44 W. G. Langworthy Taylor 



balance of merchandise is accompanied by a change in the wheat 

 and iron equilibrium in the American and English markets sev- 

 erally, wheat going up relatively to iron in the United States and 

 down in England. Of course, the delayed liquidation of English 

 agriculture must now take place, and, in America, the delayed 

 explosion of railroad schemes. The violent liquidation of the 

 crisis we leave to the next section, except the observation that 

 for it the analogy of equilibrium also holds. 



The disturbance of equilibrium, however, that explains the 

 ordinary cause of industrial progress, is of infinite complexity. 

 The field of international trade is chosen because it is the sim- 

 plest and most patent. As noted above, a disturbance of inter- 

 national equilibrium of trade is always accompanied by a dis- 

 turbance of domestic markets, and a disturbance in any one of 

 these is always accompanied by a disturbance in all the others, 

 according to the law of marginal efficiency or substitution. There 

 is, however, no theoretical need that we begin our investigation 

 of equilibrium with international trade. For large countries it 

 is in volume small compared with the domestic. The chief diffi- 

 culty is that within a country it is not so easy to correlate market 

 disturbances with transportation statistics. We know more accu- 

 rately how much wheat is sent to England from the United States 

 than how much is sent to New England from the Dakotas. Our 

 treasury bureaux are endeavoring to remedy this deficiency ; but 

 they will not make much progress until the railroads are com- 

 pelled to furnish detailed transportation statistics. It is true 

 that we export two-thirds of our cotton crop, but we do not 

 export a quarter of our wheat crop nor a tenth of our corn crop. 

 In 1900 the export of iron and steel of all kinds was $121,000,- 

 000. Now if we suppose all the unwatered capital really 

 invested in the manufacture of those articles in the United States 

 to be one billion dollars, and suppose that capital to be half of or 

 even equal to the annual product — a most conservative guess — 

 it will be seen that the expanded exports of iron and steel can 

 hardly, in those most exceptional circumstances, have equaled 

 one-tenth of the total product of the country of those articles. 



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