190 Transaction*. — Miscellaneous. 



different sources, and therefore not affected by these same errors, 

 it would be wrong to ignore them. As we are dealing too with 

 the estimated difference of the imports and exports, the error 

 ii this difference may bear a much bigger ratio to it than the 

 errors in the estimated imports and exports do to these respective 

 returns, especially as the errors in these may take different 

 directions, either the imports or the exports being undervalued 

 the other overvalued. Indeed, the exports are undoubtedly 

 undervalued in many instances in the effort to escape a portion 

 of foreign Customs duties. There is no such tendency in respect 

 to undervaluing the imports, as these are mostly free from duty, 

 and those that are subject to duty are mainly of a character which 

 do not lend themselves easily to this manner of deception. In 

 some cast-, many think, imports are overvalued for trade purposes 

 in the United Kingdom, as, when it costs nothing, the tendency 

 is to exaggerate the business done. Both these tendencies act 

 in the way of increasing the apparent balance of trade. 



It is thus difficult by making the comparison we have criticized 

 to deduce anything precise as to the rate at which England is 

 annually investing abroad, or as to how much, if any, she is 

 withdrawing. Some have proved in this way to their own satis- 

 faction that England has recently been living on her capital, 

 that English investments abroad are diminishing in value, or 

 that the volume of American investments in England is becoming 

 phenomenal ; but the data will not support such conclusions. For 

 one thing, the margin of error is altogether too large. Moreover. 

 the income-tax returns yearly indicate a continued increase in 

 the total value of British incomes derived from foreign sources. 

 This is sufficient in itself to settle the point. 



But, looking backward and comparing the present with the 

 past, ii appears to me plain that, if England is in a critical position 

 now, she was at least about equally so in and about the year 

 1*77, for in that year (no less than twenty-seven years ago) her 



ess of imports as recorded reached £141,000,000. The e 

 of recent years does not appear relatively as great as this v 

 we consider the advance in earning-power of English invest- 

 ments and shipping. From 1882-83, live years after the pear 

 considered, to 1901- 2 the annual profits from abroad assessed for 

 income-tax increased from under £32,000,000 to £62,500,000, or 

 by nearly LOO per cent. : and although part of this in may 



be due to give iicy on the part of the inland revenue, 



if musi re] Eor the most pari a real increase. The other 



s. i ii ices not revealed by the income-tax ret urns no doubt increased 

 in a somewhat equal ratio. Again, from 1880, three years alter 

 the period considi red, to L902 the tonnage of British shipping 

 increased from a little over 6,500,000 tons to over 10.000,000 : 



