wages have reached the lowest point of depression, as is the case in India, China, and a few other countries.

To establish the preceding positions, it will be necessary to consider the nature and functions of capital.

The origin of capital is to be found in man's moral nature. If the wants of that nature impel him to efforts of industry, the same wants make him put by a part of his earnings for future use. He wishes to possess the means of subsequent as well as of present enjoyment, and to make provision for those whose happiness is dear to him as well as for his own. His foresight and his affections thus make him frugal as well as industrious, and all the products which he has stored away, no matter in what materials they consist, or from what sources derived, are called capital.

But how is capital a source of profit to its owner? The answer to this question may also be found by a reference to man's moral nature.

Those who have stored away useful commodities, or, in other words, have accumulated capital, cannot be expected to let others have the gratuitous use of it. It may never be returned, and the owner might reasonably require something to compensate him for this risk. But profit is something more than indemnity against loss, and we may find foundations for this profit both in the common motives of human action, and in the creative powers of capital itself.

1. We have seen that fertile land, after it has, in the progress of society, become relatively scarce, yields an annual rent to the proprietor for its temporary use. Now it would often happen in the diversified concerns of human life, that the proprietor would gladly exchange his land, which was thus a source of perpetual profit, for the gross sum it would yield in a limited number of years, and that other persons would be found who would as gladly pay the money and take the land. In other words, land, like commodities that yield no rent, has its market price, which is but a part of the indefinite amount it is expected to yield. Now whatever was the price of the land, the money paid for it being an equivalent for that which yielded a clear annual profit, would, by the act of purchase, become invested with the like faculty of yielding an annual profit.

In this capacity of money to purchase land, we see a just foundation for interest, over and above a compensation for the risk of loss; and the rate of that interest evidently depends upon the proportion between the price of the land and its clear annual rent. Thus, suppose the rent to be $100, and the price $1000, then, money, like land, yields an annual profit of 10 per cent. This is what is called selling land at ten years' purchase. So, if the price of the land was $2,000, then the annual profit or interest would be five per cent., and the land would have been sold at twenty years' purchase.

So long, then, as the desires and occasions of men induce them to prefer a large sum in hand to a small sum indefinitely repeated every year, or, rather, a smaller sum in hand to a larger sum for which he must wait, land will have its price, and those who are able to pay it have the ready means of obtaining for it an annual profit.

But supposing that by the laws or usages of a country land could not be transferred, or that it was the property of the sovereign, as is generally the case throughout Asia, capital would not, on that account, the less yield a clear profit to its owners for its temporary use.

In every community, after society has so advanced that capital has been accumu

lated, it would be very unequally distributed and variously invested. Some would be rich, and some poor; some rich in one species of property or commodities, and some in another. Now it would often happen, that one individual would want the temporary use of some machine, or tool, or other convenience, which another possessed, as of a house, a boat, or waggon, and which convenience he had not the means of procuring, or which, though he had, would not be worth to him the cost of procuring. He then would be willing to pay for such temporary use. If the owner did not receive more than a fair proportion of the cost, he would not be induced to permit the temporary use; and if he did receive more, the excess would be profit or interest. Those, on the other hand, who did not possess these conveniences, would be willing to pay this excess, as the easiest, and perhaps the only, means of obtaining them.

It may, therefore, be inferred, that capital vested in perishable articles, and the products of human labour, would yield a net profit to its owner no less than when it was vested in land. In truth, the two cases differ more in appearance than reality as to the circumstances and motives which occasion them. In both cases, a smaller amount of present enjoyment is deemed equivalent to a larger amount that is postponed-the value of any commodity, like its magnitude, decreasing in men's eyes according to the distance. The only difference between the two cases is, that the owner of capital, in the purchase of land, has a security for the annual profit which he has not in the hire or loan of property, that may be lost or destroyed. But, in lieu of such security, he trusts to the ability and good faith of the hirer or borrower, and requires a greater rate of profit to indemnify him for the risk of loss. In both cases, too, the profits of capital naturally arise from the inequality of human condition, and the diversity of men's tempers and desires.

In these cases, however, the profits of capital may be merely the transfer of a part of the products of land and labour from one portion of the community to the other. They only suppose that some, from temper or necessity, think only of the present, whilst others are not unmindful of the future; and that the price which one class pays for its self-indulgence or its poverty, the other receives as the reward of its forbearance and self-denial. Capital, thus made to change hands by the force of these moral agents, and thus altering the distribution of national wealth, adds nothing to its amount. But capital has also a creative power, by which it adds to the wealth of the nation, as well as of its individual possessor; and this, the higher and worthier source of its profits, we will now consider.

II. In every industrious community, capital co-operates with its land and labour, and is one of its main instruments of production. It is thus creative of wealth in two ways; first, by the use of tools and labour-saving machines, and secondly, by the division of labour.

First: By the aid of the tools which his ingenuity has devised, man can perform many operations on the rude products of nature, which would otherwise be impracticable. Of this, the axe, the saw, the auger, nay, every cutting tool whatever, furnishes ready examples. But it is by those machines by which the cheap powers, wind, running water, or steam, are made to substitute human labour, that the productive faculty of capital is most strikingly manifested. Thus, if an individual, wishing to provide a large quantity of plank, were to vest a certain amount of capital in a saw mill, he might thereby obtain ten, or perhaps twenty, times as much plank in a year as the same capital would have procured if he had employed it in having the plank sawed by hand, as would have been necessary without the invention of the saw mill, and is still occasionally practised. Here, all the additional quantity of plank obtained, after deducting the proportional part of its cost, is the nett product of the capital, and its powers of production are precisely similar to those of a piece of fertile land which has yielded a ten-fold or twenty-fold increase. If, in the one case, a bushel of wheat is made (with the aid of human skill and industry) to produce twenty bushels, so, in the other, capital skilfully applied may be made to perform twenty times the labour by which that capital was produced. The saw mill is a type of all the labour-saving machines by which the power of man over the several products of the material world has been so greatly multiplied, and the amount of his wealth in industrious and intelligent communities has been so prodigiously increased.

Secondly: Capital also greatly increases production, by enabling its owner to employ many workmen in a single manufacture, and to assign to each a separate operation, whereby the aggregate result is greatly multiplied. This distribution of employments, which has, ever since the days of Adam Smith, been called the division of labour, increases production in three different ways, as Smith remarks:

"First,