upon, if they do not eradicate, the old capitalist.  The new trader has obviously an immense advantage in the struggle of trade.  If a merchant have 50,000 L. all his own, to gain 10 per cent on it he must make 5,000 l. a year, and must charge for his goods accordingly; but if another has only 10,000 L., and borrows 40,000 L. by discounts (no extreme instance in our modem trade), he has the same capital of 50,000 L. to use, and can sell much cheaper.  If the rate at which he borrows be 5 per cent., he will have to pay 2,000 L. a year; and if, like the old trader, he make 5,000 L. a year, he will still, after paying his interest, obtain 3,000 L. a year, or 30 per cent, on his own 10,000 L. As most merchants are content with much less than 30 per cent, he will be able, if he wishes, to forego some of that profit, lower the price of the commodity, and drive the old-fashioned trader—­the man who trades on his own capital—­out of the market.  In modem English business, owing to the certainty of obtaining loans on discount of bills or otherwise at a moderate rate of interest, there is a steady bounty on trading with borrowed capital, and a constant discouragement to confine yourself solely or mainly to your own capital.

This increasingly democratic structure of English commerce is very unpopular in many quarters, and its effects are no doubt exceedingly mixed.  On the one hand, it prevents the long duration of great families of merchant princes, such as those of Venice and Genoa, who inherited nice cultivation as well as great wealth, and who, to some extent, combined the tastes of an aristocracy with the insight and verve of men of business.  These are pushed out, so to say, by the dirty crowd of little men.  After a generation or two they retire into idle luxury.  Upon their immense capital they can only obtain low profits, and these they do not think enough to compensate them for the rough companions and rude manners they must meet in business.  This constant levelling of our commercial houses is, too, unfavourable to commercial morality.  Great firms, with a reputation which they have received from the past, and which they wish to transmit to the future, cannot be guilty of small frauds.  They live by a continuity of trade, which detected fraud would spoil.  When we scrutinise the reason of the impaired reputation of English goods, we find it is the fault of new men with little money of their own, created by bank ‘discounts.’  These men want business at once, and they produce an inferior article to get it.  They rely on cheapness, and rely successfully.

But these defects and others in the democratic structure of commerce are compensated by one great excellence.  No country of great hereditary trade, no European country at least, was ever so little ‘sleepy,’ to use the only fit word, as England; no other was ever so prompt at once to seize new advantages.  A country dependent mainly on great ‘merchant princes’ will never be so prompt; their commerce