CHAPTER X. EXAMINATION OF THE COMMON OPINION RESPECTING THE SINKING OF CAPITAL.

THERE is a subject intimately connected with that of money, which deserves a passing notice in a work of this kind. I allude to the common notion, that a community sustains no injury from the construction of public works or improvements that turn out unproductive, inasmuch as they afford employment to many people without occasioning any loss of capital, the money not being sunk, but merely having changed hands. To this error, which is more widely spread than many people imagine, may be ascribed the loss of tens of millions of dollars of property in the United States, and if not eradicated, it will lead to the loss of tens of millions more. Immense expenditures are annually made by the federal government, by all the state governments, by counties, townships, cities, towns, boroughs, and villages, by private corporations of every description, and by institutions established for every imaginable purpose, literary, charitable, and religious, which would never be made if this matter were perfectly understood; and as it is one that can be made plain by a very simple illustration, I will present such a one to the reader.

In a former chapter it was shown that metallic money was never employed as capital for the carrying on of any branch of industry, except that of the manufacture of gold and silver ware, but was the mere instrument by which capital, consisting of other commodities, could be conveniently transferred from hand to hand. The function, therefore, which money performs in the business operations of the community, may be compared to the function performed by carts, wagons, ships and railroad-cars, in transporting from one possessor to another the commodities which he needs to carry on his business. Now every body can perceive, that in performing the business of transporting commodities, the vehicles here mentioned are not destroyed or sunk until they are worn out, so neither is the money which performs the function of conveying the commodities from the possession of one person to that of another, destroyed or sunk. It is, therefore, clear, that although the common mode of expressing a loss by an abortive undertaking is that “money has been sunk,” yet it is easy to be seen, that no money can ever have been sunk, but that the sinking has been of something else than money. What that something else has been will now appear.

In Pennsylvania, as well as in other states, there have been at times extraordinary excitements in reference to internal improvements. Turnpike roads, bridges, canals, and railroads, have each in their turn commanded popular favor, and have been extensively constructed, without a due examination of their cost and of their probable results. The consequence has been, that some of these enterprises have proved wholly abortive, and have been abandoned without being completed, or, if completed, have been useless as a source of income, and have consequently occasioned to their proprietors a loss equal to the whole expenditure. Now in all such cases, what has been the capital that has been sunk? I answer, the raw materials of which the works were constructed, such as stone, lime, wood, timber and iron, the food and drink, clothing and fuel of the laborers employed upon the same, (for the procuring of which the money paid to them as wages only served as the instrument,) the vehicles, implements, and tools worn out or deteriorated by the work, and the food consumed by the horses and cattle employed. All these articles, being forms of accumulated capital, possessing a value equivalent to the sum in money paid for them, constitute the capital sunk, and they are said to have been sunk, because after they have been used or consumed, there is nothing of value to be shown in their place. The process which has in reality taken place has been the mere transmutation of stone and lime, wood and iron, from a form in which they possessed a value into one in which they possess no value, and the conversion of a large quantity of bread and meat, whiskey and rum, butter and milk, sugar and coffee, coats and jackets, coal and wood, hay and oats, into roads and canals, without the possibility of a reconversion to those original elements.

But it may be said, that even admitting all this to be true, still a vast number of people will have been employed. Granted; but employed in producing nothing of value, so that their industry has been of no more benefit to the community than if it had been employed in turning grindstones where there was nothing to grind, or in digging ditches merely to fill them up again. It would hardly be argued that had it not been for this employment, these people would have remained idle. This would have been impossible. The identical capital consumed in the abortive enterprise would have been seeking for laborers in some other pursuit, and these laborers would have met it on the way, or have taken the place of those who did. These remarks, it will be observed, have reference to cases where the whole enterprise has failed, such as happened many years ago, with a total sinking of large capitals, in the construction of the Philadelphia and Susquehanna, and the Chesapeake and Delaware canals. They are, however, equally applicable to partial failures of enterprises as far as they go, and the only true test of the result of an improvement, is to be found in its nett income. If that be greater than the amount that could have been derived from the employment of the same capital in some productive branch of agriculture, commerce, or manufactures, the investment will have been a profitable one. If it be merely of an equal amount, it will have been an indifferent investment, and if it be of less amount, it will have been a positive loss to the community as well as to the proprietors. The truth of this proposition can easily be seen by any one who will apply it to the case of a single farm. If a farmer, who has a thousand dollars which he can lend at six per cent., or cause to produce him six per cent., by grazing cattle or tilling more ground, should lay it out in making a new road to facilitate his intercourse with the market, by which he should only save twenty dollars a year in the reduced transportation of his produce, it is clear that he would not be as well off by forty dollars a year, as if he had continued to use the old road, and employed his capital in one of the other modes. An entire state is but a large farm, and what is true of one is true of the other.

