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1870-1879 Netherlands Australia Belgium Germany United Kingdom US New Zealand France Canada Denmark Brazil Sweden Italy Russia Switzerland Argentina Portugal Spain China Mexico Japan Austria-Hungary

Weighted 0.23 0.25 0.27 0.28 0.28 0.28 0.28 0.29 0.31 0.32 0.32 0.33 0.33 0.33 0.33 0.35 0.36 0.38 0.41 0.45 0.52 ---

Unweighted 0.35 0.29 0.36 0.33 0.31 0.42 0.35 0.36 0.47 0.41 0.43 0.41 0.44 0.47 0.36 0.34 0.50 0.45 0.55 0.45 0.52 0.47

Partner-Years 75 5 80 77 94 85 6 84 10 53 5 75 68 11 3 3 7 5 7 2 3 4

1890-1899 Switzerland Netherlands Australia Brazil Belgium United Kingdom New Zealand US Germany Denmark France Sweden Canada Argentina Russia Spain Mexico Portugal Italy Japan China Thailand

Weighted 0.13 0.23 0.25 0.27 0.28 0.29 0.29 0.30 0.30 0.31 0.31 0.32 0.32 0.33 0.34 0.34 0.36 0.38 0.38 0.43 0.44 0.53

Unweighted 0.38 0.38 0.48 0.38 0.38 0.32 0.47 0.40 0.34 0.42 0.39 0.39 0.50 0.41 0.47 0.47 0.48 0.46 0.45 0.52 0.53 0.53

Partner-Years 7 88 25 8 100 104 13 97 100 71 101 67 22 10 13 14 5 12 76 83 9 1

1880-1889 Netherlands Australia Belgium United Kingdom Germany US New Zealand France Canada Denmark Sweden Italy Japan

Weighted 0.22 0.25 0.26 0.27 0.28 0.28 0.28 0.30 0.31 0.32 0.32 0.35 0.45

Un-weighted 0.35 0.43 0.36 0.31 0.33 0.40 0.35 0.37 0.48 0.41 0.40 0.43 0.53

Partner-Years 78 13 84 91 88 85 6 89 15 69 67 67 34

1900-1913 Netherlands Australia Austria-Hungary Belgium New Zealand Germany United Kingdom Argentina Denmark Canada Switzerland US Russia France Sweden Norway Chile Brazil Italy Mexico Spain Turkey Peru Portugal Japan Venezuela Bulgaria China Colombia Greece Thailand

Weighted 0.23 0.25 0.27 0.28 0.28 0.30 0.30 0.30 0.30 0.30 0.31 0.32 0.32 0.32 0.32 0.33 0.34 0.35 0.37 0.37 0.37 0.38 0.40 0.40 0.41 0.44 0.44 0.45 0.45 0.46 0.49

Unweighted 0.37 0.46 0.47 0.39 0.46 0.34 0.35 0.39 0.42 0.50 0.42 0.40 0.46 0.40 0.41 0.41 0.44 0.41 0.45 0.49 0.46 0.44 0.48 0.49 0.51 0.48 0.51 0.52 0.52 0.51 0.53

Partner-Years 180 44 38 243 24 249 258 154 135 61 166 258 35 243 149 103 132 150 204 97 196 13 36 34 149 86 10 28 18 12 11

Table reports averages of estimated trade costs by country. Weighted averages use the product of exports divided by the sum of the product of exports over all observed trading partners as weights. Averages (weighted and unweighted) are taken for all available observations in each decade of the sample. Missing values

