GREAT BRITAIN, II
257
kind not easy to put fingers on, is found within our grasp ; a recon-
dite theorem is confirmed.
I turn now to another aspect of the problem. The concrete way
in which the inhabitants of a country get the benefit of more
favorable terms of trade — gross or net —is that their money
incomes rise, while the prices of imported commodities fall. With
the same labor they can buy more of imported goods. More
favorable terms of trade mean rising money incomes; less favor-
able terms, falling money incomes. We should expect in Great
Britain a tendency toward rising money incomes from 1880 until
1900; thereafter either falling incomes, or a check in the upward
movement.
Let the reader glance at the chart again. On it he will observe
a lower line; it indicates the movement of money wages from 1880
to 1913. The slope 1s upward until 1900. Thereafter it shows
no marked inclination either way, certainly not before 1913.
The relation between money wages and the barter terms of trade
is clear, certainly for the earlier period. As the terms become
more favorable, money wages rise. After 1900, when the change
in the barter terms is in the other direction, the rise in wages halts.
Money wages remain nearly constant. The period after 1900 was
one of rising prices and rising money incomes in the world at large ;
and the upward movement might be expected to show itself in
Great Britain. Yet as regards money wages, there is no such
tendency; a striking contrast to the conditions of the previous
period, when they moved upward in the face of falling commodity
prices. For the period as a whole there is unmistakably an in-
verse relation between the movement of wages and the changes
in the barter terms of trade. It is precisely the sort of cor-
relation we should expect on grounds of theory.
We may turn back now for a moment to the Canadian case,
described in the last chapter. The international trade of Canada
from 1900 to 1913 evidently followed a course quite the reverse of
the British. Great Britain was not only a lending country, but
was rapidly increasing her loans; Canada was borrowing heavily.
