THE UNDERLYING PRINCIPLES 355 Still another aspect of the problem remains for consideration ; namely, how the barter terms of trade shape themselves under dislocated exchanges. It is to be expected, on grounds of general reasoning, that the principles valid for specie conditions will prove applicable under paper conditions also. Nay, since under paper conditions there is no flow of money at all, and nothing moves from country to country except merchandise — an even closer resemblance to barter than under specie — it is to be expected that the fundamental causes which settle the barter terms will operate at least as effectively and surely. They do; and the preceding exposition indicates in what way. The situation which finally emerges in consequence of a remit- tance operation such as has been used for illustration is one in which more goods move from Great Britain to the United States than before, less goods move from the United States to Great Britain. In the United States, prices of British (imported) goods are lower ; in Great Britain prices of American (imported) goods are higher. The British have a less quantity of American goods than before. The Americans have a greater quantity of British goods than before. In other words, the barter terms of trade have altered to the advantage of the United States. And, as we have seen, the extent to which this change takes place, the degree to which the barter terms become more favorable to the United States, depends on the conditions of demand in the trading countries. The concrete way in which the British experience the less favorable conditions is that with the same money incomes they buy less of imported goods at higher prices; the concrete way in which the Americans experience the more favorable condi- tions is that with the same money incomes they buy more of im- ported goods at lower prices. The outcome is essentially the same as under specie conditions; the difference is that money incomes are stationary in both countries under paper, and vary inversely to each other under specie. As just remarked, international trade under paper approaches the conditions of pure barter. Under specie we may indeed lay it down that the trade is in essentials one of barter, since over-