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1870 Min. Max. Country Trade Cost Partner Trade Cost Partner Argentina (Arg) 0.33 FR 0.35 UK Australia (Austl) 0.22 NZ 0.52 China Austria-Hungary (AH) 0.36 Ital 0.59 Bel Belgium (Bel) 0.26 Neth 0.59 AH Brazil (Br) 0.32 UK 0.61 It Canada(CA) 0.31 UK 0.70 China China 0.41 UK 0.70 CA Denmark (Dmk) 0.32 Swd 0.47 Bel France (FR) 0.29 UK 0.53 China Germany (Ger) 0.26 Neth 0.54 Po Italy (It) 0.33 CH 0.61 Br Japan (JP) 0.51 UK 0.52 US Mexico (Mex) 0.44 US 0.46 UK Netherlands (Neth) 0.26 Ger 0.48 US New Zealand (NZ) 0.22 Austl 0.54 US Portugal (Po) 0.35 UK 0.58 Bel Russia (Ru) 0.32 Ger 0.62 China Spain (SP) 0.38 UK 0.57 Ru Sweden (Swd) 0.32 Dmk 0.54 US Switzerland (CH) 0.30 FR 0.46 Bel US 0.28 UK 0.56 Ru United Kingdom (UK) 0.28 Neth. 0.51 JP Numbers reported are derived from trade costs derived as described in the text. The number of trading partners with obvserved data varies across countries.

1910 Min. Max. Country Trade Cost Partner Trade Cost Partner Argentina 0.28 UK 0.48 NO Australia 0.26 UK 0.53 Swd Belgium 0.19 Neth 0.57 Ven (VE) Brazil 0.30 UK 0.52 DMK Canada 0.29 UK 0.58 VE Chile 0.32 Ger 0.58 Swd Denmark 0.30 Ger 0.63 JP France 0.28 Bel 0.55 NZ Germany 0.22 Neth 0.49 NZ Italy 0.34 Ger 0.60 VE Japan 0.41 UK 0.64 Mex Mexico 0.37 US 0.64 JP Netherlands 0.19 Bel 0.55 JP New Zealand 0.26 UK 0.55 FR Norway (NO) 0.32 Swd 0.60 JP Spain 0.36 UK 0.61 JP Sweden 0.32 Ger 0.64 VE Switzerland 0.29 Ger 0.55 No US 0.30 CA 0.50 Dmk United Kingdom 0.26 Neth 0.44 VE Venezuela (VE) 0.44 Neth 0.64 Swd Numbers reported are derived from trade costs derived as described in the text. The number of trading partners with obvserved data varies across countries.

0/

1890 Min. Max. Country Trade Cost Partner Trade Cost Partner Argentina 0.31 UK 0.50 Po Australia 0.26 UK 0.71 Ru Belgium 0.22 Neth 0.57 JP Brazil 0.27 US 0.51 It Canada 0.31 UK 0.60 It China 0.43 UK 0.64 It Denmark 0.28 Swd 0.63 JP France 0.28 Bel 0.50 CA Germany 0.23 Neth 0.49 JP Italy 0.36 Ger 0.68 Mex Japan 0.44 UK 0.76 Swd Mexico 0.35 US 0.68 It Netherlands 0.22 Bel 0.67 JP New Zealand 0.28 UK 0.46 US Portugal 0.36 SP 0.71 JP Russia 0.31 Ger 0.71 Austl Spain 0.33 FR 0.73 JP Sweden 0.28 Dmk 0.76 JP Thailand 0.53 UK 0.53 UK US 0.27 Br 0.58 Dmk UK 0.25 Neth 0.53 TH Numbers reported are derived from trade costs derived as described in the text. The number of trading partners with obvserved data varies across countries.

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Top 10 Drops Change Top 10 Increases Change Italy Brazil -0.19 New Zealand Australia 0.10 Germany Italy -0.13 France Italy 0.07 Netherlands US -0.12 United Kingdom US 0.04 US Japan -0.11 France United Kingdom 0.04 United Kingdom Japan -0.10 France Switzerland 0.03 Belgium Brazil -0.10 Denmark Sweden 0.02 US Sweden -0.07 United Kingdom Brazil 0.02 Argentina United Kingdom -0.07 Italy Switzerland 0.02 Belgium Spain -0.07 Italy United Kingdom 0.02 Mexico US -0.07 Argentina France 0.02 Notes: Change refers to the difference between the pair average of trade costs. The averages are taken at the pair level between 1870 to 1879 and also 1910 to 1913. The difference between these two values is then presented. Pairs have uneven numbers of observations in each period and many of the possible country pairs do not have data in one or both periods. 53 country pairs out of the roughly 250 possible have at least one observation of trade costs in both periods and represent the sample for this statistic.

