Trade post

“ Whatever a Personal Servant may do for a commodity specialist which otherwise the specialist must do for himself at the cost of contributing less to the production of tangible commodities, is to that extent a contribution to the production of those commodities. Interchanges of human service, if the interchangers act in freedom, each getting from the channels of Trade the equivalent in service of the service he renders, are contributions to Economic production. ”

“ Involving the production of commodities by individual contributors of human service through an infinity of specializations, and their assignment to individuals by the intricate processes of service for service, Trade tends not only to increase the per capita supply of commodities, but also to effect their fair per capita assignment in proportions corresponding to the relative desirability of the numerous and various contributions of individual service to their production. ”

“ The trading post was most conveniently established under the protection of the military camp, and the subsequent growth depended partly on an accessible position, and partly on the intelligence of the men who controlled the trade of the surrounding regions. ”

“ But division of Labor would be useless were it not for Trade. Each of those frontiersmen must trade his share in the other’s habitation for the other’s share in his habitation; each of those messengers must exchange his claim to compensation for delivering one of the other’s two messages for the other’s claim to compensation for delivering one of his. This, then, is the sum and substance of Trade in Economics—adjustments of compensation for specialized Production through division of Labor. ”

“ Beneath that surface we first find Trade, for which Money is the medium or the means of expressing relative values and adjusting balances. Trade consists essentially in interchanges of commodities, inclusive of natural resources and of human service. It is not an arbitrary custom or set of customs, but a phenomenon of natural law through which artificial objects are produced to completion and final delivery. But Trade, though lying beneath the Money surface of Economics, is not a basic fact of that science. ”

“ Were there only a small group, the natural advantages of Trade, though manifest, would be too few and too primitive to disclose its wondrous powers of production. But when millions of individuals cooperate, some serving all and all serving each through the intricacies of worldwide Trade, mankind is welded into an Economic unity, a gigantic oneness—a larger human being, “the social man” as this social organism is sometimes not inaptly called—an organism composed of individuals who give it vitality and whom in consequence it serves as a beneficent giant might serve a cooperating pigmy. ”

“ Springing out of a manifestation of natural law which is rightly distinguished in Economics as “division of labor,” and thus inspiring and facilitating specialization in the Production of Wealth, Trade is a natural phenomenon. Within manifest limits and without extra exertion two producers can produce more than twice as much as one, four more than twice as much as two, and so on, subject only to the limitations of Natural Resources. By exchanging products they therefore naturally multiply their productive powers. ”

“ What counts in Economic measurements is Money denominations—Money language rather than Money pieces. For in the world-wide processes of trade, only a slight proportion of either metal coin or paper currency passes from hand to hand. Nearly all Money measurements are entered in books of account; and in these the debits and the credits so nearly offset one another, by and large, that the difference as a whole is too slight for consideration in passing down from the Money surface of Economics to the basic facts. A common and impressive exemplification is afforded by clearinghouse statistics. ”

“ Gold itself is a product of Labor applied to and upon Land. To import it in payment of international balances would be precisely the same, Economically, as importing other products of Labor.
Some private businesses may prosper through “favorable” balances of trade, but Business everywhere and as a whole, Business in the comprehensive sense of the science of Economics, must find “favorable” balances of that unbalanced kind extremely unfavorable to the people of every nation as a whole and to most producers individually. ”

“ Though nearer to the Basic Facts of Economics than the phenomena of Money, our consideration of which immediately preceded our consideration of Trade, the phenomena of Trade are one layer above the Basic Facts toward which we have been delving down from the Economic surface, Money, and through the subsurface, Trade. ”

“ The day are gone when the merchant adventurer sent out his ships, laden with merchandise, which were to bring home to him the produce of distant lands. There are, of course, a number of merchants who, having their own establishments in foreign parts, do both an import and an export business, balancing their own transactions without many bills of exchange passing; but, on the whole, trade is now much more specialised, there are importers and exporters, and their transactions are entirely independent of each other. ”

“ Essentially different things in Economics are indeed confused by Money, which knows no difference, except in degree of Money measurement, between slaves and cattle, or mineral deposits and mining machinery. As the medium of trade, Money must measure the values of everything tradable; and custom may make tradable objects—human beings, for instance,—which in the science of Economics are no more within the normal boundaries of trade than are transfers by theft. ”

“ In that event the check and the promissory note and the bill of exchange, operating as orders to the book-keepers of banks and clearinghouses, would effect transfers of debits and credits the world over so that all Trade would be barter systematized—plain barter freed from the obstructions incident to barter in primitive Economic circumstances. Except for the use of “pocket cash,” Money pieces of every kind, whether metal or paper, would be like children’s toys to grown-ups. ”

“ Below that financial surface are phenomena which Money merely measures and compares. The first of those underlying phenomena is Trade, for which Money is the medium and upon which our attention must next be concentrated. ”

“ Though we measure service-value by Money, though Money fluctuates as a Value-measuring device, though some individual services fall in product value relatively to the productive power of service, though some individual services may increase in Value for one reason or another, there is nevertheless a Value level in Trade which tends constantly to maintain an equilibrium between service-value and service-utility. Money-measured Value and Money standards of Value may rise above or fall below the service-cost of produced commodities. ”

