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Chap, Page. 

I. Introductory 1 

II. The Valuation of 1885 10 

III. The Eecent Progress .... 29 

IV. Distribution between England, Scotland, 

AND Ireland C3 

V. Historical Retrospect .... 72 

VI. Accumulations op Capital in Foreign 

Countries 115 

VII. The Use of National Valuations . .135 



I. Estimate of English Capital Invested Abroad . IGl 


CONTENTS -Continued. 

lir. Valuation of England, Scotland, and Ireland, 

Ski'Aratkly ....... 1C3 

IV. ISIk. JJkkke'.s Valuation of Great Britain circa 


V. IMiJ. Lowe'.s Valuation of the United Kingdom 

circa 1S22 ICS 

Note. — The following ptigcs -were \\rittcn for tlio most part in 1SS7, or oarlj' 
in 1883, and should be read as speaking from those dates. The completion of the 
hook has been prevented till now by a pressure of oflScial work, leaving but scanty 
leisure. The delay, however, makes comparatively little diffei'ence in what is 
spoken of as the present time, as there was no great change in the Income Tax 
Returns for a few years after 1885, although a considerable change seems probable 
n the present year, and next year. 

December, 1889. 





In tlie pressiit essay I propose to resume and con- 
tinue the notes on accumulations of* capital in the 
United Kingdom, contained in a paper which I read 
to the Statistical Society in January, 187S, and 
since reprinted in the first scries of my " Essays in 
Finance."* An additional period of ten years can 
now be dealt with, and the later compared with the 
earlier results. 

In entering on the , task I desire to recall attention 
to the special object in view. This is to discuss the 

* Seo " Essays in Finance," first scries, fourth edition. London : Geo. 
Bell and Sons. 188G. 


accumulations of capital or growth of capital iu a 
given j^eriod. For vai'ious reasons economists desire to 
know the rate of accumulation in a country — to com- 
pare the rate of taxation, for instance, with the gross 
and with the taxable income, to ascertain in what 
forms mainly the M^ealth of the country is growing, 
to compare the growth of capital itself with the 
growth of population, and so on. It is recognised, 
however, that only approximate results are obtainable. 
Imagination shrinks from the task of framing a cata- 
logue or inventory of a nation's property as a valua- 
tor would make it : the idea of a valuation of the 
whole property of a country, as if a country could 
really be valued as a going concern, is itself a violent 
hypothesis ; yet only fro7n such inventories from 
time to time could the growth of wealth in the 
same country between two different dates be ascer- 
tained, while such growth being expressed in money 
might itself require correction if for any reason 
it did not happen to correspond with the growth in 
things. In the absence of such complete inventories 
however, it is thought that an approximation can be 
made to the results aimed at by valuing the leading- 
items of national property in some definite way, and 
that this approximation may be tolerably useful as a 
basis for comparing the growth between two different 
periods, and for comparing one country with another, 
although the incompleteness of each inventory itself 
may be fully recognised. According to well-known 
statistical experience, the comparison of the growth 
or increment may be reasonably successfiil if the same 
method is followed on each occasion in working out 
the data for the comparison, although these data 
themselves may be unavoidably incomplete. 


I must insist on this point all the more, because, 
since my former paper was written, attention has, in 
fact, been withdrawn from tlie special object in view, 
and it has been thought, apparentl)^, that such esti- 
mates of property can be used for misceUaneous 
purposes in a way whicli I believe most dangerous, 
and that they can be made with a degree of accuracy 
which I believe to be impossible. Country lias been 
compared with countr}*, and period with period, in 
the most reckless fashion, without any attention to 
the comparability of the data. Such figures have 
even been used officially for the purpose of discussing 
the relative incidence of taxation on different kinds 
of property, real and personal being the kinds dis- 
tinguished. I desire to record an emphatic protest 
against the employment of a method, which appears 
good enough for a special purpose in the absence of 
anything better, for purposes of a totally different 
kind, where a different degree of accuracy, which the 
figures are not susceptible of, may be necessary. 
Whether estimates of property, and the different 
kinds of it, can be made for such a purpose as dis- 
cussing the incidence of taxation, or the like practical 
objects, is a point at least on which I reserve my own 
opinion. At any rate, those who make such estimates 
are bound in limine to justify their method, and to 
prove that the necessary degree of accuracy for the 
purpose they have in view is obtainable. For any 
such purpose as that now in hand, comparatively 
rough estimates are all that are required, and com- 
paratively rough estimates are all that it is proposed 
to make. 

An explanation at the outset as to the method 
followed may also be allowed. The object being to 

4 'I'lIK (;i;<)\V'l'II OF CAI'ITAL. 

jiHccrlain llic ;iccniinil;iti<nis of ciqjitul, and not 
])i-'nn:irily tin- aniouiit of capital itself at a given 
time, it is an olivions suggestion that tlie problem 
may be attacked directly. Why not, it is said, 
reckon np the savings annually as they are made 
in the diilerent forms in which they are made ? 
Th's point A\as glanced at in my former paper, and 
reasons were given for the method actually followed ; 
but this question of method is of some importance, 
and, perhaps, demands somewhat fuller illustration. 

The objection to the method of merely recording 
investments as they are made, instead of valuing the 
whole property of the country at different dates, is 
first of all, its incompleteness. It is difficult, if not 
impossible, if we follow it, to take any account of the 
regular annual investment by individuals in their 
own busines5 or properties, which must always be the 
most important form of saving — far more important 
in amoimt than the visible public investments. 
Next, even if it could be complete, this method 
makes no allowance for bad investment, for the 
waste of capital which is possible, (the invest- 
ment so-called having been merely a form of 
throwing money into the sea), and it makes no 
allowance for the depreciation or loss of capital in 
old investments which have become obsolete or use- 
less. By valuing property at different times as it 
stands, any inclusion of capital which has been merely 
wasted, or which has depreciated, is avoided. At 
each date only effective capital is reckoned. No doubt 
in many cases the valuation may represent a greater 
sum than has actually been invested, even when 
allowance is made for changes in prices ; but the 
element of judiciousness in investments is as much 


to be allowed for as any other in a question of the 
amount of property in a country, and this is really a 
reason for tlie method and not against it. For these 
two reasons mainly, then, the method of valuing pro- 
perty at different times is to be preferred to the; 
method of counting up investments as they are made. 
It is the more complete method of the two, including 
all kinds of private as well as public investment, and 
it allows, as the other cannot do, for loss and depre- 
ciation of old investments. There is a third reason 
in its favour. The figures when obtained by it can 
l3e compared with those obtained from the annual 
records of investments, and this comparison is useful 
in many problems, of which the amoiuit of free 
savings coming on the general investment markets 
— i.e., the Stock Exchange — and the projDortion that 
amount bears to the whole savings of a country is 

Of course, however, the exact meaning attached to 
the word accumulation must always be kept in mind 
by those who engage in the discussion. No method 
can be quite perfect. If we record merely invest- 
ments as they are made, without considering whether 
they are judicious or not, and disregarding altogether 
the loss and depreciation of old investments, we get 
a fact which may be useful in some discussions, 
though not in others ; and may call it, if we so 
please, the annual accumulation of capital. If we 
wish, however, to compare effective capital or pro- 
perty at one time with effective capital or property 
at another, wo must proceed by the method of 
periodic stocktaking and valuation, and call the 
difference between the valuations at different times 
allowing for changes of prices, the accumulation of 

•IlIK (.lii'Wril <il' CAl'I'I'Af.. 

c;i|.i(;il. 'I'lir iiiiK >ui if s lo !)(• (lc;ilt wiili In citlier case 
mit^Mit not ill some cases differ greatly Iroiii eacli 
oilier, but tlie different senses in wliicli the words 
may be nscd, and the possibiUty of diflerences in the 
arnovmts of the accumulations as differently defined 
and ascertained, should, of course, be kept in mind. 

There is yet another preliminary point. The method 
of estunating the property in the country at different 
times, which was followed in my former paper, it will 
be remembered, was to take the income returned for 
assessment to the Income Tax, capitalise the different 
portions of that income derived from capital — land, 
houses, and so on, — at so many years' purchase, and 
then make an estimate for other property in the 
country where the income was not got within the 
sweep of the Income Tax net. A similar method, it 
may be repeated in passing, as mentioned in the former 
paper, was first employed by ]\Ir. Newmarch in the 
Economist in 1873. Mr. Newmarch by various calcu- 
lations had arrived at the opinion that to obtain an 
idea of the annual accumulation in the country the 
amount of the Income Tax assessments might be 
multiplied by 20, and the difference between the 
totals at different dates would represent the accumu- 
lation. It was with" some pleasure I noticed after- 
wards that ]\Ir. Newmarch in the last paper he read 
to the Statistical Society adopted the more detailed 
plan of my former paper and practically accepted the 
figures, substituting them for those he had formerly 
used. In such a method, then, to come to the point 
I wish now to make, a great deal turns upon the 
number of yeai-s' piu'chase assigned to each descrip- 
tion of income, and the question arises, when valua- 
tions ut difl'erent dates are compared, or when the 

ixTrtODUCTOm'. 7 

valuations of different countries are compared, how 
far is it expedient or necessary to vary the niunber 
of years' purchase as regards particular descriptions 
of property ■? In my former essay this difficulty was 
evaded. Dealing witli one country only, the question 
of assigning a different number of years' purchase 
because of a comparison with other countries, or be- 
tween different parts of the same country, did not arise; 
while I assumed that as the tendency had ratlier been 
in the interval compared, for all classes of income to 
be valued, as time went on, at a greater number of 
years' purchase, the rate of interest falling in the 
interval, the effect of ignoring this element would be 
for the figures stating the accumulation of capital 
to err rather by defect than by excess, which it was 
desirable to avoid. Now, however, the question of the 
number of years' purchase may require discussion. 
Since 1875 the capital value of many sorts of income, 
the number of years' purchase for whicli it will sell, 
has undoubtedly risen. As regards other kinds of 
income, however, such as the rent of land,t]ie number 
of years' purchase at which the same nominal rental 
will pass in the market, has undoubtedly diminished. 
The question seems, therefore, not quite so simple as 
it was. On what basis should changes of the kind 
be dealt with theoretically if the general totals are 
likely to be seriously affected ^ It is proposed also, as 
will be seen, to compare different parts of the United 
Kingdom with each other as well as to make more 
extended comparisons with foreign countries. Here 
the element of the number of years' purchase must be 
dealt with explicitly. In some references a few years 
ago whicli I made to the capital of Ireland I assumed 
that landed property in that country ouglit to 


!)(' v;iliu'<l lit :i siii;illc)- iiuiiiljur of years' i^urcliase 
of the rental tliaii landed property in tlie rent 
of the United Kingdom, and I found to iny 
astonislnnent that some critics assumed the con- 
trary. Because in capitalising the lands of the 
United Kingdom \ liad assumed so many years' 
purchase on the avcmcje, therefore it was to be 
assumed, I was told, when one part of the kingdom 
was put against another, that the valuation of each 
description of property in each part should be at the 
same number of years' purchase ! Such a procedure, 
in my opinion, would be most absurd. But whatever 
may be the right conclusion, the subject at any rate, 
owino- to tlie different circumstances with, which I 
liave now to deal, as compared with what was the 
case formerly, and owing also to the wider scope of 
the paper, will require the most careful attention. 

Another point of some difficulty, which was glided 
over in my former paper, though not altogether 
suh silentio, has also become too serious to be 
passed over now in a similar manner. This is the 
difficulty caused by changes of prices, and — to come 
to the period now specially under review, viz., the 
period 1875-85 — the difficulty caused by the fall 
of prices in that interval. The valuations being of 
property, and the money value of all kinds of pro- 
perty depending on the prices of commodities directly 
or indirectly, anything which changes the prices must 
change the valuation. Changes of jDrices between 
two dirterent dates, where they are at all serious, have 
accordingly to be allowed for in estimating the growth 
of capital by the difference in the two valuations ; and 
the practical difhculty in handling the figures, it will 


be seen, is somewhat formidable. The point will be 
dealt with in its order when it arises, but it has to 
be mentioned at the outset to give all interested 
warning of a discussion which must take up a great 
deal of space. It is a purely unavoidable complication 
of our task. 



The first step to be taken, following the metliod of 
tlie former paper, is to look at the valuation of the 
jjiiliuii's pro^ierty at the present tirae. 

For this pur[)ose the accompanying Table (A), 
(see p. 11), has been drawn up in a form precisely 
similar to that of a similar table in 1875. The 
classifications of the items of the nation's property 
follows closely as far as possible that of the Income 
Tax returns, and additions are then made for property 
which is not accounted for as connected with any 
income dealt with by the Income Tax. The I'able 
of 187.), it may be mentioned, is followed so closely 
that the list of items is word for word the same. 

The table speaks very mueli for itself, but a few 
observations may be made before we pass to the 
proper subject of this essay — viz., the recent accumu- 
lations of capital. 

T have first of all, then, to draw attention to the 
fiict that it has been thought necessary in one or 
two cases to vary the number of years' purchase 

[CoNTiKrED OS r. 12.] 



Table A. 
Amount of Income in Income-tax llL'ttmii>, dericedfrom Capital, Numher oj 
Ycam^ Purchase at ichicli the same maybe Capitalised, and Approximate 
Amount of Capital; torjel'Ucr with Estimate of remaining Income 
and Capital of the Countnj. 

[ODO's omitted in amount columns.] 

Years' Purchase & 
Capital at Yearn' 

P'rchase Emjtlotjed 

for 187S, vhcre a 

Change has now 

been made. 

Under Schedule A. 



Other profits 

Schedule B. 

(Farmers profits) 

Schedule C. 

(Public funds less home funds). .. 
Under Schedule D. 






Canals, &c | 

Fishings j 

Market tolls, &c 

Other public companies j 

Foreign and Colonial securi- "^ I 
ties. &c 3 

Eailways in United Kingdom... 
,. out of United Kingdom 

Interest paid out of rates, &.c. ... 

Other profits 

Trades and professions — one- 
fifth of total income of 

Total under Income-tax ... 


1,691,313,*! 30 
1,926,885,1 ... 
26,310, ... 





10 \ 652,330 

I, 20) 
1, or[- 
is.. J 

Trades and professions omitted 
per cent, of amount assessed 
i;30,OOl),OOO, of which one-fifth 

Income of non - Income - tax paying '^ 
classes derived from capital > 

Forei'-rn investments, not in Schedules > 
C and I) ) 

ilovoblo property not yielding income,"* 
e.g., furniture of houses, <Scc., works - 
of art, iVo ) 

Government and local property, say , 

9,859, 20 

33,270,1 28 

3,808,1 20 

5,041,1 25 

1,435,1 20 

36,096, 15 























• This is the result of capitalisinf? lands in Ireland at 15 years' purchase, and in Eng- 
land and Scotland at 2^ years' purchase. The average for the United Kingdom is an fraction over 26 years' purchase. t Estimate of income escaping 

assessment by raising of limit of cscuiptiou in 1870. 

12 TIIK (iKoW'I'll Hi- CAI'lTAL. 

IVoiii ( wliich wjis employed in the former paper 

for lb7.3, and that where this is done it is noted in 

sii])phnu'Mtal columns what the figures would have 

hecii if (.lie number of years' purchase formerly used 

li;id l)L-en retained. The general efi'ect, it will be 

seen, is that while there are alterations in the relative 

amounts of i)articular items of capital inter se, the 

linal totals arrived at are not materially different, in 

consequence of the changes made in the number of 

years' jjurchase, from what they would, have been if 

no such changes had been made. The total valuation 

now arrived at is 10,037 millions, and if no change 

liad been made in any case in the number of years' 

(^purchase the total would have been 10,070 millions. 

The next remark to be made is on the magni- 

/tude of the sum total arrived at. The round figure 

/ of 10.000 millions is about 13-| times the amount of 

/ the National Debt, and gives a sum of about £270 for 

1 every person in the United Kingdom, equal, at an 

\ average of five persons per family, to about £1,350 

\ per family. If the valuation is at all moaerate, the 

figure shows how much on the average each family in 

the United Kingdom possesses. 

Of course, there are "averages" and "averages." 
An average may be made up of items where the pre- 
ponderant numbers individually nearly correspond 
with it, or it may be made up of items where the 
preponderant numbers are greatly under it, a minority 
throwing it up. There is no doubt that, as regards 
the distribution of wealth in the United Kingdom the 
average is made up most unevenly. For convenience' 
sake the figures are reduced to so much per head or 
per family, but the actual distribution is a different 


Coming to the different items, thejlrst to notice is 
the vahiation of lands constituting about one-sixth 
of the total valuation. The income of £65,039,000 
capitalised at 26 years' purchase shows a capital of 

The question will perhaps be raised whether 26 
years' purchase, looking at the uncertainty of rentals, 
and the unsaleability of land on the basis of actual 
rentals, is not too high, although it is a great reduc- 
tion upon the number of 30 years which was em- 
ployed with general approval in my former paper. 
It is a great point, however, in such investigations to 
beware of panic figures, and of extreme quotations 
characteristic of a transitional and uncertain period. 
It is too soon yet to tell at what rent land in the 
United Kingdom will settle after the revolutionary 
circumstances of the last ten years, the adjustments 
required by the new circumstances being still in 
progress. We may be sure, however, looking at the 
low rate of interest for money, that the number of 
years' purchase, when a settlement is made, will in no 
case be so low as 26, while there is much land at 
present, whicli, for resitlential and other reasons, has 
not participated in the extreme fall of values of wliich 
we have heard so much. The figure of 26 years, 
therefore, is suggested as a safe mean in the present 
exceptional and transitional circumstances, and in the 
present uncertainty regarding the income on which 
the valuation is based. 

It may be added also that, in fixing the number of 
26 years, special regard is had to the peculiar cir- 
cumstances of Ireland, where it has not been thought 
safe to assume a higher average than 15 years on 
the nominal Income Tax assessment of about 


i:iO,000,()0(), which luust ho hirgcly iioiniual only. 
The average assumed for England and Scotland is 28 
yours, by wliicli a large idlowance is made for resi- 
dential and other land which has not yet participated 
in the extreme fall to which much land has been 

To [Hvvent misconstruction, moreover, I have to 
rciiiiud those interested that the valuation is made 
as for the year ended 31st March, 1885, when the 
extreme depreciation of agricultural produce lately 
witnessed had not yet taken place. 

2. The second item to be noticed is that of 
"Houses." The total income here is over 128 mil- 
lions, and at 15 years' purchase the capital is 1,927 
thousand millions — nearly one-fifth of the total valua- 
tion. " Houses" thus constitute the most important 
item in the valuation, being more important than 
lands which at the time of my former paper had still 
the undoubted pre-eminence, being nearly a fourth 
of the total. 

The value of " Houses " alone, per head of the 
])opulation of the United Kingdom is about £54, 
equal to £270 per family, at hve persons p;^r family. 

To prevent misconstruction, it should be understood 
that the item of " Houses" in Schedule A in the In- 
come Tax Returns, includes not merely dwelling 
houses, as might at hrst be supposed, but messuages 
and tenements generally, that is factories, workshops, 
warehouses, &c., these appearing to constitute about 
a fifth part of the total, according to the returns of 
Inhabited House Duty ; and on the other hand, it 
does not include '' Farm Houses " which are comprised 
with the item of lands. Deducting; on the one-side, 
however, messuages which are not dwelling houses, 

THE VALUATION OF 1885. \ ') 

and adding on the other side the separate vahie of 
farm Iiouses, if it could be separated, the total housing 
of the people of the United Kingdom would not 
probably be far short of the figures above stated. 

3. The third item I have to remark on is that of 
Schedule B. (Farmers' Profits), where the income, 
£65,233,000, is substantially the same as that of 
lands in Schedule A. This income, at 8 years' pur- 
chase, the figure assumed, brings out a capital of 

In this case the figure of 8 years is substituted fur 
that of 10 years which was employed for 1875, 
and in making the substitution I have been in- 
fluenced by the uncertainty of the income, and the 
exceptional and . transitional circumstances, which 
appeared to necessitate a similar substitution as 
regards the capital value of lands in Schedule A. 
In normal circumstances I should consider 10 years' 
purchase the safer number to use on the basis of 
rental, so as to obtain a total of capital correspond- 
ing to Schedule B. 

On the reading of my former paper, Major Craigie 
expressed the opinion that 10 years' purchase was too 
high, and he suggested a lower figure, which would 
have amounted to about 7 years' purchase of the 
rental of that time. Now he suggests, as I under- 
stand, a figure which would amount to about 5 years' 
purchase of the rental last returned. 

The point is of very small importance for tiie 
special object of this paper. The ditlerence in the 
number of years' purchase assigned hardly makes 
any appreciable diflerence in the accumulation of 
capital in the interval. Tlie total difference in 
income under Schedule B, between IS 75 and 1885, 


is :il)()ut i'l, .■;()( I, ()()() only, and at 10 years' purchase 
(Ills would represent a diminution of £15,000,000 in 
t'a|tit;i], at 7 years' a diminution of £10,500,000 — 
ii^anvs ([uite insignificant in comparison with the 
ininiensc accumulations here in question, while the 
diirercnce between them is only £3,500,000 — a still 
smaller figure in the comparison. Even tlie total 
farming capital, whether we take it at 300, 500, or 
700 millions, is comparatively a small item in a 
valuation of 10,000 millions. There is a good rule 
about "de minimis," which is as applicable in sta- 
tistics as in other matters, or even more applicable. 
It would be very foolish for those of us who are not 
agriculturists to waste time, in a question like this, 
on discussions about agricultural capital. 

As the point has been raised, however, I have 
thouii'ht it interestinof to look into the matter a little, 
and have a few observations to make, a small frac- 
tion of what I could write, if necessary ; but I must 
refrain from introducing matter not germane to the 
main topic. What seems to have misled Major 
Craigie, as I believe, is a misconception on two 
points. He does not allow, first of all, for the 
necessity of dealing with agricultural capital, in a 
question like the present, in such a way that all the 
capital needed for the occupation, whoever owns it, 
is comprised. This is the general method used Avith 
reference to railway and other income in the Income 
Tax Schedules. A railway is not looked at from the 
point of view of the ordinary shareholder who really 
runs it, practically borrowing from the preference 
share and debenture holders to enable him to do 
so, but the whole value of the undertaking and its 
equipment is included. The same with gas works 


and other business, and with trades and professions. 
If this had not been done, then it would have been 
necessary to make a special item of that floating 
capital which bankers and other capitalists handle and 
lend in various w^ays to the active agents in industrial 
enterprise. Dealing with agricultural capital, then, 
in the same w\ay a little reflection will show that it 
must include three main items : — (1) The value of 
one yeai''s crops, or thereabouts ; (2) the value of the 
live-stock; and (3) the value of the farming machinery 
and tools. At one period of the year, viz., harvest 
time, there must be practically a year's crops on the 
field or in stock, if not more ; the live-stock and 
equipment are always there, and somehodi/ owns them. 
On this basis, however, in 1875, a much larger figure 
than Major Craigie's £476 millions must have been 
arrived at. Sir James Caird, not long after, in his 
book on the landed interest, valued the annual crops 
in the United Kingdom at 200 millions, and the live- 
stock at the same amount — total 520 millions ; while 
the farm equipment in machinery and tools could not 
then be put at less than about £1 per acre, making 
another 50 millions* — total 570 millions for the cul- 
tivated area alone. In such a matter, of course, being 
an outsider, I can only follow agricultural authority 
as regards the data, and the data undoubtedly show 
that Major Craigie's former estimate was too low for 
such a purpose as that of the present valuations. 
Besides ail this something should be allowed fur the 
tenants'unexhausted improvements, and any beneficial 
interest he may have through his rent not being a 

The other point where Major Craigie appears to 

* See "The Book of the Farm," vol. ii., pp. 443-5, edition 1871. 


have misconceived the problem we must deal with 
here, is in not attending sufHciently to the nature of 
Scliedule B, which is called for brevity's sake the 
"Farmer's Profits" Schedule, but which is strictly and 
technically the occupation of land. Even if Major 
Crain-ie was riHit, therefore, in his estimate of 47G 
millions for farmers' capital, lie had still to consider 
what other occupation of land there might be under 
Schedule B. There are 30,000,000 acres here to be 
dealt with, no doubt for the most p:irt mountain and 
waste, but still worth something, and possessing 
occupation capital. I need only mention one item- 
viz., woods and j^lantations — to show what a huge 
hiatus there may be here. Of these there are nearly 
3,000,000 acres in the United Kingdom, and one 
has only to read the recent reports and evidence of 
the Select Committees of the House of Commons 
on Forestry to perceive that in spite of the fall 
ill timber, as in other things, compared with former 
times, the woods and plantations have a consider- 
able annual value and a still more considerable 
capital value to correspond, which would not, from 
the mode of valuation, be comprised in the income 
and ca})ital under lands in Schedule A. This capital 
I should be disposed to estimate even now at some- 
thing like 60 or 70 millions sterling, while in 1875, 
with much higher prices then prevailing, it was 
probably not less than 1 00 millions sterling, makino- 
Avith the capital of the cultivated area above 
mentioned a total of G70 millions, which was just 
about the figure in my former paper. It may 
be urged that timber goes with the land, and is 
included in the valuation of the land, but this is not 
so according to the method of the Income Tax 


returns. The real income from woods and planta- 
tions is not included in Schedule A, but only an 
assumed agricultural or prairie value. In a stricter 
account other items would have to be included, so 
that even if the 100 millions for woods and forests 
only is a little excessive the aggregate of G70 mil- 
lions would not be far out. The bulk of the G70 
millions is in any case sufficiently accounted for, and 
there are not materials, I fear, for more exact valua- 
tion. In this way it is easy to see that the criticisms 
of Major Craigie have been based partly on miscon- 
ceptions of the jDi'oblem. His figures were alto- 
gether too low as an estimate of capital under 
Schedule B, partly from his narrow construction of 
the term capital itself, and partly from his ignoring 
the large capital under Schedule B, which was capital 
of the occupation of land certainly, but not farmers' 
capital at all. 

The point, as I have explained, is of small import- 
ance for the present paper ; but perhaps the digres- 
sion may be permitted for the sake of the explanations 
of method that have arisen upon it. In such a 
general valuation, it is, above all, important to leave 
out nothing of substantial consequence. It would 
not do to construe the word capital very narrowly in 
a cjiven case, and thus leave out somethinof which is 
not included anywhere else, so that it is left out 

For the present time, I have not data on the same 
authority to refer to, but the recent valuations by 
Mr. Howard and Mr. Turnbull as to ao-ricultural 
crops, and a portion of the property, show approxi- 
mately that the present valuation of a little over 
£520,000,000 cannot be far oft* the mark. The 


crops sold oft" the farm arc valued by Mr. Ploward 
at a little over £200,000,000,* and while this is the 
value of the crops in the final form, so that it may 
be said part of it is the value of the live stock in 
another form, Mr. Howard's calculations show thtit 
the value of the crops before any part is converted 
into meat or dairy produce cannot be far short of this 
figure. Then the value of the live stock, exclusive of 
horses, is ])ut by Mr. Turnbull at £150,000,000,* to 
Avhich, if we add horses, farm implements, &c., at 
about £50,000,000 each, we have a further sum of 
£250,000,000— total £450,000,000, exclusive of the 
value of woods and other items under Schedule B, 
the importance of which has already been discussed. 
Without making exact calculations, it is easy to see 
that the sum of £520.000,000 for occupation capital 
under Schedule B — a Avider term th^m agricultural 
capital, though the item is popularly spoken of as 
agricultural capital only — cannot be far off the 
mark, even if a stricter mode of valuation is followed 
than what is possible on the basis of Income Tax 

4. The next item to comment upon is that of" Public 
Funds less Home Funds," which shows an income 
of £21,09G,000, and at 25 years' purchase a capital 
of £527,000,000. 

I have some remarks to make on this item in 
connection with the general subject of foreign invest- 
ments, and I propose afterwards to bring together 
with this view the various items in the Income Tax 
assessments which deal with such foreign income ; 
but let me refer just for a moment here to the fact 
I hat the "Home Funds," included in Schedule C, are 

• All these valuations also are at lower prices than were ruling in 1885. 


here omitted in valuing the general property of the 
countrv. The reason I gave for this omission was 
stated as follows in my paper in 1878 : — 

*' As regards the second deduction, it will only be 
proper, I think, that in such a computation as this, 
we should not reckon the National Debt twice over,* 
and that would be the effect of our capitalising the 
whole of Schedule C. The National Debt is a mort- 
gage upon the aggregate fortune of the country. As 
we may assume it to be practically all held at home, 
we may reckon up our whole estate without deducting 
the debt, w^hereas we should have to deduct it if it 
were held by foreigners ; but while we do not deduct 
the debt from the total of our estate, neither can we 
add it without falling into error."' 

