Free Trade and Protection
Mr Goodbehere, in his very interesting letter of last Tuesday, said — "One of the main principles in international trading is the well-known fact that balances due from one country to an* other are paid in goods and not 'in hard cash' as you state." It appears to us that whether paid in goods or hard cash it amounts to the same thing ; the only difference lies in the terms used to express the same meaning. We will now put the matter in other words. In all external trade the exports and sales are the receivable accounts, and the imports or purchases are the payable accounts. Balances of a nation with particular nations are against or for, as they are producers or consumers, and every nation has its own set of accounts with other nations pro and con ; but if any nation imports and consumes more than it has to export in exchange, it is like a trader who, buying more than he sells, must in time become bankrupt. If it exports more than it imports, the balances must be receivable in money ; but, if it imports more than it exports, the balance must be paid in bullion or specie. Mr Goodbehere quotes the excess of im-
ports over exports in England for the years 1877 and 1878, which, amounted to one hundred and forty-nine million pounds sterling, and triumphantly says that these enormous balances were settled without the slightest encroachment upon the ordinary circulation ol the country. But Mr Goodbeiiere does not mention that the balances owing by other nations to England for borrowed moneys are enormous, and repayments of these with interest, make large items in the adjustment of the said balances. We do not admit that "it is an incontrovertible fact that an excess of exports over imports represents the poverty of a nation, whereas an excess of imports over exports represents the weath of a nation," as a general law. As regards England we believe it may apply, but that it is applicable to all countries we do not beleive.
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Bibliographic details
Feilding Star, Volume VI, Issue 150, 4 June 1885, Page 2
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347Free Trade and Protection Feilding Star, Volume VI, Issue 150, 4 June 1885, Page 2
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