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9 APPLICATION: INTERNATIONAL
TRADE
WHAT’S NEW IN THE SIXTH EDITION:
A new In the News feature on “Trade Skirmishes” has been added.
LEARNING OBJECTIVES:
By the end of this chapter, students should understand:
➢ what determines whether a country imports or exports a good.
➢ who wins and who loses from international trade.
➢ that the gains to winners from international trade exceed the losses to losers.
➢ the welfare effects of tariffs and import quotas.
➢ the arguments people use to advocate trade restrictions.
CONTEXT AND PURPOSE:
Chapter 9 is third in a three-chapter sequence dealing with welfare economics. Chapter 7 introduced
welfare economics: the study of how the allocation of resources affects economic well-being. Chapter 8
applied the lessons of welfare economics to taxation. Chapter 9 applies the tools of welfare economics
from Chapter 7 to the study of international trade, a topic that was first introduced in Chapter 3.
The purpose of Chapter 9 is to use welfare economics to address the gains from trade more precisely
than in Chapter 3, which discussed comparative advantage and the gains from trade. This chapter
develops the conditions that determine whether a country imports or exports a good and discusses who
wins and who loses when a country imports or exports a good. This chapter will show that when free
trade is allowed, the gains of the winners exceed the losses of the losers. Because there are gains from
trade, restrictions on free trade reduce the gains from trade and cause deadweight losses similar to those
generated by a tax.
160
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 9/Application: International Trade ❖ 161
KEY POINTS:
• The effects of free trade can be determined by comparing the domestic price without trade to the
world price. A low domestic price indicates that the country has a comparative advantage in
producing the good and that the country will become an exporter. A high domestic price indicates
that the rest of the world has a comparative advantage in producing the good and that the country
will become an importer.
• When a country allows trade and becomes an exporter of a good, producers of the good are better
off, and consumers of the good are worse off. When a country allows trade and becomes an importer
of a good, consumers are better off, and producers are worse off. In both cases, the gains from trade
exceed the losses.
• A tariff—a tax on imports—moves a market closer to the equilibrium that would exist without trade
and, therefore, reduces the gains from trade. Although domestic producers are better off and the
government raises revenue, the losses to consumers exceed these gains.
• There are various arguments for restricting trade: protecting jobs, defending national security,
helping infant industries, preventing unfair competition, and responding to foreign trade restrictions.
Although some of these arguments have some merit in some cases, economists believe that free
trade is usually the better policy.
CHAPTER OUTLINE:
This chapter may be difficult to teach and very difficult for students to understand
and accept. Be prepared for a skeptical reaction from students who have been told
that free international trade is detrimental to a country. For various historical,
cultural, and political reasons, free trade has few defenders outside of the economics
profession.
Point out that international trade issues are no different from trading as it applies to
individuals within a community or between states and regions within a country. The
gains from trade between countries occur for the same reasons that we observe
gains from trade between individuals.
Pick a state adjacent to yours. Ask students why we do not seem to worry about
“importing” goods from other states the same way in which we worry about
importing goods from other countries.
I. The Determinants of Trade
A. Example used throughout the chapter: The market for textiles in a country called Isoland.
B. The Equilibrium without Trade
1. If there is no trade, the domestic price in the textile market will balance supply and demand.
162 ❖ Chapter 9/Application: International Trade
2. A new leader is elected who is interested in pursuing trade. A committee of economists is

organized to determine the following:
a. If the government allows trade, what will happen to the price of textiles and the quantity
of textiles sold in the domestic market?
b. Who will gain from trade, who will lose, and will the gains exceed the losses?
c. Should a tariff (a tax on imported textiles) be part of the new trade policy?
Figure 1
C. The World Price and Comparative Advantage
1. The first issue is to decide whether Isoland should import or export textiles.
a. The answer depends on the relative price of textiles in Isoland compared with the price
of textiles in other countries.
b. Definition of world price: the price of a good that prevails in the world market
for that good.
2. If the world price is greater than the domestic price, Isoland should export textiles; if the
world price is lower than the domestic price, Isoland should import textiles.
a. Note that the domestic price represents the opportunity cost of producing textiles in
Isoland, while the world price represents the opportunity cost of producing textiles
abroad.
b. Thus, if the domestic price is low, this implies that the opportunity cost of producing
textiles in Isoland is low, suggesting that Isoland has a comparative advantage in the
production of textiles. If the domestic price is high, the opposite is true.
II. The Winners and Losers from Trade
A. We can use welfare analysis to determine who will gain and who will lose if free trade begins in
Isoland.
B. We will assume that, because Isoland would be such a small part of the market for textiles, they
will be price takers in the world economy. This implies that they take the world price as given
and must sell (or buy) at that price.
C. The Gains and Losses of an Exporting Country
1. If the world price is higher than the domestic price, Isoland will export textiles. Once free
trade begins, the domestic price will rise to the world price.
2. As the price of textiles rises, the domestic quantity of textiles demanded will fall and the
domestic quantity of textiles supplied will rise. Thus, with trade, the domestic quantity
demanded will not be equal to the domestic quantity supplied.
Have students come to the board and label the areas of consumer and producer
surplus after you have drawn each of the figures. This should not be a problem as
they are likely familiar enough with consumer and producer surplus after completing
Chapters 7 and 8.
Figure 2
3. Welfare without Trade
a. Consumer surplus is equal to: A + B.
b. Producer surplus is equal to: C.
c. Total surplus is equal to: A + B + C.
4. Welfare with Trade
a. Consumer surplus is equal to: A.
b. Producer Surplus is equal to: B + C + D.
c. Total surplus is equal to: A + B + C + D.
5. Changes in Welfare
a. Consumer surplus changes by: –B.
b. Producer surplus changes by: +(B + D).
c. Total surplus changes by: +D.
6. When a country exports a good, domestic producers of the good are better off and domestic
consumers of the good are worse off.
7. When a country exports a good, total surplus is increased and the economic well-being of the
country rises.
D. The Gains and Losses of an Importing Country
1. If the world price is lower than the domestic price, Isoland will import textiles. Once free
trade begins, the domestic price will fall to the world price.
2. As the price of textiles falls, the domestic quantity of textiles demanded will rise and the
domestic quantity of textiles supplied will fall.
a. Thus, with trade, the domestic quantity demanded will not be equal to the domestic
quantity supplied.
b. Isoland will import the difference between the domestic quantity demanded and the
domestic quantity supplied.
Note that there will be both imported and domestically produced textiles sold in this
country. This is true for many imported goods.
Figure 3
3. Welfare without Trade
a. Consumer surplus is equal to: A.
b. Producer surplus is equal to: B + C.
c. Total surplus is equal to: A + B + C.
4. Welfare with Trade
a. Consumer surplus is equal to: A + B + D.
b. Producer surplus is equal to: C.
c. Total surplus is equal to: A + B + C + D.
a. Consumer surplus changes by: +(B + D).
b. Producer surplus changes by: –B.
c. Total surplus changes by: +D.
6. When a country imports a good, domestic consumers of the good are better off and domestic
producers of the good are worse off.
7. When a country imports a good, total surplus is increased and the economic well-being of the
country rises.
Be prepared for students to argue that trade cannot be good for everyone. More than
likely at least one of your students will know an individual who lost his or her job
when a factory closed and moved to another country. Take this opportunity to point
out that this individual is one of the “losers,” but remind the class that the gains from
trade exceed the losses, so the total well-being of society is increased.
Point out that during the 1990s with open trading (for example, the passage of
NAFTA), the U.S. economy achieved and maintained full employment even as large
quantities of imported goods entered the United States. Most of the jobs that “left
the country” were low-skill, low-wage jobs.
E. Trade policy is often contentious because the policy creates winners and losers. If the losers have
political clout, the result is often trade restrictions such as tariffs and quotas.
F. The Effects of a Tariff
1. Definition of tariff: a tax on goods produced abroad and sold domestically.
2. A tariff raises the price above the world price. Thus, the domestic price of textiles will rise to
the world price plus the tariff.
3. As the price rises, the domestic quantity of textiles demanded will fall and the domestic
quantity of textiles supplied will rise. The quantity of imports will fall and the market will
move closer to the domestic market equilibrium that occurred before trade.
4. Welfare before the Tariff (with trade)
a. Consumer surplus is equal to: A + B + C + D + E + F.
b. Producer surplus is equal to: G.
c. Government revenue is equal to: zero.
d. Total surplus is equal to: A + B + C + D + E + F + G.
Figure 4
5. Welfare after the Tariff
a. Consumer surplus is equal to: A + B.
b. Producer surplus is equal to: C + G.
c. Government revenue is equal to: E.
d. Total surplus is equal to: A + B + C + E + G.
a. Consumer surplus changes by: –(C + D + E + F).
b. Producer surplus changes by: +C.
c. Government revenue changes by: +E.
d. Total surplus changes by: –(D + F).
G. FYI: Import Quotas: Another Way to Restrict Trade
1. An import quota is a limit on the quantity of a good that can be produced abroad and sold
domestically.
2. Import quotas are much like tariffs.
a. Both tariffs and quotas raise the domestic price of the good, reduce the welfare of
domestic consumers, increase the welfare of domestic producers, and cause deadweight
losses.
b. However, a tariff raises revenue for the government, whereas a quota creates surplus for
license holders.
c. A quota can potentially cause a larger deadweight loss than a tariff, depending on the
mechanism used to allocate the import licenses.
H. The Lessons for Trade Policy
This section provides a good opportunity to review what the students have learned
thus far about trade. You should reinforce the idea that total surplus rises when trade
is introduced, but falls once trade restrictions are imposed.
1. If trade is allowed, the price of textiles will be driven to the world price. If the domestic price
is higher than the world price, the country will become an importer and the domestic price
will fall. If the domestic price is lower than the world price, the country will become an
exporter and the domestic price will rise.
2. If a country imports a product, domestic producers are made worse off, domestic consumers
are made better off, and the gains of consumers outweigh the losses of producers. If a
country exports a product, domestic producers are made better off, domestic consumers are
made worse off, and the gains of producers outweigh the losses of consumers.
3. A tariff would create a deadweight loss because total surplus would fall.
I. In the News: Trade Skirmishes
1. In recent years, trade between the U.S. and China has not been completely free.
2. This is an article from The New York Times describing how trade policy often results in
strategic moves between countries.
J. Other Benefits of International Trade
1. In addition to increasing total surplus, there are several other benefits of free trade.
2. These include an increased variety of goods, lower costs through economies of scale,
increased competition, and an enhanced flow of ideas.
III. The Arguments for Restricting Trade
A. The Jobs Argument
1. If a country imports a product, domestic producers of the product will have to lay off workers
because they will decrease domestic output when the price declines to the world price.
2. Free trade, however, will create job opportunities in other industries where the country
enjoys a comparative advantage.
Outsourced, Chapter 1. A call center in Seattle is outsourced to India. Todd is

