In general, international trade differs from domestic trade first of all in this--that it always has to pass through an examination at the frontiers through which it enters. It also differs from domestic trade in that it has to use another currency. Even when all countries have a gold currency, there are certain small fluctuations in the exchange values of the different currencies. For instance: before the war the English pound was worth in gold about 25¼ French francs, but you hardly ever had this “Parity” (as it is called) exact. The franc would fluctuate slightly against the sovereign--sometimes above, sometimes below “Parity” by a penny, or even sometimes more than a penny, one way or the other. With many countries whose currency was not in a good condition the fluctuations would be more violent, and of course since the war, now that so many nations no longer have a gold currency at all, but a fictitious paper currency, the value of one currency against another fluctuates wildly. Within a year you could get only 50 francs for an English sovereign and then a little later as much as 80 francs. Within one country exchanges can be simply conducted by counting all values in the currency of the country; but international trade, involving the use of two or more currencies, cannot be so simple. There is also a third point in international trade which must be understood, and which proceeds from the very fact that international exchanges do not essentially differ from the exchanges which take place within the same country, and that is the fact that exchanges are not simple contracts between two parties, but follow a whole chain of contracts, covering a great number of parties. We saw, in the first part of this book, that exchange even within one country, was not simple barter but _multiple exchange_. In domestic exchange a farmer sells his wheat to a broker, but does not purchase a lorry from the same buyer: he receives money from the buyer, and with that money buys a lorry, say, a month later. But what has really happened is a whole chain of exchanges in between the wheat and the lorry--a miller has bought the wheat from the broker, a baker the flour from the miller, and so on until towards the end of the chain a caster has sold castings to a motor maker who has assembled them and sold the lorry to the farmer. It is the same with international exchanges; as we saw in the earlier part of this book. There is an international chain of exchanges. The total number of units engaged in this international chain may be as large as you like; there may be ten or fifty or a hundred links before it is complete. But the universal principle holds that imports and exports usually balance. Whatever you import from abroad into a country you must, as a general rule, pay for by exporting an equivalent set of values created within your own country. But there are certain exceptions to this rule which are sometimes lost sight of.