THE UNDERLYING PRINCIPLES 347 
inelastic, there will be a slower decline of the domestic consumption, 
and a slower transfer of the goods to the export trade. The condi- 
tions both of domestic supply and of domestic demand will affect 
the duration of the bounty. 
For a time, then, and very possibly for a considerable time, there 
will be some bounty. Prices of exported goods will be high in 
Great Britain, and export trade will be prosperous. Dollar 
exchange will be high in London and will probably remain high 
for a considerable period, tho with a tendency to gradual decline 
as exports increase. The increase of exports will take time, as in 
all cases where labor and capital shift from one industry to another ; 
and the time is likely to be longer than economists have been in 
the habit of expecting. 
Converse effects will show themselves in the United States. 
In New York sterling exchange falls; and Americans who have 
sold goods to British customers and who have sterling ex- 
change to sell, get less dollars than before. Side by side with the 
tendency toward greater exports from Great Britain into the 
United States there will be a tendency toward less exports from 
the United States into Great Britain. American exporting indus- 
tries will be depressed, and depressed according to the extent to 
which they are dependent on the export market. There will 
be the reverse of a bounty on exports, a handicap, a penalty. If 
the exporting industries have been producing preponderantly for 
the foreign market, as was so long the case and on the whole 
still is the case with cotton-growing in the United States there 
may be in those industries a long period of declining prices, depres- 
sion, complaint. While importing into the United States will be 
profitable (the dealers and middlemen taking their shares of the 
gains from the growing business), exporting will be less profitable, 
middlemen as well as producers finding trade dull and profits 
small. 
In the end, it is to be expected, these things will be evened out. 
The same sort of readjustment of commodity movements takes 
place as under a specie régime. More goods move from Great 
Britain to the United States. Fewer goods move from the United