asked by his boss to travel to India to train his replacement, who earns only $11,000
per year. This is a nice clip to begin a class discussion on the factors that affect the
success of outsourcing jobs.
B. The National-Security Argument
1. Certain industries may produce key resources needed to produce products necessary for
national security.
2. In many of the cases for which this argument is used, the role of the particular market in
providing national security is exaggerated.
C. The Infant-Industry Argument
1. New industries need time to establish themselves to be able to compete in world markets.
2. Sometimes older industries argue that they need temporary protection to help them adjust to
new conditions.
3. Even if this argument is legitimate, it is nearly impossible for the government to choose
which industries will be profitable in the future and it is even more difficult to remove trade
restrictions in an industry once they are in place.
D. The Unfair-Competition Argument
1. It is unfair if firms in one country are forced to comply with more regulations than firms in
another country, or if another government subsidizes the production of a good.
2. Even if another country is subsidizing the production of a product so that it can be exported
to a country at a lower price, the domestic consumers who import the product gain more
than the domestic producers lose.
E. The Protection-as-a-Bargaining-Chip Argument
1. Threats of protectionism can make other countries more willing to reduce the amounts of
protectionism they use.
2. If the threat does not work, the country has to decide if it would rather reduce the economic
well-being of its citizens (by carrying out the threat) or lose credibility in negotiations (by
reneging on its threat).
F. In the News: Second Thoughts about Free Trade
1. Some economists worry about the impact of international trade on the distribution of income.
2. This is a column by economist Paul Krugman expressing such concerns.
G. Case Study: Trade Agreements and the World Trade Organization
1. Countries wanting to achieve freer trade can take two approaches to cutting trade
restrictions: a unilateral approach or a multilateral approach.
2. A unilateral approach occurs when a country lowers its trade restrictions on its own. A
multilateral approach occurs when a country reduces its trade restrictions while other
countries do the same.
3. The North America Free Trade Agreement (NAFTA) and the General Agreement on Tariffs
and Trade (GATT) are multilateral approaches to reducing trade barriers.
4. The rules established under GATT are now enforced by the World Trade Organization (WTO).
5. The functions of the WTO are to administer trade agreements, provide a forum for
negotiation, and handle disputes that arise among member countries.
Make sure that you point out the conclusion in this chapter. The chapter ends with a
very effective parable about the discovery of comparative advantage, its adoption, its
beneficial consequences, and finally, its abandonment for political reasons.
SOLUTIONS TO TEXT PROBLEMS:
Quick Quizzes
1. Since wool suits are cheaper in neighboring countries, Autarka would import suits if it were to
allow free trade.
2. Figure 1 shows the supply and demand for wool suits in Autarka. With no trade, the price of
suits is 3 ounces of gold, consumer surplus is area A, producer surplus is area B + C, and
total surplus is area A + B + C. When trade is allowed, the price falls to 2 ounces of gold,
consumer surplus rises to A + B + D (an increase of B + D), producer surplus falls to C (a
decline of B), so total surplus rises to A + B + C + D (an increase of D). A tariff on suit
imports would reduce the increase in consumer surplus, reduce the decline in producer
surplus, and reduce the gain in total surplus.
Figure 1
3. Lobbyists for the textile industry might make five arguments in favor of a ban on the import
of wool suits: (1) imports of wool suits destroy domestic jobs; (2) the wool-suit industry is
vital for national security; (3) the wool-suit industry is just starting up and needs protection
from foreign competition until it gets stronger; (4) other countries are unfairly subsidizing
their wool-suit industries; and (5) the ban on the importation of wool suits can be used as a
bargaining chip in international negotiations.
In defending free trade in wool suits, you could argue that: (1) free trade creates jobs in
some industries even as it destroys jobs in the wool-suit industry and allows Autarka to enjoy
a higher standard of living; (2) the role of wool suits for the military may be exaggerated; (3)
government protection is not needed for an industry to grow on its own; (4) it would be good
for the citizens of Autarka to be able to buy wool suits at a subsidized price; and (5) threats
against free trade may backfire, leading to lower levels of trade and lower economic welfare
for everyone.
Questions for Review
1. If the domestic price that prevails without international trade is above the world price, the
country does not have a comparative advantage in producing the good. If the domestic price
is below the world price, the country has a comparative advantage in producing the good.
2. A country will export a good for which its domestic price is lower than the prevailing world
price. Thus, if a country has a comparative advantage in producing a good, it will become an
exporter when trade is allowed. A country will import a product for which its domestic price is
greater than the prevailing world price. Thus, if a country does not have a comparative
advantage in producing a good, it will become an importer when trade is allowed.
3. Figure 2 illustrates supply and demand for an importing country. Before trade is allowed,
consumer surplus is area A and producer surplus is area B + C. After trade is allowed,
consumer surplus is area A + B + D and producer surplus is area C. The change in total
surplus is an increase of area D.
Figure 2
4. A tariff is a tax on goods produced abroad and sold domestically. If a country is an importer
of a good, a tariff reduces the quantity of imports and moves the domestic market closer to
its equilibrium without trade, increasing the price of the good, reducing consumer surplus
and total surplus, while raising producer surplus and government revenue.
5. The arguments given to support trade restrictions are: (1) trade destroys jobs; (2) industries
threatened with competition may be vital for national security; (3) new industries need trade
restrictions to help them get started; (4) some countries unfairly subsidize their firms, so
competition is not fair; and (5) trade restrictions can be useful bargaining chips. Economists
disagree with these arguments: (1) trade may destroy some jobs, but it creates other jobs;
(2) arguments about national security tend to be exaggerated; (3) the government cannot
easily identify new industries that are worth protecting; (4) if countries subsidize their
exports, doing so simply benefits consumers in importing countries; and (5) bargaining over
trade is a risky business, because it may backfire, making the country worse off without
trade.
6. A unilateral approach to achieving free trade occurs when a country removes trade
restrictions on its own. Under a multilateral approach, a country reduces its trade restrictions
while other countries do the same, based on an agreement reached through bargaining. The
unilateral approach was taken by Great Britain in the 1800s and by Chile and South Korea in
recent years. Examples of the multilateral approach include NAFTA in 1993 and the GATT
negotiations since World War II.
Problems and Applications
1. a. In Figure 3, with no international trade the equilibrium price is P1 and the equilibrium
quantity is Q1. Consumer surplus is area A and producer surplus is area B + C, so total
surplus is A + B + C.
Figure 3
b. When the Mexican orange market is opened to trade, the new equilibrium price is PW, the
quantity consumed is QD, the quantity produced domestically is QS, and the quantity
imported is QD – QS. Consumer surplus increases from A to A + B + D + E. Producer
surplus decreases from B + C to C. Total surplus changes from A + B + C to A + B + C
+ D + E, an increase of D + E.
2. a. Figure 4 illustrates the Canadian market for wine, where the world price of wine is P1.
The following table illustrates the results under the heading "P1."
Figure 4
b. The shift in the Gulf Stream destroys some of the grape harvest in Europe and raises the
world price of wine to P2. The table shows the new areas of consumer, producer, and
total surplus, as well as the changes in these surplus measures. Consumers lose,
producers win, and Canada as a whole is worse off.
P1 P2 CHANGE
Consumer Surplus A+B+D+E A+D –(B + E)
Producer Surplus C B+C +B
Total Surplus A+B+C+D+E A+B+C+D –E
3. The impact of a tariff on imported autos is shown in Figure 6. Without the tariff, the price of
an auto is PW, the quantity produced in the United States is Q1S, and the quantity purchased
in the United States is Q1D. The United States imports Q1D – Q1S autos. The imposition of the
tariff raises the price of autos to PW + t, causing an increase in quantity supplied by U.S.
producers to Q2S and a decline in the quantity demanded to Q2D. This reduces the number of
imports to Q2D – Q2S. The table shows the areas of consumer surplus, producer surplus,
government revenue, and total surplus both before and after the imposition of the tariff.
Because consumer surplus declines by C + D + E + F while producer surplus rises by C and
government revenue rises by E, the deadweight loss is D + F. The loss of consumer surplus
in the amount C + D + E + F is split up as follows: C goes to producers, E goes to the
government, and D + F is deadweight loss.
Figure 6
Before Tariff After Tariff CHANGE

