CHAPTER, 11

NoN-MERCHANDISE TRANSACTIONS
TRIBUTES, INDEMNITIES, TOURIST EXPENSES

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So far those transactions only have been considered which arise
out of sales and purchases of merchandise. Imports and exports
of goods have been treated as if they constituted the sole operations
in international trade and as if they alone gave occasion for international
 payments and the transfer of money. As is familiar
enough, there are other operations of large consequence. Payments
 arising from international indebtedness — the making of
loans and the payment of interest on loans — are perhaps the most
important among them; most important because, for several
generations at least, they have played a considerable part in the
trade of many countries and over long stretches of time. Other
payments also, for expenses of tourists, for charitable or family
aid, indemnities payable after defeat in a war, have been important;
 and tho less constantly in evidence than the items arising
from indebtedness, they have at times risen to a commanding
position. Charges for freight and passengers carried in the vessels
of another country, and banking and insurance charges, are also
substantial in amount.
These various transactions have come to be of increasing importance
 since the early part of the 19th century. It is true that
all of them taken together have never been as large as the transactions
 on merchandise account. In no country and at no time — so
far as I know — have they been equal (measured in terms of the
sums of money involved) to the sales of goods between countries.
But they have become large and have tended to constitute a growing
 proportion of the total. We may proceed to consider the
principles applicable to them and the modifications of our main
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