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INTERNATIONAL TRADE

Money cost is much higher in the United States for the hand
factories. But when the American machine product is compared
with the hand product of Belgium and Sweden, the money cost is
about the same — a little lower than in Sweden, a little higher
than in Belgium. The main factor in all cases is the wages expense.
 For the hand factories, this item is more than twice as high
in the United States. The money wages for the workmen, and
especially for the blowers, are higher than in the two European
countries, in accord with the higher pecuniary standards prevailing
 in American industry at large; but the effectiveness of
the labor is no greater; the wages cost per unit of product is
therefore higher. In the machine factories, the American money
rate of wages is also high; but the effectiveness of the labor which
operates the machines is greater; therefore the wages cost per
unit, while somewhat higher than in Belgium and Sweden, is by
no means higher to the same degree as under the hand process.
For both processes, the United States has lower money costs for
fuel and power, a natural concomitant of the effectiveness of its
labor in producing coal (as shown in the earlier pages of this
chapter). In sum, the United States has greater effectiveness
in producing window glass by the machine process, but no superiority
 at all in producing by the hand process; in other words,
a comparative advantage in the former.

For Japan and the United States I am able to cite data in which
again money cost can be contrasted with labor cost, or at least
with indicia of labor cost. The United States Tariff Commission
caused inquiries to be made in 1921 on competition between the
United States and Japan! Among the industries examined
was the cotton manufacture; and in that industry, attention
was given to certain staple products — yarns and plain woven
goods — of such character that comparisons could readily be made
between the conditions of production for the same articles in the
two countries. It should be remarked, however, that the homo-1
 The Japanese Cotton Industry and Trade; Report by the United States
Tariff Commission, 1921. The date to which the statements refer is 1920. The
passages referred to in the text are at pp. 100, 114-117.