ON WAGES AND THE HOURS OF LABOUR. 483 
trade will tend to remain unaltered, since the amount of exports will not 
diminish, the home country having the same interest as before in con- 
tinuing the exchange of commodities. 
Professor Sidgwick has suggested that the characteristic of inter- 
national trade is not the immobility of capital and labour, but the cost 
of carriage. Assuming that the exchange of commodities between 
nations is governed by cost of production, he regards the problem 
of international values to consist in the determination of the conditiors 
that govern the division of cost of carriage between the countries con- 
cerned.,! 
Assuming this view, the effects of a reduction of hours on international 
trade would be similar to the effects on the home trade described in 
sections 2 and 3 of this paper. But the following special considerations 
arise :— 
1. A reduction in net produce that might appear substantial mea- 
sured with reference to exports would be much less if measured with 
reference to exports plus imports. We have seen that a reduction 
in hours will affect all trades and all producers; the greater the area 
over which the effects are spread the smaller the loss each industry will 
suffer. 
2. But capital and labour are less inclined to migrate to foreign 
industries than to home industries ; hence the economic equilibrium may 
be only partially adjusted aud the chief loss may be thrown on the home 
country. 
3. The cost of production being increased by the reduction in the 
hours of labour, foreign customers may find it to their advantage to 
buy elsewhere, and a portion of the foreign trade may be lost, or if 
retained, it will be by receiving in exchange a smaller amount of foreign 
oods. 
‘4 The net produce would under such circumstances be reduced. 
The cost of carriage would, for a time at least, tend to increase, inas- 
much as a smaller amount of exports or of imports would require to be 
carried, and the probability is that this loss would fall on the country 
that reduced its hours of labour. 
~ 
The main conclusions, then, at which we have arrived may be summed 
up as follows :— 
1. That a reduction in the hours of labour which is neither universal nor 
uniform, will tend to reduce the net produce available for division amongst 
the producing classes, but such reduction may be lessened or counteracted 
by greater efficiency in labour and in the use of capital. 
2. Capital will be able to throw a portion of the loss on labour, and 
labour generally will be affected. 
3. That any check to the accumulation of capital due to the re- 
duction in the net produce will tend to raise interest and lower wages, 
but this may be avoided to some extent by the more economic use of 
capital. 
4, That the reduction in hours will not necessarily lessen the number 
of the unemployed, inasmuch as it will not increase the purchasing power 
1 Political Economy, Bk. II. ¢. iii. 