And I desire to call attention here very specially 
to the fact that this omission was, and is, made. In 
these figures, the capital represented by tlie National 
Debt is not represented as part of the property 
of the community, though, of course, to each indi- 
vidual holding a portion of the National Debt the 
holding is property. 

What I have done is clear enough, and I believe 
that, on the whole, the reason assigned is a good one. 
But I should not censure very much any one 
who included the National Debt as a part of the 
capital of the communit}^ Tlie general reason for 
such a course would be that as the debt is a charo-e 


upon the resources of the community, the money ex- 
pression of all the other capital of the community is 
less than it would otherwise be by the amount of the 
debt. If there were no National Debt^ lands, houses, 

* The phrase, " twice over," is a slip. It would have been more accurate 
to say that tho Xational Debt is not reckoned at all, which is the obvious 
meaning of the passage. 

'2'2 'I'lIK (iKoWTII OF f'AriTAL. 

and every otlier (loscri})tioii of propcirty would ex- 
eli:ui;^^e lor rather more tiuiu tliey now do. The debt 
in this view represents a certain distribution of part 
(»f the capital of the country, and we do not get a 
complete view of the capital unless we include it. 
Where the Debt is all held at home the point may 
be of importance in making comparisons with other 
countries, or in making comparisons between different 
dates in the same country where the amount of the 
Debt has changed much in the interval. I am bound 
to admit that in my view there is something in this 
reasoning, though it seems a strange thing at first 
sight to talk of debt as capital. Practically, how- 
ever, for the reasons above given, I have thought it 
safer not to include the debt, and as regards the 
United Kingdom, at least, the debt not having much, 
changed in recent years, the point is not of much 
importance in dealing with the question of the 
accumulations of capital in a given period. 

5. The next observation I have to make on the 
table is with reference to the items of quarries, mines, 
and ironworks, which are all taken at four years' 
purchase, as they were in my former paper. It has 
been suggested since that a larger number of years' 
purchase ought to be taken, as the assessments com- 
prise royalties as well as the ordinary profits of mines. 
Royalties, however, are only a mode of distributing 
profit, and experience has shown, I think, the wisdom 
of a low valuation. As will be seen afterwards, the 
income from mines and ironworks has dwindled 
enormously since 1875 ; it is only now a fraction of 
what it was Four years' pm-chase in 1875, as ex- 
perience has proved, was almost too high. 

It may be pointed out also that the result of 

THE VALUATION i)V 1885. 23 

capitalising mines and iron works, at four years' pur- 
chase, ufives only a slightly higher result than the 
mode of dealing with ordinary business income (trades 
and professions) afterwards adopted. This plan is to 
assume that only a fifth of the income is derived from 
capital, and then to capitalise this fifth at fifteen 
years' purchase. Fifteen years' purchase of a fifth is 
equal to three years' purchase of the whole. Mines 
and ironworks at four years' purchase are thus still 
valued at more and not less than ordinary business 

G. Tlie next point to notice, is the number of years' 
purchase for Gas works, where 25 years have been 
substituted for 20, which was the years' purchase 
assigned in 1875. This may seem an unwarrantable 
change, in the face of the sensation caused by the 
electric light, and the consequent fear that gas woidd 
lose its value. In this and other cases of joint-stock 
property, however, I have only followed the market 
somewhat tardily. It may be doubted whether even 
now sufficient allowance has been made for the fall 
in the rate of interest. Assuming it to be right in 
principle to vary the number of years' purchase, as 
the market varies, this change in detail seems fully 

I pass over other minor items in the list — water- 
works, canals, &c., fishings, market tolls, &c., where no 
alteration is made in the number of years' purchase 
compared with that formerly used ; and 

7. I come to three cases where such a change 
is made, viz., Other Public Companies, Foreign and 
Colonial Securities, &c., and Railways in the United 
Kingdom. In the two former cases, the number of 
years' purchase is raised from 15 to 20, and in the 

21: 'riiK (;i;()\vrii <»f caimtal. 

Litlcr IVoiii 25 to 2S. It will be for who 
ail iiilcrcst ill such matters to consider whether this 
is ail a(l(M|ii;ii(', or an iusiilHcient, or an excessive 
allowaiico loi- ilic fall in the rate of interest in the 
interval. In the case of railways the change is equal 
to an average fixli in the rate of yield to investors on 
railway securities from 4 to £3 lis. Gd. percent.; 
and in the c;ise of other public companies, &c., to 
an average fall as from i'G 13s. 4d. to 5 per cent 
The changes, however, correspond to the greater pro- 
portionate improvement of credit which seems to 
have taken place in what were formerly considered 
securities of inferior grade, though really not sub- 
stantially much inferior. High-class securities have 
improved enormously, but as they have risen in price 
investors have naturally turned to lower-priced in- 
vestments Avhere there seemed still some chance of 
5 or 6 per cent, and in many of these at any rate, 
inchiding foreign securities of all but the first-class, 
and excluding the bogus class, there has been an 
immense improvement. 

The result no doubt is, as we shall see when we 
come to make comparisons, to bring out a remarkable 
increase of capital in railways and public companies, 
without a fully corresponding increase of income ; 
and what value is to l)e placed on an increase of 
capital thus arising, as well as on the corresponding 
decrease in the case of lands already adverted to, w^ill 
be one of the main points for discussion. 

8. The remaining items of property corresponding 
to income included in the Income Tax assessments 
call for little remark. It would have been justifiable, 
I think, to increase the number of years' purchase 
applied to railways out of the United Kingdom, as it 


has been increased in the case of foreign securities, 
but I have been afraid of exaggerating, A larger 
number of years' purchase might also be assigned to 
the " Interest paid out of rates," but this has been 
avoided for the same reason. As to the method 
followed in dealing with Trades and Professions, I 
need only repeat what was said in my former paper. I 
have here followed Mr. Dudley Baxter s calculations 
— viz., to assume that one-fifth of the income is 
derived from capital, and then to capitalise at 13 
years' j^urchase. This is especially a figure where no 
exactness is possible. Trades and professions include 
to some extent the salaries of clerks and other 
employes where there is no corresponding capital ; 
but they are, no doubt, made up for the most part of 
really trading and professional incomes, where capital 
is indispensable to the income, but where the income 
as undoubtedly is mainly dependent on personal 
exertions. If a better plan can be suggested for 
dealing with this part of the Income Tax, I shaU 
gladly follow it. 

9. Coming last of all to the items of capital either 
arising from incomes below the Income Tax limit or 
being property of another kind, I have to notice, to 
begin with, the first two of these items — viz., trades 
and professions, which ought to have been assessed 
and are not, and incomes of trading and professional 
persons below the Income Tax limit, which are 
capitalised at five years' purchase. These are, oi' 
course, very rough estimates indeed, designed tu 
prevent the complete omission of something which 
ought to have been dealt with somehow. Here, again, 
I have been guided by Mr. Dudley Baxter, who 
explains in his Essay on National Income his inodv 

JC TIIK (;i{<)\\"l'll OK CAIMTAI.. 

of cHtiin;itiii«^^ the two kinds of jiicome wliicli lay 
intermediate between incomes comprised in the 
Income Tax assessments on the one side and working 
class incomes on the other. The only point I have to 
notice here is the special inclusion of a certain income 
which has fallen below the Income Tax limit since 
IST.l by the raising of the lower limit of tlie Income 
Tax since that date. On this head, however, I may 
refer sim})ly to what is said in the table and the notes. 
The point could not be passed over. 

10. Tlie next item to notice is that of foreign in- 
vestments not in Schedules C or D, where a large 
amount of income — viz., £.50,000,000 — is taken note 
of, and capitalised at 10 years' purchase. Wonder is 
expressed at so much foreign income escaping taxa- 
tion, but, in spite of all that has been done since 
1875 to get hold of such income for the revenue — 
and a great deal, I think,' has been done — I must 
appeal to a few broad considerations to justify the 
figure put down, as I did in my former paper, to 
justify a similar figure. 

The best way to look at the matter is to put 
together all the foreign income which the Income 
Tax authorities get hold of, and compare them with 
other known facts : — 

Public Funds (Schedule C) 

Forcigu and Colonial Securities (Schedule D) 
Railways out of Uuited Kiufrdom (Schedule D) .. 

Forei}::n Investments not in Schedules C or D 










It is obvious that the £34,763,000 is too small, 
whatever may be thought of the proposed addition of 
£50,000,000 for the income "omitted." I have to 
submit, however, on this last liead the table in the 
Appendix (Table i), sliowing from an analysis of 
Stock Exchange lists how probable it is that the 
income from foreign public securities alone coming to 
English people is enormously larger than the sum of 
£34,763,000 which the Income Tax authorities get 
hold of, while there is an immense investment besides 
through private channels and by mercantile houses 
with partners and establishments abroad. It should 
be explained, moreover, that a great deal of this 
income may escape assessment to the Income Tax in 
no improper way. The partners residing abroad of 
firms which are really English, but which are domi- 
ciled abroad, are perhaps under no obligation to 
return the income, though their wealth and income 
are English wealth and income, and much profit that 
may be made by such partners may be eventually 
brought home as capital and not as income, and so 
escape assessment. 

11. The next item is that of movable property not 
yielding income, which is assumed to amount to hall 
the valuation of houses. This does not pretend to be 
much more than a guess, though it was not arrived 
at without some data. It has since been very gener- 
ally accepted. In any case it is a rough figure, and 
is affected, of course, by the circumstance- that the 
item " houses " in the Income Tax assessments does 
not correspond exactly witli dwelling houses. 

1 2. The last item of all, is that of government and 
local property. Here again the figure is somewhat 
rough. But army property, navy property, and 


])iil)li('l)iilklings of all kinds are government property, 
which must come to somctliing, while local property 
of every kind cannot now be less than three hundred 
millions. It has increased on a moderate calculation 
from the amount of local loans, and the amount an- 
nually repaid, by about 100 millions at least, in the 
ten years specially under review. The figure here 
inserted certainly cannot err much by excess. 

Large as the figures are, therefore, the estimate of 
10,000 millions as the property of the United King- 
dom valued as a going concern does not seem un- 
reasonable. Of this sum again, nearly 8,500 millions 
must be reckoned as income yielding, the correspond- 
ing income being about 552 millions. The figures 
are truly bewildering, but it is quite certain that 
some such figures are about the mark. Valued as a 
going concern at the current prices of the individual 
items of the property, the business carried on by the 
community within the British Isles, with the property 
of every kind they possess, would exchange for all 
this money. 



Our special business, however, is not with the valua- 
tion of the national estate at the present time, but 
with the accumulation of capital in recent years. 
For that purpose, instead of the 30 years' comparison 
which was all that was possible when I wrote ten 
years ago, it is now possible to make a comparison in 
the same detail for two ten-yearly periods. 

I shall begin, however, by comparing 1885 with 
1875, which can be compared in the minutest detail, 
and then go on to comjmre 1865-75 with 1875-85, 
which cannot be done in quite so much detail. For 
this purpose I have copied in full the valuation for 
1875, which appeared in my former paper, and I have 
also prepared a comparative table showing, with less 
detail, the increase in 1875 over 18G5, and the increase 
in 1885 over 1875, (See valuation of 1875, p. 30, 
and Comparative Table, 18G5-75-85, pp. 43.) Com- 
paring 1885 with 1875 only, as may be done by look- 
ing at the accompanying table (p. 30), and referring 

[CO::fTINCED ON p. 31.] 



Table B. 
Amount of Income in Income Tax Returns, derived from Capital; Number 
of Years' Purchase at which the same may be Capitalised, and Approxi- 
mate amount of Capital; together with Estimate of remaining Income 
and Capital in the Country. [Year 1875 — Extracted from Paper on 
Recent Accumulations of Capital in the United Kingdom. Read before 
Statistical Society, January, 1878, " See Essays in Finance," 1st 
Scries, p. 176.] 

[OOO's omitted in amount columns.] 

Under Schedule A — 



Other Protits 

Schedule B— 

(Farmers' profits) 

Schedule C— 

(Public funds less home funds) 

Under Schedule D — 



Iron work s 



Canals, &c 


Market Tolls, &c 

Other public companies 

Foreign and colonial securities, &c 

Railways in United Kingdom 

„ out of United Kingdom 

Interest paid out of rates, &c , 

Other profits 

Tradiis and. professions — one-fifth of "^ 
total income of ^175,000,000 ) 





Total under Income Tax 377,586 




















Trades niul professions omitted, 20 per cent, of i i 
nuiouiit assessed, or £"35,000,000, of wliich - , 
mie-fifth is \ i 

lucome of non-income-tax paying classes derived ) \ 
from capital ) ] 

Fori'isrn investmei.ts not in Schedules C or D I 

Movable property not yielding income, e.g., fumi-") 
turi' of houses, &i-., works of art, &c j 

Government and lociil property, say 





















102 540, 











back to the table for 188.3 (on p. 11), tlie general 
result is that the capital of the United Kingdom, 
which appeared in 1875 to be about 8,500 raillions, 
is now estimated by an exactly similar process at 
10,037 millions iti 1885. The increase between the 
two dates is 1,489 millions, or ahnost 17-g per 
cent. The increase is not so great as in the previous 
decade, for if the increase had continued at the former 
rate of 40 per cent, in ten years, the total estimated 
capita] in 1885, instead of being over 10,000 millions, 
would have been just under 12,000 millions, and 
the increase would have amoimted to 3,420 millions 
instead of being 1,489 millions only. Still the figures 
are very large, and for the present we may postpone 
any discussion of the relative rate of growth in 18 G5 -75 
and the more recent period. 

The more prominent details, apart from the special 
questions to be presently discussed, do not seem to 
require much comment. I shall make a few observa- 
tions on the principal items in their order. 

1. No one will be surprised at the reduction shown 
in the item of lands. The income assessed has fallen 
from £GG,91 1,000 to £05,039,000, and as the number 
of years' purchase assigned is also less, there is a 
corresponding reduction of capital amounting to 
£316,000,000 on a total of £2,007,000,000, or over 
15 per cent. 

If there is any surprise at all it will be that the 
reduction is not much greater. The fall in the value 
of agricultural produce, and the consequent fall in 
rents, have been notorious. The wonder will be that 
the income from lands in these returns, and conse- 
quently tlie capitalised value, according to the method 
of estimating here followed, have not fallen more. 


In ex[)lan;ition, I liave to suggest tLe following 
reasons w\\y tlie reduction of income and capital here 
shdwii should not correspond to the popular impres- 
sion of Avliat lias been going on : — 

(d.J The valuation follows somewhat slowly the 
change in tlje property itself, and the maximum 
valuation of lands, before the fall of prices began 
to have effect, w^as not reached until after 1875, the 
fall of prices not beginning to tell until about 1881. 
Comparing the maximum reached after 1875, viz., 
£G9,5 49,000 in 1880, with the figure of £05,039,000 
for 1885, the apparent reduction of income is not 
merely 2*8 per cent., but nearly 7 -pev cent. And 
the apparent reduction of capital value, owing to the 
diminution in the number of years' purchase, would, 
of course, be greater still. Even this reduction is 
still small compared with the popular impression ; 
but, allowmg that the reduction still lags behind 
the actual change in the property, as the valuation 
of 1875 lagged belnnd the enhancement of value 
still going on then, we may expect that later returns 
will show a greater change. 

(b.) To some extent the figures of the Income Tax 
Valuation as regards lands have been stereotyped. 
In past times, it may be allowed, they did not show 
the real variation in money income that took place 
from period to period ; and as they did not show the 
increase, neither have they shown the decrease. This 
is especially the case as regards Irish land, wdiere 
Griffith's valuation seems to have been followed year 
after year, although it was much under the rents of 
1875, and is not now nearly so much under them. 

A defect of this kind in the Income Tax Valuations 
is, of course, a drawback to the use of them in 


showing the accumulations of capital in different 
periods, and if it were general throughout the returns 
would make it hardly possible to use them at all ; but 
tliere is no reason to believe the defect to be at all 

(c.) A large amoimt of " lands " has practically a 
residential as distinguished from an agricultural value, 
and the capital value of such lands will not change as 
tliat of merely agricultural land changes. 

(d.) The income from different sorts of agricultural 
land has diminished in very varying degrees, while 
the effect on landlords' rent has also been par- 
tially mitigated by the fact that tenant farmers, as a 
rule, in England have not been rackrented, that they 
have had virtually a beneficial interest in their 
holdings, and that the loss by agricultural depression 
has not consequently Mien so exclusively on landlords' 
rent as it would otherwise have done. 

All these are reasons for the item of lands not 
showing as great a diminution in these returns as it 
miglit have been expected to do. The diminution of 
rent should not have so much effect as is commonly 
supposed, and the effect in any case is partly post- 
poned. The result will be that when we come to deal 
with another period of ten years, the increase, if there 
is an increase, will not appear so great as it would 
otherwise do ; and the decrease, if there is a decrease, 
will appear to be more than it will really be, reckoning 
from the present date — i.e., 1884-85. 

2. The next item to comment upon is houses, 
which show a very large increase — quite as great, 
nearly, though this is anticipating a little, as the 
increase between 18G5 and 187.3. The capital of 
houses is now much more than lands, being just 

34 tut: growth of cAriTAL. 

under £2,000 millions, and the increase in the 
decade lias been £507 millions, or nearly 3G per 
cent. Houses, as already noticed, are now the main 
item in the whole valuation. 

Part of the increase may be due to more stringent 
valuation, a remark which applies to all the heads 
of the Income Tax ; but, on the whole, the progress 
in houses seems to correspond fairly well with pro- 
gress in the country. 

We should have expected, perhaps, as the result 
of the fall of prices, that the increase would not have 
been quite so great. It is to be observed that the 
greater part of the increase took place in the first 
five or six years of the decade, when almost all 
values were still swelling rapidly. In the last four 
or five years it has been at a slow^er rate. 

3. The next important item is that of Schedule B 
— farmers' profits, as it is popularly called, though it 
includes, as already explained, a good deal more than 
farmers' profits. Here the decrease corresponds to 
that of the item " lands," the two valuations being, 
in fact, substantially the same, and being expressly, 
according to law, made upon rental in the absence of 
a formal claim by the farmer, to be assessed after the 
method of Schedule D, which is practically never 

Here the change calls for little remark. The reduc- 
tion of capital in the ten years is from £G 07,000,000 
to £522,000,000, or between 20 and 25 per cent. It 
seems doubtful whether the diminution iii aoricul- 
tural capital has not been more. One hears of the 
tenant farmers having lost three rents, or about 
£200,000,000. I have to suggest, however, as is 
done regarding lands, that the years 1875 and 1885 


do not correspond precisely to the maximum and 
minimum years wliicli mark the whole change from 
better to worse in agriculture. Farther, the loss to 
the farmer is not the same thing for our present 
purpose as the loss of agricultural capital itself. The 
tenant farmer's loss may well have been borne in 
part out of current income, or out of otlier funds of 
liis own, or at the expense of creditors. The things 
constituting the capital, the live-stock, &c., may liave 
remained, and in fact, seem to have largely remained, 
and are only now valued at low^er prices. In put- 
ting the present figures in the Table, therefore, I 
must not be understood as under-valuing the amount 
of the farmer's losses. 

Of course, the loss is brought out very largely in 
the comparison by changing the niunber of years' 
purchase, but for this good reason has been shown. 

4. The next item of Public Funds less Home 
Funds, Schedule C, calls for more mark. The change 
in the ten vears is immaterial. The change to notice 
here is in connection with foreign investments 
generally, which will be dealt with later. 

.l The next items I have to notice are mines and 
ironworks, which show a great reduction. The income 
in the case of mines falls in the ten years from 
£14,108,000 to £7,603,000, or very nearly .jO per 
cent.; and there is a proportionate reduction in the 
estimated capital from £.50,432,000 to £30,412,000. 
In the case of ironworks the reduction in income is 
from £7,26-1,000 to £2,265,000, and in capital from 
£29,044,000 to £9,060,000; or a reduction of G9 per 

As compared with the general capital of the country 
the investments in mines and ironworks are not larsfe, 


.",() THE r.KOWTH OF fAlMTATi. 

niid llio cliaiigcs unimportant, but in themselves they 
ai-o iinmonsc. A more fluctuating industry there 
could hardly be. There is no doubt of these industries 
liaving been specially inflated about 1875. 

1 have already dealt with the suggestion which has 
been made, since my former paper was written, that 
the number of years'" purchase assigned to the income 
from mineu and ironworks, viz., four years, is too low 
— that part of the income consists of royalties which 
are worth a greater number of years' purchase. I 
may now add that possibly there may be a reason 
for assigning a larger number of years' purchase in a 
period of comparatively low income, and a smaller 
number when the income has been inflated from any 
cause, but the amounts involved are too small to 
make the question worth while. 

G. The next items are those of gasworks, water- 
works, canals, &c., fishings and shootings, which are 
all of a minor character compared with the main 
items in the Income Tax assessments, but which all 
show very considerable increase in the ten years, 
apart from the change in the number of years 
purchase, viz., gasworks 91 per cent., waterworks, 
&c., 74 1- per cent., canals, &c., 252 per cent., and 
fishings and shootings 198^ per cent. Part of the 
increase is no doubt due to transfers from other 
heads, but there must still be considerable real 
increase, corresponding to the increase in such an 
item as houses. I believe the etcetera in the case of 
canals, &c., where the increase is so remarkable, is 
specially important. It would be a mistake to sup- 
pose that canals in particular, which have been so 
long stationary or decHning, have picked up bet\^ een 
1875 and 1885 to the remarkable extent stated. 


7. Markets tolls, &c., sliow a considerable diminu- 
tion in the ten years, owing, no doubt, to the gradual 
extinction in this country of all forms of octroi. In 
any case the item is unimportant. 

8. The next item to comment upon is that of " other 
public companies," which shows a remarkable increase 
of 3.3 "6 percent, in the income and of 81 per cent, 
in the capital, the change in the income being from 
£25,647,000 to £34,789,000, and in the capital from 
£384,705,000 to £095,780,000. The change in the 
capital is, of course, largely due to the increased 
number of years' purchase, but taking the increase on 
the income only it is still immense. Part of it, we 
may believe, is due not only to the continuous creation 
of public companies for new enterprise, which is a 
process constantly going on, but to the conversion of 
private firms into limited companies, which has been 
a marked feature of Stock Exchange business in 
recent years, and which may help to account, there- 
fore, for the slow increase in " Trades and Profes- 
sions " to be presently noticed. 

9. The next item is that of Ilailways in the United 
Kingdom, which show an increase in income in the 
ten years from £26,215,000 to £33,270,000, and in 
capital from £G55 millions to £931 millions. A large 
part of the increase of capital is, of course, due to the 
increase in the number of years' purchase assigned ; 
but even without this enhancement the change 
would have been very great, as the figures of capital 
at the present time would then have stood at 
832 millions. Here the figures may be compared 
with the railway returns themselves, which give for, 
practically, the same dates, viz., the calendar years 
1874 and 1884 an increase in income from £26,643,000 

:]H TIIK f;i{()\VTH OF CAl'ITAL. 

to .£;53,:5().j,OUO, and in Ciipltal from £G10 millions to 
£80 i millions. The figures as to capital in the two 
statements do not corresj)ond, an important difference 
being made by the change in the number of years 
purchase employed in the calculation. Nothing more 
need be said, however, than what ha? already been 
said generally, or will be said later on. The magni- 
tude of railway capital, in reference to capital gene- 
rally, could not be shown without taking note of its 
selling value. In any case, it may be pointed out, 
the Eailway lleturn itself does not contain figures of 
actual investment. The record of actual investment 
in railways would show even a smaller figure than 
that shown by the Eailway Return of capital itself. 
The real investment of railway capital, wdiether 
profitable or not, is not the difference in nominal 
capital shown between 1874 and 1884, amounting to 
191 millions, but probably not more than 170 
millions, the actual new cash outlay in the interval. 

10. The item of interest paid out of rates shows a 
large increase, though the amount in comparison with 
the figures here dealt with is, of course, not large. 
Possibly if this item were larger the question might 
arise whether it should not be dealt with in the same 
way as the interest on the National Debt ; but the 
item as yet seems hardly large enough to make it 
worth while to raise the discussion. 

11. The last important item in connection with the 
Income Tax assessments themselves is that of "Trades 
and Professions." Here the total income capitalised, 
according to the method and for the reasons stated in 
my former paper, is only a portion of the net income 
assessed, but the proportion maintained is the same, 
and as the result the increase shown in the income 
capitaUsed is from £35,000,000 to £30,096,000, and 


in the capital at 15 years' purchase from £525,000,000 
to £541,000,000 ; or 3-1 per cent. 

This is a very small increase, but a partial expla- 
nation has already been suggested in connection with 
the item of PubHc Companies, viz., that private fii-ms 
of kite years liave been converted in an increasing 
degree into public companies. 

It may also be pointed out that this item has 
sj^ecially suffered between 1875 and 1885 by the 
change in the lower Hmit of the Income Tax, and 
that in all probability the income under this head 
but for this change would have been £960,000 more 
than is here estimated ; this sum of £900,000, it will 
be observed, being specially taken account of in the 
lower and supplementary part of the above Table, 
which deals with income and capital not represented 
by any Income Tax assessment. 

12. Apart from the observations already made, and 
the special remarks on foreign investments which I 
have reserved to the last, and which apply, strictly 
speaking, to all parts of the Table, the lower and 
supplementary part of the Table appears to call for 
little remark. The estimates of the income of non- 
income tax paying classes derived from capital, of 
movable property not yielding income, and of govern- 
ment and local property, are put in almost j^^ofoi'md 
and to round off the estimates, and not with any idea 
that any very exact figures can be stated. The 
increase of capital altogether under these heads is 
£513,000,000, out of a total increaseof £1,48.0,000,000, 
and deducting about £50,000,000 for capital, which 
would have appeared in the upper part of the Table 
but for the change in tlio lower limit of the Income 
Tax, it is little over £450 million?, or little more thar. 
a fourth part of the total increase of capital. 



So far iis I have been able to do so, I have en- 
deavoured to deal with these rough estimates in a 
safe manner, and so as not to exhibit too great an 
accumuhition in a given period ; but no one is more 
sensible than I am that a more exact valuation, if it 
were possible, might alter the figures somewhat, be- 
sides giving information which would be most useful 
and would enable us to discuss interesting points with 
minute accuracy, whicli must now be left undiscussed 
altogether. Whether, for instance, movable property 
not yielding income increases at a greater or less 
rate than other property would be a most interesting 
point. At present, by the method followed, equality 
in the rate of increase is assumed, and althouofh this 
may not be material in a question of the accumula- 
tion of capital generally, it would, of course, be most 
interesting in its own place. I know of no method, 
however, upon existing data, by whicli statisticians 
could attack the problem. The limits of the infor- 
mation available by the method here followed must 
be distinctly recognised. 

I come, then, to the question of foreign invest- 
ments, which affects many items in the Tables. 
Putting all the items together, the comparison 
between 1875 and 1885 is as follows: — 




Public Funds, loss House Funds 


Foroi.-j:Q and Colonial Securities 

(Schedule D) 
Railways out of United kingdom 


Foreign Invest ui cuts not in or 

D (estimated) 
















It cannot be said upon these figures that the esti- 
mate of the increase of foreign investments between 
1875 and 188.3 is at all excessive. The total increase 
of income assumed is under IG millions sterling, which 
would represent, at 20 years' purchase, more than the 
average, a capital of 320 millions only, or 32 millions 
per annum. Allowing for all the capital called in 
from abroad, of which we have heard so much, it 
must be admitted, I think, that the foreign invest- 
ments between 1875 and 1885 were more than some 
30 millions per annum. I have only to refer on this 
head to a table which was appended to my essay 
on the " Use of Import and Export Statistics," 
which was read to the Statistical Society in March, 
1882*, and which I propose to continue in the journal 
of the Statistical Society, a summary being here given 
in the Appendix. (See Appendix ii.) From this 
summary it appears that the actual new issues in 
the ten years 1876-1885 of Colonial Government 
Loans, Municipal Loans, Foreign Government Loans, 
and Kailway Issues were as follows : — ■ 















* Seo " Essays in Fiuanoo," second series, second edition. Loudon : 
Geo. Bell and Sons. The table here referred to is printed in the " Statis- 
tical Society's Journal " for June, 1882. 

42 Tuv: miowTir of cai'ital. 

— a larger ainoiiut than tho sum arrived at ])j 
capitalising the assumed addition to the income from 
foreign investments between 1875 and 1885. In 
addition there were issues of miscellaneous companies 
and nnniiig companies to a large amount. Besides 
all this there is the private investment, which must 
be very large. Of course the period between 1875 
and 1885 includes the period of the foreign loan 
collapses, but the table in the Appendix (Table i.), 
it will be observed, wliich compares with a similar 
table for 1875, is constructed in such a way as to 
allow for all such collapses. After all, the coUajDse of 
Turkish and Peruvian loans and a few minor issues 
w*ere as nothing to the great business of the market, 
the collapse at a later date in American railway issues 
being substantially more serious. Making all allow- 
ances, then, the increase here reckoned for the ten 
years is by no means excessive. 

