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 handicraft character. Still, such a return to handicrafts is but a transition to the factory system, which, as a rule, makes its appearance so soon as the human muscles are replaced, for the purpose of driving the machines, by a mechanical motive power, such as steam or water. Here and there, but in any case only for a time, an industry may be carried on, on a small scale, by means of mechanical power. This is effected by hiring steam power, as is done in some of the Birmingham trades, or by the use of small caloric-engines, as in some branches of weaving. In the Coventry silk weaving industry the experiment of “cottage factories” was tried. In the centre of a square surrounded by rows of cottages, an engine-house was built and the engine connected by shafts with the looms in the cottages. In all cases the power was hired at so much per loom. The rent was payable weekly, whether the looms worked or not. Each cottage held from 2 to 6 looms; some belonged to the weaver, some were bought on credit, some were hired. The struggle between these cottage factories and the factory proper, lasted over 12 years. It ended with the complete ruin of the 300 cottage-factories. Wherever the nature of the process did not involve production on a large scale, the new industries that have sprung up in the last few decades, such as envelope making, steel-pen making, &., have, as a general rule, first passed through the handicraft stage, and then the manufacturing stage, as short phases of transition to the factory stage. The transition is very difficult in those cases where the production of the article by manufacture consists, not of a series of graduated processes, but of a great number of disconnected ones. This circumstance formed a great hindrance to the establishment of steel-pen factories. Nevertheless, about 15 years ago, a machine was invented that automatically performed 6 separate operations at once. The first steel-pens were supplied by the handicraft system, in the year 1820, at £7 4s, the gross; in 1830 they were supplied by manufacture