meaning, therefore, must be sought from the sense affixed to Protection. Protection affirms the policy of differences of duties on the same goods. It inquires into the geographical and national origin of these goods; and then, according as they were produced abroad or at home, it imposes different rates of taxation on them, or exempts them from taxation altogether. Free Trade is the direct contradictory of this principle. It asks no question as to where the goods were made; the same goods must be treated all alike-is its doctrine. If a duty is charged, it levies it alike on those made at home as well as on those made abroad; if it exempts the domestic, it equally exempts the foreign products. It is with this principle alone that we are here concerned.

Which, then, is the correct policy, Free Trade or Protection? In order to reach the true answer to this question, it is very important to discuss it on the hypothesis that neither of the two policies has as yet been. adopted. Practically and historically it has seldom, if ever, been debated on this basis. In almost every instance, Free Trade has been the assailant of a protection already established; the rarer but most startlingly increasing procedure is that of Protection assaulting and overthrowing a pre-existing Free Trade. When Protection has previously occupied the ground, Free Trade has had to encounter the formidable difficulty of interfering with interests, often vast, both of capital and labour, reared up under Protection, and which its success might seriously compromise or even destroy altogether. This very difficulty has often turned aside statesmen, whose convictions were already won to Free Trade, from the political danger of dis

turbing industries engaging a considerable part of the population. It is most essential, therefore, to understand clearly that the existence of these interests is a matter wholly foreign to the truth or falsehood of Free Trade.

There are two questions here which belong to two different provinces, and must be carried to two different tribunals for judgment. The one belongs to the department of the Political Economist, the other to that of the practical statesman. One is a problem of knowledge, the other of politics. The truth or falsehood of the doctrine is in no way affected by the injury which its application might work to particular persons or industries. If true, it has the right to demand the enforcement of its principle, even though the industries reared under the wing of Protection should be doomed thereby to disappear. But, on the other hand, it is within the province of the statesman to declare that he must break the suddenness of the process of applying Free Trade to a country deeply committed to Protection. It is within his right to assert that the present benefit of absolute Free Trade would be overbalanced by the mischief of an immediate and rigorous enforcement of its teaching. Knowledge says that the abolition of every protective duty is a policy which promotes the welfare of a people. On the other hand, statesmanship may declare that regard for suffering to ensue may demand that time shall be given for effecting the transition from one kind of occupation to another.

Let us assume then, for the purposes of this investigation, that there is no transition period; that the capital and labour employed to-day in a protected industry may without suffering be transferred to another occupa

tion to-morrow; and that there is no call to suffer the pain of the change to stand in the way of a great public good. Political Economy has often been charged with inhumanity, as being indifferent to human suffering. No accusation can be more unjust. Have the pro

moters of railways been denounced as monsters because they brought about the ruin of the great coaching and posting interests, and of the many trades which lived by the employment furnished by the coaching business? Have printers been handed down with dishonour because their art threw the copiers of manuscripts out of employment? Has it not been clearly seen in these and numberless similar cases that the public good dominated over all regard for individual interests? Why, then, has Political Economy received a different treatment? Why has it been measured by another standard of morality? Let Political Economy, when it advocates principles whose adoption may bring distress on large classes, be held to a strict proof of the countervailing advantages which it promises. No Political Economist will repel such a trial, for to do so would be to expose the truth of its teaching to suspicion. But if it passes the ordeal successfully, why should accusations of want of feeling be flung against its disciples any more than at the discoverers of any principle which has developed the civilisation of mankind?

Let us now endeavour to demonstrate the truth of Free Trade. It rests on two fundamental principles.

1. The first is the fact that all trade is an exchange of equivalent values or services. This is the very essence of trade. Trade always exacts as much as it

gives away. A single transaction of trade may involve loss; but continuous trade necessarily balances itself on the average of its dealings. If it is permanent, then the giving away is met by the receiving; the two processes must of necessity balance each other with equal exchanges. Hence the fact of buying is a complete and conclusive proof of the corresponding fact of selling. To buy is to give away your property in exchange for the goods bought; and to give away property for other property is precisely the act of selling. Every nation, therefore, which buys sells also, and sells to the full value of what it buys. A nation which does not sell cannot buy. This is the first, absolute, incontestable truth on which Free Trade reposes.

"Not so," many thoughtlessly reply, "The foreigner is ready enough to sell us his corn or his iron, and to be paid for them; all the world is willing to do that. He will gladly take our money, but he will have nothing to say to our goods. England, then, loses her wealth, her money; she carries on a losing trade to the great injury of her people." Those who use such language are profoundly ignorant of what money is and does, nor do they perceive that their argument involves a very palpable absurdity. England certainly can buy abroad so long as she has gold and silver to send away, but as she does not herself produce these metals largely, it is obvious that such a trade must soon come to an end. When the stock of gold is gone, all purchasing abroad must cease, till she has acquired a fresh supply of gold. But how is she to procure it, except by persuading foreign countries to send it in exchange for her goods? The fact always remains the same, that England buys abroad

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with the products of her industry, for she has nothing else to buy with. If the nation from which she obtains cotton or sugar will not take her own goods, then, supposing the trade in cotton to continue, it becomes three-cornered, in a manner, instead of a direct exchange of cotton and sugar for English iron and cloth. The process is identical with that of money. hatter buys a sovereign with a hat, and then with the sovereign buys a pair of shoes: shoes are bought with a hat. If the Americans will not take English yarns or iron, England with her goods buys bills due by Americans to Frenchmen for silks and pays for the cotton with these bills. England buys bills of the Frenchmen, and with these bills purchases cotton. In every case absolutely, no country can purchase anything of foreign countries except with her own products.

A corollary of much practical value may be drawn from this reasoning. We see in many quarters great pains taken in tracing out the statistics of international commerce for the purpose of showing that the country which buys of the foreigner is not compensated by a corresponding amount of sales. This is idle and unprofitable work. It is enough to know that the trade goes on. This fact, by itself alone, upon the grounds explained above, demonstrates that the foreigner has bought as much as he has sold. No statistics are needed for the proof of this fact, nor if the statistics failed to point out how the equivalent has been received, would the demonstration be in any way weakened. Assuredly no Economist, nor, indeed, any thinking person, need give himself a thought, so far as this point is concerned, as to what the statistics may or may not