VARYING ADVANTAGES

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a he

03

figures which follow, that a relatively high rate of money wages in
the United States — a considerable gap between American and
German wages — signifies that the United States secures the larger
share of the possible gain from the trade; whereas relatively lower
rates in the United States —a smaller gap in money wages —
signify that the United States secures the smaller share. For
simplicity, the figures will be arranged on the basis of keeping
money wages in the United States at a constant figure, namely
$2.00 a day. The changes which serve to illustrate the different
possibilities are here confined to Germany, where money wages
become lower as the terms are less favorable to her, higher as they
become more favorable.
Again we take the three possible cases.
(1) Suppose first a wide gap between German and American
money wages. Let wages in the United States be $2.00, wages in
Germany $1.20. We have then:

In the U
» » B
1h) » 1

” Germer-Germany

Germanv

Wagrs

HY R o dix J

TorAL
XT pyre

lz

Propuce

*Y wheat
'inen
* cloth
' whea
.5 linen
18 cloth

DoMmEesTIC
SurpPLY PRICE

£1.00
‘1.00
1.00
*1.20
$0.80
20.662

Wheat is produced at lower money cost in the United States than
in Germany and moves from the United States to Germany. Both
linen and cloth are produced more cheaply in Germany and move
thence to the United States. The United States, while gaining
thru the importation of both, evidently gains more from the
importation of cloth than from that of linen. She gets her cloth
from Germany for $0.66%, whereas the price at which cloth can be
made in the United States is $1.00. She gets her linen from Germany
 for $0.80; less than the American supply price of $1.00, but
not as much below that price as in the case of cloth. Germany
gains by a cheapening of wheat to the amount of $0.20. It would
cost her $1.20 to produce wheat at home; she procures it from the
United States at the price of $1.00.