The first is, that the balance of trade is in our favor when our exportations exceed our importations.  Upon this theory it is argued that it cannot be unwise to put restrictions upon importations, for they say that at one and the same time you give protection to our industries and keep the balance of trade in our favor.  But the slightest investigation will show that this proposition cannot be maintained.  A single illustration, often repeated, but never old in this discussion, will demonstrate it.  Let a ship set sail from Portland, Maine, with a cargo of staves registered at the port of departure as worth $5,000.  They are carried to the West India Islands, where staves are in demand, and exchanged for sugar or molasses.  The ship returns, and after duty paid the owner sells his sugar and molasses at a profit of $5,000.  Here more has been imported than exported.  Upon this transaction the protectionist would say that the balance of trade was against us $5,000; the free trader says that the sum represents the profit to the shipper upon his traffic, and the true balance in our favor.

Suppose that after it has set sail the vessel with its cargo had been lost.  In such case five thousand dollars’ worth of goods would have been exported, with no importation against it.  The exportation has exceeded the importation that sum.  Is not the balance of trade, according to the protection theory, to that amount in our favor?  Then let the protectionist turn pirate and scuttle and sink all the vessels laden with our exports, and soon the balance of trade in our favor will be large enough to satisfy even most advocates of the American protective system.  The true theory is that in commerce the overplus of the importation above the exportation represents the profit accruing to the country.  This overplus, deducting the expenses, is real wealth added to the land.  Push the two theories to their last position and the true one will be clearly seen.  Export every thing, import nothing, though the balance of trade may be said to be overwhelmingly in our favor, there is poverty, scarcity, death.  Import every thing, export nothing, we then will have in addition to our own all the wealth of the world in our possession.

Secondly, it is said that a nation should be independent of foreign nations, lest in time of war it might find itself helpless or defenceless.  Free trade, it is charged, makes a people dependent upon foreigners.  But traffic is exchange.  Foreign products do not come into a country unless domestic products go out.  This dependence, therefore, is mutual.  By trade with foreign nations they are as dependent upon us as we upon them, and in the event of a disturbance of peace the nation with which we would be at war would lose just as much as we would lose, and both as to the war would in that regard stand upon terms of equality.  It must not be forgotten that the obstruction of trade between nations is one of the greatest occasions of war.  It frequently gives