much of our success is owing. The Vice-Presidents will be Mr. H. L. Antrobus, Mr. R. C. L. Bevan, Mr. W. B. Denison, Mr. S. S. Lloyd, Sir John Lubbock, Mr. R. H. Inglis Palgrave, Mr. R. B. Wade, and Sir Sydney H. Waterlow. For Treasurer, we propose Mr. J. B. Martin, whom we are glad to have associated with us in an official capacity. The Council will practically be the same as last year, with an important addition in the shape of Mr. A. S. Harvey, of Messrs. Glyn, Mills & Co. (their General Manager), whom we are also glad to welcome amongst us, and who will be, I am sure, an important addition to our working capacity. I will now propose a vote of thanks to Sir John Lubbock for the very able manner in which he has fulfilled the duty of the office of President of the Institute, since the commencement of the Institute. We are all greatly indebted to him for the interest he has shown, and the pains he has taken during the term of his office. I am sure you would also wish me to convey a vote of thanks in your name to the retiring Vice-Presidents, who have also shown considerable interest in the success of the Institute. The resolution was carried by acclamation. Mr. E. BRETT and Mr. W. A. STEEL having been appointed scrutineers, a ballot was taken, and on presentation of their report, the CHAIRMAN announced that the gentlemen named in the printed list, submitted in the report of the Council, were unanimously elected as the Officers and Council of the Institute for the ensuing year. The following letter from Mr. Rae was then read: DEAR SIR JOHN LUBBOCK, Fischer's Hotel, Clifford Street, 8th May, 1883. I now write to say that I am wishful to offer a prize of £50 for"The best Essay on that system of bank book-keeping which shall combine "clearness and efficiency with the minimum of book entry and calcula"tion: the Essay to include the best form of books, accounts, and 66 return, as between the head office of a bank and its branches." I wish the competition, of course, to be limited to members of the Institute. All details as to time, and other terms and conditions, I leave entirely in the hands of the Council. If the Council should deem it better to divide the prize into £30 for the first section and £20 for the second (branch book-keeping), I have no objection. I remain, with respect, GEORGE RAE. The CHAIRMAN: I am sure it will be your pleasure that a cordial vote of thanks be accorded to Mr. Rae for his generous offer of prizes for the subject stated in his letter. A hearty vote of thanks was then given to the Council for their services for the past year, and acknowledged by the Chairman, who bore testimony to the able and efficient work rendered to the Institute by the Secretary, Mr. W. Talbot Agar. MR. RAE'S PRIZE ESSAY. THE following is the title of the Essay to which a Prize of £50 will be awarded at the meeting of the Institute, 1884. The Essays must be lodged with the Secretary on or before the 1st January, 1884:"On that system of Bank Book-keeping which shall combine clearness and efficiency with the minimum of book entry and calculation. The essay to include the best form of books, accounts and return, as between the head office of a bank and its branches." The following are the conditions laid down by the Council: Each Essay to bear a motto, and be accompanied by a sealed letter, marked with the like motto, and containing the name and address of the author; such letter not to be opened, except in the case of the successful Essay. Without laying down any exact conditions as to length, it is suggested that the Essay should not exceed 75 pages (8vo.) of this publication. The Council shall, if they see fit, cause the successful Essays, or abridgments thereof, to be read at a meeting of the Institute of Bankers, and shall have the right of publishing the Essays in their Journal one month before their appearance in any separate independent form; this right of publication to continue till six months after the award of the Prizes. Competition for the above Prizes shall be limited to Members (including Fellows and Associates) of the Institute of Bankers. The Council shall not award the Prizes, except to the authors of Essays, in their opinion, of a sufficient standard of merit. The Essays must be legibly written and on one side of the paper only. If further explanation is required, it may be obtained from the Secretary, at the Offices of the Institute, 11 and 12, Clement's Lane, E.C. June, 1883. The Institute of Bankers. J. HERBERT TRITTON, Esq., in the Chair. CAPITAL, By ROWLAND HAMILTON, Esq. [Read before the Bankers' Institute, Wednesday, May 16th, 1883.] APITAL is a word which has long been familiar to us all, both in the practical affairs of life and in the more pretentious discussions of Political Economy. Such words naturally grow into use with many different shades of meaning according to their immediate associations, and in course of time will take up significations which are incompatible and misleading, though common usage may warrant these several applications of the term ; and it would be mere pedantry to assert that one was right, and all others wrong. The subjects with which Economists have to deal have suffered much from dogmatisms of this kind. The questions involved are among the most complex and many-sided of any that can profitably occupy the human mind. The enquiry is still in the stage in which thorough investigation is the most essential part of the work to be done. More precise and distinctive names will follow more adequate perceptions of the facts with which we have to deal, and, meantime, we have above all things to be on our guard against taking words for facts, or, under the pretence of "scientific" definition, ruling out and dismissing from our minds conditions which are inseparable from the problems which have to be solved. The perfectly legitimate expedient of attacking complicated questions in detail has been too often most illegitimately abused, for, from narrow premises hypothetically assumed, conclusions have been deduced, and not merely stated in unqualified terms, but worse