president's address— section f. 1S5 



combat, the issue of which would leave no quarter to the 

 vanquished. I shall treat directly of the methods which 

 were adopted in the conduct of this industrial warfare. But 

 before I do so, it is necessary that I should refer for a 

 moment to the view entertained by Mr. Henry George 

 regarding the relations of labour and capital. Whatever 

 opinions may be held concerning some of the theories of this 

 distinguished economist, there can be little doubt, I think, in 

 the minds of those who have been charmed by the elegance 

 of his diction, or who have enjoyed the pleasure of personal 

 converse with him, that he is a man of striking originaUty 

 and of transparent honesty of purpose. He has given the 

 world a valuable contribution to the discussion of this much 

 vexed wages question ; and if he has stopped short of the 

 discovery of truth, I am bound to confess that it is to a com- 

 parison of his views with those of Ricardo that I am indebted 

 for the theory that I shall venture to offer to you. 



Henry George sets out by asking, " Why, in spite of 

 increase in productive power, do wages tend to a minimum 

 which will give but a bare Hving ? " And he says, " The 

 answer of the current political economy is that wages are 

 fixed by the ratio between the number of labourers and the 

 amount of capital devoted to the employment of labour, and 

 constantly tend to the lowest amount on which labourers will 

 consent to live and reproduce ; because the increase in the 

 number of labourers tends naturally to follow and overtake 

 any increase in capital." He then states the proposition 

 which is the cardinal point of his theory, viz., " That wages, 

 instead of being drawn from capital, are in reality drawn 

 from the product of the labour for which they are paid." To 

 illustrate this theory he says, " For in all those cases in 

 which the labourer is his own employer, and takes directly 

 the produce of his labour as its reward, it is plain enough that 

 wages are not drawn from capital, but result directly as the 

 product of the labour." It must be remembered that George 

 includes in the term "wages" all reward for exertion. 

 Again, he says, " As the employer generally makes a profit, 

 the payment of wages is, so far as he is concerned, but the 

 return to the labourer of a portion of the capital his labour 

 has previously produced." Once more he affirms, " Capital 

 does not supply or advance wages, as is erroneously taught. 

 Wages are that part of the produce of his labour obtained 

 by the labourer." Now, it will be seen, that while George's 

 theory is the direct opposite of that advanced by the old 



