68 THE SCIENTIFIC MONTHLY
not accrue with the passage of time. It is not the halance of trade we are here concerned with. In the discussion of the balance of trade as in the discussion of the business of an individual, we are interested in a debit and credit account only to the extent that it shows closed trans- actions, for only then does it show what is being done as a regular thing, or in the long run. Indeed, the ^^ balance of trade as a question of policy*' can have significance on no other ground.
It appears from the foregoing that the first effect of checking im- ports of commodities is to substitute imports of gold, but it has also appeared that the substitution is temporary and is entirely shifted to a permanent checking of exports. This is to say that a nation in its corporate capacity can not force traders to deal in gold — it can not create a demand for gold, and the truth of this will become more ap- parent as we go on. But our attention must now be turned to the permanent or normal flow of gold. Is a balance of exports regularly liquidated by gold favorable ?
This is the gold question. Under the conditions we are suppos- ing, the entire excess of exports would be regularly paid for with an equivalent of gold imported. The "mercantile system" of the eight- eenth century regarded the nations as competitors for the world's gold, and each country endeavored to increase its stock of gold indefinitely by attempts to restrict its imports and expand its exports. This idea is now generally abandoned, and among the foremost nations no conscious attempt is now made to attract gold. Indeed, in the case of a country like the United States such an attempt would be without reason, since the United States produces nearly one fourth the world's supply of gold, and is therefore normally a gold-exporting country. Whatever tendency there may be for export balances to become liquidated in gold, it is apparent from the statistics of the foreign trade of the United States that, in our country at least, the persistent balance in favor of exports is not paid for in gold. In the last twenty-five years (1890 to 1914 inclusive) the yearly balance for gold has fluctuated between favoring import and favoring export, ten times, while the net balance for the whole period is an insigniflcant amount (21 millions) favoring gold export. For the same period our balance of general trade favoring exports has steadily increased (excepting only the year 1893) to a net amoimt over fowr hundred times greater than the gold balance (9,358 millions). For any single year the greatest balance favoring a gold import occurred in 1898 when we could truly say that one sixth of our balance of exports^ at least, was paid for with gold. But the flgures in general are highly incomparable, and the most they show us is that the United States is not the example we are looking for — ^an example where "other things" are equal. As far as the gold question goes, our thesis remains — ^is a balance of exports liquidated by gold favorable?
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