458 SECTIONAL TRANSACTIONS.— F. 



classification offered is an empirical one rather than a formal logical division 

 of all the possibilities. 



Four main classes are suggested : 



(i) Those which most resemble normal long period capital movements, 

 i.e. that seek to take advantage of superior investment opportunities 

 abroad and result in additional real investment abroad. 



(2) Those which provide gold to meet increasing monetary requirements 

 in the borrowing country. 



(3) Equalising capital movements to meet balance of payments differ- 

 ences, motivated either by prospects of exchange profits or by interest 

 differences. 



(4) Capital flights. 



It is argued that (i) and (2) have no sort of deflationary effect in the 

 receiving country, but may have some such effect in the lending country ; 

 that (3) are deflationary or contribute to deflation in the receiving country 

 in a manner which may be considered appropriate, given adherence to an 

 international standard : that (4) tend to produce altogether undesirable 

 deflation in the receiving country. Some consideration will be given to 

 the possibilities of offsetting the effects of (4). 



Finally two other types of short term capital movement are referred to, 

 namely the acquisition of foreign balances as reserves and speculative 

 investment abroad on security exchanges. It is suggested that the effects 

 of these are similar sometimes to those of one of the above classes and 

 sometimes to those of another. 



Prof. E. Roll. — The trend of Britain^ s balance of payments (ii.o). 



This paper surveys the development of Britain's balance of payments 

 between 193 1 and 1937. It examines the relative weight of the different 

 items and endeavours to assess their influence, during the period in question, 

 on the trend of the whole of Britain's international accounts. Special 

 attention is given to the striking fluctuations in the terms of trade ; and 

 in this connection some well-known criticisms of protectionist policy are 

 further emphasised. 



Mr. E. A. Radice. — The measurement of the causes of variations in savings 

 in Great Britain (12.0). 



Once the main determinants of different types of saving have been 

 analysed, the effects of each of them may be estimated by the method of 

 multiple correlation of the appropriate time series . The most important cause 

 of variation in all types of saving is variation in income. The rate of 

 interest is also an important variable mainly because it has important effects 

 on shifts between different types of saving, and changes in the contributions 

 of various income groups to particular types of saving. If the effects of 

 these variations are eliminated, good estimates can be made of ' income 

 elasticities ' for the different types of saving. Figures are given showing 

 the proportions of any increase in total incomes which would flow into post 

 office savings banks, building societies, insurance companies, friendly 

 societies, etc. A linear relationship can similarly be estimated between the 

 incomes of all individuals and their savings, and also between business 

 savings and profits. Figures for investment in post-war years also lead to a" 

 linear relationship between net investment and profits. Clark's quarterly 

 figures for 1929-36 lead to a linear relationship between investment and the 



