CAPITAL AND CONFIDENCE.

Colonist, Volume III, Issue 269, 18 May 1860, Page 4

CAPITAL AND CONFIDENCE.

A veky elaborate article in a weekly contemporary was devoted to explaining that capital is now very abundant in Lombard-street and the Bank, because trade is slack. This, as we hope our readers are aware, is our opinion, but we are not of those who believe that capital is the moving power of society, while our contemporary is. With the doctrine that the quantity of employment in any society dedepends on its capital," and that "capital sets labor iv motion," which is not our. creed, we find it bard to reconcile the assertion tbat loanable capital is abundant, because commerce remains nearly stationary. According to the theories of our political economists, the amount and the activity of the national industry, including trade, are always in proportion to the national savings. Now they tell us the fact is not so. Saving goes on more rapidly than enterprise ; the demand for capital doe 3 not keep pace with its increase. There are plenty of men ready to work ; capital cannot set them to work, and it falls in value. The rate of discount is low, 2^ per cent., because trade is slack. Something more, therefore, is required to set industry in action than saving or capital and that something is hope or confidence.

In the bank of France there are now about £24000,000, and letter after letter from Paris says the Trench merchant or trader cannot be got to move. Trade is very slack.in Paris, notwithstanding the abundance of capital. The traders there aud in France generally are afraid, if they import additional commodities, they wiU not be purchased at a remunerative price;' that if they manufacture more goods they will not find a market for them ; tbat ■if they work up all the raw material they have on hand tbey will find it difficult to get more at a reasonable rate; they have little hope or no confidence, and so they aro not active, diligent and enterprising. The industry they have set in motion, with the wealth it has created and accumulated, have been directed to purposes of ruin and destruction; the enjoyment they anticipated from their exertions has been snatched from their lips; they ar« afraid that further exertions will be no better rewarded; they don't know what the Emperor willl dohow he will employ the national resources; they want confidence, and enterprise is consequently stagnant. If they bad confidence in the success of their exertions—if they had strong hopes of? future benefit—they wiuld be scheming how to improve 'the''agriculture, extend the railways, enlarge the shipping, increase the manufactures, and augment the trade of France. They do none of these things, or do do them inertly, because th 9 recent course of the Government has weakened their confidence in the continuance of peace, and. prosper ity, 06nfiden<fe, in the future ratherrthaa^capital, iB the mother' and nurse of''enterprise;'^ to' Tari3 and London aiid throughout Europe thU i?DOW a Plata matter tf fact,

We'must not expect, therefore, because capital is now abundant, while confidence is small, that trade will rapidly extend. All the material elements of prosperity, good crops, a large supply of cotton, wool, and silk, an unwearied population increasing in numbers and skill, are at hand, and the increasing wants of society must be satisfied. Trade will extend but not rapidly. The moral elements of prosperity are wanting. The Governments of almost all Europe, except our own, are uneasy, and some of them are unsafe. A political, condition has been evoked in Italy which seems like a fusee, burning up to a huge mass of combustable matter, threatening an explosion. Gold may come in, as it is coming in in increasing quantities, but this—though forerunner of an active trade—cannot now restore confidence in the political future. Tho want that, combined with a still lingering want of confidence in one another among3t the mercantile classes, will keep trade quiet and keep capirtal cheap. -Nobody can know with accuracy the relation between the amount of saving aod the demand for capital. It is only to be ascertained by the rate of discount; but if, as is sauLand seems highly probable, saving ha 9 been Sil is now great— if large profits have betn made while liitle new enterprise has been begun—then capital will continue abundant, and the rate of discount will decline still lower. The bank minimum rate was 2 per cent in 1852, and we see no reason to.assert that it will not decline to the same figure iv the present year. Now there are two causes, a want of confidence in political events, and a want of confidence in mercantile men, to keep down the rate of discount.

