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Statistical evidence supports unequivocally the common theory that persons whose incomes are derived from wages suffer seriously from a depreciation of the currency. The confirmation seems particularly striking when the conditions other than monetary affecting the labour market are taken into consideration. American workingmen are intelligent and keenly alive to their interests. There are probably few districts where custom plays a smaller and competition a larger rôle in determining wages than in the Northern States. While labor organisations had not yet attained their present power, manual laborers did not fail to avail themselves of the help of concerted action in the attempt to secure more pay. Strikes were frequent. All these facts favored a speedy readjustment of money wages to correspond with changed prices.
 But more than all else, a very considerable part of the labor supply was withdrawn from the market into the army and navy. In 1864 and 1865 about one million of men seem to have been enrolled. About one-seventh of the labor supply withdrew from the market. But despite all these favoring circumstances, the men who stayed at home did not succeed in obtaining an advance in pay at all commensurate with the increase in living expenses. Women on the whole succeeded less well than men in the struggle to readjust money wages to the increased cost of living.
It is sometimes argued that the withdrawal of laborers from industrial life was the chief cause of the price disturbances of the war period. This withdrawal, it is said, caused the advance of wages, and greater cost of labor led to the rise of prices. The baselessness of this view is shown by two well established facts -- first, that the advance of wages was later than the advance of prices, and second, that wages continued to rise in 1866 after the volunteer armies had been disbanded and the men gone back to work.
Wage-earners, however, seem to have been more fully employed during the war than in common times of prosperity. Of course, the enlistment of so many thousands of the most efficient workers made places for many who might otherwise have found it difficult to secure work. Moreover, the paper currency itself tended to obtain full employment for the laborer, for the very reason that it diminished his real income. In the distribution of what Marshall has termed the "national dividend" a diminution of the proportion received by the laborer must have been accompanied by an increase in the share of some one else. Nor is it difficult to determine who this person was. The beneficiary was the active employer, who found that the money wages, interest, and rent he had to pay increased less rapidly than the money prices of his products. The difference between the increase of receipts and the increase of expenses swelled his profits. Of course, the possibility of making high profits provided an incentive for employing as many hands as possible.
After an examination of the change in the condition of the great mass of wage-earners, it may seem surprising that few complaints were heard from them of unusual privations. This silence may be due in part to the fact that a considerable increase of money income produces in the minds of many a fatuous feeling of prosperity, even though it be more than offset by an increase of prices. But doubtless the chief reason is to be found in the absorption of public interest in the events of the war. The people both of the South and North were so vitally concerned with the struggle that they bore without murmuring the hardships it entailed of whatever kind. Government taxation that under other circumstances might have been felt to be intolerable was submitted to with cheerfulness. The paper currency imposed upon wage-earners a heavier tax -- amounting to confiscation of perhaps a fifth or a sixth of real incomes. But the workingmen of the North were receiving considerably more than a bare subsistence minimum before the war, and reduction of consumption was possible without producing serious want. Accordingly the currency tax, like the tariff and the internal revenue duties, was accepted as a necessary sacrifice to the common cause and paid without protest by severe retrenchment.
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