The Sun.
London, England, 1870-11-15 00:00:00

THE HOREOII OF A BOMBARDMENT.

The Telegraph, in commenting upon the horrors of a
bombardment, says : A foretaste of what awaits Paris
was experienced by Fort Mortier, at Neu Breisach, the
other day, during a short, a slight—we might almost
say trivial—bombardment. All the buildings, except
those which are bomb-proof, have been levelled to
the ground. Everything guns, mortars, kitchens,
ovens—was smashed. The whole place was a ruin.
Paris, no doubt, is better shielded against the enemy's
fire, both by its distance from the lines of the enemy and
by the protecting fire of such forts as that of Mont
Val6rien. Yet the Krupp guns will cast shells over the
advanced posts, and far into the city. And, if we think
of the havoc and the terror which would result
from the falling of a few shells among the
densely-crowded houses of Poplar or the Seven Dials,
we shall understand what an awful significance
lies in the words, " the bombardment of Paris."
half a dozen of such messengers of destruction dropped
into a thickly-peopled faubourg may effect as terrible a
havoc as is spread by one of the minor earthquakes that
devastate South American cities, or the conflagrations
that sometimes lay waste parts of our own. Fires
will break out, with no means of extinction at
hand. Old men, old women, infants, the helpless,
the sick will be stricken down by fragments of the missiles
or buried in the debris of falling houses. The people will
rush in dismay from the quarters exposed to the cruel fire
—homeless, shelterless, without clothes and without food.
From whatever faubourg may be exposed to bombardment
there will be such an exodus; now the flight will be
from one quarter, now from another; and the whole
outer rim of the city, or even perhaps the great crowded
districts of the centre, may, at any hour of the night or
day, be seized with a panic. The actual loss of life will
be but a minor element of the horror ; it is the flying,
terror-stricken crowds, the crash of falling houses,
the constant expectancy of murderous bombs,
the sight of wounded women and children, the sound of
helpless agony, that will fill up the cup of horror which
Paris has to drink. The Angel of Death seems to hang
over the doomed city ; "we might almost hear the beating
of his wings." There i.e, indeed, a bare chance that the
advance of one horror will help to neutralise the other,
and that the pressure of famine will avert bombardment,
by giving the grim and silent enemy the prize he covets.
And there is something inexpressibly painful in the vety
calm that seems to encircle the doomed metropolis ; in
the absence of any really striking event, within or with-
out, to break the dead march of time as it resistlessly
leads, day by day, onward to the consummation of defeat.

IV.-PAYMENT OF THE. NATIONAL DEBT.

(BY THOMAS DE MESCHIN, M.A., LL.D.)

In considering the question of the National Debt it is
obviously a question of the utmost moment to determine
how it affects wages. Now I propose to shew that
when the Government goes into the money market and
effects a loan, which operates to raise the rate of
interest, it produces the same economic result as if
it had raised the whole amount of the loan by a direct
tax upon wages within the year, save that the nation
remains charged with the debt in perpetuity, whereas had
the tax been levied directly upon wages, no debt would
have been incurred.

It is obvious that this is a most material point in this
question, for paying off the debt now, would go far towards
enabling us to carry on future wars without resorting to
loans.

The elements of value are exchangeability, desireable-
ness, and scarcity—that is to say, having the capacity of
being transferred from one person to another—being
directly or indirectly productive of pleasure or preventa-
tive of pain ; and, lastly, being limited in supply.
When, from any cause, an article becomes more limited
in supply, or scarcer, its value is at once raised ; the same
quantity of it will now exchange for a larger quantity
of every other article whose value has not been altered.
If the capital of a country be lessened, the remaining
portion is rendered more valuable. Everything for which
it can be exchanged relatively falls in value—that is to
say, the same amount of capital will now purchase
more land, more labour than before it was diminished.
When Government goes into the money market and makes
a loan, it diminishes the capital of the country, and
thereby the remaining capital is rendered more valuable.

