The morning call., 1892-04-06
BUYING AND SELLING.

Our free-trade friends are somewhat In
the habit of assuming that trade is trade,
and that there must he profit in each trans
action. There is an idea abroad also that a
nation which receives more goods in value
than it exports is doing profitable business
an example of this kind of profitable bust
ness may be found in the history of a CON-
mon everyday vessel. We will suppose an
American vessel sails from New York for
Liverpool with a cargo of wheat valued at
$4,000 In Liverpool the wheat is sold and
tue owners Of the cargo receive their money,
less the amount of freight Tie ship and
the owners Of the cargo then part company.
The ships looks out for a cargo back to New
York, but as the finished goods that are
mostly shipped from Europe to America are
much more valuable in respect TO bulk aud
freight than the wheat the vessel brought
out, IL takes back cargo valued at $4,000.
Thus the value of tie goods il brings back
to the United States is $50, 900 greater than
the value Of the goods IL carried away. Has
the United States gained $50, 900 by the yoy-
age? On The contrary. it has incurred an
obligation to pay the difference between
the value OF is outgoing cargo and the
value of its incoming cargo. If vessels
enough should sail from the United States
bringing back cargoes valued at $50. 900 more
than they take out, the nation, rich as il Is,
would soon become bankrupt But we are
tod that England does that kind of O bust
ness year after year and profits by it. Let
US look into this matter. England buys,
one year with another, some 1900 600 bales
Of raw cotton. She gets some of this from
the United States and some from India. All
the cotton fiber she imports she converts
into cotton fabrics. There is something
more than 500 profit on each bale of fiber
that Is imported and expo rted in the form of
fabric. We do not mean. of course. net
profit after the cost OF converting the fiber
into fabric is taken out, but gross profit 10
the nation in the form of wages for opera
tiVeS. rent for buildings, interest on capital,
exchange, insurance and other Items of ex-
pense. A $4,000 cargo of raw cotton or cot
ton fiber goes into Liverpool, and a few
months later goes out in the form of fabrics
worth 100000. No one has made large
proht on this conversion of raw material
into printed goods. but thousands OF people
have made living wages and millions of dol
lars OF capital have earned reasonable inter-
est. England's entire foreign commerce is
OF this nature. She does not grow pound
OIL cotton, but she is the greatest cotton
WOOL, but imports more, and turns all into
high-prlced finished goods. Iron ore is a
native product, but most of 1t Is turned into
high grades of steel before it is exported.
Now 1t is easy for England to import more
than she exports as long as her imports are
converted Into goods for export worth from
len to hfty times as much as the material i'm
ported. The valuation of most of these ex-
ports is determined at home There is a
profit in low valuation to all countries which
maintain ad valorem duties. IL wooden
Cloth worth 50 yard is nvoieed to the for
eign purchaser at So per yard. one-half the
tariff tax is saved. Our free-trade friends
often Tall into error by formulating rules
without regard to conditions. They assume
that because under one set of conditions
Englands foreign commerce is profitable
| with the balance OF trade steadily against
her, foreign trade must be equally profitable
under any set Of conditions.