Chapter 25, Section 5, Parts A through C of Capital, Volume 1. This is a LibriVox recording. All LibriVox recordings are in the public domain. For more information or to volunteer, please visit LibriVox.org. Capital, a critical analysis of capitalist production. Volume 1 by Karl Marx. Translated from the 3rd German edition by Samuel Morne, Edward Aveling, and edited by Frederick Engels. Part 7, The Accumulation of Capital. Chapter 25, The General Law of Capitalist Accumulation. Section 5, Illustrations of the General Law of Capitalist Accumulation. Parts A through C. Section 5, Illustrations of the General Law of Capitalist Accumulation. Part A, England from 1846 to 1866. No period of modern society is so favorable for the study of capitalist accumulation, as the period of the last twenty years. It is as if this period had found fortianotus' purse. But of all countries, England again furnishes the classical example, because it holds the foremost place in the world market, because capitalist production is here alone completely developed, and lastly because the introduction of the free trade millennium since 1846 has cut off the last retreat of vulgar economy. The titanic advance of production, the latter half of the twenty years period, again far surpassing the former, has been already pointed out sufficiently in Part 4. Although the absolute increase of the English population in the last half century was very great, the relative increase or rate of growth fell constantly, as the following table borrowed from the census shows. Well increased percent of the population of England and Wales in decimal numbers, 1811 to 1821, 1.533 percent, 1821 to 1831, 1.446 percent, 1831 to 1841, 1.326 percent, 1841 to 1851, 1.216 percent, 1851 to 1861, 1.141 percent. That is now on the other hand consider the increase of wealth. Here the movement of profit, rent of land, etc., that come under the income tax furnishes the surest basis. The increase of profits liable to income tax, farmers and some other categories not included, in Great Britain from 1853 to 1864 amounted to 50.47 percent, or 4.58 percent as the annual average, and that of the population during the same period to about 12 percent. Footnote 31, 10th report of the commissioners of His Majesty's Inland Revenue, London 1866, page 38, and a footnote 31. The augmentation of the rent of land subject to taxation, including houses, railways, mines, fisheries, etc., amounted for 1853 to 1864 to 38 percent, or 3.512 percent annually. Under this head the following categories show the greatest increase. Houses increased 38.60 percent from 1864 over that of 1853, an increase of 3.5 percent per year. Mines increased from 1853 to 1864 by 84.76 percent, an increase of 7.7 percent per year. Mines increased between 1853 and 1864 by 68.85 percent, an increase of 6.26 percent per year. Gasworks increased from 1853 to 1864 by 39.92 percent, an increase of 3.63 percent per year. Fisheries increased 57.37 percent between 1853 and 1864, an increase of 5.21 percent per year. Gasworks increased 126.02 percent between 1853 and 1864, an increase of 11.45 percent per year, and railways increased by 83.29 percent between 1853 and 1864, an increase of 7.57 percent annually. If we compare the years from 1853 to 1864 in three sets of four consecutive years each, the rate of augmentation of the income increases constantly. Footnote 32, IBID, end of footnote 32. It is, for example, for that arising from profits between 1853 to 1857, 1.73 percent yearly, 1857 to 1861, 2.74 percent, and for 1861 to 64, 9.30 percent yearly. The sum of the incomes of the United Kingdom that come under the income tax was in 1856, 307,068,898 pounds sterling. In 1859, 328,127,416 pounds sterling. In 1862, 351,745,241 pounds sterling. In 1863, 359,142,897 pounds sterling. In 1864, 362,462,279 pounds sterling. In 1865, 385,530,020 pounds sterling. Footnote 33. These figures are sufficient for comparison, but taken absolutely are false since perhaps 100 million pounds of income are annually not declared. The complaints of the Inland Revenue Commissioners of systematic fraud, especially on the part of the commercial and industrial classes, are repeated in each of their reports. So for example, a joint stock company returns 6,000 pounds sterling as accessible profits. Their surveyor raises the amount to 88,000 pounds, and upon that sum, duty is ultimately paid. Another company which returns 190,000 pounds sterling is finally compelled to admit that the true return should be 250,000 pounds sterling and to quote Ibid, page 42, and footnote 33. The accumulation of capital was attended at the same time by its concentration and centralization. Although no official statistics of agriculture existed for England, they did for Ireland, they were voluntarily given in 10 counties. These statistics gave the result that from 1851 to 1861, the number of farms of less than 100 acres had fallen from 31,583 to 26,597, so that 5,016 had been thrown together into larger farms. Footnote 34, census, etc., location site at page 29. John Bright's assertion that 150 landlords own half of England and 12 half the Scotch soil has never been refuted. From 1815 to 1825, no personal estate of more than one million pounds sterling came under the succession duty. From 1825 to 1855, however, eight did, and four from 1856 to June 1859, i.e. in four and a half years. Footnote 35, fourth report, etc., of England Revenue, London, 1860, page 17. The centralization will, however, be best seen from a short analysis of the income tax scheduled E, namely profits, exclusive of farms, etc., in the years 1864 and 1865. I note beforehand that incomes from this source pay income tax on everything over 60 pounds sterling. These incomes liable to taxation in England, Wales, and Scotland amounted in 1864 to 95,844,222 pounds sterling in 1865 to 105,435,579 pounds sterling, footnote 36. These are the net incomes after certain legally authorized abatements, and the footnote 36. The number of persons taxed were in 1864, 308,416 out of a population of 23,891,009. In 1865, 332,431 out of a population of 24,127,003. The following table shows the distribution of these incomes in the two years. In the year ending April 5, 1864, the income from profits total was 95,844,222 pounds, which was collected from 308,416 people. In the year ending April 5, 1865, the total income from profits was 105,435,738 pounds sterling, collected from 332,431 people. Of these, in the year ending April 5, 1864, the income from profits amounted to 57,028,288,280. In 89 pounds sterling collected from 23,334 people, and in the year ending April 5, 1865, the income from profits was 64,554,297 pounds sterling, collected from 24,265 people. Of these, in April 5, 1864, 36,415,225 pounds sterling were collected from 3,619 people, while in 1865, 42,535,576 pounds sterling was collected from 4,021 people. Of these, in 1864, 22,809,781 pounds sterling was collected from 832 people. In 1865, 27,555,313 pounds sterling were collected from 973 people. Of these, in 1864, 8,744,762 pounds sterling were collected from 91 people. In 1865, 11,777,238 pounds sterling were collected from 107 people. In 1855, they were produced in the United Kingdom 61,453,079 tons of coal of the value of 16,113,167 pounds sterling. In 1864, 92,787,873 tons of value, 23,197,968 pounds sterling. In 1855, 3,218,154 tons of pig iron of value, 8,045,385 pounds sterling. In 1864, 4,767,951 tons of value, 11,919,877 pounds sterling. In 1854, the length of the railroads worked in the United Kingdom was 8,054 miles with the paid up capital of 286,068,794 pounds sterling. In 1864, the length was 12,789 miles with capital paid up of 425,719,613 pounds sterling. In 1854, the total sum of the exports and imports of the United Kingdom was 268,210,145 pounds sterling. In 1865, 489,923,285 pounds sterling. The following table shows the movement of the exports, 1846,58,842,377 pounds sterling, 1849,63,596,052 pounds sterling. In 1856, 115,826,948 pounds sterling. In 1860, 135,842,817 pounds sterling. In 1865, 165,862,402 pounds sterling. In 1866, 188,917,563 pounds sterling, footnote 37. At this moment, March 1867, the Indian and Chinese market is again overstocked by the consignments of the British cotton manufacturers. In 1866, a reduction in wages of 5% took place amongst the cotton operatives. In 1867, as consequence of a similar operation, there was a strike of 20,000 men at Preston, added in the 4th German edition. That was the prelude to the crisis which broke out immediately afterwards, FE. End of footnote 37. After these few examples, one understands the cry of triumph of the registrar general of the British people, quote, rapidly as the population has increased, it has not kept pace with the progress of industry and wealth, end of quote, footnote 38, census, et cetera, location site at page 11, end of footnote 38. Let us now turn to the direct agents of this industry or the producers of this wealth to the working class, quote. It is one of the most melancholy features in the social state of this country, end of quote, says Gladstone, quote, that while there was a decrease in the consuming powers of the people and while there was an increase in the privations and distress of the labouring class and operatives, there was at the same time a constant accumulation of wealth in the upper classes and a constant increase of capital, end of quote, footnote 39, Gladstone in the House of Commons, February 13, 1843, times February 14, 1843, quote. It is one of the most melancholy features in the social state of this country that we see beyond the possibility of denial, that while there is at this moment a decrease in the consuming powers of the people, an increase of the pressure of privations and distress, there is at the same time a constant accumulation of wealth in the upper classes, an increase of the luxuriousness of their habits and of their means of enjoyment, end of quote, Hansard, 13 February, end of footnote 39. Thus spake this unctuous minister in the House of Commons of February 13, 1843. On April 16, 1863, twenty years later, in the speech in which he introduced his subject, quote, from 1842 to 1852 the taxable