66
: INTERNATIONAL TRADE
leaves the relations between the countries undisturbed. Fur-
ther: an interest charge does not alter conditions for trade, even
tho it act on one commodity only, provided it acts on that com-
modity in the same way in both countries. The same is true
(illustration in figures may be spared) if the interest charge, instead
of being absent on one article while present on another, is merely
greater on one than on another. If the difference is the same in
both countries, international trade goes on in the same way as if
this factor had not entered.
But the circumstance that the rate of interest is higher or lower
in a country does have an effect when the needed capital equip-
ment is greater for one commodity than for another. It bears
more on those commodities which are made with much capital,
making them relatively higher in price in the country where there
is a higher rate of interest and a higher interest charge, lower in
a country where there is a lower rate.
A low rate of return on capital, then, tends to give to a country a
comparative advantage (i.e. the equivalent of one) for those goods
which are made with much capital ; these tend to be exported from
it. A high rate of interest is correspondingly a handicap on the
export of these same goods, a stimulus to their import. To put
it in a more concrete way, a country in which capital has accu-
mulated in large amounts and in which the investors are content
with a low rate of return, tends to export articles which are made
with much plant, and with raw materials which it takes time to
produce and transport; whereas a country in which accumulation
is smaller and the interest rate is higher, tends to import such
articles. High or low interest does not in itself act as an inde-
pendent factor; it exercises an influence of its own only so far
as it enters to greater degree in one commodity than in another.
The conclusion is of essentially the same sort as that reached
with regard to non-competing groups and differences of wages.
So far as differences of wages are the same in two or more coun-
tries, and so far as goods are made in these countries with the same
assortments (combinations) of different grades of labor, inter-
national trade remains as it would be in the absence of this compli-
