BY E. M. JOHNSTON, F.L.S. 



217 



of costs, not upon the old rates, but upon what we infer the 

 rates of wages, money, and materials will be on the average 

 during the time and at the place where the new contract is to 

 be carried out ; and if you are to survive as a successful land- 

 lord you will have to be guided by the same unavoidable com- 

 mercial principles. 



A. — But that would only be done by making a corresponding 

 increase in the rents of houses ? 



B. — Certainly. If competition hitherto among landlords 

 obliged them to restrict their profits to 5 per cent, on capital 

 outlay, the altered conditions of the labour market affect them 

 all alike, so that all who do not become bankrupt must earn 

 the same, profit which competition among landlords them- 

 selves determined as a safe working minimum profit long 

 before the recent rise of wages and materials came about. 

 That means that rental of houses must bear the extra cost of 

 building. Rents must be raised. The occupiers of houses 

 must inevitably bear the burden of the increase, and as both 

 you and I occupy houses we must also pay additional rent as 

 occupiers of houses. But although we do expend more of 

 our income as occupiers (i.e., consumers) of houses, that cannot 

 affect our income as derived from our business concerns as 

 landlord and builder. 



A. — Why so? 



B. — Because the profits of either are determined, not by the 

 wages, high or low, paid to workmen under them, so long as 

 they are general, but upon the intensity of competition 

 between employer and capitalist, and other employers or 

 capitalists in the same business. 



A. — But the workmen think that their higher rate of wages 

 comes out of the "Wages Fund" of the older economists, 

 and this is one of the reasons why they are so bitter against 

 the employers or capitalists for absorbing, as they think, 

 a too great share of the joint produce of labour and capital. 



B. — The older economists are largely to blame for the 

 present hostile attitude between the employer and his 

 workmen ; for undoubtedly this attitude is, in a great 

 measure, based upon the mistaken notion that the increase in 

 wages is an encroachment upon the employer's share of 

 profit ; whereas it is in reality an additional charge on the 

 values of products affected, which is ultimately borne by the 

 consumers of the particular products. 



A. — But will the workmen be satisfied if they comprehend 

 this matter in the light in which you regard it. 



B. — Why should they complain ? They have got their 20 

 per cent, increase. But if you are anxious to ascertain their 

 views let us put the matter to the test by asking Jones the 



