International Trade; An Application of Economic Theory

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There are two modes of proof, the first financial, the second concretely industrial. Let us suppose that a prohibitive tariff were to stop entirely the imports of dairy produce into Great Britain from Denmark and other Continental countries for which we pay some ^"30, 000, 000 per annum. English im- porters of dairy produce no longer draw bills to this amount and send them abroad in payment. Foreign merchants who are buying goods of various sorts from England are in the habit of paying for thes...e IMPORTS AND EXPORTS 91 goods, not by sending cash, but by buying from foreign bankers and brokers bills on London. Since the number of these bills is now reduced to the extent of, £30, 000, 000 per annum, the supply of them will be short in relation to the demand, and the price paid on the Continent for the use of this convenient mode of payment will be raised. A merchant wishing to buy from England must now pay a larger number of francs and centimes in order to make a payment of £100 to England.

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