Segak. — The Balance of Trade. 177 



(5.) Profits of investments in its territory and owned by 



foreigners or others resident abroad ; 

 (6.) Sums assigned privately by individuals — as by foreign 



residents assigning portions of their earnings to their 



families abroad, or by natives residing or travelling 



abroad drawing on their home resources, and so on ; 

 (7.) For maintenance of its army, navy, and representatives 



abroad ; 

 (8.) Charges and commissions for services rendered to it, as, 



e.g., by the ships and traders, bankers, insurance 



offices, &c, of another nation. 



And -just as a nation may have to pay on any of these accounts, 

 so she may have to receive on similar accounts. Thus a nation 

 may have to be paid, just as an individual may, for services 

 rendered, risk taken, capital lent, and so on— i.e., for items other 

 than the sale of goods. Thus, say, a million's worth of service 

 rendered by a nation is essentially as truly an item of her exports 

 as is so-much coal, iron, or cotton goods, and it is sold in the same 

 way, just as the worker as truly sells the labour of his hands or 

 brain as the tradesman sells his goods. The amount owing by 

 other nations is determined by, and must include, these other 

 items as well as the mere goods exported. Hence the term 

 " invisible exports " was originally applied by Sir R. Giffen, 

 and is now generally applied to these items of national earning- 

 power other than the sale of visible material commodities. 



We see, then, that a nation may be creditor or debtor to the 

 rest of the world on many different accounts other than the sale 

 or purchase of goods. In its foreign trade equal amounts of its 

 imports and exports pay for one another, and the excess of 

 merchandise and gold, either imported or exported as the case 

 may be, settles an account in which is included capital borrowed, 

 lent, or invested, interest and profits, and so on, as enumerated 

 above. This account, and therefore the excess of merchandise 

 and gold imported or exported, is independent of the buying and 

 selling of commerce, and depends only on the relation between 

 the country and the rest of the work! in respect to these other 

 matters. 



Before pursuing this subject further, however, we shall 

 consider the extent to which gold is used in international trade. 



The Limited Use of Gold in International Trade. 



Erroneous notions on this subject are the cause of much of 

 the false reasoning that is painfully common on matters of 

 foreign trade. If we review the statistics which the illustrative 

 figures exemplify we shall find that the use of gold in international 

 trade is of a very limited nature. During the years 1858-1902 the 



12 — Trans. 



