The figure here for money income at Taunton is $12.34 greater than that previously given, because gains on jobbing to that amount are added, which were previously deducted from depreciation.

Net earnings for present purposes are represented by the difference between total earnings and operating expenses, no allowance being made for interest or depreciation.

It thus appears that the earnings of the two municipal plants for the year, above all expenses of operation, amounted to 12.9 per cent. of their total investments.

The total earnings of the private electric plants are represented by their money incomes, and these incomes less operating expenses give the net earnings for present purposes. As the municipal plants pay no taxes, the amounts representing the taxes paid by the private plants are not included in their expenses.

Investments in the electric systems of private corporations are represented by the face values of their issued stocks and bonds, and by the notes outstanding against them.

This is so because Massachusetts law does not permit the stocks and bonds of its corporations to issue for less than par. The items of stocks, bonds and notes for the three plants are as follows:

The total investment in each case is used as a divisor of the net earning, to show the return on the investment.

This process shows the net earnings here considered to be 10.23 per cent. of the investment in the three private systems.

It was found above that the two municipal plants earned a net return during the year of 12.9 per cent. on the investment in them, so that the municipal management has rendered its capital 1.26 times as productive as the like resources under private control. It has already been shown that the price charged by the three private electric plants for service to arc street lamps was 1.458 times as great as the cost of similar service from the two municipal plants.

These results indicate, at least as to street lighting, that cheaper service and a larger return on invested capital are obtained under municipal than by private management.

Boston, Mass.

ALTON D. ADAMS.

BOOK REVIEWS.

Capital und Capitalzins. Von Eugen von Böhm-Bawerk. Zweite Vielfach Vermehrte und Verbesserte Auflage. Erste Abtheilung: Geschichte und Kritik der Capitalzinstheorien. Innsbruck, Verlag der Wagner'schen Universitäts-Buchhandlung. 1900. 702 SS.

Probably no writer of recent years has so stimulated economic discussion as did Professor Böhm-Bawerk by the publication of his "Capital and Interest" (1884) and his "Positive Theory of Capital" (1889). At a time when economists were turning their attention toward the analysis of the psychical processes of valuation, as distinguished from the physical processes of production, exchange, distribution and consumption, this work held the attention of the economic world by the originality of its methods and the boldness of its conclusions. Much of the theoretical discussion of the last dozen years has centered around these works, and it would be surprising if something of importance had not been produced. This second edition is now published in order to bring his discussion down to date, and to take account of the various criticisms that have been passed upon the original edition.

The author still adheres to his original plan of attempting to demolish every other theory of interest in order to make room for his own, which is set forth in his "Positive Theory of Capital." He apparently sees no reason for modifying any of his own views for, though this edition contains many additions to the original, it contains few changes. Many will doubtless think that it would have been better if it had contained fewer additions and more changes. The additions consist mainly in criticisms upon recent writers and replies to criticisms upon his own theory, though there is some enlargement of his discussion of earlier writers. Among the earlier writers, John Rae, in particular, deservedly receives a large share of appreciative discussion. Among the later writers and critics of the author's theory, Professor Marshall and the late President Walker receive the most attention, though Clark, MacVane, Macfarlane, Stolzman, Wieser, Dietzel, and several others come in for a share.

Since the author's own theory is not set forth in this volume, it would be improper to enter upon a discussion of here. It can

not, however, be out of place to mention that he fails to appreciate the real strength of some of the theories which he criticizes, because of his too narrow view of the problem. This is true of the "Productivity" and the "Abstinence" theories in particular. The problem of interest must be looked at from two widely different standpoints, the physical and the psychical, and neither view is the only absolutely correct one. Physically, there can be no doubt that capital is productive. No one doubts that tools are useful, yet their usefulness consists not in any direct satisfaction which they furnish, but in the larger product which they enable industry to realize. That is the only sense in which anything, including labor, can be said to be productive. It so happens that the making of a tool is a round-about process of producing goods, but it is the usefulness of the tool and not the round-about-ness of the process that counts. The initial act of bringing capital into existence is an act of saving, or waiting, which may or may not involve sacrifice, according to circumstances. Under the physical law of diminishing returns, which is applicable to the other factors of production as well as to land, the more capital there is brought into existence relatively to the other factors the lower the physical productivity of each unit of capital. The more prevalent the policy of saving or waiting becomes, the more capital there will be in proportion to the other factors of production, and the lower its productivity. These are some of the physical facts which can not be ignored in the solution of the problem of interest.

of interest is Goods have a Goods which

On the other hand, it is evident that the problem a part of the general psychical problem of valuation. commodity value represented by their selling price. endure for a time are also capable of furnishing a flow of services or utilities. This flow also has its market value, represented, in the case of land, by rent, and in the case of produced goods, by interest. The services of capital are known as its productivity. It is because of this productivity that capital is capable of earning an income at all. This income is simply the price that is paid for the flow of services which capital furnishes. How does it happen that the sum of the prices paid for the services of a piece of capital will in the end exceed the present price of the piece of capital itself? This is the problem which Professor Böhm-Bawerk set out to solve, and for whose solution he offers the ingenious theory of the discounting of the future. We might grant the correctness of his theory and yet maintain that he is in error in supposing that this is the whole of

the problem of interest. It is because he assumes this to be the whole of the problem that he is unable to see the real value of some other theories which deal with other parts of the problem. This is the chief weakness of the volume before us, and the one which renders many of his criticisms meaningless. This weakness is even more apparent in this edition than it was in the original, because the "Productivity" and the "Abstinence" theories have, since the original edition was published, undergone considerable revision, freeing them from the objections which could then be urged against them. These revisions the author is apparently unable to understand.

Harvard University.

T. N. CARVER.

An Introduction to the Industrial and Social History of England. By Edward P. Cheyney, Professor of European History in The University of Pennsylvania. New York: The Macmillan Company, 1901-317 pp.

This is a text-book, intended for college and high school classes. The three hundred pages may be divided, for the purpose of description, into three nearly equal parts. Of these the first is devoted to the period before 1350, and contains an introduction and chapters on rural life, on town life and on trade. The second part

covers in chronological order the economic changes from the later fourteenth century to the early eighteenth century, and the third sketches the course of the industrial revolution from the later eighteenth century to the present day. Some interesting cuts and maps illustrate the text, and to each chapter is appended a bibliographical paragraph that gives to the student the titles of the principal secondary authorities, though it withholds from him, curiously enough, the important item of the date and place of their publication.

Professor Cheyney's book bears well a comparison with other books of the kind, and will undoubtedly play an important part in the extension of instruction in economic history. It offers to the student a sober and careful description of the economic development of England. The author confines himself to pretty sure ground (so omitting with scarcely a reference the whole subject of the origin of the manor), and maintains the reader's confidence throughout. Occasional misprints in the dates were noticed (1361, Bretigny; 1792, invention of the cotton gin), and slips such