it not unfrequently happens that in the struggle they have expended all their savings, and run themselves so far into debt that they actually find themselves in a worse position than if they had remained constantly at work at the old prices.

One of the commonest causes of combination amongst workmen is to resist a reduction of wages. When the demand for an article slackens, the manufacturer must either sell a smaller quantity of goods, or endeavour to attract more custom by lowering his price. Suppose a manufacturer to employ 60 men, and that his trade falls off one-sixth, he will then require only the labour of fifty, and this reduced demand will naturally lower wages. But if the workmen combine to resist the fall in wages, the manufacturer, as his trade has fallen off one-sixth, will only be able to find work for his men five days in the week, or to employ 50 men out of the 60. In either case the weekly receipts of the 60 men who combined are reduced one-sixth.

Now, if the falling off in the trade is not the mere temporary effect of over production, but

arises from a change in the taste of customers, or from the successful competition of other manufacturers, it is probable that the same cause that occasioned the first falling off in the demand will occasion a second, unless it be counteracted by lowering the price of the article.

For

But the manufacturer, by this combination among his workmen, actually pays more to produce the same article than he did before. while in wages there is no reduction, he is obliged to charge himself the same sum as before as interest for the fixed capital invested in his trade, to produce a diminished amount of goods. Thus, to continue to sell the article he manufactures at the same price, he must content himself with smaller profits; it may, indeed, be out of his power to lower price, particularly if he is trading upon borrowed capital; for then, unless he pays the interest upon the borrowed sums, he becomes bankrupt.

The capital employed in this trade will naturally continue constantly to diminish, and with it, of course, the demand for labour. Thus the ordinary effect of combinations to raise wages

above their natural rate, is, to reduce them below their previous level. Where such combinations exist, the trade will be contracted; and, where it is practicable, the manufacturer will be supplanted in the market by goods brought from places where labour is free. Consequently, where a trade is open to the competition of all the world, workmen necessarily perceive it to be their interest to allow their wages to be reduced when the demand for the article they manufacture materially falls. If, for example, the handloom weavers, whose wages have been reduced by the competition of the power-loom, were to combine for a rise of wages, their services would be altogether dispensed with.

But in those trades which are not open to any exterior competition, a combination of all that trade living in a particular town is often permanently successful. Suppose, for instance, the masons of a particular place to combine, and by intimidation to prevent any who do not belong to their union from working, there can be no doubt but that they can force their masters to raise their wages.

Let us now examine at whose expense these additional wages are paid. It is not taken out of the pocket of the master builder, because, if he does not get a fair profit upon his capital, he will leave the place or the business, and he has but little fixed capital invested in his trade to keep him long in either. The master builder, therefore, to reimburse himself, charges a higher price for all his buildings. Everybody, therefore, who builds a house pays more for it in consequence of this combination, and charges in return a higher price to his lodger or tenant. What, however, is important to observe, is, that not only the price of lodging in the new houses, but in all the old houses in the town, is raised in consequence of this combination.

When the population of a town advances so as to increase the demand for, and, consequently, the rent of lodgings and houses,—if the price of lodging room rises sufficiently high to make it profitable to build more houses, new houses are in consequence built; but it is evident that the greater the expense of raising new buildings, the higher must the price of lodging-room

rise, before any new buildings will be undertaken.

Supposing there are 500 houses in a town, and that there is a demand for more lodgingroom, but that, in consequence of the high rate of masons' wages, no more than five new houses can be profitably erected,—the proprietors of these houses compensate themselves for the increased expense of building by the higher rent they receive. But the obstruction thus thrown in the way of affording new accommodation to the inhabitants keeps up the price of lodging room in all the 500 houses in the old town. Thus the increased wages paid to the masons in the erection of only five houses influences the rent paid by the occupants of the 505 houses, of which the town now consists. Every tenant pays more for his lodging, and every landlord receives more rent than he would otherwise be entitled to.

Thus, to raise the wages of the masons employed in the building of five houses, the rent of lodgings in all the 505 houses is kept at a higher price. This is a curious instance of a combina