3 
INTERNATIONAL TRADE 
If now our supposed mass meetings took place and the possibility 
of trade between the two countries were contemplated, it is obvious 
that Germany would gain by sending 15 linen to the United States 
and getting anything more than 7% of copper in exchange. The 15 
of linen are in Germany the product of 5 days of labor (30 linen 
for 10 days, hence 15 linen for 5 days). That same amount of 
labor in Germany (5 days) would produce 7% of copper. By 
shipping 15 of linen to the United States and getting more than 
7% of copper in exchange, Germany gains. Conversely, the 
United States would gain by an exchange of 15 linen for anything 
less than 30 of copper. The ten days labor produce in the United 
States 30 of copper; any less quantity of copper (25 or 20) is the 
product of a correspondingly smaller amount of labor. But 10 
days in the United States are needed to produce 15 linen. If the 
United States gets the 15 of German linen for as much as 27, 2§, 
29 of copper, she still gets the linen for less labor than would be 
needed to produce it at home. 
‘The quantitative relation between these physical amounts — 
between pounds of copper and yards of linen — we designate as 
the “barter terms of trade.” We are assuming, be it remembered, 
that no money is used and that the transactions are simply and 
solely the exchange of goods for goods. Much copper for little) 
linen, or much linen for little copper — these are the possibilities of 
the barter terms of trade. What is the meaning of the phrase under 
this simple condition is obvious enough and is easily visualized. 
~ But with the use of money and with sales and purchases in terms 
of money — under the complex conditions of the actual foreign 
commerce of the world — the facts which the phrase describes are 
by no means easy to visualize. Not only are they very difficult to 
keep in mind, but they are so disguised, so overlain by other more 
conspicuous and not less significant phenomena, that one is apt to 
forget that they exist at all. In the every-day talk about foreign 
trade their existence is completely ignored; one would not dream 
that there was such a thing. Even in the discussions of the 
economists they are often forgotten. Yet this is the important 
thing: it is here that we have the essence of international trade ;