go SECTIONAL ADDRESSES 
reasons for this belief. Before doing so, it is necessary to draw a contrast 
between the world of to-day and the world of a short time ago. For the 
purpose in view the period immediately prior to the War will serve very well. 
II. 
First and foremost, the peace treaties of 1919 and following years 
increased the number of countries and national boundaries in Europe. 
In all these new areas trade barriers were immediately set up to protect 
industries the establishment of which was encouraged and often financed 
by the states themselves so that they might have under direct control in 
their own territories as many as possible of the processes necessary for 
the production of armaments. As it is not difficult for producers of very 
wide ranges of commodities to persuade governments that their own 
special products are essential, or, alternatively, that their factories can 
readily be adapted for the manufacture of war materials, the field embraced 
in these new protective systems was progressively extended until it soon 
covered the whole range of agricultural and industrial activity. Important, 
however, as was this stimulus to economic self-sufficiency it might have 
spent its force and gradually petered out if the structure of international 
relations had not at the same time been radically altered by a change in 
the mutual indebtedness of nations, which occurred with such rapidity 
as to render impossible smooth readjustments to the entirely new con- 
ditions thus created. This transformation from debtor to creditor, 
which was the experience of the United States of America, and from 
creditor to debtor, the outstanding example of which was Germany, 
called for a complete reversal of the general attitude towards the Balance 
of Trade which up to that time had been current in the countries con- 
cerned. It demanded some re-orientation of ideas, also, on the part of 
other countries where the differences between the new and the old 
positions were of degree rather than of kind. Unfortunately, the line of 
least resistance was followed everywhere, both by statesmen and by 
peoples ; and difficulties were accentuated instead of being surmounted. 
A country which is on balance a debtor has gradually to build up credits 
abroad so as to pay the interest on its debts, to meet amortisation instal- 
ments or make provisions of some other kind for repayment. It can only 
do this by contriving to have a favourable balance of trade and this, in 
turn, can be secured only by an increase in exports, or a reduction in 
imports. A large increase in exports, however, is not always easy to 
effect for a country which is already highly industrialised. Such a com- 
munity is largely dependent on foreign sources for its supplies of raw 
materials. For it, therefore, increased exports of manufactured goods 
means increased imports of raw materials which, in turn, have to be paid 
for by further exports. This is impossible unless the volume of foreign 
trade as a whole is increased at the same time. It is just because this 
latter increase is not taking place, or is comparatively insignificant in 
amount, that older industrial debtor countries fail to build up the balances 
required from them by their creditors and that creditor countries, in 
turn, find it difficult to expand their export trade and at the same time 
pursue a policy of drastic restriction of imports. Further, if a country 
