and the United States in iron and corn, suppose that the United States taxes her export of corn, the tax not being supposed high enough to induce England to produce corn for herself. The price at which corn can be sold in England is augmented by the tax. This will probably diminish the quantity consumed. It may diminish it so much that, even at the increased price, there will not be required so great a money value as before. Or it may not diminish it at all, or so little that, in consequence of the higher price, a greater money value will be purchased than before. In this last case, the United States will gain, at the expense of England, not only the whole amount of the duty, but more; for, the money value of her exports to England being increased, while her imports remain the same, money will flow into the United States from England. The price of corn will rise in the United States, and consequently in England; but the price of iron will fall in England, and consequently in the United States. We shall export less corn and import more iron, till the equilibrium is restored. It thus appears (what is at first sight somewhat remarkable) that, by taxing her exports, the United States would, in some conceivable circumstances, not only gain from her foreign customers the whole amount of the tax, but would also get her imports cheaper. She would get them cheaper in two ways, for she would obtain them for less money, and would have more money to purchase them with. England, on the other hand, would suffer doubly: she would have to pay for her corn a price increased not only by the duty, but by the influx of money into the United States, while the same change in the distribution of the circulating medium would leave her less money to purchase it with.344
This, however, is only