Believing that general rules prevail in politics as well as physics, we cannot allow the opportunity to escape of extending this principle, and asserting that confidence rather than capital is the mainspring of social industry. In Turkey there is a want of confidence; there is plenty of hoardings, but there is no enterprise, or only the enterprise which is Bfcarted by foreigners, assured of the protection of the Government. In England, on the contrary, there is a large market for every species of produce. The people by free speech guarantee the seourity of one another and the continuance of doraeatio tranquillity; they keep the Government in check; there is almost complete confidence and a continual increase of enterprise. There is leis real saving or hoarding in England than Turkey; less idle capital; but there is in England a continual creation of new instruments and implements—of machines, bridges, road 3, ships, factories, docks, &c, &c, in the full confidence that they wiil facilitate or increase production, and add to the wealth of those who contrive, make, use, or employ them. The fanner drains his fields and sows more wheat than usual, because he hopes to grow more, and hopes to sell it at a good price. He has confidence that 'jfpr men will be re&ly to buy it. He knows when he sells it he can buy other things which he wants, and he has full confidence that other men will be making thera while he ia growing corn. The merchant, in like manner, imports more cotton and corn bacause be is confident that he will soil them to advantage. Ifc is not capital, but hope or confidence which sets his labor in motion. This holds good throughout. Tiie capitalist has confidence iv himself, and he is confided in by others, and so he is enabled to set the labor of other men in motion. The principle is universal. Not capital, but hope or confidence, is the soul of enterprise, the mainspring of all social employment.

Capitalists play, however, an important part in society. What makes them of importance, if capital does not set labor in motion ? This is a question of property, not of production. Lawyers, surgeons, physicians, architects, and authors, are also all very important parts of society, but they are not capitalists. They are laborers of particular glasses, and their labor to supply their own wants sets other labor in motion and rewards it. So the master carpenters, master bricklayers, master masons, are laborers of a particular olass. Merchants and bankers, too, with all other capitalists, are laborers whose work is as necessary to the joint and combined production by which society is fed as that of the man who carries the hod, lays a brick in mortar, or planes a piece of wood. As contributors to combined production, capitalists are as useful as any other class of men, but they are something more than this.

The importing merchants, the distillers, brewers, and growers of hops, hand ove,r. the Customs and Excise duties to the Government, and consequently they and-the persons they commonly deal with, or sell their commodities to, are the real tax-gatherers for the Government. Moreover, they receive property from the rich to use, for which they pay usance, and this usance like a tax, they must extract from the laborer. A farmer, for example, receives the loan of a farm from the land owner, on condition of paying him annual rent. Tha farm *is not capital; it is a mere portion of land guaranteed in the possession of some particular person by the rest of the community. The farmer can only pay the rent by recovering it from the jproduce of the laborers, whom this guaranteed possession shuts out of the means of living, and makes dependent on him. He is thus enabled to deal on most advantageous terms*with the laborer, ousted from any share of the land, and the advantage possessed by him is-shared by all other capitalists. The wages of agricultural laborers have been the standard of wages throughout the community. Higher wages thau they received were the reward of superior skill or a peculiar art, and were the exception, not the rule. So the capitalist tenant-farmer is the tax-gatherer for the landlord. All other capitalists share his advantages and bis duties. Oue rate of profit regulated in the main, according to all modern and political economists, by the profit made by cultivating the soil, and one standard of wages, prevail throughout the community. In different occupations the rules of both may vary, but in all occ.ipat.ous they tend 10 the standard of profit and wages obtained from cultivating the ground.

The peculiar importance, then, of the capitalist, on which hs prides himself, is, that be is the agent of all the recipients of rent, tithes, and taxes, and collects their dues from laborers. They are tax-gatherers for the bureaucracy. Like all such agents they share largely in the spoil they gather, and it is in this capacity—not as joint producers of the common subsistence and common enjoyments—that they are cherished by the upper classes and disliked by laborers. This is the real source of the quarrel between them.. The time will come, though not; yet, when they will ;be ashamed of^being the instruments • for extorting the fruits of toil from their natural and right owuers.— ifotfer.

The "Tusoarora CoRN. Ji--Mr. A. J. Hockings has forwarded to this office, for the inspection of persons interested in agriculture, two cobs of this valuable corn, grown at Rossaville. The Tuscarora corn is a pure white corn of dwarf habit, and very early. It consists entirely of flour, whiter than wheat flour, as destitute oi that flinty character which is so prominent in other varieties. It enters largely into consumption in America, both as com meal and for mixing with wheat flour; -and if approved of here, might relieve the colony of part of that heavy drain of capital, (iri the exportation of money to buy flour) which now tends so much to impoverish it. We strongly recommend farmers and others to sow this corn to rear seed for more extended experiments, that it may have a fair "trial.— Moreton Bay Courier.