To those who are the possessors of large properties, a gradually diminishing rate of return for the use of capital makes but little difference so far as personal comforts are concerned; but to the small capitalists the steady reduction in income which has been experienced in recent years means always discomfort, and often misery. A striking illustration of this, derived from actual experience, and contingent on a reduction by the Prussian Government of the interest on its debt to 3½ and 3 per cent, is thus given by a recent correspondent (1887) of the London "Economist":
"This reduction," he says, "struck a heavy blow at the existence of what may be called the 'middle classes' in Germany—that is, the great number of people who own a small capital invested in funds, besides carrying on some business or having some other profession. The combined income from both enabled them to live in fair style, making both ends meet by way of carefully regulated expenditure. These classes have formed for over half a century the 'backbone' of Germany. They are now gradually disappearing, making room for great wealth on one side and great poverty on the other."
Decline in Land-Values.—Another interesting and curious feature of the existing economic condition—the direct outcome of the recent radical changes in the methods of production and distribution—has been the decline in the value of land over large areas of the earth's surface. Thus, in the case of Great Britain, while every other item of national wealth has shown an increase — often most extraordinary—since 1840, the estimated value of land in the United Kingdom since that date has heavily decreased. A similar experience is also reported as respects France,
the four years from 1883 to 1886 inclusive, declined 0.96 per cent, and the average of the private banks of Germany during the same period, 1.60 per cent; all of which clearly indicates that the banking business of Germany is becoming less and less profitable.
- According to Mr. Mulhall, the English statistician, the following table exhibits the changes in the leading items of wealth in Great Britain since 1840:
[Omitting 6 ciphers.]
1840. 1860. 1887. Railways £21 £348 £831 Houses 770 1,164 2,640 Furniture 385 582 1,320 Lands 1,680 1,840 1,542 Cattle, etc 380 460 414 Shipping 23 44 130 Merchandise 70 190 321 Bullion 61 105 143 Sundries 710 827 1,869 Total £4,100 £5,560 £9,210
In 1837 the population of the United Kingdom was 26,000,000; in 1887, it was 37,000,000, an increase during the period of 42 per cent.