By spreading the return over several successive periods the total time of circulation and hence also the turnover are abridged. The first to increase is the frequency with which the means of transportation function, for instance the number of railway trains, as existing places of production produce more, become greater centres of production. The development tends in the direction of the already existing market, that is to say, towards the great centres of production and population, towards ports of exports, etc. On the other hand these particularly great traffic facilities and the resultant acceleration of the capital turnover (since it is conditional on the time of circulation) give rise to quicker concentration of both the centres of production and the markets. Along with this concentration of masses of men and capital thus accelerated at certain points, there is the concentration of these masses of capital in the hands of a few. Simultaneously one may note again a shifting and relocation of places of production and of markets as a result of the changes in their relative positions caused by the transformations in transport facilities. A place of production which once had a special advantage by being located on some highway or canal may not find itself relegated to a single side-track, which runs trains only at a relatively long intervals, while another place, which formerly was remote from the main arteries of traffic, may now be situated at the junction of several railways. This second locality is on the upgrade, the former on the downgrade.
Changes in the means of transportation thus engender local differences in the time of circulation of commodities, in the opportunity to buy, sell, etc., or an already existing local differentiation is distributed differently.
The importance of this circumstance for the turnover of capital is evidenced by the wrangling of the commercial and industrial representatives of the various localities with the railway managements. (See for instance the above-quoted Bluebook of the Railway Committee. [See p. 154 of this book.
-- Ed .] )
All branches of production which by the nature of their product are dependent mainly on local consumption, such as breweries, are therefore developed to the greatest extent in the principal centres of population.
The more rapid turnover of capital compensates here in part for the circumstance that a number of conditions of production, building lots, etc., are more expensive.
Whereas on the one hand the improvement of the means of transportation and communication brought about by the progress of capitalist production reduces the time of circulation of particular quantities of commodities, the same progress and the opportunities created by the development of transport and communication facilities make it imperative, conversely, to work for ever more remote markets, in a word -- for the world-market. The mass of commodities in transit for distant places grows enormously, and with it therefore grows, both absolutely and relatively, that part of social capital which remains continually for long periods in the stage of commodity-capital, within the time of circulation. There is a simultaneous growth of that portion of social wealth which, instead of serving as direct means of production, is invested in means of transportation and communication and in the fixed and circulating capital required for their operation.
The mere relative length of the transit of the commodities from their place of production to their market produces a difference not only in the first part of the circulation time, the selling time, but also in its second part, the reconversion of the money into the elements of the productive capital, the buying time. Suppose a commodity is shipped to India. This requires, say, four months. Let us assume that the selling time is equal to zero, i.e., the commodities are made to order and are paid for on delivery to the agent of the producer. The return of the money (no matter in what form) requires another four months. Thus it takes altogether eight months before a capital can again function as productive capital, renew the same operation. The differences in the turnover thus occasioned form one of the material bases of the various terms of credit, just as oversea commerce in general, for instance in Venice and Genoa, is one of the sources of the credit system, properly speaking. "The crisis of 1847enabled the banking and mercantile community of that time to reduce the India and China usance" (time allowed for the currency of bills of exchange between there and Europe) "from ten months' date to six months' sight, and the lapse of twenty years with all the accelerations of speed and establishment of telegraphs . . . renders necessary . . . a further reduction" from six months' sight to four months' date as a firs step to four months' sight.
"The voyage of a sailing vessel via the Cape from Calcutta to London is on the average under 90 days. A usance of four months' sight would be equal to a currency of say 150 days. The present usance of six months' sight is equal to a currency of say 210 days." ( London Economist , June 16, 1866.)On the other hand: "The Brazilian usance remains at two and three months' sight, bills from Antwerp are drawn" (on London) "at three months'
date, and even Manchester and Bradford draw upon London at three months and longer dates. By tacit consent, a fair opportunity is afforded to the merchant of realising the proceeds of his merchandise, not indeed before, but within a reasonable time of, the bills drawn against it fall due. In this view, the present usance for Indian bills cannot be considered excessive.
Indian produce for the most part being sold in London with three months'