So much for the comparison between 1875 and 
1885. I have next to call attention to the accom- 
panying Table (see Table on p. 43), which exhibits 
the comparative results above dealt with in a more 
condensed form, and places alongside, in addition, the 
comparative results for the ten years preceding for 
which it is impossible to give so many details. The 
comparison between the progress shown in 1865 and 
1875, and the progress now shown, is instructive, 
both as regards the total amounts and the details. 

Between 1865 and 1875 the increase in total 
capital was from 6,113 millions to 8,548 millions, an 
increase of 2,435 millions, or 40 per cent. ; whereas 
now the increase is from 8,548 to 10,037 millions, or 
1,489 millions and 17^ per cent. only. Both in 
amount and i)ereentagc the increase in the second 



Table C. 

Approximate Amount of Capital or Proferly in United Kinfjdom in 
1863, 1873, and 18S3, compared. 




Farmers' profits 

Public funds less home -^ 
funds ^ 







Other profits 

Other Income-tax in--^ 
and professions and 
public companies 

Trades ami professions omitted.. 
Inconin from capital of nonO 

inoome-tax i)ayiii!,' classes ... S 
Forci^ii iuvcstiiicuts not in ) 

Schedule C and D i 

Movable propei'ty not yielding ) 

income } 

Government and local pro- ) 

perty, say S 























2,007 1,G91 
1,420 ] 1,927 
















1,128 I1.GG4 

Increase in 

In. or Dec. iu 



Am'unt. 'Am'unt 
















7,G20 1,705 












38 507 
8 -146 




- 25 

— 20 

























17. t 

41 TllK tiUoWril OK CAPITAL. 

ten years is considerably less tlian in the first ten. 
Omitting the supplementary items whicli are not 
directly based on Income Tax assessments the differ- 
ence is just as remarkable. The increase between 
1SG5 and 1875 was from 4,938 millions to G,G43 
millions, an increase of 1,705 millions, or 35 per 
cent.; between 1875 and 1885 it is from G, 64 3 to 
7,G20 millions, i\n increase of 977 millions, or about 
15 per cent. A little difference would be made in 
the latter period by adding in about 50 millions of 
capital representii:ig income transferred from the 
higher to the lower part of the Table in consequence 
of the change in the lower limit of the Income Tax, 
but the difference would not be very materiaL The 
rate of increase in the later period would still be less 
than half what it was in the earlier period. 

Looking at the comparison in more detail, the first 
broad fact noticeable appears to be that, whereas 
between 1865 and 1875 every item of capital shows 
an increase — in some cases very little in proportion, 
but in others a great deal — yet between 1875 and 
1885 there are, as already noticed, a good many 
items of decrease. Lands, Schedule B, and mines 
and ironworks are all cases of actual decrease — in 
some cases of very great decrease between 1875 
and 1885, — although in each case in the previous 
period there was an increase, and that increase in 
the case of mines and ironworks was very large, 
amounting to 195 and 314 per cent, respectively. 
Next, it is to l)e noticed that the rate of increase 
generally between 1875 and 1885, where there is an 
increase, is much less, with one or tw^o exceptions, 
than in the previous ten years, and where the in- 
crease is now at an equal or greater rate, it is owing, 



in part, to the increase in the number of years' pur- 
chase at which the income has been capitalised. The 
following comparison hring.T the facts on this head to 
a point : — 

Increase i^sr Cent, of certain Items of Capital in lS6o-73 and 1875-85 



Public Fiia<Is, Ipss House Funds 

Railways, United Kingdom 

Canals, &z 

Gfis works 

" Other Profits " 

Other Income Tax Income 

Trades and Professions omitted 

Income of non-Income Tax paying Classes ... 

Foreign Investm.'nts, &c 

Moveable Property not yielding Income 
Government and Local Property 









1 1 


















In all directions, therefore, there is a diminution in 
the rate of increase in the later as compared witli 
the earlier period. The two exceptions are those of 
canals, &c., and gasworks, where the amounts are 
too small to be material, and where, in one case, at 
least — that of canals, &c. — the apparent increase is 
not improbably due to transfers, and in the other 
the increase is largely due to the increased number 
of years' purchase at which the income is capitalised. 
The broad fact that the change in the rate of in- 
crease in the two periods extends tlu'oughout almost 
all the items of the comparison, a decrease in some 
cases being substituted for an increase, and in others 
a less rate of increase shown, is not to be qualified in 
any way. The decrease shown in the general totals 
is made up of minor changes, all in the same direc- 

* In these cases part of the enhancement of capital is due to the 

increase of the number of years' purchase at which the whole or part of 
the income is capitalised. 

K; TIIK CltOWTir OF f'AriTAL. 

Tlic only apparent exception to tlic general change 
is j'onned by "Houses," and in tlie corresponding 
item of capital in the supplementary part of the table, 
viz., moveable propeity not yielding income, where the 
estimate is based on the assumption that such pro- 
perty bears a certain proportion to the capital value 
of the houses. Here it will be seen the rate of increase 
in 18G5-75 is fairly well maintained in 1875-85. The 
maintenance of the former rate, however, as regards 
these two large items, implies, oF course, that the 
Gfeneral reduction on other heads must be somewhat 
more than the average of the above totals. 

As regaixls these two special items, again, the point 
already noticed, that in the last half of the last decade 
the rate of increase here has slackened greatly, would 
require serious consideration in forming any conclu- 
sions as to the present growth of property in the 
country as far as its money expression is concerned. 
There is nothing, indeed, to alter the general impres- 
sion given by the figures that in the last decade, as 
compared with the previous decade, something must 
have happened to diminish the rate of accumulation 
of capital as expressed in money. Tlie increase in 
the last decade is not inconsiderable, and if com- 
parison were not made with a preceding decade of a 
ditferent character would be accepted at once as com- 
pletely satisfactory, but the comparison cannot but be 
made and the causes of the difference must be sought 

The discussion of this comparison and their causes 
should be one of the most interesting topics of a 
paper like the present. 

Before entering on it, however, let me notice very 
briefly the other general question which has been 


suggested as to varying the number of years' pur- 
chase in comparing different periods. In tlie above 
Table, contrary to the practice in 1875, I have in 
some cases taken a different number of years' pur- 
chase at the two dates compared. Formerly, how- 
ever, one of my reasons for the contrary course was 
to avoid any error by way of excess in estimating the 
increase of capital between the two dates. It seems 
to be expedient now, in view of the apparent 
diminution in the rate of increase of capital, to 
avoid any error hy way of defect by taking note of 
variations in the number of years' purchase, and this 
I have accordingly done. 

Theoretically there would seem to be no good 
argument against altering the number of years' pur- 
chase from period to period according to market 
changes. Such a course would appear to be absolutely 
indispensable if changes in the relative amounts of 
property in different categories are to be taken note 
of. Possibly with little cliange in aggregate wealth 
between two dates there may be great changes in its 
distribution, through a community setting higher 
store by one species of it relatively to others at one 
time than at another. In the present case, too, it is 
notorious that as regards two large branches of pro- 
perty there have been great changes in the last 
decade in the common estimates of their value. On 
the one hand land sells for a smaller number of years' 
purchase of the actual rent than it did. On the 
other hand Stock Exchange securities of all descrip- 
ti<'ns, but especially the highest and the next higher 
classes, such as the public funds, colonial securities, 
and the like, as above explained, have been rising in 
value. There is another reason of a general kind for 


varying ilic nuinlxn- of years' purcliasc. There is 
reason to believe that in tlie last decade the rate of 
interest on capital has been steadily declining, and 
this means that the number of years' purchase for 
which old securities will exchange has increased. 
Capital has to be invested for a smaller and smaller 
return. But while this means that, as far as income 
is concerned, wages and salary receivers get a larger 
and larger proportion of the whole income of a com- 
munity, yet accumulated or fixed capital, in relation 
to commodities or circulating capital, bears a higher 
value than before, and we do not take note of this 
change in capital, which is really a mode of accumu- 
lation, unless we take note of the change in the 
number of years' purchase. 

Practically, however, I do not, as a rule, vary the 
number of years' purchase in comparing 1875 with 
1885 anymore than in comparing 1805 with 1875, 
when there was perhaps less reason for making a 
change. I have only made the change in one or two 
cases where there seemed an obvious necessity. As 
regards land, for instance, it would be pedantic not 
to have made a change in view of the fact that the 
nominal rent in the Income Tax returns has ceased 
to be the real rent, and tliat for the present at least 
the selling value of land is much less than it was. 
It is quite true that as yet the whole affair is 
in transition. Land is speculatively depreciated 
because of the uncertainty as to what the rent is to 
be reckoned at. When things are more settled it 
seems quite possible, and even probable, that land 
will participate in the general tendency of all in- 
come from })roperty to pass for an increasing number 
of years' purchase. But the blow that has been dealt 


at land is too big to pass altogether unnoticed even 
in this transitionary period. As regards other secu- 
rities, such as those of the Stock Exchange, again, 
the chanofe in the dh^ection of an enhancement of the 


years' purchase they command is so great that it 
would be pedantic not to recognise the relative 
transference of capital. What the community loses 
in one direction it gains in another. The increase 
of the exchangeable value of a security is an increase 
of its real power as capital. 

I have further to call attention to what was 
noticed at the outset, tliat the aggregates are little 
changed by these changes in the number of years' 
purchase ; the items only are changed. 

In comparing the different parts of the United 
Kingdom witli each other, and the United Kingdom 
with other countries, we must return to this ques- 
tion of the number of years' purchase, but for the 
present we need only notice that the few changes 
in the above table appear sufficiently justified by the 
S]3ecial reasons stated. 

We come, then, to the practical discussion of the 
causes of the change in 1875-85, as compared witli 
1865-75, in tlie rate of accumulation of property in 
the United Kingdom as expressed in money. How 
far is there a change in the rate of accumulation of 
things to corresj^ond I How far is it due to a mere 
change in money values ? 

The question is not quite a new one. In a very 
interesting book, written more than sixty years ago, 
called " The Present State of England," by Mr. Joseph 
Lowe, which is well-known to students of the litera- 
ture of Political Economy, though I must confess, for 
my own part, that I was ignorant of it when I wrote 


my fonnor paper in 1878, this very question is ex- 
plicitly treated. Mr. Lowe, in giving an account of 
English resources, treats in one part of the hook of the 
capital valuation of the country. He employs as his 
basis the estimate of Mr. Colquhoun (a writer who 
was most luijustly decried, I think, by M'Culloch), for 
about the year 1812, and then makes a correction of 
them by allowing for the fall of prices in the intcT- 
val. This correction is the more remarkable because 
Mr. Lowe, in making it, allows for the relative import- 
ance of different commodities, applying, correctly in 
fact, the principle of an index number and discussing 
with much good sense, the historical index number of 
Sir George Evelyn, who was the first, so far as I 
know, to employ the method. I shall have to notice 
]\Ir. Lowe's results afterwards, but for the present 
I am only pointing out that the point I am raising- 
is not really novel, and that it has been present to 
the minds of former statistical inquirers * Mr. Lowe 
also suggested the expediency of a tabular standard 
of value for making payments which is now exercis- 
ing not a few minds, and will probably do so for a 
lonef time to come, until a solution is found, as the 
importance of some such standard for deferred pay- 
ments, let alone statistical inquiries like the present, 
is beyond all question. 

It must be obvious, to begin with, that some cor- 
rection must be made in the present case for the 
change in money. On the one hand, the fact of a 
great reduction of prices between 1875 and 1885 is 
notorious. On the other hand, it is equally most 
imlikely that the rate of accumulation of things in 

* See Chapters 8, 0, aud 10^ aud Chapters 3, 8, aud 10 of Appendix to 
Mr. Lowe's book. 


this country should have changed so much in the 
period 1875-85, as compared with 1SG5-75, as is 
represented hy the diminution in the rate of growtli 
of the Income Tax assessments, or by the diminu- 
tion in the rate of growth of capital from about 44 
to 17^- per cent., or even, to take tlie upper part of 
the above table only, from 35 to 15 per cent. An 
inspection of the table in detail abundantly confirms 
this impression. In cases where there is absolute 
diminution of money capital, such as lands, farmers' 
profits, mines, and ironworks, there has been notori- 
ously a great fldl of prices ; while, in regard to the 
two latter classes of property at least, tliere has been 
simultaneously a great increase of production, so 
that t]ie apparent diminution of property shown 
must ]:»e nominal, not real. 

But the question of the amount of correction raises 
very difficult points. What articles are to be taken 
as typical of things in general 1 and how is the fall 
of prices to be ascertained between two given dates ? 
What should be the precise effect of. such a fall on 
general valuations of property ? Even if these par- 
ticulars could be ascertained as between two <riven 
dates, how are they to be applied to valuations of 
property based on Income Tax assessments, M'hich 
necessarily lag behind the real clianges in the market 
\'alues of the income valued, and the money amount 
of tlie income itself'? It is plain, on a consideration 
of these questions, that we can only correct in a very 
rough manner. 

As regards the fall of prices itself, I should be 
disposed to put it, comjiaring either period 18(55-75 
with the period 1875-85, or the year 1875 with the 
year 1885, at about 15 per cent. There are three 



fTcncral index numl)ers which wc may compare for 
this purpose, and tliis is tlie mean of the result wliich 
they give, wliilc the mean itself does not vary greatly 
from either residt. 

The first of these index numbers is the well-known 
Economist index No., which gives the following re- 
sults : — 




Index No. 


151 % 



Index No. 




The next is Mr. Sauerbeck's, which gives the fol- 
lowinjr results : — 




Index No. 





Index No. 





= 16 9b 

= 241 % 

The third is that of Mr. Soetbeer, which gives the 

following results 




Index No. 

120 75 





Index No. 




= 6 0-0 

= 16 % 


And tlio mean oPall these recluctions is : — 




15 A 





12 i 


Mean of periods and yeai*a 17 per cent. 

I am not sure but that a smaller and more care- 
fully formed index No., based on a few articles only, 
according to tlic plan followed by Mr. Lowe, would 
not be just as serviceable ; but no very different 
results would be produced. 

With the above may also be compared the fall in 
silver, amonnting between IS 75 and 1885 to a fall 
from 56^d. to 50fd., or 12 per cent. 

It is most important in fact to keep in mind that 
we are not dealing here with the whole fall of prices 
which has occurred since what is called the appi'ecia- 
tion of gold Ijegan, but only with what has occurred 
in a particular period of ten years, I should be 
disposed to place the fall in the interval covered by 
the present essay at about 15 per cent., which 
is a little under the mean of 17 i)er cent, above 

Tlie correction of the capital figiu'cs, however, 
woidd depend on a further estimate as to how far 
the income tax assessments lag behind the real 
changes in the amount of income dealt witl), or the 
money value of that income. There is tmdoubtedly 
some laii'iiino- behind, as in the income of lands and 
other items, but I am disposed to tliink not so nnich 
in general as would at first siglit be sup[)Osed, public 
companies and other bodies being, of course, assessed 


exactly oil their profits. At any rate, if cbange.s in 
average prices are to be the test, I should be disposed 
to correct the comparative valuation between 187.5 
and 1885 either by a deduction of 15 per cent, from 
the valuation of tlie former period or by a similar 
addition to the valuation of the latter period. 

On the whole I think also the average prices of 
stajjle articles are a good test. As I have explained 
in an address to the British Association in 1887 at 
Manchester,* money income of every kind of pro- 
perty necessarily depends on price. Some property 
is de^^endent directly ; all property is dependent in- 
directly, and the valuation on the whole must vary 
directly as the variation of average prices of staple 
articles, or what may be called the price-level. 

If the matter is considered for a moment, the 
necessity for this result will appear. As regards all 
properties held and worked by their owners, without 
payment of wages or rent, the effect of the fall of 
prices is instantaneous. The money return is so 
nuich less than it would otherwise be to the extent 
of the Ml of price. If an owner has money wages 
to pay, but no rent, he is even worse off at fii'st than 
an owner who has everything in his own hands. 
Tlie prices change quicker than the wages, and the 
margin of income which has to be valued in valuing the 
property is reduced in even greater proportion than 
the prices of the articles produced. The case cannot 
be different where rent or mortgage charges or 
equivalent payments have to be made. Such pay- 
ments are only a mode of distributing the net income; 
the corpus of the net income itself must be affected 

* See " The Kecent Eate of Material Progress in Eng-laud." London : 
Geo, Bell and Sous. 


in [)reclse]y tlie same way as if it were in one hand 
only, and were not distributed to different individuals. 
Hence, in fact, the complaints that some owners have 
had their margins swept away altogether, and that 
mortgagees or rent chargers liave had to suffer. 

The only doubts that can apparently be raised 
arise from the great bulk of mortgage or similar pro- 
perty, which seems to be unaffected by considerable 
changes of price, and the muss of Stock Exchange 
securities of different kinds, particularly public 
funds, w^hich appear equally imaffected. It has to 
be considereiJ, however, that the comparison is not 
between mortgages at one time and at another, but 
between what they are at the different times and 
what they would have been if there had been no 
change of prices. The same mortgage interest or 
rent- charge continues to be paid with as great a 
margin apparently as before. But the explanation 
is that the property has really become more produc- 
tive — that continual efforts to maintain its money 
value, in spite of the fall of prices, have been suc- 
cessful. The margin has not been increased as it 
would otherwise have been. Similarly, as regards 
Stock Exchange securities, if they are in the nature 
of mortgages, the same explanation applies ; while if 
they are in the nature of residual margins, the 
margin may have been maintained, in spite of the 
fall in prices, by greatly increased production. It is 
less than it would otherwise have been, tliough it 
may not be less on a comparison with a previous 
period. The only exception I can think of is in the 
case of public funds where the funds are lield by one 
community, and the debt is that of another com- 
munity. The former is so much richer, the latter so 


iimcli poorer, than it would otherwise be by tlie fall 
of prices. There is a real as well as a nominal change 
corresponding to the fall of prices. By such a change 
between 1875 and 1885 a community like England 
should have benefited. There need be no reduction 
in this part of its capital, as far as old securities are 
concerned, as compared with what it would other- 
wise have been owing to the fall of prices. But 
looking at matters broadly, the differences thus pos- 
sible seem too small to be allowed for. 

Correcting, then, the valuations of 1875 and 1885 as 
above suggested, we should find that, by reducing the 
valuation of 1875 by 15 per cent., the total would be 
about 7J thousand millions instead of 8j thousand 
millions, uj^on wdiich an increase to a little over 10 
thousand millions is very nearly 40 per cent., thus 
apjDroaching the increase in the previous decade. 
Applying the correction to the 1885 figures and 
adding 15 per cent, to them, the total would be 11^ 
thousand millions, rather more, which again is an 
increase of nearly 40 per cent, upon 8 J thousand 

So much difference is apparently made in the 
valuation by a difference of 15 per cent, in the level 
of prices only. 

The correction of course cannot pretend to any 
exactness. It only serves to fix in our minds that 
probably there is less difference in reality in the 
growth of wealth in the country in the two periods 
1865-75 and 1875-85 than would seem at first sight. 
The necessary correction for prices makes most of the 

A cpiestion of a different sort is suggested. Is 
there any meiuis of deducing from these figures, 


what, in point of fact, is tlie normal rate of growth in 
the country in wealth, from which a variation upwards 
or downwards in the actual money figures would 
imply an avenige rise or fall in prices, or change in 
the purchasing power of money '? 

So far as the remarks already made go, the answer 
would appear to be that if, allowing for the fall of 
prices since 1875, the rate of growtli has been about 
40 per cent,, which was about the rate of growth in 
the ten years before, during which no allowance 
seemed required for the fall of prices, then the 
normal growth must be taken to be about 40 per 
cent, in ten years. This would, liowever, raise the 
question whether in the decade 1S.35-G5 in which 
prices rose greatly, and in which the growth of the 
Income Tax assessments was nevertheless only 28 per 
cent., the actual advance in wealth measured by 
things can have been so great as it has since been. 
The comparison might be carried further back, and 
the figures of 1845 compared Avlth those of 1815, 
from which it would appear that the fall of prices in 
that interval must have been enormous if wealth 
had really grown in the interval as it has since done 
— such a fall of prices in fact as it is difficult to believe 
in. The question is not without practical interest, as 
it is difficult not to believe that the real growth of 
wealtli in the country must have been tolerably steady 
all through, in which case the normal growtli cannot 
be so great as 40 per cent., assuming prices to be 

To elucidate the problem a little I have thought it 
would be interesting to insert the accompanying 
statement of the growth of Income Tax assessments 
from period to period since 1815. (See Table p. 5i).) 

."iS TIIK ClfoW'lli OK (ArriAL. 

This can only be duiiu fur England, and Wales, and 
for Scotland, the Irish figures, which are in any case 
less important, not going back so far. 

The effect of this table is that, while the increase 
of population all through has been tolerably uniform, 
the averatre annual rate of increase of Income Tax 
assessments has been : — 





Mean (exclusive of 1815-45) 












4' I 







From this, assuming the state of prices to have 
been in 1885 much the same after 40 years' interval 
as they were about 1845, the normal rate of growth 
of wealth would come out as nearly 2i per cent, per 
annum, from which it would also follow that, in spite 
of the assumption made in my former paper that 
the growth between 1865-75 was not swollen by any 
general rise in prices, yet that some such augmentation 
must have occuri-ed. Part of the increase of capital then 
dealt with in 1875 must have been a money increase 
only, and even part of the increase between 1855 and 
18G5, the total enhancement of prices thus apparent 
being about 15 per cent., which corresponds fairly 
well with Mr. Jevons' estimates in 1862 of the de- 
preciation of gold. It is impossible to reason on the 
subject at all tinely, owing to changes in the strin- 
gency of valuation ; but either the mean above stated, 

[CostixuEd OS p. 60:) 


Slaleineni sliowbuj the fjross amjunt of propcrtij and profits assesse<l to the 
Income 2'ax in England and Wales and Scotland in the nndcrmen- 
tioned years, the amount and proportion of the increase in each such 
year over the previous year mentioned^ ani the average annual rate per 
cent, of increase in each period :^ 




; over 

Kate of 


Rate of 
of Popu- 

Amount. % 

% ' % __ 


AND Wales.' 


































































4' I 









as a wliole, underrates tlie normal growth of wealth, 
measured by thuigs and not by money, or there must 
liavc been an inflation of money values, of prices, and 
of property as the result of prices, between 1855 and 
1S75. The subject can hardly be followed out in 
this connection. It can only be studied properly in 
connection with changes in wages as well as prices. 
But the experience of many years proves, at least, 
tliat tlie recent growth of the Income Tax is far 
belou' the normal rate of the past forty years, and 
tliat it can only be explained by the fall of prices, 
which alters all the valuations. Tlie growth between 
1875 and 1885 has, in fact, got back to the rate 
between 1815 and 18-45, wh(^n there was an enormous 
fall of prices. 

There is yet another conclusion to be drawn from 
the figures which has a bearing on the larger question 
of the appreciation of the standard. It is sometimes 
argued that when prices fall there need have been 
no change in the money — it is only the commodities 
that need have changed. It is assumed that a line 
can be drawn at a given date, and that the increase 
of commodities or money can be measured as from 
that date. But if it is at all correct to assume that 
throughout the whole period covered by the above 
table commodities have been increasing with com- 
parative steadines, yet, nevertheless, there have been 
great changes from time to time in the money growtli 
of property in the country owing to changes of prices, 
then these changes of prices themselves, when long 
periods are surveyed, must be properly held to be 
determined by changes in money and not in com- 
modities. Dynamically, commodities do not change 
all through ; their increase is constant ; but dynami- 


cally money does change : it niovea at one time in 
such a way as to keep prices in equilibrium, or even 
make them, and all property valuations with them, 
rise ; at another time it either diminishes or only 
grows so slowly that all money prices and property 
valuations with them fall. This result ciin onlv be 
described as due to changes in money. The opposite 
view, ascribing the change in a given period to com- 
modities, is the result of a study of the subject for a 
short period beginning with what is an impossibility 
in such a subject — a statical equilibrium. Viewino- 
a long period dynamically, it is beyond all question 
that the commodities are comparatively steady and 
only the money changes.* 

This is not a paper on money; but, having said so 
much, I may be permitted to add that if in future 
commodities are to progress as they have done in the 
past, then unless money changes dynamically, prices 
must continue to fall, and income tax and property 
valuations must increase more slowly than they other- 
wise do, or even dimmish. An Income tax increasing 
ten per cent, only in ten years will be a very difterent 
thing, as the Chancellor of the Exchequer recognises, 
from one ^\•hicll increases 40 per cent, in the same 

In making these comparisons in my former essav I 
took occasion to notice also the official ficfiires of the 
Legacy and Succession Duty Returns, showing from 
time to time a growth in property corresponding to 

* See for a fuller explanation on this head the paper on " Eeoent 
Chano-es in Prices and Incomes Compared," read last year and published 
in Statistical Society's Journal, December, 1S88. 


Aviiilt is sliown in the Income Tax Ee turns. It 
appears innu^ccssary to do so now, the superiority of 
the Iiicoiiic Tax figures for such a purpose l)eing 
uiiivcisallv a(hnitte(l. Tliere has also been a change 
in the last few years in regard to the Legacy Duty, 
wliich makes the figures no longer comparable. The 
Probate Duty figures must be substituted, and these 
cannot Ijc carried very far back A\'itli the needful 



Writing in 1878, I made no attempt to sliow the 
distribution of wealtli between tlie communities of 
England, Scotland, and Ireland, which compose the 
United Kingdom. I regard any attempt at such a 
comparison very doubtfully, indeed. The people con- 
stituting the United Kingdom are closely intermixed 
in their business I'elations. Property in one part of 
the kingdom is held by people resident in another 
part ; there are not a few whose domicile is by no 
means certain, Avho are as fixed in Scotland or 
Ireland as they are in England, leading, in fact, a 
dual existence, part " in the country," in Scotland or 
Ireland, and part in the metropolis ; so that for the 
purposes of a comparison like the present, they can- 
not be classed as distinctly and exclusively English 
or Scotch or Irish, There is, moreover, a consider- 
able amount of foreign property belonging to people 
in all parts of the United Kingdom, but assessed 
exclusively in the metrojDolis. An exact division 
between England, Scotland, and Ireland, represent- 

(;4 TiiK r;K0WTir of fAriTAL. 

ino- tlin wcultli of each section, as the tal)le above 
o-iv(Mi i-cprcsciits the wealtli of the United Kingdom, 
is accordingly impossible. 

I h;ive been encouraged, however, to make an 
attempt at separation, as useful, for certain political 
computations, as helping, if properly done, to show 
the relative strength of the metropolitan connnunity, 
that of England, in comparison with the compara- 
tively outlying communities of Scotland and Ireland. 
In doing so we must make the assumption that, on 
the whole, the foreign income, and certain other 
income, must be assigned exclusively, or mainly to 
the metropolitan community because it really belongs 
to the people of the United Kingdom in their metro- 
politan and even cosmopolitan capacity, and on a 
division, if such a thing were conceivable, would 
most probably go with the metropolis. 

For the rest it will probably be convenient to 
follow the divisions of the Income Tax assessment 
generally, and credit to each community the property 
locally situated, although we know, for instance, that 
railway shares and other property in Ireland and 
Scotland are held in England and vice versa. Tlie 
presumption is that this mode of division will not 
assign too little to Scotland and Ireland ; it Avill even 
assioii to these countries so much in excess as to be a 


set-off against any defect that may arise through the 
whole or larger part of the metropolitan or cosmo- 
politan capital, as above explained, being assigned to 

I have accordingly to refer to the Tables in the 
Appendix in which such a division between England, 
Scotland, and Ireland is attempted. (See Tables, 
Appendix iii.). These Tables follow exactly the 



model of Table A. inserted above (Chap, ii.), so that 
it will be easy to compare the details of each section 
with the similar details for the United Kingdom as 
well as for each other. 

The general effect is striking enough. The pre- 
ponderance of England is manifest. Scotland is a 
long way behind. Ireland is comparatively insignifi- 
cant. If we include the element of population, Scot- 
land is not far behind England in the amomit per 
head, but Ireland is a long way behind. 

In the following short Table a comparison is made 
l)oth of total amounts and amounts per head : — 

Propirhi in hnfjland, Scotland, and Ireland, and the nmonnt per head of 
jiopidation compared. [_The calcnlatiunx are made on the population 



Per Cent, of 

Property per 




Mln. £. 


