286.  If we look only at the interests of the consumer, the case is different.  When too large a supply has produced a great reduction of price, it opens the consumption of the article to a new class, and increases the consumption of those who previously employed it:  it is therefore against the interest of both these parties that a return to the former price should occur.  It is also certain, that by the diminution of profit which the manufacturer suffers from the diminished price, his ingenuity will be additionally stimulated; that he will apply himself to discover other and cheaper sources for the supply of his raw material; that he will endeavour to contrive improved machinery which shall manufacture it at a cheaper rate; or try to introduce new arrangements into his factory, which shall render the economy of it more perfect.  In the event of his success, by any of these courses or by their joint effects, a real and substantial good will be produced.  A larger portion of the public will receive advantage from the use of the article, and they will procure it at a lower price; and the manufacturer, though his profit on each operation is reduced, will yet, by the more frequent returns on the larger produce of his factory, find his real gain at the end of the year, nearly the same as it was before; whilst the wages of the workman will return to their level, and both the manufacturer and the workman will find the demand less fluctuating, from its being dependent on a larger number of customers.

287.  It would be highly interesting, if we could trace, even approximately, through the history of any great manufacture, the effects of gluts in producing improvements in machinery, or in methods of working; and if we could shew what addition to the annual quantity of goods previously manufactured, was produced by each alteration.  It would probably be found, that the increased quantity manufactured by the same capital, when worked with the new improvement, would produce nearly the same rate of profit as other modes of investment.

Perhaps the manufacture of iron(1*) would furnish the best illustration of this subject; because, by having the actual price of pig and bar iron at the same place and at the same time, the effect of a change in the value of currency, as well as several other sources of irregularity, would be removed.

288.  At the present moment, whilst the manufacturers of iron are complaining of the ruinously low price of their produce, a new mode of smelting iron is coming into use, which, if it realizes the statement of the patentees, promises to reduce greatly the cost of production.

The improvement consists in heating the air previously to employing it for blowing the furnace.  One of the results is, that coal may be used instead of coke; and this, in its turn, diminishes the quantity of limestone which is required for the fusion of the iron stone.

The following statement by the proprietors of the patent is extracted from Brewster’s Journal, 1832, p. 349: