BOOK III. CH. III. den thrown on the nation. As to a rise in the wages of colliers. From the evidence which was given in 1873 before a Select Committee of the House of Commons appointed to investigate the causes which had produced the rise in the price of coal, it appears that not more than one-fifth of the rise which took place is due to an increase in the wages of colliers. The increase in their wages did not account for a rise of more than 2s. a ton, whereas the rise in price at the pit's mouth I was certainly not less than 10s. a ton. It therefore follows that four-fifths of the increase in the price of coal was added as extra profits on all the coal obtained from sources of supply that were previously worked. the annual production of coal in this country is about 120,000,000 tons, the amount of extra profit thus obtained by the owners or lessees of coal mines may be estimated at 40,000,000l. a year while the exceptionally high price lasted. It can be scarcely necessary to point out that Great bur- this rise in the price of coal imposed as real a burden upon the community as if the taxation of the country had been increased by an amount equivalent to the rise in the price of the coal retained for home consumption. The amount of coal used for domestic purposes in this country is about 19,000,000 tons per annum. Assuming that the rise in price was 10s. a ton, the burden thrown upon the householders of the country was equivalent to the imposition of an income-tax which would yield 9,500,000l. a year. To obtain this sum an addition of fivepence to the income tax would be required. There is, however, this difference between a burden thus imposed upon the people and an income-tax which would yield 9,500,000l. a year. An income-tax is not levied upon very small incomes, whereas even the poorest person must bear his share of the burden which is imposed by a rise in the price of coal. It is also to be remarked that the loss which the community suffers from a rise in the price of coal is not to be estimated by simply considering the amount of coal which is used for domestic purposes. A rise in the price of coal must ultimately increase the cost of producing manufactured commodities, and it will be shown in the next chapter that the price at which manufactured commodities are sold to the consumer depends upon the cost of producing them. The nation may BOOK III. CH. III. obtain one compensation for the loss resulting from a rise in the price of coal. It cannot be doubted that the comparative cheapness of coal led to very wasteful methods One comof burning it, both for manufacturing and domestic pur- pensation for a rise poses. The rise in its price caused the adoption of many in the contrivances for economizing its use. As geologists agree that the available supplies of coal in this country are by no means inexhaustible, it is evident that the prevention of waste is of great importance, not only to those who are now living, but to future generations. Many causes have combined to prevent coal permanently retaining the remarkable advance in price which it obtained in 1872. Towards the close of 1874 the price of coal began to decline, and this decline went on so rapidly that in about two years time its price had receded almost to its former level. This fall in price may be regarded as partly due to accidental circumstances, but no doubt the fall has also been partly produced by causes which are certain to come into operation whenever there is a period of such exceptional prosperity in a trade that the profits and wages obtained by those engaged in it greatly exceed their ordinary rate. With regard to those accidental circumstances. which we have described, it may be mentioned that soon after the great rise in the price of coal took place, there was a marked change in the general commercial condition of the country. The extraordinary activity of trade which had continued for many years was succeeded by a period of industrial depression, and in no branch of industry was this depression more strikingly exhibited than in the falling off both in the foreign and home demand for iron. In a single year between 1873 and 1874, there was a decline of no less than 25 per cent. in the quantity of pig iron produced, and even this diminished quantity could only meet with a sale at considerably reduced prices. Consequently the iron masters not only greatly diminished their purchases of coal, but they could only afford to pay a much lower price for it. When it is remembered that the great development of the iron trade was one of the chief causes which contributed to the rise in the price of coal, it naturally follows that the decline of this trade exerted a corresponding influence in reducing its price. This fall in price was no doubt assisted by the depression in the price of coal. BOOK III. general industrial condition of the country. Coal is of course largely used in every industry in which machinery is employed, and, consequently, inactivity of trade is sure immediately to affect the demand for coal. But even had there not been this depression of trade there were other circumstances in operation which would have caused a reduction in the price of coal. The exceptionally high profits and wages earned in the coal trade led to a largely increased production. New mines were opened in