(3) form of government makes little difference: a republic is good in Switzerland, bad in Ecuador; a constitutional monarchy is good in Britain, bad in Turkey. The character of a gov ernment is what counts, and that depends largely on the character of the people. A wise government can greatly increase trade by making proper laws as to taxes, shipping, and commercial intercourse. Many people think that Great Britain owes much of her foreign com merce to her policy of free trade, while others think that a protective tariff has stimulated domestic trade in the United States. Both points are disputed, but almost everyone agrees that when backward people are governed and directed by those who are more progressive, trade is usually much stimulated. If India, the Philippines, and especially the Guianas had never been under foreign governments, their positions in the table of foreign trade per capita would be much lower than at present. In fact, they would almost disappear.
(4) Distance is also highly important in determining the amount of trade between two regions. We might get from the East Indies all the products that we get from the West Indies, but we actually get relatively little. It would scarcely pay to carry products five to seven thousand miles when we need to carry them only one to three thousand. It should be noted, however, that distance is a purely relative matter. It is easier to carry goods 7000 miles by sea where lines of communication are already established than 100 miles across mountains with no roads.
(5) Language and Customs likewise play a great part in foreign trade. Customs, or habits, are like government in being largely the product of racial character. An astonishingly small matter will prevent trade even among highly civilized people. For example, the British buy a good deal of American salt pork. But the pork must be salted with British salt. American salt leaves an insoluble white residue on the meat. This does no harm and Americans rather like it, but the British object. Hence, in order to maintain a profitable British trade, the packer must import British salt which is absorbed completely by the pork. As for language, everyone prefers to do business with someone whom he can understand. Hence, while Portugal does only a negligible business . with the rest of South America, a fifth of all her exports go to the Portu guese-speaking country of Brazil.
The Ideal Conditions for Active Exchange of Products.—Ideally the conditions most favorable to active business between two regions are as follows: (A) Both should be inhabited by people of high mental capacity and of as great energy as is consistent with the climate. (B)
The two regions should be quite different in climate so that one, for example, produces cereals, beef, mutton, hides, wool, soft wood, and other products of the temperate zone, while the other produces sugar, coffee, rubber, tropical fruits, spices, hard wood, fibers like Manila hemp, and other tropical products. (C) At the same time, the cooler country should have plenty of coal, petroleum, and water power so that manufacturing is stimulated; while the other should produce all sorts of metallic ores, especially iron, which can readily be taken by sea to the coal of the other country. The coal country should also produce mineral fertilizers which are chiefly needed in the warmer country. (D) The countries should lie as close together as is consistent with a pro nounced climatic difference, and should be connected by a sea, both coasts of which have been submerged so as to provide many deep inden tations and good harbors. Thus transportation will be as easy as possi ble. (F) Both countries should be under the same government, and the government should be wise, honest, and progressive. (G) The people in both regions should speak the same language and should be as similar as possible in ideals and habits so that they will understand one another's preferences and peculiarities.
The eastern United States and Cuba; England and Ceylon; the Netherlands and Java; and Belgium and Belgian Congo are pairs of countries which approach the conditions most favorable for trade. All fall far short of the ideal here described, but the United States and Cuba approach it most closely. In spite of their differences in racial character, government, language, and customs, their nearness and the fact that they have almost the right degree of difference of climate, plus the activity of the United States, causes the per capita trade of the Cubans with the United States to be exceeded only by that which the Dutch are able to carry on with the Germans because they hold the mouth of Germany's main river. Everywhere the activity with which any two regions carry on the exchange of products and services can be largely explained by the five factors here considered, namely, racial char acter, diversity of products, government, transportation, and language and customs.