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INTERNATIONAL TRADE 
The converse supposition — equally permissible under the given 
conditions — is that money wages are 50 per cent higher in Ger- 
many. Let them be $1.50 in Germany, $1.00 in the United States. 
Then we have: 
WAGES ToraL 
PER Day WAGES 
In the U. S. 10 days’ labor $1.00 $10 
i 8k D0 | ee ” $1.00 $10 
” Germany 10 ” 2” $1.50 $15 
” Germany 10 ” 2 $1.50 $15 
D 
Propuce Ane a 
30 copper $0.333 
15 linen $0.663 
15 copper $1.00 
30 linen $0.50 
As before, linen is produced more cheaply in Germany, and 
flows thence to the United States; copper more cheaply in the 
United States, and flows to Germany ; but now with copper, not 
linen, relatively the cheaper of the two. The barter terms of trade 
are now 15 of copper for 10 of linen, or 22% of copper for 15 of 
linen. At the price of copper which rules in both countries 
($0.33%) the sum of $7.50 will buy 22% of copper; while at the 
ruling price of linen ($0.50) that same sum will buy 15 of 
linen. The barter terms of trade have become more advanta- 
geous to Germany. And this betterment of Germany's gain is in 
accord with her higher money wages, now 50 per cent above those 
of the United States. 
Suppose now that money wages are the same in the two coun- 
tries. Let them be $1.50 alike in Germany and in the United 
States. Then we have: 
In the U. S. 10 days’ labor 
» » i. S. 10 Jy) 2) 
” Germany 10 ” »” 
” Germany 10 ” 2 
T D 
oo Toe Wore Propuce Sr Peer 
$1.50 $15 30 copper $0.50 
$1.50 $15 15 linen $1.00 
$1.50 $15 15 copper $1.00 
$1.50 $15 30 linen $0.50 
Yo 
y 
Copper moves from the United States to Germany, and linen 
from Germany to the United States. Exchange of goods takes 
place, both countries gain, and both countries gain alike. The 
barter terms-of trade are no more favorable to the one country 
than the other; they exchange their labor par for par, so to speak. 
Money wages being the same, the inhabitants of each country have 
the same degree of benefit from the trade between them.