220 
INTERNATIONAL TRADE 
factor in foreign trade operations. It may lead to a shift in foreign 
exchange, a movement of specie, a disturbance of money markets, 
— all of which in turn have their effects on prices of commodities 
and on the sales of commodities between countries. Such, for 
example, was the effect of the agitation for the free coinage of 
silver in the United States in the first half of the decade 1890-1900. 
European holders lost confidence in American securities and sold 
large quantities of them in the New York market. After 1896, 
with the strong prospect of maintenance of the gold standard, 
renewed confidence in turn caused many of them to be bought 
back in the European markets. The international trade of Italy 
between 1880 and 1900 was similarly affected by fall and rise of 
confidence among foreign investors in Italian government securi- 
ties. As will appear in the sequel, the entire effect of international 
lending operations is much less regular and predictable than the 
theoretic analysis would seem to indicate. The irregularity 
appears not only in the long-time swings of investment, in the 
changes of commodity imports and exports with swelling invest- 
ments of capital and the subsequent swelling accumulations of 
interest payments; it appears also in those movements of securi- 
ties, even less predictable, which are influenced by confidence, 
prestige, market availability. In ordinary times, when all goes 
smoothly, the existence of a large range of stocks and bonds which 
can easily move to and fro exercises a stabilizing influence on inter- 
national trade. In times of disturbance, however, that same cir- 
cumstance may become an independent cause of still further dis- 
turbance, and not least an independent cause of gold movements. 
This sketch — so brief that it almost calls for an apology — of 
the various ways in which the international movement of gold 
may be staved off by various devices and reduced to a minimum, 
has been introduced in order to emphasize the complexity and the 
delicacy of the mechanism of international payments. This part 
of the economic world may be likened, indeed, not so much to a 
mechanism as to a sensitive organism that reacts to every quicken- 
ing or slackening of its life-blood. There is sensitiveness, not 
impassive resistance. In the last resort, when all expedients for