The specification of the patent is numbered 594, 27th February, 1866, and is taken out by Mr. William Edward Gedge for Mr. Frederick James Vivian Minchin, of Aska, Madras Presidency, India. The well-known excellence of the Aska sugar, made on the old plan, is a sufficient guarantee that the invention has found favor in thoroughly practical eyes, and we believe by the time of the great Paris Exhibition of this year that it will have been fully tested; and that samples of the sugars made by this beautifully simple process will be shown. We confess that we entertain sanguine hopes of the success of diffusion, as applied to the sugar cane from the experimental trials already made; but of course until the invention has been thoroughly tried its commercial results remain open to question. The process of diffusion claims a distinct superiority over all other processes, in its capacity for extracting a much larger amount of juice than has heretofore been obtained by ordinary pressure. It is confidently asserted that at least as much as 15 per cent. of saccharine matter can be obtained. In the next place, the expenses attending the extraction of the juice are about 50 per cent. less; and the cost of the machinery is about 40 per cent. less; thirdly, the machinery is comparatively simple and inexpensive in its management; and finally, "the process excels not only in its simplicity and regularity, but the juice can be delivered to the factory diluted with but 15 per cent. of water." Diffusion is also said to be peculiarly applicable to the extraction of sugar from the sorghum and the maize. NO. CONTENTS FOR MARCH. PAGE. 1 The Prevailing Commercial Depression 169 5. Debt and Finances of Michigan.. 6. Debt and Financos of Louisiana.. 7. California Borax.. 8. Iron Vessels in France.. 178 17. Commercial Chronicle and Review.... 228 18. Journal of Banking, Currency, and Finance... ... 236 181 19. Public Debt of the United States...... 28 185 20. Missouri State Debt 239 187 21. Canadian Trade since the abrogation 9. The Dunderberg-the ocean trial trip. 196 | 23. Gold production of New Zealand... 241 10. The Illinois Chester Coal Fields. 11. Condition of the Fire Insurance interest 12. Railroad Earnings for January.. 200 24. Coin and currency in the U. S. Treasury 24 204 | 25. The L. Superior Copper product in '66 242 207 26. Taxes paid by Banks. 13. Report of James W. Taylor to Secre- 27. Gold Certificates, Redeemed, and outtary McCulloch.. 14. Trade of the State Canals-Report of the Auditor.. 15. Debt of San Francisco.. 208 standing.... 242 243 28. Nevada Treasure moveme: t for 186 -'6 243 224 29 Postage charges to Bremen & Hamburg 244 226 30. Massachussetts Interest Law 245 16. Price of Grain-The Cental System... 227 | 31. Diffusion--a revolution in sugar-making 245 The following advertisements appear in MERCANTILE. Fowler & Wells-389 Broadway. L. Prang & Co.-Boston and New York-Hol- Howard & Co.-619 Broadway-Diamonds, Ferdinand Korn-191 Fulton St.-Eau de Lewis Audendried & Co.-110 Broadway-An- A. B. Sands & Co.-139-141 William St.-Drugs BANKERS & BROKERS. Tenth National Bank-336 Broadway. our advertising pages this month: INSURANCE. New York Mutual Insurance Co-61 William st Sun Mutual Ins. Co.-49 Wall St. U. S. Life Insurance Co.-40 Wall St. THE MERCHANTS' MAGAZINE AND COMMERCIAL REVIEW. APRIL, 186 7. POLITICAL ECONOMY-CAPITAL AND VALUE. BY RICHARD SULLY. Political economy seems hitherto to have been treated rather as an abstract science, than one that ought to be considered and studied, as the basis and guide of the statesman, in his most important function of securing the prosperity and happiness of the people. This negligence may be attributed no doubt, to a variety of causes. The science itself has been greatly incumbered by unnecessary details, which, in some instances, has led the author into serious contradictions, with respect to the principles which govern the science; while, in other cases, these principles have neither been sufficiently comprehended, nor defined with sufficient accuracy. The term capital, though designating so important an element of political economy, lacks a proper and correct definition. It does not appear to require a very extraordinary amount of wisdom or discernment, after a man has attained to sufficient gravity of mind to think for himself, that the first requisite for his commencement in business of any kind is capital; because, without it, he cannot proceed a single step. And yet the nature of capital, and its importance seems neither to have been clearly apprehended, nor pointed out, by any of the standard writers upon the subject in question. Dr. Adam Smith seems to have taken exactly opposite grounds to the French economists, though they were much nearer the truth than he sup. posed. He excluded land entirely from his category of capital, and gave to labor the greatest importance in the production of wealth or value. If the economists had assumed that the land and its products necessarily limited the supply of capital, instead of comprehending its amount, they would have been correct. M. Say admits the concurrence of natural agents in the production of value, but does not perceive