Consumer Surplus A+B+C+D+E+F A+B –(C + D + E + F)
Producer Surplus G C+G +C
Government Revenue 0 E +E
Total Surplus A+B+C+D+E+F+G A+B+C+E+G –(D + F)
4. a. For a country that imports clothing, the effects of a decline in the world price are shown
in Figure 7. The initial price is Pw1 and the initial level of imports is Qd1 – Qs1. The new
world price is Pw2 and the new level of imports is Qd2 – Qs2. The table below shows the
changes in consumer surplus, producer surplus, and total surplus. Domestic consumers
are made better off, while domestic producers are made worse off. Total surplus rises by
areas D + E + F.
Figure 7 Figure 8
Pw1 Pw2 CHANGE

Consumer Surplus A+B A+B+C+D+E+F C+D+E+F
Producer Surplus C+G G –C
Total Surplus A+C+G A+B+C+D+E+F+G D+E+F
b. For a country that exports clothing, the effects of a decline in the world price are shown
in Figure 8. The initial price is Pw1 and the initial level of exports is Qs1 – Qd1. The new
world price is Pw2 and the new level of exports is Qs2 – Qd2. The table below shows the
changes in consumer surplus, producer surplus, and total surplus. Domestic consumers
are made better off, while domestic producers are made worse off. Total surplus falls by
area D.
Pw1 Pw2 CHANGE

Consumer Surplus A A+B+C B+C
Producer Surplus B+C+D+E+F+G+H E+F+G+H –B – C – D
Total Surplus A+C+G A+B+C+E+F+G+H –D
c. Overall, importing countries benefit from the fall in the world price of clothing, while
exporting countries are harmed.
5. The tax on wine from California is just like a tariff imposed by one country on imports from
another. As a result, Washington producers would be better off and Washington consumers
would be worse off. The higher price of wine in Washington means producers would produce
more wine, so they would hire more workers. Tax revenue would go to the government of
Washington. So both claims are true, but it is a bad policy because the losses to Washington
consumers exceed the gains to producers and the state government.
6. a. There are many possible answers.
b. There are many possible answers.
7. Senator Hollings is correct that the price of clothing is the world price. When trade is allowed,
the domestic price of clothing is driven to the world price. The price is lower than it would be
in the absence of trade, so consumer surplus is higher than it would be without trade and
this means that consumers do benefit from lower-priced imports.
8. a. Figure 9 shows the market for T-shirts in Textilia. The domestic price is $20 Once trade is
allowed, the price drops to $16 and three million T-shirts are imported.
Figure 9
b. Consumer surplus increases by areas A + B + C. Area A is equal to ($4)(1 million)

+(0.5)($4)(2 million) = $8 million. Area B is equal to (0.5)($4)(2 million) = $4 million.
Area C is equal to (0.5)($4)(1 million) = $2 million. Thus, consumer surplus increases by
$14 million.
Producer surplus declines by area A. Thus, producer surplus falls by $8 million.
Total surplus rises by areas B + C. Thus, total surplus rises by $6 million.
9. a. Figure 10 shows the market for grain in an exporting country. The world price is PW.
Figure 10
b. An export tax will reduce the effective world price received by the exporting nation.
c. An export tax will increase domestic consumer surplus, decrease domestic producer
surplus, and increase government revenue.
d. Total surplus will fall because the decline in producer surplus is less than the sum of the
changes in consumer surplus and government revenue. Thus, there is a deadweight loss
as a result of the tax.
10. a. This statement is true. For a given world price that is lower than the domestic price,
quantity demanded will rise more when demand is elastic. Therefore, the rise in
consumer surplus will be greater when demand is elastic.
b. This statement is false. Quantity demanded would remain unchanged, but buyers would
pay a lower price. This would increase consumer surplus. Domestic producer surplus will
fall, but by less than the rise in consumer surplus. Gains from trade will increase.
c. This statement is false. Even though quantity demanded does not rise when trade is
allowed, consumer surplus rises, because consumers are paying a lower price.
11. a. Figure 11 shows the market for jelly beans in Kawmin if trade is not allowed. The market
equilibrium price is $4 and the equilibrium quantity is 4. Consumer surplus is $8,
producer surplus is $8, and total surplus is $16.
Figure 11
b. Since the world price is $1, kawmin will become an importer of jelly beans. Figure 12
shows that the domestic quantity supplied will be 1, quantity demanded will be 7, and 6
bags will be imported. Consumer surplus is $24.50, producer surplus is $0.50, so total
surplus is $25.
Figure 12
c. The tariff raises the world price to $2. This reduces domestic consumption to 6 bags and
raises domestic production to 2 bags. Imports fall to 4 bags (see Figure 12). Consumer
surplus is now $18, producer surplus is $2, government revenue is $4, and total surplus
is $24.
d. When trade was opened, total surplus increases from $16 to $25. The deadweight loss of
the tariff is $1 ($25 − $24).
12. a. Using Figure 4 from the text, the quantity demanded will fall to Q2D, the same quantity
demanded under the tariff. However, quantity supplied will not change because the price
sellers receive will be the world price. Thus, quantity supplied will remain at Q1S.
b. The effects of the consumption tax can be seen in the table below:
World price World price + tax CHANGE