income of the country increased by six percent. In the eight years from 1853, it had increased from the basis taken in 1853 by twenty percent. The fact is so astonishing as to be almost incredible, this intoxicating augmentation of wealth and power entirely confined to classes of property, must be of indirect benefit to the laboring population, because it cheapens the commodities of general consumption. While the rich have been growing richer, the poor have been growing less poor. At any rate, whether the extremes of poverty are less, I do not presume to say, end of quote, footnote 40, Gladstone in the House of Commons, April 16, 1863, Morningstar, April 17, end of footnote 40. While lame and anti-climax, if the working class has remained, quote, poor, only, quote, less poor, end quote, in proportion as it produces for the wealthy class, quote, an intoxicating augmentation of wealth and power, end quote, then it has remained relatively just as poor. If the extremes of poverty have not lessened, they have increased, because the extremes of wealth have. As to the cheapening of the means of subsistence, the official statistics, e.g. the accounts of the London Orphan Asylum, show an increase in price of 20% for the average of the three years 1860 to 1862, compared with 1851 to 1853. In the following three years, 1863 to 1865, there was a progressive rise in the price of meat, butter, milk, sugar, salt, coals, and a number of other necessary means of subsistence. Footnote 41. See the official accounts in the blue book, Miscellaneous Statistics of the United Kingdom, Part 6, London, 1866, pages 260 to 273, pass them. Instead of the statistics of orphan asylums, etc., the declamations of the ministerial journals in recommending dowries for the royal children might also serve. The greater dearness of the means of subsistence is never forgotten there. End of footnote 41. Gladstone's next budget speech of April 7, 1864, is a pindaric dithirambas on the advance of surplus value making and the happiness of the people, quote, tempered by poverty, end quote. He speaks of masses, quote, on the border, unquote, of pauperism, of branches of trade in which, quote, wages have not increased, end quote, and finally sums up the happiness of the working class in the words, quote, human life is but in nine cases out of ten a struggle for existence, end quote. Footnote 42, Gladstone House of Commons, 7 April 1864, quote, the Hansard version runs, quote, again and yet more at large what is human life but in the majority of cases a struggle for existence, end quote. The continual crying contradictions in Gladstone's budget speeches of 1863 and 1864 were characterized by an English writer by the following quotation from Boileau, quote, voilà l'homme en effet, il va du blanc au noir, il condamne au matin ses sentiments du soir, important à tout autre à soi-même incomode, il change à tout moment d'esprit comme de mode, end quote, such as the man he goes from black to white, he condemns in the morning what he felt in the evening, a nuisance to everyone else, and an inconvenience to himself, he changes his way of thinking as easily as he changes his way of dressing, end quote, the theory of exchanges, London 1864, page 135, end of footnote 42. Professor Fawcett, not bound like Gladstone by official considerations, declares roundly, quote, I do not of course deny that money wages have been augmented by this increase of capital in the last ten years, but this apparent advantage is to a great extent lost because many of the necessaries of life are becoming dearer, end of quote, he believes because of the fall in value of the precious metals, quote, the rich grow rapidly richer whilst there is no perceptible advance in the comfort enjoyed by the industrial classes, they, the laborers, become almost the slaves of the tradesmen to whom they owe money, end of quote, footnote 43. H. Fawcett location cited, page 67 to 82. As to the increasing dependence of laborers on the retail shopkeepers, this is the consequence of the frequent oscillations and interruptions of their employment, end of footnote 43. In the chapters on the quote working day, end quote, end quote, machinery, end quote, the reader has seen under what circumstances the British working class created, quote, an intoxicating augmentation of wealth and power, end of quote, for the property classes. There we were chiefly concerned with the social functioning of the laborer, but for a fully lucidation of the law of accumulation, his condition outside the workshop must also be looked at, his condition as to food and dwelling. The limits of this book compel us to concern ourselves chiefly with the worst paid part of the industrial proletariat, and with the agricultural laborers who together form the majority of the working class. But first one word on official pauperism, or on that part of the working class which has forfeited its condition of existence, the sale of labor power, and vegetates upon public arms. The official list of paupers numbered in England 851,369 persons, in 1856 877,767, in 1865 971,433. Footnote 44. Wales here is always included in England, end of footnote 44. In consequence of the cotton famine, it grew in the years 1863 and 1864 to 1,079,382 and 1,014,978. The crisis of 1866, which fell most heavily on London, created in this center of the world market, more populous than the Kingdom of Scotland, an increase of pauperism for the year 1866 of 19.5% compared with 1865 and of 24.4% compared with 1864 and a still greater increase for the first months of 1867 as compared with 1866. From the analysis of the statistics of pauperism two points are to be taken. On the one hand the fluctuation up and down of the number of paupers reflects the periodic changes of the industrial cycle. On the other the official statistics become more and more misleading as to the actual extent of pauperism in proportion as with the accumulation of capital the class struggle and therefore the class consciousness of the working men develop. For example, the barbarity and the treatment of the paupers at which the English press, the Times, Palmelgazette etc. have cried out so loudly during the last two years is of ancient date. F Engels showed in 1844 exactly the same horrors, exactly the same transient canting outcries of quote sensational literature end of quote. But frightful increase of quote deaths by starvation end of quote in London during the last ten years proves beyond doubt the growing horror in which the working people hold the slavery of the workhouse that place of punishment for misery. Footnote 45 A peculiar light is thrown on the advance made since the time of Adam Smith by the fact that by him the word workhouse is still occasionally used as synonymous with manufactory, e.g. the opening of his chapter on the division of labor quote, those employed in every different branch of the work can often be collected into the same workhouse. End of quote. End of footnote 45 The badly paid strata of the British industrial class. During the cotton famine of 1862 Dr. Smith was charged by the Privy Council with an inquiry into the conditions of nourishment of the distressed operatives in Lancashire and Cheshire. His observations during many preceding years had led him to the conclusion that quote to avert starvation diseases end of quote the daily food of an average woman ought to contain at least 3,900 grains of carbon with 180 grains of nitrogen, the daily food of an average man at least 4,300 grains of carbon with 200 grains of nitrogen, for women about the same quantity of nutritive elements as are contained in two pounds of good wheat and bread, for men one ninth more, for the weekly average of adult men and women at least 28,600 grains of carbon and 1,330 grains of nitrogen. His calculation was practically confirmed in a surprising manner by its agreement with the miserable quantity of nourishment to which want had forced down the consumption of the cotton operatives. This was in December 1862, 29,211 grains of carbon and 1,295 grains of nitrogen weekly. In the year 1863 the Privy Council ordered an inquiry into the state of distress of the worst nourished part of the English working class. Dr. Simon, medical officer to the Privy Council, chose for this work the above mentioned Dr. Smith. His inquiry ranges on the one hand over the agricultural laborers on the other over silk weavers, needle women, kid-glovers, stocking weavers, glove weavers, and shoemakers. The latter categories are, with the exception of the stocking weavers, exclusively town dwellers. It was made a rule in the inquiry to select in each category the most healthy families and those comparatively in the best circumstances. As a general result it was found that, quote, in only one of the examined classes of indoor operatives did the average nitrogen supply just exceed what in another it nearly reached the estimated standard of bare sufficiency, i.e. sufficient to avert starvation diseases, and that in two classes there was defect in one a very large defect of both nitrogen and carbon. Moreover, as regards the examined families of the agricultural population, it appeared that more than a fifth were with less than the estimated sufficiency of carbonaceous food, that more than one third were with less than the estimated sufficiency of nitrogenous food, and that in three counties, Berkshire, Oxfordshire, and Somersetshire, insufficiency of nitrogenous food was the average local diet, end of quote, footnote 46, Public Health, 6th Report, 1864, page 13, end of footnote 46. Among the agricultural laborers those of England, the wealthiest part of the United Kingdom, were the worst fed, footnote 47, location site at page 17, end of footnote 47. The insufficiency of food among the agricultural laborers fell as a rule chiefly on the women and children, for, quote, the man must eat to do his work, end of quote. Still greater penury ravaged the town workers examined, quote, they are so ill fed that assuredly among them there must be many cases of severe and injurious privation, end of quote, footnote 48, location site at page 13, end of footnote 48. Privation of the capitalist all