to pay for it.
If, then, the United States imports wine from Spain, giving for every pipe of wine a bale of cloth, the exchange value of a pipe of wine in the United States will not depend upon what the production of the wine may have cost in Spain, but upon what the production of the cloth has cost in the United States. Though the wine may have cost in Spain the equivalent of only ten days' labor, yet, if the cloth costs in the United States twenty days' labor, the wine, when brought to the United States, will exchange for the produce of twenty days' American labor, plus the cost of carriage, including the usual profit on the importer's capital during the time it is locked up and withheld from other employment.268
The value, then, in any country, of a foreign commodity, [pg 392] depends on the quantity of home produce which must be given to the foreign country in exchange for it. In other words, the values of foreign commodities depend on the terms of international exchange. What, then, do these depend upon? What is it which, in the case supposed, causes a pipe of wine from Spain to be exchanged with the United States for exactly that quantity of cloth? We have seen that it is not their cost of production. If the cloth and the wine were both made in Spain, they would exchange at their cost of production in Spain; if they were both made in the United States, they would [possibly] exchange at their cost of production in the United States: but all the cloth being made in the United States, and all the wine in Spain, they are in circumstances to which we have already determined that the law of cost of production is not applicable. We must accordingly, as we have done before in a similar embarrassment, fall back upon an antecedent law, that of supply and demand; and in this we shall again