70 THE SCIENTIFIC MONTHLY
tiy^s own people who furnish the commodities with which to pay. In a sense thej are paying interest on a debt before it is incurred — the debt of war. The people are saving only in the sense in which a miser saves, only because they have a certain soreness and fear towards other peoples. It is a superstitious regard for gold that no longer exists. A nation that hoards gold is making a sacrifice for something in which other nations are not trying to forestall her. To-day the process of saving is a creation of working capital goods, of wealth such as buildings, rail- ways, machinery and so on. And in time of war such working wealth is quite as negotiable as gold, for a country at war may not only sell her securities for the necessaries she may immediately need, but so stable has the conmiercial world become she may undertake a public debt by issuing bonds for sale to other nations. The hoarding of gold is bad then, because working capital is better than idle capital, even in time of stress. Since this is now generally recognized, the point in favor of hoarding can not be granted even as a concession to ^' relative ethics.'^ The nations of to-day are hardly more keepers of gold than are our rich men.
Therefore we say : A balance of exports induced for the purpose of storing gold for time of stress is unfavorable. Indeed, it seems to be doubtful if in these times such a balance could exist, but that in general it does not exist is sufficient warrant for the elimination of the gold question from the trade controversy by merging gold along with other commodities making up exports and imports. Gold moves first only because it has the least bulk and weight for a given value, but this gives it no distinction in kind over pig iron or any other form of wealth. The discussion is now reduced to that net balance of trade remaining after gold has been accounted for by including it in the inventory along with all other commodities.
Having satisfied ourselves that international payments are made in goods, exports and imports^ of which gold is only one out of several hundreds, we have cleared the ground for the third part of our discus- sion, for an examination of the causes that make a ^'balance of trade possible.
An international debit and credit account is not complete until every transaction affecting the transfer of wealth has entered into it On broad lines such transactions might be divided into four classes, which would include them all. These are: exchanges, gratuities, loans and interest. Wealth may pass between two parties through free exchange, free giving, free lending or giving through coercion. The term interest is made broad enough to include everything from interest strictly speak- ing to tribute pure and simple. If we expand this to embrace in a more concrete way the larger items of present-day trade, we are able to frame up a general debit and credit account of one country with the rest of the world which is typified by:
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