! 97 





loo o 



England, in fact, on this showing, possesses rather 
more than 8-|^ tenths of the wealtli of the United 
Kingdom ; Scotland about a tenth ; and Ireland less 
than half a tenth. The wealth of the metropolitan 
community is equal to about £308 per head ; of 
Scotland to £243 per head, or rather less than the 
average of the United Kingdom ; and of Irehnd to 
about one-third of the average, or about i'U:^ per 
head only. 

* In rcufjlily estimating in ISStJ, in a paper on " The Economic Value 
of Ireland to Great Britain," I jnit the totnl capital of Ireland at about 
400 millions. The presout fij^uro I should still think too high if a strict 
account were taken, but I have followed here the method explained in 
the text of distributing th(; Income Tax income which yives some 
advantage to Ireland. 'I'he present is also a more detailed statement 
than that of ISSU. 


A rapid survey reveals in a moment liow tliese 
great dilierences arise. Apart from land in Scliednlcs 
A and B, Ireland possesses very little of the o^reat 
elements of capital M'liicli constitute the wealth of 
the United Kingdom. Its total capital connected 
with Income Tax income is only about 400 millions, 
and of this al)Out 230 millions arises from land in 
Schedule A, or the occupation of land in Schedule B, 
leaving only 1 70 millions as the whole capital of the 
Irish people in connection with the other Schedules. 
The income in Ireland under Schedule A for land 
and houses is valued at a smaller number of years' 
purchase than similar income in Great Britain, a 
point which will be discussed presently ; but this 
is not the case wdth other income. Ireland is, in 
fact, singularly destitute of all the constituents of 
wealth under Schedule D ; its total income under 
this head in tlio appended tables above the Income 
Tax limit being about £4 millions only, as against a 
similar income in the whole of the United Kingdom 
of £148 millions ; so that Ireland, as regards Schedule 
1), is one-thirty-seventh only of the United King- 
dom. It is in this way, then, that the difference 
between Ireland and the rest of the United Kinmlom 



No doubt some difference is also made by the 
difference in the number of years' purchase at wliic-li 
certain property in Ireland is valued, as compared 
with similar property in the United Kingdom, Land 
in Ireland is valued at 15 years' purchase only, as 
compared witli 28 years' purchase in England and 
Scotland; and houses in Ireland are valued at 12 
years' purchase only, as compared with 1.5 years' 
purchase in England and Scotland. Even, liowever, 


if we applied the same number of years' purcliase in 
Ireland as in Enoland and Scotland, tlie valuation of 
wealth in Ireland would still lag far behind in its 
proportion to that of its neighbours. About £140 
millions would be added to its total capital, and the 
amount would remain under GOO millions, about a 
seventeenth, in place of a twenty-third, part of the 
wealth of the United Kingdom. 

There is, however, I contend, no justilication for 
cstimatino' income fi-om Irish land and houses at a 


similar number of years' purchase as similar property 
in the United Kingdom. We should get a false idea 
of Irish wealth and relative resources if we did so. 

Tlie reason as regards houses, the smaller item, is 
plain. The average rent of houses in Ireland is 
much below what it is in England or Scotland, and 
the lower the rent, at any rate when it is very low, 
the smaller number of years' purchase it is worth. 
I need hardly add tliat many of the so-called houses 
in Ireland for which rent is paid are merely huts, 
and not properly comparable with the houses of a 
more advanced community. The property is not of 
the same kind. 

The reason as regards land is, first, that from the 
exceptional difficulty of collecting small rents, land 
in Ireland being in smaller holdings than in Great 
Britain, there is more difference in Ireland between 
gi'oss and net rental than in England and Scotland. 
The capital value is really less because the net 
income on the same gross figures is not really so 
large. Next and even more important the income 
from land in Ireland, like all other income to some 
extent but even in greater degree, is rendered in- 
secure by the political agitator, and its capital ^•alue 


(IS TilK (,i;<t\V'ril (IF CAl'I'l'AL. 

is consequently less tlum it would be if politics were 
more stable. The ditference is a real loss to the 
insecure community. It means that the general 
credit of the community in proportion to its income 
is less than that of a more stable community with 
the same income ; it can do less with what seems the 
same property than a more stable communit}^ can. 
Individually the loss is marked enough. The same 
amount of income in the one community actually 
exchanofes for le-'.j than it does in the other. The 
test of the market proves that it is not the same 

Fifteen years' purchase for tlie income of Irish 
land may seem too little ; but the rental itself in the 
Income Tax returns, it must be remembered, is a 
little exaggerated above the reality, as many Irish 
landlords only too well know. The net ascertained 
and paid rental may sell for more than fifteen years' 
purchase, though according to recent reports of sales 
not for very much more ; but the nominal rental 
here in question is as moderately valued at 1.5 years' 
purchase as the similar rental in England and Scot- 
land at 28. 

Another point is raised by these comparative 
valuations. If the rent of land in Schedule A, it is 
said, cannot be valued at more than 15 years' pur- 
chase, ought not the capital value of tenant-right to 
be included under Schedule B, the tenant in Ireland 
possessing a property of a kind which is not pos- 
sessed by the tenant in England or Scotland, and 
which is, in fact, saleable? 'The answer to this is in 
part that it will be found something is in fact 
credited to Irish agricultural capital under Schedule 
B which is not credited to the same capital in Eng- 


land and Scotland, because Irish occupation capital 
in [proportion to rent, apart from tenant-right, is not 
so large as in England or Scotland, and yet the same 
number of years' purchase is applied. But I object 
, to including the capital value of tenant-right, except 
to a very moderate degree, as being, in fact, not a 
positive quantity which can come into comparisons 
like the present, the so-called capital value of tenant- 
right . being largely a fine which the excessive land 
hunger compels farmers to pay to live, and not a real 
capital asset which would be available on a large 
scale in the open market. Even if sales of tenant- 
right, therefore, were better recorded than they are, 
and the means existed for forming averages over Ire- 
land, I should doul)t the propriety of allowing for 
this capital value to more than a moderate extent — 
to such an extent, for instance, as would include the 
cost of the houses which tenants have built, and 
other substantial improvements in the way of di-ain- 
age and manuring they have made. The fine paid 
for the right to live is not to be reckoned, at any 
rate in comparison with a country where no such 
fines are paid, and where the rental is unquestionably 
a simple bargain between landlord and tenant, the 
tenant professedly having nothing but the occupa- 
tion capital. 

It is fair also to add, I tliink, that Irish capital is 
not only greatly less than it would otherwise be, 
owing to the political insecurity of the countr}^ but 
it is also lessened by the excess of its population 
above what is needed for the most fitting agricul- 
ture. I\ent is below what it is in England for similar 
qualities of land, because the land has to support a 
larger cultivating population, and rent of course is 

'iiiK (;i;»)\v'iii Ml' cai'ITAIj. 

<iiil\' possible alter tlio cultiviitiiii;' pojjiihitioii, :iccur<l- 
iiiL;' (<) the scale of living it is able to maintain, lias 
been supported. With a different arrangement for 
cultivation, requiring a smaller population, rent might 
be increased on the one hand, and the comfort of the 
cultix'ating population on the other, in which case 
the capital value of the land would undoubtedly be 
nuich increased. The possibility of a great increase 
of Irish capital, as soon as the political and economic 
causes of its being so small as it is are removed, 
must accordingly be recognised. Political insecurity 
and over - population combined probably make its 
capital less than it Avould otherwise be even now 
by from two to three hundred millions sterling, the 
mischief being about equally divided between the 
two causes of evil specified. Whatever figure we 
may place upon it the loss must be very great. 

I have referred very little in these remarks to the 
case of Scotland, because it is so much on all fours 
with that of England. It is not a contrast to Eng- 
land. As showing the difierence, however, between 
a politically insecure country and one that is every 
way secure, and between a country with an excessive 
cultivating population and one free from that evil, 
it may be pointed out that wdiile Scotland, as regards 
land, has rather less income than Ireland, though not 
so very much less in spite of its smaller area, yet 
with a population of just under four millions, as com- 
pared with nearly five in Ireland, it has more than 
t^vice the capital — 973 millions, as compared with 
447 in Ireland — and that this difference largely arises 
in connection with Schedule D, The income in Scot- 
land from capital under Schedide D dealt with in 
the tables in the Appendix is in fact about 1 5 millions 


sterling as compared with 4 millions from the same 
sources in Ireland. No contrast could be more 

The main lesson of the whole comparison is, how- 
ever, that already given, viz., the predominance of 
the metropolitan community of England. Keckoning 
by wealth England should have SG per cent, of the 
representation of the United Kingdom, or 57G 
members out of G70. Scotland by the same rule 
sliould have about (54 only ; and Ireland no more 
than 30. These are very different figures from those 
which actual politics have established, or which the 
exact proportions of population would give, though 
even the latter would give a smaller representation 
to the ^veaker parts of the community than is now 
given. But for all that they point to a real w^eakness, 
I believe, in our present constitutional arrangements. 
It is neither wise nor prudent to make so complete a 
divorce as has now been made between the real 
strength of different parts of the population of the 
United Kingdom and tlie representation in Parlia- 
ment. There should be a representation of forces in 
Parliament, if we had perfectly just arrangements, 
and not merely a. counting of heads. Nothing can 
be more absurd to the mind of any student of 
politics, who knows how forces rule in the long run, 
than the system now established as between the 
metropolitan community of England and its com- 
panions in sovereignty by wdnch one of the comj^anion 
connnunities, and that the least entitled to privilege, 
obtains most disproportionate power. 



Another comparison to be made is tliat between the 
figures of the present time ami more distant periods. 
It will of course be impossible in such comparisons, 
to show the same details as in the recent years, 
when we have the benefit of Income Tax Returns on 
the same basis for several periods, but the older totals 
at least, (Uid possibly some of the main details may be 
compared w^th these of the present time. In certain 
respects, I am inclined to think, the figures we are using 
are more serviceable and more trustworthy, when the 
right precautions are taken, for extended historical 
comparisons than for any other purpose. The great 
intervals of time and the great differences in the 
figures, in these extended historical comparisons, 
bring out certain facts with marvellous clearness, 
which could not be brought out in any other way. 

It is most interesting to find that the inquiry as to 
pnst valuations of aggregate property takes us back 
to a })criod in which statistical studies in this country 
to a certain extent originated, and to authors who 


are well-known as among the founders of the study, ' 
which they cilled by the name of Political Arithmetic. \ 
The period is the latter part of the 1 7th century, and / 
-the- authors are Sir William Petty and Sir William / 
Davenant, both of whom devoted no little attention/ 
to this very question of the valuation of aggregate 
property, including the connected subject of aggre- 
gate income. In fact one of the main objects of their 
" Political Arithmetic " was to obtain an idea of tlie 
resources of the country, and of their growth, partly 
for pur2:)03es of taxation, and partly for comparison 
with the resources and growth of England's depen- 
dents or neighbours at the time; Ireland, France, and 
Holland, being the chief countries considered. The 
subject has only been intermittently studied in the 
■ same form since, but those who began, we may believe, 
had a good idea of what tiiey were about, and it is all 
the more instructive, therefore, for us to go back in 
this matter to the earliest promoters of formal statis- 
tical knowledge in this country. 

I do not propose, of course, to go through the entire 
work of these two authors on this head. It will be 
sufficient to notice briefly the leading estimates, in 
which a great deal of their work is summed up, only 
premising that those who care to pursue the study 
will find that the estimates now to be used, and com- 
pared with those of the present time, were not hap- 
hazard guesses, but were based on available data, 
carefully considered and built upon. There are 
certain points of difference between tlie two authors 
which I shall endeavour to explain, but this would, 
of course, be impossible if they had not themselves 
used what were largely common data, and shown how 
their sums were done. Imav add that the estimates 


'rilK CKOWril nl- CAITI'AL. 

c;m |)i-;ictl(';illy Ix' used, so as to form a tli'i'd stale- 
iiiciil till- ilio ye;ii- I (!()() i^ood ciioiiu'li i"«>r comparative 
]iiii-|)os('s. I^'irst, liowovor, I sliall uotice the various 
statements of the two autliors separately. 

Sii- Wilham Petty, as tlie founder of Political 1\ rith- 
metie, and as the author of the statement earliest in 
date, the date as near as I can judge l)cing 1G79, 
ought tirst to be noticed. He makes many state- 
ments and calcuhitions as to population, taxable re- 
eoiu'ces, income and property, in his numerous essays 
in Political Arithmetic, but for our present jDurpose. 
these are summed up in his little " Yerbum Sapienti." 
The result of the calculation there given, may be 
summarised as follows : — 

Statement of the Income and Capital of the pcoj^le of Enfjkuid anno circa 

1679, summarised from Sir Williarn Pettijs Verhum Sapienti 

[In mlu6. stg.] 
















Stock of Cattlo. etc 


Coined (jold ;in(l Silver 


Wares. MercLaudise, Plate, and Furniture ... 


Ineoine ffom above sources, exclusive 

of Laud 

and Houses, and from personal services . . . 



Sir William Pettv, in his essay, proceeds to 
eapitalise the income from personal services as well 
as the income from property by a process wdiicli 
appears to me not quite correct as introducing a 
figure, not on all fours with the others in his state- 
ment, and which would not at any rate be comparable 
with statements made up on the basis of the Income 
Tax returns, according to the method followed in 


tlic ):)re8eat paper. I have, therefore, omitted this 
additional computation in the above summary, but 
those wlio are interested can easily read for them- 
selves in the original. The above figures, if at all 
near the mark, appear to he strictly comparable ^vitll 
those of the present time. 

The enormous ditterence between two centuries ago 
and the present time is at once palpable. Taking 
the population of England as little over five millions 
when Sir William Petty wrote (his own figure of 
7 millions appearing somewliat excessive), the above 
figures would give something less than £8 per head 
of income, and £50 per head of capital for the whole 
peoj)le ; the capital now, as we have seen, being 
approximately £270 per head, and the income being 
probably not less than about £34 per head. The 
difference is so enormous that the largest possible 
corrections would still shov%^ an enormous advance 
between two centuries ago and the present time 
The difference, it may be said, would not be so great 
if we allowed for the greater purchasing power of 
money two centuries ago. But as far as I can judge 
no allowance, or little allowance, should be made on 
this head. Great masses of articles are much lower 
in money price now than they were then, and the 
staple article, wheat, is also rather clicaper. 

The items may be more conveniently noticed in con- 
nection and comparison w^ith Sir William Davenant's 
figure to be presently considered. It may be men- 
tioned, how^ever, that the land rent in the above state- 
ment works out at 18 3'' purchase, and that this 
figure of 18 years' purchase is explicitly adopted by 
the author, while only 12 years' p\u-chase is allowed 
f(tr liousc rent> The otlier items are all arrived at on 

7G TllK (iKOWTll OK ('Al'ITAL. 

coiisidenttioii and for reasons giveu. Lands and 
] louses were of course at the time in question mucli 
more in i)roportion to the total wealth of the country 
lh;in iliey are now, so that the preponderance here 
given to them is pr/^iz-a /ac/e reasonable. The data 
regarding them at the time were also fairly complete 
;uid trustworthy, there being assessments for the 4s. 
tax, since become the land tax, and for otlier taxes, 
wlille the more exact knowledge as to London and 
some parts of the country on many points could be 
made use of by a simple rule of proportion to supple- 
ment the less complete knowledge on the same points 
as to renioter parts of the country. 

Coming next to the estimate of Sir William 
Davenant, the first remark to make is that in using 
his figures we must associate with him another w^ell- 
known name, that of Mr. Gregory King. Sir William 
Davenants figures, when we look into them, are 
found to be, and are, in fact, expressly acknowledged 
to be those of Mr. Gregory Knig, though Sir William 
Davenant discusses them very fully in adopting them. 
Whether Gregory King was employed by Sir William 
Davenant is not quite clear ; but the connection was, 
at any rate, very close, and I shall therefore treat 
the fiofures as those of Sir William Davenant and 
Gregory King together, taking them directly from 
Gregory King's essay. This essay is reprinted in 
full in another book well-known to economic students, 
Mr. Chalmers' " llesources of the Nation,'' published 
at the end of last and the beginning of the present 
century, in which the material history of England and 
the Empire is traced throughout the eighteenth 
century, that is, from Gregory King's time down- 
wards, with the addition of various notes for earlier 


periods. Mr. Chuliners, I may take the opportunity 
of noting, was for many years an oliicer of the Board 
of Trade. His hook is an admirable essay in every 
way. Mr. Gregory King himself was by profession 
a surveyor, and, therefore, well acquainted with the 
data he uses, chiefly those showing the income and 
value of land, for which, as already hinted, in the 4s. 
tax and other official records which have either 
perished or are buried in the Record Office, there 
were probably more official data available to people 
like Gregory King, disposed to use tliem, than we 
should now be apt to imagine. 

There are Ihree documents of Gregory King's, 
which may be referred to. Only one (>f these is a 
statement of capital, but the other two are useful by 
comparison and otherwise for studying it. 

The first of these is Gregory King's calculation of 
the income and expense of the community according 
to tlu^ different classes, — a most minute table. The 
second is a table exhibiting the author's idea of the 
several sorts of land in cultivation, the produce, the 
rent, the capital of the cultivation, and the like 
particulars. The third is the table to which I shall 
have to call particular attention, includnig, as it does, 
a statement of the estimated value of the property 
of the nation. The first is, apparently, the most 
flmciful, the nat\u"e of the data not being apparent ; 
but if we compare it with the others, it will be 
obvious that the author must have liad data of some 
sort, at any, rate, for the totals, however imperfect 
his distribution among dift'erent classes may be. 

The general effect, then, of these tables is as 
follows: — 1. Tlie income of the country in 1()8S is 
reckoned as £43,500;000, or nearly £8 per head, of 

78 THK (;i{()\v'i'ii of capital. 

wliicli ;il)ont i'13,000,()()0 is tlio rent of land and 
other hereditaments, about £10,000,000 being con- 
sidered the rent of land alone, and the remainder is 
derived from trade and industry or labour of some 
kind, including agricultural labour. 

2. The valuation of the country is computed at 
£6.")0,000,000, or, deducting a valuation of income 
from personal services in which Sir William Potty's 
shnilar computation is followed, at £320,000,000, the 
items being as follows : — 

1. Rent at 18 Years' Purchase 

2. CapiUilined Vahie of Remaining Income of the 
yation. 11 Years' PnrcJiase 

3. Stofk in Money, Plate, Jewels, and Hoiiseliold 

4. Stock in Sliii)pmo;, Forts, Stores, Goods, lustru- 
meuts. and Materials 

5. Live Stock, Cattle, Beasts, Fowls, &c 


Deduct — 
Item No. 2 as on a different basis from modem 

Net Total 







3. The annual accumulation of the country, the 
excess of the income over tlie expense, is put i),t no 
more than £1,800,000, which would be in round 
figures about £20,000,000 every ten years. 

In many respects, therefore, Gregory King, like Sir 
William Petty, supplies figures in a form which can 
be compared with those of the present time. The 
methods followed are, in fact, nnich the same, and I 
am disposed to think that Sir William Davenant and 
Gregory King have sim2:>ly bettered Sir William 
Petty's instruction, going through the data more 
fully, and discussing some points — such as the pro- 
bable excess of actual over assessed rental — with 
perhaps greater knowledge. 


Before comparing the two statements, let me only 
just notice, as regards Gregory King's, how real the 
computation for the most part is. Thus, as regards 
rent, the second statement referred to shows that he 
was fully alive to the difficulties in the way of arriving 
at an exact figure. He expressly points out that liis 
estimate is larger than the rental of the country 
which had been got hold of in the assessments 
for the 4s. tax, now known as the land tax, and 
he points out in detail where the difference arises. 
Farther, his statement shows that he has compared 
the value of the produce with tlie rent per acre, 
and the yield of the different crops required for the 
consumption of the community valued at current 
prices. He may err on points, but his figures are not 
pure guesses ; they are built up on data which he 
must have had some means of checking. Comparing 
his figures with those of our modern agricultural 
returns, we find that he has hit the mark pretty 
nearly. His estimated area is 39,000,000 acres, as 
compared with 37,000,000 acres ascertained in modern 
times. His cultivated area, again, is only 21,000,000 
acres, as compared with 24,000,000, or thereabouts, 
in modern times, from whicli we may infer that his 
estimate was somewhat in excess, allowing for 
commons and waste land since brought into culti- 
vation, but not more, perhaps, than 10 per cent, in 
excess. Considering the data which must have been 
in his possession, his work is thus, in my opinion, 
wonderfully good. At any rate, allowing for the 
great distance of time, and the wide difference in 
values, we may at least use Gregory King's estimate 
of capital, like that of Sir William Petty, for 
comparison with the present time <2uantuin valccit. 



T\\r ostiina.te iillogetlier comes to about .£120 per 
head on an estimated total population of 5 J millions 
!is compared with the present average of £270 
])('r liead for the United Kingdom and £415 for 
England only. As already seen, too, the question of 
clianges in the purchasing power of money does not 
affect tlie comparison. Whether we take this estimate 
or that of Sir William Petty already noticed for com- 
parison with the present time, the differences are 
plainly innnense. 

The differences between the two statements are 
brought out in the following comparison in which I 
omit any capitalisation of j)ersonal services : — 
Capital Valuation in 17th Century. 

Sir William Petty, 


Grej^oiy King t*c Davenant. 












Live Stock, &c 


Stock of Cattle, etc 


Money, Plate, Jewels, and 



Household Goods 


Coined Gold and Silver ... 


Shipping. Forts, Stores, 

"Wares, Merchandise, Plate, 

Goods. Instruments, and 

and Furniture 








Thus, the main cause of Sir William Davenant s 
estimate being higher than Sir William Petty s is 
the higher value put upon the rental by the latter 
tlian the former in two ways. It is first taken to be 
V^\ millions instead of 12^ millions, which is Sir 
William Petty 's figure, owing to the sj^eeial allow- 
ance made by Gregory King for the reasons stated 
on account of the under assessment for the 4s. tax. 
Next, Gregory King capitalises the whole rental, 
land and houses together, at 18 years' purchase, while 
Sir William Petty only capitalises house rent at 12 
years' purchase. The extra rent allowed for, ca[)ital- 


Ised at 18 years' purchase, makes a difference of 
£18,000,000 ; and the different rate of capitalisation 
for the house rent, viz., G years' purchase, on 2^ 
millions, makes a difference of £15 millions — total 43 
millions. In proportion, tlie difference is very con- 
siderable, but it may l)e partly accounted for by 
Gregory King's estimate being made at the later 
date, as well as by greater care in allowing for under- 
estimate in the tax assessments. The additional 
number of years' purchase on the average seems also 
to be justified by the fall in the rate of interest in 
the interval between the two statements, so that if 
Gregory King had valued land and houses separately 
as Sir William Petty had done, he must have taken 
land at more than 18 years' purchase, al though 12 
years' purchase might still have been about sufficient 
for houses. 

With regard to the other items, constituting what 
was at that time called the stock of the country, the 
circulating as distinguished from the fixed capital, a 
close comparison is not easy owing to the cross 
divisions. The general effect is that this stock is 
valued by Sir William Petty at £7G,000,000, and by 
Gregory King at £86,000,0C0, the latter, it will thus 
be seen, being again in excess. The difference, on the 
whole, might not be considered serious, but there is a 
curious difference in detail Sir William Petty, it 
will be observed, is in excess of Gregory King in one 
item, that of live stock, where his estimate is 
£36,000,000 against Gregory King's £25,000,000. 
The consequence is, that the remainder of the stock 
is valued by Sir William Petty at £40,000,000, by 
Gregory King at £60,000,000, a difference of 50 per 
cent. b(}tween them, which is all the more serious 

82 'I'lIK {il;()\V"J"lI OF CAl'ITAL. 

as tlio diirercnco is in tliu opposite direction to that 
Avliicli arises in regard to the hve stock, and there are 
no circumstances which make it likely that live stock 
would diminish in vakie between the two dates, while 
other descriptions of stock in the same period woukl 
increase in value. I find on examination, however, 
that a large part of the difference woukl be accounted 
for by Sir William Petty 's exceedingly low estimate 
for coinage. The difference between the coinage 
estimates of Sir William Petty and Sir William 
Davenant amounts to about £12,000,000 ; the former 
arriving at a sum of £6,000,000, according to a method 
explained in his Quanttilumcumque, and the latter 
arriving at a sum of about £18,000,000 by a different 
method. Into the details it is unnecessary to enter 
here, as the question was brought to the test of 
experiment shortly after, at the great recoinage of 
1G9G, when a coinage of £7,000,000 in silver was 
required to renew the silver coinage alone, and the 
whole circumstances were such that the gold coinage 
in use and hoarded must have been considerably more. 
Gregory King's estimate on this head, then, seems to 
be the more correct ; but we must recollect that he 
estimates for a date later than Sir William Petty, 
and this may always account for a small part of the 

On the whole, we cannot conclude that the capital 
of England increased between Sir William Petty and 
Gregory Kings estimates to the amount of the 
difference between them, though some increase must 
liave taken place, and I am disposed to accept Gregory 
King's figure as, on the whole, the more carefully and 
thoroughly done, and the one most properly com- 
parable with the estimates made in tliis essay for the 


present time. Practically, the advance is so great 
since two centuries ago that, great as are the differences 
between some of Sir William Petty's and Gregory 
King's figures, if we look at them strictly, the im- 
pression of the comparison with the present time is 
the same, whichever estimate we take. 

I have noticed that these estimates can be used to 
form a third estimate, going back to 1600, but I shall 
only refer to this briefly. The authority is a writer 
in the British Merchant, a publication of the early 
part of the last century, in which the Treaty of 
Commerce with France of that period was discussed 
from a Protectionist, or perhaps we might say even 
more accurately, a Fair Trade point of view, and the 
principal articles of which publication were afterwards 
collected in three volumes under the same title of a 
" British Merchant."* The writer referred to, who is 
described as the Inspector-General of Customs, 
requires for his argument to estimate the proportion 
of foreign commerce to the income and wealth of 
England, for which purpose he accordingly falls back 
on what are evidently the estimates already referred 
to, though there are minor discrepancies, discussing 
therewith other estimates which had been made. 
From this paper it appears that at the beginning of 
the seventeenth century the rental of England was 
about £6,000,000, giving a capital of £72,000,000 
only at twelve years' purchase. As the "stock," 
according to the above proportions, would not 
be much more than a third, the total valuation of 
England at the beginning of the seventeenth century 
could not be more than £100,000,000, or about £20 
per head. The Inspector-Generals figure is only 

* The British Merchant : or. Commerce Preserved. London, 1721. 



.£17,000,000 for tlie stock, making witli other 
capital only £89,000,000 in all. Tiiese figures, it 
may be added, are prima facie probable, assuming 
a rental of about £14,000,000 at the end of the 
century, because there was a great fall in the pur- 
cliasing power of money in the early part of the 
century. Of course, in comparisons witli the present 
time, this cliange in the purchasing power of money 
would have to be allowed for, though we need make 
no such change as we have seen in comparisons with 
the latter part of the seventeenth century. 

The same British Merchant practically also gives a 
figure for the time he writes — viz., between 1713 and 
1721, since he estimates the population of England 
as then 7,000,000,* the annual expense £49,000,000, 
and the rental at least £14,000,000, equal at eighteen 
years' purchase to £252,000,000. The stock at the 
same time he estimates at £88,000,000, — total, 
£340,000,000. There is a little want of precision, 
however, in the data, so that in one way this is little 
better than a fresh estimate on the basis of KSir 
AVilliam Petty and Gregory King's figures, and for 
a period which at this distance is practically the 
same. It is probable enough that with the defec- 
tive data of those days, the liability to difference, 
owing to the changes caused by lapse of time, was 
not sufficiently allowed for by tliose who Avere 
making the estimates, and who had not even in 
view the expediency of making comparisons for the 
statistical object alone, the figures being always 
employed for some other argument. The " British 
Merchant '' recognises progiess during the seventeenth 
century, but, curiously enough, does not explicitly 

* An over-estimate apparently. 


make an estimate of the capital and stock of England 
for his own time, as distinguished from the latter 
part of the seventeenth century. We may be sure, 
however, that as the best estimate of the population 
of England about 1G96 does not carry it higher than 
5^- to 6 millions, then, allowing for the probable in- 
crease down to 1713 or thereabouts, the estimate of 7 
millions for the time, though a little in excess of the 
true figure, with the corresponding estimates of in- 
come and capital, could not be far off the mark. At 
the most I think the figure of 340 millions should be 
increased by no more than a tenth to make it pro- 
perly comparable with Gregory King's estimate of 
320 millions for the latter part of the seventeenth 

Passing from the seventeenth century and the 
beginning of the eighteenth century, I find no good 
estimates of income and capital properly comparable 
with those already described until we come to the 
close of the last and beginning of the present century, 
when the great wars arising after the Frencli llevo- 
lution seem to have given fresh and practical interest 
to the question of the resources of the country. 
There are one or two publications, however, whicli I 
should like to notice before passing on. 