that the available quantity of these natural agents must necessarily limit the supply of capital as well as, finally, the creation of value. In fact that the whole fabric of wealth, must be upheld and kept in existence by the products of these natural agents; and if the supply be cut off or limited at any given point, either by the exhaustion of the soil, or the successful competition of other consumers, a further increase of capital at that particular point, or even of value, becomes impossible. The error of the economists consisted in the assumption that the landowner still retained a monopoly of capital after the division of labor had commenced; the error of Adam Smith and the more modern political economists lies in the assumption that land is not capital. Previous to its appropriation, land would, of course, have no value, and might, under those circumstances, be considered like air or water, as practically unlimited. But after it had become the property of individuals, it would necessarily, by the division of labor and the increase of population, become valuable, and therefore ought to be considered capital. To say that land varies in productiveness with a given amount of labor, from the force of unequal fertility, is only to say that some land is more valuable than other land, and admits of the payment of what political economists call rent; but this can be no valid objection to its being ranked as capital, as it also varies in the amount of rent (net product) according to its proximity or distance from market. It also constantly increases in exchangeable value, by the accumulation of other capital, and the increasing necessity for its products, without a corresponding increase in its utility. It appears, therefore, to be a mere groundless assumption that the poorest soil in cultivation pays no rent beyond the interest of the capital invested in the fences and buildings necessary to its occupation. there is ever so small an advantage in its cultivation, the powers of the soil will surely be remunerated to the owner. Land is, therefore, not only capital, but it has superior advantageous to any other kind of capital, and consequently ought to bear its fair share of taxation according to its value for the support of the government, but not to the extent of preventing cultivation. We should define capital, therefore, not exactly in the words of McCulloch. "as those portions of the produce of industry existing," etc., but as those portions of wealth "which may be directly employed, either to support human beings or to facilitate production." In the word wealth, therefore, we must include the fertility of the soil, as no amount of the accumulated products of labor could possibly produce a single grain of corn or other vegetable production without it. If Having decided what we consider to be capital, we will, for a moment, return to the economists, merely to point out the rock upon which they split. If they (the economists) had closely observed the operations of society, they must have detected the fact that the division of labor had originated a new kind of capital, which we designate skill, and which would enable its possessor to accumulate the products of industry, which, in their turn, would become capital, and therefore yield a revenue. Laying the whole burden of taxation upon the land would not have prevented this aggregation of circulating capital, though it might have prevented the increase of agricultural capital as well as population, unless a free importation of agricultural products had at the same time been allowed, which would speedily have ruined the home producer. There is no doubt, however, that taxes ought to be as few and simple as possible. To prove the assumption that land is neither wealth nor capital, political economists generally have denied that it has any value, merely because it is one of the elements of nature, and has not been produced by the labor of man. Say considers utility to be the chief element of value. He says "to create objects which have any kind of utility is to create wealth; for the utility of things is the groundwork of their value, and their value constitutes wealth." Yet, like Smith and others, he excludes land both from wealth and capital, but is forced to acknowledge its agency in production. McCulloch also, notwithstanding he finds fault with Adam Smith for writing the following passage-"that no equal quantity of productive labor or capital employed in manufactures can ever occasion so great a reproduction as if employed in agriculture"-is himself forced to admit that nature powerfully assists the labor of man in agriculture;" but this he afterwards endeavors to neutralize by assuming that we are not less indebted to nature in every department of industry-referring to the use we make of the wind, the water, the pressure of the atmosphere, steam, etc.