STOCK EXCHANGE AN INTERNATIONAL MARKET g11 
before the war, the United States regularly showed greater 
exports than imports in its trade returns, and many people, 
who gave the matter only a careless consideration, were wont 
to think that this country profited by the amount of our excess 
exports. Such a fallacious view, of course, left out of all 
reckoning our invisible trade, wherein we were steadily im- 
porting more services from other nations than we exported. 
Strictly speaking, then, there is normally no such thing as a 
permanent “favorable balance” in a nation’s total foreign trade 
with the world. There may be a relatively permanent favor- 
able balance in the visible or in the invisible trade, but total 
exports must in the long run balance total imports. 
How International Payments Come to Balance.—At this 
point it may well be asked how it happens that every nation’s 
total exports and total imports come to balance in this way. 
Trade is, after all, mainly free, and individuals in every coun- 
try can usually buy and sell such goods or services from or 
to foreigners as they please. When the Chicago merchant 
buys French tapestries, or when the Detroit manufacturer 
sells an automobile to an Argentine or a Brazilian, neither has 
the slightest thought or anxiety as to the effect of his trans- 
actions upon our national trade balance. Indeed, relatively 
few people here or abroad even understand what national trade 
balances really are. Furthermore, most items in a nation’s 
international trade are governed as to their amounts not only 
by free choice but also often by inevitable and quite inflexible 
circumstances. What, then, brings about this continual bal- 
ance between each nation’s total exports and total imports? 
The answer, of course, is—the flexible financial items in the 
total trade list, consisting of gold, bank credit, and securities. 
Fundamentally, in every gold standard nation, the basic 
method of balancing its international trading account with 
the world consists in shipping or receiving gold. Such shift- 
ing of actual gold bullion can be effected fairly quickly, and 
no gold standard creditor can, of course, ordinarily refuse to