rests upon belief in the Mercantile Theory of Commerce, of which more later.

2. Because the inhabitants of a country should produce all that is needed in that country.

Therefore, the state must discriminate and favor production by customs duties on what they think should be produced at home, rather than elsewhere, and should repress imports by taxing them.

Protectionists favor intrastate commerce, but not interstate commerce, (with other nations).

Protectionists draw a line against fredom of commerce just where race or political or religious differences have placed it, i. e., the boundary line that separates one country, state, or nation from another country, state, or nation. They would change it at every change of boundary line. Intrastate freedom of commerce is all right, they say, but interstate freedom of commerce is another matter.

Protectionists are not cosmopolitan- their horizon is limited to their own nationality. Free traders are broader-minded, and "no pent-up Utica contracts their powers."

COMMERCE IS TRADE BETWEEN MEN, NOT BETWEEN COUNTRIES

Protectionists constantly err in treating commerce as taking place between countries, whereas it takes place only between men. Moreover, the men en

gaged in commerce may be inhabitants of one country or of different countries—that is, an American living in New York may engage in commerce between some port in China and some port in Japan; an Englishman living in India may engage in commerce between some port in Japan and some port in China; or a German living in Paris may engage in both branches of such commerce and carry on commerce not only between some port in China and some port in Japan, but he may also engage in commerce between some port in Japan and some port in China. There is no end to the possible complications of relationship between men engaged in commerce. They have one common feature that protectionists are unable to grasp that commerce results in economic advantage to the men on both sides engaged in it, and also to the inhabitants of both countries who buy or sell these imports, or who sell or buy these exports. Were this not so, commerce would come to an end. It is only by a figure of speech we say that countries trade with each other. Taken literally, we are led into error. To say that nations engage in commerce is a mistaken figure of speech carelessly indulged in by loose-thinking protectionists.

Even Stanwood speaks of exporting and importing as being carried on by countries,* "Not a single

*American Tariff Controversies in the Nineteenth Century, vol. 2, p. 68.

example can be cited of a serious decline in the imports of one nation from another because of a refusal of the second country to buy the products of the first. On the other hand, examples by the score can be had, taken almost at random, of increasing export trade to one country by another which placed great, even prohibitory, obstacles in the way of importations from the country to which it sold freely." It will be claimed that it is only a figure of speech that is used when we speak of countries as exporting and importing, to which the reply is that figures of speech are to be avoided when we are trying to deal with definite conceptions. The use of figures of speech in a different sense than the natural one of the words used, certainly conduces to looseness of thought, and that is perhaps the reason why we gather from the whole of the page noted that the author fails to realize that the operations of commerce may affect at the same time the interests of the inhabitants of several countries.

COMMERCE IS MUTUALLY BENEFICIAL, WHETHER
BETWEEN THE INHABITANTS OF ONE STATE
OR OF DIFFERENT STATES

Suppose the Mississippi River divided the United States into two countries, would not Texans still be benefited by exchanging their cotton for hay, potatoes, or white pine lumber from Maine? Maine might tax imports of cotton into Maine and force

her citizens to raise cotton under glass (to protect this infant industry). But she would lose her Texan market for her hay, potatoes, or white pine, or perhaps all of them. Texas might tax the hay imported from Maine and force her citizens to raise Bermuda or some other grass as a substitute (to protect this new and feeble industry), and Texans might substitute home-raised sweet potatoes for Maine potatoes. But then Texans would lose their market in Maine for their cotton. The same results would follow whether Maine and Texas were in the same country or in different countries. If the Civil War had resulted in the dismemberment of our country and we were now forty-eight independent states instead of being the United States with forty-eight component states, free trade would equally be an economic advantage to all.

COMMERCE BENEFITS BOTH PARTIES

If, in a primitive condition of society, one man makes all the shoes and another makes all the coats, and the shoemaker exchanges a pair of his shoes for a coat of the coatmaker, both are benefited or they would not make the exchange. If the coat is worth more than the shoes and the shoemaker pays a dollar and a pair of shoes in exchange for the coat, again both are benefited. If the shoemaker keeps his shoes and pays ten dollars for the coat, still both profit. And it makes no difference where they live, whether

in the same state or country or in different states or countries. In every case each one has obtained what he wanted more and has parted with what he wanted less. Multiply by millions the number of persons trading with each other and the result is the same. Man cannot improve upon the economic laws of nature. It is only because of the necessity for a revenue with which to pay the expenses of government that he is warranted in interfering, and the less he interferes, the better.

EXAMPLE OF THE BENEFICENT RESULTS OF

COMMERCE

Merchant A. (it matters not what his nationality nor where he lives) sends a vessel from New York to some port in Europe, laden with grain, or some other American product that has cost him $200,000, according to the custom house entry. A. sells the cargo at ten per cent profit on its original cost after paying all expenses, or $20,000. (We leave out of account the foreign duty, for it is paid ultimately by the foreign purchaser-consumer.) A. directs that his proceeds of the sale of this cargo be put into specified foreign products for which there is a good demand in the United States. When this cargo reaches New York it may have cost ten per cent additional for the expenses incurred, or $242,000 in all, at which valuation it is entered in the New York