wealth of the most highly-civilized communities, the store of food which must be kept on hand to meet the necessities of the year's subsistence constitutes no insignificant part of the aggregate value; while among nations which comprise, probably, two thirds of the human race, so severe is the struggle with nature, so hard are the conditions of life, so many its enemies, that, after all the painful accumulations of centuries, spring remains as it was in the days of Alkman," the season of short fare," when the progress of the growing crop is eagerly watched, not with eyes greedy of gain, but with eyes hollow from hunger.'

To the extent of a year's subsistence, then, it is necessary that some one should stand ready to make advances to the wage-laborer out of the products of past industry. All sums so advanced come out of capital; but it is important to note that it need not be the capital of the employer. The laborer himself may be a capitalist to this extent. Where the reward of industry is as liberal as it is in America and Australia, there is no reason why a laborer should not save enough out of three or five years' wages to be a year beforehand, and thus, so far as the employer is concerned, that man's labor be thereafter freed from this condition of provisional maintenance. Moreover, even where the laborers' dependence on the employer for the year's subsistence is entire, it should be clearly noted (for it has been strangely overlooked,' with most unfortunate results in the

་

1 "There is in Ireland," says Alison," what is called the 'starving season,' which is about six weeks before the new harvest.'"-Hist. Europe, xxi. 204.

"A very little consideration will render it evident that laborers whilst engaged in any particular industry can not live upon the commodity which their labor is assisting to produce. The ploughman who tills the soil from which in the following autumn the harvest will be gathered, is fed with the wealth which his master has saved; or, in other words, the master pays his laborer's wages from the wealth which he has previously saved."-Prof. Fawcett, Political Economy, p. 19.

Here we find asserted or assumed, (1) the necessity of the laborer for

popular theory of wages) that this by no means involves the payment of his entire wages in advance of the harvesting of the crop or the marketing of the goods. There is nothing in the need the laborer has of provisional maintenance which defeats his claim to a payment, over and above the mere cost of his subsistence, out of the product when completed. It may be that poor Piers, the ploughman, must, as Professor Fawcett says, depend daily until harvest upon the squire for bread out of the crop of the last year; but surely that constitutes no reason why Piers should not at harvest receive some sheaves as his own. And in the case of all laborers of a higher class, whose wages may be perhaps twice or three times the cost of their bare subsistence, it is evident that, in countries where capital is scarce, the advances which are likely to be made to them during the year will leave a very considerable portion of the wages to be taken out of the product at the close of the year.

But how largely, in fact, are wages advanced out of capital? In old countries, to a very great extent certainly. Yet even in these there is but a small proportion of cases where wages are paid oftener than once a week-that is, where the laborer does not trust his employer with six days' work. And in some exceptional industries it happens that the employer realizes on his product' in a shorter

maintenance while the crop is growing; (2) his entire dependence on the employer for that maintenance; (3) the natural equivalency of subsistence and wages.

'I may mention, in illustration, the case of transportation companies, owning railroads, canals, steamboats, or coaches. The employees of such companies in the United States number hundreds of thousands, and they are rarely paid by the day, commonly by the week or month. Yet the companies collect all their fares for passage and a portion of their charges for freight, daily. They are thus always in debt, often to a vast amount, to their laborers (using that term in its generic sense) for services which have been rendered to them, and of which they have availed themselves to the full extent. So that the

time than this, so that the laborer is not only paid out of the product of his industry, but actually advances to the employer a portion of the capital on which he operates. Quite as common, probably, even yet in countries which we may call old, as weekly payments are monthly payments; and here the probability that the laborer may receive his wages out of the price of this marketed product increases with the quadrupled time given the employer to dispose of it. Yet even here the cases are doubtless exceptional where the employer does not have to "stand out," for a longer or a shorter time, of the amount which he pays in wages, though always, be it remembered, in the expectation of a reimbursement out of the product when marketed, the anticipated price of the product determining the amount which he can safely thus advance.

