COMPARATIVE COSTS 
Fa 
gl 
29 
These last figures, however, call for correction. They have 
been worked out on the supposition that, as before, one-half of the 
wages in each country are spent on linen, one-half on wheat. But 
this supposition is not consistent with what has been assumed with 
regard to the conditions of demand; namely, that the demand 
of the Germans for wheat has increased. The Germans, under 
that assumption no longer spend one half of their wages on wheat. 
They have come to spend a larger proportion of their total income 
on wheat. The Americans, on the other hand, have been tempted 
by rising prices of wheat to send more of that commodity to Ger- 
many, and have been led to consume less of it themselves. And 
they have also been tempted by falling prices of linen to buy from 
the Germans more of that article; they have come to spend a 
larger proportion of their income on linen. We need to modify 
our figures accordingly. 
Make the modification by supposing that under the changed 
conditions of demand % of the Americans’ income is spent on 
linen, % of it on wheat; and that in Germany 4 of the income is 
spent on linen, § on wheat. Then we have: 
2 or $0.68 spent on wheat @ $0.85 = 5% wheat 
In the 1. S. wages $1.70 ‘1.02 ” » linen @ en 2) A linen 
r 80.60 ” 7 wheat @ &’ wheat 
In Germany wages $0.90 or 80.30 ” ” linen @ $0.60 5 linen 
Compare now the figures with those arrived a ton page 26, 
where the commodity wages were worked out under the first set 
of conditions, before the increase in German demand for wheat. 
Because of the increase in demand the nature of the changes in 
commodity wages is as follows: 
In the U. S. commodity wages were 
[n Germany commodity wages were 
BEFORE 
wheat 
linen 
wheat 
men 
AFTER 
3. wheat ' 
linen 
wheat 
— linen 
Can it be held, under this revised (and consistent) statement, 
that commodity wages in the United States have unquestionably 
risen, those in Germany unquestionably fallen? True, the Amer-