FREIGHT CHARGES 
139 
If now the shipping is all done in British vessels (this of course 
was the sort of situation that prevailed as between these two 
countries for a generation preceding the war of 1914-18), the actual 
relations become different. The official statistics will again 
reflect the change; but again with figures not indicative of the 
real situation. If the merchandise imports and exports of the 
United States, as recorded by the United States, are the same in 
money value — that is, if the imports f.0.b. just equal the exports 
f.o.b. — the United States has nothing left with which to pay the 
freight charges due to British vessel owners. In due time the 
relation of imports to exports will become such as to bring about 
payment for this extra item; the exports recorded f.o.b. must 
exceed the imports recorded f.o.b. by the amount of the freight 
charges. An equilibrium of international payments will be reached 
only when the United States statistics regularly show an excess 
of impqrts. And this will indicate the real situation: the United 
States will be paying for the shipping services by sending merchan- 
dise to Great Britain. On the other hand, Great Britain, whose 
records would show an excess of imports in any case, because of 
her statistical practice, will again show — as in the case of trade 
with Australia — a greater excess of imports than would be shown 
if the shipping trade were equally divided. Part of her import 
excess will be nominal, but part will be real. 
In sum, the usual statistical practice — that of valuing imports 
c.f. and exports f.o.b. — makes the imports of most countries 
appear large in relation to their exports. If all countries kept 
their records in this way, all would tend to show an excess of im- 
ports. That is, to state it more carefully, if merchandise exports 
and imports were such as exactly to pay for each other — if this, 
the simplest situation in international trade, were established, 
and if shipping trade were equally divided, so that nothing from 
this factor intervened to disturb the simplicity of the situation — 
nevertheless the statistics would show for each and every country 
an excess of merchandise imports. And therefore if the shipping 
trade is not equally divided, allowance has to be made for this 
continuing deceptive circumstance; a discount, so to speak. has