F.—ECONOMIC SCIENCE AND STATISTICS 105 
of itself have altered the totals of exports and imports, slowed down the 
pace of the machine, as it were, without stopping it altogether. Freedom 
to search for new markets would then have speeded it up again in a very 
short time. But the new trade barriers prevented those rapid adjust- 
ments in the quantities of imports and exports which usually occur when 
there is variation in capital movements; for every country aimed at 
protecting its own domestic production from the dislocation that might 
follow a rise in its imports. The consequence was further increases in 
the gaps between commodity prices in different countries which, in turn, 
led to additional import restrictions and to general slowing down of trade. 
When restrictions are being imposed for the reasons just described 
due regard has to be paid to the possibility of retaliatory measures. 
Therefore, the victims are selected with care. They are invariably the 
countries in trade with which the restricting country has an excess of 
imports over exports on consolidated account of goods and services. The 
effect of this is a reduction of trade balance between the two parties in 
question and consequent further curtailments of the opportunities for 
triangular or multilateral trade. 
Attempts to gauge the contraction in triangular merchandise trade since 
1929 have been made by the Economic Intelligence Service of the League 
of Nations. The difficulties in the way of accurate estimation are con- 
siderable; and much allowance must be made even when guesses are 
obviously well-founded. Of the general truth of the conclusions there 
is no doubt. The following table (taken from Review of World Trade, 
1933) setting out the results of a careful examination of the trading 
accounts of 22 countries which together handle about three-fourths of 
the international commerce of the world, shows how the percentage 
proportion of bilateral trade has increased during the depression at the 
expense of triangular trade. 
e925 ek 1932 1933 
Bilateral Trade . i) Sa 81°5 82°5 83-4 
Triangular Trade Sesh fiche 18-5 jae 16-6 
100°0 100°0 100°0 100°0 
This tendency is exceedingly serious for countries which have a highly 
‘specialised production and which, therefore, are dependent on the sale 
and export of a small number of commodities. Chile, Greece, Bolivia 
and certain agricultural countries are examples. It is only because of 
triangular or multilateral trade that such nations can effect satisfactory 
balances on income and outgo account; for, frequently, they cannot 
dispose of enough of their products in the countries from which they 
borrow in order to offset the payments due from them to these creditors 
for goods inported and for interest on loans. The pressure exerted on 
them, then, in consequence of the growth of bilateralism, to increase their 
exports to countries which do not want their products leads to low prices 
which, in turn, stimulate further production, so that the total of receipts 
deemed necessary may not be impaired. It is in this way that the 
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