Iv
r
CONTENTS
CHAPTER 10
Two CoUNTRIES COMPETING IN A THIRD
Various combinations of barter possible when two countries or
more compete in a third, 97. An increase in demand in one of
the countries for any one of the commodities affects the barter
terms of trade of all countries, 98. Two ways in which a country
obtains its commodities cheaper thru foreign trade, 101. Ex-
amples of more complicated variants of barter among three
countries, 102. The same variants considered in terms of money
prices and money incomes, 104.
CHAPTER 11
NoN-MERCHANDISE TRANSACTIONS. TRIBUTES, INDEMNITIES,
Tourist EXPENSES :
PAGES
97-107
108-122
Increasing importance of international payments arising out of
non-merchandise transactions, 108. Illustration of the change
in barter terms of trade brought about by foreign payments for
which no quid pro quo is obtained, 109. The terms “favorable”
and “unfavorable” balance of trade, 111. Payment of a tribute
or indemnity is costly in two ways: a country parts with a
quantity of goods, and it obtains its imports on less favorable
terms, 112. Distinction between the gross barter terms of trade
and the net barter terms of trade, 113. Illustration of the effect
on both gross and net barter terms of a change in elasticity of
demand for one of the imported commodities. ‘‘Invisible” items
in the balance of payments not alike in their effects on the barter
terms of trade, 114. Effect of indemnities and of tourist ex-
penditures contrasted, 117. Gifts and charitable remittances,
121.
CHAPTER 12
NoN-MERCHANDISE TRANSACTIONS, FURTHER CONSIDERED. LOANS
AND INTEREST PAYMENTS; FREIGHT CHARGES ; ;
123-140
Foreign loans by individuals cause a flow of specie from the lend-
ing country, 123. Qualification of this statement if foreign loans
are linked directly with commodity exports, 124. The borrowing
country secures a double gain from the capital movement: an
additional supply of imported goods, and the procurement of all
imports on barter terms more favorable than before, 127. Inter-
est payments, as they accumulate, tend to reduce the gain.
When annual interest payments finally exceed annual borrowings,
the double gain shifts from borrowers to lenders, 128. The
changes operate thru flow of specie and modification of money