But there is an argument which may here be urged with some apparent force, and it is one that is entitled to consideration. It is that in estimating the value of a road or canal, the whole benefit to the community resulting from it is not to be measured by the mere income which the owners or stockholders derive from it. A part of the benefit is shared by the public, that is, by the producers and consumers of the commodities which pass over the road or canal, and by the persons who travel over it. It may, therefore, very well happen, say the objectors, that whilst the stockholders of the road get only three per cent, dividends on their stock, the advantages which the community gain may be equal to three, five, or seven per cent. more. Let us analyse this argument, which appears to possess so much plausibility, and see to what it will lead us.

The interest of money or capital is that sum which is paid to the owner of money or capital for its use, and is, as we have shown in another place, that rate which is established by the competition of the market. When persons borrow capital for employment in any productive branch of industry, whether connected with agriculture, commerce, or manufactures, it is always with the expectation that they can make out of it a sum beyond that which they pay for its use, and the average rate of interest may be considered to be the rate which all judicious applications of capital ought to produce. In the Atlantic states of the Union, where capital is more abundant than in the western states, the annual net profits of capital, after defraying all the expenses of wages, rent, superintendence and other charges incident to the enterprise, may be estimated at about six per cent.,* and six per cent, may therefore be considered, in the region of country mentioned, as the profit which ought to be produced from capital, and consequently in those cases, where a road or canal does not produce a benefit to the stockholders, equal to six per cent, upon the outlay, there will have been a sinking of capital equal to the principal sum that ought to have yielded the deficiency; and for this reason, that six per cent, would have been the profit derived from the employment of the capital in other pursuits.

The next question then which presents itself is this. Can it be, that the public shall derive a benefit of three, five or seven per cent, per annum from the construction of a road or canal, whilst the proprietors of the improvement derive only a profit of three per cent?

It is a possible case, that a charter of incorporation may have fixed the rates of toll on a road or canal so low, without any power on the part of the company to raise them, as that the income arising therefrom shall not be more than equivalent to three per cent, upon the expenditure. In such an instance, it might happen that the public should enjoy an advantage equal to what has been named and even more. But, I apprehend, that no such cases exist in the United States; and I think I am warranted in saying, that no company has ever accepted of a charter which does not allow a chance for a revenue exceeding six per cent., besides reserving a sum adequate to keep the works in repair and pay all other expenses. When, therefore, the income of a road or canal falls short of an average of six per cent., it must be, and can only be, in consequence of its not being used to a sufficient extent, that is, in consequence of a sufficient portion of the public’s not finding it to be for its interest to pay the toll, rather than to transport their commodities or their persons on some other route. The only conceivable mode of ascertaining the utility to the public of an improvement, is by the amount they are willing to pay for its use; and if this amount be equivalent to not more than three per cent, of the capital expended, it may be considered as an indisputable point, that the present loss to the community by the investment is equal to at least one half of the capital. Whether this shall have resulted from a bad location of the improvement, from the limited quantity and number of commodities and passengers that are transported over it, from an excess in the cost of the work over the estimates, from extraordinary damage or obstruction from freshets or droughts, or other causes, or from the road or canal being superseded or interfered with by a rival improvement, it matters not. The effect is precisely the same in either case. The stockholders, and consequently the community, have not only failed to reap the usual profit on a portion of their capital, but have seen it transmuted into a form wherein it can never again be rendered capable of producing that profit.

