The Theory of International Trade

Purchase of this book includes free trial access to www.million-books.com where you can read more than a million books for free. This is an OCR edition with typos. Excerpt from book: qualities which have given them their position, and particularly, their portability, they are, and always have been, specially suited for being the subject of foreign trade. Another circumstance of some importance is the mode of their production (in general, by mining), which makes the law of diminishing...
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Purchase of this book includes free trial access to www.million-books.com where you can read more than a million books for free. This is an OCR edition with typos. Excerpt from book: qualities which have given them their position, and particularly, their portability, they are, and always have been, specially suited for being the subject of foreign trade. Another circumstance of some importance is the mode of their production (in general, by mining), which makes the law of diminishing return applicable to them; so that, in accordance with the principle stated above (p. 29), it is very probable that they will be produced in different countries, and will not be monopolised by any one nation. The amount of the total annual production is, moreover, very uncertain, and is largely affected by chance, from which, as might naturally be expected, it results, that the amounts obtained at different periods vary widely. Finally, the extraordinary durability of both metals has led to the accumulation of a very large store, in comparison with which the variations in amount of production during short periods are quite insignificant. These patent facts lead directly to some inferences of importance. If the money-material is durable, and if a large stock of it is in existence, and if the quantity of it in a country is a principal factor in determining the scale of prices in that country, it follows that bullion will be a very convenient form of import, or export, as the case may be, since it will never be unsaleable, and can be retained without deterioration. When any particular case of international exchange is being carried out, the precious metals will naturally be used as a means of adjusting any discrepancies in the equation of exchange; but in such cases gold and silver, though discharging a highly useful function, would still be nothing more than peculiarly desirable commodities. Asyet wo have not openly abandoned the hypothesis that barter exists in domestic as well ...