INTERNATIONAL TRADE 149 
former. In the former they operate strongly 
between the most widely distant parts ; but 
in the latter they weaken or cease when the 
boundaries of countries have to be crossed. 
A perfect example of the circumstances 
of foreign trade would exist in the home 
trade were it a fact that between two 
contiguous parts of a country trading with 
one another there could be no passage [ of 
labour and capital. Imagine a trade under 
such conditions between the English counties 
of Lancashire and Yorkshire, and imagine 
that in some peculiar way, owing to its- 
climatic or geographical conditions, or the 
nature of its soil, Lancashire is exception 
ally favourable for producing in. When 
trade opened between Lancashire and York 
shire the most paying industries in Lancashire 
would flourish at the expense of the less 
paying, and the same thing would happen 
in Yorkshire. To that extent the reactions 
referred to would be set in motion. But 
when these reactions, working within the two 
fields, had brought about their fullest effects,, 
it would still be true that earnings in Lanca 
shire would be higher than earnings in York 
shire, despite the fact that earnings, whether 
of labour or capital, would be equalised 
throughout Yorkshire and would, at the