annum.

These facts are in themselves conclusive proofs that there is but little employment for capital in Ireland. We are informed that the farmers are understood to be the most numerous class depositing."2 A bank manager in Ireland, whose attention has been directed to the subject, has assured me that nine-tenths of the amount of these deposits belong to the farming classes. The commercial classes, it needs scarcely be observed, keep the balances of their banking accounts-that is, their unemployed capital-as low as possible; and certainly they do not lend their money at under 2 per cent. Therefore, very little of the above sum can belong to them. Well, indeed, may we agree with Dr. Hancock that these deposits indicate that any neglect in executing the more lasting agricultural improvements cannot arise from a general want of capital amongst those connected with land in Ireland; and it is a matter of grave inquiry why the farmers of Ireland should lend such large sums to the different banks, at an average of 2 per cent., to be employed in the large towns, and much of it in London, instead of expending it in agricultural improvements in Ireland.'3

It is well known that for many years certain Irish banks have been paying their shareholders, in dividends and bonuses, 20 per cent. per annum on a paid-up capital of 600,000l. or 800,000l. This they were enabled to do by the large amount of deposits, in some instances 4,000,000l., which they each held at under 2 per cent., and on which they received interest at a rate varying from 4 to 10 per cent. A very large proportion of these deposits is lent in London; for money, like any other commodity, will always find its way to the market in which it is most in demand. Then there are several Irish merchants

In one or two exceptional years, when the London rate was very high, the Irish banks, competing for deposits, have allowed 3, 4, and even 5 per cent., but for comparatively limited periods. The present rate of interest on deposits is 1 per cent.

2 'Supposed progressive Decline of Irish Prosperity,' p. 50. Ibid. p. 52. One of these banks has within a few years nearly doubled its capital.

WEALTH NOT ALWAYS CAPITAL TO A COUNTRY. 159

and traders, who are induced by the high rate of interest allowed to let balances lie on call in the London joint-stock banks. The aggregate of these balances is considerable. Moreover, it is notorious that the surplus or savings of absentee rentals, as well as of the rentals of the great London companies drawn from the north of Ireland, are not employed as capital in Ireland; inasmuch as they can be much more profitably invested elsewhere.

Hence we may infer, that whatever portion would be saved of this sum of 10,000,000l. would not to any appreciable extent be employed as capital in Ireland, but would be sent back to England, where, beyond all doubt, in the present social and economic condition of Ireland, it could be much more profitably employed. In other words, it would be an instrument of production, used in England, its owners in Ireland receiving a very low rate of interest, or payment for its use, from English capitalists.

CHAPTER XL.

THE INHABITANTS OF A COUNTRY MAY POSSESS A CONSIDERABLE AMOUNT OF WEALTH, NOT CAPITAL TO THE COUNTRY; CASE IN POINT; BENEFICIAL EFFECTS OF A NINETY-NINE YEARS' LEASE-MOUNTAIN IMPROVEMENT, OR THE CREATION OF CAPITAL BY LABOUR, IN 1766; THE SAME TRACT IN 1869-ANOTHER INSTANCE IN 1766; ANOTHER, 1837-65—MASTER FITZ GIBBON ON THE NECESSITY OF PROTECTING, BY LEGISLATION, THE RIGHT OF THE TENANT TO HIS LABOUR AND CAPITAL THUS INVESTEDMONEY HOARDED BY TENANTS; TENANTS PURCHASers of property, sold IN SMALL LOTS, IN THE INCUMBERED ESTATES COUrt.

OBVIOUSLY the inhabitants of a country may possess a considerable amount of wealth which is not capital to the country. For it is not wealth alone, but wealth productively employed, that constitutes capital. The following case in point lately came under my notice. A farm of 190 statute acres was to let, in one of the southern counties of Ireland. It was thoroughly improved and in good heart, with house, offices, fencing and drain

ing, all completed by the landlord, at a cost of close on 2,000 There were six or seven applicants for this farm. One of them was an ordinary frieze-coated farmer, who had, up to that time, held land on adjoining estates, as tenant from year to year, without laying out one shilling on improvements. The landlord, a retired merchant, who had purchased the property under the Incumbered Estates Court, and whose ideas of the management of land were an exception to the general rule, was willing to give a lease of ninety-nine years. He selected this man, who paid down a fine of 800l., and showed his landlord 800l. more, as his floating capital to work the farm. The whole 1,600l. were in gold. Now, as long as this sum of 1,600l. was in the farmer's strong box it was not capital to him, or to the country. The same may be said of the 16,000,000l. deposited in the Irish banks at 14 per cent. by the farmers of Ireland. The greater part of this money is capital to England-not to Ireland. The Irish farmers, as a class, unlike the farmers of all other countries, do not make the land their bank, nor can they do so in the existing state of things. Surely there must be something very wrong in the condition of a country where land, labour, and capital abundantly exist, and yet cannot be brought together.