But when the price of anything from any cause is raised,
the price paid for the use of it is necessarily raised in a
greater ratio than than that of the article itself. When
capital becomes more valuable the price paid for its use is
necessarily raised. Those who have capital to lend will
now require more for the loan thin they would have done
when it was more plentiful—that is, the rate of interest
will be increased. Therefore when the quantityof capital
in the country is lessened by a loan the rate of interest
rises.

There are three elements of profit—namely, first,
interest on the capital employed; second, insurance against
risk ; and third, remuneration for superinitendenco.
Every part of profit is contained under those three heads.
If any of them permanently rise or fall, profits rise or fall
pro tanto. Therefore if from any cause the rate of interest
be raised, it is immediately followed by a rise in the rate
of profit. Many may imagine that in practice this does
not take place, owing to the difficulty of transferring
capital from one employment to another ; but in point of
fact it will be found the course is this : If one employ.
ment ceases to yield the ordinary rate of profit, that part
of the business transacted on credit—i. e., with other
people's capital—is curtailed and contracted, and
this capital is set free to be employed in
those employments giving higher profits. On the
other hand when profits are large and the business
flourishing, the credit transactions are extended as much
as possible—thus the capital of the country passes from
employment to employment, and profits keep tending to_
wards equality, therefore it may be laid down as generally
true, that a permanent rise in the rate of interest is
fotTowed by a rise in the general rate of profit. But it was
before proved, that a loan is always followed by a rise in
the rate of interest ; a loan is, therefore, always followed
by a rate in the general rise of profit.] Thus if the general
rate of profit were 10 per cent. while the rate of interest
was 4 per cent., and from any cause the rate of interest
rose to 5 per cent., the general rate of profit would
necessarily rise to 11 per cent. Dr. Hamilton in his
"inquiry into the National Debt " maintains the converse
—he says—" a rise in the Three per Cents to par [when he
wrote they were at 621] could not take place without a
general reduction of the rate of interest, and this must be
accompanied by a like reduction of the profits on trade and
manufactures." [Chap. 6, 247.]
Leaving rent out of the question, the whole produce of
the country, arising from trade, manufactures, and every
industrial employment, is shared between capitalists and
labourers. The capitalist's share is profit, the labourer's,
wages—the former is determined by the general rate of
profit, the latter by the general rate of wages. Every
commodity produced is divided into two shares, bearing a
certain proportion to each other ; if while the productive
powers of labour and capital remain unaltered, this pro-
portion be altered, the share of one will be increased, the
share of the other diminished—that is, wages will rise and
profit fall, or profits will rise and 'wages fall. Any-
thing taken from wages and added to profit will
increase the capitalist's share or proportion ; any-
thing taken from profit and added to wages will
raise pro tanto the labourer's share, hence it, follows
if any cause (not affecting the productive powers of
capital or labour, or the value of production) produce a
rise in the general rate of profit, it increases the capitalist's
share, but it has been before proved a loan raises the rate
of profit—consequently a loan increases the capitalist's
share of production.
If a financial operation increases the capitalist's share of
production out of the remuneration of labour, that scheme
becpmes a real tax upon wages ; it matters not whether it
be open and avowed or covert and secret, but a loan in-
creases the capitalist's share, therefore a loan is a -tax upon
wages. Now a tax exclusively on wages is simply in-
iquitous, it is laying the brunt and burden of war on the
back least able to bear it.

The subject may be regarded in another point of view.
A loan is abstracted from circulating capital; it cannot be
taken from fixed capital—buildings, machinery, and tools.
Circulating capital is almost all consumed and reproduced
within the year, and forms the wages-fund for the main-
tenance of labour. When this wages-fund is diminished
the number of labourers remaining the same, a less sum
remains to be divided among all, and consequently each
must receive less ; that is, when the general rate of wages
falls, every labourer must suffer in his wages. When
Government goes into the money market and contracts a
loan it lessens to that extent the circulating capital of the
country, and diminishes the wages-fund; consequently
the labour must be supported less liberally.
The theory of wages being so intimately connected
with the subject, it may be well briefly to advert to it
here

The general rate of
wages depends on
the amount of the
fund for the main-
tenance of labour-•
ers, compared with
the number of
labourers to be
maintained, which
depends

Tartly on the pro-
ductiveness of la-
bour in the direct
or indirect pro-
duction of corn;
modities to be used
by the labourer,
which depends on

Partly on the number
of labourers em-
ployed in the pro-
duction of things
for labourers—i.e.,
the production of•
wages, compared
with the whole

'l. The quality of the
labourer.