this, i.e., quote, abstinence, end of quote, from paying for the means of subsistence absolutely necessary for the mere vegetation of his, quote, hands, end of quote, footnote 49, location site at appendix page 232, end of footnote 49. The following table shows the conditions of nourishment of the above named categories of purely town dwelling work people as compared with a minimum assumed by Dr. Smith and with the food allowance of the cotton operatives during the time of their greatest distress. With sexes of five indoor occupations the average weekly carbon was 28,876 grains and the average weekly nitrogen was 1,192 grains. The unemployed Lancashire operatives had an average weekly carbon intake of 28,211 grains and an average weekly nitrogen of 1,295 grains. The minimum quantity be allowed to the Lancashire operatives equal number of males and females was 28,600 grains and the average weekly nitrogen 1,330 grains. One half or sixty of 125 of the industrial labor categories investigated had absolutely no beer, 28% no milk. The weekly average of the liquid means of nourishment in the families varied from seven ounces in the needle women to 24 and three quarter ounces in the stocking makers. The majority of those who did not obtain milk were needle women in London. The quantity of breadstuffs consumed weekly varied from seven and three quarter pounds for the needle women to 11 and a half pounds for the shoemakers and gave a total average of 9.9 pounds per adult weekly. Sugar, for example, triacal, etc., varied from four ounces weekly for the kid-glovers to 11 ounces for the stocking makers and the total average per week for all categories was eight ounces per adult weekly. Total weekly average of butter, fat, etc., five ounces per adult. The weekly average of meat, bacon, etc., varied from seven and a quarter ounces for the silk weavers to 18 and a quarter ounces for the kid-glovers. Total average for the different categories, 13.6 ounces. The weekly cost of food per adult gave the following average figures. Silk weavers, two shillings, two and a half pence. Needle women, two shillings, seven pence. Kid-glovers, two shillings, nine and a half pence. Shoemakers, two shillings, seven and three quarter pence. Stocking weavers, two shillings, six and a quarter pence. For the silk weavers of Macclesfield, the average was only one shilling eight and a half pence. The worst categories were the needle women, silk weavers, and kid-glovers. Footnote 50, location-sided pages 232 and 233, and the footnote 50. Of these facts, Dr. Simon, in his general health report, says, quote, that cases are innumerable in which defective diet is the cause of the aggravator of disease can be affirmed by anyone who is conversant with poor law medical practice or with the wards and outpatient rooms of hospitals. Yet, in this point of view there is, in my opinion, a very important sanitary context to be added. It must be remembered that privation of food is very reluctantly borne, that as a rule great poorness of diet will only come when other privations have preceded it. Long before insufficiency of diet is a matter of hygienic concern, long before the physiologists would think of counting the grains of nitrogen and carbon which intervene between life and starvation, the household will have been utterly destitute of material comfort. Clothing and fuel will have been even scantier than food. Against inclemencies of weather there will have been no adequate protection. Dwelling space will have been stinted to the degree in which overcrowding produces or increases disease. Of household utensils and furniture there will have been scarcely any. Even cleanliness will have been found costly or difficult, and if there still be self-respectful endeavors to maintain it, every such endeavor will represent additional pangs of hunger. The home too will be where shelter can be cheapest bought. In quarters where commonly there is least fruit of sanitary supervision, least drainage, least scavenging, least suppression of public nuisances, least or worst water supply, and if in town least light and air. Such are the sanitary dangers to which poverty is almost certainly exposed when it is poverty enough to imply scantiness of food. And while the sum of them is of terrible magnitude against life, the mere scantiness of food is in itself of a very serious moment. These are painful reflections, especially when it is remembered that the poverty to which the advert is not the deserved poverty of idleness. In all cases it is the poverty of working populations. Indeed, as regards the indoor operatives, the work which obtains the scanty pitons of food is for the most part excessively prolonged. Yet evidently it is only in a qualified sense that the work can be deemed self-supporting. And on a very large scale the nominal self-support can be only a circuit longer or shorter to pauperism. End of quote, footnote fifty-one. Location cited pages fourteen and fifteen, end of footnote fifty-one. The intimate connection between the pangs of hunger of the most industrious layers of the working class and the extravagant consumption course are refined of the rich, for which capitalist accumulation is the basis. Reveals itself only when the economic laws are known. It is otherwise with the quote housing of the poor, end quote. Every unprejudiced observer sees that the greater the centralization of the means of production, the greater is the corresponding heaping together of the laborers within a given space, that therefore the swift or capitalistic accumulation, the more miserable are the dwellings of the working people. So-called improvements of towns accompanying the increase of wealth by the demolition of badly built quarters, the erection of palaces for banks, warehouses, etc., the widening of streets for business traffic, for the carriages of luxury, and for the introduction of tramways, etc., drive away the poor into even worse and more crowded hiding places. On the other hand, everyone knows that the dearness of dwellings is an inverse ratio to their excellence, and that the mines of misery are exploited by house speculators with more profit or less cost than everywhere the mines of Potosi. The antagonistic character of capitalistic accumulation, and therefore of the capitalistic relations of property generally, is here so evident that even the official English reports on this subject team with heterodox onslaughts on, quote, property and its rights, end the quote, footnote 52, quote. In no particular have the rights of persons been so avowedly and shamefully sacrificed to the rights of property as in regard to the lodging of the laboring class, every large town may be looked upon as a place of human sacrifice, a shrine where thousands pass yearly through the fire as offerings to the mollock of avarice, end the quote, S. Lang, location cited, page 150, end the footnote 52. With the development of industry, with the accumulation of capital, with the growth and so-called improvement of towns, the evil makes such progress that the mere fear of contagious diseases, which do not spare even, quote, respectability, end, quote, brought into existence from 1847 to 1864, no less than ten acts of parliament on sanitation, and that the frightened bourgeois in some towns as Liverpool, Glasgow, etc., took strenuous measures through their municipalities. Nevertheless, Dr. Simon in his report of 1865 says, quote, speaking generally, it may be said that the evils are uncontrolled in England, end the quote. By order of the Privy Council in 1864, an inquiry was made into the conditions of the housing of the agricultural laborers in 1865 of the poorer classes in the towns. The results of the admirable work of Dr. Julian Hunter are to be found in the 1867, 1865, and 1866 reports on public health. To the agricultural laborers, I shall come later. On the condition of town dwellings, I quote as preliminary a general remark of Dr. Simon, quote, although my official point of view, he says, is what exclusively physical, common humanity requires that the other aspect of this evil should not be ignored. In its higher degrees, it, i.e., overcrowding, almost necessarily involves such negation of all delicacy, such unclean confusion of bodies and bodily functions, such exposure of animal and sexual nakedness as is rather bestial than human. To be subject to these influences is degradation, which must become deeper and deeper for those on whom it continues to work. To children who are born under its curse, it must often be a very baptism into infamy. And beyond all measure hopeless is the wish that persons thus circumstance should ever, in other respects, aspire to that atmosphere of civilization, which has its essence in physical and moral cleanliness. End of quote, footnote 53. Public Health, 8th Report, 1866, page 14, note. End of footnote 53. London takes the first place in overcrowded habitations, absolutely unfit for human beings. Quote, he feels clear, says Dr. Hunter, on two points. First, that there are about 20 large colonies in London of about 10,000 persons each, whose miserable condition exceeds almost anything he has seen anywhere in England, and is almost entirely the result of their bad house accommodations. And second, that the crowded and dilapidated condition of the houses of these colonies is much worse than was the case 20 years ago. End of quote, footnote 54, location cited, page 89. With reference to the children in these colonies, Dr. Hunter says, quote, people are not now alive to tell us how children were brought up before this age of dense agglomeration of poor began. And he would be a rash prophet who should tell us what future behavior is to be expected from the present growth of children who under circumstances probably never before parallel in this country are now completing their education for future practice as, quote, dangerous classes end quote, by sitting up half the night with persons of every age, half naked, drunken, obscene and quarrelsome. End of quote, location cited, page 56. End of footnote 54. Quote, it is not too much to say that life in parts of London and Newcastle is infernal. End of quote, footnote 55, location cited, page 62. End