CONTENTS
X11
PAGES
when they bear in the same way on commodities in each country,
do not alter the conditions of trade if merely the rate of interest
is different, 62; nor if they act on some only of the commodities
produced, 63; nor if they act on some more than on others, 64.
But differences in the rate of interest do influence international
trade in so far as different quantities of capital are used in the
production of different commodities, 65. The quantitative
importance of this influence, 67. Another aspect of the influence
of capital and interest: capital is used more effectively in some
countries than in others, 68. Some comparisons and illustra-
tions of the existence of a comparative advantage secured because
of the more effective use of capital, 71. Lower transportation
costs by railway illustrate the possibilities of more effective use
of capital, 73.
CHAPTER 8
a
Varying Costs; DiviNisHING RETURNS; INCREASING RETURNS
76-87
Trade in commodities produced with varying costs, 76. Con-
nection between varying costs, international trade, and rent, 77.
Varying costs are found in manufacturing industries as well as
in agriculture. The human element is the main cause of vari-
ations of cost in industry, but not in agriculture, 80. Superior
powers of production resting on physical causes are not trans-
ferable; those ascribable to the personal element are capable
of being transferred, 81. One of the effects of this difference on
international trade illustrated by the operation of protective
duties, 82. Meaning of ‘increasing returns,” 83. Internal and
external economies, 84. Advantages resting on human causes
are cumulative, but do not persist indefinitely. How this
affects international trade, 85. Some problems as to mining
industries, 86.
CHAPTER 9
VARYING ADVANTAGES .
RR-06
Various possibilities of barter when more than two commod-
ities are being exchanged. Illustrations under varying relations
of comparative effectiveness of production, 88. Variation in
barter terms of trade arising from changes of demand, 90.
[nfluence of total demand for all imports on the barter terms of
trade. How new conditions of trade arising from changes in
demand are brought about thru the mechanism of money prices
and monev incomes. 92
