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 I. Theory

Collection:: Economics Books

CAPITAL AND INTEREST LR RE 73 The difference in interest rates between England and the United States became less after 1900, and had less and less effect during the decade preceding the Great War. It ceased entirely during the war itself and the years immediately following. Whatever the future may bring — perhaps equality in interest rates between the two countries, perhaps a slight difference one way or the other — it is tolerably certain that this factor will no longer be of such weight as it was in the earlier period. A similar contrast, and an illustration of a similar sort, can be found in the effects of railway transportation. The capital account is especially large in railways; the initial investment, the plant, figures to an immensely greater degree than in most industries. The interest charge is therefore an unusually large item in the ex- penses of production. As regards the labor item, the labor applied to the transportation of an article is as much a part of the total applied to producing it as is the labor of growing or of fashioning (manufacturing). When we envisage the total labor applied to an article produced in England or the United States, we must include the labor in the railway transport of raw materials to the places where they are fashioned and of the marketable goods to the places where they are sold. Now in the United States this labor has been applied with unusual effectiveness in long distance transportation. The United States thus has had a comparative advantage as regards commodities carried over great distances. On the other hand, as regards the interest charge entailed, the United States has been at a disadvantage compared to England. The interest charge, an unusually large item in railway expenses, was long at a higher rate in the United States, and hence had an effect in railway rates, for the same volume of capital, greater than in England. Hence in the United States there was an endeavor to get on with as small a capital-account as possible, and 50 to lessen the interest burden. But this mitigation of the interest charge, thru a minimizing of capital expenditure, was not at all the most important factor in maintaining for the United States A comparative advantage as regards the item of transportation. The important factor was that of the construction and operation of

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