FREE TRADING 75 



home trade has an advantage over the foreign 

 trade in increasing capital, and therefore of 

 finding employment. However much the use of 

 the telegraph, even in making payments, abridges 

 the loss of time, it does not prevent that loss. 



As soon as labour employment is increased the 

 demand for commodities increases. When men 

 are long out of work they naturally have to do 

 with very little accommodation : as soon as they 

 again draw wages, they must be once more 

 properly fed and clad. This increased employ- 

 ment then gives rise to the employment of a fresh 

 lot of men, and thus has a cumulative effect. 



When a foreign trade transaction takes place 

 between two countries, each of which has some 

 peculiar facility in producing certain commodities, 

 then the foreign trade in these articles brings in 

 more capital and therefore gives more employ- 

 ment than a home trade of similar magnitude. 

 Suppose one country to make a hundred bales 

 of shirts at the same expense as eighty boxes of 

 mirrors ; and suppose another country to make 

 only eighty bales of shirts at that expense, but 

 to make a hundred boxes of mirrors at the same 

 expense. Then if the former country, ceasing 

 to make mirrors, made instead a hundred bales 

 of shirts, she could get for these shirts a hundred 

 boxes of mirrors, instead of the eighty boxes she 

 could herself produce. This exchange would 

 bring in more capital, set more labour to work, 

 than home trade of equal magnitude, and thus 

 give the foreign trade an advantage over the 

 home trade ; this advantage holds good in all 



