14 
INTERNATIONAL TRADE 
AH 
HE 
BAT 
iy 
many. And evidently the gain from the exchange will be greater 
to that country which has the higher money wages. The price of 
each commodity, once the exchange has begun, will be the same in 
both countries. The German price for linen will be the ruling price 
in the United States as well as in Germany. The American price 
for copper will be the same in Germany as in the United States. 
But, with money wages higher in the United States and with the 
prices of the goods identical (both linen and copper), evidently the 
American purchasers will be better off. Conversely, if money 
wages be higher in Germany, as they quite possibly may be, the 
Germans will be better off. 
The range of possible deviation in money wages between the two 
countries will be between $1.00 and $2.00. It is possible that 
money wages in the United States will be nearly double those in 
Germany ; and money wages in Germany may be nearly double 
those in the United States. If, for example, money wages are 
$2.00 in the United States and $1.00 in Germany, we have : 
In the U. S. 10 days’ labor 
» )) U. S. 10 » bad 
” Germany 10 ” 2 
” Germanv 10 ” 3 
ir En | Promos DON 
$2.00 $20 30 copper $0.66% 
$2.00 $20 15 linen $1.33% 
$1.00 $10 15 copper $0.662 
$1.00 $10 30 linen $0.33% 
ig 
_ 
Here the supply price of copper is the same in the two countries 
— $0.662. But linen is very much cheaper in Germany — 
$0.33% against $1.33 in the United States. No copper will move 
from the United States to Germany; but linen will move from 
Germany to the United States. As German linen is sold in the 
United States, gold will have to be remitted in order to pay for it. 
The outflow of gold from the United States will lower prices there, 
and will lower money wages also; while the inflow of gold into 
Germany will raise prices and money wages. Thereupon copper 
will begin to move in payment for linen. How great the move- 
ment will be and what the limits to it, need not at this stage be 
considered. It is enough to observe that as soon as money wages 
in the United States become less than $2.00 — less than double 
the German rate — the possibilities of sales of goods both ways