all directions, new shafts were sunk, all available labour was pressed into this particular industry, and in fact everything was done to stimulate increased production. What happened in this case, as previously pointed out, is sure to occur whenever any trade becomes exceptionally prosperous. It is obvious that it would have been impossible for this price of coal to be maintained unless the increased production, stimulated in the manner just described, had been accompanied by a corresponding increase in the demand for coal. But far from this being the case, we have seen that just at the very time when the new mines that had been opened began to yield their additional supplies, there was a depression of trade, and consequently a considerable falling off in the demand for coal. The decline in the price of coal was therefore assisted by two powerful circumstances, an increase in its supply occurring simultaneously with a diminution in the demand. CHAPTER IV. ON THE PRICE OF MANUFACTURED COMMODITIES. N this chapter the price of those articles will be consi BOOK III. CH. IV. Commo dities of which the be indefisupply can creased without increasing the cost of produc tion. previously enumerated. To such commodities the name of manufactured articles is given; because the name suggests the leading points of difference between these commodities and those the price of which was considered in the last chapter. It may be thought that no such distinc-nitely intion really exists; a manufactured article, it might be said, is in one sense either an agricultural or a mineral product. A piece of linen cloth is woven from flax, which is in every sense of the word as much an agricultural product as the wheat from which a loaf of bread is made. Since, therefore, bread and linen cloth are both made from the produce of agriculture, it may appear that the laws which regulate the price of one ought to regulate the price of the other; and that, therefore, those laws of price which were enunciated in the last chapter, with regard to agricultural and mining produce, will equally apply in determining the price of such a commodity as a piece of linen cloth. But there is this distinction: the value of agricultural and mining produce is almost entirely derived from the value of the raw material; whereas the value of the raw material from which a manufactured article is made only forms a small portion of the entire value of this particular article. The reason of this must be manifest to all. Before a bundle of flax can be woven into a piece of linen cloth, it must pass through many different processes, carried on by many different classes of labourers. Not only must all these labourers be remunerated, but the employers of these labourers have advanced F. M. Y The value of the raw material forms a small part of the value BOOK III. CH. IV. of manufactured goods. The price of manufactures need not increase with an increased demand, as only one of the elements of their value is affected. capital and invested money in expensive machinery, and for all this outlay they must receive an adequate compensation. There must, therefore, be such a difference in the price of the flax in its raw state, and the price of the linen cloth into which it is woven, as will serve to give both to the employers and their labourers all the remuneration just pointed out. The value, therefore, of the raw material forms only a very small portion of the whole value of the particular article into which it is manufactured. It is this circumstance which causes the price of manufactured commodities, and the price of raw produce, to be regulated by very different laws. Unless a fresh discovery is made, or unless improved machinery and improved methods of production are introduced, it is generally impossible to increase the supply of mining produce without resorting to less productive sources, or to increase the supply of agricultural produce without resorting either to less fertile land or to more expensive culture. Such produce therefore, in the absence of counteracting circumstances, must rise in price as it becomes necessary to increase the supply, in order to meet a larger demand. But the same law does not apply in the case of a manufactured article. If it were known that the quantity of linen cloth required to be manufactured in this country would increase twenty per cent. in the next two years, manufacturers of linen would have to increase their purchases of raw flax by twenty per cent. This increased demand for flax would cause its price to rise, in obedience to the principles enunciated in the last chapter. This rise in the price of flax would, of course, produce some effect on the price of linen; because the manufacturers of the linen must be compensated for the higher price which is paid for the raw flax. But since the value of the flax forms only a very small portion of the whole value of the cloth into which it is woven, it follows that the rise in the price of the cloth due to the rise in the price of flax will be, comparatively speaking, small. Thus we are informed that a rise of twenty per cent. in the price of flax would not cause the price of · linen cloth to rise as much as five per cent. The causes, therefore, which affect the price of raw produce also influence the price of manufactured commodities, but only |