Consumer Surplus A+B+C+D+E+F A+B -C - D - E - F
Producer Surplus G G None
Government Revenue None C+D+E C+D+E
Total Surplus A+B+C+D+E+F+G A+B+C+D+E+G -F
c. The consumption tax raises more government revenue because the tax is on all units
(not just the imported units). Thus, the deadweight loss is smaller than that associated
with a tariff.
13. a. When a technological advance lowers the world price of televisions, the effect on the
United States, an importer of televisions, is shown in Figure 13. Initially the world price
of televisions is P1, consumer surplus is A + B, producer surplus is C + G, total surplus is
A + B + C + G, and the amount of imports is shown as “Imports1”. After the
improvement in technology, the world price of televisions declines to P2 (which is P1 –
100), consumer surplus increases by D + E + F, producer surplus declines by C, total
surplus rises by D + E + F, and the amount of imports rises to “Imports 2”.
Figure 13
P1 P2 CHANGE
Consumer Surplus A+B A+B+C+D+E+F C+D+E+F
Producer Surplus C+G G –C
Total Surplus A+B+C+G A+B+C+D+E+F+G D+E+F
b. The areas are calculated as follows: Area C = 200,000($100) + (0.5)(200,000)($100)

= $30 million. Area D = (0.5)(200,000)($100) = $10 million. Area E = (600,000)($100)
= $60 million. Area F = (0.5)(200,000)($100) = $10 million.
Therefore, the change in consumer surplus is $110 million. The change in producer
surplus is -$30 million. Total surplus rises by $80 million.
c. If the government places a $100 tariff on imported televisions, consumer and producer
surplus would return to their initial values. That is, consumer surplus would fall by areas
C + D + E + F (a decline of $110 million). Producer surplus would rise by $30 million.
The government would gain tariff revenue equal to ($100)(600,000) = $60 million. The
deadweight loss from the tariff would be areas D and F (a value of $20 million). This is
not a good policy from the standpoint of U.S. welfare because total surplus is reduced
after the tariff is introduced. However, domestic producers will be happier as they benefit
from the tariff.
d. It makes no difference why the world price dropped in terms of our analysis. The drop in
the world price benefits domestic consumers more than it harms domestic producers and
total welfare improves.
14. An export subsidy increases the price of steel exports received by producers by the amount
of the subsidy, s, as shown in Figure 14. The figure shows the world price, PW, before the
subsidy is put in place. At that price, domestic consumers buy quantity Q1D of steel,
producers supply Q1S units, and the country exports the quantity Q1S – Q1D. With the subsidy
put in place, suppliers get a total price per unit of PW + s, because they receive the world
price for their exports PW, and the government pays them the subsidy of s. However, note
that domestic consumers can still buy steel at the world price, PW, by importing it. Domestic
firms do not want to sell steel to domestic customers, because they do not get the subsidy
for doing so. So domestic companies will sell all the steel they produce abroad, in total
quantity Q2S. Domestic consumers continue to buy quantity Q1D. The country imports steel in
quantity Q1D and exports the quantity Q2S, so net exports of steel are the quantity Q2S – Q1D.
The end result is that the domestic price of steel is unchanged, the quantity of steel
produced increases, the quantity of steel consumed is unchanged, and the quantity of steel
exported increases. As the following table shows, consumer surplus is unaffected, producer
surplus rises, government revenue declines, and total surplus declines.
Figure 14
Thus, it is not a good policy from an economic standpoint because there is a decline in total
surplus.
Without Subsidy With Subsidy CHANGE

