TKANSACTIONS OF SECTION F. 751 



might perhaps he obtained by granting bounties, but a proper food-supply could 

 be developed by taxing the wheat of countries which do not receive our manu- 

 factures, and thus giving a preference to those which do. This might lead to a 

 temporary and slight rise of price, but it would give a stimulus to the production 

 of corn in noQ-hostile countries, aad there is reason to believe that it would help 

 to break down the highly artificial protective system in America. 



Such retaliation is urgently desirable on political grounds, as the persistence in 

 laissez-faire tends to the disintegration of the Empire, and puts a special strain 

 upon the loyalty of Canadians. 



The manifesto of economic experts appeared to appeal to the principle of free 

 trade in an illegitimate manner, and to take for granted that an economic principle 

 which is framed on the assumption that all poHtical considerations are neglected, 

 also holds good in all political conditions alike. It is not a question of economic 

 principle, but oi laissez-faire temperament ; the issue is between haphazard drifting 

 and intelligent supervision. We need an Imperial Council of Trade, of an advisory 

 character, to work actively for the introduction of universal free trade, in order 

 to preserve the prosperity of this manufacturing community, and to introduce a 

 wise division of employment throughout the British Empire. 



3. WJiat is Success 171 Foreign Trade ? 5?/ Edwin Cannan, J/.J., Z//.i?. 



The object of foreign trade is to enable the people of a country to get income 

 easier than they could without it. A country is not successful in foreign trade 

 when this object is most fully attained. 



It is commonly imagined that relative success in foreign trade can be measured 

 in some way or other by comparison of the import and export statistics published 

 by various Governments, good, bad, and indifferent. But these statistics are often 

 totally untrustworthy for any purpose except that of indicating fluctuations over 

 short periods of time, and if they were trustworthy they would not give us the 

 mere trade of the various countries, but only their external receipts and payments. 

 Their receipts and payments include investments and repayments of capital and 

 interest on capital invested in a country different from that in which the owner of 

 the capital resides. Payments on account of these items constantly quite obscure 

 those which are made on account of trade proper, the exchanging of goods for 

 goods. Further, even if we had to deal only with countries which had no receipts 

 or payments except representing the immediate exchange of goods for goods, and 

 if the statistics were perfectly accurate, we could not judge of the success of 

 different policies by any amount of consideration of the import and export figures. 

 A country's success in foreign trade cannot be measured by the magnitude of its 

 exports, or by the magnitude of its imports, or by the magnitude of the sum of its 

 imports and exports, or by the magnitude of the "difference between them, whether 

 considered absolutely or in relation to area population or any other condition that 

 can be suggested. Success is attained when the right things are imported and tlie 

 right things exported, and import and export figures do not and cannot tell us how 

 far that is the case. 



Free traders say that, as things are, the right things are most likely to be 

 imported and exported if the Government abstains from exerting influences 

 against the importation or exportation of particular goods. The protectionists 

 agree in saying that Governments, whether democratic or autocratic, pure or 

 corrupt, ignorant or enlightened, will decide the question what should be exported 

 or imported better at all times and places than private interest ; but they give 

 different and often entirely contradictory reasons for their belief at different times 

 and places. 



