and iron pipes; B in manufacturing bobbin-net. The capital of A will be expended in building a house and erecting a steam-engine, which costs, we shall suppose, 3000l.; and in laying down iron pipes to supply his customers, costing 7000l. The greatest part of this latter expense is payment for labour: and if the pipes were to be taken up, the damage arising from that operation would render them of little value, except as old metal; whilst the expense of their removal would be considerable. Let us, therefore, suppose, that if A were obliged to give up his trade, he could realize only 4000l. by the sale of his stock. Let us suppose again that B, by the sale of his bobbin-net factory and machinery, could realize 8000l. and let the usual profit on the capital employed by each party be the same, say 20 per cent: then we have
| Capital invested. | Money which would arise from sale of machinery. | Annual rate of profit per cent. | INCOME. | |
|---|---|---|---|---|
| Water-works | £10,000 | £4,000 | £20 | £2,000 |
| Bobbin-net Factory | 10,000 | 8,000 | 20 | 2,000 |
Now, if, from competition, or any other cause, the rate of profit arising from water-works should fall to 10 per cent., that circumstance would not cause a transfer of capital from the water-works to bobbin-net making; because the reduced income from the water-works, 1000l. per annum, would still be greater than that produced by investing 4000l., (the whole sum arising from the sale of the materials