But it may be said that roads and canals increase the value of the lands through and near which they pass. This may be sometimes true, but it must not be forgotten that they also diminish the value of other lands through which they do not pass, by drawing off a part of their population, and of the travelling which used to frequent old routes.* But after all, there is no real value conferred upon the country at large by a road or canal in an economical point of view, but what is to be measured by the actual reduction in the expense of transporting its produce to market and obtaining its distant supplies, and in the facilities afforded to the conveyance of passengers. Where the aggregate of these benefits is to the parties concerned of such value as to induce them to pay to the capitalists who have constructed the improvement for them, the same interest for the use of their capital, that they could have obtained by its employment in other pursuits, then, and then only, has the expenditure been beneficial to the country. It is no doubt true, that turnpike roads or rail roads are very convenient and advantageous to those who reside on their route, and that they may all be willing at times to pay for the privilege of passing over them. But even the value of this convenience and advantage has its limits. The turnpike road from Philadelphia to Frankford, a distance of six miles, is extremely convenient in the winter season to all those who reside on its border and in its vicinity; yet as they prefer other roads in summer, and are not willing to pay for its use in winter an aggregate sum equal to the interest on the capital expended in its construction, it is manifest that the existence of the road is not considered to be worth to them that amount. Who could doubt that the investment of a thousand dollars in an omnibus to run from the Delaware to Schuylkill would be a loss to the community as well as to the owner, if the public for whose benefit it was established, would prefer to walk rather than to pay for its use more than thirty dollars a year over and above the expenses and repairs? I say “loss to the community,” because, had it not been for this misapplication of capital, sixty dollars might have been obtained for it on loan by the proprietor, and consequently the aggregate wealth of the community would have been augmented to the additional extent of thirty dollars.

There is still, however, another popular error very prevalent on this subject, which ought not to be passed over without notice. It is, that although roads and canals may not produce to their proprietors at the very moment of their completion, an income equal to the ordinary interest on capital, yet that they will do it at some future period, say, three, five, or ten years hence. If a farmer were to expend a hundred dollars to-day in the purchase of a wagon, which he did not expect to use for three, five, or ten years, he would be a very bad calculator, if he did not know that the interest on a hundred dollars or the profit he could have made on that sum for that number of years, would add to its cost an amount precisely equal to that interest or profit, and that the whole of this amount would be an uncompensated loss to him, besides what he might lose by the deterioration of the wagon. The same is true of all other investments made in anticipation of future periods. One million of dollars expended on a road, that should not be wanted for eleven or twelve years, would cost two millions of dollars at the expiration of that term, because money at compound interest of six per cent, per annum, doubles in about eleven years and eight months, and that sum would have been the amount in the hands of the capitalists had they employed it in any branch of productive industry.* If repairs should also be required, the amount would make a further addition to the cost of the road, unless they were met by the receipt of a corresponding amount of tolls; and hence it is evident, that those who leave out of view in their estimates of the judiciousness of investments, the accumulating power of capital at compound interest, are very unsafe counsellors. It is true, that nobody would be so unwise as purposely to construct a road or canal, a long time before it was wanted at all, and hence so strong a case as the one above supposed, has probably never occurred. Still, the principle here laid down is true as regards every investment made in advance, to the extent of that portion of the capital that does not yield the ordinary income. A regular interest account current would show the true amount of the cost of the improvement, and if reference were had to this test of productiveness more frequently than it is, it would be found that many investments which have been usually considered productive, have been upon the whole losing transactions.

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* From the period of the Independence of the United States up to about the year 1823, nearly all their imports from China and India were paid for by an exportation of silver dollars, brought into the country in addition to the supply required for the currency. Since the year mentioned, the chief part of the China and India cargoes, are paid for by credits or bills on London, exports of manufactures, and by coin procured in Europe.

* Wealth of Nations, Book I. Chap. xi.

† In corroboration of this fact, the following statement of the coinage of Gold by the mint of the United States, at, and about the period referred to, is adduced.

	1818,	.	.	$242,940,
	1819,	.	.	258,615,
	1820,	.	.	1,319,030,
	1821,	.	.	189,325,
	1822,	.	.	88,980,
	1823,	.	.	72,425,
	1824,	.	.	93,200.

This diminution in the coinage of gold after 1820 arose from the circumstance that nobody wished to import gold into the country to have it coined into eagles at ten dollars each, when the gold contained in an eagle was worth more than ten dollars.

* The ducat of Holland is current all over the continent of Europe at its fair equivalent. Gold in France circulates at the market rate of premium, silver being the ordinary currency.

* The reader will be pleased to keep in mind, that price in political economy is the value of a thing expressed in money only, and therefore differs from the term value, which expresses the worth of things as compared with other things than gold and silver. Thus we would say that five dollars is the price of a hat, where money is to be paid for it, but we would say that five pairs of shoes are the value of a hat, if the hat is to be paid for in that many shoes.

