INTERNATIONAL TRADE 155 
that the marginal cost of wheat may drop to 
20s. In France, at the same time, reciprocal 
effects will have _ been wrought on cotton 
producing and wheat producing, so that 
costs there may have become respectively 
40s. and 18s. Further trade will bring about 
further alteration in relative costs of produc 
tion in both of the countries, and finally a 
position may be reached in which the com 
parative costs are 38s. Cd. and 19s. in both 
countries when England is exporting 76,000 
pieces of cotton goods annually and receiving 
from France 154,000 bushels of wheat. This 
would be the position of equilibrium, for 
comparative costs would be identical in the 
two countries, and England would be sending 
goods to France of the annual value of £146,300 
(38s. 6d. X 76,000), and receiving from France 
goods of the same annual value (19s. x 
154,000). Were trade to expand still further, 
France receiving more than 76,000 pieces of 
cotton goods and exporting to England more 
than 154,000 bushels of wheat, over the last 
step in trade loss would be incurred. This 
step would therefore be retraced, under the 
influence of the new difference between com 
parative values which it created. 
The objection may be raised that though 
the state of affairs depicted above is possible,