of footnote 55. Further, the better off part of the working class together with the small shopkeepers and other elements of the lower middle class falls in London more and more under the curse of these vile conditions of dwelling in proportion as so-called improvements and with them the demolition of old streets and houses advance as factories and the afflux of human beings grow in the metropolis and finally as house rents rise with the ground rents. Quotes, rents have become so heavy that few laboring men can afford more than one room. End quote, footnote 56. Report of the officer of health of St. Martin in the Fields, 1865. End of footnote 56. There is almost no house property in London that is not overburdened with a number of middlemen. For the price of land in London is always very high in comparison with its yearly revenue and therefore every buyer speculates on getting rid of it again at a jury price, the expropriation valuation fixed by jury men, or on pocketing an extraordinary increase of value arising from the neighborhood of some large establishment. As a consequence of this as a regular trade in the purchase of quote, fag ends of leases. End quote. Quote, gentlemen in this business may be fairly expected to do as they do, get all they can from the tenants while they have them, and leave as little as they can for their successors. End quote, footnote 57. Public Health, 8th Report, 1866, page 91. End of footnote 57. The rents are weekly and these gentlemen run no risk. In consequence of the making of railroads in the city, quote, the spectacle has lately been seen in the east of London of a number of families wandering about some Saturday night with their scanty worldly goods on their backs without any resting place but the workhouse. End of quote, footnote 58. Location cited page 88. End of footnote 58. The workhouses are already overcrowded and the so-called improvements already sanctioned by parliament are only just begun. If laborers are driven away by the demolition of their old houses, they do not leave their old parish or at most they settle down on its borders as near as they can get to it. Quote, they try of course to remain as near as possible to their workshops. The inhabitants do not go beyond the same or the next parish, parting their two room tenements into single rooms and crowding even those. Even at an advanced rent, the people who are displaced will hardly be able to get an accommodation so good as the meager one they have left. Half the workmen of the Strand walked two miles to their work. End of quote, footnote 59. Location cited page 88. End of footnote 59. The same Strand, a main thoroughfare which gives strangers an imposing idea of the wealth of London, may serve as an example of the packing together of human beings in that town. In one of its parishes, the officer of health reckoned 581 persons per acre, although half the width of the Thames was reckoned in. It will be self-understood that every sanitary measure, which as has been the case hitherto in London, hunts the laborers from one quarter by demolishing uninhabitable houses, serves only to crowd them together yet more closely in another. Quote, either, says Dr. Hunter, the whole proceeding will of necessity stop as an absurdity, or the public compassion, exclamation point, be effectually aroused to the obligation which may now be without exaggeration called national, of supplying cover to those who by reason of their having no capital cannot provide it for themselves, though they can by periodical payments reward those who will provide it for them. End of quote, footnote 60. Location cited page 89. End of footnote 60. Admire this capitalistic justice. The owner of land of houses, the businessman, when expropriated by so-called improvements such as railroads, the building of new streets, et cetera, not only receives full indemnity, he must, according to law, human and divine, be comforted for his enforced, quote, abstinence, end of quote, over and above this by a thumping profit. The laborer with his wife and child in chattels is thrown out into the street, and if he crowds in two large numbers towards quarters of the town where the vestries insist on decency, he is prosecuted in the name of sanitation. Except London, there was at the beginning of the 19th century no single town in England of 100,000 inhabitants. Only five had more than 50,000. Now there are 28 towns with more than 50,000 inhabitants. Quote, the result of this change is not only that the class of town people is enormously increased, but the old close-packed little towns are now centers built around on every side, open nowhere to air, and being no longer agreeable to the rich are abandoned by them for the pleasanter outskirts. The successors of these rich are occupying the larger houses at the rate of a family to each room, and find accommodation for two or three lodgers, and a population for which the houses were not intended and quite unfit has been created whose surroundings are truly degrading to the adults and ruinous to the children. End of quote. Footnote 61, location cited, page 55 and 56, end of footnote 61. The more rapidly capital accumulates in an industrial or commercial town, the more rapidly flows the stream of exploitable human material. The more miserable are the improvised dwellings of the laborers. Newcastle on Tyne as the center of a coal and iron district of growing productiveness takes the next place after London in the housing inferno.  Because of their absolute danger to the community, houses in great numbers have lately been destroyed by the authorities in Newcastle and Gateshead. The building of new houses progresses very slowly, business very quickly. The town was therefore in 1865 more full than ever. Scarcely a room was to let. Dr. Ambleton of the Newcastle Fever Hospital says, quote, There can be little doubt that the great cause of the continuance and spread of the typhus has been the overcrowding of human beings and the uncleanliness of their dwellings. The rooms in which laborers in many cases live are situated in confined and unwholesome yards or courts and for space, light, air, and cleanliness are models of insufficiency and insaluberty and a disgrace to any civilized community. In them men, women, and children lie at night huddled together, and as regards the men, the night shift succeed the day shift and the day shift the night shift in unbroken series for some time together, the beds having scarcely time to cool, the whole house badly supplied with water and worse with privies, dirty, unventilated, and pastiferous. End of quote, footnote 62, location cited page 149, end of footnote 62. The price per week of such lodgings ranges from eight pence to three shillings. Quote, The town of Newcastle on Tyne, says Dr. Hunter, contains a sample of the finest tribe of our countrymen, often sunk by external circumstances of house and street into an almost savage degradation. End of quote, footnote 63, location cited page 50, end of footnote 63. As a result of the ebbing and flowing of capital and labor, the state of the dwellings of an industrial town may today be bearable and tomorrow hideous, or the edalship of the town may have pulled itself together for the removal of the most shocking abuses. Tomorrow, like a swarm of locusts, come crowding in masses of ragged Irishmen or decayed English agricultural laborers. They are stowed away in sellers and lofts, or the hitherto respectable laborers dwelling is transformed into a lodging house whose personnel changes as quickly as the billets in the 30 years' war. Example, Bradford, Yorkshire. There, the municipal Philistine was just busy with urban improvements. Besides, they were still in Bradford in 1861, 1751 uninhabited houses. But now comes that revival of trade which the mildly liberal Mr. Forster, the Negro's friend, recently crowed over with so much grace. With the revival of trade came, of course, an overflow from the waves of the ever fluctuating, quote, reserve army, or, quote, relative surplus population, end quote. The frightful seller habitations and rooms registered in the list which Dr. Hunter obtained from the agent of an insurance company were, for the most part, inhabited by well-paid laborers. Footnote 64. Table, Collecting Agents List, Bradford. Vulcan Street, No. 122, One Room, 16 Persons. Lumiev Street, No. 13, One Room, 11 Persons. Bauer Street, No. 41, One Room, 11 Persons. Ortland Street, No. 112, One Room, 10 Persons. Hardy Street, No. 17, One Room, 10 Persons. North Street, No. 18, One Room, 16 Persons. North Street, No. 17, One Room, 13 Persons. Weimar Street, No. 19, One Room, 8 Adults. Joett Street, No. 56, One Room, 12 Persons. George Street, No. 150, One Room, 3 Families. Rifle Court, Marigate, No. 11, One Room, 11 Persons. Marshall Street, No. 28, One Room, 10 Persons. Marshall Street, No. 49, One Room, 3 Families. George Street, No. 128, One Room, 18 Persons. George Street, No. 130, One Room, 16 Persons. Edward Street, No. 4, One Room, 17 Persons. George Street, No. 49, One Room, 2 Families. York Street, No. 34, One Room, 2 Families. Salt Street, Bottom, Two Rooms, 26 Persons. Region Square, One Seller, 8 Persons. Acre Street, One Seller, 7 Persons. 33 Roberts Court, One Seller, 7 Persons. Back Pratt Street, used as a brazier shop, One Seller, 7 Persons. 