still, very generally extended far beyond the due bounds of their application. Hence we have not only theories so far abstracted from the actual conditions of life as to be fit only for Laputa, but a supplementary multiplication of so-called "laws," which threatens to make the popular hand-books of Political Economy about as useless as an ill-digested index to the Statutes at large. The premature attempt to "exalt" it into an exact science leads only to obscurity and confusion. Thus much in explanation of the method which I propose to adopt in this paper. I shall be very cautious in using or even suggesting precise definitions, but shall endeavour to show in what senses the term Capital has been understood, and how it came to bear these several meanings; and further, to describe what are the uses of Capital from an industrial point of view, and how these uses have never been wholly lost sight of, though sometimes thrown very much into the background. I shall have to deal directly with what are often termed the baser concerns of mankind, but ignore these as we may, it is not the less true that all life, the highest as well as the lowest, is based upon physical conditions, and the due supply and due distribution of those things needful for wants common to all, are essential to the health and wellbeing of the whole body corporate. 2. I need not enter into any curious speculations as to how savage or isolated life may be maintained. It were out of place to talk of Capital except in connection with comparatively civilised and organised communities; nevertheless, the road will lay most clearly before us by starting with the consideration of the most simple and primary conditions. Let us take, then, Natural Agents, Labour, and Capital, as the three essential requisites for production, or, to state the case in familiar terms:-If we have something on which to work, limbs to work with, and enough of food and other necessaries (the stored results of previous labour) to support the energies of life, we have all the material conditions which put the extended work of production fully within our power. If we do not avail ourselves of them it is from want of will or from want of skill-that is, from moral and mental, and not from physical incapacities. These fundamental truths may seem to be mere truisms, but simple as they are, we shall not get very far into our subject before finding that they are often forgotten or inadequately kept in mind when we come to deal with the conflicting interests which arise with complex organisations of industry. And even at this early stage it must be clearly recognised not only that all these three conditions must be severally fulfilled, but that the utility of each depends on the other two. Even in this short chain the available strength is that only of the weakest link, and the ever-recurring problem of industry is to find out how these three requisites can be brought together and adjusted in due proportion. 66 66 3.—Mr. J. S. Mill, however (Principles of Political Economy, Book I, cap. iv, sec. 1)-as it seems to me prematurely and incompletelyintroduces very early in the course of his exposition the "intention of the capitalist. "The distinction," he writes, " between Capital and "Not Capital does not lie in the kind of commodities, but in the mind "of the capitalist-in his will to employ them for one purpose rather "than another; and all property, however ill-adapted in itself for the use of labourers, is a part of Capital so soon as it, or the value to be received from it, is set apart for productive re-investment." This is open to the objection that it tacitly assumes the existence of an available supply of those things which are required to support labourers, which can be exchanged for property not suited for that purpose; an assumption which cannot safely be made without limitation, even in a country where wealth of all kinds is already abundant, still less in many of the less advanced countries which are within the limits even of the British empire. Practical experience often shows that the "intention" to supply Capital and actually supplying it are very widely apart. How it comes about that many things not directly fitted to support Labour come to be called and taken as Capital, I hope to show hereafter. Again, it is said (Book I, cap. v, sec. 1) "that industry is limited by Capital," which is indeed one side of a very important truth, but if property becomes Capital according to the intention of the Capitalist, this intention, and not the excess or deficiency of production, or the saving of products, would appear to determine the limits of the "wages fund," and why should not the owners of property supply Capital for all who "intend" to labour. Mr. Mill presents "the Capitalist" as both initiating productive work and paying the "wages of superintendence," as well as all other charges needful for carrying it out. But if production is thus made "a function" of Capital on the one side, why may not the labourer assume with equal justice on the other that it is " a function" of Labour. As Capital is the result of storing the products of Labour, the precedence in order of time is with the latter. We have, in short, not one concrete and valid truth, but one half-truth in mischievous opposition to another. Taking the question in purely abstract and static form, it may be quite true that saving or "profit " implies the increase of Capital, and waste or loss its decrease; and further, that Capital employed successfully implies Labour employed "productively," at least within the range of economic enquiry. But in the affairs of actual life we do not mean by "a capitalist" any one who thus owns and employs a small amount of Capital. By the very nature of language names are given according to the distinguishing characteristics by which any class is best and most familiarly recognised, certainly not from some one accident common to many. Traders, manufacturers, shopkeepers, and even artisans, have all more or less Capital, but they are known according to the special work they do. And when we come |