80 Wisconsin Academy of Sciences^ Arts, and Letters 



ume of gold and, consequently, domestic prices are again 

 brought up to the common level in other countries, and then 

 the influx of gold will cease. This point where the exports 

 and imports just balance each other, is what Mr. Mill happily 

 calls " the equation of sui')ply and demand^ This law of trade 

 is just as immutable and invariable in its operation as any law 

 of chemistry, as every economist knows. Owing to the com- 

 plicated transactions of commerce, it is impossible for com- 

 mercial sagacity to adjust those transactions to the exact line 

 of this equation. They are constantly oscillating across it,, 

 like a pendulum across the center of gravity, but never vary- 

 ing very widely from it, on either side ; for the moment the 

 slightest deviation is detected, commercial self-interest is 

 prompt to apply the corrective by importing more goods and 

 less gold, or more gold and less goods, as either one becomes 

 more profitable than the other — the one which is most profi- 

 table being always the right one to restore the equation of 

 supply and demand. Wherever gold will buy less than it 

 will elsewhere, there it is depreciated just to the extent of the 

 difference, and if unobstructed by artificial barriers, elsewhere 

 it will go till the difference no longer exists. 



Now suppose a country places obstructions in the way of com- 

 merce in the form of heavy duties on imports, as our country 

 has done. What will be the consequence ? Undoubtedly the 

 price of all importables, that is, commodities imported and all 

 domestic products of the same descriptions, will be forcibly 

 raised to the extent, or very nearly to the extent of the duties 

 imposed, except where the duties are so high as to become 

 probibitive ; while the prices of exportables, that is, all domes- 

 tic products of which we raise a surplus for exportation, 

 whether exported or consumed at home, will still be governed 

 by the foreign market and remain the same as before. The 

 consequence will be a rise of average prices above the average 

 prices in other countries where these obstructions to commerce 

 do not exist, and the advance of average prices will continue 