27 Ebenezer Street, One Seller, 6 Persons, No Mail, Above 18. Source, Location Sided, Page 11, End of Footnote 64. They declared that they would willingly pay for better dwellings if they were to be had. Meanwhile, they become degraded, they fall ill, one and all, whilst the mildly liberal Forster MP sheds tears over the blessings of free trade and the profits of the eminent men of Bradford who deal and worsted. In the report of September 1865, Dr. Bell, one of the poor law doctors of Bradford, ascribes a frightful mortality of fever patients in his district to the nature of their dwellings. Quote, In one small cellar measuring 1500 cubic feet, there are 10 persons. Vincent Street, Green Air Place, and Delays include 223 houses having 1,450 inhabitants, 435 beds, and 36 privies. The beds, and in that term I include any role of dirty old rags, or an armful of shavings, have an average of 3.3 persons to each. Many have 5 and 6 persons to each, and some people, I am told, are absolutely without beds. They sleep in their ordinary clothes on the bare boards, young men and women married and unmarried altogether. I need scarcely add that many of these dwellings are dark, damp, dirty, stinking holes, utterly unfit for human habitations. They are the centers from which disease and death are distributed amongst those in better circumstances who have allowed them thus to fester in our midst. End of quote. Footnote 65. Location cited page 114. End of footnote 65. Bristol takes the third place after London in the misery of its dwellings. Quote, Bristol were the blankest poverty and domestic misery abound in the wealthiest town of Europe. End of quote. Footnote 66. Location cited page 50. End of footnote 66. Part C. The Nomad Population. We turn now to a class of people whose origin is agricultural, but whose occupation is in great part industrial. They are the light infantry of capital thrown by it according to its needs now to this point, now to that. When they're not on a march, they quote camp, unquote. Nomad labor is used for various operations of building and draining, brick making, lime burning, railway making, etc. A flying column of pestilence. It carries into the places in whose neighborhood it pitches its camp, smallpox, typhus, cholera, scarlet fever, etc. Footnote 67. Public Health, 7th Report, 1865, page 18. End of footnote 67. In undertakings that involve much capital outlays such as railways, etc. The contract to himself generally provides his army with wooden huts and the like, thus improvising villages without any sanitary provisions outside the control of the local boards, very profitable to the contractor who exploits the laborers in two-fold fashions, as soldiers of industry and as tenants. According as the wooden hut contains one, two, or three holes, its inhabitant, navvy, or whatever he may be, has to pay one, three, or four shillings weekly. Footnote 68. Location cited page 165. End of footnote 68. One example will suffice. In September 1864, Dr. Simon reports that the chairman of the nuisance's removal committee over the parish of Seven Oaks sent the following denunciation to Sir George Gray, Home Secretary. Quote, Smallpox cases were rarely heard of in this parish until about 12 months ago. Shortly before that time the works for a railway from Lewisham to Tunbridge were commenced here, and in addition to the principal works being in the immediate neighborhood of this town, here was also established a depot for the whole of the works so that a large number of persons was of necessity employed here. As cottage accommodation could not be obtained for them all, huts were built in several places along the line of the works by the contractor Mr. Jay for their special occupation. These huts possessed no ventilation nor drainage, and besides were necessarily overcrowded because each occupant had to accommodate lodgers, whatever the number in his own family might be, although there were only two rooms to each tenement. The consequences were, according to the medical report we received, that in the nighttime these poor people were compelled to endure all the horror of suffocation to avoid the pestiferous smells arising from the filthy stagnant water and the privies close under their windows. Complaints were at length made to the nuisance's removal committee by a medical gentleman who had occasion to visit these huts, and he spoke with their condition as dwellings in the most severe terms, and he expressed his fears that some very serious consequences might ensue unless some sanitary measures were adopted. About a year ago Mr. Jay promised to appropriate a hut to which persons in his employ who were suffering from contagious diseases might at once be removed. He repeated that promise on the 23rd of July last, but although since the date of the last promise there have been several cases of smallpox in his huts and two deaths from the same disease, yet he has taken no steps whatever to carry out his promise. On the 9th September instant Mr. Kelsen, surgeon, reported to me further cases of smallpox in the same huts, and he described their condition as most disgraceful. I should add for your, the Home Secretary's, information that an isolated house called a pest house, which is set apart for parishioners who might be suffering from infectious diseases, has been continually occupied by such patients from many months past and is now also occupied, that in one family five children died from smallpox and fever, and that from the 1st April to the 1st September this year, a period of five months, there have been no fewer than ten deaths from smallpox in the parish, four of them being in the huts already referred to, that it is impossible to ascertain the exact number of persons who have suffered from that disease, although they are known to be many, from the fact of the families keeping it as private as possible. End the quote. Footnote 69. Location cited, page 18. Note, the relieving officer of the Chapel and Le Frith Union, reported to the Registrar General as follows, quote, At Dove holes a number of small excavations have been made into a large hillock of lime ashes, the refuse of lime kilns, and which are used as dwellings, and occupied by laborers and others employed in the construction of a railway now in course of construction through that neighborhood. The excavations are small and damp, and have no drains or privies about them, and not the slightest means of ventilation, except up a hole pulled through the top and used for a chimney. In consequence of this defect, smallpox has been raging for some time, and some deaths amongst the troglodytes have been caused by it. End of quote. Location cited, node 2. End of footnote 69. The laborers in coal and other mines belong to the best paid categories of the British Polotariat. The price at which they buy their wages was shown on an earlier page. Footnote 70. The details given at the end of part 4 refer especially to the laborers in coal mines. On the still worst condition in metal mines, see the very conscientious report of the Royal Commission of 1864. End of footnote 70. Here I merely cast a hurried glance over the conditions of their dwellings. As a rule, the exploiter of a mine, whether its owner or his tenant, builds a number of cottages for his hands. They receive cottages in coal for firing, quote, for nothing, unquote, i.e., these form part of their wages paid in kind. Those who are not lodged in this way receive in compensation four pounds per annum. The mining districts attract with rapidity a large population made up of the miners themselves and the artisans, shopkeepers, etc., that group themselves around them. The ground rents are high, as they are generally where population is dense. The master tries, therefore, to run up within the smallest space possible at the mouth of the bit just so many cottages as are necessary to pack together his hands and their families. If new mines are opened in the neighborhood or old ones are again set working, the pressure increases. In the construction of the cottages, only one point of view is of moment, the, quote, abstinence, end, quote, of the capitalist from all expenditure that is not absolutely unavoidable, quote. The lodging, which is obtained by the pitmen and other laborers connected with the colluries of Northumberland and Durham, end, quote, says Dr. Julian Hunter, quote, is perhaps on the whole the worst and the dearest of which any large specimens can be found in England. The similar parishes of Monmouthshire accepted. The extreme badness is in the high number of men found in one room. In the smallness of the ground plot on which a great number of houses are thrust, the want of water, the absence of privies, and the frequent placing of one house on the top of another or distribution into flats. The lessee acts as if the whole colony were encamped, not resident, end, quote, footnote 71. Location cited pages 180, 182, end of footnote 71, quote. In pursuance of my instructions, says Dr. Stevens, I visited most of the large colliery villages in the Durham Union. With very few exceptions, a general statement that no means are taken to secure the health of the inhabitants would be true of all of them. All colliers are bound, bound, an expression which like bondage dates from the age of serfdom, to the colliery lessee or owner for 12 months. If the colliers express discontent or in any way annoy the so-called viewer, a mark of memorandum is made against their names and at the annual so-called binding such men are turned off. It appears to me that no part of the so-called truck system could be worse than what obtains in these densely populated districts. The collier is bound to take as part of his hiring a house surrounded with pastiferous influences. He cannot help himself, and it appears doubtful whether anyone else can help him except his proprietor. He is to all intents and purposes a serf. And his proprietor first consults his balance sheet, and the result is tolerably certain. The collier is also often supplied with water by the proprietor, which, whether it be good or bad, he has to pay for, or rather he suffers a deduction for, from his wages. End of quote. Footnote 72. Location cited pages 515, 517. End of footnote 72. In conflict with, quote, public opinion, end quote, or even with the officers of health, capital makes no difficulty about, quote, justifying end quote, the conditions partly dangerous, partly degrading, to which it confines the working and domestic life of the laborer. On the ground that they're necessary for profit. It is the same thing when capital, quote, abstains, end quote, from protective measures against dangerous machinery in the factory, from appliances for ventilation and for safety in mines, etc. It is the same here with the housing of the miners. Dr. Simon, medical officer of the Privy Council, in his official report says, quote, In apology for the wretched household accommodations, it is alleged that miners are commonly worked on lease, that the duration of the lessee's interest, which