only in a highly developed state of civilisation. [Illustration: “THE SHIP OF THE DESERT”: THE CARAVAN IS THE OLDEST EXISTING MEANS OF COMMUNICATION BETWEEN PEOPLES From J. F. Lewis’s picture “The Halt in the Desert,” in the South Kensington Museum (Photo, Mansell) ] [Sidenote: Birth of New Trades and Institutions] Foreign trade is carried on overland by means of caravans, and, in later times, by railways; over sea, through a merchant marine--sailing vessels and steamships. The magnitude of commerce, its peculiar methods, and its manifold, varying phases combine to produce new and surprising phenomena: traffic by sea leads to insurance and to different forms of commercial associations; intercourse by caravan gives rise to the construction of halting-stations, establishments for refreshment and repair, that finally develop into taverns and inns. And that which first arose from necessity is subsequently turned to use for other purposes: insurance is one of the most fruitful ideas of the present day; hotels are an absolute necessity. Commerce is able to bring further contrivances and institutions into being, here, again, overcoming individual incongruity by means of combination. Trade cannot always be carried on directly between the places of production and of consumption; one district requires more, another less; it would be difficult to supply all from one centre of distribution. Thus an intermediate carrying trade is developed, rendering the surmounting of obstacles less difficult and increasing the stability of the market. The demands of the middleman are compensated for by these advantages. [Sidenote: Commerce Brings the World Together] Thus the world’s commerce develops, and that which is accomplished by market traffic in lesser districts is brought about by the concentrative influence of bourses, or exchanges, in the broadest spheres. Here, as in the smaller markets, the tendency is for all prices to seek a level, to become as independent as possible of individual conditions; and so commerce between nations, and the possibility of ordering goods from the most distant lands, bring with them an adjustment: world prices are formed; and to establish these, is the business of the exchanges. The exchange is a meeting together of merchants for the transaction of business by purchase or sale. It has acquired still more the character of a world institution since men have been able to interchange advices by means of telegraph and telephone; it is possible for the bourses of different countries to transact business with one another from moment to moment, so that the ruling prices of the world can be immediately known. It has already been stated that commerce leads to a taking up of residence in foreign countries; it also leads to colonisation, and it is chiefly due to commerce that civilisation is introduced into foreign lands. [Sidenote: Supply of Human Labour]