xactly suffice to take off
the corresponding supply; and 10 yards for 18 will be the rate at which,
in both countries, cloth will exchange for linen.

The converse of all this would have happened if instead of 800 times 17
yards, we had supposed that England, at the rate of 10 for 17, would
have taken 1200 times 17 yards of linen. In this case, it is England
whose demand is not fully supplied; it is England who, by bidding for
more linen, will alter the rate of interchange to her own disadvantage;
and 10 yards of cloth will fall, in both countries, below the value of
17 yards of linen. By this fall of cloth, or what is the same thing,
this rise of linen, the demand of Germany for cloth will increase, and
the demand of England for linen will diminish, till the rate of
interchange has so adjusted itself that the cloth and the linen will
exactly pay for another; and when once this point is attained, values
will remain as they are.

It may be considered, therefore, as established, that when two countries
trade together in two commodities, the exchangeable value of these
commodities relatively to each other will adjust itself to the
inclinations and circumstances of the consumers on both sides, in such
manner that the quantities required by each country, of the article
which it imports from its neighbour, shall be exactly sufficient to pay
for one another. As the inclinations and circumstances of consumers
cannot be reduced to any rule, so neither can the proportions in which
the two commodities will be interchanged. We know that the limits within
which the variation is confined are the ratio between their costs of
production in the one country, and the ratio between their costs of
production in the other. Ten yards of cloth cannot exchange for more
than 20 yards of linen, nor for less than 15. But they may exchange for
any intermediate number. The ratios, therefore, in which the advantage
of the trade may be divided between the two nations, are various. The
circumstances on which the proportionate share of each country more
remotely depends, admit only of a very general indication.

It is even possible to conceive an extreme case, in which the whole of
the advantage resulting from the interchange would be reaped by one
party, the other country gaining nothing at all. There is no absurdity
in the hypothesis, that of some given commodity a certain quantity is
all that is wanted at any price, and that when that quantity is