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The Pamphlet Collection of Sir Robert Stout: Volume 52

The Balance of Trade, and How it is Paid

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The Balance of Trade, and How it is Paid.

It is said we are draining ourselves of gold to pay for the excess of Imports. What are the facts?

The account of Imports and Exports on the first page shows an excess of the former over the latter of £94,403,259, but the Exports of Bullion and Specie only show an excess over Imports of £1,677,369, or seventeen farthings in the pound. It may be said that a single year is no test, but the case of the Fair Traders is not strengthened by taking a series of years. The following are the figures for the previous ten years:—
Imports of Commodities, 1874 to 1883 £3,893,522,521
Exports of Commodities, 1874 to 1883 2,778,247,656
Excess of Imports £1,115,274,865
Imports of Gold and Silver, 1874 to 1883 £268,391,090
Exports of Gold and Silver, 1874 to 1883 £253,811,085
Excess of Imports of Bullion and Specie £14,580,005

From which it would appear, according to the Protectionist theory, that the foreigner had paid us £14,000,000 in Bullion and Specie to take £1,115,000,000 worth of goods off his hands.

The apparent mystery is very easily solved. Free Trade has given England the lion's share of the carrying trade of the world, and of Marine Insurance. Our merchants do not work for nothing, and English capital is largely invested abroad. Hence we receive yearly payments from abroad. For fuller details see "The Reciprocity Craze," by Mr. G. W. Medley, which contains the following estimate of these payments:—
Received for Ocean Carrying Trade £45,000,000
Received for Marine Insurance 3,500,000
Received for Interest upon Capital 5,000,000
Received for Merchants' Profits 17,500,000
Received for Interest on Foreign Investments 55,000,000
£126,000,000