I*

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+

, (1)

Regressors by category POLICIES ln (product of TARIFFS) Both on GOLD STANDARD Mild exchange rate volatility indicator Extreme exchange rate volatility Both in a MONETARY UNION INFRASTRUCTURE ln (product of kms. of WATERWAYS/AREA in sq. kms) ln (product of kms. of RAILROAD TRACK/SQ. KM ) GEOGRAPHY ln (DISTANCE) x indicator for 1870-1879 ln (DISTANCE) x indicator for 1880-1889 ln (DISTANCE) x indicator for 1880-1899 ln (DISTANCE) x indicator for 1900-1913 One country in pair is an ISLAND Both in pair are an ISLAND Countries share a BORDER ln [prodcut of (1+ kms. of COASTLINE)/area in sq. kms]

Baseline

" -).*4-/-0 (2)

(3)

Ctry Fixed Effects Pair Fixed Effects

(4)

(5)

(6)

(7)

1870-1879

1880-1889

1890-1899

1900-1913

0.03 [0.01]*** -0.04 [0.01]*** -0.01 [0.01] -0.02 [0.01]* 0.05 [0.02]**

0.03 [0.02]* -0.03 [0.01]*** -0.02 [0.01]*** -0.03 [0.02]** -0.01 [0.07]

0.04 [0.02]** -0.04 [0.01]*** -0.01 [0.01] -0.02 [0.01]* ---

-0.01 [0.03] -0.04 [0.01]** 0.002 [0.01] 0.01 [0.03] -0.11 [0.07]

0.02 [0.04] 0.02 [0.04] -0.01 [0.01] 0.002 [0.01] 0.13 [0.06]**

0.02 [0.02] -0.01 [0.02] 0.01 [0.01] 0.05 [0.03] 0.17 [0.04]***

-0.002 [0.01] -0.07 [0.01]*** -0.004 [0.01] -0.03 [0.01]** 0.08 [0.02]***

-0.23 [0.51] -0.004 [0.002]**

-0.10 [0.46] -0.02 [0.01]***

---

-1.20 [0.78] -0.01 [0.004]***

0.39 [0.80] -0.03 [0.01]*

-0.04 [0.56] -0.01 [0.002]***

-0.80 [0.65] -0.01 [0.004]***

0.11 [0.02]*** 0.10 [0.02]*** 0.10 [0.02]*** 0.09 [0.02]*** -0.03 [0.04] -0.07 [0.07] -0.16 [0.05]*** 0.39 [0.17]**

0.21 [0.07]*** 0.19 [0.04]*** 0.12 [0.03]*** 0.05 [0.03]* -0.36 [0.13]*** -0.70 [0.28]** -0.16 [0.05]*** -0.25 [0.10]**

---

---

---

---

0.01 [0.04] ---

---

---

---

---

0.14 [0.04]*** ---

0.08 [0.02]***

---

---

---

---

---

-0.33 [0.06]*** -0.50 [0.06]*** -0.23 [0.09]** 0.18 [0.17]

-0.04 [0.11] -0.04 [0.18] -0.14 [0.10] 0.23 [0.21]

