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 can alone produce a permanent effect in ameliorating the condition of the poorest class of labourers.

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.

2. 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 wagesreceiving 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 depend upon cost of production. Cost of production consists of the following elements: cost of labour, profits of capital, and taxes; these include cost of carriage, cost of the raw material. An increase in the cost of any of these elements will increase the prices of commodities; but profits of capital, cost of carriage, cost of the raw material and taxes, might all be increased, and prices thereby greatly augmented, 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 equalisation between demand and supply will be effected by increasing the price of cotton goods. The new prices will perhaps exceed by 10 per cent. the cost of production. These exceptionally large profits will induce manufacturers to produce 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, it is said, 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 first of these circumstances causes the price of cotton cloth to return to a point closely approximating to the cost of production; the price may even sink below the cost of production. In either of these cases 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 prices were below the cost of production, to shut up his mills; and in this event thousands of workmen might be out of employment altogether. In thus illustrating the temporary nature of the effect of high 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. 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.

IF competition acted freely among all classes of labourers, the inequalities of wages for the same work in different localities would cease to exist. There are, however, differences in wages in different employments which are permanent in their character. Adam Smith

has thus enumerated the five causes which produce different rates of wages in various employments :

1st. The agreeableness or disagreeableness of the employments themselves.

2nd. The easiness and cheapness, or the difficulty and expense, of learning them.

3rd. The constancy or inconstancy of employment in them.

4th. The small or great trust which must be reposed in those who exercise them.

5th. The probability or improbability of success in them.

Mining industry affords several examples of the manner in which the agreeableness or disagreeableness of an employment acts upon the wages of those engaged in it. The miners who work underground receive much higher wages than those who are employed in the less dangerous and more agreeable occupation of breaking, sifting, and washing the ore on the surface. No workmen would enter into an occupation which is exceptionally dangerous or injurious to the health, unless they were compensated for the risk they incur by an exceptionally high rate of wages. Those who labour in a coal-mine receive, over and above the ordinary wages current in the district, a sum sufficient to induce them to risk their lives in a peculiarly dangerous occupation. Other things being equal, the more explosive a mine is, the higher are the wages of those engaged in working it.

Under the head "agreeableness or disagreeableness of