824 REPOiti— 1884. 



The following Papers were read : — 



1. What makes the Rate of Wages ? By E. Atkinson. 



In the consideration of wages, a distinction must be made between the rate of 

 wages which is stated in terms of money and the absolute wages which induce 

 the labourer to do the work ; such absolute wages consisting in what the money 

 will buy — food, fuel, shelter, clothing — aEd the proportion saved for future use. 

 Furthermore, when considering the question of wages, attention needs to be given 

 to the proportion of the population of any given State or nation who depend upon 

 wages — that is to say, the proportion of any given popidation who are in the 

 position of the employed rather than of the employer. If we consider the annual 

 product of this country as a unit or single subject of distribution, it will be apparent 

 that this product, whatever its value may be, is converted into terms of money by 

 bargain and sale, and is distributed among the people who consume it in greatest 

 measure by way of wages. That is to say, the greater part is consumed by those 

 who work for wages. The annual term fits the case, because the year represents 

 one succession of seasons. A small part of the product of a previous year has 

 been brought over to begin the work of the present year upon, and a small part of 

 the present year's product is carried over to the next year to start the work of that 

 year. Substantially, each year's subsistence depends upon each year's work. The 

 world, and even the most civilised State in the world, is always within less than 

 one year of starvation, never having a full year's product of food on hand at any 

 one time, and so the most civilised nation is always within two or three years of 

 becoming naked. In fact, the entire capital of the richest State — to wit, all the 

 railroads, mills, works, warehouses, dwelling-houses, and goods and wares of every 

 kind in existence — bears a market value not exceeding the value of two, or, at the 

 utmost, of three years' product of the same State. Hence it follows that all 

 profits, all wages, all taxes, are and must be derived from the market value of the 

 annual product. Now the absolute law brought into action by the force of compe- 

 tition is this :• — In proportion to the increase of capital, profits diminish relatively, 

 while wages increase absolutely. If this principle can be sustained it is a complete 

 answer to all the nonsense which certain American politicians attempt to palm off 

 upon the credulity of well-meaning but uninformed men and women. How can it 

 be sustained ? The most complete proof of this law will be found in the table at 

 page 830, in which are given both figures and graphical illustrations of the law. 



The table has been constructed from data obtained as follows : — The founders 

 of the cotton manufactories of this country — Messrs. Patrick T. Jackson, 

 FranciB C. and John Amory Lowell, Kirk Boott, George W. Lyman, Samuel 

 Batchelder and others — were men of great foresight and business capacity. They 

 proceeded cautiously, both in constructing their factories, in establishing the kind 

 and quality of the goods to be made, and especially in the method of keeping the 

 accounts. Through the kindness of friends, many of the earliest cost-sheets of 

 some of the principal factories have come into the author's hands, from which 

 records he has been able to take the actual days of labour, the sum of money paid 

 and the product, both in quantity and value. To these tables, relating to the earlier 

 years, he has been enabled to add the data of more recent years from personal 

 knowledge in the management of factories and by the kindness of others. From 

 among these various tables he has sorted the facts which are contained in the fore- 

 going statements. They are mainly taken from the records of two factories which 

 have been continuously employed on one fabric. They cannot, however, be 

 imputed to either of the two, and they do not disclose the actual results of the 

 business of either corporation, but they are exactly consistent with the facts, and 

 they show the general result more accurately than if the figures of a single factory 

 had been taken. It was said that by the force of competition profits diminish and 

 wages increase. That is to say, the competition of capital with capital works effec- 

 tively in reducing the ratio of profit which the capitalist can secure from any given 

 product, while on the other hand the competition of labourer with labourer utterly 

 fails to reduce the rate of wages ; but, on the contrary, in the face of such com- 



