But if capital were worth only 5 per cent, rents would fall in. pro portion. We will suppose that labor falls 25 per cent, and capital 5 per cent, —or one half. Taking the cost of a house at £500, the rent would then bo £65 , made up as follows : 5 per cent, interest, £25 ; 4 per cent, renewal (this being fixed by the fall of 25 per cent, in material and wages) £20 ; and 4 per cent- insurance and contingencies, £20. This is actually an over-estimate, as in the foregoing examples we have, for the sake of convenience, adopted an obvious fallacy in the arguments of the working-man, namely, that depreciation and insurance must be calculated on the capital cost, including land. Of course no one insures land, and instead of depreciating it increases in value, and this increase is always taken into account in assessing rent. As a matter of fact, under existing circumstances a house costing with the land £600 would probably not let for more than £80 a-year, while under the altered circumstances of cheaper labor and capital it woukl let for £43 a-year. Still, as the question is one of propor tionate cost, the over-estimate in the rent does not materially affect the argument. It could be shown that the other points raised have an, equal bearing on ,

each othei*, but' sufficient has been said to prove that, before the resources, of the country can be thoroughly de veloped> both capital and labor must be cheaper. We have incurred some obloquy for contending that the price of labor would fall, and that this would be to the advantage of the community, but we still contend that if wfetges are lowered in exact proportion to the price of living, the working-man will be equally well ofi v ,\ while the colony will be immensely tm> gainer, inasmuch as the change would enable us to manu facture many now imported. The only otheyway to insure the estab lish mentfif these manufactures would be to atford them Protection, in which case the price of the commodity would be raised, and the community injured instead of benefited. But, it labor falls Avhile capital remains equally scarce, then the laborer will suffer. 