THEORY OF INTERNATIONAL VALUES
613
The chapter on the Distribution of the Precious Metals
requires no comment.
In the first section of the Chapter on Competition (Book III.
ch. 25),. the lenient judgment which Mill expresses appears to
explanation of the action of competition in such a case is good. Grundriss, 2nd
edition, Appendix.
I submit that this solution is more correct than that of Mill, who virtually alters
the data when he supposes a larger supply of cloth than the by hypothesis constant
1,000,000 yards to be evoked (note to sec. 7). In doing so he abandons the first head
which we have called A.
B. We go on now to the class of cases in which the demand is not supposed pro-
portional to the cheapness (sec. 8). This class may be subdivided into two cases :—
0 TM
(1) where ‘ the proportionality of demand to cheapness holds good in one country, but
not in the other, (2) where it ‘ does not hold good in either country ’ (Zoe. cit. par. 3,
first sentence).
B (1). The first case under this head, in which ‘ the demand of England for linen
is exactly proportional to the cheapness, but that of Germany for cloth, not propor-
tional,’ is represented by Fig. 4. where the German demand-curve is the line of in-
difference at least up to the point where it meets a perpendicular through the point
T, O T = 800,000, as ‘ she required 800,000 cloth at a cost equivalent to 1,600,000
linen’ (Zoc. cit.). After the point S the demand-curve must leave the straight line
as it strikes Mm at the point R, ME = 1,400,000.
Another variety of this case is represented by the dotted curve line intersecting
O M at point R' M R'=1,700,000 (sec. 8 par. 2).
The alternative suggested by Mill ‘ or else tempt England to part with some of
the cloth she previously consumed at home ’ is not proper to case B (1).
B (2). This case is represented by two ordinary demand-curves, Fig. S, which ‘ by