Principles of Political Economy and Taxation. 189 



ever I shall still suppose the effect proportional to the quantity 

 introduced. If g x be the money at one period, and g~ the same 

 with the addition of the imported gold, I shall suppose that 

 prices increase in the ratio g t : g 3 . 



The preceding considerations may seem to shew how difficult 

 and complex must be all calculations on this subject. 



III. In the condition of equilibrium of a trading country, 

 the annual exports and imports must be equal in money value. 



We speak here of a condition of things which may continue 

 from year to year unaltered. It is clear that in such a condition 

 we could not have a regular excess of exported value over im- 

 ported, or the reverse. For if we had the former case, the 

 balance must be brought here in gold, and we should import 

 a fixed quantity of gold every year. But in consequence of 

 this circumstance, the prices of all our commodities would rise, 

 some that had been usually exported would cease to be so from 

 their increased price, and this operation would never stop till 

 the exports had reached a point at which their money value 

 was equal to that of the imports. 



Let p be the price of a unit of any exported article, e the 

 number of units exported : similarly let p, p", &c. be other prices, 

 e, e", &c. the corresponding quantities: then ep + e'p + e"p" + &c. is 

 the value of the whole export. This may be represented thus 

 Sep. In the same manner if i, i', i", &c. be the quantities im- 

 ported of articles of which the prices are s, s', s' &c. i.t + i's' + i".i" 

 + &c. = Sis represents the whole of the imports. Hence we have 

 by the principle just explained Sej) = Sis. 



IV. The prices supposed here are the remunerating prices 

 in the equilibrium of demand and supply. 



