INTERNATIONAL TRADE. Trade between or between distant regions has been a fruitful source of discussion ainom.t economic writers, and a subject which has often engrossed governmental attention to the I.xelnsion of infer nal commerce, though it is a familiar fact that in modern times internal commerce is far more important to the welfare of the State. This ap parently undue prominence in discussion and legislation was due not only to the fact that inter national trade caught the eye of the observer, while domestic trade withdrew' itself from obser also to the fact that in early economic life foreign trade, as compared with home trade, was far more significant than it is in modern This greater relative importance of interna tional trade in its historieal beginnings was due to the slight division of labor in the older eco nomic order. and to the relatively small areas of Slates. The soil of the neighborhood produced what was necessary for the S11111111' wants of the inhabitants. TOM], were rare and small, and artisans few in number. Alost of the inhabitants Were agriculturists, whose most pressing needs for manufacturing products were satisfied by the produce of the household. in short. the satisfa•• lion of daily wants did not give rise to a 'home trade' such as characterizes modern industrial ,:0 eii•ty. To the uniformity of economic organiza tion must be added the difficulty of internal com munication as an obstacle to the development of any considerable interchange of •igable rivers furnished the only means of internal transportation which were not attended with prohibitive costs. Only those nations with a favorable seacoast could develop any eonsiderable commerce, and, with it, that diversification of in dustrial 11p011 domestic trade rests. We may, therefore, say that foreign trade preceded domestic trade.
If We except the period of the Roman Empire, when such trade as existed became internal trade, because the known world became. as it were, one nation. the division of sovereignty he fore modern times was so great that most trade was foreign rather than domestic. When petty principalities or provinces of the same realm enjoyed their own customs regulations. nmeh trade was 'foreign' which in modern times would be domestic.
Largely to these considerations, as well as to the more showy character of foreign trade, its spectacular and romantic character, does this trade owe its prominence in economic discussion and in the attention of governments.. :\loreover, as such, trade came into early notice as a means of raising revenue for the State, it thus became a matter of public concern.
It cannot be claimed that the contradictory and vacillating practice of mediaeval rulers de veloped any well-defined theory of foreign trade.
It is not until after the discovery of America and the commercial awakening that followed the influx of the American silver that the begin nings of a theory of trade appear in the writ ings of pamphleteers who have since been desig nated as the mercantile school. Thomas Mun, in his work upon England's Treasure by l'oreign Trade (1664), states in a few words the wisdom of his time. "The ordinary means to enerease our wealth and treasure is by Forruign Trade, wherein wee ever observe this rule: to sell more to strangers yearly than wee consume of theirs in value. By such a course the balance roust be paid in coin, and the country Enriched. while a contrary course would deplete its stock of the precious metals." The confusion of wealth and money is obvious, and characterizes the whole thought of the period. As we shall see, it led to some extraordinary governmental measures to promote the flow of gold and silver into the na tion and to check its outflow. It distorted the economic policy of the nations for generations, and threw the entire public interest in foreign trade upon its capacity to attract specie. It carried with it the corollary that importations should be limited as far as possible, and caused vexatious restrictions, high import duties, and frequent prohibitions of the importation of for eign commodities. Thus, in 1674 the total pro hibition of the importation of French brandy was advocated in England, not only to encourage the consumption of domestic ale and beer, but also because it was considered undesirable to in crease the consumption of French goods. Writ ings upon trade subjects are full of fears lest any ration should sell more to England than it bought from her, and the Government was re peatedly urged to take measures against any nation which so offended against public policy. All writers did not. however, share this short sighted view, and Mun stands out from his con temporaries by his perception that what is ap parently lost by trade with one nation may he the means of gain, since the goods imported from it may be disposed of at great profit to some other nation. lie is none the less quite convinced that the aggregate of exports and imports should show' a decided balance in favor of the former. Another characteristic of the time is the pref erence given to trade in distant parts, as when ..1lun says: "Also wee ought to esteem and eher ish those trades which wee have in remote or far countreys, for besides the encrease of shipping and mariners thereby, the wares also sent thither and received from thence are far more profitable unto the kingdom than by our trades near at hand." The great profits secured by those States which came to be depots of the Indian trade doubtless led INIun to take this view.