23%, 
) 
5 
INTERNATIONAL TRADE 
on with increasing volume. In general the stage of maturity, 
the turning point, seems to have come in Great Britain shortly 
after the middle of the nineteenth century. 2 
A second factor was the new position which Great Britain’s ship- 
ping trade attained, or, to be more precise, the accentuation of its 
already dominant position. British ships had long done more 
than their share — their “fair” share of one-half —in carrying 
the imports and exports. With the advent of steam, and especially 
with the advent of iron steamships, an even greater part of the 
country’s own carrying to and fro was done in British ships; and 
in the outside carrying trade — that between third countries — a 
similar extension took place. The result was a great increase in 
the earnings of shipping. This item also reflected itself in the 
excess of merchandise imports. The shipping earnings grew 
apace after the middle of the nineteenth century, and came to 
have a larger and larger importance for the international trade of 
the country, and for the balance of international payments. 
The excess of imports, however, did not grow with steadiness. 
At times the upward movement relaxed, at other times speeded up. 
In a schematic analysis of the consequences of continuing loans, 
such as was made in the first part of this volume, it is convenient 
to assume that they are made at a steady rate — a given amount 
each year — under which conditions it is clear that in time the 
accruing interest on old loans will over-balance the new ones. 
In fact, however, they are made with great irregularity. The 
fAuctuations are closely associated with the alternations and 
repression of industrial activity. During the recurrent upward 
stage of buoyancy and speculation, large loans are made; after 
each crisis there is a sharp reduction, perhaps complete cessation. 
Each of the successive cycles in British economic history during 
the last hundred years has been characterized by a great wave of 
foreign investment, followed by recession and quiescence. Mean- 
while the item of income from the old and still outstanding invest- 
ments has continued steadily to grow. The outgoing movement 
has been irregular; the incoming movement has been regular. 
The net outcome therefore has been, as regards these two forces,