se, be done
everywhere, and in making some articles for local use it is
best that the artisan should be where the customer can always
reach him. A large cost of transportation favors local
industries, a high degree of productivity in agriculture has
an unfavorable influence, and a protective tariff on
manufactures reduces the returns from agriculture and favors
manufacturing industry.

The general rule for determining whether a branch of manufacturing can
survive in the area of abundant land and well-paid labor is as
follows: it can do so if the cost of making the article which this
branch of business is devoted to producing is as low as the cost of
acquiring it by exchange. The cost may in both cases be reduced to
bare labor and the rule will then stand thus: if ten days' labor will
make the article and if nine will make something that can be exchanged
for it--_i.e._ if all the costs of the exchange can be covered and the
thing can be brought from abroad for a total expenditure of nine days'
labor instead of ten--the manufacturing of that article will not
survive. In a region of abundant land and well-paid labor it is
chiefly the tolls which governments exact which make it as costly an
operation to get the manufactured products by producing other things
to barter for them as it is to make them directly. Density of
population, overworking of land, meagerness of returns to agricultural
labor--these are the conditions that primarily fix the habitat of most
kinds of manufacturing. In the case of particular products these
influences may be overcome by the presence in limited parts of the
sparsely settled area of exceptional natural advantages for
production. Natural gas, special ores, particular kinds of lumber,
etc., may draw some branches of manufacturing to the region of fertile
land and high wages; but as the comparison which we are making is the
most general one which it is possible to make we are safe in our
assertion that, in the main, manufacturing processes tend, in the
absence of exceptional influences, to concentrate themselves in the
region of dense population and of meager earning power of labor.

_The Approximate Static Adjustment of Prices._--In the main, and with
tariffs as they are, the price of raw products is somewhat lower at
the left of the figure, while that of highly wrought merchandise is
markedly lower at the right of it; and with the comparative density of
population