202 ECONOMIC PRINCIPLES

The mode of payment for such enlarged supplies needs to be
considered, and we are brought back to a consideration of
what changes, in the prices of home-produced goods, may
result from the growth of demand for foreign goods, and
from the need to provide enlarged exports of some kind to
exchange for the increased supply of imports. The cost of
procuring the imported coffee is the cost of producing the
oil or other goods whose export pays for it, and its value will
correspond to cost of acquisition in the same way as that of
home-produced goods does, for in this latter case the cost of
acquisition is the cost of production, for acquisition is effected
through the operations of production. The process of production
 is the process of acquisition in the one case; in the
other the process of acquisition is the process of producing
something else and of securing an exchange of this something
 else for the desired goods. It is, in fact, the process
by which the individual gets most of his goods, whether they
be of foreign or of domestic origin.
Turning to another case, let us vary the illustration by
considering the trade between England and the United
States in cotton wool and cotton goods. England buys a
great quantity of cotton wool, a product which is not raised
at home. As to its value in England, therefore, the preceding
 considerations apply, and we need only give special
attention to the question of the value of the cotton goods
in America. The new feature in the problem is that cotton
fabrics are manufactured in the United States. So far as
they are of different kind to the imported fabrics, again no
new point arises, except that there is possible a substitution
of domestic for foreign fabrics, and thus we have not to
deal in this case with a domestic demand arising from a
desire which cannot be directly satisfied by domestic
products. The substitution of a domestic beverage for tea
is another order of substitution to that of a foreign cotton
fabric for a domestic article.
Let us give our attention to the direct competition of
foreign goods with home manufactures. Being of the same
kind, they must be able to be offered at the same price
if both are offered in the market at once. Why is the