an improvement in the condition of the poor, have exerted little permanent effect in this direction, because the additional wealth which was temporarily enjoyed encouraged earlier and more improvident marriages, and thus an increase of population was stimulated. The wages-fund has indeed been vastly increased, but the number of the wages-receiving classes has increased with corresponding rapidity. The physical condition of the poor must therefore be improved by other than material agencies. Habits of prudence and foresight, accompanied by the adoption of a higher standard of comfort, can alone produce a permanent effect in ameliorating the condition of the poorest class of labourers.

Local and temporary circumstances cause the Rate of Wages constantly to fluctuate. The above remarks indicate the general causes which regulate the wages of labour, but it must not be overlooked that local and temporary circumstances produce great fluctuations in the rate of wages. Just as the price of commodities continually varies on each side of the sum which is exactly sufficient to provide the current rate of wages and profits to their producers, so the price of particular kinds of labour constantly fluctuates above and below the general average, produced by the proportion between the wagesfund and the number of the labouring population.

Do High Prices produce High Wages ? It is sometimes said that high prices produce high wages. The meaning of such an expression will be rightly understood only by those who know that no circumstance can produce a permanent effect upon the condition of the labouring population, if the ratio between the wages-fund and the number of the wages-receiving classes remains unchanged. Bearing this fact in mind, let us investigate some instances in which it is said that high prices produce high wages, and that low prices produce low wages. There are many cases in which high prices produce no effect whatever upon wages. Prices of articles the supply of which can be increased depend upon cost of production. Cost of production consists of the following elements : labour, abstinence and risk. No one will incur either of these elements of cost without receiving as great a reward as he can obtain ; the price of the article must therefore provide the current rate of wages and profits. If an increased amount of labour, abstinence and risk is required to produce the commodity, its price must be increased ; or if any circumstance should enable its producers to secure a larger reward for their services, its price must also be increased. In the first case where we supposed that a greater exertion of labour, abstinence, and risk was necessary to produce the commodity, its price would necessarily be increased without raising either the profits of capital or the wages of labour. The price of an article may also be increased by taxation, without any corresponding increase in the wages of labour. There are however some circumstances in which increased prices produce a temporary effect in raising wages. Suppose that there is a greatly increased demand for such a commodity as cotton cloth. For a time the equalization between demand and supply will be effected by increasing the price of cotton goods. The new prices will perhaps provide the manufacturers with exceptionally large profits, and this circumstance will cause a largely increased supply of cotton goods. For this purpose the employment of new capital will be required; the manufacturers will perhaps erect new mills, and employ new capital in setting up machinery; to work this machinery an increased number of labourers will be required. This increased demand for labour will cause an increase in wages ; here, then, is a case in which high prices have produced high wages. But these high prices and high wages are

sure to attract the competition of other manufacturers and other labourers, who think that they would like to share these high profits and high wages. Production is therefore still further augmented in consequence of the competition of other capitalists; the supply of labour is also largely increased owing to the competition of other labourers. The increase of the supply causes the price of cotton cloth to return to a point closely approximating to its former position; the price may even sink below what is necessary to provide the ordinary rate of wages and profits current in the trade before the rise took place. In either of these cases wages and profits must both decline in a degree corresponding with the fall in price. The manner in which the fall of wages is brought about may be described as follows :-Production is checked ; manufacturers no longer realise exceptionally high profits ; they may perhaps be making less than the ordinary rate of profit. Hence they will strive to reduce the supply; they will not extend their buildings, and they may probably keep their men on at half-time. 'In such a case what will be the effect on the wages of labour ? We have supposed that the high wages which accompanied the original increased supply, attracted a large number of workmen, who were anxious to share the prosperity of the trade.

Hence when trade is dull and manufacturers are desirous of reducing production, there is a largely increased number of workmen who are seeking employment. These circumstances must undoubtedly produce a decline in wages. If the men resist such a decrease and refuse to work for lower wages, it might be to the manufacturer's interest, if his profits were less than the ordinary rate, to shut up his mills ; and in this event thousands of workmen would be out of employment altogether. In thus illustrating the temporary nature of the effect of high

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prices upon wages, an extreme case has perhaps been taken. In all cases, however, where the competition between labourers is active, exceptionally high wages are sure to produce an additional supply of labour, which will, sooner or later, reduce wages to their former level. This is an illustration of the theory of supply and demand, as explained in a previous section. When the demand for labour is in excess of the supply, an equalisation between demand and supply is effected by an increase in the price of labour. The higher wages, however, attract an increased supply of labour, and the equalisation finally takes place at a lower rate of wages. An illustration of the effect of high prices on wages may be taken from the recent great rise in the price of coal and the subsequent additions made to the wages of the miners. In this case the miners were able to obtain the maximum of advantage ; they were really masters of the situation because they possessed what almost amounted to a natural monopoly of the trade. Other labourers unused to the work could not be introduced to compete with them and run down wages; as they possessed this advantage, they were able for some time to prevent the price of coal from going down by strictly limiting the supply, or, as it is called, the “out-put” of each man per week. Hence they made the most of their opportunities.

Where competition is active the effect of a local depression of Trade upon Wages is only temporary. When wages are below the average and trade is dull, an influence is exerted by these very circumstances to restore wages and prices to their normal condition. Manufacturers will not go on producing commodities at a comparative loss, and intelligent workmen will not go on labouring at an occupation in which they receive lower wages than they could obtain elsewhere. The supply of capital and labour engaged in the depressed trade is accordingly reduced ;

production is decreased, and the supply being diminished prices rise, and wages are restored to their former level.

Charitable donations often interfere mischievously with the operation of Competition. It frequently happens that when an industry is much depressed, and the profits and wages realised in it are very small, there is temporarily great distress among the workmen, numbers of whom are thrown out of work altogether. Where competition is active, and no efforts are made to check its operation, many of the workmen will, under such circumstances, find work in other employments, and frequently in other localities; the distress in this way is relieved without the agency of private charity or parochial assistance. In too many instances, however, workmen are encouraged, by the help they receive from the poor-rates and private charity, to remain in the locality where trade is depressed, and not to seek fresh employment elsewhere. A striking instance of this well-meant but mischievous interference was exhibited in the Lancashire cotton famine. During the American war the supply of raw cotton, which had hitherto been obtained from the southern states of the Union, almost entirely ceased. The manufacture of cotton cloth is the staple industry of Lancashire, many thousands of artisans being engaged in it. The civil war in America, by checking the supply of the raw material, completely paralysed the cotton trade of Lancashire. Manufacturers suffered heavy losses, and thousands of workmen were out of employment. The suddenness and severity of the misfortunes of the poor people who were thus on the brink of starvation appealed powerfully to the sympathies of the whole country. Subscriptions were set on foot in the remotest parts of the kingdom. Relieving societies were formed who were in weekly receipt of large sums of money, which they devoted to the support of the cotton operatives and their families. The workmen, therefore,