the country calls for an increased quantity of a particular article, the cost may increase under the law of diminishing returns until a foreign country—having inferior agents of production as compared with our best—may be able to send supplies into our markets. It all depends on whether the United States wants more articles than can be produced on grades of natural agents superior to those possessed by foreigners, taking cost of carriage to this country into consideration. Even though foreign competition appears when we reach poorer grades of natural agents, it does not follow that some of the particular articles will not be produced. What ought to be clear is, that untrammeled exchange between countries will not prevent the existence of various industries, but only limit production to those grades of agents which are its best. This may be better seen by a simple diagram:
| Iron and Coal: England | 7 | 6 | 5 | 4 | 3 | 2 | 1 |
|---|---|---|---|---|---|---|---|
| Iron and Coal: United States | 4 | 3 | 2 | 1 | |||
| Wheat: England | 4 | 3 | 2 | 1 | |||
| Wheat: United States | 7 | 6 | 5 | 4 | 3 | 2 | 1 |
England may have seven different grades of productiveness in her iron and coal supplies,