Consumer Surplus A+B A+B 0
Producer Surplus E+F+G B+C+E+F+G +(B + C)
Government Revenue 0 –(B + C + D) –(B + C + D)
Total Surplus A+B+E+F+G A+B–D+E+F+G –D
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However, from whatever cause arising, we had the full benefit of the
peal.
“We got to our rural retreat about half-past nine, both the men-
servants attending us on horseback. At ten o’clock your old Mumpsa
[the child’s pet name for her mother] laid the first brick, and placed
under it a medal struck in commemoration of the centenary of the
Revolution of 1688. Your darling father then placed another for
himself, and a third for his beloved treasure, which he made Toney
put her foot upon; and after the little rogue had done so, you would
have laughed to have seen how she wagged her tail, and nodded
her head upon it, as much as to say she was very proud of being
admitted to have, not a finger, but a foot, in the business. The men
worked merrily on until two o’clock, and then repaired to the public-
house, where two legs of mutton, and bread, beer, and potatoes
were provided for them. There they enjoyed themselves for the rest
of the day, and this morning cheerily resumed their labours.”
Having thus impressed the natives, including the landlord of “The
Bell,” with a sense of the importance of the new owner about to
come among them, Dr. Mitford completed the business by
substituting the name “Bertram House” for that of “Grazeley Court,”
the reason for which, did the curiosity of the neighbouring aristocracy
cause them to inquire, was to be discovered in the fact that he was a
scion of the Mitfords of Bertram Castle, Bertram being the original
and ancient name of the family.
Judging by the very scant records of this period at our command, it
would appear that the erection of Bertram House, and its completion
to Dr. Mitford’s satisfaction, must have occupied nearly four years.
This would give Miss Mitford a clear three years of life among the
mild excitements which Reading then offered before taking up
residence at Grazeley in a district which she was to immortalize—the
term surely needs no justification for its use—and in which she was
destined, save for a few notable occasions when duty or
considerations of health called her away for short periods, to live out
her life to the end.
Her introduction to the gaieties of this respectable Borough took
place in the August of 1803, when she would be nearly sixteen. The
occasion was the annual Race Ball, at which function it was the time-
honoured custom of the race-steward to dance with the young ladies
then making their début, an ordeal almost as trying to the débutante
in those prim and decorous days as a presentation at Court,
especially if the steward happened to be a total stranger to her.
Writing to her mother, towards the end of her school career and
commenting on this, Miss Mitford added—possibly to gain courage
from the inditing—“I think myself very fortunate that Mr. Shaw
Lefevre[8] will be steward next year, for by that time I shall hope to
know him well enough to render the undertaking of dancing with him
much less disagreeable.” In this connexion we venture to suggest
that on this occasion Mr. Shaw Lefevre would have full hands, when
we remember that even at this comparatively early date Miss
Mitford’s figure had already assumed generous proportions and that
she was short of stature into the bargain.
Naturally enough, the conclusion of school life and the re-
commencement of life at home afforded the young girl the fullest
opportunities for observing, noting and commenting on persons and
events, a pastime in which she delighted. Her pictures of the
Reading of her day are notable alike for their quaint fancies as for
their fidelity. Her picture of the town—which she disguises under the
name of Belford Regis—as viewed from the southern heights of
Whitley, is one to which all true lovers of the old town turn with
pleasure even to-day.
“About this point,” she says, “is perhaps to be seen the very best
view of Belford, with its long ranges of modern buildings in the
outskirts, mingled with picturesque old streets; the venerable towers
of St. Stephen’s [St. Mary’s] and St. Nicholas [St. Laurence’s]; the
light and tapering spire of St. John’s [St. Giles’]; the huge monastic
ruins of the abbey; the massive walls of the county gaol; the great
river winding along like a thread of silver; trees and gardens mingling
amongst all; and the whole landscape enriched and lightened by the
dropping elms of the foreground, adding an elusive beauty to the
picture, by breaking the too formal outline and veiling just exactly
those parts which most require concealment. Nobody can look at
Belford from this point, without feeling that it is a very English and
very charming scene; and the impression does not diminish on
further acquaintance.”
Continuing, she compares the old romantic structures in which our
ancestors delighted—now, unhappily, nearly all demolished—with,
what she calls, the handsome and uniform buildings which are now
the fashion; and she remarks on the rapid growth which the town
was then making, “having recently been extended to nearly double
its former size.” What would she have said, we wonder, could she
have foreseen the Reading of to-day with its palatial polished-
granite-fronted business emporiums controlled from the Metropolis
by great limited liability companies whose insatiable appetites are
devouring, as their policy of grab is choking, the life from the old-time
burgesses; burgesses who gloried in their town and whom their town
took pleasure in honouring; men whose places are now filled by
battalions of shopmen whose fixity of tenure is so doubtful as to
preclude them from taking any part or interest, however slight, in the
town which shelters them? And, in regard to the extension which she
names with so much pride, how she would gasp with astonishment
had she been told that Whitley, from which she viewed the pleasant
scene, would be turned into dreary streets of uniformly built villas,
never deviating by so much as half a brick from the monotony of the
usual “desirable residence”; that the old limits of the town, beyond
which she could easily descry the panoramic revel of field and
meadow, would be extended for nearly two miles each way, almost
indeed to her beloved “Our Village,” and that the population of
16,000—each unit placidly pursuing its fairly prosperous calling—
would be transformed, seventy years later, into a struggling,
perspiring, more or less harassed army of 88,000, the majority not
daring, though they would not admit the stern impeachment, to call
their bodies their own.
“The good town of Belford,” she later remarks, “swarmed of course
with single ladies ... and was the paradise of ill-jointured widows and
portionless old maids. They met on the tableland of gentility, passing
their mornings in calls at each other’s houses, and their evenings in
small tea-parties, seasoned with a rubber or a pool, and garnished
with the little quiet gossiping (call it not scandal, gentle reader!)
which their habits required.... The part of the town in which they
chiefly congregated, the lady’s quartier, was one hilly corner of the
parish of St. Nicholas, a sort of highland district, all made up of short
rows, and pigmy places, and half-finished crescents, entirely
uncontaminated by the vulgarity of shops,” chosen, it is suggested,
“perhaps because it was cheap, perhaps because it was genteel—
perhaps from a mixture of both causes.” A kindly satire this, and
interesting because it points so conclusively to a certain backwater
near the Forbury, and under the shadow of the church of St.
Laurence, which will be easily recognized by many who remember
how it retained its character as a settlement for prim old ladies, of the
kind described by Miss Mitford, until within quite recent times.
“Of the public amusements of the town, as I remember it at bonny
fifteen,” she continues, “these were sober enough. Ten years before,
clubs had flourished; and the heads of houses had met once a week
at the King’s Arms for the purpose of whist-playing; whilst the ladies,
thus deserted by their liege lords, had established a meeting at each
other’s mansions on club-nights, from which, by way of retaliation,
the whole male sex was banished,” save one. “At the time, however,
of which I speak, these clubs had passed away; and the public
diversions were limited to an annual visit from a respectable
company of actors, the theatre being, as is usual in country places,
very well conducted and exceedingly ill attended; to biennial
concerts, equally good in their kind, and rather better patronised; and
to almost weekly incursions from itinerant lecturers on all the arts
and sciences, and from prodigies of every kind, whether three-year-
old fiddlers or learned dogs. There were also balls in their spacious
and commodious townhall, which seemed as much built for the
purposes of dancing as that of trying criminals. Public balls there
were in abundance; but at the time of which I speak they were of
less advantage to the good town of Belford than any one, looking at
the number of good houses and of pretty young women, could well
have thought possible.”
These few extracts—space forbids a larger selection—are
sufficient, we think, to prove how keen was the observing eye and
how critical was the mind of Miss Mitford at this time when,—to use
her own phrase—“I was a very young girl and, what is more to the
purpose, a very shy one, so that I mixed in none of the gaieties,” a
statement which seems to lend support to the current saying that
“the onlooker sees most of the game.”
So far we have dealt with the Reading life as dating from 1797, but
it is important to note that Miss Mitford speaks of a short residence in
the town when she was but four years of age, and this would give us
the year 1791. Unfortunately no proof for or against this is available,
so far as we know, and we should scarcely have thought it worthy of
mention but for another statement which she makes in her
Recollections the authenticity of which it would be well to at least,
attempt to clear up.
The statement has reference to the interest which Samuel Taylor
Coleridge evinced in one of her earliest literary efforts, Christina; or,
The Maid of the South Seas, when it was being prepared for press at
about the year 1811. This interest she ascribes to “Mr. Coleridge’s
kind recognition of my father’s exertions” in his behalf and relates to
that romantic period of the poet’s life when, in the December of
1793, he suddenly enlisted as a common soldier in the 15th Light
Dragoons under the nom de guerre of “Silas Tomkyn Cumberbatch.”
We have it on good authority that on December 4, 1793, he was
sent, with other raw recruits, to be drilled with his regiment, then
garrisoned at Reading, from which date until his discharge on April
10, 1794, he clearly proved his unfitness for the calling of a man-at-
arms.
The story of his discharge has been variously related, but all are
agreed that his identity was revealed by his being overheard by
certain of his officers reciting Greek lines, to say nothing of the polish
which, scholar as he was, he could not disguise. The circumstance
was sufficiently unique in those days—the gentleman ranker was a
growth of later date—to occasion inquiries, and these resulted in
communications with his friends, who came, identified, and bought
him out. One of these officers was Captain Ogle, eldest son of that
Dean of Winchester to whom, as we have noted in the earliest
chapter of this book, Dr. Mitford was on the visit which resulted in his
introduction to Miss Russell.
Miss Mitford’s account of the event is somewhat circumstantial, for
she relates that as Dr. Ogle was on a short visit to the Mitfords, the
opportunity of calling upon his father was gladly embraced by the
son, who, in the course of conversation, recorded the unusual
incident of the learned recruit, with the result that “one of the
servants waiting at table” was “induced to enlist in his place,” and the
“arrangement for his [Coleridge’s] discharge took place at my
father’s house at Reading.”
The dates relative to Coleridge’s enlistment and discharge are
incontrovertible, therefore in view of the lack of evidence to support
the idea of the Mitfords being in Reading in 1794, we are inclined to
doubt—as others have doubted—the authenticity of Miss Mitford’s
narrative, suggesting rather, that having heard this romantic story,
many years after—possibly from the lips of Captain Ogle himself—
she readily assumed, with the licence of literary folk in general, that
the incident took place as she recorded it.
FOOTNOTES:
[8] He represented Reading in Parliament, 1802-1820.
CHAPTER VI
BERTRAM HOUSE
Bertram House was at last finished and the beginning of 1806 saw
the Mitfords in residence. In the matter of furnishing the Doctor had
spared no expense, everything being new and of the latest pattern,
in fact the best that a fashionable London upholsterer could supply.
Of the pictures we know that the walls were well covered and that
the collection included a Gainsborough, a pair of female heads by
Greuze, and a portrait of the Doctor by Opie. We have already seen,
in Mrs. Mitford’s description of the stone-laying ceremony, that they
were attended by “the two men-servants on horseback”; this hints at
a fairly complete retinue having been installed at the Reading house,
but it was considerably augmented when the arrangements were
completed at Grazeley. Appearances counted for much in the district
and the Doctor was not the man to let slip such a grand opportunity
for ostentatious display.
His hospitality was profuse and indiscriminate, resulting in a
house-warming which extended over quite a lengthy period. As an
incentive—had he need of one—Dr. Mitford had recently been
appointed as one of the County magistrates, a tribute of appreciation
from the Whigs, of whose cause he was an earnest partizan, which
gave him an immediate rise in social status.
In time, of course, the family settled down to a more or less
ordered form of life, so ordered indeed that the Doctor created as
many excuses as possible to cover his frequent journeys to Town
and his clubs. There was sport in plenty to be had in the
neighbourhood, and of this the Doctor took full advantage, being a
familiar figure around the countryside with his gun and spaniels.
Then, too, there were the coursing meetings—the famous meetings
at Ilsley and private matches arranged between friends—none of
which were considered complete unless the Doctor were present or
his famous kennel represented. Throughout Miss Mitford’s letters,
occasionally to her father and often to friends, there are frequent
references to the greyhounds whose names, in accordance with a
custom prevalent then and still fashionable, all began with the letter
M in token of their ownership. Thus, to name only a few, we have
Mia, Manx, Marmion (a notable dog this, with an equally notable son
of the same name), Mogul, Miller, Moss-Trooper, and Mopy. For all of
these Miss Mitford ever exhibited the greatest affection, and in those
cases where a spaniel grew too old to follow the gun or a greyhound
too stiff to be matched, an asylum under Miss Mitford’s immediate
eye and care was immediately provided, and the creature was
henceforth looked upon as her own.
Taking advantage of this motherliness to dumb animals her father
frequently handed over to her some specially valuable dog from
whose later exploits as a courser he expected much. Apparently,
however, the real reason for the supposed gift was not disclosed,
with the result that when the dog was eventually removed the little
mistress gave vent to her annoyance in no measured tones.
“It is a most extraordinary thing,” she says in one communication
to her father, “that I never can have a dog that I like but you
immediately take it from me and burthen me with the care of some
detestable brute whom you in your eternal caprice fancy a good one.
Observe, however, that in giving up my own darling Mordor, I bargain
that that sulky, ungrateful, mangy beast Marmion shall be sent off as
soon as you come home, and that I shall again have my sweet
Marian to pet and comfort me.”
This was not, of course, a serious outburst, but merely the
explosion of what she doubtless considered a truly righteous
indignation, for, although she was no sportswoman, her love for her
father gave her an interest in his pursuits, and she shared with him
to the full the joy of triumph and the sorrow of defeat, while to
disparage the Mitford kennel was to offer her a personal affront. On
the other hand, she was quick to convey to the Doctor any item of
praise which she overheard or might have addressed to her. “We
called yesterday at the Fawcetts’, and the old General said he had
kept greyhounds and seen many thousands, but had never had an
idea of perfect and consummate beauty until he saw her” [a
reference, in a letter to her father, to Mia, one of the hounds].
She had a strong dislike to equestrian exercise—the rides of
babyhood across the Alresford downs with her father could not count
in this connexion—and although every inducement was offered her
to ride, an inglorious fall from a donkey quickly settled her
convictions as to her horsemanship, and her one and only riding-
habit was forthwith converted into a winter-gown. Strictly speaking,
the greater portion of her time was spent at home with her mother,
receiving visitors or lying for hours at a time on the sofa, where she
would devour a great quantity of books at a pace which, having
regard to the extraordinary knowledge she imbibed from her reading,
was truly astonishing.[9] At other times the little green chariot, their
favourite equipage, would be ordered out, calls would be returned
and the drive be possibly extended to Reading, where there would
always be plenty of shopping to do and calls to be made on the old
neighbours and friends who would have the latest news from Town
or the latest gossip of their immediate circle to retail.
With a desire to augment his income, which must have been
seriously depleted by the building operations and by the subsequent
reckless expenditure on the household, the Doctor now began to
indulge in a series of hazardous enterprises, which, with all a
gambler’s insistence, he pursued intently the while they dragged him
deeper and deeper into the mire. One of these was an extensive
speculation in coal in which he engaged with a brother of M. St.
Quintin. For this he supplied the whole of the capital in expectation of
a return of £1,500 a year, but the whole thing was a failure and, with
the exception of about £300, the capital was lost. Another
Frenchman, a man of ingenious ideas but no money wherewith to
put them to practical use, found a ready supporter in the Doctor, who
was induced to advance £5,000 on the strength of a paper scheme.
This man was the Marquis J. M. F. B. de Chabannes, and his
scheme, a supposed improved method for the lighting and heating of
houses, was embodied in a booklet which he published in 1803 with
the comprehensive title of Prospectus d’un Projet pour la
Construction de Nouvelles Maisons, Dont tous les calculs de détails
procureront une très-grande Economie, et beaucoup de
Jouissances. Unfortunately for its promoters, the scheme did not
catch on with the public, the Marquis returned to France and the
deluded Doctor continued for years to spend good money in the
hope of recovering that which was irrevocably lost by suing the
Marquis in the French courts, efforts which were all vain.
Meanwhile his fever for gambling grew apace and his absences
from home were more and more frequent and prolonged, and the
two women, being left much to themselves, conceived the notion of
arranging and copying out for the press a collection of verses
composed by the reverend father of Mrs. Mitford, Dr. Russell. They
took considerable pains with this, to which was added a special
preface by Mrs. Mitford, and when the packet was ready it was
forwarded to Dr. Mitford, in Town, with a request that he should find a
publisher and get as much as he could for it. Unfortunately, the
sanguine editors were disappointed, for no publisher sufficiently
enterprising could be found to accept the manuscript, although
sundry extracts did subsequently find a certain publicity within the
pages of the Poetical Register.
Following closely upon this effort, and in the May of 1806, Miss
Mitford went for a few days on a visit to London as the guest of
Monsieur and Madame St. Quintin, her old schoolmaster and his
wife. A short round of festivities had been arranged for her benefit,
including a visit to the Exhibition of Water Colours, evenings at the
theatres and, what appears to have been a great treat for the
impressionable Miss, some hours of two days which were spent at
Westminster Hall looking on at the trial of Lord Melville[10] and
listening to the speeches, and for which the Doctor, then in Town and
staying at Richardson’s Hotel in Covent Garden, had procured
tickets. She had now been absent from London for over three years
and, no doubt, extracted a great deal of pleasure from her visit and
its reunion with Fanny Rowden and Victoire St. Quintin, M. St.
Quintin’s sister, with both of whom, together with the Doctor, the
round of sight-seeing was enjoyed.
Mrs. Mitford stayed at home, but was kept well-posted in all the
news by the inevitable letters, full of critical details, from her dutiful
daughter. From one of these, dated from Hans Place, May 12, 1806,
we quote:—
“I have much to tell you, but it can scarcely be compressed within
the bounds of a letter. On Thursday, after I wrote, Miss Ayrton, Miss
Carp, papa, and I went to the Exhibition. There are some
uncommonly fine pictures, and it is even better worth seeing than
last year. In the evening, Victoire, Miss A. and myself went with papa
to the play to see The Provoked Husband and The Forty Thieves.
Miss Duncan in Lady Townley is most admirable. I do not much
admire Elliston as her husband. The Forty Thieves is a very
magnificent spectacle, but nothing more; for the language and music
are equally vulgar and commonplace. On Friday morning we went to
Oxford Street. I was extravagant enough to give half a guinea for a
dress skirt for myself, which I wore the next day to the trial. We were
rather disappointed in Mr. Romilly.[11] The speech in itself was
beautiful beyond description; but he wants animation, and drops his
voice at the end of every sentence.... Miss Rowden, papa, and I are
going to see Henry the Eighth to-night, and we are going to
Westminster Hall to-morrow.... I shall hope to return Thursday or
Friday; for, though I am greatly amused here, I am never quite happy
without my dear, dear mother.”
Two days later this was followed by a still more characteristic
effusion. The second day at Westminster Hall decided her that: “Mr.
Romilly is charming and interesting; but my first and greatest
favourite is Mr. Whitbread. Mr. Plumer is rather an inelegant speaker,
though very animated. I have promised papa to write some verses to
Mr. Whitbread. He has even superseded Mr. Fox in my good graces.
I did not tell you, I believe, that I had the happiness of seeing Mr. Fox
mount his horse on Saturday. I shall never again contend for his
beauty. He was obliged to lean on two people, and looked so sallow
and pale in the face, and so unwieldy in person, that I am obliged to
yield our long-disputed point.” Rather hard on poor Mr. Fox, whom,
hitherto, this exuberant young person had worshipped as a hero,
even to the extent of removing her watch-stand from the head of her
bed that it might give place to a bust of this gentleman which the
Doctor had sent from Town. On this occasion it was a case of “Off
with the old love and on with the new” in double-quick time, for,
continuing, she says: “To make me amends my new favourite is what
even you would call exquisitely handsome; a most elegant figure,
and a voice which I could listen to with transport, even if he spoke in
an unknown language. Mr. Plumer attacked him with the most
virulent irony and ridicule; and Mr. W. stood with his face turned
towards him and leant upon the desk, smiling the whole time, with
the most fascinating good humour. You know I am always an
enthusiast; but at present it is impossible to describe the admiration I
feel for this exalted character.”
We quote these extracts with no thought of ridiculing the ardent
partisan, but as a fore-shadowing of that enthusiasm and that quick
impressibility which ever seemed to dominate Miss Mitford’s life;
characteristics which often led her into excesses of transport at the
discovery, or supposed discovery, of some noble trait in the
characters of those who came within her ken, only to be as quickly
repented of; often giving unintentional pain to others and resulting in
an infinitude of trouble and annoyance to herself. Despite this
temperamental defect, however, and while her friends looked on
amazed at her infidelity, there was one to whom she remained
unwaveringly faithful to the end, though this object of her great
affection was the least worthy of all who came into her life.
Mr. Whitbread, favoured man, was the immediate recipient of