—and then asks if they are not all the spontaneous gifts of nature? Just as if these elements, or natural forces, could, like the land, be limited to the use, or become the property of individuals. Though the vegetable and the animal kingdoms, as well as the elements of nature, were gratuitous to man, and were really, while he was in a savage state, previous to the institution of propertv, his common possession, yet they never lacked utility, one of the elements of value, and only required to be limited in use, by becoming the property of individuals, to give them the other element, which may be appropriately termed, "difficulty of attainment." Most political economists who have assumed that labor is the measure of all values, have been considerably puzzled to make it fit under all circumstances. For instance, Dr. Smith says: "But though labor be the real measure of the exchangeable value of all commodities, it is not that by which their value is commonly estimated. It is often difficult to assertain the proportion between two different kinds of labor," etc. This is quite true with respect to the difficulty of measuring the value of different commodities, merely by the amount of labor represented, as this must be in many cases extremely uncertain, and, in some, have little bearing upon the matter. The real difficulty appears to be, that neither the term nor the principle of labor on the one hand, nor the principle of utility on the other, are sufficiently comprehensive to express concisely the compound. principle of value. This will be much better done by substituting the terms desirability and difficulty of attainment. These terms seem sufficiently comprehensive to include the whole of the phenomena which tend to make up this difficult problem. They include all the circumstances of supply and demand, the operations of scarcity and gluts, the lucky inci And though dent of finding a precious stone, or a nugget of gold, etc. each of these principles must be present to form every item of value, it is not to be expected that they always act uniformly or equal; sometimes the influence of one may predominate, and sometimes that of the other. It should seem that desirability (utility) is the more constant quality, while labor, or difficulty of attainment, is the more variable. We therefore consider the definition of the principle of value by Dr. Smith, as well as all the other political economists we have ever seen, to be defective and incomplete. But we agree with Dr. Smith that agriculture is a more important and productive employment than manufactures, in as much as it is the foundation upon which all manufactures must be built, and sustains all other employments, whether productive or unproductive. The economists were right, therefore, when they assumed that land and its natural productions were capital, but they were wrong when they assumed that it was the only capital of a community. And yet circulating or accumulated capital must always be limited by the extent and power of the soil; that is, assuming that we are enclosed within a given circle, either by a real or artificial wall of non-intercourse. On the other hand, if the freest intercourse with other nations be allowed, it will finally be limited in amount by the agricultural productions, which can be obtained by a direct competition with the manufacturing labor of other countries. According to this view-if capital be a fixed quantity, it follows that when the ultimate is reached, the maximum of profits and population will also be reached, and if wealth should afterwards accumulate in the hands of the rich, that is, that part of it which consists of articles of luxury and convenience, which cannot be applied to reproduction, it will be at the expense of the further degradation of the people. These conclusions apply more especially to old and populous countries, nevertheless, they are not without significance to every large and populous city. The great difficulty at present between the capitalist and the laborer, is upon the division of profits; or rather, the remuneration of labor. This division may appear arbitrary and unequal, but it is not therefore unjust; because it must be the necessary consequence of the relative economical condition of the working classes in other countries; and therefore cannot be altered without reference to wages elsewhere, except with great danger to the welfare of the community acting in so absurd and arbitrary a manner. If the masses of the people were intelligent and moral, there need be no violent altercation with the capitalist to obtain their fair share of profit But under the present circumstances of intense competition, it is neither for the interest of the laborer nor the capitalist to give too much to consumption; as in case of very low profits, whatevery might happen to the community, there might be nothing to fall back upon to relieve a public calamity; and a community so situated would not easily recover its former opulence and prosperity. If we could be made to understand that the laws which govern the moral are equally immutable, with those that govern the physical, there might be some hope for bettering the condition of the people; but as long as they depend either upon arbitrary regulations, enforced by themselves, or upon protectionist schemes enacted by governments, so long will crime, pauperism and misery abound in all large communities. To illustrate the truth of these propositions we might refer to many of |