INSTITUTIONS & CULTURE Both in pair had or have a common COLONIZER

-0.003 [0.002]* ---

-------

-0.04 [0.05] -0.08 [0.09] -0.18 [0.06]*** 0.41 [0.19]**

0.10 [0.02]*** -0.04 [0.04] -0.07 [0.07] -0.11 [0.04]*** 0.31 [0.19]*

0.33 0.42 ----0.56 0.38 0.42 [0.11]*** [0.10]*** [0.10]*** [0.08]*** [0.10]*** Both in pair share a COMMON LANGUAGE -0.22 -0.28 ---0.08 -0.59 -0.35 -0.27 [0.03]*** [0.08]*** [0.09] [0.10]*** [0.08]*** [0.03]*** One in pair was a COLONY of the other prior to 1870 0.02 0.19 ---0.10 ----0.10 [0.09] [0.08]** [0.08] [0.08] Both in the BRITISH EMPIRE or UK and a British Colony -0.30 -0.26 --0.13 -0.04 -0.20 -0.33 [0.11]*** [0.09]*** [0.07]* [0.12] [0.10]** [0.10]*** Constant -1.59 ---0.49 0.00 -1.44 -1.18 [0.20]*** [0.35] [0.00] [0.22]*** [0.16]*** Observations 1744 1744 1744 175 244 337 988 Country-Pair Fixed Effects no no yes no no no no Country Fixed Effects no yes no no no no no R-Squared 0.37 0.99 0.14 0.73 0.54 0.5 0.32 Notes: Dependent variable is the natural logarithm of trade costs. Year indicators are included but not reported. Estimation is by "random effects" or OLS with heteroscedasticity and serial correlation robust standard errors. Column 3 uses country pair fixed effects. See the text for descriptions of the variables.* significant at the 10% level; **significant at the 5% level; *** significant at the 1% level.

I-

'

>

= (1)

Regressors by category POLICIES ln (product of TARIFFS) Both on GOLD STANDARD Mild exchange rate volatility indicator Extreme exchange rate volatility Both in a MONETARY UNION INFRASTRUCTURE ln (product of kms. of WATERWAYS/AREA in sq. kms) ln (product of kms. of RAILROAD TRACK/SQ. KM ) Distance < 480 km.

GEOGRAPHY

480 km. < distance < 5,380 km. distance > 5,380 km. One country in pair is an ISLAND Both in pair are an ISLAND Countries share a BORDER ln [prodcut of (1+ kms. of COASTLINE)/area in sq. kms]

,

Distance Spline

(2) Ctry Fixed Effects Distance Spline

0.03 [0.01]*** -0.05 [0.01]*** -0.01 [0.01] -0.02 [0.01] 0.05 [0.03]*

0.03 [0.02]* -0.03 [0.01]*** -0.02 [0.01]** -0.03 [0.02]* -0.08 [0.06]

-0.16 [0.47] -0.005 [0.00]***

-0.12 [0.45] -0.01 [0.01]**

0.08 [0.03]*** 0.09 [0.02]*** 0.09 [0.02]*** -0.03 [0.04] -0.06 [0.07] -0.15 [0.05]*** 0.39 [0.17]**

0.06 [0.04]* 0.08 [0.03]** 0.07 [0.03]** 0.33 [0.14]** 0.70 [0.27]*** -0.13 [0.05]** -0.29 [0.12]**

" -).*4-/-0 Alternative Functional Forms (3)-(5)

Regressors by category POLICIES ln (product of TARIFFS) Both on GOLD STANDARD Mild exchange rate volatility indicator Extreme exchange rate volatility Both in a MONETARY UNION INFRASTRUCTURE ln (product of kms. of WATERWAYS/AREA in sq. kms) ln (product of kms. of RAILROAD TRACK/SQ. KM ) GEOGRAPHY ln (DISTANCE) x indicator for 1870-1879 ln (DISTANCE) x indicator for 1880-1889 ln (DISTANCE) x indicator for 1880-1899 ln (DISTANCE) x indicator for 1900-1913 One country in pair is an ISLAND Both in pair are an ISLAND Countries share a BORDER ln [prodcut of (1+ kms. of COASTLINE)/area in sq. kms]

INSTITUTIONS & CULTURE Both in pair had or have a common COLONIZER

(3) Dep. Var

(4) Dep. Var

Level Trade Costs Level Trade Costs

(5) Dep. Var

Tariff Equivalent

0.01 [0.00]** -0.02 [0.004]*** -0.003 [0.003] -0.01 [0.005] 0.003 [0.01]

0.01 [0.01] -0.02 [0.01]*** -0.01 [0.002]* -0.01 [0.01] -0.02 [0.02]

0.03 [0.02] -0.06 [0.02]*** -0.01 [0.01] -0.01 [0.02] -0.03 [0.05]

-0.07 [0.18] -0.002 [0.0008]**

0.05 [0.13] -0.01 [0.00]**

-0.28 [0.63] -0.01 [0.003]**

0.05 [0.01]*** 0.05 [0.01]*** 0.05 [0.01]*** 0.04 [0.01]*** -0.01 [0.02] -0.03 [0.03] -0.06 [0.02]*** 0.19 [0.07]**

