the housing accommodation of the district. In the same way it will be seen that the farmer receives in the reduction of his rent the equivalent of what he pays extra in wages; while the labourer gets an increase in wages equal to his rise in rent. Thus the experiment leaves the three parties to the transaction exactly as they were in terms of money, so far as concerns the labourers who are householders on the estate.

But the secondary effects must be analysed a little more closely. The new standard wage is seventeen shillings, and this increase will be found to tend to raise the wages of other men employed on the farm, whether they be housed elsewhere, or be single men lodging in the neighbourhood. Thus, if the farmer employs much outside labour, his wages bill may tend to rise more than the allowance contemplates. At some periods of rural history this possibility might prove a serious obstacle, but, with the present upward trend of prices and keen demand for farms, it will be found that most farmers. will be willing to give the system a fair trial. Many of them know that a rise in wages is partially set off by an increase in the efficiency of labour. Moreover, as the supply of cottages rises in response to the increased returns, the farmer will gain much greater freedom of choice in selecting and changing his men.

The labourer gains directly if he be a non-householder, or live elsewhere. But indirectly, wherever he may live, he will benefit greatly by a more plentiful supply of cottages, by an increased facility of movement and an improved power of bargaining for wages. Moreover, if the process of raising rents be carried out at the same time as the change to a direct tenancy under the landowner, it will be found that the man regards his increased security of tenure as a distinct gain, and views the whole scheme with approval.

To the landowner, the new system certainly means a little more trouble. But he gains economic freedom to build new cottages if needful; he has the satisfaction of feeling that the receipts from his estate are more nearly apportioned between farm and cottages at their true value, and that he has stopped a vicious system which was an obstacle to all schemes of rural housing. And again, a general rise in wages will mean an increase in general cottage rents and in the demand for land

for cottages and gardens, an increase which, on a broad view, must benefit the landowning interest. The whole countryside must, in the long run, gain by placing the relative returns from farms and cottages on their true economic footing. A prosperous and contented peasantry cannot be other than a source of strength and satisfaction to all concerned.

But, even when the cottage problem is placed on a sound economic basis, we have still to face the fact that cottages are not a convenient or pleasant form of investment. If confidence could be restored in the stability of land as a form of property, it is probable that we should not look in vain to the oft-tried landowners of England to supply the housing needs of their own estates. But even that action would not now meet the needs of the growing rural population not directly employed in agriculture, while, to secure variety and the independence it brings, different classes of owners, public as well as private, may be desirable. From the point of view we take, all attempts to subsidise building from taxes or rates would tend to maintain the present bad system of low rents, and do more harm than good. Probably indeed the very suggestion of such help has already appreciably checked private enterprise. A large subsidy from national funds to District Councils towards the cost of cottages would stop at once all private building, and a system of housing the working classes by the bureaucratic action of a Government Department would remain the only future possibility. Subsidies from the rates are open to the same criticism, with the added probability of incompetence and corruption among the local authorities, usually composed largely of farmers, builders and contractors-some of them men of limited outlook and small experience—who have too much to gain or lose to make impartial administrators. Provided however the housing schemes are framed on a paying basis, there is less objection to using the security of the rates to borrow money at lower terms than could otherwise be obtained. On these lines of sound finance, the Housing Act of 1909 may safely be put into action. At the same time it is desirable to encourage individual enterprise by extending to private owners, subject to adequate safeguards against abuse, the credit facilities afforded by that Act to local authorities. More than one Bill has been drafted for this

purpose, but all need amendment in that they commonly contain clauses requiring the cottages built with such loans to be let at the small rents which tend to perpetuate an evil and discredited system.

Finally, since a restoration of a feeling of security is a necessary preliminary if we are to expect landowners to embark on large schemes of cottage building, it may be opportune to refer very shortly to the basis of the rents of agricultural land and the allied subject of a reform in the rating system.