2. The assistance
derived from
natural agents.

3. The assistance
derived from
capital.

4. Freedom from
Government in-
terferenee.

(5. Partly on the rate
of profit.

number of labour-
ing families,which
depends on

6. Partly on the
period forwhich
capital em-
ployed in the

production of
wages must be
advanced.

Hence the general rate of wages depends on these six
elements. An alteration in any of the first four will
cause an alteration in the amount of the general rate of
wages. Any alteration in the last two will effect an
alteration in the proportion, that the general rate of wages
bears to the general rate of profits.
Of the two great classes, a rise or fall in the first four
elements (which form the first great class) may be compen-
sated inter se by other falls or rises, in which case the
amount of the general rate of wages will remain unaltered
Thus if the assistance derived from natural agents become
less efficient in production, that might be counteracted
by increased industry and skill on the part of the
labourers.

_Of the other great class which consists of the last two
elements, a rise in one may be counteracted by a fall in
the other, in which case the proportion will not be
altered.
And lastly, one of the two great classes may rise, and
the other fall just sufficientlyto neutralise the rise, in which
case no change will be effected in the amount of the gene-
ral rate of wages, but only in the proportion of wages to
profits. Thus the rate of profit might rise, which would
increase the share of the capitalist of the resulting of pro-
duction, but the effect of this might be neutralised by an
increase in the productiveness of labour.
The six elements on which the usual rate of wages de-
pend are—

Ist. The quality of the labourer. The productiveness
of labour depends on the strength of body of the labourer.
Any cause tending to diminish the physical strength of
the labouring classes, whether it arises from bad sanitary
arrangements, or an insufficiency of wholesome food, or,
any enervating cause, will destroy the efficiency of the la.
bourer, diminish his productiveness, and tend to lower
the general rate of wages. A solid education, imparting
habits of industry, will make hi% a constant producer,
which will increase the productiveness of labour.
Expanded intelligence will enable him to adopt any
trade or occupation, should he be pushed out of his own,
by anyone of the thousand discoveries which are every day
being made. Had the hand-loom weavers had this intelli-
gence, it would have enabled them to turn to other occu-
pations as soon as they saw their own was gone for

ever, and thus have escaped the harrowing and heartrend-
ing misery which occurred some years ago. Englightened
intelligence will also enable the artisan at once to under-
stand and adopt the annually-accuinu'ating improve-
ments in all branches of production, and also enable him to
see when strikes are beneficial,and when they entail greater
evils than they can cure, limiting, as they do, production,
lessening the fund for the maintenance of labour, and
lowering the general rate of wages by diminishing for the
time, at all events, the amount of the fund to be divided
amongst labourers.
Also some knowledge of the arts of life, the igno-
rance of which notoriously limits our production.
The great obstacle which besets inventors is the
impossibility of procuring persons to perform operations
which cannot be reduced to regular routine or a mere
matter of memory, Mr. J. S. Mill treats this subject in
a masterly manner. Pol. Econ., B. 1., ch. 7.
The mean age of the labouring population is also an
element in their productive efficiency, that condition
where there is the greatest number of adults, other
qualities being equal, being the most productive.
Then the "moral qualities," to use the words of Mr.
Mill, "are fully as important to the efficiency and worth
of their labour as the intellectual."

