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 little affected. Their raw material is rising and their finished commodity likewise (or the rise in raw material could not go on rising long), but so also are all the other materials that enter into food, clothes, shelter, and transport. For a time, owing to the habitual "lag" in wages, they may earn an extra profit at the expense of those who work for them; but this cannot last and when it is over what they make on cloth and clothes is offset by higher prices for all the things that they have to buy. And in the case of a fall it is likewise, except that then the advantage of the lag in wages is on the workers' side.

But if wool, cloth and clothes go up or down when other things are steady or moving in the opposite direction, then there is a big gain or loss. If the cloth maker can make a bigger profit and buy other things more cheaply, or suffers a loss at a time when all that he has to buy is dearer, then it may be a question of fortune or of ruin, and such things are quite possible with a successfully stabilized Index Number. And in spite of Mr. Hawtrey's conviction to the contrary there is surely something to be said for the view that trade depressions begin owing to these special fluctuations in the fortunes of particular enterprises, which arise because of the uneven