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98 to be due to capital in the strict sense of the term, that is to say, as distinct from labour. Thus only one-fifth of the incomes of trades and professions (in Schedule D} is accounted for in this way—the remainder being, in the language of the economists, 'wages of superintendence.' Of the income of the lower middle class and the labouring classes a still smaller proportion is set down as due to capital proper. It is plain also that the number of years' purchase selected in different cases is somewhat arbitrary, and in every case must depend partly on the rate of interest. It is necessary that these qualifications should be borne carefully in mind, for there is something so pleasantly definite about two hundred and forty millions per annum that the steps in the calculation are liable to be forgotten.

It is well, also, that some of the teaching of the older economists should be remembered—that capital, although saved, is always being consumed, and that, as Adam Smith says, 'the annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniences of life which it annually consumes.' If this learning is somewhat too musty, at any rate the American statistician, Mr. Atkinson, may be heeded when he states that the richest nation has never more than the value—all told—of two or three years' production in hand in a concrete form, and that the whole world is always within a year of starvation. The recent accumulations of dead capital, when regarded in this manner, will assume somewhat less startling proportions.

A far better way, however, of restoring the due economic perspective seems to be to revert to the method of Petty and the early masters, and to assign a value to living, as well as to dead, capital. In order to make the comparison as fair as possible, I shall first of all take Mr. Giffen's figures for the various classes of income, and also for those parts of the various incomes supposed to be derived from the possession of capital in his sense. In this way a first approximation will be made to the income derived from 'living' capital, and greater accuracy may be then attained by considering in more detail certain kinds of income, and also certain comparatively permanent sources of 'wealth' (personal) which do not yield income.

The fundamental difficulty, which has probably thrust this problem into the background, is to pass from income to capital. We are all familiar with capital valuations of lands, houses, &c., based upon the revenues which they yield, but since the abolition of slavery in civilised communities we are not familiar with the