CHAPTER 3 
EQuaL DirFrFereENCES IN CosT 
THE figures representing Case II, it will be remembered, 
are * 
In the U. S. 10 days’ labor produce 30 copper 
Pu. ? U.S. 10." 3 fi 15 linen 
” Germany 10 ” n 2 20 copper 
" Germany 10 ” D a 10 linen 
Cost in terms of labor is lower in the United States for both articles ; 
labor 1s more effective all around by 50 per cent. Then we have: 
In the U. S. 15 linen = 30 copper 
10 linen = 20 copper 
In Germany { 15 linen = 30 copper | 
It is obvious that no gain can accrue to either country from a 
direct exchange of goods for goods. In both, linen and copper, if 
produced within their respective limits, would exchange on the 
same terms. The labor that would produce 15 linen in the United 
States would produce in that country 30 of copper. Precisely the 
same 1s the case in Germany. If Germany were to take the 
product of 10 days’ labor in linen (10 of linen) and carry this amount 
to the United States, she would there get, at the American terms of 
trade, 20 of copper; and that amount of copper the same 10 days 
of labor will enable Germany to produce. Similarly, the United 
States could gain nothing by sending copper to Germany for 
exchange against linen. 
It is further obvious that the people of Germany would pre- 
sumably find it to their advantage to transfer themselves en masse 
to the United States. I say presumably; the advantage would 
not necessarily be realized. True, Germany is the less prosperous 
country ; labor is less effective all around than in the United States; 
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