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Rh Contents, xxvii ratios in two different countries — The greatest portion of this cost of carriage would be borne by the country whose demand is least diminished by the commodity bein^ increased in price, in conse- nDce of the cost of carriage — If it is assumed that there is perfect trade between the two countries, then there cannot be a greater difference in the price of any commodity in the two countries than is equiTalent to the cost of carriage — The principles investigated in tius chapter are equally true when a great number of commodities are interohansed, and when foreign commerce is not restricted to two countries — when it is said that, in order to satisfy the equation of international trade, the commodities which a country imports must be equivalent in value to those which she exports, it is assumed that a country has no other payments to make to other countries except for goods imported, and no other payments to receive except for goods exported — If a country is a debtor of other countries, then her exports will exceed in value her imports by an amount equivalent to this indebtedness — If a country is a creditor of other countries, then her imports will exceed in value her exports by an amount equivalent to the net indebtedness of other countries to her — These principles explain why the exports of India always greatly exceed her imports, and why, on the other hand, the imports of England greatly exceed her exports paoes 387 — 419 Chapter VIII. On the Transmission of the Precious Metals from One Country to Another, In a note at the beginning of this chapter, it is shown that the value of the metal selected as Sie standard currency is the same whether in bullion or in coin, when the Government makes no charge for coinage — The precious metals are distributed in two ways : first, they are exported from the mining countries as an ordinary commodity of commerce; secondly, they are transmitted from one country to another in the form of money — The value of the precious metals is regulated by laws identical with those which regulate the value of any other commodity which is exchanged in foreign commerce — The precious metals are constantly transmitted in the form of money from one country to another, because, in the first place, they contain great value in a small bulk, and secondly, every kind of wealth can be purchased by gold and silver — England is to a ffreat extent the emporium ot gold ; a great portion of the gold which is produced in Australia, California, &c., is in the first instance sent to her, and then distributed by her to the various countries of the world — Although England imports and exports so much gold, yet the value of gold is kept in England approximately constant— This constancy in value is maintained, because it is impossible to obtain an undue amount of the precious metals, without producing a decline in the value of gold, or, in other words, a rise in general prices — If general E rices rise in one country comparatively more than in another, the alance of trade is at once disturbed ; tne exports from the country are diminished, and her imports increased, and a drain of specie, consequently, at once commences — There is, therefore, a constant agency at work, which causes the precious metals to be equally distributed over the world 420 — 4^ Digitized by VjOOQIC