In new countries, by which we mean those to which men have gone with the industrial ideas and ambitions of older communities, but with an amount of capital which, from the necessity of the case, is more or less inadequate to the undertakings for which their skill and labor qualify them, the wages of labor are paid only partially out of capital. The history of our own country so amply illustrates this statement that we need not go elsewhere for examples. From the first settlement of the colonies down to the discovery of gold in California, laborers, whether in agriculture or in manufactures, were, as a rule, hired by the year, and paid at the end of the year. Bare subsistence might be furnished by the employer meanwhile; small amounts of money might be advanced "for accommodation;" the laborer's tax bill or doctor's bill might be settled by the employer; but these payments were not to such an extent (except in case of protracted sickness or sudden misfortune) but that the employer was always in debt to his laborer.

companies are virtually carrying on their operations on capital a portion of which is advanced by their own employees. Many other examples might be given.

I have before me a considerable collection of accounts taken from the books of farmers in different sections as late as 1851. These show the hands charged with advances of the most miscellaneous character. There are charges for grain and salted meats from the product of the previous year, for cash for minor personal expenses, for bootmaker's bills, grocer's bills, apothecary's bills, doctor's bills, and even towntax bills, settled by the employer, for the use of teams for hauling wood for the laborer, or breaking up his garden in the spring. Yet in general the amount of such advances does not exceed one third, and it rarely reaches one half, of the stipulated wages of the year. Now it is idle to speak of wages thus paid as coming out of capital. At the time these contracts were made the wealth which was to pay these wages was not in existence. At the time these services were rendered, that wealth was not in existence. It came into existence only as the result of those contracts and the rendering of those services.

Not less distinctly did this system of paying wages prevail in the department of manufacturing industry during the same period. Extensive inquiries have satisfied me that manufacturers in New-England did not generally leave off paying their workmen by the year until after 1854 or 1855. Some of the more successful were able to make the change to quarterly or monthly payments as early as 1851. A gentleman conducting one of the largest, oldest, and most successful manufacturing establishments in Massachusetts informs me that, up to the earliest of the dates mentioned, his firm paid their workmen yearly; and any hand requiring an advance of wages on work done was charged interest at current rates to the end of the year.

Now in this there was nothing unjust or ungenerous. Such an arrangement was the very condition on which alone the industry could be prosecuted, on which alone employment could be given. Capital was scarce, because the country was comparatively new; and if wages had been

measured by capital, wages must have been low; but at the same time production was large,' because natural agents were copious and efficient, and labor was intelligent and skilful, and as it is production, not capital, which affords the measure of wages, wages were high; but the workmen had to wait for them till the crop was harvested or the goods sold. And this they gladly did, and never for an instant suspected they were being paid out of capital; indeed, they knew better, for they had seen growing under their hands that in which they were finally paid. In the Middle States the change referred to came a few years later than in New-England; yet by the outbreak of the civil war monthly or weekly payment of wages had probably become more general than payment by the year.

Farther to the West and South the change to monthly and weekly payments has, in many sections, not yet begun. In these parts of our country the payment of wages out of capital is scarcely more common than it was in New-England a hundred years ago. The employer advances to the laborer such provisions and cash as are absolutely required from time to time; but the "settlement" does not take place until the close of the season or of the year, and the final payment is often deferred until the crop is not only harvested but sold.

- But whether wages are advanced out of capital in whole, or in part, or not at all, it still remains true that it is the product to which the employer looks to ascertain the amount which he can afford to pay: the value of the product furnishes the measure of wages. When the employer shall pay is a financial question; what he shall pay is the true industrial question with which we have to do in treating wages. This is determined by the efficiency of labor under the conditions existing at the time and place.

1 "Capitalists and laborers receive large remuneration in America because their industry produces largely."-J. E. Cairnes, Some Leading Principles, etc., p. 462.