5. What is meant by "the margin of cultivation"? 6. What determines the position of the margin of cultivation?

7. Give an illustration of the manner in which the margin of cultivation varies with the price of agricultural produce.

8. What determines the price of agricultural produce? 9. In what two ways is Rent increased by the lowering of the margin of cultivation ?

10. Briefly recapitulate Ricardo's theory of Rent.

II. In what sense are the interests of landowners opposed to those of all other classes of the community?

12. In what respects are the interests of landlord, farmer and labourer identical?

13. Shew that low wages are not always profitable to the farmer and the landlord.

14. In what way does an increase of population affect the prosperity of a country like Australia?

15. What is the effect of increased population on the prosperity of a country like England?

16. Prove that rent is not a part of the price of agricultural produce.

17. Are rents always regulated by competition?

18.

Describe the metayer tenure.

19. Does the landlord under this system get as large a share of the produce as he does where rent is regulated by competition?

20. What are some of the advantages and disadvantages of the metayer tenure?

21. Describe the Ulster custom of tenant-right. What are its advantages and disadvantages?

22.

What is the cottier tenure of Ireland? 23. Describe its disadvantages.

24. What is conacre?

I. If a farmer pays a rack-rent for his farm, will it make any difference to him whether the land be barren or productive?

2. If a hundred square miles of fertile land could be added to the area of England, what effect would it have on the price of agricultural produce?

3. Would the effect in all probability be permanent? 4. If you were going to be a farmer, would you rather pay a rack-rent, or would you prefer being a metayer tenant?

5. If all the landlords in England excused their tenants paying rent, would bread be cheaper?

6. If all farmers instead of paying their rent to private individuals paid it into the national exchequer, what effect would it have on the general wealth of the country?

CHAPTER II. The Wages of Labour.

THAT part of wealth which is given in exchange for labour is called wages. In a former chapter it was stated that the portion of circulating capital which was used as the wages of labour was called the wages-fund. Hence it was asserted that any circumstance which increases the wages-fund tends to raise wages; while an increase in the wages-receiving classes, by adding to the number of those amongst whom the wages-fund is distributed, tends to depress wages.

Wages as regulated by Competition. Wages, like rent, may be regulated either by custom or by competition. They are, however, for the most part, regulated by competition, that is to say, the labourer tries to get as much as possible in exchange for his labour, and the employer tries to obtain labour at the least cost to himself. There

are, of course, exceptions to this general assertion; there are many labourers who would not leave an old master in order to gain an increase of wages; and it not unfrequently happens that an employer hires labourers partly out of charity, and would not part with some of his labourers even though he could get their work done for a smaller amount of wages. Such circumstances as these are, however, the exception, and not the rule. Employers and workmen may be regarded as the buyers and sellers of a commodity. Employers want to obtain labour; workmen want to sell it. Employers will try to get labour as cheap as possible, but their competition between themselves tends to raise wages. Suppose that owing to an increase of trade the demand for labour is very active, employers, rather than be deprived of the labour which enables them to obtain their profits, will raise wages in order to retain the services of their employés. The employed try to sell their labour for as much money as possible, but their competition between themselves tends to depress wages. Suppose that three labourers are anxious to obtain work of an employer who only wants the services of one of them. Assuming that all three are equally good workmen, and competition to be unrestricted, the situation will be gained by him who will consent to take the lowest wages. If, on the other hand, three employers are seeking the services of one labourer, he will be hired by the employer who offers the highest wages. It must however be remembered, that the whole industrial population of a country does not compete indiscriminately for all employments. It is rather divided into a series of layers, within each of which considered separately there is a real and effective competition; but as between the different layers or groups competition is practically inoperative. Thus the lowest class of manual labourers are not in competition for the same kind of employment

as the skilled artisan; and again, the skilled artisan is not in competition with the professional classes. This limitation of competition is one of the most powerful of the causes which produce different rates of wages in different kinds of employment.

Circumstances which regulate the Amount of Wages. Wages depend on the proportion between the wages-fund and the number of the labouring population. If this proportion remains unchanged, the average rate of wages cannot be raised. This should be borne in mind by those who desire to improve the condition of the labourer by raising his wages; for none of these efforts will prove successful if they do not tend either to increase the wages-fund or reduce the number of the labouring population. The wages-fund increases when a fresh employment for capital is opened, and when, therefore, there is additional inducement to save. The wages-fund has been much increased by the introduction of machinery, which by decreasing the cost of production has set free a large quantity of capital and labour, which has been employed by their owners in extending their own trades, or in carrying out new industrial enterprises. In both these cases fresh employment for labour is provided, and the wagesfund is increased. Suppose that a manufacturer is carrying on his business with a capital of £10,000, and that he discovers some new process which, by saving time or avoiding waste, reduces the cost of production 10 per cent. He will now be able to carry on the same business with £9000 which previously required £10,000. There is no reason to suppose that the £1000 which he has saved will be spent unproductively. Even if it is placed in a bank it will be used as capital. But it will in all probability be used by the manufacturer to enlarge his own business. In other words, he will erect new buildings, and employ more labour, fixed and circulating capital are both

increased, the wages-fund is augmented and wages rise. The wages-fund is virtually increased by any circumstance which cheapens food. The wages of labour are in reality increased though no change takes place in the amount of money received by the labourers, if this money will exchange for an increased quantity of bread and meat. A Dorsetshire labourer with 9s. a week is better off when bread is 10d. a gallon, than he is with 10s. a week when bread is Is. 5d. a gallon.

The influence of Population on Wages. The greatest difficulty in permanently improving the condition of the labouring population arises from the fact that an increase of the wages-fund is almost invariably followed by à corresponding increase in the number of the wages-receiving class. At the time of the repeal of the corn laws, it was thought by some ardent repealers that the cheap food which the abolition of the duty on corn brought to every cottage in the kingdom, would permanently improve the condition of the labouring poor; it was said that there would be no more starvation, and no more pauperism. The workhouses, it was confidently asserted, would soon be in ruins. The result has proved far otherwise. The cheap food, which the repeal of the corn laws brought to England, has stimulated a vast increase of population; the benefit which might have been derived from a plentiful supply of cheap food has been absorbed by the demands of millions of hungry mouths. The principal effect, on the labourer, produced by the repeal of the corn laws is that cheap food has enabled him, not to live in greater comfort, but to support an increased number of children. Such considerations lead to the conclusion that no material improvement in the condition of the working-classes can be permanent unless it is accompanied by circumstances which will prevent a counterbalancing increase of population.