The first is Sir Matthew Decker's essay on the 
" Causes of the Decline of Foreign Trade," written 
in 1740, in which there are several notices of the 
rental and income of the people of England at that 
time, although there is no attempt to capitalise them. 
His estimate of the income is based on that of the 
British Merchant already referred to, with the two 
differences that the population which the British 
merchant estimated at 7,000,000 is now reekuned at 


8,000,000,* and that the expense per head is reckoned 
at £8, instead of £7 per head, on account of the 
increase of the average expense, owing to taxes, &c., 
in tlie interval. t As regards the question of the 
expense per head, the calculation is perhaps open to 
some criticism ; at any rate we should have liked a 
fuller contemporary investigation on the point. But 
it is also to be observed that a statement of the kind 
by a writer like Sir Matthew Decker, who was alto- 
gether wideawake, is not without its value. It would 
not have been made without some reference to what 
was actually probable on various grounds, as well as 
on the grounds stated, at the time. The result then 
is that the income of the people of England is valued 
in 1740 at £04,000,000, as compared with Sir 
William Petty's and Gregory King's estimate of 
£40 to £45,000,000 at the end of the previous 
century, and the British Merchants' estimate of 
£49,000,000 at the beginning of the 18th century. 
The amount of this income considered to be rental 
(land and houses together) is also estimated in the 
same essay at £20,000,000 a great advance, it will 
be observed, on the £6,000,000 at the beginning of 
the 17th century, and the £12,500,000 to £14,000,000 
at the end, although at the time Sir Matthew Decker 
wrote rents are spoken of as having lately been 
fallino^, or at least the net income of the landlord 
diminishing, owing to poor rates and taxes. Sir 
Matthew Decker's object was in fact to improve the 
condition of the landlord by removing restraints and 
taxes upon trade and especially upon foreign trade, 

* An excessive estimate apparently. The true figure could hardly 
h^ve been much more than 7,000,000. 

t Sir Matthew Docker, p. 28. 


and it is probable enough, for many reasons, that 
rents before 1740 had not been rapidly increasing. 

Using these fi,2:ures of Sir Matthew Decker as the 
basis, and applying Sir William Petty's and Gregory 
King's methods, the valuation of England about 
1740 would be something like the following : — 


Rental (18 years' puroliase of 2U millions) 

Stock — oue-third of ditto 




(In round fi;^au-es about ^500 inillious.) 

— a figure which, at any rate, w^ould compare not un- 
fairly with the preceding estimates, there having 
been no material change of prices in the interval to 
be allowed for. 

The next publication to notice is a curiosity in its 
way, and I should almost have passed it over alto- 
gether if it had not been a curiosity, and if it had not 
also been noticed in a third publication, which will 
be referred to presently, and which is one of the 
most interesting I have come across in the series. 
This second and curious publication is called "The 
Essay on the National Debt," &c.,by Andrew liooke, 
who ventures very dogmatically to supersede Sir 
William Petty and Davenant, and to substitute what 
he calls an improved method for valuing a country's 
wealth, which is to midtiply the cash, or assumed 
cash, of the country by 20 to find the amount of the 
personal stock, and then, after ascertaining the capital 
value of the land directly, to add together the values 
of the cash, the personal stock, and the lands. In 
this way Mr. Hooke arrived at a net valuation for 


'I'lIK (iKoW'l'lI (»K CAPITAL. 

iMigkuul ill 174y of exactly 1,000 millions, as 
follows :— - 

Casli Stix'k ... 
PorKonal Stock 
Land Stock ... 





Moreover, correcting Sir William Petty and Dave- 
nant, he gives the following esthnates for 1600, 
1G60, 1688:— 




Cash Stock 

Personal Stock 

Laud Stock 




i 14 

i 173 




j 467 


Finally, warming with his subject, and working on 
an assumed cash stock, which is a hypothesis based 
upon a hypothesis, he winds up with a valuation of 
England luider the three heads stated for each year 
from 1600 down to 1748, ending with the round 
figure of 1,000 millions! 

This is a most curious essay altogether, and of a 
kind to bring all such essays into disrepute. 

The obvious criticism is that no exact propor- 
tion between cash and personal property can be 
stated ; that the proportion must have been con- 
stantly varying ; and that the method by which 
the proportion of 20 is arrived at is the loosest 
observation of individual habits in the matter. 
AVliat is just as fatal is that the amount of cash 
which the writer confidently puts at £30,000,000, 
could nev(;r be known with the exactness necessary 


to base such a calculation upon, while the method 
which he follows, that of an assumed annual incre- 
ment based upon Davenant's examination of the Mint 
reports, import and export statistics. &c., was most 
fallacious. The essay is altogether most curious. 

It need hardly be added that the slightest attempt 
to give the items of the £600,000,000 of personal 
stock, which, Mr. Hooke states, would have exhibited 
the of the whole proceeding. The value of 
cattle witli the numbers and current prices ; the value 
of shipping ; the value of furniture ; the value of 
goods in trade which can hardly exceed the annual 
produce of the country — must always constitute the 
main items in such a valuation ; and even Avhen so 
good a plan as the metod of the Income Tax returns 
is available, these main items must be thought of, 
much more in the case of such a guess upon a guess 
as that of the present writer. It is interesting to find 
that the mode of valuing national capital in the air, 
as it were, and without reference to data which is not 
altogether unknown at the present day, was intro- 
duced so long ago in a way to demonstrate its folly. 

Almost the only solid piece of fact I can find in 
this pretentious pamphlet is the statement that the 
rental of Eno-land was then 20 millions sterlinof, based 
on the computation that the Land Tax yield of two 
millions was only a tenth of the actual rental, though 
nominally assessed at 4s. per £, which is very 
much the same statement as that of Sir Matthew 
Decker. This rental, Mr. Hooke suggests, shoidd be 
capitalised at 18^ years' purchase. He makes no 
suggestion as to the difference between houses and 

The third publication I have to notice is called ''A 

1)0 TlIK (iKoWril OF (Arri'AL. 

General View of England from the Year IGOO to 
I rCrl, in a letter to A.M.L.C.D. by M.V.D.M. ; " and 
is tlie translation published in 17GG of a French 
book published in 17G2. The translator states in his 
l^reface that the author "is (upon j^retty sure grounds) 
suppos(^d to be a Frencli gentleman, who, several 
yc;ars ago, resided for some time in England, and 
who, within these last ten years, was at the head of 
the finances of France. During his residence here 
he was extremely assiduous in obtaining all the infor- 
mation he coidd procure with regard to the constitu- 
tion, laws, finances, tillage, manners, and commerce of 
this kingdom." The translator then speaks in the 
highest terms of the judiciousness and accuracy of 
the writer, which must be obvious, I think, to all 
who read him. It is enough to show that the esti- 
mate of 20 millions as about the rental of England, 
in the middle of last century was based upon a real 
study of data, and was not a guess ; and that the 
best writers who gave their minds to these subjects 
were well aware what they were doing. Every state- 
ment is here examined and questioned, and compared 
with similar facts in France. 

What we find as most important for the present 
purpose is the criticism of Sir Matthew Deckers and 
Hookes estimate of a rental of 20 millions sterling:. 
The writer, for the purpose he had in view, required to 
make a distinction between land and houses, which 
compelled him to recognise that houses were assessed 
less in proportion to the actual rental than lands, 
although not so much less in proportion to their sell- 
ing value, which was less in proportion to income 
than that of land*. Altogether his general view is 

* "A General View of England," p. 36. 


that the land rental of England is 385 million livres, 
or £15,500,000, and of houses 95 million livres, or 
about 4^ millions. He states incidentally, howev^er, 
that the cayjital value of land is about 22 years' pur- 
chase, against 12 years' purchase for houses only, at 
which rate lands would come out as worth about 340 
millions and houses about 45 millions — total 385 
millions ; as compared with the above estimate of 
3G0 millions, taking the rental at 18 years' purchase 
only, and Mr. Hooke's estimate of 370 millions, 
taking the rental at 18^^ years' purchase. On this 
basis, and following the same mode of dealing with 
the stock as that followed by Sir William Petty and 
Gregory King, it would still be impossible to place 
the valuation of England alone at the middle of last 
century on any basis which can properly compare 
with those we have been making for the present time 
at much more than £500 millions. 

There is one point noticed by the latter writer, *' 
and I think by other writers in their books which I 
have been reading, which deserves a passing notice. 
This is that a considerable part of the National Debt 
of England was at that time held by foreigners. The 
estimates are that a third of the debt was so held. 
Whether any other foreign capital was lent to England 
does not appear, but not impossibly, looking at the 
amoinit of English debt held abroad, some was so lent. 
England as an indebted country, then, if an exact 
statement could have been made, should have had 
something deducted from the valuations above made 
to show its exact position, which is the very opposite 
of what must bo done now. But the amounts are 
too small, and the whole estimates too rough, to 

* See p. 160. 


make it worth wliilu to attempt any rectification 
beyond calling attention to the fact. 

Another point for wliicli the present writer may 
be used is his references to the resources of Scotland 
and Ireland. Of Scotland he does not think much ; 
but Ireland he speaks of as a serious quantity, its 
general position, he thinks, being niucli like that of 
England before the Revolution. This last statement, 
jiowever, is based mainly upon the national expendi- 
ture of Ireland, which is stated to be £2,000,000, and 
there are no details such as would enable us to give 
a contemporary valuation of Scotland and Ireland for 
comparison with the present time. 

The next statement to be noticed is that of Mr. 
Pulteney, in a pamphlet written in 1779, about the 
time of the American war, entitled, " Considerations 
on the Present State of Public Affairs and the Means 
of liaising the Necessary Supplies." Mr. Pulteney is 
referred to frequently as having made a valuation of 
the aggregate national wealth, but ir, is evident that 
whatever value attaches to Mr. Pulteney 's remarks he 
made no valuation in the nature of tlie valuations 
already referred to, or of a kind w^hich can properly 
be compared with those of the present day. His main 
plan is to state the rental of land in Great Britain 
at 20 millions, to assume that the farmers have an 
equal net income out of it, and then to multiply the 
net produce of land thus arrived at by 2r), assumed 
to be the number of years' purchase applicable. In 
this way a sum of one thousand millions is arrived at 
for land alone, " without taking in other property 
to an immense amount which equally constitutes 
national wealth." Another plan suggested by Mr 
Pulteney is to take the average income per head of 


the people of Great Biitaiii, which is estimated at 
£7 lOs. for a total population of 7,000,000 (apparently 
a very low estimate of population) by which he 
arrives at a total of 52 J millions as the income of tlie 
people, and thence reckoning the stock or fund 
from which this revenue is derived to produce 3 per 
cent, he calculates the fund itself at 1,050 millious. 
It is evident from these statements that they are not 
calculations of national wealth properly comparable 
with those already used for the 17th century or with 
those of the present time. By such methods the 
rental of land in the United Kingdom in 1885 would 
be capitalised at no less a sum than 3,250 millions, 
and the income of the people of the United Kingdom, 
at about 1,300 milhons, would indicate a capital of 
26 thousand millions ! 

Mr. Pidteney's distinct statement, however, as to 
the land rental of Great Britain at the time he wrote 
being about 20 millions, appears to be consistent 
with the statements of Petty, Davenant, Decker, and 
others already noticed, and gives an intermediate 
fiofure between their estimates of rental and the 
much larger figures twenty or thirty years later, 
with which we shall presently have to deal. His 
estimate of population, however, is altogether too 
low, as already glanced at, and there are not suffi- 
cient data in what he states from which to make up 
a contemporary estimate of wealth at the time he 
writes, viz.: 1779. It seems tolerably certain that 
there must have been considerable advance between 
1750 and ] 780, popidation increasing, commerce in- 
creasing, and more than one contemporary writer, 
speaking of a great rise of rents in many parts of 
the countrv owino- to continued enclosures and con- 

\)[ 'niK (iltoW'III OF CAl'ITAL. 

tiiiui'd ])rogi'C8.s in the art of iigTiculture. There is, 
liowcver, no contemporary estimate of national wealth, 
sucli as is supj^osed to have been made, but was not, 
ill fact, made by jNIr. Pulteney. 

We come, tlien, to tlie time of tlie great wars at 
the end of Jast and the beginning of the present 
century, wlien the pressure of a great struggle for 
existence compelled a discussion of the national 
resources as a practical question, and the instrument 
of the Income Tax at once supplied the means, and 
was in part the result, of such estimates. 

Here we find a writer, Mr. Beeke, apropos of Mr. 
Pitt's scheme of an Income Tax, discussing fully both 
national income and national capital, and giving 
detailed estimates which there is no difiiculty in com- 
paring with previous estimates, and with those of the 
present time.''' Mr. Beeke deals ostensibly with 
income mainly, but the examination involves ques- 
tions as to capital as well, and finally the author 
states, in a postscript, that he had made notes 
specially as to capital, which he completes and repro- 
duces. This postscript I have extracted, and put in 
the appendix (see Appendix iv.) 

It will be apparent at a glance from this postscript 
that the author's work is very nearly on all fours 
with the method which I have used at the present 
time, the principal differences being that he includes 
the amount of the debt as part of the capital of the 
country, which I have consistently excluded, and that 
lie capitalises that part of the income of the country 
permanently appHed to the annual expenditure of the 
Gove rnmen t and the payment of interest on the 

* Observations on the Produce of the Income Tax, &c. By the Rev. 
H. Beeke, B.D. A Mew and Corrected Edition. London : J. Wri"-ht' 
Piccadilly. ISOO. 



National Debt. His estimate of 2,300 millions, 
therefore, as the national capital would fall to be 
reduced by the item of 300 millions for the debt, and 
250 millions for the capitalisation of the income of 
the nation applied to Government expenditure and 
debt interest, leaving a sum of 1,750 millions as an 
estimate of national capital for Great Britain in 1800 
approximately on all fours with the estimates which 
I have lately made. The items of this sum are as 
follows, and, for convenience' sake, I have taken the 
liberty of picking out from Mr. Beeke's text corre- 
sponding estimates of income from capital, and the 
approximate number of years purchase he must have 
reckoned* : — 

Suviviary of Mr. Beeke'.i Estimates of Income and Capital, 1800. 





















Mines, Canals, Timber, Tolls, &c. ... 




Farmincf Capital 




Home Trade 




Foreii^n Trade and Shipping 




Foreign Possessions 




Waste Lands 


Household Furniture 


Plate, Jewels, A; c 





Shipping, Arsenals, &c 


Provincial and Municipal Buildings, 

&c. ".'.'. '.".'. 


Grand Total ... 


* It will be seen that I have not taken the precise figures in Mr. 
Beeke's Table on p. 130 of his immphlet, but that various corrections 
are uiade, which I have; done after carefully perusing liis text. 

t I have been unable to identify this item, which appears iu Sir. 
Beeke's Income Table, p. 13G, with any item in the Capital 'J'able iu his 


Tlie figures in this summary as to income and num- 
ber of years' purcliase must of course be taken subject 
to tbe observation that they are not placed by Mr. 
Beeke himself alongside his capital figures, while to 
some extent I have been obliged to estimate them 
because the first four items are not given at all by 
Mr. Beeke for Great Britain but are given by him for 
England and Wales only, with an addition in the 
gross for Scotland. As regards land, however, the 
remarks of Mr. Beeke fully justify what is done, and 
I think in other cases there is also sufficient warrant. 
The most tantalising item of all is that oi Foreign 
Possessions which appears in the income table, but 
not explicitly in that of capital ; but it may perhaps 
be considered as properly belonging to foreign trade 
and shipping. 

So far as I can judge, Mr. Beeke's figures are not 
extravagant. His figure of 30 years' purchase for 
land might be thought so, but the income he deals 
with, it is found on examination, is a net income, and 
the gross rental of land in Great Britain w^as con- 
sidered by him to be nearly 30 millions. This mode 
of dealing with the income may have been partly his 
justification for capitalising that part of the income 
of the nation applied to national expenditure — the 
land tax, for instance, being in this M'ay treated as a 
rent charge belonging to the State, which might pro- 
perly be capitalised. This, however, would raise the 
question whether all the income is not capitalised at 
too high a rate by Mr. Beeke's method, 30 years' 
purchase being apparently too high for land in his 
time if taken upon the gross rental. There is no 
need, however, to go into minute criticism on such 
points. The principal objection I would make to the 


figures would be that furniture, plate, &c., and specie, 
are, together, taken rather too high. The value of 
houses comes out as 200 millions only, but furniture 
alone is IGO millions, with plate, &c., 50 millions, and 
specie 40 millions more. The furniture and contents 
of houses, altogether, I have not ventured to put at 
more than half the capital value. I am making these 
remarks, however, in the absence of all details on this 
head, which do not come into Mr. Beeke's paper on 
income, although it is evident from his postscript 
that he probably had notes on this subject. In all 
other respects, however, Mr. Beeke is moderate. 
There is no reason that I can see why his estimates 
shoukl not be made use of as good contemporary 
estimates, properly comparable with earlier and later 
estimates, at least after the (jualifications above in- 

Comparing them with earlier estimates, they show 
an enormous advance. Deducting about an eighth 
on account of Scotland being included, a sum of 
1,500 millions is left, as compare;! witli a little over 
300 millions at the time of Gregory King, and 
between 500 and GOO millions half-a-century latei'. 
Per liead of population, the rise is from about £G0 
per head in Gregory King's time to about c£140 in 
the year 1800 ; and the greater part of tliis advance 
both in amount and per head nmst have been in the 
latter half of the 18th century. 

Astonishing as the increase is, all the evidence 
seems to show that while part of the improvement 
may have been owing to that remarkable rise of prices 
which commenced between 1780 and 1790, yet a very 
large part intleed nuist have been an increase of things 


<)S 'I'lIK (;i;t)\V'l'II OK CAl'lTAL. 

aiul not of iiionc!}- values merely. Mr. Be(;ke irunself 
contends that up to the date he wrote, notwithstand- 
ing the war, the capital of the country in things had 
been increasing rapidly ; that shipping had been in- 
creasing rapidly; and imports and exports, measured 
by things, had also been increasing in the same way 
as the shipping ; and that increase in well-being and 
population in a most striking degree had been going 
on simultaneously. The book of Mr. Chalmers to 
which I have already referred, may also be noticed in 
the same connection, besides not a few other authors 
to the same effect. The matter is pat by Mr. Van- 
sittart in a very striking way in one of the war pam- 
phlets, written in 1794,* in a passage which I venture 
to quote : — 

" It is clear that whatever sums any Government may levy upon 
its subjects, if the income of the nation, after defraying those sums, 
furnishes a surplus to be added to its productive capital, unless its 
expenses are increased in proportion to the new income furnished by 
this additional capital, a still larger surplus will remain at the next 
period of computation; this will again be added to the capital, and 
as long as these accumulations continue the wealth of the nation will 
increase in a proportion perpetually accelerated. It is impossible to 
estimate with precision the progress of national riches, as they arise 
from the aggregate savings of all the individuals in the State; but 
it is not ditlicult, by many obvious circumstances, to discern in 
which of any two periods of time it has been most rapid. If there 
have been extraordinary sums expended upon works of public 
utility; if harbours, bridges, high roads, and inland navigations have 
been improved, and multiplied ; if numerous buildings have suddenly 
arisen; if cultivation has extended over Avastes; if shipping has 
increased in a manner more remarkable at one period than the other 
— no one can hesitate in deciding in which the national capital, and 
consequently the public power and prosperity, has most rapidly aug- 
mented. It will hardly bedenied that all these signs of eminent felicity 
exist in the nation beyond all former example, but some other circum- 
stances must be taken into consideration to give an adequate idea of 
the magnitude of its advancement. If, in addition to the vast sums 
which have been employed in the improvements I have mentioned, a 

* Eeflections, &c. by N. Vansittart. A New Edition. London : Stock- 
tlalc, 1704. 


great capital lias boon absorbed into tlie vortex of the National Debt, 
it will show the extent of these resources of public industry and 
economy which have at once supplied the one and provided for the 
other. In this point of view they cannot fail to excite our astonish- 
ment. Between the years 177G and 178G <£115,190, 000 were added 
to the National Debt, yet so completely has the general wealth kejit 
])ace with so vast an increase that the share possessed liy foreigners 
in our funds is understood to be much less than in former times, 
when their extent was comparatively trifling. An addition of 
.£4,.S(;4,OO0 was, in consequence, made in the same time to the 
annual interest and charge of the debt, and during the late peace 
many occasional expenses of a large amount were discharged,* 
■while the peace establishment was more considerable than at any 
former period. Yet the taxes necessary to furnish such extraordinary 
payments have not diminished the comforts of the people, or injured 
any branch of their industry. On the contrary, it is certain that in 
both these respects a great improvement has taken ])lace." — Extract 
from Vansitfarf s ^'Meflecfions on the Propriety of an Immediate 
Conclusion (f Peace.'" London, 17 9 i, pp. 122-7. 

Such was the conteuiporary belief in 1800 as to 
the recent progress. Wliatever numbers and wliat- 
ever classes failed to benefit by the growth of income 
and wealth in the latter part of the IStli century, a 
vast increase of aggregate income and wealtli did 
undoubtedly take place, of which one proof among 
others is furnished by comparing the estimates of 
wealth on similar bases made at the beginning and 
end of the period, and allowing for a mere rise of 
prices. I should doubt whether the additions for 
the rise of prices, comparing 1700 with 1800, ought 
to be more than 50 per cent, upon the figures of the 
former period, so that the comparison would be 
between tibout 500 millions in the former and 1,500 
millions in the later period, or from alxiut .£i)0 to 
£170 per head, still leaving an enormous advance to 

* In addition to the increased charges of the National Debt, many- 
large sums were raised during the late peace for purposes of a temporary 
nature, particularly Debentures gi'anted to the American Loyalists. 


loo 'ril!'] (IIJOW'I'II OF CAl'ITAL. 

be marked. Whatever may be the exact corrections 
necessary, the broad result is vindeniable. 

Ijefbre passing from Mr. Beeke's figures I should 

like to mention tliat many of liis calculations were 

fully justified by the results of the Income Tax. The 

total of all the schedules in 1 803 for Great Britain 

was .£115,351,000, which compares with Mr. Beeke's 

estimate of about £90,000,000 net, excluding certain 

trade items. Owing to the Income Tax Returns 

sometimes only dealing with net income instead of 

the cross as well, and the like causes, exact com- 

parisons all the way through between Mr. Beeke and 

the first Income Tax Schedule are difficult ; but I am 

satisfied that Mr. Beeke's calculations were so good 

that we may practically accept his valuation of 

national wealth as upon an Income Tax basis. His 

work in all is extremely good. As regards Schedule A 

in particular, the gross assessments in the Income Tax 

were in 1803 for Great Britain £38,691,000, which 

would include lands, houses, tithes, mines, and other 

items, while the total of Schedule B was £24,279,000, 

not far short of I\Ir. Beeke's figure for lands only. 

The total of £35,000,000 for trades and professions 

agrees fairly well with Mr. Beeke's estimate of income 

from home and foreign trade, allowing for differences 

in arrangement and classification between his method 

and that of the Income Tax Schedules. 

1 need not compare Mr. Beeke's figures in detail 
with the more recent valuations which have been 
made. It will be sufficient to say that the increase 
apparently shown from his time to the present would 
b? added to and not diminished l)y bringing in the 
question of prices. In any case it may be expedient 
to look first at one or two vahiations for the earlier 
part of the present century. 


One of these is a valuation for about the year 1812, 
tlie height of the war, by Mr. Colquhoun, who, like 
Mr. Chalmers, was, I believe an officer of the Board 
of Trade, and who at ariy rate speaks of himself as an 
official person. Mr. Colquhoun who gives a valuation 
of income, or, as he speaks of it, production, as well 
as uf capital, is most elaborate and detailed, while he 
gives figures for every British dependency as well as 
for the United Kingdom itself His work is spoken 
of with a good deal of disapproval by Mr. McCuUoch, 
as has already been noticed, and many of his details 
are no doubt somewhat fanciful, while the work is 
also open to further criticism as not recognising 
sufficiently the special objects of such investigations 
and the necessary unsuitability of the figures for 
general jDurposes owing to the inherent difficulty of 
the data. For the present purpose, however, and 
comparing Mr. Colquhoun's results with those of Mr. 
Beeke, allowing for the growth of population and 
income tax in the interval, Mr. Colquhoun's estimate 
is obviously not so wide of the mark for the time 
of which he wrote that it cannot be utilised for 
comparison with earlier and later figures. This is 
especially the case as regards the valuations of capital 
with which we are more immediately concerned. 

The following is a summary of Mr. Colquhoun s 
valuations of capital. (See p. 103) : — 

Eugland i l,84G.StU0,0<:0 

fScotUmd 281.08U,0UU 

Total Great Britain 2.127.980,000 

Ireland ot;3.60U,(X»0 

Total 2,691,580,000* 

* Add dockyards, ships, &c., £4:3 millions, making a total of ^£2,730 
millions, as on i3. 103. 

102 'i"iiK (;i;()\V'i'ii OF cAi'ri'Afv. 

And these; iiguri's coinp;u\; with the ;ibove totals 
of 1,500 iiullioiis for Engliind and 1,750 for Great 
l^rltain, whicli arc Mr. Beeke s figures, when certain 
corrections are made as to the debt and other matters. 
Mr. Colquhoun, in fact, leaves out the debt in his 
totals, and otlierwise so deals with the subject as 
to place his calculations, as far as the omission and 
inclusion of items are concerned, very much on all 
fours with the more recent valuations. It cannot Ijc 
said, I think, that an increase from 1,500 to 1,S4G 
millions for England between 1800 to 1812, an in- 
crease o? about 23 per cent., is at all out of the ques- 
tion or extravagant ; nor the similar increase for 
Great Britain from 1,750 to 2,127 millions. Looking 
at the great growth of business and the rise of prices 
in the interval, these changes are not out of the 
question. If Mr. Beeke is near tlie mark, Mr. 
Colquhoun cannot be far wrong. 

I am disposed to think Mr. Colquhoun's figures 
for Ireland are too high, but not much, Ireland, 
however, not coming into Mr. Beeke's valuation. 
Still, it has to be remembered that Ireland was a 
much more important part of the United Kingdom, 
in proportion, at the beginning of the century than it 
is now, while its agriculture was specially stimulated 
at the expense of the people of Great Britain by the 
Corn Laws. 

It may be convenient to state here for the sake 
of comparison the following principal items of Mr. 
Colquhoun's valuation, alterinsf his arrano-ement a 
little so as to make them more easily comparable 
with other fisfures. 



3L'. Cuhjiulwiuis Estimates of PrajKiiy, 1812. 
[lu Millions.] 






Atcriciiltnral Property and Liv( 


Dwelling Houses 

Mines and Minerals 

Canals, Tollo, and Timber 

Manufactured Groods — Honn 

Trade .' .. 

Foreign Merchandise 

British Shipping 



Waste Lands, ttc 

Household Furniture 

Wearing Apparel 

Plate, Jewels, &c 

Specie , 

Public Pioperty, as Buildings, ic. 
Dockyards, Ships, &c 




















































, 2,647 









Mr. Colquhoun's estimate of income is given in 
such a way that details cannot be separately stated 
lor England or Great Britain. The general result is 
as follows : — 

' Fropcrdj Created in Great Britain and Ireland in the Year 181'2-V^ 

[In milliona.] 

Agriculture in all its branches 

Mines and Minerals, etc 


Inland Trade 

Foreign Cmumerce and Shipping 

Coasting Trade 

Fisheries, exclusive of Newfoundland 

Chartered and Private Bankers 

Foreign Income Remitted 






10 1 Till'; (IKoWril OF CAIMTAL. 