“ Rapidly the camp grew under the influx of the new men; the song of the whip-saw rose in the forest and long clean timbers began piling themselves along the trail; now and again the roar of some huge tree shook the air as it mowed a swath of jungle in its fall; a tiny store was opened and 308 now and again Leccos came to trade—out from the original jungle of the year before had come a tiny, fragmentary community hanging on to the frontier. ”

“ This exclusion is not for moral reasons, it may be well to interject for the benefit of such advanced students of Economics as recoil from mixing moral principles with Economic science. It is due to the fact that exchange, or trade—an essential element in Economics,—is in theft utterly lacking.
In the Economic sense, making money is making it for all concerned in any particular process, and not for one or more of the parties at the expense of the others. No art of getting something for nothing can be within the scope of Economic science. ”

“ They do so in terms of Price when measured by Money; they do so in the essentials of Value when measured by comparisons of commodities. As a rule, however, Money-prices are fair guides to Commodity values. Commodity values rise and fall according to cost of production, inclusive of delivery; and in so far as Money is stable, the rise and fall in prices is evidence of variations in production cost.
The relative rise and fall in Value, be it measured by prices in Money or otherwise, is so common a phenomenon of Trade that critics might be pardoned for denying a Value level. ”

“ In describing Trade as consisting essentially of interchanges of human services, we are of course to be understood as including not only such services as are embodied in tangible commodities, but also personal service. ”

“ The manufacturer or the merchant must take the pains to accommodate a direct import trade to the exigencies of the local market. As an example, smaller bales and shorter lengths are requisite in the piece goods. The establishment of sample warehouses at the treaty ports, and in the more important trade-centres of the interior, where bales of shirting, cotton and woollen goods, cases of farming implements, &c., could be opened and sold for cash, would appeal to the natives. ”

“ The demands of the importing departments for foreign exchange were met by the Treasury, after they had been scrutinised by the Exchange Requirements Committee, a body set up on 29th August 1939 with representatives from all the importing departments, the Treasury, and the Bank of England. The demands of private importers were controlled by the Import Licensing Department of the Board of Trade. ”

“ Though the inland tradesmen do not, and need not, acquaint themselves with the manner of foreign exchanges, yet there is a great deal of business done by exchange among ourselves, and at home, and in which our inland trade is chiefly concerned; and as this is the reason why I speak so much, and repeat it so often to the tradesman for whose instruction I am writing, that he should maintain the credit of his bills, so it may not be amiss to give the tradesman some directions concerning such bills. ”

“ Today one out of every six manufacturing jobs is tied to exports. So first, I offer a strategic trade policy, including new free trade agreements with the emerging democracies of Eastern Europe. By increasing trade we increase American jobs. ”

“ One of the most promising things that the Board of Trade had done to foster exports was to set up an Industrial Supplies Department with the specific duty of determining the competing claims upon raw materials advanced on behalf of the home civilian market and the export market. ”

“ The government, of course, will have no pecuniary responsibility or interest in the enterprise, and the essays upon the various branches of American production will be general, and not in the interest of any firm or business organization. The enterprise is designed to collect material for the improvement of our export trade, to show what American producers can furnish for the markets of the world, to encourage American competition with foreign markets, and to call the attention of foreign capital to the opportunities of sound and profitable business with this country. ”

“ The first branch of foreign trade, which is the export and import of goods, depends on the money. if one half of the people are imployed, and the whole product and manufacture consumed; more money, by imploying more people, will make an overplus to export: if then the goods [Pg 24] imported ballance the goods exported, a greater addition to the money will imploy yet more people, or the same people before employed to more advantage; which by making a greater, or more valuable export, will make a ballance due. ”

“ The tariff board can clearly be of great assistance to our various customs officers if it should continually keep informed and have in its possession facts and figures relative to the cost of foreign products, as incidental to their true value and as indicative of the price which the foreign manufacturer or owner would have received and was willing to receive, when sold in the ordinary course of trade, in the usual wholesale quantities, in the principal markets of the country, whence the goods may be exported. ”

“ An opening has also been made for manufactured products that will undoubtedly, if this policy is maintained, greatly augment our export trade. The full benefits of these arrangements can not be realized instantly. New lines of trade are to be opened. The commercial traveler must survey the field. The manufacturer must adapt his goods to the new markets and facilities for exchange must be established. ”

“ In speaking about the future trade relations, it is natural that the question should arise as to what goods can be exported, and what goods can be imported. I think that it would be perhaps a little hazardous on my part to give a detailed list of such goods. This question can be settled only by a most elaborate and careful study of all conditions of the markets in each department of trade. These conditions change continually: goods that cannot be sold to-day may be sold very readily to-morrow. ”

“ Special instructions in regard to packing, for instance, are ignored because the American thinks he knows more than his customer in a foreign land.
Before export business is even attempted, the sales department should become thoroughly familiar with conditions in the country with which it wishes to do business. Some man in the department should study the customs regulations, the descriptions necessary, the kind of packing needed, and the size of package best adapted to the country. Above all, he must study the desires of the trade, and conform to them, if he expects to make and hold customers. ”