be shown by keeping a strict account of debit and credit. To debit put down the cost of construction, to credit the increased value of lands, forests, mines, and quarries, the new industries which spring up, and the improvements in agriculture; the credit side of the account will be by far the larger.

The much discussed question as to whether the State ought also to take upon itself the working of railways is of the most complex character. Perhaps it should be answered by the economist in the affirmative, by the politician in the negative. Possibly both parties might be satisfied if all the lines were concentrated in the hands of the State, which should then entrust their working to a company acting under Government control.

§ 9. Commerce.

In the clear and simple manner taught him by Socrates, Xenophon explains the cause and the advantages of commerce. "No town," he says, "possesses at the same time both wood and flax, for wherever flax is plentiful the country is flat and without wood. One country has one commodity, another another. It follows that every state is obliged both to export and import. Commerce thus enriches the city by substituting useful commodities for articles which, by their excessive abundance, had lost all value."

In the words of Montesquieu-"The natural effect of commerce is a tendency towards peace." How,

indeed, is it possible to inflict harm upon an enemy without either ruining a debtor or killing a customer? Commerce, again, applies between nation and nation the fertile principle of the division of labour. This is admirably expressed in a sentence of President Garfield-" Commerce makes all mankind a family of brothers, in which the welfare of each member depends on that of the others. It thus creates that unity of our race which causes the resources of the whole world to be at the disposal of each individual.”

The maxim of commerce is to buy cheap and sell dear. Stimulated by self-interest, the merchant is ceaselessly summoning commodities from where they are over abundant and consequently cheap, to sell them where they are scarce and therefore dear; and in doing this he is serving the general interest. Retail traders choose goods with discrimination, buy them under the best conditions, class them in assortments, preserve and sell them in small quantities in such a way as to suit the resources and needs of the consumers. Were it possible to abolish these middlemen and bring customers face to face with producers, nothing could be better. Meanwhile, however, the middlemen render very real services.

CHAPTER X.

COLONIES.

IN speaking of commerce, a few words must be said on the subject of colonies, since it is imagined nowadays, very wrongly, that a state must have colonies if it is to have a flourishing trade and large navy.

The commercial city of Tyre and, later on, Carthage, established factories for trading purposes, and these developed into colonies and flourishing towns. The Greek cities founded colonies as outlets for the surplus population deprived by the slaves of the resource of manual labour. Despite the diminishing population of Italy, Rome founded colonies by establishing veteran soldiers and the poorer burgesses on lands wrested from the conquered nations. The object was to "romanise" the provinces and consolidate the imperial rule, and it was completely attained. In modern times the Spaniards and Portuguese founded colonies as a means of obtaining what was believed to be the most real kind of wealth, the precious metals. The Dutch and English afterwards followed their example in order to develop their trade and gain a monopoly of the sale of certain products much sought after in Europe.

Little by little from out a mass of restrictive regulations was born the "colonial system." This system

rested on two monopolies. The mother country reserved to itself the exclusive right of purchasing the products of the colonies and selling them in Europe. It thus reckoned, in the absence of all competition, to buy cheaply and sell dear. This was the first monopoly. Again, it reserved to itself the exclusive right of selling in the colonies its made up goods, once more reckoning, in the absence of competition, to obtain extremely high prices. This was the second monopoly. Both hopes were deceived, and the violation of freedom produced, as usual, nothing but bitter fruits. On the one side, the colonies, crushed beneath so many obstacles, continued poor and purchased little; on the other, the inhabitants of the parent country paid high prices for the products of their colonies, which free trade would have brought to them at cheaper rates. Their slender profits were thus more than counterbalanced by the disguised tax they had imposed on themselves. To this must be added the cruel working of the Indians, the slavery of the blacks, the frightful amount of blood and money which their enfranchisement has cost in the colonies of England, France, and recently of the United States, the destruction of the ancient civilisations of Mexico and Peru, the ruinous cost of maintaining armies and fleets, and, lastly, half a century of barbarous wars between European states rising out of colonial relations. If all these be taken into consideration the total loss will far outweigh the total profit.

Undoubtedly the discovery of America and the trade with Asia have enlarged the dominion of the human race, and procured it the enjoyment of a large number of useful and agreeable products. But trade would have supplied the world with the same goods without making it pay so cruel a price. There is not a colony to-day which does not cost the inhabittants of the mother country more than it brings in.

No more magnificent possession can be imagined than India. An immense empire, peopled by 300,000,000 laborious and submissive inhabitants, and on the plains which descend in a gentle slope from the heights of the Himalayas to the sea, yielding every kind of product, because every kind of soil and climate is successively represented; an empire, again, which is the theatre of one of the most ancient civilisations in the world! Yet, if we look at its balance sheet, we find a permanent annual deficit, continual disquietudes, and, what is worse, smouldering jealousy or expensive wars with one or another of the European states; lastly, the whole foreign policy dominated by a single interest. The English economists have adjusted the balance, and it does not incline in their favour. The younger sons of well-to-do families are employed by the Indian treasury, but, in reality, it is the English people that pays them. The imperial crown which the Queen has recently placed on her forehead, has cost, and will cost again, many a million of her subjects' money.