216 ECONOMIC PRINCIPLES

Merchandise imported or exported.
) Loans, borrowed from or by other countries.
(¢) Interests due on outstanding loans.
‘@) The services of shipping.
(¢) Personal services rendered in one country when
payment is received in another, or made by funds derived
from another.
(f) Tributes, subscriptions, and the like.
(g) Specie imported or exported.
When the net indebtedness due to the first six heads is
worked out, and no addition to any of those heads avails to
balance the account, the settlement must be made by movements
 of specie as shown in the last of the headings, that is
to say, the balance-sheet which shows all the items in the
above schedule in their proper amounts will show equal debit
and credit totals, This will be more clearly seen by
examining the items in order, and considering how they
affect the obligations of a country as against all other
countries. The direct exchange between any two countries
cannot be handled in this way unless we can determine the
amount of indirect payments made and received.
The first item needs little further comment. The valuation
 of imports is naturally made of the goods as received,
for they must be paid for in that state, whether the payment
involve transactions with the foreign seller of the goods, and
the shipowner, or with others concerned in handling and
transferring the goods from the place of purchase to the
point at which they are received as imports. If all the
imports of a country were carried in ships owned by that
country, provided with supplies from that country, and
manned by hands who received their payment in the country
itself, the conveyance would involve only payments among
fellow-citizens, and we might properly value the goods at the
values placed on them when they thus passed into the hands
of the citizens of the country of destination, for conveyance
further by that country’s labour entirely. When goods are
received over a land frontier, it is obvious that the proper
place for valuation, if the account is to represent reality, is at
the frontier. Goods received by sea are, taking international

(2)