The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1904-03-05
TRADE BALANCE
IDEA EXPLODED
JOHN SHARP WILLIAMS GIVES
LESSON IN POLITICAL ECONOMY.
Minority Leader Ridicules Popular
Interpretation of Phrase and Shows
Business Transactions Are Conducts
ed to Advantage of Both Buyer and
seller-Even Exchange OF Commod-
tiles Best Balance.
From The Journal Bureau, Colorado Building

From The Journal Bureau Colorado Building,
Washington.
Washington, March 5.-The house
or representatives Is developing into
a primary class in political economy.
John Sharp Williams Of Mississippi,
the new minority leader, is head in
structor. He evidently believes that
there are some radically false notions
at large concerning the commercial
and economic principles which under
lie the prosperity of the country, and
ne has undertaken some part in Grad
icating them. Last Monday the Will
hams lecture was on the balance of
trade, and he set out to show that it
IS mistake to regard a balance of
trade as an evidence of prosperity.
He told the class that a balance of
trade showed simply that one country
mad sent less of merchandise than
the other, and that there was a credit
calling for a certain amount Of gold
or silver The best balance, he said,
was. a, settled balance, and one where
tnere was an. even exchange of COM
modltles. He, went on:
Ihere is no such thing as a balance
OF trade, except when you come to con-
slider simply two traders and no more;
and even then not for great time, as
history counts time.
illustrates by Story.
large balance of trade in favor of a Ken
lucky mule dealer, for example, as against
myself, because every year bought from
six to twelve mules from the Kentucky
mule dealer and the mule dealer never
bought anything from me, and therefore
these old mercantile theory people would
tell you the Kentucky mule dealer grew
immensely rich and I am being neces-
sari1y impoverished by the trade between
myself and the Kentucky mule dealer.
True, IT somebody did not come along
and buy my cotton it would not be long
before the Kentucky mule raiser would
have to sell his mules to somebody else.
Again, the man who paid me money for
cotton sold me nothing. Thus, according
to this balance of trade theory, I impov-
erished him.
. The truth is the mule raiser, the cotton
buyer and I, and the cotton spinner who
bought from the cutton buyer all made
money, and there was between all of us
and everybody else of whom we bought
and to whom We sold, no balance of trade
at all.
We each parted with what we wanted
topart with, and got what we wanted
to- get. Neither grew rich by buying
neither by selling. We each and all grew
rich, if we. grew rich at all, by both buy.
ing and selling s<r~.' 30
After quoting from Adam Smith
Ricardo and other authorities, the lee
turer continued his exposition of the
theory Of buying and selling:
Amy country that goes along trading
with the world any, length of time ant
buys more than 1t sells, or sells more thar
1t buys, leaves its people in a very BAG
fix, and for.+no great length Of time car
you doEit. Ill buy thing and pay for Il
why do buy it? Because I had rather
have the thing than the money.
Reason for Trading.
| Why have more use for it? Because II
will enrich me more to have the thing
either for consumption or resale, than II
will to have the money. ~
| Now If sell anything for money, why
do sell it? Simply because would rath.
er have the money than to have the thing
because I see that the money will enrich
me more than the thing that I am parting
with. And so, your gold and silver, which
is money everywhere, is, in international
relations, a commodity like other things.
In further elucidation of the gair
Of buying and selling, Professor Will.
Hams cited an instance from his early
recollections:
Now then, this balance of-trade theor,
Of prosperity reminds me Of quarrel tina
my old step-grandmother had with M
about swapping knives when I was a boy
| I came home one day with Barlow
knife
where did you get that knife. John?'
II snapped it for my knife. with sucl
and such a boy" es.a.-...s
| She said:,
well, now, you have to be taught t,
stop that right now. am going to Civ
you a whipping
After the old lady had slapped me sh
said:
John, want you to understand why
slapped you. When you snapped knives
with that other boy you did one of tw,
things-you acted either a fool because yo1
let him cheat you, or a knave because 70,
cheated him" Iaughter) That is tn
laughable theory, that when people trad
and swindled.