* British goods have frequently been sent back from the United States to England, as affording the best market for them, and it is a very common thing for vessels to bring back from the West Indies part of their outward cargoes, owing to their being worth more at home than they could be sold for abroad.

† All the propositions here laid down, have recently been fully established as practical truths in the United States, and especially at New York even to the reshipping of British goods to England.

* During the panic of 1834, when the scarcity of money greatly lowered the prices of commodities, the amount of specie imported into the United States for the purchase of cotton at the low price of the period was very great, as will appear from the following official table.

Table of Imports and Exports of gold and silver coin and bullion from 1821 to 1838, each year ending on 30th of September.

	IMPORTED.	EXPORTED.
1821	$8,064,890	$10,478,059
1822	3,369,846	10,810,180
1823	5,097,896	6,372,987
1824	6,473,095	7,014,552
1825	6,150,766	8,797,055
1826	6,880,966	4,663,795
1827	8,151,130	8,014,880
1828	7,489,741	8,243,476
1829	7,403,602	4,924,020
1830	8,155,964	2,178,773
1831	7,304,945	9,014,931
1832	5,907,504	5,656,340
1833	7,070,368	2,611,701
1834	† 17,911,632	2,076,758
1835	13,131,447	6,477,775
1836	13,400,881	4,324,336
1837	10,506,414	5,976,249
1838	17,747,116	3,513,565

† A part of this amount was the result of the passage of the gold bill of 28th of June of this year, and to the same bill is to be ascribed the large importations of 1835 and 1836.

* For a table of Imports and Exports of the United States from 1789 to 1839, see Appendix F.

* Specie was shipped from New York to England, at a loss, in October, 1839, in preference to bills at par, owing to the apprehended difficulty of getting them discounted under the pressure of the London money market. Other shipments were made, at the same time, of specie, under the impression that the Bank of England was about to stop cash payments, in which event, the specie would have commanded a premium in London. The cost of freight and insurance on specie from the United State3 to Europe, may be computed at one per cent.

* The mint price of silver at that period, as well as at the present, was 5s. 2d. per ounce. The weight of the dollar was 17dwt. 8 grains, hut somewhat inferior in quality to the British standard, so that if sent to the mint, it would have produced about 4s. 5½d. As an exportable foreign coin, it was probably worth in the market an additional ½d., there being at that time a prohibition against the exportation of British coins.

† The adoption of this proportion was probably the result of a sort of average, founded upon the comparison of the mint proportions of several different countries. What they were at that precise date, I cannot say, but, by some tables that I have seen, it appears that the mint proportions in 1810, at the places named, were as follows, and probably had been so for a long period.

Paris,	1 to 15.65-129.
Cadiz,	1 to 16.
Lisbon,	1 to 15.7-10.
Naples,	1 to 14.5-10.
Genoa,	1 to 14.53-100.
Leghorn,	1 to 14.53-100.
Venice,	1 to 14 88-100.
London,	1 to 15 13-62
Bengal,	1 to 14 861.
Madras,	1 to 13 872.
Bombay,	1 to 15.
China,	1 to 14 296.

Amsterdam, no regulation: market rate, about 1 to 14 7-10.

Hamburgh, no regulation: market rate, about 1 to 14 83-100.

* The sign + at the end of the figures in this sentence, and wherever it occurs, denotes that there is a fraction still remaining.

* Since the appearance of the first edition of this book, the author has been politely furnished, by Joseph Perry Esq., of the General Post Office at Washington, with a very detailed statement of the value of the sovereign in American currency under the different acts of congress, ascertained by algebraical calculations, from which it appears, that the par of the pound sterling, was

By the act of 2d April, 1792—$4.5657+ which was 2 per cent above the computed par of $4.4444.

By the act of 28th June, 1834, commonly called the gold bill—$4.87075+ which was 9.591875+ or within a small fraction of 9 per cent. above the same computed par, and

By the act of 18th January, 1837, now in force—$4.8665+ which is 9.496+ or very nearly 9½ per cent. above the same computed par.

The British mint price of standard gold is £3. 17s. 10½d. per oz. and consequently the weight of the sovereign, the coin of one pound sterling is 123.2744+ grains. The British standard of gold is, 22 carats fine, that is, 11 parts pure metal and 1 part alloy, and consequently the quantity of pure gold contained in a sovereign is 113.001 grains.

