1. It does not make very much difference whether the debtor country pays by sending goods direct to the creditor or by selling them elsewhere and remitting cash. In either case the goods come on to the world market and are sold competitively or coöperatively in relation to the industries of the creditor, as the case may be, this distinction depending on the nature of the goods rather than on the market in which they are sold. 2. It is not much use to _earmark_ non–competitive goods against the payment of the debt, so long as competitive goods are being sold by the debtor country in some other connection, _e.g._, to pay for its own imports. This is simply to bury one’s head in the sand. For example, out of the aggregate of goods which Germany would naturally export in the event of her exports being forcibly stimulated, it might be possible to pick out a selection of non–competitive goods; but it would not affect the situation in the slightest degree to pretend that it was these particular goods, and not the others, which were paying the debt. It is therefore useless to prescribe that Germany shall pay in certain specified commodities if these are commodities which she would export in any case, and useless, equally, to forbid her to pay in certain specified commodities, if that merely means that she will export these commodities to some other market to pay for her imports generally. No expedient on our part for making Germany pay us, or on America’s part for making us pay her, in the shape of particular commodities affects the position, except in so far as it modifies the form of the paying country’s exports _as a whole_. 3. On the other hand, it does us no harm to receive for nothing the proceeds of goods, even when they are sold competitively, if these goods would be sold on the world’s market in any case. 4. If the result of pressing the debtor country to pay is to cause it to offer competitive goods at a lower price than it would otherwise, the particular industries in the creditor country which produce these goods are bound to suffer, even though there are balancing advantages for the creditor country as a whole. 5. In so far as the payments made by the debtor country accrue, not to the country with which the debtor’s goods are competing, but to a third party, clearly there are no balancing advantages to offset the direct disadvantages under 4. 6. The answer to the question, whether the balancing advantages to the creditor country as a whole outweigh the injury to particular industries within that country, depends on the length of the period over which the creditor country can reasonably expect to go on receiving the payments. At first the injury to the industries which suffer from the competition and to those employed in them is likely to outweigh the benefit of the payments received. But, as in the course of time the capital and labor are absorbed in other directions, a balance of advantage may accrue.