y the demand of the
manufacturers; and the transport of hides and bark, and the demand for
these materials of tanning, will be regulated by the demands of the
tanners. So the quantity of stock at each of the points A, B, C, D, E,
and the rate of their progress from one point to the next, are
dependent in each case upon the quantity demanded at the next stage.
Hence it follows that the quantity of productive goods at any time in
stock at each of the points in the production of shoes, and the
quantity of productive work done and employment given at each point,
is determined by the amount of consumption of shoes. If we knew the
number of purchases of shoes made in any community by consumers in a
given time, and also knew the condition of the industrial arts at the
different points of production, we should be able to ascertain exactly
how much stock and how much auxiliary capital was required at each
point in the production of shoes. At any given time the flow of
consumption indicated by F determines the quantity of stock and plant
of every kind economically required at each point A, B, C, D, E. What
applies to the shoe trade applies to trade in general. Given the rate
or quantity of consumption in the community, it is possible to
determine exactly the quantity of stock and plant required under
existing industrial conditions to maintain this outflow of consumptive
goods, and any stock or plant in excess of this amount figures as
waste forms of capital or over-supply. F then is the quantitative
regulator of A, B, C, D, E.[163] Nor is the accuracy of this statement
impaired by the speculative character of modern trade. Speculative
merchants or manufacturers may set up business at D or C and provide
themselves with stock and machinery to start with, but unless they
meet or create a growing demand of consumers their capital is waste,
or else if they succeed in getting trade it is at the expense of other
members of the trade, and their capital is made productive by
negativing the capital of other traders.

Sec. 11. The truth here insisted on, that an exact quantitative relation
exists between the amount of stock and plant, severally and
collectively, required at the different points A, B, C, D, E, and that
the amount economically serviceable at each point is determined by the
quantity of current consumption, would seem self-evident. But though
this has never been explicitly denied, the important results following
from its recog