than their sales, they will have to pay money, and they will presumably be
living on their capital. The argument fails, however, in many ways. Even as
regards the experience of the individual trader, it is to be observed that
he may or may not receive his profit, if any, in money. As a rule he does
not do so. As the profit accrues he may invest it either by employing
labour to add to his machinery or warehouses, or by increasing his
stock-in-trade, or by adding to his book debts, or by a purchase of stocks
or shares outside his regular business. At the end of a given period he may
or may not have an increased cash balance to show as the result of his
profitable trading. Even if he has an increased cash balance, according to
the modern system of business, this might be a balance at his bankers', and
they in turn may have invested the amount so that there is no stock of the
precious metals, of "hard money," anywhere to represent it. And the
argument fails still further when applied to the transactions between
nations, or rather, to use the phrase already employed, between the
aggregate of individuals in nations engaged in the foreign trade. It is
quite clear that if a nation, or the individuals of a nation, do make
profit in their foreign trading, the amount may be invested as it
accrues--in machinery, or warehouses, or stock-in-trade, or book debts, or
stocks and shares purchased abroad, so that there may be no corresponding
"balance of trade" to bring home. There is no doubt also that what may be
is in reality what largely happens. A prosperous foreign trade carried on
by any country implies a continuous investment by that country either
abroad or at home, and there may or may not be a balance receivable in
actual gold and silver.

[v.03 p.0236] In another particular the argument also fails. In the
aggregate of individual trading with various countries, there may sometimes
be purchases and sales as far as the individuals are concerned, but not
purchases and sales as between the nations. For example, goods are exported
from the United Kingdom, ammunition and stores and ships, which appear in
the British returns as exports, and which have really been sold by
individual British traders to individuals abroad; but these sales are not
set off by any purchases on the other side which come into the
international account, as the set-off is a loan by the people of one
country to the people or government of another. The same with t