ON BRITISH AND FOREIGN STATISTICS OF INTERNATIONAL TRADE. 303 
simple. Even the position of the national frontier is not always what we 
should expect ; for example, trade between France and Corsica, and 
between the United States and Hawaii or Porto Rico, is domestic trade ; 
though trade between France and Algeria, and between the United States 
and the Philippines, is international trade. This is a simple matter 
compared with the complication introduced by the existence of free 
zones, like the free port of Hamburg in Germany, and that of Copenhagen 
in Denmark. Yet the position of the customs frontier is among the least 
of our difficulties. 
We can easily imagine a world in which international trade, or goods 
carried across a national frontier, fell into four distinct classes, as 
follows :— 
Imports. 
Class 1.—Goods imported which will 
be used or consumed at home. 
Class 2.—Materials and components 
imported in order to be made up in the 
country and then exported. 
Class 3.—Goods imported which will 
be sold for export without change of 
form. 
Class 4.—Gvoods simply passing into 
the country on their way to another 
Exports. 
Goods produced at home and ex- 
ported. 
Manufactured articles made up of 
foreign materials and exported. 
Goods of foreign origin exported after 
purchase and sale within the country. 
The same goods passing out of the 
country. 
country without changing ownership 
within it. 
The first is sometimes called ‘ special trade,’ the second ‘improvement 
trade’ (Veredelungsverkehr), the third may be called entrepdt trade, and 
the fourth ‘transit and transhipment trade.’ The sum of the four may 
be called ‘ general trade,’ or this title may be confined to the sum of the 
first three. 
In the real world, however, these four classes are not sharply divided 
by distinct and easily ascertainable lines of demarcation. It is often 
impossible for anyone to say for certain when an article is imported, 
whether it belongs to the first, second, or third class. When an 
article is exported the exporter has frequently no exact knowledge as 
to its origin, and when it is made up of various components or ingredients, 
part of domestic origin and part of foreign origin, it becomes impossible 
to classify it under the first or second head without adopting some 
arbitrary standard as to the degree in which a commodity must contain 
foreign ingredients before it can be classified as of foreign origin. Again, 
the distinction between the third and fourth class is a slight one, not 
always easy to verify. Finally, the fourth class is not very distinctly 
divided from goods carried in ships past the country instead of into the 
country and out of it. No one would propose to reckon in the transit 
trade all the goods in ships which have simply passed through the 
territorial waters of a country, nor even those in ships which have called 
at a port to coal; but as to what exact amount of detention and 
manipulation in port is required to constitute arrival and departure of 
goods, considerable difference of opinion may legitimately prevail. 
As the benefit derived from international division of Jabour or 
localisation of industry is frequently very small, it is often the case that 
transactions in Class 4 are just as advantageous to a country as trans- 
actions in Class 1, but popular opinion tends to regard the ‘ special trade’ as 
more important than the ‘improvement trade,’ the improvement trade as 
