482 REPORT—1890. 
poly of production it may throw a large portion of the loss on its foreign 
customers. 
But a monopoly that depends on special productive power may be de- 
stroyed by a reduction in hours, and foreign customers may be able to 
obtain better terms from other States. 5 
The relative importance to the two States of the article each imports 
is also very material as regards demand. The necessaries of life are more 
important to a nation than luxuries, and a decrease in supply in the 
former would probably not affect demand so much as a decrease of supply 
in the latter. 
The possibility of finding a substitute amongst the commodities pro- 
duced by trades where no reduction has occurred, may result in a new 
direction being given to foreign trade, with a consequent disturbance to 
industry. 
These and other circumstances will tend to determine how much of 
the decrease in ‘total-gain’ will fall on the country that reduces its 
hours of labour. 
If, instead of confining our attention to one or two articles, we look at 
foreign trade as a whole, the question becomes more complex, though the 
results of a reduction in hours will be governed by the considerations 
applied to the simpler case of two commodities. 
A reduction in the hours of labour that is not universal, and yet is 
unequal in amount, will, apart from diminishing the gain arising from 
foreign trade, greatly disturb relative values, and tend, for a time at 
least, to disorganise industry. We cannot assume that the foreign 
demand for commodities will vary in each industry with the correspond- 
ing reduction in hours and in produce, or that such reduction will not 
affect the home demand for foreign produce. Hven were we to suppose 
that we should lose none of our foreign trade, yet the direction of such 
trade would tend to alter, and the process of adjusting our industries to 
meet the changed conditions would undoubtedly tend to injure, at least 
for a time, the working classes. 
If, however, the reduction in hours is general and uniform and 
applies to all industries, relative values will remain undisturbed, but if 
the output in every industry is diminished a smaller amount of exports 
will be available for exchange with foreign countries, whilst the ‘ total 
gain’ may be diminished. As far as the home country is concerned, it 
has, owing to relative values being unchanged, the same incentive as 
before to export some commodities and import others, but whether foreign 
countries will or will not be prepared to give the same amount of their 
exports for a smaller quantity of the home country’s produce will depend 
on the circumstances (already referred to) affecting reciprocal demand. 
It is conceivable that the home country, owing to its special facilities for 
production, may still obtain as large a quantity of imports, and as large 
a share of the ‘ total gain’ as before. It is even possible that its imports 
and its gain from foreign trade may increase. But in view of the deve- 
lopment of the industrial resources of the world and the improvement in 
means of communication, it is more probable that a disturbance might 
Hae in some industries, and that the direction of foreign trade may be 
altered. 
On the other hand, if the output be maintained after the reduction 
in hours and relative values remain unchanged, the course of foreign 
