3d, The union of labor and capital is most effective when the latter is appropriately distributed. Capital creates no values by its own powers. It must be joined with labor. Somebody must use it, bring his personal energies to bear upon it, set it in motion, watch its operations, work with it. The farmer, the merchant, the manufacturer, must each bestow constant attention on the capital he employs, or no good will come of it. The more intense and vigilant the application, the more certain the return, the larger the profits. This is a well-known practical principle; and from it follows that the point will be reached where an individual has so much capital under his control that his entire efforts, by himself and those working under his direction, are not sufficient to secure its greatest effectiveness. Of course, in such a case, it is economically right that the excess of capital should be transferred to some other position, where its full productiveness can be obtained.

Such limitations are highly beneficial to society; for, were there no restrictions of this kind, were capital in vast aggregations equally efficient as in smaller bodies, the business of the world might be controlled, and the profits appropriated, by a very few persons.

The point is of great importance. Such a concentration of capital as effects the highest division of labor, and the fittest application of machinery, is desirable for the interest of all; and for those purposes, and up to such a degree, capital so concentrated has a wonderful power in production. But its aggregation, merely, is a hinderance rather than a help. After the two advantages spoken of above are once secured, capital becomes potent and beneficial just in proportion as it is distributed. By such distribution, it comes closer to labor and natural advantages. It makes use of various powers; it defends itself better in emergencies ; it adapts itself more shrewdly to peculiarities of circumstance; it has a keener intelligence of the public wants ; it commands a greater amount of executive talent; it superintends its employes with more accuracy ; it saves the pieces, keeps machinery oiled, looks after tools.

The man who is to gain by the work is brought nearer to it. He is well served, because he serves himself.

For a long time, it was a favorite belief with the American people, that corporations were the most efficient agents of production, even where the work was not so great as to be beyond individual enterprise. The older wisdom of the country turns more and more to the smaller establishments, which secure full, interested personal supervision of labor. The English economy has always preferred these, except where the operations were beyond the reach of ordinary capital.

4th, The union of capital and labor is most effective where there is the greatest freedom of industry.

Whenever a population is sufficiently intelligent to understand its own interests, it should be left to direct its own labors. Its industry should never be interfered with by government. In all countries which may be considered as enlightened or civilized, like the European and Anglo-American, the people have no occasion to look to government for direction as to the business they shall engage in, or the manner in which they shall conduct it. Every branch of industry, in a normal state of society, grows spontaneously out of the wants and capacities of the people. Tillage, manufacturers, commerce, fisheries, spring up in the places to which they are best adapted. They can never be advantageously forced into being, or maintained by governmental authority and patronage. Every plant will thrive best in its own soil. Soils and climates vary: productions will differ in consequence.

But our immediate topic relates, not to acts of government, based on a distinct purpose to change the general course of national industry, — which will be more appropriately discussed elsewhere, — but rather to those which impose minor restrictions; directing the modes of labor, moulding the forms of capital, and prescribing the conditions of their union. All limitations of the rights and powers of capital or labor, not required by the public morality or security, are useless and mischievous.

No lawmaker can gather and express the desires of his people so accurately and seasonably as they are shown in the market demand; or set in train and carry on their efforts, with myriad instrumentalities, to that end, so savingly and earnestly as is done by interested, educated capitalists; or present satisfactions so fully and happily as is done by the merchant whose fortune is to answer for his appreciation of the public wants.

The work of the politician in this behalf is gratuitous and impertinent. It is an indignity to industry which will be revenged upon the people. Capital and labor should be mobilized as far as possible; free to collect or divide, to turn to the right or to the left; free in gift, purchase, and heritage. On the contrary, the effort of legislation has generally been to impose checks and limitations and hinder-ances everywhere.

We have thus discussed at length the union of capital and labor ; passing close by the great practical questions of protection and entail, but reserving them, the one to the division of " Exchange," the other to that of u Distribution."