. The linen imported would be more than could
be paid for by the cloth exported: the difference must be paid in money:
the change in the distribution of the precious metals between the two
countries would lower the price of cloth in England, (and consequently
in Germany), while it would raise the price of linen in Germany, (and
consequently in England). Germany, therefore, by the annihilation of
cost of carriage, would save in price more than the cost of carriage of
the cloth; England would save less in price than the cost of carriage of
the linen. But if by the miraculous annihilation of cost of carriage,
England would not _save_ the whole of the carriage of her imports, it
follows that England did not previously _pay_ the whole of that cost of
carriage.

Thus, the division of the cost of trade, and the division of the
advantage of trade, are governed by precisely the same principles; and
the only general proposition which can be affirmed respecting the cost
is, that it is _pro tanto_ a deduction from the advantage. It cannot
even be maintained that the cost is shared in the same proportion as the
advantage is; because the increase of the demand for a commodity as its
price falls, is not governed by any fixed law. Suppose, for instance,
that the advantage happened to be divided equally: this must be because
the greater cheapness arising from the establishment of the trade,
either did not affect the demand at all, or affected it in an equal
proportion on both sides. Now, because such is the effect of the degree
of increased cheapness resulting from importation burthened with cost of
carriage, it would not follow that the still greater degree of
cheapness, produced by the additional saving of the cost of carriage
itself, would also affect the demand of both countries in precisely an
equal degree. But we cannot be said to bear an expense, which, if saved,
would be saved to somebody else, and not to us. Two countries may have
equal shares of the clear benefit of the trade, while, if the cost of
carriage were saved, they would divide that saving unequally. If so,
they divide the gross gain in one unequal ratio, the cost in another
unequal ratio, though their shares of the cost being deducted from their
shares of the gain leave equal remainders.

4. The question naturally suggests itself, whether any country, by its
own legislative policy, can engross to itself a larger share of the
benefits of foreign commerce, than would