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 There is one country which at the present moment stands in marked contrast to us as regards the balance of her imports and exports. I mean the United States. She of late years has been a large exporter on balance, and our Fair Traders have often pointed to this excess of exports as a proof of her prosperity, and of the virtues of her Protective system. When, however, we call to mind the fact that while we are a lending nation, with an excess of capital, and do more than half the ocean carrying trade of the world, and that the United States are a borrowing nation, requiring capital, and ready to pay for the use of it; and that owing to her Protectionist policy foreigners carry more than 80 per cent of her foreign commerce; it is easy to see that, other things being equal, while we have to import on balance, she has to export. Now, it is impossible to estimate with any approach to accuracy what the States have to send abroad each year by way of interest on their indebtedness, and for freight, and for other things. I cannot put it down at less than 20 millions, and it is most likely a great deal more, probably nearer 40 millions. Whatever the amount may be, however, it has to be allowed the foreigner in account, and, therefore, any argument in favour of Protection, and against Free Trade, built up out of the bare figures of her trade returns, and without regard to the considerations to which I have called your attention, must necessarily be most fallacious.

If we turn to France, we shall find in her trade returns a curious exemplification of the truth of the principles on which I am insisting. As you are aware, the Franco-German war broke out in 1870 and closed in 1871. Well, just before that war, that is in 1869 and 1870, her imports and exports, according to Martin's "Statesman's Year Book," balanced each other almost exactly. You also know that in 1871 France had to pay an indemnity of 200 millions to Germany, and that she appealed abroad for a large loan to aid her to pay that indemnity. Well, in 1871 she imported on balance 21 millions. In 1872, however, and during the three following years she exported on balance 39 millions. How is this to be accounted for? By simply