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additional supply of food would be greatly augmented if it were necessary to resort to land not only less conveniently situated but also less fertile. Every quarter of corn grown on land of inferior productiveness might require thirty per cent. more capital and labour to produce it and bring it to market; if this were the case the price of corn throughout the community would be in'creased thirty per cent.

There is yet another case to be considered, in which the additional supply of food could not be provided except at a much greater cost. Suppose that the village community were settled on a small island, or in a mountain valley shut in by rocks, where an extended area of cultivable land was not attainable. The additional supply of food which the increased population of such a village would require could only be obtained by improving the cultivation of the land already under the plough, by an increased application of labour and capital. It is however well known that after a certain point, even with the advantages of improved machinery and scientific farming, double the amount of capital and labour does not double the produce; and the cost of the increased quantity of food might-very possibly be twice as much per quarter as that which was formerly required by the smaller population.

The growth of population tends to increase the price of food. From these examples it is seen that the increased demand for food cau: by an increased population cannot be satisfied without increasing the cost of the production of food ; in other words, an increase of population exerts a direct tendency to raise the price of agricultural produce. The supply must be made equal to the demand; the demand increases with the growth of population, and an increased supply cannot be obtained but at a greater cost. The tendency of the growth of population to increase the price of agricultural produce can be to some extent counteracted in two ways :

ist. By the importation of agricultural produce from other countries.

2nd. By improved agricultural machinery, and by the application of chemical discoveries, such as powerful

manures.

Thie influence exerted by the first of these counteracting causes has in our own country been very great. Notwithstanding a vast increase in our population since 18411, the price of corn has not materially increased. The repeal of the corn laws in 1846 has rendered the existence of this increased population possible. The corn laws, by imposing a heavy duty upon all corn imported into this country, greatly checked the importation of food from foreign countries, and made the population of England mainly dependent on the supplies of corn that could be grown at home. Hence an increase in population exerted its full effect in raising the price of agricultural produce. If the corn laws had not been repealed the growth of population must have been checked ; had it continued to increase corn must have risen to a famine price. One may form some estimate of the effect of increased population upon the price of food by considering those commodities which cannot be, to any considerable extent, imported. The price of milk and of butcher's meat has steadily and of late years rapidly increased ; and if the population goes on increasing, there is no doubt that these commodities will get dearer and dearer, unless the efforts to provide the English market with preserved meat from Australia, and with condensed milk from Switzerland, prove more successful than they have hitherto been.

1 The population of England and Wales increased between the years 1841 and 1871 from 15,914,148 to 22,712,266.

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A summary of the laws governing the price of Agricultural Produce. The following is a brief summary of the causes which regulate the price of agricultural produce.

An equality must be effected between the demand and the supply. When the demand is in excess of the supply the equality cannot be restored, as with some other commodities, by withdrawing a corresponding portion of the demand. For the demand for the necessaries of life must always bear a proportion to the number of the population. The demand for such a commodity as bread does not vary in an inverse ratio with its price. People must either eat or die, whether bread is dear or cheap ; the effect therefore of the price of bread upon the demand for it is very small, for people are obliged to relinquish every unnecessary expenditure before they diminish their demand for bread. It was said above that the demand for necessaries could not be withdrawn in the same manner as a demand for other commodities. This is true, it cannot be withdrawn in the same way ; but it can be and is diminished by starvation and semi-starvation. But this means of reducing the demand necessarily diminishes the number of the population, so it still remains true that the demand for necessaries must always be proportionate to the number of the population. When, therefore the demand is in excess of the supply, equality is restored, not by decreasing the demand, but by increasing the supply. In order to increase the supply resort must be had to less fertile or to less conveniently situated land. When this is done the additional quantity of food is raised at a greater expenditure of labour and capital ; in other words, the cost of production is increased, and prices consequently rise. It is therefore seen that, as regards the necessaries of life, the demand does not depend on the price, but the price depends upon the demand ; that is to say, the price depends, other) .;

things being cqual, upon the number of the populatior. It should, however, be pointed out, that counteracting circumstances often prevent a rise in the price of food corresponding to the increase of the population. Free trade, for instance, and other agencies, have prevented a rise in the price of wheat at all commensurate with the increase of the population of England during the present century.

The productions of Mines and Fisheries. What has been stated with regard to agricultural produce is also true with regard to the produce of mines and fisheries. When an increased demand for fish takes place the demand is satisfied by resorting to less productive or more distant fisheries ; hence the cost of production (that is the labour and risk incident to production) is increased, and prices rise. The recent great rise in the price of coal may in great part be traced to similar causes. An extraordinary activity in the iron trade in the years 1871—2 caused a great increase in the demand for coal. This demand had to be satisfied by resorting to seams of coal which were less productive, and consequently more costly than those that were formerly sufficient to satisfy the demand. Hence the increased demand could not be met except at a largely increased cost. The sudden rise in price was not produced, as it seems sometimes to be supposed, by the increased wages paid to colliers; the rise in wages followed the rise in prices. The men took advantage of the exceptional activity of the trade to demand and obtain higher wages. The demand for coal has already (1874) considerably declined, consequently the seams of coal which were most costly to work, in proportion to their productiveness, are ceasing to be worked, and prices are declining.

The Laws which govern the Price of Manufactured Commoditles. When illustrating the general theory of value the laws regulating the price of manufactured commodities were referred to; but it may be desirable more fully to explain their nature, for manufactured articles are those whose supply can be increased without increasing their cost of production. They therefore form the third of the classes into which commodities are divided in respect to their price.

It has been previously stated that the price of such commodities is governed by their cost of production, in so far as free competition exists among their producers. It is now necessary fully to explain of what elements their cost of production is composed. It may perhaps be thought that the price of manufacturing produce is governed by the same laws as those which regulate the price of agricultural and mining produce. For the materials of which manufactured commodities are made are always derived from the land. A piece of linen cloth is composed of flax; it may therefore be thought that as an increased supply of linen is produced, the cost of producing it must be augmented, because the raw material of which it is composed will gradually become more expensive. The price of the raw material no doubt forms a part of the price of manufactured commodities; but with most manufactures it does not form an important part. Take the instance of a piece of cotton cloth. The number of processes which the cotton goes through is so great that the price of the raw material forms but a very small part of the cost of producing the cotton cloth.

The raw cotton is grown in America ; it has to be packed on board ship, and conveyed across the ocean to Liverpool ; when it arrives in England it goes through almost inumerable processes, carried on by different classes of labourers, all of whom have to be remunerated ; the capital also which is required for carrying on these various processes must be replaced and rewarded by the ordinary rate of profit.

The principal Element of Cost of Production. It is

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