some verses from his ardent admirer. They reached him, ten days
after his Westminster display of elegance and fortitude, through Dr.
Mitford, to whom they were posted from Bertram House under cover
of the following ingenuous letter: “May 24, 1806.—I claim great merit,
my dear darling, in sending you the enclosed lines, for I am not
satisfied with them; but I would sooner mortify my own vanity by
sending you bad verses, than break my promise by withholding
them. I have called them impromptu to excuse their incorrectness;
and though some may suspect them to be an impromptu fait à loisir,
you must not betray the secret. From a perfect consciousness of my
own enthusiasm, I have been so much afraid of saying too much,
that I have fallen into the opposite fault and said too little. However, I
had rather be thought anything but a flatterer, though it be in my
opinion impossible to flatter Mr. Whitbread; for what language can
equal his merits? Do not impute the faults and deficiencies in these
lines to my laziness; for I assure you they cost me an infinite deal of
trouble; but they are not good enough to show, and I had rather you
would return them to me immediately. At all events, let me know how
you like them, and what you have done with them.”
Not to be misled by the feigned artlessness of his daughter’s
concluding sentences, the Doctor, as we have said, passed on the
verses to Mr. Whitbread, who was pleased to acknowledge and
eulogise them; and since they deserve it we give them below:—
Impromptu on Hearing Mr. Whitbread Declare in
Westminster Hall, on Friday, May 16, 1806, that He
“Fondly Trusted His Name would Descend with Honour
to Posterity.”
The hope of Fame thy noble bosom fires,

