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banker, avowedly with the cheap magnanimity of commercial selfinterest, but really with the admixture of a more generous feeling. The Kettering societies bank elsewhere.

5. One workshop, the new Corset Manufacturing Society, stands in some respects by itself. It was registered in 1897, and has already opened new premises in July, 1899. Like the Leicester Hosiery, the oldest copartnership in the district, it is essentially a women's society, and its workers in their new large workshop are as striking a sight as is to be seen in Kettering. Their work is chiefly done by machines, at the treadle, by steam power, all dangerous straps being boarded out of sight and out of reach. There could not be happier conditions of labour; and we were told that the workers themselves see to it that no unworthy person finds entrance.

It is sometimes said that we only praise moral qualities where we think little of the intellect. But even in ordinary business the moral qualities have their commercial value, and still more in those societies. The omnipresence of machinery, too, does not seem to have deadened the intelligence of the workers; it certainly puts a premium on the power of close attention. This applies both to the men's and to the women's work.

The working folk of the Midlands are perhaps not regarded as the finest cream of the English working classes; and yet the men and women of the Kettering copartnerships impressed their visitors as superior to those of ordinary workshops of the north and south. Kettering no doubt is a picked town, and the men employed in the half-dozen copartnerships there are picked men. The ordinary employer picks the best men he can get. It is significant that the societies not only get but keep the picked men. There was a strike in the boot trade in Kettering in 1895; but, though it affected all the rest of the town, it left the copartnerships untouched.

Reformers and philanthropists of the middle classes have been recently turning their attention to the successful copartnerships in Leicester and Northampton. But, if "Jerusalem" is to be "builded here amidst these dark Satanic mills" of our country generally, it is the curiosity of the working classes that must be aroused. Working men themselves must do elsewhere in England what working men have done in Hebden Bridge, in Leicester City, and not least in the otherwise unromantic little town of Kettering.

SAVING AND SPENDING

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J. BONAR.

A REJOINDER TO PROFESSOR FLUX.-At the close of my reply to Professor Flux's first article, I summarized 1 Economic Review, April, 1899, pp. 195, 196.

as carefully as I could my whole theory of saving in order that he or any other critic might, if he could, demolish it. Instead of attempting this, Professor Flux has spent eight irritable pages in assailing positions taken by me, or imputed by him to me, which are mostly of quite subsidiary importance. He has in some instances misrepresented me, in other instances himself; he has done nothing to break down the theory of excessive saving.

On p. 343 he accuses me of lack of "confidence," and apparently of inconsistency, because, believing there is too much saved, I would yet advise an individual working man to save what he reasonably could. But my position is not open to this criticism. Why should I recommend the individual to sacrifice himself and his family for the public good? In the present condition of competitive industrial societies, his duty to himself and his family comes first: this is the only condition which gives any order at all to such a society.

On the same page Professor Flux misrepresents my attitude towards war. I do not indulge in "calm contemplation of war as a remedy;" I have over and over again denounced war as the worst form of wasteful consumption. In The Physiology of Industry, and elsewhere, I have, indeed, pointed out how quickly the ravages of war were repaired, and how, in particular, the Franco-German War benefited England by the temporary rise in demand for commodities. In some degree war is an economic remedy of over-saving, but I have always pointed to it as the worst.

Whether a period of over-production implies an excess in all industries or a general excess (i.e. an excess in some not compensated by a corresponding defect in others) is really quite unessential to the argument, though Professor Flux presses it so keenly. Even the passage on which he relies for technical conviction of a trifling error does not support him. Writing not of depressions in general, but of a particular depression, I affirmed excess of producing power" in all the important industries" as a fact commonly known to business men. This I believe at the time was true; but supposing there was some important industry which was not over-supplied, the error is one I would have readily admitted; it makes no difference to my argument. The heated language in which Professor Flux deals with a section heading, "The Fallacy that Saving implies no Reduced Consumption," is quite uncalled for. It does not touch my criticism of his misrepresentation in the former article. What I complained of was the imputation to me of the view that increased saving meant consumption restricted to the old level (see p. 187). I have always held that

