FREIGHT CHARGES 
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a 
pi 
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price (i.e., the price at the place of export) plus freight charges. 
But this is not necessarily the amount which the people of the im- 
porting country have to remit to the exporting country, say Great 
Britain. If the goods are carried from Great Britain in vessels of 
the United States, the freight charges are paid by one set of Ameri- 
cans to another set of Americans. The freight item then is 
purely domestic; no remittance to Britain must be made. The 
British goods alone need to be paid for. But if the goods are 
carried in British vessels, some British persons must be paid for the 
further service of bringing them over. It is immaterial to the 
individual Americans who happen to buy the goods whether this 
additional payment goes to their own countrymen or to the 
British. But it is material for the balance of international pay- 
ments; an item arises in the latter case which must take its place 
in the adjustment of that balance. 
The same distinction of course must be made at the other end — 
that is, as regards a country’s exports. American sellers of goods, 
when they export them to Great Britain, get only the price of goods 
at the place of export. The British purchasers pay as individuals 
that price plus cost of ocean transportation. If the goods are 
carried in American vessels, the freight charges become an addi- 
tional item, also payable to Americans, even tho (in modern 
times) presumably a different set of individuals from those that 
have sold the goods. Should the goods be carried in British vessels, 
the freight charges become a payment made by one set of the 
British to another set, not made by the British to the Americans; 
and then it does not figure in the international balance sheet. 
If, now, the business is halved — if half of the carriage is done 
by British vessels, half by American — the items offset each other 
in the international account. As much is due one way as the other. 
The total volume of international payments is greater than it would 
be if the countries were contiguous, but the balance of payments 
is not affected. If, however, all the carriage takes place in the 
vessels of one of the countries, say Great Britain, a balance 
becomes due to that country. Supposing the other transactions 
between the countries to balance — imports and exports. and