me of wage relationship of wages
adjusted to price movements. The best method of adjustment a
compromise.

1.--In the last chapter the reasons for seeking an ordered scheme of
wage relationship in industry were discussed, and some suggestions were
made in regard to such a scheme. One essential to its success was
pointed out. That is, that under it the distribution of the product of
industry should recommend itself as just to the wage earners and the
community in general. The possibility of satisfying this requirement
remains to be considered.

The ultimate distributive question to be met in any attempt to formulate
a policy of wage settlement is the distribution of the product of
industry between wages and profits (rent incomes, in the Ricardian
sense, being left out of the question). It is entirely conceivable that
a policy of wage settlement should be put into practice which would take
note only of the facts of this relation. However, there are distinct
advantages to be obtained by taking note of an intermediate relation.
That is the relation between wages and changes in the price level.

The relation between wages and general price movements has been
discussed. It has been seen that movements in the general level of
prices affect the outcome of distribution. They occasion changes in the
distributive situation; and these changes may be desirable or
undesirable--having reference to the distributive result that is sought.
Any plan by which such changes as are undesirable are prevented from
taking place would contribute, therefore, to the attainment of the aims
of the proposed policy; and would be a valuable adjunct to the policy.
The conclusions reached in the previous discussion on this subject make
up a plan suitable for the purpose. They may now be fitted into the body
of these proposals. Then in the following chapter that most difficult
problem of wage settlement can be considered--the problem of governing
the distribution of the product between profit and wages in order that a
just distribution may result.

2.--The results of the discussion in Chapter V concerning a plan for
the adjustment of wages to price change may be applied at this point
without further comment.

The central authority in its decisions should take note of all changes
in the approved price index number since the time when the wage rates
which are up for reconsideration were fixed. It should then in its
awards adjust these wag