Townsmen, in their prevailing ignorance of country matters, usually regard the land of England as a gift of nature, and its fertility as an inherent property. We would refer anyone who holds that the rent of agricultural land is different from other forms of return on capital, to papers by the late Mr. Albert Pell in the Journal of the Royal Agricultural Society' for 1887 and 1899, entitled 'The Making of the Land in England'— papers reprinted as an appendix to Mr. Pell's ' Reminiscences.' They will be surprised to find that pastures and tillage fields are as much the product of enterprise, capital, and labour as, let us say, chemical works or a pottery factory. To create from a state of nature-coarse grass, sour marsh, or impenetrable thorn scrub-a typical Midland estate, to fence it, drain it, provide roads and gates, would cost £10 or £12 per acre. The buildings on a modern farm cost on the average some £9 per acre. Hence to make and equip such land for farming has cost about £20 an acre. With the existing average annual rent of perhaps 20 or 25 shillings, of which at least one-third is absorbed in repairs and taxes, it will be seen how small a return even in this case is obtained on the capital sunk in development. The small area of very rich old grass land would show better figures, but on reclaimed moorland or sandy waste the results would be still less favourable. The 'site value' and unearned increment,' of which we hear so much, vanish together into less than nothingness.

Under the Finance Act of 1909, the term 'site value,' perhaps fairly applicable to urban property, was extended to rural areas and made to include much of the cost of preparing the land. This method of assessment was designed from the point of view of possible increment duty where agricultural land passes into use for building. But it makes the result an unfair basis for other purposes, and causes the 'site

'values' now being assigned to agricultural estates to give a monstrously false impression to those ignorant of our land and its history.

The needs of rural housing are urgent; all efforts should be made to encourage building. There is room for the private owner, there is room for the local authority, while the success of some of the Public House Trust Companies suggests that, in this direction also, relief might be sought. Trust Associations, with dividends limited to 5 or 6 per cent., might be founded by local people of public spirit and assured position, whose personalities would be the best guarantee for pure administration, while the pressure of shareholders would secure that efficiency which is sometimes found to be incompatible with the expenditure of public money by elected representatives. To such Associations Government loans, on the security of the cottages, might safely be made, and thus another step taken in the direction of adequate housing.

The whole condition of rural life is well worthy of careful, scientific, and impartial examination. History assures us that the different classes in the economy of our country-side have all useful parts to play; that the status of the labourer need not be one of personal enslavement and economic dependence; and that, in attempting to recreate, by methods adapted to the present day, some of the wise co-ordinations of the past centuries, we are not violating any principle of political science or social development. And the problem of rural housing must take the first place in any adequate consideration of the position of agricultural labour in England.

W. C. D. AND C. D. WHETHAM.

THE INFLUENCE OF TRADE UNIONS

ON WAGES

I. The Distribution of Income. By WILLIAM SMART. 2nd edition. Macmillan and Co. 1912.

2. Industrial Democracy. By SIDNEY and BEATRICE WEBB. Longmans, Green and Co. 1897.

3. Strikes and Social Problems. By J. SHIELD By J. SHIELD NICHOLSON. A. and C. Black.

1896.

4. Business Men and Modern Economics. By T. S. CREE. Glasgow: Bell and Bain.

1903.

5. Evils of Collective Bargaining in Trades Unions. By T. S. CRee. Glasgow Bell and Bain. 1898.

6. A Criticism of the Theory of Trades Unions. By T. S. CREE. 4th edition. Glasgow: Bell and Bain.

IN

N his presidential address to the Economic Section of the British British Association in 1907, Professor Ashley gave as a typical instance of the vital questions which divided economists, the question whether trade unions can or cannot raise the general rate of wages. The works mentioned above represent the varying views that are held. Mr. Cree, who was himself an employer, and, as Professor Smart testifies, a good employer, represents the view of the classical economists. Several of the greatest living authorities, whose own views are very different, have, publicly or privately, borne witness that his presentation of the case is one with which trade union advocates must seriously reckon. Mr. Cree's excellent pamphlets are out of print, but might well be reprinted. Of Mr. and Mrs. Sidney Webb's monumental work it is not necessary at this time of day to say much. The impression it makes is at first overwhelming, and even when the reader has recovered his power of criticism, it, and particularly Part III. on Trade Union Theory, remains a formidable statement of the trade union case. As Professor Smart says, it is not necessary to go outside its pages for information of what trade unionism is and what it aims at. Professor Nicholson and Professor Smart, of whose Distribution of Income' a second edition has recently appeared, represent a middle view. Professor