president's address — SECTION F. 141 



the true definition to be that "profit is the value given 

 to capital, and wages the value given to labour by the 

 co-operation of the two forces of capital and labour." Let us 

 illustrate this by a simple instance : — A labourer goes into the 

 forest and fells a valuable timber tree. When he has done 

 so he finds his labour has been spent in vain, because he can- 

 not saw the wood into a marketable commodity, nor can he 

 transport it to market. He discovers, however, one capitaHst 

 with a sawmill plant which he cannot utilise, because he can 

 find no one with timber which requires sawing, and another 

 with a team of horses for which he can find no employment. 

 By a combination between the three, however, the labourer's 

 timber is sawn and carried to market ; tlie sawmill plant and 

 team of horses are both employed ; the two capitalists receive 

 a profit for the use of their capital, and the labourer receives 

 wages for his labour. I need not multiply this instance ; the 

 principle will be found to hold good in every walk and phase 

 of industrial hfe. 



In elaborating tliis theory we shall, of course, have to 

 determine the respective shares of labour and capital in the 

 final result. We shall also have to bear in mind that the line 

 of demarcation between labour and capital is very faint, — that, 

 especially in these colonies and in all young countries, the 

 capitalist of to-day was the labourer of yesterday. I must, 

 however, reserve the fuller treatuient of these aspects of the 

 question for some other occasion, and content myself now 

 with little more than a definition. 



Let us consider, however, what will be the effect of 

 the acceptance of this doctrine in the industrial hfe of the 

 nation. In the first place, it will tend to make labour 

 more eflticient, because the labourer will realise that he is a 

 partner in the enterprise, and that his remuneration will tend 

 to increase in proportion to the zeal and skill with which he 

 applies himself to the performance of his task. In the next 

 place, it will tend to induce the employer to provide the most 

 efficient means to aid the labourer, to husband his strength, 

 to make his circumstances as comfortable as possible, in order 

 that he may be able to utilise his efforts to the best advantage. 

 In the third place, by persuading both capitalist and labourer 

 that their interests are mutually dependent, and not 

 antagonistic, it will tend to make capital more productive and 

 labour moie efficient by the union of the two forces acting 

 in the same direction instead of in opposite directions. It 

 will at once suggest the introduction of a new dispensation, 



