Trade between countries is Export trade, when goods are sent out of the country; Import trade, when goods are brought into the country.

Effects. International trade brings nations into close intimacy and arouses a spirit of competition which becomes an incentive to world production. All nations are rivals, but whereas in past centuries the rivalry was exerted with a view to gaining territorial and political supremacy, and was carried on by wars and bloodshed, to-day the rivalry is confined to gaining commercial supremacy, and is carried on by more peaceful means better products, more attractive display of goods, the genius of invention, advertising, timeliness of the appearance of commodities upon the markets.

Foreign commerce may become in the hands of a nation a powerful weapon with which to inflict serious injury upon another nation. Favoritism, discrimination, and injustice may be practiced by one country towards another in commercial transactions, and may arouse intensely bitter feelings, that can open the way to serious international difficulties.

International commerce may, at the same time, be an effective means of checking the encroachments of too aggressive nations, and of bringing about the adoption of just and fair treatment. This will prove to be the case especially between nations having protective tariffs, through which advantages may be granted or discriminations made in their mutual commercial relations.

Exchange among individuals is the result or complement of division of labor. This holds true for international trade in great measure. Here the division of labor is of course that world division of labor described before, whereby nations may apply themselves more or less exclusively to the production of those commodities for which they possess special natural advantages.

Advantages. The advantages of international trade are many. In addition to those already suggested, some of the more special advantages may be enumerated as follows:

Advantages of Importation: (1) Additional well-being of the

country, in receiving commodities which it could not produce itself. Thus, Holland receives building stone; Switzerland, coal; Norway, tropical fruits; England, lumber and wine; France, copper; the United States, rubber. (2) Economy of labor in buying things which can be produced more cheaply abroad than at home. This may happen when one nation is inferior to another in raw material, or has a higher scale of wages. Even when the country is rich in raw material, the facilities for production in a foreign country may be greater, as, for example, when coal is nearer to the operating plants and more abundant in the foreign country. (3) Help from other nations when the home products fail through accident.

Advantages of Exportation: (1) It utilizes national resources and productive forces. (2) It develops a nation's industries finds markets. (3) It furnishes markets abroad where much of the material produced at home may be disposed of after demand has ceased for it in the home markets.

Extent of International Trade. The commerce of the United States with foreign countries is enormous. The following table shows the imports and exports in recent years, in millions of dollars:

The domestic agricultural exports of the United States expressed in percentage of all domestic exports were as follows:

(Yearbook Agric. Dep't, 1911; Stat. Abstr., 1911, p. 710.)

Following is a table showing the commerce of some foreign countries for comparison, in millions of dollars:

Domestic Commerce. As shown by the preceding tables, the foreign commerce of the United States in 1912 amounted to $3,857,000,000, and is surpassed only by that of Germany and the United Kingdom.

With regard to foreign commerce, it must be said that the United States, with its wealth of natural resources, of raw material and foodstuffs, its great systems of railroads, and the business genius of its citizens, stands in a position peculiar and distinct from that of other nations. Our country could do

very well without any foreign supplies, and if it devoted all its energies to the establishment of domestic markets throughout the immense extent of its own domains, it might find large enough and profitable enough sale for its products.

The densely populated countries, England and Germany, and the comparatively small nations of Portugal, Denmark, Switzerland, Belgium, and Greece, limited as they are in natural resources, need foreign trade to supply them with the necessaries of life, and could only with difficulty get on without such trade. Again, their territories are so circumscribed that they would not find markets enough for their surplus products. Russia, although greater in extent of territory than the United States, has not the same class of inhabitants as the United States, and is more or less dependent on outside help.

The domestic trade of the United States could be immensely increased. Even as it is, the domestic trade of this country is so extensive that foreign trade appears small in comparison. It is the opinion of many that too much emphasis is put upon our foreign trade, and too much mental labor and discussion are accorded it, when our domestic trade deserves more attention because of its immense expansion. Yet to others it is an indication of the extent of production in the United States, that the country, large as it is, cannot supply markets enough for its produce, but must seek more markets abroad.

To arrive at any definite knowledge of the extent of this domestic trade is not easy, since it is so difficult to know the facts. Whereas foreign trade transactions are recorded in the custom houses, domestic trade transactions are carried on in great measure without public record. Estimates, however, have been made, and the following table will give a fair idea of the extent of the domestic trade of the United States:

Consular Service.

$7,750,000,000

12,000,000,000

20,000,000,000

1870

To look after its commercial interests in

foreign countries, each nation has its Consular Service. The

consuls of one country are stationed in all the important cities of every other country, and it is their duty to watch over the interests of the home country and to send home reports of trade conditions abroad.

The United States has about 1100 consular representatives of different grades in the various trade centers of the world. They are appointed by the President.

The consular service of the United States has been of help to home manufactures through the reports sent in to and published by the government. Manufacturers are informed about the foreign markets and the best methods of shipping their goods to those markets. Various means are suggested for increasing the foreign trade and of coping successfully with the competition of manufacturers of other countries.

Before 1906, the consular service of the United States was at a low ebb of efficiency, due to the facts that the consuls were poorly paid, that favoritism and the "spoils system" had much to do with the appointments, that very little supervision was exercised over the consular officers by the government.

In 1906, a law was passed which classified the consulships according to their importance, substituted salaries for fees, confined consuls of a certain grade to the duties of their office, and instituted a system of supervision and inspection of the work performed. At the same time, the President (Roosevelt) issued an executive order subjecting all candidates for the consular service to a rigid examination, and providing that appointments should be made to the lower grades, and that the persons so appointed should be promoted to vacancies occurring in the higher grades, such promotion to be dependent on the efficiency shown.

These measures promise well for the improvement of the service, and have already had a beneficial effect by attracting a better class of applicants for consular positions. There can be no doubt that our foreign trade will be helped by the greater efficiency of the consular service.

Foreign Payments.

The means of receiving payment for