“Surely it is a waste of time to elaborate these A B C’s of commerce,” Mr. Calvin said tartly.  “We all understand them.”

“And it is by these A B C’s I have so carefully elaborated that I shall confound you,” Ernest retorted.  “There’s the beauty of it.  And I’m going to confound you with them right now.  Here goes.

“The United States is a capitalist country that has developed its resources.  According to its capitalist system of industry, it has an unconsumed surplus that must be got rid of, and that must be got rid of abroad.* What is true of the United States is true of every other capitalist country with developed resources.  Every one of such countries has an unconsumed surplus.  Don’t forget that they have already traded with one another, and that these surpluses yet remain.  Labor in all these countries has spent it wages, and cannot buy any of the surpluses.  Capital in all these countries has already consumed all it is able according to its nature.  And still remain the surpluses.  They cannot dispose of these surpluses to one another.  How are they going to get rid of them?”

* Theodore Roosevelt, President of the United States a few years prior to this time, made the following public declaration:  “A more liberal and extensive reciprocity in the purchase and sale of commodities is necessary, so that the overproduction of the United States can be satisfactorily disposed of to foreign countries.”  Of course, this overproduction he mentions was the profits of the capitalist system over and beyond the consuming power of the capitalists.  It was at this time that Senator Mark Hanna said:  “The production of wealth in the United States is one-third larger annually than its consumption.”  Also a fellow-Senator, Chauncey Depew, said:  “The American people produce annually two billions more wealth than they consume.”

“Sell them to countries with undeveloped resources,” Mr. Kowalt suggested.

“The very thing.  You see, my argument is so clear and simple that in your own minds you carry it on for me.  And now for the next step.  Suppose the United States disposes of its surplus to a country with undeveloped resources like, say, Brazil.  Remember this surplus is over and above trade, which articles of trade have been consumed.  What, then, does the United States get in return from Brazil?”

“Gold,” said Mr. Kowalt.

“But there is only so much gold, and not much of it, in the world,” Ernest objected.

“Gold in the form of securities and bonds and so forth,” Mr. Kowalt amended.

“Now you’ve struck it,” Ernest said.  “From Brazil the United States, in return for her surplus, gets bonds and securities.  And what does that mean?  It means that the United States is coming to own railroads in Brazil, factories, mines, and lands in Brazil.  And what is the meaning of that in turn?”

Mr. Kowalt pondered and shook his head.