which they think they would not reap if they placed the capital in small competing businesses.  But though it has been calculated that about one-third of English commerce is now in the hands of joint stock companies, this by no means exhausts the significance of the centralizing force in capital.  Almost all large businesses, and many small businesses, are recognized to be conducted largely with borrowed capitals.  The owners of these debentures are in fact joint capitalists with the nominal owner of the business.  They prefer to lend their capital, because they hope to enjoy a portion of the gain and security which belongs to a large business as compared with a small one.  Along with this coming together of small capitals to make a large capital, there is a constant centralization and organization of business ability.  It is not uncommon for the owner of a small and therefore failing business to accept a salaried post in the office of some great business firm.  So too we find the son of a small tradesman, recognizing the hopelessness of maintaining his father’s business, takes his place behind the counter of some monster house.

Sec. 2.  How Competition affects Capital.—­Now the force which brings about all these movements is the force of competition.  Every increase of knowledge, every improvement of communication, every breakdown of international or local barriers, increases the advantage of the big business, and makes the struggle for existence among small businesses more keen and more hopeless.  It is the desire to escape from the heavy and harassing strain of trade competition, which practically drives small businesses to suspend their mutual hostilities, and to combine.  It is true that most of the large private businesses or joint stock companies are not formed by this direct process of pacification.  But for all that, their raison d’etre is found in the desire to escape the friction and waste of competition which would take place if each shareholder set up business separately on his own account.  We shall not be surprised that the competition of small businesses has given way before co-operation, when we perceive the force and fierceness of the competition between the larger consolidated masses of capital.  With the development of the arts of advertising, touting, adulteration, political jobbery, and speculation, acting over an ever-widening area of competition, the fight between the large joint stock businesses grows always more cruel and complex.  Business failures tend to become more frequent and more disastrous.  A recent French economist reckons that ten out of every hundred who enter business succeed, fifty vegetate, and forty go into bankruptcy.  In America, where internal competition is still keener and speculation more rife, it has been lately calculated that ninety-five per cent, of those who enter business “fail of success.”  Just as in the growth of political society the private individual has given up the right