“Beware,” said he to Armstrong, “of despising my hints about your way of life because I have condemned my own. Remember that however much I injure myself, I serve society after a certain manner. Not by example, I own. In this, I can only be of use as a warning,—a humbling thought to a proud man.—But I not only pay my way honestly, like you, but I am providing wealth for others. It benefits them already, for I put it out to use. It will benefit them again when I am dead. May it never more make any one so wretched as it makes me!”
“Are you a man,” said Mr. Wallace solemnly, “and do you yet submit to such bondage? I could not acknowledge such slavery for an hour. Break your habits of care, and enjoy the life a good God has given you. Think of the days when your father’s smile was what you loved best, when your mother’s voice was your sweetest music, when perhaps there were playmates beside you whom you loved more than you now love gold. Be a child again in heart while you are a man in understanding, and then you will be at ease without and at peace within.”
Paul made no reply, but turned away to hide the workings of his face, and with long strides crossed the ridge of the hill and disappeared.
Chapter VI.
DISASTERS.
The change of times of which Mr. Wallace was ever mindful came at last. At the end of three years the price of bar-iron was just half what it had been in the days we have described. There were many perceivable reasons for this change. The political state of various countries was unsettled, and trade in general therefore, disturbed. The quantity of iron produced by the flow of capital and labour to that department had more than met the immediate demand, and there was a glut in the market. It was hoped that this glut was only temporary; but there was much doubt whether the demand for bar-iron from South Wales would ever again be as extensive as formerly, for the Welsh iron-masters had now rivals abroad. In America and in various parts of Europe, establishments for the preparation of iron were beginning to flourish at the expense of those of longer standing in our own country. Where the iron-stone, coal, and limestone were of good quality, and the works were situated near some navigable river, their produce could be brought into the market at little more than half the price for which the Welsh iron-masters could afford to sell theirs.
This circumstance seemed to destroy the hope that the works in which we are interested could ever more enjoy the prosperity which had been their lot for a few years. Many a sigh escaped from their masters as they were obliged to diminish their profits again and again; and many a curse did the least wise amongst their people vent upon the French or the Americans who took their trade from them; forgetting that as nature had scattered her mineral treasures over various regions of the earth, all their inhabitants have an equal right to use those treasures as the interest of society may prompt. What men have to do is not to refrain, or to expect others to refrain, from using the materials put within the reach of all; but by industry and ingenuity so to improve the resources of art as that the greatest possible number of men may share the benefit; in other words, that the produce may be made as excellent and as cheap as possible. To render any article of production more and more cheap, and more and more excellent, is the only way to create a permanent demand; as the competition among producers which has always subsisted, and always will and ought to subsist, can only be met by bringing the article into more general use. So that Mr. Wallace’s labourers, instead of cursing their competitors on the other side of the water, had better have aided their employer in devising means for improving his manufacture, and thus becoming better able to stand a competition which could not be prevented.
The affairs of the concern underwent perpetual and anxious consideration by the partners. They thought apart, they consulted together, they exercised the greatest possible care to promote the interest of all concerned in all their measures. Knowing that it is an unfounded prejudice that the interests of the two parties united in production can be opposed to each other, they wished that their men should understand the reasons of their measures and approve of them, and were therefore ever ready to converse with such as made their complaints or proposed their doubts in a reasonable manner. Some such there were, and some had already informed themselves sufficiently respecting the fluctuations to which trade is liable, to be more sorry than surprised at the present state of things; but there were many more who were ignorant enough to suppose that their earnings were never to be lessened, however the fortunes of their masters might be suffering; and who made as heavy complaints at every mention of a reduction of wages as if they had been treated with injustice. It was hard for the partners, who were as benevolent as they were discreet, to bear these complaints in addition to their own change of fortune; but they would willingly have listened to them, if the grumblers would in turn have heard their reply. This, however, the men were unwilling to do. If they had chosen, they might have known that the affairs of the concern stood thus.
The capital employed in this iron-work was made up, as we have seen, of three parts,—the implements of labour, the material on which labour was to be employed, and the subsistence, or wages, of labourers.—Of these three parts, the first, comprehending the buildings, machinery, and tools, came under the head of fixed capital. The second and third, comprehending the mineral material of the manufacture and the wages of the work-people who carried it on, constituted the reproducible capital of the concern. The fixed capital had not itself brought in any profit; its purpose had been to enable the reproducible capital to bring in a profit: that is, the furnaces and steam-engine had yielded no money themselves, but were necessary to bring the iron-stone into a saleable shape. When the bar-iron sold well, it not only paid the owners the interest of the money they had laid out as fixed capital, and whatever they had spent in iron-stone and in wages, but a great deal over for profit. This profit was called their revenue, and out of it they paid the expenses of living, and then added what remained to their capital, which enabled them to employ more labour, to produce more iron, and therefore to increase again their revenue and their capital. If all had proceeded smoothly, if there had been a continually increasing demand and no foreign competition, it is clear that the wealth of the partners and the prosperity of the concern would have gone on continually increasing; but as it did not, a change in the employment of the capital became necessary.
It is common to speak of two kinds of revenue. That which we have mentioned,—the profits of capital,—is called neat revenue; while the name of gross revenue is given to the whole return made to the capitalist; that is, his reproduced capital and his profits together make his gross revenue, and his profits alone make his neat revenue.