in colluries is commonly for 21 years, is not so long that he should deem it worth his while to create good accommodations for his laborers, and for the tradespeople and others whom the work attracts, that even if he were disposed to act liberally in the matter, this disposition would commonly be defeated by his landlord's tendency to fix on him as ground rent and absorb in an additional charge for the privilege of having on the surface of the ground the decent and comfortable village which the laborers of the subterranean property ought to inhabit, and that prohibitory price, if not actual prohibition, equally excludes others who might desire to build. It would be foreign to the purpose of this report to enter upon any discussion of the merits of the above apology, nor here is it even needful to consider where it would be that if decent accommodations were provided the cost would eventually fall, whether on landlord or lessee or laborer or public, but in presence of such shameful facts as are vouched for in the annexed reports, those of Dr. Hunter, Dr. Stevens, etc., a remedy may well be claimed. Claims of landlordship are being so used as to do great public wrong. The landlord in his capacity of mine owner invites an industrial colony to labor on his estate, and then in his capacity of surface owner makes it impossible that the laborers whom he collects should find proper lodging where they must live. The lessee, that is the capitalist exploiter, meanwhile has no pecuniary motive for resisting that division of the bargain, well knowing that if its latter conditions be exorbitant the consequences fall not on him, that his laborers on whom they fall have not education enough to know the value of their sanitary rights, that neither obscenist lodging nor foulest drinking water will be appreciable in inducements towards a quote strike, end quote, footnote 73, location cited, page 16, end of footnote 73, end of chapter 25, section 5, part c, of capital volume 1. Chapter 25, section 5, part d, of capital volume 1. This is a LibriVox recording. All LibriVox recordings are in the public domain. For more information or to volunteer please visit LibriVox.org, recording by Anna Simon. Capital, a critical analysis of capitalist production, volume 1, by Karl Marx, translated from the third German edition by Samuel Moore and Edward Averling and edited by Frederick Engels. Part 7, the accumulation of capital. Chapter 25, the general law of capitalist accumulation. Section 5, illustrations of the general law of capitalist accumulation. Part d, effect of crisis on the best paid part of the working class. Before I turn to the regular agricultural laborers, I may be allowed to show by one example how industrial revolutions affect even the best paid, the aristocracy of the working class. It will be remembered that the year 1857 brought one of the great crises with which the industrial cycle periodically ends. The next termination of the cycle was due in 1866. Already discounted in the regular factory districts by the cotton famine, which threw much capital from its wanted sphere into the great centers of the money market, the crisis assumed at this time an special financial character. Its outbreak in 1866 was signalized by the failure of a gigantic London bank, immediately followed by the collapse of countless swindling companies. One of the great London branches of industry involved in the catastrophe was our own shipbuilding. The magnets of this trade had not only overproduced beyond all measure during the over-trading time, but they had, besides, engaged in enormous contracts on the speculation that credit would be forthcoming to an equivalent extent. Now a terrible reaction set in that even at this hour, the end of March 1867, continues in this and other London industries. Footnote, quote, wholesale starvation of the London poor. Within the last few days, the walls of London have been placarded with large posters, bearing the following remarkable announcement. Fat oxen, starving man.  The placards bearing these ominous words are put up at certain intervals. No sooner has one set been defaced or covered over than a fresh set is placarded in a former or some equally public place. This reminds one of the secret revolutionary associations which prepared the French people for the events of 1789. At this moment, while English workmen with their wives and children are dying of cold and hunger, there are millions of English gold, the produce of English labour, being invested in Russian, Spanish, Italian and other foreign enterprises. End quote. Reynolds newspaper, January 20th, 1867. End footnote. To show the condition of the labourers, I quote the following from the circumstantial report of a correspondent of the Morning Star, who, at the end of 1866 and beginning of 1867, visited the chief centres of distress. Quote. In the east end districts of Poplar, Millwell, Greenwich, Dedsford, Limehouse and Kenningtown, at least fifteen thousand workmen and their families were in a state of utter destitution, and three thousand skilled mechanics were breaking stones in the workhouse yard, after distress of over half a year's duration. I had great difficulty in reaching the workhouse door, for a hungry crowd besieged it. They were waiting for their tickets, but the time had not yet arrived for the distribution. The yard was a great square place with an open shed running all round it, and several large heaps of snow covered the paving stones in the middle. In the middle, also, were little wicker-fenced spaces, like sheep pens, wherein fine weather the man worked, but on the day of my visit the pens were so snowed up that nobody could sit in them. Men were busy, however, in the open shed, breaking paving stones into macadam. Each man had a big paving stone for a seat, and he chipped away at the rhyme-covered granite with a big hammer, until he had broken up, and think five bushels of it, and then he had done his day's work and got his day's pay, threpence, and an allowance of food. In another part of the yard was a rickety little wooden house, and when we opened the door of it we found it filled with men who were huddled together shoulder to shoulder for the warmth of one another's bodies and breath. They were picking oak-em and disputing the while as to which could work the longest on a given quantity of food, for endurance was the point of honour. Seven thousand in this one workhouse were recipients of relief. Many hundreds of them had peered where six or eight months ago, earning the highest wages paid to artisans. Their number would be more than doubled by the count of those who, having exhausted all their savings, still refused to apply to the parish because they have a little left to pawn. Leaving the workhouse, I took a walk through the streets, mostly of little one-story houses that abounded in the neighbourhood of Poplar. My guide was a member of the Committee of the Unemployed. My first call was on an iron worker who had been seven and twenty weeks out of employment. I found the man with his family sitting in a little back room. The room was not bare of furniture and there was a fire in it. This was necessary to keep the naked feet of the young children from getting frost-bitten, for it was a bitterly cold day.  The man worked in the stoneyard of the workhouse for a certain ration of food and thruppings per day. He had now come home to dinner quite hungry, as he told us with a melancholy smile, and his dinner consisted of a couple of slices of bread and dripping and a cup of milkless tea. The next door at which we knocked was opened by a middle-aged woman, who, without saying a word, led us into a little back parlour in which sat all her family, silent and fixedly staring at a rapidly dying fire. Such desolation, such hopelessness, was about these people and their little room, as I should not care to witness again. Nothing have they done, sir, said the woman, pointing to her boys, for six and twenty weeks, and all our money gone, all the twenty pounds that me and father saved when times were better, thinking it would yield a little to keep us when we got past work. Look at it, she said, almost fiercely, bringing out a bank-book with all its well-kept entries of money paid in and money taken out, so that we could see how the little fortune had begun with the first five-shelling deposit and had grown by little and little to be twenty pounds, and how it had melted down again, till the sum in hand got from pounds to shillings, and the last entry made the book as worthless as a blank sheet. This family received relief in the work-house, and it furnished them with just one scanty meal per day. Our next visit was to an iron labourer's wife, whose husband had worked in the yards. We found her ill from want of food, lying on a mattress in her clothes, and just covered with a strip of carpet, for all the bedding had been pawned. Two wretched children were tending her, themselves looking as much in need of nursing as their mother. Nineteen weeks of enforced idleness had brought them to his pass, and while the mother told the history of that bitter past, she moaned as if all her faith in her future that should atone for it were dead. On getting outside, a young fellow came running after us, and asked us to step inside his house and see if anything could be done for him. A young wife, two pretty children, a cluster of pawn-tickets, and a bare room were all had to show. End quote. On the after-pains of the crisis of 1866, the following extract from a Tory newspaper — it must not be forgotten that the east end of London, which is here dealt with, is not only the seat of the iron ship-building mentioned above, but also of a so-called home industry, always underpaid. Quote. A frightful spectacle was to be seen yesterday in one part of the metropolis. Although the unemployed thousands of the east end did not parade with their black flags en masse, the human torrent was imposing enough. Let us remember what these people suffer. They are dying of hunger. That is the simple and terrible fact. There are forty thousand of them. In our presence, in one quarter of this wonderful metropolis are packed next door to the most enormous accumulation of wealth the world ever saw. Cheek by jowl with this are forty thousand helpless, starving people. These thousands are now breaking in upon the other quarters. Always half-starving.  