Yesterday, accompanied by the two English agents, we inspected the Freeland Central Bank. The comprehensive and--as a necessary consequence-- exceedingly simple clearing system excited the highest admiration of the two experienced gentlemen. The remarkably small amount of cash required to adjust the accounts of the whole of the gigantic business transactions drew from Lord E---- the inquiry why Freeland retained gold as a measure of value. He thought that, as the Freelanders already made the value of a unit of labour-time the standard of calculation in their most important affairs, the simplest plan would be to universalise this method--that is, to declare the labour-hour to be the measure of value, the money-unit. This would, he thought, far better harmonise with the general social order of Freeland, in which labour is the source and basis of all value. The director of the bank (Mr. Clark) replied: 'That is a view which has been repeatedly expressed by strangers; but it is based simply upon confounding the _measure of value_ with the _source of income_. For labour alone is not the source of value, though most Socialists adopt this error of the so-called classical economists as the ground of their demands. If all value were derived from labour and from labour alone, then even among you in the old exploiting world everything would be in favour of the workers, for even there the workers have control over their working power. The misery among you is due to the fact that the workers have no control over the other things which are requisite for the creation of value, namely, the product of previous work--_i.e._ capital, and the forces and materials derived from nature. We in Freeland have guaranteed to labour the whole of what it assists to produce. But we do not base this right upon the erroneous proposition that labour is the sole source of the value of what it produces, but upon the proposition that the worker has the same claim to the use of those other factors requisite for the creation of value as he has to his working-power. But this is only by the way. Even if labour were the only source of and the only ingredient in value, it would still be in any case the worst conceivable _measure_ of value; for it is of all things that possess value the one the value of which is most liable to variations. Its value rises with every advance in human dexterity and industry; that is, a labour-day or a labour hour is continuously being transformed into an increasing quantity of all imaginable other kinds of value. That the value of the product of labour differs as the labour-power is well or badly furnished with tools, well or badly applied, cannot be questioned, and never has been seriously questioned. Now, among us in Freeland _all_ labour-power is as well equipped and applied as possible, because the perfect and unlimited freedom of labour to apply itself at any time to whatever will then create the highest value brings about, if not an