At iirst sio-lit this sterns too high, tlio figure <>t 
agriculluial pi-oductioM being especially very large. 
The error, liowever, cannot be such as to tlirow us 
out much when comparisons are made with distant 
periods. The Income Tax income of Great Britain 
about 181:2 was 130 millions sterling, and adding 
al)out a fourth for Ireland, wliicli seems to have been 
the calculation of the relative resources of Ireland to 
those of Great Britain at that time, we get a total of 
IG.j millions. This figure, according to modern ex- 
perience of the relation of Income Tax income to 
total income would justify an estimate of such total 
income at about 350 millions ; and assuming, wdiat 
seems to be the case, according to Mr. Beeke's estimate 
and other estimates at the time, that the Income Tax 
income bore a less proportion to the total than it 
now does, a figure of about 400 millions at least as 
the national income in 1812, at the high prices then 
ruling, would not appear to be far off the mark. 
This would also appear from a comparison vriih Mr. 
Beeke's estimate of income, which amounts to 218 
millions for Great Britain in 1800. Allowing for the 
increase of population to 1812, and for rise of prices, &c , 
in the interval, this total in the latter year would not 
be far short of 320, and an addition of one-fourth for 
Ireland would bring the sum up to 400 millions. I 
think, however, judging by various signs, that Mr. 
Colquhoun's estimates of income are not, perhaps, so 
well supported by data as his estimates of capital, and 
at any rate they are not required for our present 
purpose. I have only called attention to these points 
to show that the fio-ures are at least near enouo'h 
the mark to be available for some distant compaii- 


Shortly after he wrote — viz., about 1820 — Mr. 
Colquhouu's work was considered and discussed by 
Mr. Joseph Lowe, to whom I have ah'eady referred, 
whose corrected figures I now ])ropose to add to 
those of Mr Colquhoun. There is the more reason 
for this, as values were, no doubt, somewhat inflated 
in 1812, when Mv Cohpihoun wrote, and the infla- 
tion had died out in 1823, when Mr Lowe wrote. 

I extract, then, from Mr. Lowe's work* a stateineut 
as to the capital of the country at the time he wrote. 
(See Appendix v.) 

The principal items of this 1822 estimate are : — 



Land unJc-v cultivation 1,200 

rarminij Capital , 200 

Dwelling Houses, Warehouses, and Manufactories (Houses)' 400 

Manufactured Goods 1-10 

British Sbippinpf 20 

Other Mercautile and Manufacturing Capital 130 

Mines and Minerals 65 

Canals, Tolls, and Timber \ 45 

Total 2,20U 

Mr. Lowe's figures it will be seen are substantially 
those of Mr. Colquhoun with a few modifications in 
detail, and with the omission of those items of 
unproductive private property, such as furniture, 
plate, &c., and certain items of public property which 
I believe Mr. Colquhoun very properly includes. The 
eflect then of Mr. Lowe's corrections generally is that 

* See " The Present State of England." By Joseph Lowe. London 

he hclicvcs the iiicreasu of population between 1S12 
nnd 1822, and the increase of things, nearly made 
ii[) i'i)V Avhatevcr excess in Mr. Colquhoim's esti- 
mates was due to tlie inflation of prices in 1812. It 
will be seen, indeed, from the Table in the Appendix 
that Mr. Lowe himself gives the corrected figure 
of Mr. Colqulioun for 1812, for comparison with Lis 
own in 1822, as 2,3.30 millions. Substantially Mr. 
Lowe's figures are thus Mr. Colquhoun's figures, but 
they imply, it should be understood, real and consi- 
derable progress between the two dates — apparently, 
amounting to about G^ per cent., or equal to the 
corrections which Mr. Lowe suofaests for the fall in 
prices in the interval. It is Mr. Lowe's explicit 
opinion that there was this progress. 

About sixteen years after Mr. Lowe, we come upon 
another valuation by Mr. Pablo de Pebrer, who is 
described as having written in English, and as being 
a member of several scientific societies, but of whose 
book I have only seen a French translation, published 
in 1839. This book is called " Histoire Financiere 
de rEmpire Britannique," and it contains an elaborate 
calculation of capital and income based upon Mr. 
Colquhoun's valuations, on the general plan of adding 
one-third to them, being less than the increase of 
population in the interval, which was about 41 per 
cent. The writer, however, though he follows this 
general plan, is careful to justify its moderation by 
reference to many details, while he points out that 
^Iv Col(|uh(»un was generally moderate according to 
the prices of the time. The result is not so satisfac- 
tory as if the writer had made a wholly independent 
and new valuation, but quantum valeat it may be 
referred to. 



The principal items are :— 

Summanj of Vahalion of the United Kingdom for about the year IS33- 
[Pablo de Pebrers, based on Mr. Colqulionn^s]. 



Agricultural Property ... . 


Mines and Minerals 

Canals, Timber. Railways, &c. 

Manufactured Goods 

Foreign Merchandise... 



Total ... . 

Waste Land 

Household Furniture 
Wearing Ajaparel 

Plate, Jewellery, kc 

Coin, ic 

Savings Banks 

Chancery Money, etc 

Public Property, Buildings, &c. 

Dockyards, Arsenals 

War Ships, &c 










































































Such is a vahiatlon about 1833, believed to be about 
the mark by an author who has taken some pains, 
tliough unfortimately for us he has only in form 
applied a somewhat mechanical method to a former 
valuation without making up an entirely new valua- 
tion from original materials. The weakest point in 
the whole is, perhaps, the new figures which the 
author gives for Savings Banks and Chancery money 

* These figuies, acoDrding to the aldltiou, should bo 3,001, 3,5SG 
and 3,080 ; but the exact figures ai"o copied. 

108 'I'lIK (.liuWril OF CAI'I'IAL. 

as if tlicso items wore on the sdiiie footing as coin in 
circulation, not observing tliat these moneys being 
invested must appear under some other head in tlie 
ereneral vakiation. The amount is too small to make 
any material difference in the general total, while the 
item of coin itself to which these items are intended 
to be sup2^1en)entary is itself too small, as the reintro- 
duction of specie payments must have caused, T should 
say, a much greater addition than one-third bef )re 
1833, to the coin in circulation in 1812. With all 
defects, however, M. Pablo de Pebrer's valuation may, 
perhaps, pass as a contemporary valuation for the 
period between 1830 and 1840. 

Subsequently to the latter date there are Income 
Tax returns once more to be made use of, and as I 
have now practically made three valuations based on 
these returns, viz., for 18G5, 1875, and 188.5, 1 may, 
perhaps, be allowed to leave the history at this 
point. I shall only point out that the first returns 
to the renewed Income Tax for 1843 exhibit such 
an increase as on the whole to conflnri M. Pablo de 
Pebrer for 1833. The assessments to the Income 
Tax for Great Britain, which were 130 millions in 
1812, amounted to 240 milhons in 1843 — an increase 
of about 80 per cent, as compared with the increase 
of 30 per cent., which M. Pablo de Pebrer allows for 
up to 1833. Adding 80 per cent, to Mr. Colquhoun's 
estimate of 2,700 milHons as the property of 1 8 1 2, 
we should get a total of over 4,800 millions as the 
property of 1843. This figure would be, perhaps, 
excessive, and it allows for an increase in Ireland 
equal to what had gone on in Great Britain, which 
is not likely to have occurred, but a figure of 4,000 


millions for the United Kingdom about 1845 would 
certainly not 1)3 over the mark. Some difference 
might be made in the items, the increase in lands 
being less, and the increase in other items, such as 
houses, being more than M. Pablo de Pebrer shows ; 
but all the figures tend to show an enormous advance 
between t\\e two dates notwithstanding the foil of 

None of these figures show mucli advance in the 
amount per head as compared with Mr. Beeke's 
valuation for Great Britain in ISOO. This indicates, 
however, a real advance in wealth, a fall in prices 
being in progress the whole time from 1812 down- 
wards. The infusion of the population of Ireland, 
which is convenient for the sake of havino- a com- 
putation for the United Kingdom, also brings down 
the average a little. 

We may attach the more unportance, therefore, to 
the advance shown by the subsequent figures, espe- 
cially as there is no doubt regarding the very latest, 
that they are not inflated in any way by prices — that 
prices generally in 1885 were about as low as at any 
previous time in the century. If property has in- 
creased from about 2,000 millions and £140 per head 
at the beginning of the century, and from about 4,000 
millions, and the same amoiuit per head towards the 
middle of the century, to no less a figure than 10,000 
millions and £270 per head at the present time, then 
the latest experience is quite unprecedented. On a 
very much larger scale the experience of the 17th 
century, wiien the rental of England increased from 
G to 14 millions ; and of the 18th century, in which 
the capital of England increased from a little over 
300 to about 1,500 millions; has been repeated in 
the 19th century. The increase of capital in the 


TiiK (iKowi'ii OF f.\rrr.\i;. 

])i-('S('ii( cciilui-y lias n^nm l)con nearly ilvo times, 
;iii(l tli( re is no suspicion, such as attaches to the 
increase in tlic 'I8lh century, tliat it is partly (hie 
to a mere rise oi" })rices, 

A short Tal)k\ puttini^ the lea^hno" results together, 
aii<l inl loihicino- a compiu'ison per head all through, 
may he interesting: — 

OroH'tli of Cnjntal and Population in England and the United 
Kingdom since 1600. [In round figures.] 



( Property 
Property. jl^ 


(British Merchant, &e.) 


(Gregory King-Davenant.) 

(British Merchant.) 






Mlns. Stg. £' 
loo 22 

250 46 

320 58 

370 57 

500 71 

1,500 107 


Gkkat Britain. 

United Kingdom. 
















(Colquhoun-Pablo de Pabrer.l 





(Income Tux.) 









Present time 




The changes are thus constantly in an upward direc- 
tion, with the exception of the short period hetween 
1812 and 1S22, when allowance had to be made for 
the fall in prices. No doubt part of the rise, with tlie 



exception of that in tlie present century, may be 
ascribed to the rise in prices which undonbtedly took 
place in the first lialf of the 1 7th and the latter part 
of the 18th century, but on the whole there is a vast 
real advance as well as nominal advance all throufjh. 
As already remarked, as far as the increase in the 
present century is concerned, comparing the latest 
Avith the earliest date, no part can be ascribed to the 
rise of prices, since prices are now at the lowest level 
on which they have been since the beginning of the 
century. There may have been some such rise aflect- 
ing the valuations of 18 Go and 1875, but that rise 
has since been lost, and comparing the present time 
with a date like 1812, and perhaps 1800, there is 
undoubtedly a fall of j)rices. 

It is interesting to observe also tlie variations in 
the amounts of some of the principal items of pro- 
perty and their proportions to the total. I need 
only show the two items, land and houses, and at one 
or two of the dates only : — 

Summary Showing the Growth of Lands and Houses and their Proportion 
to Total Propertij. 



1 Pro 






(In mlns. stg.) 

Per Cent, 
of Total. 

(In mlns. stg.) 

Per Cent, 
of Total. 







(Gregory King.) 







United Kingdom. 






















1 1 1^ TIIK (IIMWI'II ()V TAl'ITAL. 

Thus, lands, from constituting at tlie beginning of 
the period (]i) ]H'Y cent, of the property of the 
eoiuitry, and wliile forming as late as 18G5 about 30 
])er cent, of the property, do not now constitute 20 
per cent, of the total, tliere having also been in tlie 
most recent years an absolute decrease in amount, 
Avhile other capital is increasing. Houses, on the 
other hand, maintain a rather increasing proportion of 
a total property, which is itself constantly increasing 
in amount ; and in the last period of all this tendency 
has been accentuated till houses — buildings — have 
come to constitute a fifth part of the total property 
of the country. Changes like this have undoubtedly 
been in progress. The proportion of individual pro- 
perty held inland has been steadily diminishing, other 
property increasing by leaps and bounds, while land, 
though participating in the unearned increment, has 
improved more slowly, and of late years has diminished 
absolutely in value, owing to the unearned increment 
having for the moment disappeared under the influence 
of foreign competition. At the same time the progress 
of civilisation is steadily marked by the growth and 
improvement of buildings, which increase not only 
with population and the increase of jDroperty generally, 
but in even a greater ratio. 

This is hardly the place to introduce general eco- 
nomic remarks, or deduce special lessons from the 
figures, especially as I reserve a chapter for the dis- 
cussion of the uses to which such figures may be put. 
I should like, however, just to say a word m parsing, 
on a question which will perhaps occur to many. — 
How do these figures bear on the problem of the 
improvement or detoriation of the masses from 
period to period ? I think it has been sufficiently 


demonstrated, that in the last fifty years there 
has been progress all round ; in recent years, as 
I need not remind you, not so much at the top as 
lower down ; but it is alleged that just fifty years 
ago the masses had sustained a special deterioration. 
Sometime ago on the strength of mortality and other 
statistics I put in a caveat against this conclusion, 
and on the strength of the figures here given I am 
disposed to strengthen this caveat. All through it 
seems to me there must have been improvement 
all round. The necessary effect of a continuous 
increase of capital is dispersal. If the land mono- 
poly had heen constantly absorbing more and more 
of the national earnings through unearned increment, 
the conclusion might have been different, but the 
unearned increment is plainly un peu de chose. What 
all the figures point to is that there has been a 
steady levelling up among the masses for several 
centuries ; that this improvement largely takes the 
shape of constant additions to the lower middle class 
and the upper artisan class ; and that there is a 
residuum which does not improve much, and hardly, 
by comparison, seems to improve at all, but this 
residuum certainly diminishes in proportion, and 
probably diminishes in absolute amount, from century 
to century and from period to period. It would be 
impossible to set out fully liere the facts supporting 
this view ; but as the question may arise on the 
general figures here exhibited, I desire to anticipate 
a natural and hasty, but what I believe a most 
erroneous conclusion inconsistent with many other 


Of course other communities throughout the world 
have progressed in a Uke manner — the United States 
even more remarkahly. The statement made is not 
intended to be of* a Chauvinist or spread-eagle kind. 
It is merely to state scientifically in a line how 
immensely greater in reality are the resources of 
modern commimities than those of their predecessors 
in a very recent period — to render a little clearer, 
in fact, the degree of material improvement in modern 



I PROPOSE now to consider for a little the question 
of the accumulations of capital m other countries. 
What estimates on the subject have been made by 
our principal neighbours? and how far are the results 
arrived at comparable with our own ? 

The United States is above all the foreign country, \ 
if it is correct to speak of it as a foreign country at 
all, in which we are most interested, while it is also a 
country in which for a considerable period, attempts 
at a national valuation have been made. Let us look, 
then, first at what is done in the United States. 

There is first of all in tlie United States an official 
valuation. The principal source of revenue in the 
States and localities is a tax upon property, which must 
by the terms of the constitution itself be equal upon^ 
all j^roperty. Hence every State has an official valua- 
tion. But, like attempts to tax property elsewhere, 



this I )!•() vision lias failed. Either property escapes 
taxation by heing greatly undervalued, or it escapes 
assessment altogether, the property called personal, 
as distinguished from real, it need hardly be said, 
being the kind which escapes. In consequence, at 
every census since 1850, the officers entrusted with 
the duty have endeavoured to arrive at a true valua- 
tion, as well as to bring together the figures of the 
assessment. The method and details of this true 
valuation are not, as far as I have observed, fully 
explained in the census reports, but the nature of the 
attempt is at any rate partially indicated. That 
there is a great difference between the assessment 
and the " true valuation " goes without saying. The 
differences since 1850 have been as follows : — 

] Assessment. 
Mln. Dollars. 

True Valua- Proportion 
, . of Assess- 

^^°^- ImenttoTtne 

Mln. Dollars. iYaluation % 



— showing an increasing discrepancy between the 
assessment and the true valuation, which may be 
largely ascribed, there is no doubt, to the vast 
growth of personal property in recent years. 

Practically also for the present purpose we must 
discard the official assessment and look at the true 
valuation only, as being at any rate an attempt to 
arrive at a fiorure resemblino^ the valuations which 
we have been using as a means of computmg the 
accumulations of capital. 


The true valuation of 1880, then, is given in the 
census of that year (see vol. 7, pp. 11, et seq) as 
follows : — 

" True" Valuation of the United States acconling to the Census of 18S0. 


Residence and business real estate 

Railroad and equipment 

Telegraphs, sbippinp:, aud canals 

Live stock, farming tools, and machinery 

Household furniture, painting, books. clothing, 
jewellery, household supplies, and food, 
fuel, &.C 

Mines, petroleum wells, and quarries, with ) 
one-half the annual product estimated as / 
amount on hand ) 

Three fourths of the annual products of agn-") 
culture and manufactures, and of the im- 
ports of foreign goods estimated as the 
average supply ou hand 

All real estate exempt from taxation 


Miscellaneous — including tools of mechanics .. 



























And comparing this hroadiy with the simlhir 
valuation for the United Kingdom above given, which 
is for five years later, or the similar vn.l nation for the 
United Kingdom for 1875, which is for five years 
earlier, it is easy to see that the United States' figures 
are at least within sight of the mark. In 1880 the 
United States had a population of ^"^1 millions, as 
compared with 37 millions in the United Kingdom 
in 1885, and although the United States might be 
assumed not to have the manufacturing capital or 
the large investments of the people of the United 
Kingdom, yet their agricultural and general wealth 
could not but be enormou.s and might easily reach 
in 1880 the total of the United Kino\lom in 1875. 


In detail also there is nothing improbable in the 
particular items. 'J.'hiis the valuation of "farms" 
corresponds very closely with the item of lands in 
the statement for the United Kingdom, which seems 
by no means unreasonable considering that the culti- 
vated area of the United States in 1880 amounted 
to over 160,000,000 acres, or more than three times 
the cultivated area of the United Kingdom. The 
relation of capital value to income is not explained 
in the United States returns, but making all allow- 
ance for the inferiority of the cultivation and the 
smaller saleable value of the same net income in the 
United States compared with the United Kingdom, 
the value of farms in the United States must be 

The next item of "residence and business real 
estate" appears to come into comparison with the 
item of Houses, &c., in the Income Tax returns, and 
is more than the similar English valuation for 1875, 
and just about the English total for 1885. Always 
remembering, however, the enormously greater popu- 
lation of the United States compared w^ith that of 
the United Kingdom, the figure cannot but be con- 
sidered as at least an approximate one. 

The next item of " railroads and equipment" is 
supported fairly by the railway returns of the United 
States, though the figure seems a little too high as 
compared with what a valuation by net income 
capitalised at so many years' purchase would have 
produced. The net income of the United States 
.railways in 1880, according to the United States 
Statistical Abstract, was about £42,000,000, and to 
justify a valuation of £1,100,000 this sum would 
have to be capitaHsed at 26 years' purchase, which 


seems above the rate at which railway income sells 
for, or rather sold for in 1880, in the United States. 
Still the figure camiot be said to be excessive or 

The next item, that of " live stock, farming tools, 
and machinery," amounting to £480,000,000, seems 
very large. It does not include the whole farming 
capital, much less the whole capital corresponding to 
Schedule B in England, and it points to a much 
larger figure for agricultural capital in the United 
States than anything I have ventured to assign for 
Eno^land. But we should look for some such result. 
The agricultural business of the United States is 
enormous compared with that of England, and even 
at much smaller values for every kind of stock and 
produce, the valuation runs into very big figures. 

The next item, that of " household furniture," is 
expressly defended by Mr. Gannett, of the United 
States Census, who is resj)onsible for it, as having 
been very carefully made, though the process by 
which it is built up, as is the case w^ith the other 
items, is not shown in detail. It is interesting to 
note that, however it may be arrived at, it corresponds 
very closely to half the valuation of the item of 
" houses," which we have assumed it would be a safe 
rule to follow in the United Kingdom. 

The item of mines, &c., like the same item in the 
United Kingdom, is comparatively small, notwith- 
standing the importance attached to mines. 

Tlie next large item, that of " Three -fourths of 
annual products of agriculture and manufactures and 
of the imports of foreign goods estimated at the 
average supply on hand," has notliing exactly corre- 
sponding in the English method, but with the addi- 



tlon of two otlier items, " specie " and " miscellaneous," 
may be assumed to correspond fairly well with the 
items of Other Public Companies, Trades and Pro- 
fessions, Trades and Professions Omitted, and Income 
of Non-Income Tax classes derived from capital in 
the United Kingdom valuations, with this difference 
only, that perhaps a fifth of the American valuation 
under this head is really agricultural capital. American 
figures on this head for 1880 would thus compare 
with similar figures for the United Kingdom in 

American Figures. 


Three-fom'ths of Annual Products, &c 




Deduct — 
One-fiftli iissumed to be Agricultural Capital 




English Figures. 

Other Public Companies 

Trades and Professions in Income Tax 

Do. do. omitted 

Capital of Income and Non-Income 1 ax Classes derived 

from Capital 





Perhaps one or two other items ought to go into 
the valuation of the United Kingdom for comparison, 
but I doubt if anything very considerable. I cannot 
help thinking, then, that on this head there is either 
some under-valuation in the English returns, or some 
over-valuation in the United States. A -large part 
of the sjDecial wealth of England is in its stocks of 
goods— tlie circulating capital of its shops and ware- 
houses. The population engaged in these branches 


must be much larger than the similar population in 
the United States. It is hardly possible that the 
corresponding capital can be so little more. I am 
disposed to think tliat the English valuation is 
rather under tlie mark, but the point is not very 

The items in whicli the Enoflish valuation differs 


most from the American is in the amount of capital 
in vested abroad. To this there is, of course, nothing 
corrssponding in the American return, although it 
amounts to £1,300 millions in the English valuation. 
There is, also, no valuation of national property in the 
United States returns. 

On the whole, then, there seems nothing unreason- 
able in the American valuation so as to make it 
unsuitable for comparison with the English valuation, 
the object of both being to state a figure represent- 
ing the exchangeable value of property belonging to 
the people at current rates. The process by which 
the American figures are built up is not shown in 
detail as the similar process is in England ; but there 
are other modes of checking the main items, as we 
have seen. So long, therefore, as there is no attempt 
at reasoning too finely, and the comparisons are 
limited to such ol)jects as showing the comparative 
growth of capital proportionately to former amounts, 
the United States figures may be taken to be as 
sufficiently on all fours with those of the United 
Kingdom for the purpose. 

There is only one important qualification to be 
made, I think. This is, that the United States being 
a country where a large part of the capital in use is 
owned abroad, a deduction from the capital brought 
out by the above method of calculation ought to be 


'rilK (iKOWril (»K CAI'ITAL. 

made so as to cxliibit tlie net capital of" the com- 
iniinity of the United States. Not only should the 
valuation of the United Kingdom differ from that of 
the United States, by including an item for capital 
invested abroad, but there sliould be the further 
diffei-ence that tlie valuation of the United States 
should exliibit a deduction in respect of foreign 
capital invested in the United States. 

How much should that deduction be ? If there 
were no borrowing or lending transactions going on, 
and no remittances from the United States to other 
countries to pay the expenses of Americans travelling 
or residing abroad, the interest of the indebtedness 
ought to be shown by the excess of exports over 
imports ; but corrections must, of course, be made. 
I am inclined to submit the foUowinor account as for 
about the year 1880 : — 

iSlatementshowi)iff the sum approximately due AnnuaUy hy the Commiiinly of 
the United States in respect of Foreign Capital iin'ested in the United 
States: — 


Impovts-^Avevage 1879-81 

Under valuation of ditto in 
oflRcial returns 

Amount annually due for 
Americans travelling ov 
residintr abroad 







Exports — Average 1879-81 



Balance brought down .. 

Add estimated annual 
borrowing or sales of 
securities in Europe on 
American account 






Of course an account like this is only a rouo-h 
guess at the reality, and everything it will be 


observed turns upon the point as to the amount of 
the annual borrowing in Europe on American account, 
which must be very large, and but for which the 
excess of exports now shown in tlie American returns 
would be even larger than it is. At twenty years' 
purchase the 50 millions of estimated annual indebted- 
ness of the American community on account of foreign 
capital invested would come to 1,000 millions sterling, 
which is a serious deduction from the valuation 
of capital above stated. Instead of having been 
£8,700,000,000 in 1880 according to the above state- 
ment, it must have been under £8,000,000,000. 
Some deduction must be made. 

It need hardly be added, however, that the valua- 
tion being for 1880, and the growth of population 
in the United States being enormously rapid, the 
capital figures for 1885, if we had been able to get 
them, so as to show a figure properly comparable 
wdth the valuation of the United Kingdom, would 
have been nearly as much as, if not more than, tho3e 
of the United Kingdom, even making a deduction, 
as above suggested, for foreign capital invested in 
the United States. 

The growth of capital in the United States may 
now be shown. For this purpose I extract from my 
former essay, with the addition of the above figures 
for 1880, a statement of the comparative growth of 
capital in the United States according to the " true 
valuation" since 1850, and with an estimate on a 
similar basis for the census periods before that made 
by tlie United States census authorities. The figures 
before 1870, it should be explained, mclude the 
valuation of slaves in the Southeiii States ; and there 
are, of course, other minor discrepancies, in conse- 


qnence of changes, of wliicli tlicre is no record, in 
tlu' method of valuation, but the real growth must 
evidently liave been so large that minor discrepancies 
are lost. As explained in a note, also, the figures for 
is 70 are subject to a deduction of 15 percent., or 
thereabouts, so as to reduce them to a gold valuation; 
and it will, of course, be understood that all the 
figures are subject to further deduction on account of 
foreign capital invested in the United States. (See 
p. 125.) 

Deducting for foreign capital invested in the 
United States the figures would still be very large. 

This statement niay be compared with the similar 
statement for the United Kingdom {supra 'p. 110). 
The growth in the United States absolutely is greater 
than in the United Kingdom, but the wealth of the 
latter community per head is still the larger. 

It must be kept in mind, of course, that the com- 
parison is here of capital and not of income. Nothing 
would, in fact, be more interesting than to show the 
ditierent relation of income to capital in different 
countries. It does not follow that because one com- 
munity is inferior to another in the exchangeable 
value of its property either in total amount or per 
head, therefore everything has been said as to their 
relative resources. The differences in the stage of 
economic development they have reached, the poten- 
tialities as well as the actualities of their condition, the 
earning power as distinguished from the exchangeable 
value of the property, are all matters to be considered. 
The property test is useful as far as it goes, but it is 
not the only test. And we can all see that these 
points must be specially kept in mind with regard to 
the United States. A new country so full of un- 



Slalemeut showing the Population and Wealth of the United Scales 

decades from 1790 to 1880; Decennial percentage Increase cf 
Population ; Decennial percentage of Increase of National Wealth ; 
and Average Propertg to each person. {Sec tahle, p. 186 of " Essays 
in Finance," 1st series) -. — 





Decennial Per- 
centage Increase. 


to each 

r ^ 



Milu. dollars. 




1790 ... 


8750 (estimated) 


1800 ... 






1810 ... 






1820 ... 






1830 ... 






1840 ... 


3,764 (oflBcial) 




1850 ... 






1860 ... 






1870 ... 


30,069 ,, 




1880 ... 






* Allowance ought to be made here for the depreciation of the dollar 
between ISGO and ISVO. In the introduction to Vol. VII. of the Tenth 
Census of the Unit^id States, p. 8, it is also stated that between 18G0 and 
1870, allowance ought also to be made for the fact that slave property 
is included in the former census and had disappeared in the latter. Mr. 
Gannett suggests that, including slave property ia 1860, as well as in 
1870, and allowing for the depreciation of the dollar in 1870, i.e., reduc- 
ing the values at that date to gold values, the more approximately correct 
figures of the true valuation for 18G0 and 1870 would be : — 


... 9,253,000,000 dollars 
... 23,973,000,000 „ 

I have thought it more convenient, however, to retain the official 
figures in the text. It brings up to a point, what i.s said elsewhere, aa 
to the importance of price in these valuations. 


developed resources may develope much quicker than 
another. The comparison one day shows it to be 
inferior in capital or 2:)roperty to another community ; 
but the next time we look the whole position may be 

Let us next turn to France, which, for historical 
reasons, as well as reasons of neighbourhood, is by 
far the most interesting country to us, — next, at any 
rate, to the United States. 

Here, we find, computations of national wealth have 
been made, especially in recent years, as to which we 
may put the question how far they are comparable 
with our own. 

M. de Foville, whose name is so well known in this 
country, and whom every statistician must honour 
greatly for the good work he has done, has investi- 
gated the subject so thoroughly as regards France, 
summing up what has been done by others e.s well 
as himself, that one is necessarily spared a great deal 
of labour in the discussion. If there is any imper- 
fection in our reference, it will be easy for those 
interested to refer to the various writino-s of M. de 



It is obvious, then, at the outset, that it would not 
do to accept any valuation of property for another 
CO an try, and compare it with the figures above set 
out for the United Kingdom, and we must now add 
the United States figures, without looking into the 
details, and iniderstanding the process by which the 
account is made up. M. de Foville gives the follow- 
ing list of different estimates in recent years, and 
although the first is, perhaps, of too old a date to be 
comparable, yet the others are obviously recent 



enough, reo-arcl being had to the slow growth of 
population in France, to justify the expectation that 
they would approximate closer than they do if they 
were all made on the same basis : — 

Estimates of Property in France \iidns. stq^* 


Personal ' 









M. de Girai'din 

... 1853 




M. Wolowski 

...1 1871 




M. C. Due d'Ayen ... 

...t 1872 




M. C. D. Vacher ... 

...1 1878 




M. Amelin 

... 1878 




M. S. Mony 

... 1881 



4,040 1 


I need not weary the reader with the details of 
these estimates, though to the students who wish to 
understand what statistical method is, I can recom- 
mend M. de Foville's criticism and comparison. It 
is quite plain that, however useful even widely dif- 
fering estimates may be, if each set of estimates for 
different years is made up in the same ^^■ay, for show- 
ing the progressive accumulation of capital and the 
variations in the rate of accumulation, and for similar 
purposes, yet that such estimates themselves cannot 
even be compared with each other properly, or with 
those of other countries, without an understanding 
as to details and method. I need only mention that 
in some no distinction is made between incomes from 
property and incomes from personal exertion, but all 
are capitalised alike ; whereas in others, agreeing with 
the plan we hcive ourselves followed in the United 
Kingdom, and which appears to be followed in the 
United States, the idea of propeiiy, which is really 
exchangeable, is steadily kept in mind, and there is 
no capitalising of income, except there is property to 

* M. de Foville : " La France Econoiniqiie," p. 438. 



answer to it. M. de Foville refers to even larger 
estimates that liave been made in France than some 
of tlie above, but there is, of course, no need to refer 
to them. 