They cry to heaven. They tell us from their miserable dwellings that it is impossible for them to find work, and useless for them to beg. The local ratepayers themselves are driven by the parochial charges to the verge of pauperism. End quote. Standard, 5th April 1867. As it is the fashion amongst English capitalists to quote Belgium as the paradise for the labourer, because so-called freedom of labour, or what is the same thing, freedom of capital, is there limited neither by the despotism of trade unions nor by factory acts, a word or two on the so-called happiness of the Belgian labourer. Assuredly, no one was more thoroughly initiated in the mysteries of this happiness than the late Monsieur Duc Petiot, Inspector General of Belgian Prisons and Charitable Institutions and Member of the Central Commission of Belgian Statistics. Let us take his work, Budget Économique des classes ouvrières de la Belgique. Brussels, 1855. Here we find, among other matters, a normal Belgian labourer's family, whose yearly income and expenditure he calculates on very exact data, and whose conditions of nourishment are then compared with those of the soldier, sailor and prisoner. The family, quote, consists of father, mother and four children, end quote. Of these six persons, quote, four may be usefully employed the whole year through, end quote. It is assumed that, quote, there is no sick person nor one incapable of work among them, end quote, nor are there, quote, expenses for religious, moral and intellectual purposes except a very small sum for church sittings, end quote. Nor, quote, contributions to savings banks or benefit societies, end quote. Nor, quote, expenses due to luxury or the result of improvidence, end quote. The father and eldest son, however, allow themselves, quote, the use of tobacco, end quote, and on Sundays, quote, go to the cabaret, end quote, for which a whole 86-son team a week are reckoned, quote. From a general compilation of wages allowed to the laborers in different trades, it follows that the highest average of daily wage is one franc 56-son team for men, 89-son team for women, 56-son team for boys, and 55-son team for girls. Calculated at this rate, the resources of the family would amount at the maximum to 1068 francs a year. In the family, taken as typical, we have calculated all possible resources. But in ascribing wages to the mother of the family, we raise the question of the direction of the household. How will its internal economy be cared for? Who will look after the young children? Who will get ready the meals, to the washing and mending? This is the dilemma incessantly presented to the laborers, end quote. According to this, the budget of the family is, per year, the father 468 francs, mother 267 francs, boy 168 francs, girl 165 francs, total per year 1068 francs. The annual expenditure of the family would cause a deficit upon the hypothesis that the laborer has the food of the man of war's man, namely 1828 francs, then a deficit of 760 francs, the food of the soldier, which would be 1473 francs, leading to a deficit of 405 francs, or the food of the prisoner, amounting to 1112 francs, leading to a deficit of 44 francs. Quote, we see that few labouring families can reach, we will not say the average of the sailor or soldier, but even that of the prisoner. The general average of the cost of each prisoner in the different prisons during the period 1847 to 1849 has been 63 centime for all prisons. This figure, compared with that of the daily maintenance of the labourer, shows the difference of 13 centime. It must be remarked further that if in the prisons it is necessary to set down in the account the expenses of administration and surveillance, on the other hand, the prisoners have not to pay for their lodging, that the purchases they make at the canteens are not included in the expenses of maintenance, and that these expenses are greatly lowered in consequence of the large number of persons that make up the establishments, and of contracting for or buying whole sail the food and other things that enter into their consumption. How comes it, however, that the great number, we might say, a great majority of labourers, live in a more economical way? It is by adopting experience the secret of which only the labourer knows by reducing his daily rations, by substituting rye bread for weed, by eating less meat, or even none at all, and the same with butter and condiments, by contenting themselves in one or two rooms where the family is crammed together, where boys and girls sleep side by side, often on the same pellet, by economy of clothing, washing, decency, by giving up the Sunday diversions, by, in short, resounding themselves to the most painful privations. Once arrived at this extreme limit, the least rise in the price of food, stoppage of work, illness, increases the labourer's distress and determines his complete ruin. That's accumulated, credit fails, the most necessary clothes and furniture are pawned, and finally the family asks to be enrolled on the list of paupers. End quote. In fact, in this paradise of capitalists, there follows on the smallest change in the price of the most essential means of subsistence, a change in the number of deaths and crimes. See Manifesto of the Maatrapé, De Vlamingen vooruit, Brussels 1860, page 15 and 16. In all Belgium are 930,000 families, of whom, according to the official statistics, 90,000 are wealthy and on the list of voters is 450,000 persons. 390,000 families of the lower middle class in towns and villages, the greater part of them constantly sinking into the proletariat, is 1,950,000 persons, and finally 450,000 working class families is 2,250,000 persons of whom the model ones enjoy the happiness depicted by D'Cupitio. Of the 450,000 working class families, over 200,000 are on the paupal list. End of part 7, chapter 25, section 5, part D.


Hello and welcome to this session in which we would look at the revenue recognition process. Specifically, we're going to be working on step two in the revenue recognition process and the prior recording we looked at step one which is identifying the contract with customers. Now in the real world, identifying the separate performance obligations is the most challenging for companies. Well, for us, it's not as challenging. Hopefully, we will understand the concept and that's all what you need to do. And the reason is this. Once you identify the performance obligation, it means what do you need to do? What is your obligation? What are you expected to deliver? Then you're going to allocate the transaction price to those separate performance obligation or one obligation. If it's one obligation, it's pretty straightforward. If it's more than one, then you have to determine how to allocate this money. Then so point two, step two will influence step four and step two would influence step five because you would recognize the revenue when performance obligation is satisfied. So first you have to identify that performance, then give it a give it a price. Then once you complete it, you have to recognize the revenue. So that's why it's an important step in this process. Now let's identify how do we define or how do we identify the separate performance obligation in the contract? So what is a performance obligation? So let's talk about this word, performance obligation. Well, at the performance obligation, it's a promise. You made a promise to provide or to transfer a goods or service a product to a customer. That's your obligation. That's your performance obligation. When you deliver goods or product, the goods has to be what we called a distinct service, a distinct product or service. Now, what do we mean by distinct? What does this word means? Because we have to define it. Distinct means the customer can enjoy the product, can benefit from the product on its own. So you gave them something and that something is useful to them either on its own or they can use it with something else, other readily available resources. So if they cannot use it on their own, they can use it with something else. In other words, it's useful to them. It's not an incomplete. An incomplete means you give them something that they cannot use. And we'll talk about this a little bit further. Typically, those distinct product usually, they are a standalone product. It means usually the company sell them separately. Typically, this is what you would do. No one's going to buy an incomplete product from you if they cannot use it or if they cannot enjoy it. Also, a distinct product don't have to be integrated with other goods and services. It's a standalone product. Also, not interdependent. Interdependent means if it's not sold with something else, it's not useful. No, those distinct product are totally independent. They are good to go. Also, maybe your competition sells it. This is how we know it's a distinct product. This is how you determine whether it's a distinct product or not. Also, it's available in the market as a separate item. So you can go to the market and you can buy it as a separate item. Then you have a distinct product. So those are the features that you would look for to find out if you have a distinct product or not. Now, we're going to look at specific examples, but it's also important to define what is not explained, what is not considered a distinct product. Because if we understand what's not considered a distinct product, then we'll understand how a distinct product would work. Before we proceed any further, explaining the distinct product versus what's not distinct product, whether you are an accounting student or a CPA candidate, take a look at my website farhatlectures.com. I don't replace your CPA review course if you're studying for your CPA or your accounting courses. My motto is saving accounting students and CPA candidate one at a time by providing resources, lectures, multiple choice, true, false. That's going to help you in your CPA review course, which is aligned