is building streets, house after house, each house costing him L800,
and selling for L1000 say; and this, after paying his interest at the
bank, etc., pays him about 10 to 15 per cent on his own capital
embarked. Suppose now that the bricklayers increase their
inefficiency either by a trade rule or by a combination to shorten
the hours of labour. The cost of each house is increased L50 to him:
nothing in the new bricklaying rules or rates affects the purchasers;
the builder estimates that his profits will fall to 5 to 8 per cent
on his capital. He does not care to pursue so risky a business at
this rate of profit; he determines to contract operations. When he
goes to his bank, a branch of one of the gigantic London joint-stock
banks, at the end of the quarter, the manager of the branch comes
forward as usual ready to continue the bank advances; but the builder
says simply, "The building trade is not so good as it was," and
declines. The increased cost of bricklaying has affected all other
speculative builders in much the same way; the consequence is that
"gold" accumulates in the branch banks. The secretaries and managers
of the great joint-stock banks do not let their capital idly
accumulate; they buy New Zealand 6 per cents, or transfer to
Frankfort or New York the capital that, but for the rise in cost of
bricklaying, would have gone to the London bricklayers.

In this case it is easy to see that the quantity of work to be done
is not limited. Should the cost of building diminish but a little,
the rate of profit of the builders on their _own_ capital (in many
cases not one-tenth of the capital they employ) will run up to 20 or
30 per cent, or even more; and at even a 20 per cent profit the
bricklayers would find that a perfect rage for building would set in.
Every speculative builder in the trade would strain his credit to the
utmost, and take up every L100 from his bank that he could induce the