Nor vain the hope thy ardent mind inspires;
In British breasts, whilst Purity remains,
Whilst Liberty her blest abode retains,
Still shall the muse of History proclaim
To future ages thy immortal name.
And while fair Scotia weeps her favoured son,
By place corrupted and by power undone,
England with pride her upright patriot sees,
And Glory’s brightest wreath to him decrees.
FOOTNOTES:
[9] A list kept as a check on the Circulating Library account for the
years 1806 to 1811 inclusive, is a sufficient indication of this, the
number for one month alone totalling fifty-five volumes and
ranging through Fiction, Belles-Lettres, Travel and Biography.
[10] Impeached for malversation in his office as Treasurer of the
Navy. The trial lasted sixteen days. Whitbread led for the
Impeachers; Plumer—afterwards Master of the Rolls—ably
defended and secured his acquittal.
[11] Sir Samuel Romilly, Solicitor-General.
CHAPTER VII
THE TRIP TO NORTHUMBERLAND
With a proper and increasing pride in his clever daughter, the Doctor
now conceived the idea of taking her with him on an extended trip
into Northumberland, thereby affording her some acquaintance with
the scenes amidst which his family had lived for generations, a trip
which would serve the double purpose of impressing the girl with a
sense of the importance of her ancestors and present relations and
of introducing her to the latter who, although they must have heard of
her, had never yet seen her.
The journey was begun on Saturday, September 20, 1806, the first
stage, that from Reading to London being by coach. From London
they travelled in the carriage of Nathaniel Ogle, who personally
conducted them to his own place in Northumberland, from which
they were to make their various excursions in the district. Mrs.
Mitford did not accompany them, but was kept well informed, as
usual, by her daughter.
The first letter is dated from Royston, September 21: “We had a
very long interval between the parting from my most beloved darling
and the leaving Reading. The coach was completely full; and it was
fortunate papa had secured a place on the box, where he continued
during the whole journey. The company in the inside had the merit of
being tolerably quiet; and I do not remember any conversation which
lasted longer than a minute. I, certainly, ought not to complain of
their silence, as I was more than equally taciturn, and scarcely spoke
during the whole way. I was quite low-spirited, but never less
fatigued by travelling. Both Mr. Joy and Dr. Valpy[12] met us before we
left Reading, and M. St. Quintin and Victoire met us at the Bath
Hotel. As soon as Victoire left me, I retired to bed, under the idea of
pursuing our journey early in the morning. It was, however, half-past
ten before Mr. Ogle got up, and we did not leave town till twelve. We
employed the interval in going to the bookseller’s for a Cobbett, and
bought a Cary’s Itinerary, an edition of Peter Pindar, and a few plays.
The Edition of P. P. which we bought cheap, remains in town; but the
others are our travelling companions. We went by Enfield to see
Mary Ogle, and finding them at dinner we dined at Mrs. Cameron’s;
we then changed horses at Waltham Cross; again at Wade’s Mill;
and are just arrived here, where we sleep to-night. Mr. Ogle is
extremely pleasant, and the carriage very convenient. We went the
two first stages on the box of the barouche. I need not tell you, my
dearest darling, that we felt nothing so much as the loss of your
society; and I have wished myself at home fifty times in the last
twenty-four hours, to be again with my dear mamma.”
Apart from the interest which, in these days, is always attached to
an old-time account of stage-travel the letter is interesting by reason
of the variety of literature purchased for perusal on the journey. The
Cobbett referred to would probably be Cobbett’s Political Register
(then being issued in parts), and intended for the Doctor’s personal
reading; he being not only an admirer but an intimate friend of the
outspoken reformer. Cary’s Itinerary was, of course, the well-known
road-book and constant companion of all who travelled in stage-
coach days; though why Miss Mitford was not content with her
dainty, green-leather-covered copy of Bowles’ Post-Chaise
Companion in two vols.—now a valued possession of the author’s—
is difficult to understand, unless it was overlooked in the hurry and
excitement of departure. Peter Pindar’s Works, then just completed
in five vols., would be a valuable addition to the library at home, but
the purchase of the plays is significant, proving the influence which
Fanny Rowden had exercised on the mind of her pupil, inculcating a
taste for the Drama which was to be of lasting importance.
The next letter is written from Little Harle Tower—a small place
about fourteen miles from Morpeth—and is dated Sunday Evening,
September 28.—
“I arrived here with Lady Charles,[13] about two hours since, my
dearest mamma; and I find from papa that in his letter to you to-night
he never mentioned that the irregularity of the post, which never
goes oftener than three times a week from hence, will prevent our
writing again till Wednesday, when we go to Sir William Lorraine’s,
and hope to get a frank from Colonel Beaumont, whom we are to
meet there. It is only by Lord Charles going unexpectedly to Morpeth
that I am able to write this, merely to beg you not to be alarmed at
not hearing oftener. I imagine papa has told you all our plans, which
are extremely pleasant. Lord and Lady Charles stay longer in the
country on purpose to receive us, and have put off their visit to
Alnwick Castle that they may take me there, as well as to Lord
Grey’s, Colonel Beaumont’s, and half a dozen other places.”
The reference in this letter to a “frank” is one which frequently
occurs in Miss Mitford’s correspondence. It was, as Sir Rowland Hill
once said, an “expedient for saving postage”—“discreditable shifts”
another writer called them. In the days before the institution of Penny
Postage—an event which put an end to “franking”—Members
of Parliament enjoyed the privilege of having their letters delivered
and despatched free of charge. To secure this, members had merely
to write their names on the covers to ensure free passage through
the post, and frequently furnished their friends with packets of franks
which were placed aside for use as occasion required. This latter
expedient was, of course, a flagrant abuse of the privilege, and in
one year it was computed that, had postage been paid on the
franked correspondence, the revenue would have been increased by
£170,000! In an endeavour to check this abuse it was enacted that
the whole superscription must be in the handwriting of the Member,
and that the frank was only available on the date (which it was
necessary to name) which was on the cover. While the regulation
certainly diminished the quantity of franking it did not put an end to
the use of the privilege by other than Members, to whom it became
the custom to despatch an accumulated batch of letters, intended for
a number of people, with explicit instructions as to their destinations.
The annoyance caused to Members, and the general confusion
which sometimes resulted from this practice, may be better imagined
than described. Miss Mitford herself gives us an amusing account of
the troubles and trials of those who both used and abused the
franking privilege, in her sketch on “The Absent Member,” in Belford
Regis.
In the next letter which Miss Mitford wrote we have a record of
some amusing table-talk, essentially feminine in character and
which, undoubtedly, greatly impressed the observant young person
who overheard it. It is addressed still from Little Harle Tower, dated
October 3, and after a short description of the scenery, and the mud
—which caused her to beg to be excused from such excursions in
the future—she relates an account of a dinner at Sir William
Lorraine’s at which Colonel and Mrs. Beaumont were of the party.—
“Mrs. B. was so polite as to express great regret that, as she was
going from home, she could not see us at her house, but hoped,
when next we came to Northumberland, we should come to see
them at Hexham Abbey. She is a very sweet woman.... Mrs. B. told
Lady Charles that they received last year a hundred thousand
pounds from their lead mines in Yorkshire; and they never make less
than eighty thousand, independent of immense incomes from their
other estates. Mrs. B. was dressed in a lavender-coloured satin, with
Mechlin lace, long sleeves, and a most beautiful Mechlin veil. The
necklace she wore was purchased by her eldest son, a boy of
eleven, who sent it from the jeweller’s without asking the price. It is
of most beautiful amethysts; the three middle stones are an inch and
a half long and an inch wide; the price was nine hundred guineas.
Mrs. B. wished to return it; but the Colonel not only confirmed the
purchase, but gave his son some thousands to complete the set of
amethysts by a bandeau and tiara, a cestus for the waist, armlets,
bracelets, brooches, sleeve-clasps, and shoe-knots. All these she
wore, and I must confess, for a small dinner-party appeared rather
too gaily decorated, particularly as Lady Lorraine’s dress was quite
in the contrary extreme. I never saw so strong a contrast ... Colonel
Beaumont is generally supposed to be extremely weak, but I sat next
him at dinner, and he conducted himself with infinite propriety and
great attention and politeness; yet when away from Mrs. Beaumont,
he is (they say) quite foolish, and owes everything to her influence.”
Added to this cryptic description—cryptic because, read it how we
will, we cannot be sure that there is not a subtle touch of sarcasm in
the words—is a shrewd observation on another visitor whom she
calls Mr. M.
“I told you I was not enamoured of Mr. M., and I will now describe
him to you.... He is an oddity from affectation; and, I often think, no
young man affects singularity when he can distinguish himself by
anything better. He affects to despise women, yet treats them with
great respect; and he makes the most extraordinary exertions to
provoke an argument, from which he generally escapes by some
whimsical phrase.”
The letter concludes with a long list of festivities which are to take
place in honour of her visit. Following on these, they journeyed to
Kirkley, Mr. Ogle’s seat, whither it was originally intended they should
travel direct but were deterred from so doing by the hospitality
offered en route. As a matter of fact their stay at Kirkley was a short
one, due to the same cause which had prevented their earlier arrival.
The only letter addressed from Kirkley is dated Wednesday
morning, October 8:—
“We arrived here on Monday at about three o’clock; received with
great glee by the Squire, and, after taking a short walk in the garden,
returned to dress. We had some time to wait for Lord and Lady
Charles, who did not arrive before half-past five or near six, and
even then undressed. They had been detained by the axle-tree
breaking down, and the detestable roads. Without their waiting to
dress, we immediately sat down to dinner and spent a most
delightful day. In the evening we found a manuscript play which had
been sent last year for Mr. Sheridan’s perusal.[14] It is taken from a
very striking story in the Canterbury Tales, of which I have forgotten
the title.... I read it aloud to the ladies, and the gentlemen played
billiards, and occasionally visited us. The play, which bears the name
of ‘Sigendorf,’ is really extremely interesting, and much better, as to
language, than most modern productions. Sheridan had never
looked at it, and Mr. Ogle lent it to Lady Charles.
“Yesterday morning, after a long walk, Lord and Lady C. left us.
We had an excellent dinner, and amused ourselves in the evening
with the ‘Liber Veritatis,’ which is, as you may remember, a very
expensive collection of two hundred of Claude Lorraine’s sketches,
published by Boydell.
“We are going in about an hour to Little Harle ... for Mr. Ogle and
papa remain here together. We go to-morrow to Alnwick and return
the same night. To-morrow is expected to be a very full day at the
Castle, on account of the Sessions Ball. The ladies—the married
ones I mean—go in Court dresses, without hoops, and display their
diamonds and finery on the occasion.
“Mr. Ogle is quite a man of gallantry and makes his house
extremely pleasant. We talk of coming to see him again next week,
when my cousin Mary and I are left to keep house alone at Morpeth,
and my uncle and aunt go to Little Harle Tower.”
From Morpeth, on October 11, was despatched a very long letter,
too long indeed for quotation in full, but from which we must give a
few extracts. It begins:—
“In papa’s letter of yesterday, my dearest darling mamma, he
promised that I would write you a long one to-day, and I certainly
owe you one in return for the very entertaining epistle I received
yesterday. After we left Kirkley, we called at Belsay, and saw Lady
Monck and the little Atticus, who was born at Athens fifteen months
since. He is a very fine boy, very like Sir Charles. Belsay is a very old
castle, and its eccentric possessor has done all he possibly could
desire to render it still more outré by stopping up the proper road,
and obliging us to approach this fine specimen of Gothic architecture
through the farm-yard. We arrived at Little Harle to dinner; and you
would have been greatly amused at my having my hair cut by Lord
Charles’s friseur, who is by occupation a joiner, and actually
attended with an apron covered with glue, and a rule in his hand
instead of scissors. He, however, performed his office so much to my
satisfaction, that I appointed him to dress my hair the next morning
for my visit to Alnwick. While I was thus employed, Lady Swinburne
called on purpose to see me. Lady Charles said I was out walking.
She is, you know, niece to the Duke of Northumberland, and I
regretted not seeing her.