0.07 [0.02]*** 0.07 [0.01]*** 0.05 [0.01]*** 0.02 [0.01] 0.27 [0.06]*** 0.54 [0.12]*** -0.06 [0.02]*** -0.12 [0.04]***

0.21 [0.03]*** 0.19 [0.03]*** 0.19 [0.03]*** 0.16 [0.03]*** -0.49 [0.07] -0.12 [0.13] -0.14 [0.07]** 0.83 [0.33]**

INSTITUTIONS & CULTURE 0.28 0.29 Both in pair had or have a common COLONIZER 0.12 0.15 0.35 [0.13]** [0.11]*** [0.05]** [0.05]*** [0.24] Both in pair share a COMMON LANGUAGE -0.18 -0.17 Both in pair share a COMMON LANGUAGE -0.06 -0.11 -0.13 [0.07]** [0.07]** [0.01]*** [0.03]*** [0.06]** One in pair was a COLONY of the other prior to 1870 -0.03 0.09 One in pair was a COLONY of the other prior to 1870 -0.02 0.08 -0.13 [0.11] [0.08] [0.04] [0.04]** [0.14] Both in the BRITISH EMPIRE or UK and a British Colony -0.28 -0.20 Both in the BRITISH EMPIRE or UK and a British Colony -0.11 -0.09 -0.33 [0.11]** [0.09]** [0.04]** [0.03]*** [0.16]** Constant -1.44 --Constant 0.09 ---0.49 [0.17]*** [0.08] [0.30]* Observations 1744 1744 1744 1744 1744 Country-Pair Fixed Effects no no no no no Country Fixed Effects no no no yes yes R-Squared 0.38 0.99 0.34 0.99 0.23 Notes: Dependent variable is the natural logarithm of trade costs cols (1)-(2). Dependent variable is listed above for cols. (3)-(5). Year indicators are included but not reported. Estimation is by "random effects" or OLS with heteroscedasticity and serial correlation robust standard errors. Column 2 and 4 use country pair fixed effects. See the text for descriptions of the variables.* significant at the 10% level; **significant at the 5% level; *** significant at the 1% level.

I(

'

. A

" -).*4-/-0 (1)

(2) Structural Coeff.

Regressors by category POLICIES ln (product of TARIFFS) Both on GOLD STANDARD Mild exchange rate volatility indicator Extreme exchange rate volatility Both in a MONETARY UNION INFRASTRUCTURE ln (product of kms. of WATERWAYS/AREA in sq. kms) ln (product of kms. of RAILROAD TRACK/SQ. KM ) GEOGRAPHY ln (DISTANCE) x indicator for 1870-1879 ln (DISTANCE) x indicator for 1880-1889 ln (DISTANCE) x indicator for 1880-1899 ln (DISTANCE) x indicator for 1900-1913 One country in pair is an ISLAND Both in pair are an ISLAND Countries share a BORDER ln [prodcut of (1+ kms. of COASTLINE)/area in sq. kms] INSTITUTIONS & CULTURE Both in pair had or have a common COLONIZER Both in pair share a COMMON LANGUAGE One in pair was a COLONY of the other prior to 1870 Both in the BRITISH EMPIRE or UK and a British Colony ln (GDP-Exports) country i ln (GDP-Exports) country j

(3) Structural Coeff.

Baseline

rho = 11

Ctry Fixed Effects

rho = 11

0.46 [0.39] 1.68 [0.44]*** 0.21 [0.21] 0.29 [0.47] -0.35 [0.65]

0.02

-0.37 [0.25] 0.46 [0.21]** 0.06 [0.10] 0.04 [0.27] 0.62 [0.81]

-0.02

3.42 [7.37] 0.03 [0.09]

0.08 0.01 0.01 -0.02

0.17 0.002

-1.49 [0.56]*** -1.51 [0.46]*** -1.50 [0.41]*** -1.15 [0.42]*** 0.78 [0.70] 1.69 [1.39] 1.00 [0.86] -0.82 [3.38]

