Page:The Bank of England and the State, 1905.djvu/55

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Foreign Trade and the Money Market.

carriage of goods between foreign countries, or between British Colonies; and, again, there is the income from foreign investments, both of which are included in the term "invisible exports" or services rendered, of which there are a. great number not mentioned in the Blue Book, and regarding the extent of which no statistics are to be obtained. The income accruing from these services, such as banking and trading commissions, insurance premiums, and all the profits of our indirect trade, viz., trade not touching our shores at all, must amount to very large figures indeed. I think the excess of imports over exports may be taken to be the measure of our prosperity, so long as our earning power through invisible exports is not decreased thereby.

But we must not assume simply because we do not send gold out of the country that imports of goods are, of necessity, paid for by goods. Exports of gold are prevented through the action of the money market, and, through such action, eventually, the balance must be adjusted. The process is somewhat complicated, and it shows how the actions of a great number of individuals are governed by a universal law. The day are gone when the merchant adventurer sent out his ships, laden with merchandise, which were to bring home to him the produce of distant lands. There are, of course, a number of merchants who, having their own establishments in foreign parts, do both an import and an export business, balancing their own transactions without many bills of exchange passing; but, on the whole, trade is now much more specialised, there are importers and exporters, and their transactions are entirely independent of each other. The merchant abroad who sells his goods here does not know, nor does he care whether any goods go out in exchange; he obtains payment, as we have seen, in a bill of exchange, which does not necessarily imply an export of gold, but which gives the holder of such bills the power of withdrawing gold from here if he so chooses. Thus we have, at certain seasons, such as the present, withdrawals of gold, which can be directly traced to our imports of wheat and cotton from the United States or Egypt, or