The standard of gold in the United States by the existing act of 18th January, 1837, is 21.60 carats fine, that is 9 parts pure metal and 1 part alloy, and the weight of the eagle, the coin of ten dollars, is 258 grains standard, or 232.2 grains pure gold.

Now as the sovereign of full weight and standard purity contains precisely as much pure gold as is contained in 4.866563+ parts of an eagle, it follows that the true par of the pound sterling is $4.866563+ that is $4.86 and a fraction of nearly of a cent.

But it appears by the Report of the Director of the Mint of the United States of March 19, 1839, that by the latest assays made by him of the British gold coins, their standard does not exceed 915 ½ thousandths, whereas by the British mint regulations, it ought to he 916 thousandths, which is equal to 22 carats. Taking this then as the true standard of the sovereign, it contains when of full weight only 112.8577 grains pure gold, and consequently the par of the pound sterling thus found, is but $4.860366, that is $4.86 and a very small fraction, equal to 9.35+ or 9 per cent above the old computed par.

But this is not all. The act of congress of June 28, 1834, entitled “An act regulating the value of certain foreign gold coins within the United States,” declares that the sovereign when of Standard purity, shall be a legal tender, at the rate of 94 cents per penny weight. By this act which has never been altered, a sovereign of full weight and of the legal standard is worth in our gold currency the same as by the gold bill of 1834, above referred to, that is $4.87 and a fraction, thus presenting the anomaly of foreign coins having a higher value attached to them than their intrinsic worth in the coins of the country.

It so happens, however, that many of the sovereigns that reach this country, have been somewhat worn, and on this account, no doubt, in connection with the deficiency of purity above referred to, they have been received and paid out by the banks at $4.85.

For the benefit of practical men, the following documents are submitted.

PRESENT VALUE OF THE POUND STERLING IN DOLLARS AND CENTS AT DIFFERENT RATES OF EXCHANGE ON THE COMPUTED PAR OF $4.4444.

RATE.			Above par.
Par.		. . . . . .	4.4444
	¼	. . . . . .	4.4555
	½	. . . . . .	4.4666
	¾	. . . . . .	4.4777
1 per cent.		. . . . . .	4.4888
	¼	. . . . . .	4.5000
	½	. . . . . .	4.5111
	¾	. . . . . .	4.5222
2 per cent.		. . . . . .	4.5333
	¼	. . . . . .	4.5444
	½	. . . . . .	4.5555
	¾	. . . . . .	4.5666
3 per cent.		. . . . . .	4.5777
	¼	. . . . . .	4.5888
	½	. . . . . .	4.6000
	¾	. . . . . .	4.6111
4 per cent.		. . . . . .	4.6222
	¼	. . . . . .	4.6333
	½	. . . . . .	4.6444
	¾	. . . . . .	4.6555
5 per cent.		. . . . . .	4.6666
	¼	. . . . . .	4.6777
	½	. . . . . .	4.6888
	¾	. . . . . .	4.7000
6 per cent.		. . . . . .	4.7111
	¼	. . . . . .	4.7222
	½	. . . . . .	4.7333
	¾	. . . . . .	4.7444
7 per cent.		. . . . . .	4.7555
	¼	. . . . . .	4.7666
	½	. . . . . .	4.7777
	¾	. . . . . .	4.7888
8 per cent.		. . . . . .	4.8000
	¼	. . . . . .	4.8111
	½	. . . . . .	4.8222
	¾	. . . . . .	4.8333
9 per cent.		. . . . . .	4.8444
	¼	. . . . . .	4.8555
	½	. . . . . .	4.8666
	¾	. . . . . .	4.8777
10 per cent.		. . . . . .	4.8888
	¼	. . . . . .	4.9000
	½	. . . . . .	4.9111
	¾	. . . . . .	4.9222
11 per cent.		. . . . . .	4.9333
	¼	. . . . . .	4.9444
	½	. . . . . .	4.9555
	¾	. . . . . .	4.9666
12 per cent.		. . . . . .	4.9777
	¼	. . . . . .	4.9888
	½	. . . . . .	5.0000
	¾	. . . . . .	5.0111

THE PAR OF EXCHANGE ON FOREIGN COUNTRIES.

Extract from the Report of the Secretary of the Treasury of 28th May, 1838, on Exchanges.