with your backer, Roger, Gleam and Wiley. And it's going to help you in your accounting course, whether you are taken intermediate, audit, tax, governmental, so on and so forth. If you're a CPA candidate, I give you access to 1,500 previously released original AI CPA questions with detailed solution. If you have not connected with me on LinkedIn, please do so. Take a look at my LinkedIn recommendation, like this recording, share it with other connect with me on Instagram, Facebook, Twitter and Reddit. So let's see what is not a distinct product. Well, I'm going to give you a simple example, but hopefully it will make the point. Goods and services that are highly interdependent or interrelated. Well, what would be a good example of this? Well, let's assume I enjoy vanilla chai tea and specifically I enjoy it from Wawa. And because I talk about Wawa and all my lectures, one of a CPA candidate that passed his exam gave me a generous gift card from Wawa. So yes, that's my favorite place in case, you know, hint, hint. So what is, what is vanilla chai is made of? Vanilla chai is made of milk and tea spices. Now it means of other things, but we're simplifying the example. Now, can you enjoy the vanilla chai without the milk or without the spices? So can you separate them? Can you separate the milk and the tea spices and say those are two independent product? Yes, they are two independent product, but I'm not buying milk or tea spices. I am buying a vanilla chai. So a vanilla chai is one distinct product. I cannot break it into a milk. Say I sold the milk, I'll account for the milk, then I'll account for the tea spices. So you can't do that. Why? Because they are highly interdependent. When, when the product is highly interdependent or interrelated, then you don't have this, this product is the distinct product, the cup of, the cup of chai tea. Now, can you enjoy, can you enjoy it separately? No. Now let's assume you want to buy a vanilla chai tea, a cup of that, and also an egg sandwich from Wawa. Are these two separate distinct product? And the answer is, yes, Wawa will, will have a price for this and they will have a separate price for this and they, they can sell them separately. Here you have two independent product, two independent product, because the customer can enjoy each item separately. Remember, we talked about how the customer can enjoy benefit from it. Well, we can, we can eat this and we can maybe buy a fry separately and, you know, enjoy it. It doesn't matter or we can eat it separately. So these are not interdependent or interrelated, although they are two distinct products. So you can, you can, you can sell them separately. So that's the first item. If the product is highly interdependent, then it's not a distinct product. So the chai tea itself is a distinct product, but we cannot say the milk or the tea spices are distinct. In this example, now you can buy milk separately from the supermarket. That's a distinct product. That's a distinct product. Two, also what's not a distinct product is when the company integrate the goods and services promise in a contract into a bundle of goods and services that represent one product or service offered to customer. Here's what's going to happen is this, we're going to take several distinct good, they could be several distinct goods or services, we're going to bundle them and we're going to sell them as one product. How do we know we're selling them as one product? It will be written in the contract. Do you guys remember in the prior recording, we emphasize the concept of contract? In the contract, it will spell out what we need to do. So here's an example of how this works. Let's just assume I entered into a contract with a construction company to build the home from A to Z. A to Z means I'm going to tell them, look, build the home. Once you're done, give me the key and I will, you know, the deal is over. So what would the construction company will have to do? The construction company that I hired, they will have to dig the foundation, pour the concrete, do the wiring, piping, electrical, of course I need the roof, so on and so forth. So notice, these are all independent steps and they can be sold separately by the construction company, but that's not how I am buying them. I told them I'll pay one price, give me the house. So as they complete this, they did not really sell me a distinct product because that's not how the contract is written. So you have to have the whole thing to get to the contract, to the final product, which is giving me the house. So under those circumstances, this is a one product. Let's look at another example that illustrates similar concept but differently. So when do we have multiple performance within a contract? We have to spell it out. So the company promised to sell the goods or services to the customer must be separately identifiable from other promises within the contract. So remember in the previous, in the last example here, we said it's a one product because that's how the contract is written. Let's assume I want to build a website for my business and I contracted with a company called Maze Inc. for the following items. One, design the website. Two, build the website. Three, provide training to update the website. Four, maintenance and support and Maze sells these services on a standalone basis and they can easily separate and identify each task. So now the way we wrote the contract is totally different. Well, I said, okay, here we go. We're gonna go into this contract and here's what's gonna happen. We're gonna have several items here. First, I'm gonna pay you for designing the website. So that's a one performance obligation. They can design the website and I can only agree to this and take this design, go to another company and ask them to build the website. Can't I do that? And the answer is yes. So designing the website by itself is a distinct product because I can enjoy it. I can use it. Remember when we said you could either enjoy it, you can either enjoy the website or what you can do is you can use it with other readily readily available resources. Maybe I have someone at my company that can build the website, just design it for me, give it to me and I will build it. Okay, so it's not good enough by itself but I have something else that I can make it useful for me. So this is what we meant by if it's not readily but you can use it then with some other resources, then building the website. I can ask them to design the website and build the website. That's it. Then I will tell them, look, I don't need any training. I can get a third party, give me training for the site. I can do that. I can also contract with the company for maintenance and support. So the way I wrote the contract, it's a four different tasks. And what's gonna happen is Mays will have to, Mays is selling me four different distinct product. So under those circumstances, the way the contract is written, it's a four distinct product. Although you may think, well, why isn't this example similar to the construction? Well, I cannot use the home because the final product was the home unless I have all those pieces. But this is how I wrote it in the contract. The contract is deliver the home. Here I can write the contract as you are performing these service obligations step by step. So maybe they do the design and I say, okay, thank you very much. I'm gonna build the website, so on and so forth. This is how it's written in the contract. And obviously, Mays will sell also those product are sold separately. So Mays might build a website for some other designer. That's something that they do. So under those circumstances, they would recognize revenue for each step fulfilled, for each step fulfilled. Again, it's all about how the contract is written. So keep that in mind. Okay, let's look at another example. MFARHAT purchased a Toyota RV RAV4. The Toyota dealer offered MFARHAT a one year free SOS button for emergency services. And basically, this is a button in case something happened, you got into an accident, you can click on it and will contact the nearest emergency service. Okay, after one year, if MFARHAT chooses to keep the service, then she needs to pay for the service separately. And she is my wife. MFARHAT is my wife. That's who bought the RAV4. Now, here we go. The SOS cost by itself. So the SOS, if you want to price it, if you want to buy an SOS system in your vehicle, there's an annual fee of $80. But here, they're given my wife one year of a free service. Then she can pay for the rest on her own if she chooses to keep the service. Well, what do we have here? Do we have one or two products sold by Toyota? And obviously, we have two. Why? Items are not interrelated. So we can enjoy the RAV4, the car, without having the SOS system. They're not interrelated. And the item is sold separately. They can sell this item separately for anyone. Here we have a two distinct product. So Toyota can sell the car without the SOS button for emergency services. Now, Toyota cannot say, well, selling the batteries inside the car and selling the tires are sold separately, those are separate distinct items. You can't do that because the car will not function without not batteries, one battery, maybe you need some smaller batteries for other things or the tires. You can't drive the car. It's not a distinct product. So you cannot separate the batteries and the tire, but you can separate this SOS system. Again, these steps in the real world are the most challenging because you have to make a judgment. What is this? What is this product? Can we account for it separately? Yes or no? No. For the CPA exam, for accounting classes, it's not as challenging. What should you do now? Go to farhatlectures.com, work MCQs, work exercises that's going to help you reinforce the concept. In the next session, we'll look at step three in this process, and this is the transaction price. And after step three, we'll look at step four and step five, and by doing so, completing the revenue recognition. Once again, go to Farhat Lectures, invest in yourself. Don't shortchange yourself. Give me a try for a month. 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