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 says, "£1,000 will buy 2,000 tons of coal free on board at Cardiff; the freight of this coal to San Francisco will be £1,500; the amount realised for it in San Francisco will be £2,500, which sum, invested in wheat, will purchase 2,000 quarters. The conveyance of this wheat to Liverpool will cost £1,500, and it will require to be sold at £4,000 in Liverpool to cover cost and expenses. In the import tables there will be an entry of £4,000 of wheat; in the export tables there will be an entry of £1,000 coal; the one exchanges for the other."

The Fair Trader, however, regardless of all such considerations, persists in asserting that every year we buy of the foreigner more than we sell him. The fallacy under which he labours arises, of course, from the use of the terms buy—sell. The Free Trader, with a more just appreciation of what takes place, discards these terms in the sense thus implied, and rightly says:—So far as commodities are concerned, we got in 411 millions of them, and gave out only 286 millions, and if that were all to be considered, it seems to be a mighty fine business.

But, there are a great many things to be considered, as we shall soon see. One great thing to be considered is, whether John Bull at the end of each year owes anything to anybody for his excess of imports. Everything turns upon this; so we will at once proceed to put the matter to the test. Now, in order to assist us in the investigation, let me lay down this proposition, which I consider an axiom:—That in international commerce there are three, and only three, modes of squaring accounts—namely, by commodities, bullion, or securities; in other words, that between nation and nation, debts can only be settled and liquidated in some one or more of these three modes. Let us apply this axiom to the facts of our commerce as recorded in our official returns. I will first take the figures of the last eleven years, because, as they comprise the latest periods of inflation and depression of trade, they are calculated to give us a correct notion as to what has been going on. Now, what do these records say as to commodities? I find that during this period our imports in round numbers were 4,016 millions, and our exports 3,022