The quotations of exchange on France, are so many france and centimes, (or hundredth parts of a franc,) payable in France for a dollar paid here. According to the regulations of the French mint, the silver franc should contain 69.453 troy grains of pure silver, equivalent to 18.708-1000 cents in silver currency of the United States, (not quite 18¾cents.) The quantity of pure silver in an American dollar, is equal to that in 5 francs 34.5341000 centimes. But as foreign coins are not a legal tender in France, and as a seignorage of about 1½ per cent is charged on silver coinage at the French mint, American dollars, when sold as bullion in France, are said to bring on an average not more than 5 francs 26.25-1000 centimes. This is, by some writers assumed as the par of exchange on France. Other writers assume 5 francs 34 centimes as about par.

The quotations of exchange on Holland, are so many cents a guilder; on Hamburgh, so many cents a mark banco; and on Bremen, so many cents a rix dollar.

The exact value of the guilder of Holland, is 39.97-100 cents of United States silver currency; but 40 cents are usually assumed as the par of exchange.

The mark banco of Hamburg is a money of account, equal to 35.144-1000 cents United States currency.

The rix dollar of Bremen is a money of account, equal to 80 cents and a very small fraction United States currency.

FROM TATE’S CAMBIST.

The par of exchange between London and
Paris,	is 25 francs, 22 centimes per £ stg. in gold.
“	is 25 “ 57 “ “ in silver.
Amsterdam,	is 12 guilders, 09 centimes “ in gold.
“	is 11 “ 97 “ “ in silver.
Hamburgh,	is ,13 m’cs banco, 10½ schillings, “
Bremen	is 609¼ Rix dollars for 100 £ stg. in gold.

* Those who are desirous of being particularly informed on this subject, are referred to Smith’s Wealth of Nations, Book I, chap. xi, Part III, where they will find the matter examined with great care and ability.

* If it be said that American dollars would not be as saleable in England as Mexican dollars, although of equal intrinsic value, on account of the greater notoriety of the former, I would reply, that this may be the case, and on that account I have no objections, if the reader chooses, to reduce the estimate of the undervaluation of silver, one quarter or one half per cent. which has been the premium in New York upon Mexican dollars, when paid for in American silver or gold, from January, until May of the present year, remarking at the same time, that during the same period, the weekly quotations of “The Philadelphia Price Current” of Mexican dollars, and American half dollars in Philadelphia depreciated paper currency, have been uniformly the same.

* See also Appendix A and B.

* It is computed that at this period (1840) upwards of a hundred millions of dollars of European capital, chiefly British, are invested in such securities. Many persons estimate the amount at near two hundred millions, but that is probably an over estimate.

* This operation is thus performed: A borrower is willing to give 12 per cent, per annum for the use of money, and he agrees to give $112 at twelve months’ credit for a stock worth in the market only $100, and stipulates with the broker, that contemporaneously with the purchase he is to sell the stock at $100 cash. The broker finds a lender who has money but no stock, but who is willing to give $100 cash for stock, if he can contemporaneously sell it at $112 for an approved note at twelve months credit. The broker manages the negotiation, and thus two persons are made to buy and sell what has no real existence. Such transactions, however, are clearly illegal, but cases rarely occur in which an appeal is made to the law.

* Since the first edition of this work was published, a great depression has taken place in the English and American markets in the price of state stocks, putting an end for the present to the possibility of obtaining loans at five per cent.

* The laws of New York establish the rate of interest at seven per cent. In all the other Atlantic states it is fixed at six per cent.

* The following article is taken from a late English newspaper as being quite in point.

Effects of Railroads upon Tavern Property.—Previously to the opening of the Great Western and the Southampton railroads there were eighty-two long stages passed through the town of Egham daily, nearly all of which changed horses at the several inns in the town. Now, the eighty-two are reduced to four. Some of the inns have been closed, and several others are about to be shut up. The following is a proof of the great reduction which has taken place in the value of tavern and public house property:—Three years ago the Catherine Wheel Inn Egham, which makes up thirty beds, and to which are attached an acre and a half of garden ground, a bowling green, large barns, sheds, coach house, and stabling for upwards of thirty horses, let for 250l. a year. It then carried on a profitable trade, and the proprietor realised a handsome living. The same property was let, a few days since, at 50l. a year.

*The present value of a million of dollars payable eleven years and eight months hence, is five hundred thousand dollars, which of course would be the present loss, or sinking of capital in the case supposed. If ten per cent, were taken as the annual profit that could have been made on the employment of the capital, (a profit which capital will earn in some parts of the “Western country,) the result would of course be much more unfavorable to the community.