How different is it in those rarely exceptional cases, where the bar to productive industry is removed! In such cases, by a law of mutual attraction, land, labour, and capital are immediately brought into combination, and that, too, with the happiest results.

An apt illustration of this is given by Arthur Young,2 in the following interesting account of mountain improvement carried out on the estate of Sir William Osborne, in the county of Tipperary, about a century ago:

Twelve years ago, he met a hearty-looking fellow of forty, followed by a wife and six children in rags, who begged. Sir William ques

1 This I know as a positive fact. It is very rarely, however, that the Irish farmers keep gold. What they generally hold are deposit receipts of the several banks.

2 Tour in Ireland,' vol. ii. p. 170.

6

CREATION OF CAPITAL BY COTTIERS IN 1776.

161

tioned him upon the scandal of a man in full health and vigour supporting himself in such a manner. The man said he could get no work. Come along with me; I will show you a spot of land upon which I will build a cabin for you, and, if you like it, you shall fix there.' The fellow followed Sir William, who was as good as his word. He built him a cabin, gave him five acres of a heathy mountain, lent him four pounds to stock with, and gave him, when he prepared his ground, as much lime as he could come for. The fellow flourished; he went on gradually, repaid the four pounds, and presently became a happy little cottar. He has at present twelve acres under cultivation, and a stock in trade worth at least 801. His name is John Conory.

The success which attended this man, in two or three years, brought others, who applied for land, and Sir William gave them as they applied. The mountain was under lease to a tenant who valued it so little, that upon being reproached with not cultivating or doing something with it, he assured Sir William that it was utterly impracticable to do anything with it, and offered it to him without any deduction of rent. Upon this mountain he fixed them; gave them terms as they came, determinable with the lease of the farm, so that every one that came in succession had shorter and shorter tenures, yet are they so desirous of settling that they come at present, though only two years remain for a term.

In this manner Sir William has fixed twenty-two families, who are all upon the improving hand, the meanest growing richer, and find themselves so well off, that no consideration will induce them to work for others, not even in harvest; their industry has no bounds, nor is the day long enough for the revolution of their incessant labour. Some of them bring turf to Clonmel, and Sir William has seen Conory returning loaded with soap ashes.

He found it difficult to persuade them to make a road to their village, but when they had once done it, he found none in getting cross roads to it, they found such benefit in the first. Sir William has continued to give them whatever lime they come for; and they have desired 1,000 barrels among them for the year 1766, which their landlord has accordingly contracted for with his lime burner at 11d. a barrel. Their houses have all been built at his expense and done, by contract, at six pounds each, after which they raise what little offices they want for themselves.

Their cattle are feeding on the mountain by day, but of nights they house them in little miserable stables. All their children are

M

employed regularly in their husbandry, picking stones, weeding, &c.; which shows their industry strongly, for in general they are idle about all the country. The women spin.

Too much cannot be said in praise of this undertaking. It shows, that a reflecting, penetrating landlord can scarcely move without the power of creating opportunities to do himself and his country service. It shows that the villainy of the greatest miscreants is all situation and circumstance: EMPLOY, don't hang them. Let it not be in the slavery of the cottar system, in which industry never meets its reward, but, by giving property, teach the value of it: by giving them the fruit of their labour, teach them to be laborious. All this Sir William Osborne has done, and done it with effect, and there probably is not an honester set of families in the county than those he has formed from the refuse of the whiteboys.

The following interesting account of the great-grandchildren of these men is given by the 'Times' commissioner, writing from Clonmel, September 1, 1869:—

I took care to visit a tract in this neighbourhood which I expected to find especially interesting. Arthur Young tells us how in his day Sir William Osborne, of Newtownanner, encouraged a colony of cottiers to settle along the slopes that lead to the Commeraghs, and how they had reclaimed this barren wild with extraordinary energy and success. The great-grandchildren of these very men now spread in villages along the range for miles, and, though reduced in numbers since 1846, they still form a considerable population. The continual labour of these sons of the soil has carried cultivation high up the mountains, has fenced thousands of acres and made them fruitful, has rescued to the uses of man what had been the unprofitable domain of nature. These people do not pay a high rent; they are, for the most part, under good landlords; but I was sorry to find this remarkable and most honourable creation of industry was generally unprotected by a certain tenure, The tenants, with hardly a single exception, declared they would be happy to obtain leases, which, as they said truly, would 'secure them their own, and stir them up to renewed efforts.'

In this case alone, traced through four generations of improving tenants, who have rescued thousands of acres from unprofitable sterility, and made them bloom with fruitfulness for the uses of man, we have an irresistible argument for legis