zi

CONTENTS

Belgium, National Bank issues of United States secured by ond
deposit. Aims of regulation of note-issues. Security against loss to
holders and against inflation of prices. The currency principle
and the “banking principle.” The former sacrifices elasticity but
ensures security. Use of cheques compensates for lack of elasticity of
English note-issues. Note-issues of declining importance as deposit
banking develops. Government issues and bank-issues compared.
Single and multiple issues. Paper currency secures circulating power
through convenience and confidence in its value. The latter provided
by constant redemption, legal tender power, or acceptance in payments
to public offices. Coinage a prerogative of the sovereign. Standard
coin and token coin. The Bank price and the Mint price of gold.
The latter not a true price but a definition of the metallic representative
of the unit of account. Free coinage and what it secures. Seigniorage
and its effect on the general price-level . . 181-108

CHAPTER XIII

VALUES IN INTERNATIONAL TRADE

AUTHORITIES
Jo S. MILL .  ““ Principles of Political Economy,” Book III. Chapter
XVIIL
BASTABLE . “*Theory of International Trade.”
CAIRNES . . ‘Leading Principles, etc..” Part IIL

The problem of the terms of exchange under barter resumed. In domestic
trade industrial competition modifies the problem, but not in the same
way in international trade. Case when the terms depend on reciprocal
demand purely. Each of the goods exchanged is a supply of itself and
a demand for the other. Case when the supply of a commodity is
partly imported, partly produced at home. Cost of acquisition the
measure of value. Competition of imported and domestic products.
Diminishing returns in the domestic industry. Importation mitigates
the effects. Effective competition assumed. General productivity of
industry increased. Increase of imports necessitates increase of exports,
in general. Case where each of the trading countries produces part of
its supply and imports the rest. The effects of imports of cheap wheat
on English land values. Comparative costs of producticn change as a
result of international trade, and are adjusted to the relative values of
the goods. Examination of case of imports in competition with
domestic production under increasing returns. Apparently the
domestic production must either vanish or capture the entire home
market. Imported goods often appeal to different tastes from those
met by home products. The gain from foreign trade, the economic
use of each country’s resources. Adaptation may lag behind change of
conditions. Hence the existing distribution of industry not necessarily