Let us get clear a simple distinction concerning foreign trade. There is a kind of trade which is normal, and would thrive in a "free" society. In the United States we can produce nearly all the necessities of life, but there are a few which we cannot produce--rubber, for example, and bananas, and good music. These things we wish to import. We buy them from other countries, and incur a debt, which we pay with products which the other countries need from us; wheat, for example, and copper, and moving pictures with cowboys in them. This is equal exchange, and a natural phenomenon. A "free" society would produce such surplus goods as were necessary to procure the foreign products that it desired. When it had produced that much, the workers would stop and take a vacation until they wanted more foreign products. But under capitalism we have an entirely different condition--we produce a surplus of goods which we _have_ to sell in order to keep our factories running, and to keep our working population from starving. And note that it does not help us to get back an equal quantity of foreign goods in exchange. We must have what we call "a favorable balance"; that is, we must have other people going into debt to us, so that we can be continually shipping out more goods than we take back; continually piling up credits which we can "negotiate," or turn into cash, so that we can go on and repeat the process of making more goods, selling them for more profits, and putting the surplus into the form of more machinery, to make still more goods and still more profits. And then, after a while, we come upon this embarrassing phenomenon; nations which buy and do not sell must either do it by sending us gold, or by our giving them credit. The sending of gold cannot go on indefinitely, because then we should have all the gold, and if other nations had none that would destroy their credit. On the other hand, business cannot be done by credit indefinitely; for the very essence of credit is a promise to pay, and payment can only be made in goods, and how can we take the goods without ruining our own industry?