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WHAT’S NEW IN THE SIXTH EDITION:

A new In the News feature on “Trade Skirmishes” has been added.

By the end of this chapter, students should understand:

➢ what determines whether a country imports or exports a good.

➢ who wins and who loses from international trade.

➢ the welfare effects of tariffs and import quotas.

➢ the arguments people use to advocate trade restrictions.

CONTEXT AND PURPOSE:

I. The Determinants of Trade

B. The Equilibrium without Trade

2. A new leader is elected who is interested in pursuing trade. A committee of economists is

C. The World Price and Comparative Advantage

II. The Winners and Losers from Trade

C. The Gains and Losses of an Exporting Country

3. Welfare without Trade

a. Consumer surplus is equal to: A + B.

b. Producer surplus is equal to: C.

c. Total surplus is equal to: A + B + C.

4. Welfare with Trade

a. Consumer surplus is equal to: A.

b. Producer Surplus is equal to: B + C + D.

c. Total surplus is equal to: A + B + C + D.

a. Consumer surplus changes by: –B.

b. Producer surplus changes by: +(B + D).

c. Total surplus changes by: +D.

D. The Gains and Losses of an Importing Country

3. Welfare without Trade

a. Consumer surplus is equal to: A.

b. Producer surplus is equal to: B + C.

c. Total surplus is equal to: A + B + C.

4. Welfare with Trade

a. Consumer surplus is equal to: A + B + D.

b. Producer surplus is equal to: C.

c. Total surplus is equal to: A + B + C + D.

a. Consumer surplus changes by: +(B + D).

b. Producer surplus changes by: –B.

c. Total surplus changes by: +D.

F. The Effects of a Tariff

1. Definition of tariff: a tax on goods produced abroad and sold domestically.

4. Welfare before the Tariff (with trade)

a. Consumer surplus is equal to: A + B + C + D + E + F.

b. Producer surplus is equal to: G.

c. Government revenue is equal to: zero.

d. Total surplus is equal to: A + B + C + D + E + F + G.

5. Welfare after the Tariff

a. Consumer surplus is equal to: A + B.

b. Producer surplus is equal to: C + G.

c. Government revenue is equal to: E.

d. Total surplus is equal to: A + B + C + E + G.

a. Consumer surplus changes by: –(C + D + E + F).

b. Producer surplus changes by: +C.

c. Government revenue changes by: +E.

d. Total surplus changes by: –(D + F).

G. FYI: Import Quotas: Another Way to Restrict Trade