COMPARATIVE COSTS 
27 
States at the price of $0.75. Suppose, however, that at this price 
they want more than 8,000,000; the German demand for wheat 
increases. More than the 8,000,000 bushels are bought in Ger- 
many, and more than $6,000,000 become payable by German 
purchasers to Americans. Foreign exchange no longer is at par. 
Exchange rises in Germany, falls in the United States. Specie 
ows from Germany to the United States. Prices tend to rise in 
the United States, to fall in Germany; and not only prices, but 
money wages also. 
The nature of the outcome of these readjustments is indicated 
by such figures as the following : 
Wages in the United States rise from $1.50 to $1.70. 
Wages in Germany fall from $1.00 to $0.90. 
aay VR, 
= PS 
At these rates of money wages : 
In the U. S. 10 days’ labor 
" » U. S. 10 » 2) 
” Germany 10 ” ? 
" Germany 10 ” 2 
WAGES 
PER DAY 
™a 70 
. TU 
$0.90 
20.90 
ToraL 
WAGES 
L 
x 
PropUCE 
20 linen 
20 wheat 
i5 linen 
10 wheat 
DowmesTIC 
SuprrLY Price 
$0.85 
$0.85 
$0.60 
$0.90 
Observe that, as before, the prices of both articles are such that 
they will move from country to country. Wheat in the United 
States at $0.85 still sells for a lower price than that at which 
it can be produced in Germany ($0.90). Linen at $0.60 in Ger- 
many still sells for a lower price than that at which it can be 
produced in the United States ($0.85). The range of difference 
between the domestic supply price and the import price is now 
less in wheat than in linen; but the differences are of the same 
kind as before. 
The physical quantities moving between the countries also will 
be affected. More wheat will move from the United States to 
Germany, obedient to the greater German demand. But more 
linen will also move from Germany to the United States. Money 
incomes as well as prices rise in the United States, and the Amer- 
icans will be tempted to buy more German linen. Since prices 
(as well as money incomes) fall in Germany, the price of linen will