186 Transactions. — Miscellaneous . 



countries of the world are added together they exceed the total' 

 exports by a sum in the neighbourhood of £250,000,000. This, 

 apart from inaccuracies in the statistics, represents the value 

 added by shipping and allied services, and the United Kingdom, 

 by her great mercantile fleet and commercial services, must secure 

 nearly one-half of this added value. 



Again, it should be carefully borne in mind that it does not 

 in the least follow that a country is prosperous because it has 

 an excess of exports, or the reverse of prosperous because it has 

 an excess of imports. An excess of exports may, it is true, be 

 due to great wealth and an increase in the foreign investments of 

 its citizens, but it may be due to the country having to pay 

 interest on loans contracted in the past, or to the fact that much 

 of its industry is exploited with foreign capital and its profits 

 have to be sent abroad. An excess of imports, again, may be due 

 to poverty of native capital, to borrowing, or to the withdrawing 

 of foreign investments, and the living of the nation on its capital, 

 but it may also be due, in whole or in part, to the receipt of in- 

 terest on loans and profit on capital it has advanced, or it may 

 be due to payment for services rendered. Thus neither an excess 

 of imports nor an excess of exports can be considered in itself 

 as being favourable or unfavourable. 



Also observe there is no necessary relation between the mag- 

 nitude of the balance of trade and the volume of trade. The 

 balance of trade may be depressed {i.e., smaller than at some 

 time previous and some time afterwards) at a time when trade 

 is exceptionally brisk, and the balance of trade may be inflated 

 when trade is exceptionally slack. 



Once more I may point out that there is no necessity for gold 

 to How out of a country when the balance of trade is exception- 

 ally high, or to How in when the balance is exceptionally low. 

 In fact, gold may How in with other goods, and out with other 

 goods, in discharging for the nation the obligations of the moment. 

 A very cursory glance at ligs. 1 -4 will show that the balance of 

 imports and '\\ports of gold bears no correspondence to that of 

 general merchandise. 



One other feature strikes us at once on contemplating these 

 figures, and that is the great fluctuations. The line as a whole 

 rises, for instance, in the case of the United Kingdom, and falls 

 in 1 i United States and New Zealand. The rise or 



fall, however, is on the average wave-like. There are a few vears 

 for which the line is higher than for neighbouring years; then 

 after a depression for a. number of years the same thing happens 

 again. Bui this, again, docs not come about uniformly: there 

 are irregulai changes from year to year, though these changes 

 arc generally not comparable with the difference between the 



