International trade

Bibliographic data

Monograph

Identifikator:: 1758394757

URN:: urn:nbn:de:zbw-retromon-136209

Document type:: Monograph

Author:: Taussig, Frank William http://d-nb.info/gnd/120199459

Title:: International trade

Place of publication:: New York, NY

Publisher:: Macmillan

Year of publication:: 1927

Scope:: XXI, 425 Seiten; graph. Darst.

Digitisation:: 2021

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part III. International trade under inconvertible paper

Collection:: Economics Books

362 INTERNATIONAL TRADE but less only to a slight degree. And that the terms change so little is clearly due to the different conditions of demand in the two countries, the British de- mand being inelastic, the American elastic. (5) A definitive stage will be reached when cotton has reverted (risen) in the United States to the price which prevailed before the disturbing factor entered, and steel in turn has reverted (fallen) in Great Britain to its former prevailing price. Until such a stage is reached, cotton sells in the United States at a price less satisfactory to its producers than with other American products; while steel sells in Great Britain at a price more satisfactory. The tendency must be for the production and export of cotton to diminish in the United States, for the production and export of steel to rise in Great Britain. The following figures indicate the nature of the stage which will finally be reached, and will be stable. They are illustrative figures only ; they indicate not what stage will necessarily be reached, but in what manner a definitive outcome will be brought about. The price of cotton in New York reverts (rises) to the original figure of $0.20. [The price of eottonin' London rises to (gay). . . . o's » a. = 6d. The price of steel in London reverts (falls) to the original figure of . 4.84. The price of steel in New York fallsto (say) . . . . . . . . ..%0.16 At these prices, the merchandise transactions may be supposed to be : U. S. exports 45 million cotton @ 6d. = £1,125,000 G. B. exports 70 million steel @ $0.16 = $11,200,000 Sterling bills on sale in New York are : From cotton £1,125,000 From loans 250,000. .: . . £1,375,000 Whereas the demand (on steel account) is oo. S11 200,000 Sterling exchange is £1 = $8.15. The gross barter terms of trade are 45 cotton for 70 steel; having regard to these, the United States evidently gains much more from the trade than she did at the outset. Making allowance, as before, for the steel that provides for the loan remittances of £250,000 (12% million of steel at $0.16, with exchange at $8.15), we get as the net barter terms of trade 45 of cotton for 55% of steel. The new terms have finally become distinctly more advantageous to the United States than they were before the remittances set in.

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