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INTERNATIONAL TRADE 
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very best German lands, those on which 10 days of labor yielded 
15 of wheat, could always hold their own against American compe- 
tition. Those on which the yield was less than 15 might or might 
not succumb under American competition. The continued cul- 
tivation of wheat on them would depend on the terms of exchange 
between the two countries. If the terms were 14 of wheat for 10 of 
linen (favorable to Germany), only those German lands which pro- 
duced as much as 14 could continue in face of American compe- 
tition; those on which the yield was less than 14 (13, 12, 11) would 
find themselves forced out. If, on the other hand, the terms of 
exchange were not favorable to Germany — if she got for her 10 of 
linen only 11 of wheat — a poorer grade of German land could 
continue the production of wheat. The more wheat the United 
States gives in exchange for linen, the more will Germany restrict 
her production of wheat to those lands on which her labor is least 
ineffective. That is, where it is least ineffective compared with 
American labor in wheat-raising; most effective, compared with 
other German labor in wheat. Barter terms of trade which are 
favorable to Germany will mean that the conditions are not 
favorable for the maintenance of her wheat production. 
Obviously this means also that the rent of wheat lands in Ger- 
many depends on these same terms of trade. If the terms are 
unfavorable to Germany, — if she gets but 11 of American wheat in 
exchange for her 10 of linen — the wheat-growers on her poorer 
lands will remain in the market, and the differential advantage of 
the better lands will be little impaired. Their rent will be the 
excess of product over 11 of wheat, instead of the excess over 10; 
the margin of cultivation will move only from 10 to 11. But if the 
terms are favorable to Germany, — if she gets 14 of wheat for her 
10 of linen — more of her wheat lands will be forced out of culti- 
vation, and those which continue to grow wheat will afford less 
rent. The grade on which 14 wheat are produced for 10 days of 
labor will afford no rent at all; that on which 15 wheat are pro- 
duced will afford a rent of only 1. 
Under a régime of prices all these results will work themselves out 
as they would under a barter régime. If the terms of trade are