344.  The effect of improvements in machinery, seems incidentally to increase production, through a cause which may be thus explained.  A manufacturer making the usual profit upon his capital, invested in looms or other machines in perfect condition, the market price of making each of which is a hundred pounds, invents some improvement.  But this is of such a nature, that it cannot be adapted to his present engines.  He finds upon calculation, that at the rate at which he can dispose of his manufactured produce, each new engine would repay the cost of its making, together with the ordinary profit of capital, in three years:  he also concludes from his experience of the trade, that the improvement he is about to make, will not be generally adopted by other manufacturers before that time.  On these considerations, it is clearly his interest to sell his present engines, even at half-price, and construct new ones on the improved principle.  But the purchaser who gives only fifty pounds for the old engines, has not so large a fixed capital invested in his factory, as the person from whom he purchased them; and as he produces the same quantity of the manufactured article, his profits will be larger.  Hence, the price of the commodity will fall, not only in consequence of the cheaper production by the new machines, but also by the more profitable working of the old, thus purchased at a reduced price.  This change, however, can be only transient; for a time will arrive when the old machinery, although in good repair, must become worthless.  The improvement which took place not long ago in frames for making patent-net was so great, that a machine, in good repair, which had cost L1200, sold a few years after for L60.  During the great speculations in that trade, the improvements succeeded each other so rapidly, that machines which had never been finished were abandoned in the hands of their makers, because new improvements had superseded their utility.

345.  The durability of watches, when well made, is very remarkable.  One was produced, in going order, before a committee of the House of Commons to enquire into the watch trade, which was made in the year 1660; and there are many of ancient date, in the possession of the Clockmaker’s Company, which are still actually kept going.  The number of watches manufactured for home consumption was, in the year 1798, about 50,000 annually.  If this supply was for Great Britain only, it was consumed by about ten and a half millions of persons.

346.  Machines are, in some trades, let out to hire, and a certain sum is paid for their use; in the manner of rent.  This is the case amongst the framework knitters:  and Mr Henson, in speaking of the rate of payment for the use of their frames, states, that the proprietor receives such a rent that, besides paying the full interest for his capital, he clears the value of his frame in nine years.  When the rapidity with which improvements succeed each other is considered, this rent does not appear