-0.07

-9.26 [1.94]*** 4.06 [1.38]*** -2.37 [1.54] 3.61 [1.23]*** 1.79 [0.22]*** 1.78 [0.24]***

-0.46

-0.08 -0.08 -0.06 0.04 0.08 0.05 -0.04

0.20 -0.12 0.18 -----

0.02 0.003 0.002 0.03

-0.35 [4.54] -0.17 [0.44]

-0.02

-2.06 [0.95]** -2.09 [0.46]*** -1.53 [0.47]*** -0.53 [0.64] -0.06 [0.48] ---

-0.10

-0.01

-0.10 -0.08 -0.03 -0.003

1.89 [0.55]*** 4.74 [0.86]***

0.09

-16.13 [1.35]*** 8.83 [1.26]*** -8.13 [1.24]*** -0.27 [1.80] 1.82 [1.05]* -3.58 [1.48]**

-0.81

0.24

0.44 -0.41 -0.01 -----

Decadal Ctry Fixed Effects

Structural Coeff.

-0.45 [0.19]** 0.41 [0.21]** 0.08 [0.09] 0.02 [0.24] 0.62 [0.80]

-0.02

-0.14 [4.54] 0.09 [0.37] -2.17 [0.92]** -2.13 [0.47]*** -1.57 [0.47]*** -0.56 [0.63] 0.01 [0.48] ---

rho = 11

0.02 0.004 0.001 0.03

-0.01 0.005

-0.11 -0.11 -0.08 -0.03 0.001

1.90 [0.55]*** 5.06 [0.85]***

0.10

-16.10 [1.33]*** 8.87 [1.25]*** -8.15 [1.22]*** 0.00005 [1.76] 3.63 [0.92]*** -1.56 [0.73]**

-0.81

0.25

0.44 -0.41 0 -----

Observations 1483 1483 1483 Country-Pair Fixed Effects no no no Country Fixed Effects no yes yes R-Squared 0.68 0.98 0.98 Notes: Dependent variable is the natural logarithm of the product of real exports. Year indicators are included but not reported. Estimation is by OLS with heteroscedasticity and serial correlation robust standard errors. Column 2 uses country pair fixed effects. Column 3 uses country fixed effects interacted with indictaors for each "decade" between 1870 and 1913 (the last "decade" includes 1900-1913). See the text for descriptions of the variables.* significant at the 10% level; **significant at the 5% level; *** significant at the 1% level.

I0

;

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1 87 5

1 88 0

5 ,

" -).*4-/-0 2-/-0T-**3

108 107 106 105 104 103 102 101 100 99

II

1 91 0

1 90 5

1 90 0

1 89 5

1 89 0

1 88 5

1 87 0

98

;

I 85

"8

# "-).*4-/-0 2-/-0T-**3

115

110

105

100

Core

Periphery

I+

1 91 0

1 90 5

1 90 0

1 89 5

1 89 0

1 88 5

1 88 0

1 87 5

1 87 0

95

1 89 5

North South

I> 1 91 0

1 90 5

+ =

1 90 0

1 89 0

1 88 5

1 88 0

1 87 5

1 87 0

; , 85

115

110

105

100

95

;

> =

6C

, 85

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125 120 115 110 105 100

Asia

I.

Oceania

1 91 0

1 90 5

1 90 0

1 89 5

1 89 0

1 88 5

1 88 0

1 87 5

1 87 0

95

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5 ,

" -).*4-/-0 2-/-0T-**3

120

115

110

105

100

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Core

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1 91 0

1 90 5

1 90 0

1 89 5

1 89 0

1 88 5

1 88 0

1 87 5

1 87 0

90

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5 ,

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115

110

105

100

I/

1 91 0

South

1 90 5

1 89 5

North

1 90 0

1 89 0

1 88 5

1 88 0

1 87 5

1 87 0

95

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/ =

1 87 0

1 87 5

6C

5 ,

" -).*4-/-0 2-/-0T-**3

130 125 120 115 110 105 100 95 90 85 80 75 70

Asia

+*

Oceania

1 91 0

1 90 5

1 90 0

1 89 5

1 89 0

1 88 5

1 88 0

65