and B are a Pennsylvania farmer and a Pennsylvania iron-maker whose lands are adjoining. Under the protective policy A is furnishing B with bread and meat, and vegetables and fruits, and food for horses and oxen, and fresh supplies of horses and oxen themselves occasionally, and receiving in exchange all the iron, iron utensils, tools, and implements he needs. In this process of exchange each receives the whole of that which the other parts with, and the reward of labor between them is perfect—each receiving the product of just so much labor as he has himself bestowed on what he parts with for it. But the change comes. The protective policy is abandoned, and A determines to buy his iron and iron manufactures of C in Europe. This he can only do by a direct or an indirect exchange of the produce of his farm for them. We will suppose the direct exchange is adopted. In this A desires to exchange ten barrels of flour—the precise product of one hundred days' labor—for the largest quantity of iron, etc., that he can get. C also wishes to exchange the precise product, in iron, of one hundred days' labor for the greatest quantity of flour he can get. In intrinsic value the things to be so exchanged are precisely equal. But before this exchange can take place, the flour must be carried from Pennsylvania to England, and the iron from England to Pennsylvania. The flour starts. The wagoner who hauls it to Philadelphia takes a part of it to pay him for his labor; then a merchant there takes a little more for storage and forwarding commission, and another takes a little more for insurance; and then the ship-owner carries it across the water, and takes a little more of it for