1 Economic Review, July, 1899.

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saving and consumption vary inversely, meaning by "consumption' what is the only conceivable meaning, "consumption of commodities," in opposition to Mill, who held that there was as much consumption of commodities as before, only that it was done by different persons. Professor Flux's pedagogic reminder that "demand" is without meaning apart from consideration of a price, has no bearing on the case to which it is applied, that of existing loanable capital. owner of fluid loanable capital will take the highest price he can get, but he will lend for any price rather than let his money lie idle. The existence for long periods of large quantities of loanable capital, lying unemployed, disposes of Mill's argument, quoted p. 345, and accepted by Professor Flux as "sufficiently reasonable." The latter can conceive of holders of funds which may be called loanable who desire to retain control over their funds more than they desire to receive immediate high returns on lending them." So can I; but this does not explain the phenomena which bankers and financiers know as "gluts of loanable capital," when large numbers of owners of capital can find no investment which promises even a safe minimum rate of interest, and when steadily falling prices attest the existence of an excess of capital above the amount required to satisfy the demand for commodities at former prices.

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Professor Flux is indignant at my assertion that he regards "replacement of wear and tear" as new investment." Now, it is quite true that on p. 180 he correctly observes that "replacement of wear and tear. . . must be counted off before we can account the remainder of the annual product as net product, to be spent or saved as its owners are inclined." But the words which follow are these, "This replacement is by no means a simple physical reconstitution of the capital; it is often accompanied by the most varied and extensive changes of form. Neither foresight of the conditions of the distant future nor the power of creating imperishable forms of capital is necessary to provide openings for indefinite saving." If this does not mean that where replacement is accompanied by the most varied and extensive changes of "form," it is saving, the distinction drawn between such replacement and ordinary replacement of wear and tear has no meaning whatever. The fact that this meaning is inconsistent with other statements as to the nature of saving made by Professor Flux, does not get him out of his difficulty, but rather enhances it.

On p. 349 Professor Flux professes to oppose direct evidence to my statement that "no competent business man would think of explaining the slow development of electric enterprise in this country by the high rate of interest for capital." But his direct evidence does not meet my

statement, excepting "so far as interest on capital is an element in price." But neither Mr. Danson nor any other business man would dream of explaining the high cost of production which stands in the way of electrical development to high rate of interest. Interest on capital has been falling; is lower in England than in any country where electricity is more developed. I fear Professor Flux and I must continue to differ as to which of the two is guilty of "persistent and perverse misreading of what was tolerably plain."

J. A. HOBSON.

LEGISLATION, PARLIAMENTARY INQUIRIES,

AND OFFICIAL RETURNS.

THE session of 1899 has been more prolific of economic and social legislation than that of 1898. It is especially remarkable for the number and importance of statutes relating to what may be called the parental rather than the grand-maternal functions of the State. The Board of Education Act, 1899 (62 & 63 Vict., ch. 33, 6 pp., 1d.) abolishes the Education Department and the Department of Science and Art, and puts in their place a board consisting of the President of the Board of Education, the Lord President of the Council, the Secretaries of State, the First Lord of the Treasury, and the Chancellor of the Exchequer. The sole use of this board is to enable the minister in charge of education to receive a name, "President of the Board of Education," which will not shock conservative English ears. Precedents for dummy boards of course already exist in the Board of Trade (of which it is said the Archbishop of Canterbury is an ex-officio member), the Local Government Board, and the Board of Agriculture, the constitution of which could be described by very few persons without reference to the Acts of Parliament constituting them, to say nothing of the Committee of Council on Education. It is a curious example of the British respect for fictions that Sir John Gorst's badinage of the Committee of Council should have ended in the creation by statute of an equally shadowy body. Sir John will be an extra member of the board, retaining his present title, but after him there will be no more Vice-Presidents of the Committee of Council on Education, but there will be instead a Secretary to the Board. All this not inappropriately comes into force next year on the 1st of April. The Board may be granted the educational functions at present exercised by the Charity Commissioners and the Board of Agriculture, and may make arrangements for the inspection of any secondary school desirous of being inspected. The Elementary Education (School Attendance) Act (1893) Amendment Act, 1899 (62 & 63 Vict., ch. 13, 2 pp., d.) raises the age of exemption from school attendance from eleven, as fixed six years ago, to twelve. Thirteen may be substituted by local authorities' bye-laws in the case of children "to be employed in

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