"In the so-called political economies of our forefathers we read a vast deal about the advantages to a country of having an international trade. It was supposed to be one of the great secrets of national prosperity, and a chief study of the nineteenth-century statesmen seems to have been to establish and extend foreign commerce.--Now, Paul, will you tell us the economic theory as to the advantages of foreign commerce?" "It is based on the fact," said the lad Paul, "that countries differ in climate, natural resources, and other conditions, so that in some it is wholly impossible or very difficult to produce certain needful things, while it is very easy to produce certain other things in greater abundance than is needed. In former times also there were marked differences in the grade of civilization and the condition of the arts in different countries, which still further modified their respective powers in the production of wealth. This being so, it might obviously be for the mutual advantage of countries to exchange with one another what they could produce against what they could not produce at all or only with difficulty, and not merely thus secure many things which otherwise they must go without, but also greatly increase the total effectiveness of their industry by applying it to the sorts of production best fitted to their conditions. In order, however, that the people of the respective countries should actually derive this advantage or any advantage from foreign exchange, it would be necessary that the exchanges should be carried on in the general interest for the purpose of giving the people at large the benefit of them, as is done at the present day, when foreign commerce, like other economic undertakings, is carried on by the governments of the several countries. But there was, of course, no national agency to carry on foreign commerce in that day. The foreign trade, just like the internal processes of production and distribution, was conducted by the capitalists on the profit system. The result was that all the benefits of this fair sounding theory of foreign commerce were either totally nullified or turned into curses, and the international trade relations of the countries constituted merely a larger field for illustrating the baneful effects of the profit system and its power to turn good to evil and 'shut the gates of mercy on mankind.'" HOW PROFITS NULLIFIED THE BENEFIT OF COMMERCE. "Illustrate, please, the operation of the profit system in international trade."