For all practical purposes I need only use for com- 
parison witli our own valuations M. de Foville's own 
estimates, because they are obviously devised with 
the same end in view, and have the confirmation to a 
large extent, as he points out, of partial estimates by 
M. Maurice Block, another name we must mention 
with lionour in this country, as regards real and 
personal property at different times in France. 

M. de Foville then niade the following estimate in 
1878, which he supplements by a less detailed esti- 
mate for the present time in his recent book, "La 
France Economique " : — 

M. lie Foville's Estimates of French Properti/. 





Real Property, exclusive 

Real Property, exclusive 

of Houses 


of Houses 


Houses, &c 


Houses, etc 


Freucb Proi^erty Abroad 


French Funds & Foreign 

Gold and Silver 




Farniture. Personal Pro- 

Other Moveable Property 


perty, Worlis of Art . . . 


Agricultural " Material " 


Farm Animals and others 


Agricultural " A.ppro- 

visionneuient " 


Other Commercial Capital 


Other Industrial Capital 


Marine, Arsenals, &c. ... 






The estimate for the present time is much the 
same in total as for 1878, but the details are generally 
not comparable. In reality, the 1886 estimate is less 
than the 1878 estimate, as it includes the amount of 
the French National Debt not included in the 1878 

Economiste Francaise, Jan. 18, 1879. f J^« France Economique, p. 442. 


estimate, but that there is ground for a reduction of 
some sort, or, at any rate, for little or no increase, is 
justified by M. de Fovilie on the score of the fall in 
prices and the consequent fall in value of much real 
and other property in the interval. 

In two respects, it will be observed, the above 
figures for the present time differ from those 
employed for the United Kingdom. They include 
in the valuation of property the amount of the home 
debt, which is not included in the above valuation 
for the United Kingdom, and which in France is 
a larger sum than it is in the United Kingdom, and 
they do not include the amount of Government and 
local property, which items are included in the 
valuation of the United Kingdom. M. de Foville 
discusses this point ; and, making an addition to his 
figures for the present time, so as to include the 
property of Government and local authorities, and 
then deducting the aggregate amount of their debts, 
he arrives at a sura of about 7,200 millions sterling, 
which would be properly comparable, as far as I can 
judge, with the valuation of the United Kingdom. 

An examination of the details confirms the vral- 
semMance of these figures for France. By far the 
most important item, it will be observed, is that of 
" real property not built upon," answering to the 
lands in our own returns, and for this figure there 
are undoubtedly abundant data, the net income and 
selling value, (the latter through the registration 
duties on the transfer of property,) being matters of 
official record. In point of fiict, the selling value of 
real property not built upon in France was officially 
reckoned by the French Financial Administration in 
1 882 at 3,6 G3 millions sterling, so that M. de Fovillu's 

180 THE GROWTH of capital. 

fiofure In ilie aljove estimate shows a considerable 
falling off. There are similar means of dealing with 
the next great item — the house property, which 
seems to me rather more highly valued than similar 
property in tlie valuation of the United Kingdom, 
if we assume, as I suppose we may, that farm-houses 
are valued with the land, but still not so highly valued 
as to make the comparison wholly out of place. As re- 
gards others, M. de Foville shows that he is quite alive 
to all tlie points to be considered, and it would be out 
of place to follow him minutely. That the moveable 
property of the United Kingdom must be enormously 
greater than in France goes without saying, though 
perhaps some may think not so great as represented 
by the figure of about G,000 millions sterling for the 
United Kingdom, and less than 3,000 millions for 

If the valuations of the United Kingdom and of 
France, in any case, are not properly comparable, the 
data as regards France are very fully supplied by M. 
de Foville, and there need be no mystery on the point. 

M. de Foville has discussed, with no small in- 
genuity, 8, method of ascertaining the amount of 
property in France from the amounts annually passing 
by succession, a process to which he has resorted in 
the absence of income tax figures corresponding to 
those which we have for England. The conclusion 
at which he arrives is that the averao-e annual 
amount of the successions, 'plus about a fourth for 
successions irder vivos, may be multiplied by 36 so 
as to show the amount of property held in tlie 
country — the assumption being that 1-3 6th part is 
succeeded to annually either by death or gift, about 
l-45th part by death alone. The speculation is a 


most interesting one, and is based largely upon 
data of a kind in the possession of the Ministry of 
Finance, which are either not in tlie possession of our 
own Inland Revenue department or are not pubhshed 
by them. Mr. Porter in this country, as I pointed 
out in my former essay, seemed to arrive at a similar 
proportion of 1-4 5th annually passing by death. I 
should like to see the question followed up more 
carefully both in this country and in France. Mean- 
while it may be observed that if the proportion can 
be assumed not to vary for considerable periods, as I 
think may be the case': there is every antecedent 
probability, looking at the slow change in the rates 
of mortality or the customs of people regarding 
inheritance, that it will not vary greatly : then the 
growth of property passing by succession should 
indicate the growth of property itself. Succession 
figures are most useful for our discussion. We can 
compare the rate of growth of property which we 
arrive at by successive valuations with the rate of 
growth indicated by the amounts passing at death. 

Looked at in this way there is no doubt that the 
growth of property in France has been very rapid, as 
rapid during the present century as in the United 
Kingdom. The following are the French succession 
duty figures at ten years' intervals since 1826 : — 

Successions and DoucUlons inter vivos awiualUj taxed in France at the 
untlernifniioued dates * 




£ Stfj. Mlus. 

£ Stg. Mlns. 

1 £ St^. Mlns. 


1 53-5 

; i8-o 

1 71-5 

1835 1 


' 20-8 



697 1 







1865 1 

121-2 1 




170-2 1 



1885 1 

216-3 1 

40- 1 


* La France Economique, p. 44(i. 



Allowing for a change in the method of vahiing 
rural property in 1(S75, these figures show compara- 
tively httle progress since that time, apparently con- 
lii-ming M. do Foville's disposition not to swell tin; 
totals, but rather to diminish them since he made his 
estimate in 1878. In the United Kingdom there 
would equally have been little progress, as far as we 
can judge, apart from the increase of population. 
Thus in France, as in the United Kingdom, the 
progress in money values has not been so great since 
1 8 75 as before. 

I do not propose to go into the subject of esti- 
mates of property in other countries. Students who 
desire to follow this subject will find references in 
M. de Foville's papers. The only other countries for 
which verifiable computation seems to have been 
made are Belofium and Italy. In the former case the 
estimate is that of M. Massalski, whose work I have 
not seen, but who has followed, apparently, the 
method of M. de Foville — the preferable method in 
a country which has data like those of France or 
Belgium or Italy — and who thus arrives at a total 
of about £1,200 millions (2 9 J milliards of francs) — a 
calculation so far supported by an estimate of £440 
millions alone for the value of the real property, land, 
and houses, which is stated to have the authority of 
M. Malou, who valued in 1880 lands at £300 
millions and houses at £136 millions."^ The total of 
£1,200 millions seems to compare closely with that 
above given for Scotland, which has a smaller popu- 
lation, but which is probably somewhat richer per 

* See De Foville:- "La France Econotuique," v. 446. I have not seen 
this calculation of M. Malou, but it is not improbable, as M. Malou has 
made a valuation of .£320 millions for the year 1S65 or thereabouts. 


head. With regard to Italy, we have the advantage 
of a very ehxborate study by M. Pantaleoni, a most 
able Italian economist, who discusses fully the whole 
question of valuations of property in different 
countries in his work, entitled, Ddl 'Ammontare 
Frohahile delta Richezza "privata in Italia, published 
at Rome in 1884. Finally, M. Pantaleoni adopts 
the method of M. de Foville in calculating from the 
figures of the succession duty by means of a co-effi- 
cient, though he supports the results by direct calcu- 
lations as to the value of lands and houses. In this 
way he arrives at a total of £1,920 millions for Italy 
composed approximately as follows : — * 

Mlns. stg. 



Other property 







I should have thought, at first sight, that such 
figures were too small for Italy, whose population is 
three-fourths that of France, but whose wealth, 
according to this account, is something like 2-7ths 
only. It is not essential, however, for our present 
purpose to criticise minutely ; M. Pantaleoni has cer- 
tainly discussed the subject in a proper manner, and 
I could not go behind his data. That he considers it 
not improbable that the private wealth of Italians is 
much less than that of Frenchmen is a fact of itself 
to be taken note of. The figures may not be very 
exact, but some such difference, we may be sure, 
exists, much else that is known of the economic con- 
dition of Italy agreeing with the estimates. 

* Pp. 221 et scq. 

134 THE cKowTir ok capital. 

Still, neither as t(j Belgium, nor Italy, do I wish to 
critise in detail, especially in the absence of any 
fiiTures as to the accumulation of canital which is our 
speciid topic. What I wish to point out is that, for 
tliose who care to follow up the subject, certain data 
are accessible in many countries, which would assist 
in the compilation of useful figures, although the 
limit of error would necessarily be somewhat wide. 
The chief items everywhere must be land and houses, 
and in most cases now railways, the first being rela- 
tively more important in almost every other country 
than it is in England. Limits of the valuation in 
gross of other items, if land, houses, and railways can 
be valued, are always capable of being ascertained, 
even if no exact figure can be stated. But it is 
absolutely necessary for comparison that the process 
should be set out in full ; that a valuation of capital, 
as much as possible, should be made on some calu- 
lation of income ; and that such points as whether a 
community is a creditor or indebted in respect to 
other nations should be allowed for. 



In my former essay, and in the introduction to the 
present essay, the uses to which general vakiations 
of the property of a community, and of the estimates 
of accumulation of capital derived from them, may 
be put are briefly indicated. After this long inquiry 
it may be useful to return to the topic, and explain 
in some measure how the statistics may be applied. 

But first let it be understood, as it cannot be too 
frequently repeated, that the figures, wliich can l^e 
arrived at by any method, are necessarily not exact. 
A detailed valuation of each description of property 
is hardly possible, and would present many difficul- 
ties of its own, while it would be subject in any case 
to the observation tliat only by a violent hypothesis 
can the property of a community be valued like tluit 
of an indidvidual member of it, seeing that it is not 
conceivable that it can all be the subject of a sale at 
a given moment. In actual fact, however, we ha\ e 
to be content with something that falls very far 
short of such a detailed valuation, and to apply 


average rates of value to gross quantities either of 
property or income wliicli are themselves imperfectly 
ascertained. For certain purposes the results may 
be good enough, and I believe are good enough ; but 
they are certainly not to be treated as sums in an 
account definitely ascertained, and compared one 
with another, without attention to the nature of 
the data themselves, and the similarity or dissimi- 
larity of the processes by which the results are 
arrived at. 

The uses to which the figures can properly be put, 
regard being always had to the fact that the data 
and methods employed are sufiiciently alike for 
the special purpose in hand, appear to be the fol- 
lowing : — 

1. To measure the accumulation of capital in com- 
munities at intervals of some length — not less, per- 
haps, than ten years — this having been the main 
object in view in my essay in 1878 on the accumula- 
tion of capital, and being perhaps the most important 
use to which such figures can be put. 

2. To compare the income of a community, where 
estimates of income exist, with its property. 

3. To measure the burden of national debts upon 
difi'erent communities. 

4. To measure, in conjunction with other factors, 
such as aggregate income, revenue, and population, 
the relative strength and resources of different com- 

5. To indicate generally the proportions of the 
different descriptions of property in a country to the 
total — how the wealth of a community is composed. 

6. To measure the progress of a community from 
period to period, or the relative progress of two or 


more communities, in conjunction with the flicts as 
to progress in income, population, and the Hke ; to 
apply, in fact, historically and in conjunction Avith 
No. 1, the measures used under the above heads 2, 3, 
4, and 5 for a comparison at a given moment. 

7. To compare the aggregate accumulation in a 
community Avith that portion of the accumulation 
which can be described as free savings, and which is 
gradually invested through the agency of the Stock 

8. To throw light on the question of changes in 
the value of money, which are themselves among the 
facts to be investigated and allowed for in comparing 
the valuations of different countries, or the valuations 
of the same country at different times. 

There are, no doubt, other uses to which the figures 
of national valuations, when judiciously used, can 
properly be put ; but tlie above, it may be allowed, 
form a good enough list if it can be shown, as I think 
it can, that with all their inexactness the figures still 
sujDply useful materials for discussion. There is, of 
course, no reason why such figures should not be 
used if they are exact enough for the purpose, and if 
they are the best obtainable. 

To take the various heads of comparison in their 
order, there can be no doubt, to begin Avith, that it is 
with reference to the accumulation of capital, and 
especially for the comparison of such accumulations 
over different periods, that valuations of property are, 
perhaps, most useful, and it was for this purpose 
mainly that the present study has been entered upon. 
Here, from the nature of the case, whatever rough- 
ness there may be in the property valuations them- 
Belves, the results arrived at become trustworthy for 


comparison, provided the same method is followed in 
the valuations. Of course, the figure of accumula- 
tion is itself mainly useful as a comparative figure 
for comparison with otiier figures, as we shall notice 
presently ; but accumulation is so obviously important 
a matter that it may be given a separate head. The 
problem w^h ether a community is adding to its pos- 
sessions or not is of manifest interest. 

That the calculation is rough is also no serious 
drawback to its utility. It is even important to 
know whether there is progress or not ; and not only 
can progress or retrogression be shown, but the limit 
of error is reducible to a narrow percentage. Accord- 
ing to a well known rule of statistics, also, the move- 
ment may be even more exactly appreciated than the 
amount of the accumulation at a given period. Sup- 
pose the accumulation at two dates to be inexactly 
stated, OAving to the necessary imperfection of the 
figures by 10 per cent., the intermediate accumulation 
will also be inexactly stated by an equal percentage. 
But the proportion of this intermediate accumulation 
to the total property at a given date, as it is itself 
only a fraction of the total, need not be inexact by 
more than a small percentage of that total property. 
When the figures of valuations of property, therefore, 
are spoken of as inexact, it should be remembered 
that the real utility of the figures is not thereby 
brought into question. The proportion of the accu- 
mulation to the property may be shown more exactly 
than the valuation of the property itself at a given 

We come next to the use of such valuations for the 
purpose of comparison with estimates of the income 
of the communities concerned. Here, again, minute 


accuracy must be unnecessary, while the utihty of 
the proposed comparison is obvious. Tlie relation 
between property and income, roughly as the figures 
may be done, must disclose something as to the 
economic condition of the communities, and help to 
render clearer the true idea of that economic condition 
which might be best derived from other sources. It 
is obvious, for instance, that the income of the com- 
munity of the United States is probably much larger 
in proportion to the property than it is in an older 
country. The f(xct that it is a community indebted 
to other communities instead of beino; a creditor 
community is, and is caused by, a material difference 
in their circumstances. It is because their income is 
so large, because their natural resources undeveloped 
or in process of development are so large, that they 
can afford so well to borrow. Potential is quickly 
converted into actual capital, and individual members 
of the community have less need of capital. But the 
circumstances are likely enough to change rapidly, 
and even now tlie different conditions of geographical 
groups within the greater community of a nation 
like the United States must present great variety. 

Of course, for any such purpose the figures of 
property valuation can only be used with great 
discretion, and by avoiding any attempt to reason 
finely, especially as approximate figures of income 
are as difficult as approximate figures of property. 
The conclusions which the figures may point to are 
illustrative and suggestive ; but it is wise, of course, 
to use them only with a due consideration on inde- 
pendent data of what their real meaning may be. 

The next special and obvious use of a property 
valuation which has been mentioned is to make a 


comparison ])etween it and the amount of national 
and local indebtedness. Here, again, there is no 
question of the appositeness and sufficient accuracy 
of the figures. We need give only a few illus- 

Our own National Debt looks enormous, but, after 
all, it is only about 7^ per cent, of the property of 
the country, a mere bagatelle, especially taking into 
account the fact of its being held at home, deducing 
the national valuation itself by any conceivable 
amount, it must still be a bagatelle. It is mostly, in 
fact, as well as appearance, a charge upon the income 
of property as distinguished from the income from 
personal exertion, and it has to be viewed as really a 
mode of distributing the wealth of the community 
among individuals, and not as a burden upon tax- 
payers, who are separate in fact, as well as in name, 
from the fundholders ; but, apart from such views as 
to the burden of National Debts, the proportion of the 
debt to the whole wealth of the country in our own 
case is plainly a small one, and would still be a small 
one, however much the valuation of the property 
might conceivably be modified. Even adding the 
debts of local authorities — about 200 millions in 
all — the indebtedness of the community to the fund- 
holder is inider 10 per cent. 

The value of these comparisons is even more clearly 
seen if we look abroad. In France, it is plain, the 
national indebtedness is a much more serious atiair 
than it is in England. The national and local debts 
together in France cannot be put at less than about 
1,200 millions sterling — about a sixth part of the 
property of the community as compared with a 
proportion of less than a tenth in the United 


Kingdom. No doubt in France, as in the United 
Kino^dom, the debt is only a mode of distributing the 
property of the propertied classes. What they j)ay 
as taxpayers they get back as fund holders ; but the 
difference in the two proportions must be felt in 
France as regards that portion of the debt burden 
which must be borne by the income from personal 
exertions as distinguished from the income of pro- 

In the United States, again, the debt is obviously 
a bagatelle. It is 300 millions only, or less, as com- 
pared with a property of, probably, at the present 
time, 8,000 or 9,000 millions, deducting what the 
community owes to foreign countries. Even if we 
add the indebtedness of State and local authorities, 
tlie United States, as a community, is singularly free 
from the burden of Government debt. 

Illustrations could be multiplied without difficulty, 
but it is easy enough to see that the question of 
National Debts could hardly be properly treated at 
all except in the terms of property, and that liowever 
widely property may be estimated useful comparisons 
between its amount and that of the debt may be 

We have next to deal with the use of such valua- 
tions as a rough measure of the relative strength of 
different communities, along with comparisons of 
other factors, such as territorial area, population, 
revenue, principal sources of revenue, and the like. 
Here there can surely be no doubt of the apposite- 
ness and sufficient accuracy of the figures. The 
comparison of the property of the respective com- 
munities in a line, as it were, even if it is somewhat 
roughly done, shows markedly how two communities 


niiiy diflfor in wcaJtli, and, as far as wealtli is a 
iiieasnro of stroiig-tli, qualifies any inferences tliat 
miglit be drawn from a comparison of population 
alone, or of one or two items of wealtli only, or 
of actual as distinguislied from potential revenue. 
Where the differences are great tlie value and neces- 
sity of the comparison are obvious. If they can be 
supplemented by comparisons of national income so 
much the better, and nothing else can supply their 

We have only to look at the estimates of property 
for the two chief countries mentioned in tlie pre- 
ceding chapter and compare them with similar results 
for the United Kingdom to perceive how any con- 
clusions as to relative strength from numbers of 
population and actual revenue alone must be 

In population France exceeds the United Kingdom 
a little; in Imperial revenue a great deal, though 
in Imperial and local revenue together, not so much. 
In popidatlon, the United States exceeds the United 
Kingdom enormously ; in actual Imperial revenue it 
falls short a little, though, perhaps, not so as regards 
Imperial, State, and local revenues all put together. 
A superficial examination of population and revenue 
alone would tempt to the conclusion that France has 
larger resources than the United Kingdom, because 
it has more population and more revenue ; and that 
the United States has more resources than either 
because it has larger population, and does not fall 
short in revenue when Imperial, State, and local 
revenues are put together. 

These conclusions themselves may also be true, apart 
from the data ; there may be other data to support 



them ; but at least the data we have been deahng 
with as to property show that it would be unsafe to 
rest in the conclusions without farther examination 
and discussion. 

Taking population alone, the figures for the three 
countries are about : — 

United Kingdom 


United States (part estimate) 




Taking actual revenue alone, the figures are :- 





State 1. 


United Kingdom (mlns.) 

France „ 

United States „ 








The amounts per head being : — 

United Kingdom 

United States ... 

£ s. 
4 10 
2 10 

In property, however, the figures would work out : — 

Total. Per bead. 

United Kingdom 


United States 




— showino; that if the United Kino^dom has fewer 
numbers tlian its great neighbours, and a smaller, or 
not greater, actual revenue, yet its property as 

* Not deducting for indebtedness to foreign countries. 


actually developed is greater, and especially greater 
per head, which must surely qualify very much the 
conclusion from numhers and revenue alone. That 
tliis must be the case can be seen by the simplest 
comparison between the property and the actual 
revenue. In France the Imperial taxation is nearly 
2 per cent, of the property ; Imperial and local 
revenue together, 2^- per cent, of the property. In 
the United Kingdom the proportion is for Imperial 
revenue about 9 per cent only ; for Imperial and 
local together, less than 1 1 per cent. Whatever the 
income from property may be, these differences in 
what is taken by the Government must be serious. 
Similarly, in the United States, although the taxation 
per head is less than in the United Kingdom, the 
annual revenue of the central government in propor- 
tion to the capital of the community mounts up to 
about 1 per cent, of the property ; and the annual 
revenues of the central state and local governments 
together to about 1-^ per cent, of the property. The 
notion that taxation in the United States is low com- 
pared witli the figure in the United Kingdom is thus 
shown to be unfounded, while we get a notion of the 
burden of taxation in France, which alters altogether 
the superficial impression conveyed by the amount of 
the national revenue itself. If we were to go farther, 
and compare taxation with income and taxable income 
as well as with property, the aspect of the facts would 
be still further altered, I believe, to the advantage of 
the United Kingdom in the comparison ; but it would 
clearly be useful also to compare the property. 

The broad facts are also such, it will be observed, 
that any possible variation from the true facts as to 
property would modify the conclusions very little. 


The greater wealth of the United Kingdom per head, 
as compared with either France or the United States, 
would still remain undoubted, however the figures 
may be modifiable ; though we must now conclude 
that in absolute amount at the present moment the 
wealth of the United States is probably much greater 
than that of the United Kingdom, and almost certainly 
as great. 

Comparing the wealth of the United Kingdom, or 
of France and the United States, with other States, 
such as Italy and Belgium, there is room of course 
for a still wider margin of error without affecting the 
broad conclusion of theii' immense preponderance in 

The preponderance of England by itself in the 
United Kingdom as compared with either Scotland 
or Ireland, especially Ireland, is equally apj^arent, 
and no possible modification of the figures would 
alter the conclusion. It is infinitely greater than the 
preponderance shown by population alone. 

A special point on this head may also be referred 
to. We hear a good deal of the vast expenditure 
on military armaments, and the burden they impose 
on certain communities. Heavy as the burdens are, 
does not the vast amount of property relatively indi- 
cate that the point of exhaustion may be more remote 
than is commonly supposed '? To treat this topic 
suitably would require a paper by itself, which I 
hope to write some day ; but it may be useful now 
to hint at the conclusions I am disposed to arrive at. 
The relativity of the burden of military armaments 
has been too little considered, I fear, by economists 
who have denounced them in the abstract, and whose 


(leminciations have, in fact, been falsified by the con- 
tinued prosperity of the countries which ought to 
have been ruined but were not. 

The next suggested use of the figures is that of 
indicating generally the proportions of the different 
descriptions of property in a community — how the 
wealth of a community is composed. Here we find 
that the relative bulk of the main descriptions of 
property comes out clearly enough, while the utility 
of being able to answer, however roughly, how much 
of the property is land, how much houses, how much 
is invested in industry, and so on, is manifest. These 
are obviously all matters which, may become of prac- 
tical interest in connection with problems of taxation, 
as they were, in fact, of interest at the beginning of 
the century, when Dr. Beeke made one of the studies 
on the subject to which reference has been made in 
the course of the present essay. The fact of exact 
figures being impossible hardly affects the value of 
the result. It is important, for instance, to know 
whether land represents about three-fourths, or 
a-half, or a-third, or a less proportion of the whole 
wealth of a community, although it may not be 
possible to state to a fraction whether the proportion, 
instead of being exactly three-fourths, is perhaps 70 
per cent, only, or perhaps 80 per cent. Within a 
very wide limit of error the figures may obviously be 
of some use. 

The value of the results is increased when his- 
torical comparisons are attempted, or comparisons 
between different countries. If in a country like 
England we find land at one historical period to con- 
stitute GO per cent, or upwards of the total w^ealtli, 
and then by a gradual descent to be less than 20 per 


cent., the value of tlie land itself almost all tlie while 
steadily increasing, then, in spite of inexactness in the 
figures, the broad fact is in many ways instructive. 
Whether the change, if more exactly described, would 
be from, say, 65 or 55 to 25 or 15 per cent., the 
nature of the change would hardly be afifected, while 
it is obvious that the limit of possible error is not 
nearly so wide. In comparing England with France, 
aofain, or with the United States, it is at once obvious 
that economic conditions are entirely different, seeing 
that England has less than a fifth of its wealth in 
land, while France has half, or more than half, and 
the United States more than a third. Minute accu- 
racy is here unnecessary, while the proportions, if 
fractionally changed, woidd still justify the broad 
conclusions which they now appear to justify. 

We come next to the question of applying the 
figures in the comparisons above stated in the 
illustration of historical problems, either in the 
history of a particular country or in the compara- 
tive history of one or more countries. Here, again, 
minute accuracy is less necessary than ever, while 
the appositeness of the figures is more than ever 
palpable. This has already been seen incidentally 
in various ways, as, for instance, with reference to the 
last head of the comparison where attention has been 
drawn to the changing proportion of land to other 
property in England. But many other illustrations 
could be given. To begin with, — The concrete in- 
stances already given in Chapters iii. and vi., have 
only to be mentioned to show how practically useful 
these comparisons may become. The conspicuous 
difference between the proportions of the National 
Debt to our resources at the end of the great wars 


148 TFiK f;iK)WTir of capital. 

at tliG beginning of the century, and at the present 
time, sliows, perhaps, most strikingly the vahie of the 
comparison. The whole debt, all(j\ving especially for 
the recent increase of the debt incurred for the 
purpose of making loans to local authorities, has not 
diminislied much in the interval ; but seventy years 
ago this debt amounted to a third of the property of 
the community. The accumulations of the com- 
munit}'- in the interval, from about 2,200 to 10,000 
miUions, or, in round figures, 7^ thousand millions of 
accumulations, arc about ten times the National 
Debt proper, and about eight times the debt of the 
Imperial Government and the localities put together. 
Comparing the progress of the accumulation with 
revenue, what appears is that, whereas the revenue of 
the State seventy years ago was equal to a tax of 
aljout 3 per cent, on the property of the community, 
it is now, as we have seen, about 0*9 per cent, only of 
the property, and, even adding local revenues, the 
whole is less than 1-| per cent, of the property. The 
burden of Government is thus greatly less than it 

When the respective amounts per head are com- 
pared, the facts are exhibited even more strikingly. 
Whatever doubts, it may again be repeated, exist as 
to the valuations themselves, yet the limit of error 
is such, when we compare such distant intervals, as 
to leave no doubt that, when all possible corrections 
are made, the comparisons of the accumulations with 
the growth of population, revenue, and debt would 
be substantially unaffected. Tiiat there has been an 
immense reduction of burdens compared with re- 
sources is clear. 

Even comparing the last two or three decades only. 


where we have not the advantage of distant intervals 
to take away the effect of unavoidable error in some- 
what rough computations, the figures are found to 
be so large as to justify our affirming with certainty 
a great reduction of burdens. Between 1865 and 
187.5 the increase of property, amounting to 2,400 
millions, was about three times the debt ; between 
1875 and 1885 the increase, amounting to 1,500 
millions, was nearly twice the debt. Tlie valuations 
at each date may be rough, but being made on the 
same basis on each date, the figures as to the accu- 
mulations can hardly be exaggerated. Suppose tlie 
mode of valuation to exaggerate the property at a 
given date 10 per cent., the effect would be to ex- 
aggerate the accumulation between two dates by an 
equal percentage. In the first period, therefore, the 
correction would be to substitute about 2,160 for 2,400 
millions, and in the second period to substitute 1,."350 
for 1,500 millions, which would for all practical pur- 
poses show so enormous a growth of property in com- 
parison with debt as to make the difference between 
them and the larger figures immaterial. 

