[Footnote 186-1: _Wolkoff_ very well shows that the economic progress of mankind is effected partly by the improvement of production, and partly by saving. The former increases the rate of interest, the latter lowers it. (Lectures, 182, 189. Compare _supra_, § 45.)] [Footnote 186-2: Thus the rate of interest in Russia rose, after Catherine II. had conquered the provinces situated on the Black Sea. (_Storch_, Handbuch, II, 34.) The same is still more strikingly apparent in the judicious planting of agricultural colonies.] [Footnote 186-3: Abolition of the English corn laws! Foreign commerce when very advantageous, always adds to the well-being of the people; to the rate of interest, however, only to the extent that articles which are calculated to satisfy the wants of the working class become cheaper in consequence; and this in turn lowers the rate of wages. Let us suppose that a country had hitherto purchased yearly 10,000 barrels of wine for $1,000,000. It might now happen that, in consequence of an advantageous commercial treaty, for instance, the 10,000 barrels might be obtained for $500,000. If, after this, wine-drinkers want to spend $1,000,000 for wine as they did before, they of course double their consumption of wine, but the rate of interest remains unchanged. If, on the other hand, they leave their consumption of wine where it was before and apply the saved half million to effect an increased demand for home products, the capital required for this production is set free at the same time. Hence, the relation between the supply and demand for capital has not changed, abstraction made of certain difficulties in the transaction. Compare _Ricardo_, Principles, ch. 7, rectifying _Adam Smith_, Wealth of Nat., I, ch. 9.] [Footnote 186-4: An increase in the rate of interest caused by a diminution in the rate of wages does not last long. Capital now increases more rapidly, and the increase is accompanied by an increased demand for labor. If, in the mean time, workmen have become accustomed to a lower standard of life, the increasing wages are followed by an increase of population: then the necessity of having recourse to the cultivation of land of a worse quality is an additional cause of a decreasing rate of interest. (Edinb. Rev., March, 1824, 26.)] [Footnote 186-5: According to this, it is easy to tell what influence the increasing skill or activity of the working class (for instance by a decrease in the number of holidays, coöperation of wife and child) must have. Where there has been no accompanying and corresponding elevation of the standard of life, and of the want of the class, the gain soon falls to the lot of the capitalists or landowners.]