price of wine would fall in England in consequence of the real advantage from the improvement of its manufacture; that is to say, its natural price would fall: the relative price of cloth would rise there from the accumulation of money.
Thus, suppose before the improvement in making wine in England, the price of wine here were 50l. per pipe, and the price of a certain quantity of cloth were 45l., whilst in Portugal the price of the same quantity of wine was 45l., and that of the same quantity of cloth 50l.; wine would be exported from Portugal with a profit of 5l., and cloth from England with a profit of the same amount.
Suppose that, after the improvement, wine falls to 45l. in England, the cloth continuing at the same price. Every transaction in commerce is an independent transaction. Whilst a merchant can buy cloth in England for 45l., and sell it with the usual profit in Portugal, he will continue to export it from England. His business is simply to purchase English cloth, and to pay for it by a bill of exchange, which he