The figures, of course, are only to be used in con- 
junction with other facts, and such a fact, for instance, 
as the fall of prices qualifies them materially for some 
comparisons. In the present case, however, the com- 
parison is of one money value witii another, and the 
relation of property to debt has changed in the way 
described. It is quite conceivable, however, that 
along with changes in a community as regards real 
wealth, wealth in things as distinguished from money 
values, in tlie direction of greater prosperity, or the 
reverse, there might be changes in money values in 
the opposite direction. All that is noticed here is the 

150 'iMiF> (;r()W'I'ii of cai'ITAL. 

actual change as between property and debt, which 
is not affected by this consideration. 

The comparisons are even more interesting wlien 
we pass to France and the United States. In France, 
it may be doubted whether property has been in- 
creasing for several years, but debt has been increasing. 
Between 18G5 and 1875, again, came the Franco- 
German war, which added several hundred millions to 
the debt. If we go back fifty years ago or so, it might 
appear that French resources liave increased to an 
enormously greater amount than the debt ; but it 
may be doubted whether the proportion of debt to 
resources is not higher than it was — at least, if a 
comparison is made for the last ten years or so. 

In any case, if there is improvement in France as 
regards resources in relation to debt, and a similar 
improvement as regards property and revenue, it is 
not so great an improvement as there has been in 
the United Kingdom in the same period. 

The same facts could be shown by a comparison of 
the growth of expenditure only, which has been much 
greater in amount and proportion in the last fifty 
years than it has been in the United Kingdom ; but 
the relation between resources and burden makes the 
comparison far more complete. 

The history of the United States on this head 
is quite the opposite. As lately as 1865 the 
United States had a debt of 600 millions sterling, 
with an annual charge of 30 millions sterling, bearing 
a considerable proportion, there is no doubt, to the 
property and resources of the country at the time. 
The sum of 600 millions, as compared with the true 
valuation of 1860 above given, is about 20 per cent. 
Now the debt is only half what it was, and the 


property is three times what it was. The debt, from 
being a fifth of the property, has, in the short period 
of twenty years, become one-thirtieth only. 

In no other way coiikl the difference in financial 
progress between France and the United States be 
so vividly shown as by introducing this factor of 
property in dealing with the financial history. The 
difference between the United States and the United 
Kingdom, though not so marked, is also very great. 
Our accumulations in the same period are about five 
times our debt, which has not much changed in the 
interval. The accumulations in the United States 
are ten times what the debt was at the commencement 
of the period, and twenty times what it is now. 

Of course the results thus arrived at are only 
materials for the critical economist or histoi'ian who 
has to discuss causes and consequences. The United 
States may have acted unwisely and might have been 
able to exhibit even better results if it had acted 
differently. Either France or the United Kingdom^ 
on the other hand, may have done the best that could 
be done witli the means at their command. Com- 
munities have their good and bad fortune. The 
criticism and discussion should be all the clearer, 
however, the better the facts are brought out. 

We come next to the use of the statistics for com- 
2)aring the growth of the capital in a given period 
with the amount annually available for investment 
through the mechanism of the Stock Exchange. On 
this- head the figures appear to be most instructive 
as regards an economic fact of exceeding importance 
and difficulty. It is most difficult to realise, until 
one thinks of it, that savings in the modern indus- 
rlil world can only bo made by a conununity as a 


whole as they are invested ; saving and investment 
go on 2)ot?'i passu. But the appreciation of this fact 
is necessary to the comprehension of our monetary 
system. If the two things were not to go on i^ccri 
2KISSU, and the saving community in all directions 
endeavoured to heap up its savings in hard cash even 
for a month, certainly if it did so for a year, the 
Money Market would collapse. The accumulations of 
a single year, even taking them at 150 millions only, 
according to the figures of 1875-85, instead of the 
higher figures of the preceding decade, would absorb 
more than the entire metallic currency of the country. 
They cannot, therefore, be made in cash. An indi- 
vidual may save by depositing what he calls cash 
with his banker ; but the banker must either invest 
directly or indirectly through a borrower, and there 
must be new investments for the new money, or the 
investments could not be made in the aggregate, for 
although the banker or his borrower may purchase 
old investments, the seller has immediately the same 
money to re-invest. Hence the importance of the 
question of what has been described as free savings 
coming on the Stock Exchange for investment, as 
compared with accumulation generally. Savings, in 
fact, are made as a rule individually. A shopkeeper^ 
or merchant, or manufacturer making profit adds to 
his stock, or improves his premises, or buys a new 
house. In this or some similar way profits and 
savings are invested directly as they are made, and 
tliey have no visible effect on the Money Market. 
The industrial world could not, in fact, go on unless 
by a fixed arrangement for saving, — a portion of the 
community being constantly employed by the savings 
directly to create the investments in which the 


savings may be put. It is only a certain part of 
the whole savino^s which ffoes to the Stock Exchanofe, 
and seeks new securities of the kind dealt with there. 
Even a portion of this part is comparatively steady ; 
but there is a varying surplus, and the changes in 
this surplus, or final margin, are most significant of 
the general state of trade. When the surplus is at 
a maximum it is a sign of inflation, of great and 
unusual profits in trade ; when it is at a minimum it 
is a sign of losses and discredit. It is probable that 
even the final margin never varies so much as it 
seems to vary; ditiiculties arising through people, 
when prosperous, engaging to invest more than they 
afterwards find they can save, but the real savings 
not even then being changed. But there are un- 
doubtedly variations in the final margin which it 
would be interesting to trace. Whatever it is, let it 
be understood that the margin is one which, like all 
other savings, is accruing constantly, and is constantly 
being invested. If it were not so, there would be a 
great accumulation of cash in the banks, and this we 
never see. 

How much is the free saving in proportion to the 
total, how much is the margin, and how much does 
the margin vary 1 No complete answer can be given 
to these questions; b\it from calculations I have made 
at different times I should say that about 80 millions 
annually represents this free saving, or about a thii'd 
of the annual accumulations between 1865 and 1875, 
and about a half of the annual accumulations be- 
tween 1875 and 1885. This means, however, that 
the amount as a rule is about a third, because the 
faU of prices has to be allowed for in the latter 
period. But for this fall the money value of property 


at the present time would be more than it is, and 
we may assume that the new accumulations, in 
things, have been more than the difference of the 
valuations in 1875 and 1885. In any case the figure 
must be a large one. The saving in the form of new 
houses and furniture, the largest items in the above 
list, is not free savings ; and the same may be said 
of many of the investments in mines and other pro- 
perty, especiall}' in trades and professions. The 
savings are invested as they are accumulated, directly 
by the owners, and are not free. As to the final and 
varying margin it is impossible to give exact figures, 
but even a small sum, sucb as 20 millions, coming on 
the Stock Exchange in a fat year compared with a 
lean year probably makes an enormous difference. 
Any greater apparent difference probably implies 
much inflation and paper profit which swells Stock 
Exchange prices for a time, but disappears as it 
began. The free margin, whatever it is, goes very 
largely into foi-eign and colonial securities, but the 
exact amount invested in this manner cannot easily 
be traced in consequence of the continual sales and 
purchases of old securities as distinguished from new 
issues which are being made. It is quite easy for 
the Stock Exchange of London to purchase and bring 
over from New York batches of existing American 
securities, the money which is paid for them being 
invested by Americans in new securities. The rule 
that there cannot be a new savins: in the ap-o-reofate 
without a new investment is thus complied with ; 
but the aggregate in the case supposed must include 
the whole field of investment — the new investment 
need not be at home, and it may be made abroad in 
an indirect manner. Qtia the English investor the 


transaction is the purchase of an old security, but 
qua the general field of saving and investment, there 
is in the whole transactions a new investment. 

The final question to be treated is the use of these 
general figures in discussions as to changes of prices 
and in the purchasing power of money. Illustra- 
tions have already been given on this head in con- 
nection with the question of the comparative rate of 
progress of accumulation in difierent periods during 
the last fifty years and longer (see Chapter iii. 
supra) ; but it may be useful to point out even more 
generally how the figures may be used. 

It is plain, then, that ihe results of the valuations 
of the property of the community at difierent dates 
unavoidably suggest that changes of prices may have 
to be allowed for. The increase of the valuation, it 
is plain, may either be in exact proportion to the 
increase of population, or in proportion to that 
increase multiplied by an assumed increase of the 
productive capacity of the j)eople in the period under 
review. If two periods are compared in which the 
increase of population is known to be at much the 
same rate throughout, and the increase of productive 
capacity may be assumed to be at the same rate or 
not less in one of the periods than in the other, then 
if the apparent accumulation of capital in the one 
period proved to be less than in the other, it must 
be ascribed to some change in the money values. All 
other factors are equal, but the money expression of 
wealth has not increased as it would have done if 
prices had also been equal. This has been fully 
shown in the illustration already referred to froni 
recent periods in English history. The utility of the 

150 TiiK nnowTir of capital. 

iii^-mcs, tlicreforc, to illustrate changes of prices is 

'J hat the phenoineim are quite general is obvious, 
moreover, from a comparison with the French returns 
of successions already referred to. Whatever may 
be the causes of these changes of prices, their visible 
effect on the periodic valuations of property leaves no 
doubt that they can only be described as significant 
of changes in the purchasing power of money — in the 
ratio of exchanges between money and other things. 
If the valuations were to be corrected by the ratio of 
exchange of a group of staple articles, a more steady 
rate of growth would be apparent. 

Farther, there is no doubt that in future such 
valuations may even be more useful m connection 
with questions of changes in prices than they have 
been in the past. As valuations are made more fre- 
quently from time to time, and the method and data 
improve, while other data, showing the progress of 
population and of industrial power, also improve, the 
varying rates of the accumulation of property as ex- 
]iressed in money cannot but attract attention. The 
failure of a money accumulation to come up to a 
normal rate, or its excess over that rate, or its corre- 
spondence to that rate, will all be matter for observa- 
tion and discussion, and will serve to correct and 
qualify the notions as to changes in the standard 
itself which may be otherwise arrived at. It is 
already permissible to anticipate that the next 
valuation of the United Kingdom may show about 
as slow a progress as that of the last decade, and not 
the rapid advance of the years 1 855-7 j. The same 
in other countries. The reason being not that real 
wealth — the wealth in things — is not progressing at 


as great a rate as ever it did before, but that tlie 
material of which money is made, notwithstanding 
the constantly new appliances for the efficiency of 
money, does not alter in such a way as to maintain 
prices at their former level. 

Valuation of property, therefore, and studies of the 
accumidation of capital, though the figures are neces- 
sarily rough, have their nses in various investigations. 
They make a little clear what would otherwise be 
most dark, and they suggest problems for inquiry 
which would not otherwise be thought of The 
figures, though rough, can be reasoned on safely with 
care. Better figures would be desirable, but in the 
absence of better figures it would be folly not to 
use what we have, and set our wits to work to use 
tliem properly. 

I should be disappointed, however, if the discus- 
sions of the last few years do not lead in time to the 
production of better figures. As the practice of 
periodic valuations continues, light should be thrown 
on the value of the method and the way in which it 
can be used properly, while investigations could be 
made by means of the various property taxes and 
otherwise which would throw light on some of the 
more difficult parts of the problem. If the Inland 
Eevenue Department, for instance, were to inquire 
into the proportions of different kinds of property 
passing at death, and to publish the results, these 
proportions might become a check upon general 
valuations of property. The resemblances or diflfer- 
ences in the proportions might suggest points for 
inquiry, and by arguing from the known to the 
unknown, useful corrections, at least, in minor details. 


could probably be obtained. The census might also 
be made use of, as it is in the United States, in order 
to obtain data for an independent valuation apart 
fi-om the Incf>me Tax returns. Were all this trouble 
taken, results would be arrived at which would be of 
the utmost value to the Government practically, as 
well as to economists in their discussions. The 
progress of revenue is intimately connected with the 
progress of national resour-ces, and the progress of 
money revenue witb the progress of the money 
expression of these resources. The resources them- 
selves and the money values must be studied by 
Chancellors of the Exchequer with almost equal 
anxiety, and they sbould both, at any rate, be studied 
together. Periodical complete valuations of property 
are in this view as indispensable as the census of 
population itself 




I. — Estimate of Annx;al Interest on English CAriTAL Invested 
Abroad in Public Loans or Shares of Companies. 

(Compiled from "Investor's Monthly Manual," 31st May, 18S6, and Banking 
Supplement to " Economist "for 22nd May, 1SS6.) 

[OOO's omitted.] 


1. Public Loans ia " Manual " List, exclusive of 
United States, French, Austrian, and Italian,' 
only partially held here, and of Prussian, Dutch, 
and certain (recent) Russian loans, almost wholly 

held abroad 38,470 

Add estimate for proportion of United States, 
French 42 per cents, Austrian, and Italian 
held here. Total interest = d£37,267,000, say 
Totb.* 3-726 

2. Railways. — 
(a) United States, excepting shares and bonds of 

lines in default 1 3,906 

(6) Indian and Colonial 6,264 

(c) Foreign, £7,0i:2, less iil,16S, half of Lombardo- 

Venetian interest 5.874 

(of) Add — French railways ^6 17,990, say j'oth held 

in England Ij799 

3. Dividends of Anglo-Foreign and Colonial ' 

(a) Banks 

(b) Canal companiesf 314 

(c) City loans 964 

(d) Gas and waterworks i>o93 

(e) Coal, iron, and steel companies 120 

(/) Land, financial, and investment companies ... 1,328 

(17) Tea Companies 71 

(h) Other companies Ij293 

(i) Mines 500 

4. Capital investment of English insurance com- 
panies doing business abroad, say ^£11,000,000 at 
per cent 

5. Deposits of Anglo-Foreign and Colonial banks, = 
.£170,000,000 (EconomistJ, at say 3 per cent ,.. 

Total I 





* In 1878 this item was estimated at li\\, but apparently since that time the 
English holding of these particular securities would scorn to have been diminished 
in proportion. 

t Exclusive of Suez Canal Shares. 



ir.- Sidumarij of List of PttUic Issues of Loans and nndcrtalcinrjs on 
account of Foreign Countries in the years 1876-85 incli.sivc, as puh. 
lislied in " Stat'istical Societfs Journal," March, 1882, pp. 91 et seq 
and to he continued in the " Statistical Society's Journal'' for 1890. 

[lu tlioiisauds of pounds, OOO's omitted.j 

1876. 1877. 


Colonial Government 

16,210 7,37C 

Municipal Loans fcSl 97-1 

Foreign Government^ 

Loans ' 3,i79i 6,272 


1878. ; 1879. , 1880. 1881 

11,151 18,934 12,982 11,168 

I . i 

792 1,538 1,368 100 




9,177 24,097 23,937 

Railway Issues c,242 

Miscellaneous Com- 

Mining Companies 


25,642 18,780 


10,730 ... 


859 6,471 10,083 

2,931 2,626; 14,671 26,302125,260 


25,901 23,098 29,880 44,041 ' 45,166 

755 4,040 3,990 13,542 17,122 
7,0.51' 11,082 2,C43 


1,512 1,832 

,601 10,329 






48,764 48,852 

15,028 12,267 
2,500 3,852 




T^I^^-— Valuation of England, Scotland, and Ieeland, separately, 
ACCORDING TO Incomk Tax Eeturns. — Year 18S5. 


Amount of Income in hicome Tax Returns, derived from Capital; Number 
of Tears' Purchase at which the saine may be Capitalised ; and Approxi- 
mate Amount of Capital, together ivith Estimate of remaining Income 
and Capiital in the Country. 

[OOO's omitted in amount columns.] 

Under Schedule A — 



Other Profits 

Schedule B — 
(Farmers' profits) . . 

Schedule C— 

(Public funds less home funds) 

Under Schedule D — 








Market Tolls, &c 

Other public companies 

Foreign and colonial securities, &c 

Railways in United Kingdom 

,, oixt of United Kingdom 

Interest paid out of rates, A;c 

Other profits 

Trades and professions — one-fifth of 
total income of ^154,300,000 , 




















Total under Income Tax 355,411, 

Trades and professions omittefl, 20 per cent, of* 
amount asses^sed, or ±'30,872,000, of which one- > 
fifth is ) 

Income of non-income-tax paying classes derived ) 
from capital ." J 

Foreifrn investments not in Schedules C or D 

Movable i)roperty notyieldinfj income, e.g., furni-li 
ture of houses, &c., works of art, &c ) 

Government and local property, say 





































* The nuraher of years' purchase here is a small fraction over 15. 

t Estimate of income osuapiug assessment by laismg limit of exemption in 1876 





Amount of Income in Income Tax Returns, derived from Capital; Number 
of Years' Purchase at tvhich the same may be Capitalised ; and Approxi- 
mate Amount of Capital; together with Estimate of rcnaininj Income 
and Caxntal in the Country. 

[OOO's omitted iu amount columns.] 

Under Schedule A — 



Other Profits 

Schedule B— 

(Farmers' profits) 

Schedule C — 

(Public funds less home funds) 

Under Schedule D — 








Market Tolls, &c 

Other public companies 

Foreign and colonial securities, &.c 

Kail ways in United Kingdom 

„ out of United Kingdom 

Interest paid out of rates, &.c 

Other profits 

Trades and professions — one-fifth of ) 
total income of .£19,215,000 ) 

Total under Income Tax 


Trades .ami professions omitted, 20 per cent, of) 
amount assessed, or £3,843,000, of which one- [- 
lifthis ) 

Income of non-iucome-tax p.aying classes derived 7 
from capital } 

Foreiirn investments not in Schedules C or D 

Movable property not yielding income, e.g., furni- ) 
ture of houses, &c., works of art, &c J 

Government and local property, s.ay 








r>, V ' Capital. 
P rchase '■ 






















• The number of years' purchase here is a small fraction over 15. 

+ Estimate of income escaping assessment by raising limit of exemption in 1870 



Amount of Income in Income Tax Returns, derived from Capital; Numher 
of Tears' Purchase ativ'hich the same ma]/ he Capitalised ; and Ai->proxi- 
mate Amou7it of Capital; together with Estimate of remaining Income 
and Capital in the Country. 

[OOO's omitted in amount columns.] 

Under Schedule A — 

L ands 


Other Profits 

Schedule B— 

(Farmers' Profits) 

Schedule C — 

(Public funds less home funds) 

Under Schedule D — 






Canals, &c 


Market Tolls, &c 

Other public companies , 

Foreign and colonial securities, &c 

Railways in United Kingdom 

„ out of United Kingdom 

Interest paid out of rates, &c 

Other profits 

Trades and professions — one-fifth of ) 
total income of <£G,904,000 ) 

Total under Income Tax 

Trades and professions omitted, 20 per cent, of") 
amount assessed, or £1,381,000, of which one- f 

fifth is ; 

IncoiuG of non-income-tax paying classes derived ) 
from capital ) 

Foreign investments not in Schedules C or D 

Movable property not yielding' income, e.g., furni- ) 
ture of houses, &c., works of art, &c j" 

Government and local property, say 















































1 ,220, 















* This is less than the averapre for the United Kinfrdom. 

t E.stimatc of income escaping assessment by raising limit of exemption iu 1876. 


IV.— Mr. Beekk's Valuation of Great Britain circa 1800. 

Extract from Mr. Beeke's Observations on the Produce of the Income Tax 

4'-c. (irp, 182-5.) 

I SUBJOIN a sbort statement of the present value of the capital 
of Great Bi-itain, abstracted from one which I drew up with 
some attention a few years at^o, and which was calculated on 
fjrounds similar to those of the preceding estimate of income. 
It will not be expected that I should here enter into the parti- 
culars of my calculations, but this summary sketch may have its 
utility in poiming out the amount to which human industry has 
raised the value of this country beyond that of its natural pro- 
duce, and in giving some idea of the immensity of the losses 
which might be occasioned by an overthrow of the principles of 
order and a disregard of the security of property. Fur this 
reason I have included a very moderate estimate of many 
articles of public property not convertible into money (at least, 
to any considerable amount), but which are necessary to the 
enjoyment of civil society in its pi-esent form, and which were 
originally provided, and must be replaced if destroyed, at an 
expense vastly exceeding what I have allowed for them. 
Peoductive of Income. 

1. Cultivated lands. South Britain, .£600,000,000 ; North! £ 

Britain, iJl 20,000,000.* | 720,000,000 

2. Tithes, in South Britain only after deductions for thej 

personal service required on account of the part 

possessed by the clergy.f 75,000,000 

3. Houses not included in the rent of lands + ' 200,000,000 

4. Mines, canals, limber, tolls, &c., &c.§ ' 100,000,000 

5. Present value of income from the public debt [ 300,000,000 

6. Farming capital, equal at present to not less, on an| 

average, than 5 clear rents, viz., pasture, 2 to 3 ; 

arable, 5 to 7 rents 125,000,000 

7. 120,000,000 

8. Foreign trade and shipping** ! 80,000,000 


Unproductive of Income. I 1,720,000,000 

9. Waste lands, after exckiding all such as are incapable' £ 

of any improvement adequate to the exj^ense, and' 
also allowing for incidental diminution of the value; 
of adjacent lands in case of their loss of the benefit of 
pasture. See., about 10,000,000 acres 30,000,000 

10. Household furniture ! 160,000,000 

11. Plate, jewels, and all other useful and ornamental, 

articles not considered as household furniture I 50,000,000 

12. Specie, about ' 40,000,000 

Unproductive private property 280,000,000 

Productive private property 1,720,000,000 

Total 2,000,000,000 

• See p. 19, &c. t See p. 2S, &c. J See p. 38. § See p. 36, &c. I| See p. 112 &c. *♦ See 
p. 44, &c., and 111. [These references arc to the pages in Mr. Beeke's pamphlet.] 



The value of that part of the permanent income * of the £, 

nation which is applicable to the annual expenditure, 
about '.. ' 160,000,000 

The value of that part which is appropriated to extinguish 

the public debt, about ' 90,000,000 

Value of shipping, arsenals, national buildings, stores, 
credits, and all other assets, after deducting all un- 
funded debt j 15,000,000 

Value of all provincial and municipal buildings, &c., &c., asi 
churches, hospitals, bridges, prisons, &c., &c., with thei 
effects belonging to them I 25,000,000 

* This calculation is founded on the produce of the national income 
in 1 738, exclusive of the aid and assessment, or any other temporary 
articles. In 1799 that produce was much more considerable. 

N.B. — A good deal of public has been already estimated jointly with 
private property, such as the crown lands, corporate incomes, &c., &c. 
But in so general a statement as this a more accurate analysis appears 
to be unnecessary. 

The above statements must certaiuly, in many parts of them, 
depend on circumstances which allow a considerable latitude of 
conjecture; but they are not made in any instance without some 
attention to the general, civil, and political economy of the 
country, and probably do not vary more than one-tenth, at 
most, from the real value of the whole capital of Great Britain, 
which appears to be about d£2, 300,000,000 or between two 
thousand and two thousand live hundred millions sterling, 
exclusive of any value which might be assumed for personal 
labour ; and also exclusive of foreign possessions to the value of 
at least ^81 00,000,000 sterling, which belong to settled inhabi- 
tants of this country, and which, therefore, if sold, and if the 
produce of their sale were remitted to Great Britain, would 
obviously be considered as a part of the national capital, and 
perhaps ought now to have been included as such in the pre- 
ceding estimate of productive private property. 



V. — Mr. Lowe's Valuation of xifE United Kinodom circa 1822, 

Extract from Mr. Joseph Lowe's "Present State of Ewjland" 

(Appendix, pp. S2-!i). 


Great Britain and Ireland. 


for 1812, nearly 

in the form 

adopted by 

Mr. Colquhoun. 

A similar 


for 1823. 

Land under cultivation, -whether in 

pasture, tilla<,'e, or trardons 

Farmin<jj capital, whether vested in 
iinpleuients of husbandry and farm- 
injr btock, or in corn and other pro- 

Dwellint? - houses, warehouses, and 


Manufactured goods in progress or 
ready for sale, whether in manufac- 
tories, warehouses, or shops ; also 

foreign merchandise on hand 

British shipping of eveiy description... 
Here it seems fit to make an addition 
to Mr. Colquhoun's statements on 
account of — 
Mercantile and manufacturing capital 
not specified by him, viz., money 
in hand, advances to correspondents 
abroad, manufacturing machinery, 
tools and implements of mechanics... 
This carries to nearly ^£300,000,000 
our mercantile and manufacturing 
capital employed in current busi- 
ness, and exclusive of whatever 
capital our merchants may have 
in fixed property, such as the 
f unds^ land, or houses. 
Such are the great heads of our 
national property — the lessei', as 
given by Mr Colquhoua, are — 

Mines and minerals 

Canals, tolls, and timber 


1 ,280,000,000 




1 60,000,000 


1 30,000,000 






This table is to be uuderstood as representiucr private pro- 
perty, aud exclusive of — 

1. All public property, such as niilitaiy stores, churches, hos- 
pitals ; also of 

2. Such ]n-ivate property as is unproductive — viz., waste 
lands, furniture, or wearing apparel ; and, finally, of 

8. "Whatever is expressive of a debt from one part of the com- 
munity to another, such as the stocks, mortgages, or mercantile 

Ai'i'ENDlX. i6*J 

How, it may now be asked, does it happen that the decrease 
of our national property, since the peace is so much less than is 
commonly supposed 'r* The reasons are — 

Laud, as a property, is worth, in peace, from thirty-two to 
thirty - five years' purchase; in war, only twenty-seven or 
twenty-eight years' purchase; so that, though on our rental we 
reckon a fall of fully 30 per cent., the j^rincipal has not sunk 
above 15 or 20 per cent. 

Farming capital experiences at present a depression of value 
far beyond the reduction in our table, but its amount in 1812 
was, we believe, underrated by Mr Colquhoun, while, in point of 
quantity, whether of implements, cattle, or corn on hand, it has 
increased, probably, 20 per cent, since that year. 

As to buildings, whether warehouses, manufactories, or dwell- 
ings, the surprising increase in the number appears fully to 
have balanced the decrease of rent, particularly as such decrease 
appears to have been much smaller in this kind of property than 
in land. 

In our manufactured and foreign goods on hand the fall of 
price, great as it has been, is nearly equalled by the increase of 
quantity. In our shipping the case is otherwise, and we have 
accordingly made a large deduction. 

Such is the comparative amount of our national property in 
1812 and 1822 when represented in money of the respective 
years. But were the calculation for both made in money of 
equal value, the balance would be in favour of the present year ; 
we mean, that the valuations for the present year, if made in 
the money of 1812, would not be short of 082,500,000,000. 

Were we to take a retrospective view of the value of our 
national property since 1792, we should, in the absence of satis- 
factoi'y returns for the earlier years, estimate it at two-thirds of 
the present amount. 


4th Edition Revised. Demy Svo. 10s. 6d. 



Contents : — 
The Cost of the Franco-Gprman. War of 1870-71 — Depreciation of 
Gold since 1848 — The Liquidations of 1873-76 — Depression of Trade 
greater in Raw-material Producing Countries than Manufacturing 
Countries— Foreign Competition— Excess of Imports— Recent Accu- 
mulations of Capital — Depreciation of Silver — Mr. Gladstone's Work 
in Finance — Taxes on Land — Reduction of the National Debt — 
Taxation and Representation of Ireland — Bimetallism — Fall of 
Prices of Commodities in Recent Years. 

"It is impossible to read a pa^e of these essays without being struck by the careful and 
conscientious character of the work displayed in them. We feel that we arc dealiufr with 
a man who is giving us the fruit of honest labour. Every problem he attacks is fairly 
considered on every side." — The Times. 

Second Edition. Demy Svo. lis. 



Contents : — 
Trade Depression — Gold Supply, the Rate of Discount and Prices 
— The Effects on Trade of the Supply of Coinage — Bank Reserves — 
Foreign Trade of the United States — The Use of Import and Export 
Statistics — Foreign Manufactures and English Trade — The Utility 
of Common Statistics — General Uses of Statistical Knowledge- 
Progress of the Working Classes in the last Half-Century. 

"Those — and they are many— who desire to know what the material condition of the 
country really is at the present time will do well to study this volume." — Alhcnivam. 

" Tho(=e who are at all sceptical of the value as well as interest of statistical inquiries 
may be advised to read this volume, since Mr. Giffen aims at strictly practical ends." — 

hailij Clii'oniclc. 


An Essay on the General Causes of Fluctuati(m in their Price. 
Enlarged by an Appendix of Evidence given before the Royal 
Commission on the Stock Exchange. Demy Svo. Ss. Gd. 

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Address to the Economic and Statistics Section of the British 
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