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HINKING it possible that some students of

fiscal policy may retain sufficient regard for economic principles to seek their aid towards a clearer understanding of the issues involved in International Trade, I have designed in these chapters to make an orderly application of some leading principles to the questions of Free Trade and of Preferential and Protective Tariffs.

My aim has been to use as sparingly as possible the technical language of economic science, and to give so clear an explanation of the terms I use as to enable those unversed in that science to understand the lines of argument. A somewhat close following of the methods of discussion commonly employed by protectionists and free traders alike has impressed me with the urgent need of more rigorous thought, and of a removal of the subject from the heated atmosphere of partisan controversy to one more favourable to a calm and concluded judgment.

The book contains no new theory, but it departs in one important particular from the treatment of international trade adopted in Great Britain by most economic writers since Ricardo and J. S. Mill. This departure consists in a simplification of the theory of foreign trade by the extension to it of the same laws as govern the rates of exchange between commodities within a single nation. This repudiation of the necessity of a separate theory for the determination of international values, if it is accepted, greatly reduces the complexity which, even in so clear and powerful a presentation as that of Professor Bastable, bewilders readers, and which in the treatment by J. S. Mill has led to hopeless entanglement and contradiction.

While limits of space forbid the use of lengthy illustrations, the statement given here claims to be distinctively concrete. It seeks to examine the most vital issues relating to free exchange and tariffs, and to vindicate the rightful authority of economic principles by showing how they explain the actual phenomena of international trade.

I desire to express my thanks to the editor of the Contemporary Review for permission to republish an article on “The Mystery of Dumping” and a portion of an article on "The Inner Meaning of

Protection," which appeared in recent issues of that Review, and to the editor of the Westminster Gazette for similar permission to embody parts of several shorter articles in chapters of this book.

February, 1904

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