The Stourbridge Observer, Cradley Heath, Halesowen & District Chronicle.
Stourbridge, West Midlands, England, 1878-01-19 00:00:00

ACCUMULATIONS OF CAPITAL.

At the meeting of the Statistical Society held in
London on Tuesday evening, under the presidency of
Mr. Shaw Lefevre, M. P., a paper was read by Mr.
Robert Giffen on "Recent Accumulations of Capital
in the United Kingdom."
It appeared that the growth of those accumulations
had been very rapid. The Income Tax returns showed
that the gross income assessed rose in Great Britain
from £115,000,000 at the beginning of the century
to £130,000,000 in 1815, £251,000,000 in 1843, and
£262,000,000 in 1853; and then, in the United King-
dom, from £308,000,000 in 1855 to £396,000,000 in 1865,
and £571,000,000 in 1875. If the capital of that portion
of the income derived from capital had only progressed
at the same rate, the annual increase of capital all
through, and especially of recent years, must have
been enormous. The increase in the income assessed
between 1865 and 1875 amounted to £175;000,000,
which was equal to 44 per cent. of the income assessed
in 186 Leaving out altogether the capital not yield-
ing income, a similar increase of capital, assuming
the present amount to be what he had stated,
would give us for 1865 a total capital of about
£5,200,000,000, on which the increase at 44 per cent.
would be £2,228,000,000; or in round figures,
£230,000,000 per annum.
Mr. Giffen observed that if his estimate was mode-
rate, and any cause would justify a higher figure for
the present capital, then the increase between 1865
and 1875 would be even more than he had stated.
A question which had been raised of late was
whether the nation was now spending its capital.
The figures in his paper might, he thought,
be taken to prove that if the nation had begun to
spend its capital instead of saving capital, the process
was a very new one. As far as his researches
carried him, the fact he had to deal with was that
the rate of saving had been far greater of late than
at any previous period during the present century ;
that the saving all through had been at an increasing
rate. The figures would also show that the only fac
alleged in proof that we were living on our capital was
insufficient to make out the case. That allegation
was that the excess of imports was now so great as to
show that we were calling in our capital from abroad.
There was incidental evidence as to the great amount
of lending in former years, which entitled us to the
receipt in each year of an enormous income from
foreign countries, so that the excess of imports would
need to be much larger than it was to prove any
material calling in of capital from abroad. Apart
from this evidence, however, it must also be appa-
rent that if the nation was calling in some fraction
of its foreign investment it was not therefore stopping
its savings or diminishing its capital. The foreign
investments, though they were very large in the
years before 1875, were by no means the chief part
of the national accumulations. Our main savings
were at home. Before the nation could be said to be
living on its capital, it must be shown that not only
was capival being called in from abroad, but that more
was called in than was being simultaneously invested
at home. He had not seen this point considered by
any of those who had made the suggestions that the
nation was living on its capital.
The reading of the paper, which lasted upwards of
an hour, was followed by a discussion in which Dr.
Guy F.R.S., Mr. Stephen Bourne, Mr. Newmarch,
F.R.S., who expressed his belief that the figures given
by Mr. Giffen were considerably below the reality,
Mr. C. Walford, Captain Craigie, Mr. Mundella,
M.P., and the Chairman took part.