2. The principles that form the basis of exchange are the same as those implied in the great law of association and individuality; namely, those which give rise to the combination and division of labor. There is usually some one kind of labor, or at most a few kinds, for which each individual is competent. But the variety of occupations so nearly corresponds with the variety of aptitudes in every well-ordered community, that each may, with little effort, find the calling to which he is suited. But while each individual is thus limited in his productive capabilities, his claims and wants are nearly limitless. He is in need of a thousand commodities, only a very few of which he can produce. He depends for the remainder of these upon his fellow-men. On the other hand, he can produce a thousand times as much of the few kinds of commodities to which he devotes himself, as he himself needs. These he transfers to his fellow-men, taking in return the surplus of their several products. This is exchange, or commerce. It is implied in the very constitution of man. Association is an imperative condition of humanity. 3. A distinction is sometimes made between _commerce_ and _trade_—a wise distinction, as it seems to me, though observed by but few writers. The former is the _object_ to be accomplished; the latter is the _agency_ through which it is accomplished. Thus, a farmer has wheat, butter, eggs, poultry, wool, etc., which he wishes to exchange for cloth, sugar, agricultural implements, boots and shoes, and a hundred other articles. He can not go to the several producers of these, carrying his own products to exchange for them, except at immense disadvantage. Hence arises the necessity for the trader, or merchant. Trade and commerce have sometimes been represented as mutually antagonistic. This is true only to a certain extent. The great economical point to be guarded is to have no more traders than are necessary to make the exchanges. When the industrial and commercial conditions of a country are such that the producers and consumers, who are the real exchangers, are placed and kept at a great distance from each other, so that they can not combine with each other except through the agency of a great number of middle-men, the conditions are highly detrimental to the interests of the parties chiefly concerned. Beyond a certain point, the greater the power of trade, the worse it is for commerce. It is nevertheless true that there are certain natural obstacles to direct commerce which can be surmounted only by some kind of intermediate agency; and this makes the trader necessary. In this respect, and to this extent, trade is an aid to commerce. Yet commerce should be as direct as possible. To this end it is desirable that the greatest number of commodities for which productive facilities exist, should be produced in the same community.