2nd. The assistance labour derives from natural agents :
the climate of a country ; its soil ; mineral products ; the
water power of its rivers; its harbours and maritime
position ; all facilitate and increase the productiveness of
labour. When from any cause natural agents are rendered
more available for production, as in the case of new dis-
coveries, it tends to raise the rate of wages.
3rd. The assistances derived from capital are innumera-
ble—as machinery, tools, railroads, canals, bridges, roads,
and ships, and the minute sub-division of labour which
can alone be accomplished by capital. But when the
capital of a country is diminished, especially its circu-
lating capital, the assistance that this capital has lent to
labour is diminished, at least pro canto. and consequently
wages must fall. When a government, therefore, goes
into the loan market and effects a loan, it necessarily
diminishes the capital of the country and lowers wages.
On the other hand, by paying off the National Debt, it
takes a portion of the annual revenue of the country, and
converts it into capital by paying it to the fundholder, and
thereby increases the circulating capital of the country,
which tends to increase the rate of wages.
4th. Freedom from Goverment interference, interference
which has done more to impede and prevent production
than all other causes acting among civilised communities ;
the main function of a government should be to give secu-
rity against violence and fraud, foreign and domestic. If
the National Debt were all paid off, it would free labour
from that very great and constant government inter-
ference, which the necessity of having to raise £26,000,000
of taxes a year to pay the interest, entails, and the muLi-
plied evils which such heavy taxation involves.
sth. The rate of profit. Mr. J. S. Mill lays down that
the gains of the capitalist depend alone on two elements.
1. The magnitude of the produce, i.e., the productive
power of labour. 2. The proportion of that produce ob-
tained by the labourers themselves, i.e., the ratio which
the remuneration of the labourers bears to the amount
they produce. But the rate of profit, the percentage on
the capital, dePends only on the second of these two ele-
ments.

The rate of profit also depends on—the cost of labour,
which is a function of three variables, viz. : •
1. The efficiency of labour.

2. The wages of labour (meaning thereby the real re-
.
war 4 of the labourer).
3. The greater or less cost at which the articles com-
posing that real reward can be produced or pur-
chased.
The former part of this analysis is the conclusion arrived
at by Ricardo, from whom Senior differs, and with ap-
parently good reason, but the discussion would extend to
too great a length to be entered on here. When the
rate of profit is increased, the first and third of those
variables remaining constant, it is obvious that it must be
at the expense of the second variable, i.e., the wages of
labour.

The gross profits of capital may be distinguished into
three parts, viz. :

1. Remuneration for risk insurance
torm.d { wages of superin-
2. ditto for trouble tendance
3. ditto for capital interest
When the government, therefore, by borrowing, raises
the rate of interest, as it did to an enormous extent during
the French war, it raises the profits of capital, and such
augmentation of profits is abstracted entirely from the
wages of labour.
6th. The period for which capital employed in the
production of wages.must be advanced—it is the labourer's
interest that this period should be as short as possible.
From this it appears that the general rate of wages
depends partly on the number of labourers employed in
producing wages compared with the whole number of
labourers, and this last mainly depends on the rate of
profit. If, therefore, the proportionate rate of profit
be increased from the effects of a loan or any other cause,
the number of labourers employed in the production of
wages will be diminished, and the number of labourers
engaged in producing profits will be increased.
There will be the same amount of production, but it
will be differently distributed ; the capitalists will receive
more, the labourers less. And this may have happened
while wages have actually risen. They may have been
depressed from the effects of the loan, and been raised
from other causes—that is to say, their amount may have
been raised, and their proportion diminished.
But the apparent or money value of wages must not be
confounded with the real amount, which is to be estimated
by "the quantity and quality of the commodities which
form wages, if paid in kind, or are purchasable with
the wages, if paid in money." Of this difference Senior
gives a striking example : " Estimated in money, we say
that wages have risen in England since the reign of Henry
VII., because the labourer now receives ls. 6d. or 2s. a
day, and then received only 4id. Estimated in commo-
dities, we say that wages have fallen in England since
that reign, because the labourer then earned two pecks of
wheat a day, and now earns only one."
Thus, then, wages may have an apparent rise while
suffering a seal fall, wages in money may be high at the
moment wages in kind are low. I therefore use wages
to express not the money, but the commodities received
so purchasable by the labourer.
(To be continued.)