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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Document type:: Monograph

Structure type:: Chapter

Title:: Part I. Theory

Collection:: Economics Books

64 INTERNATIONAL TRADE is produced with the aid of very much capital, the other (linen) with none at all. Suppose that the American capital investment for copper is $100, and that during the period over which $20 is paid for wages, 10 per cent on $100, or the sum of $10 in all, is payable to capital for interest. In Germany suppose the copper situa- tion to be of the same sort. Then the German capital investment for copper will be $66.66, because the same quantity of labor ap- plied to making that capital, paid at the German rate and having the German effectiveness, will bring the investment to that sum, as against $100 in the United States. The German interest charge for copper, at 10 per cent, will then be $6.66. For linen, be it remembered, there is no interest charge. Then we have: , WAGES DoMmEsTIC Days ToTAL INTEREST TorAL LABOR ph WAGE CHARGE EXPENSE SurFLy Day AGES 5 2 PRICE U.S. 10 $2.00 $20 10% on $100 = $10 $30 30 copper $1.00 U. S. 10 $2.00 $20 nil $20 15 linen $1.33 Germany 10 $1.33 $13.33 10% on $66.66 = $6.66 $20 20 copper $1.00 Germany 10 £1.33 $13.33 nil $13.33 10 linen $1.33 PropUCE Both in the United States and in Germany copper is now higher in price than it was before the interest item was added. It was $0.66% in both countries before the interest charge was added ; it is now $1.00 in both. Being the same in both, copper moves neither way. The price of linen remains unchanged, still at the old figure and still the same in either country. Trade between the countries still will not arise. Suppose now, however, that there is an interest charge for copper (and still for copper only — none for linen), but not at the same rate in the two countries. Suppose the rate to be 5 per cent in the United States, while it remains at 10 per cent in Germany. Then we have: , WAGES Days LABOR wn Day U.S. 10 $2.00 U.S. 10 $2.00 Germany 10 $1.33 Germany 10 $1.33 ToTAL INTEREST ToTAL WAGES CHARGE EXPENSES $20 5% on $100 = $5.00 $20 nil $13.33 109% on $66.66 = $6.66 213 33 nil $25 $20 $20 $13.33 DoMESTIC SuppPLY Price 30 copper $0.83 15 linen $1.33 20 copper $1.00 10 linen $1.33 The situation has changed. The price conditions are such that copper will move from the United States to Germany. Tho linen

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