104 
INTERNATIONAL TRADE 
aR 
Rc 
England only. Any deviation from these terms (13 cloth for 10 
wheat) would cause Germany to enter. If the cloth given in 
exchange for 10 wheat were more than 13 cloth, Germany would 
turn from cloth to wheat and would send wheat to England. If it 
were less than 13 cloth, Germany would turn from wheat to cloth, 
and would send cloth to the United States. At the precise figure 
of 13 cloth she would have no inducement for concerning herself 
with the other countries at all, and would go her way, producing for 
herself both cloth and wheat. The only trade would be between 
the United States and England. 
These suppositions, like the various others which have been con- 
sidered in the preceding pages, can be put in terms of money prices 
and money incomes. At the risk of wearying the reader, I will 
indicate how money wages and money prices might shape them- 
selves in the three countries in the several cases just described. 
(1) Suppose that money wages and domestic supply prices in the 
countries are as follows : 
In the U.S. 10 days’ labor 
)) )) 1, S. 10 J) » 
England 10 7” 2 
” England 10 7” » 
” Germany 10 ” 2 
»” Germany 10 7” 2 
WAGES 
PER Day 
$2.00 
$2.00 
$1.40 
$1.40 
$1.21 
$1.21 
ar 
TorAL 
WAGES 
$20 
$20 
$14 
$14 
$12.1v 
$12.10 
ProODUCE 
20 wheat 
20 cloth 
10 wheat 
15 cloth 
10 wheat 
13 cloth 
DowmEsTIC 
SuppLY PRICE 
$1.00 
$1.00 
$1.40 
$0.93 
$1.21 
$0.93 
The domestic supply price of cloth is the same in England and in 
Germany — $0.93. It is lower than the domestic supply price of 
cloth in the United States; and both German and English cloth 
will be sold in the United States at a price which no American cloth 
maker could meet. The Americans would get their cloth for $0.93 
by importation, instead of paying $1.00 for it, as they would if it 
were made at home. Both Germany and England would get 
American wheat for $1.00. Wheat, if grown in England, would 
entail a money cost of $1.40; if grown in Germany, would entail a 
money cost of $1.21. In other words, England would gain the 
difference between $1.40 and $1.00, and Germany the difference 
between $1.21 and $1.00. Both gain, but England gains more.