247
by far the most important lending country, that the capital export
 reached undreamed-of dimensions.
The consequence was that for a decade or thereabouts the normal
trend — so it may be called — of the country’s international trade
was interrupted. A glance at the uppermost line of the chart,
which indicates from year to year the excess of imports over
exports, shows that this excess grows until the close of the
century. But with the year 1900 it ceases to grow ; and after 1904
it declines sharply. Its movement shows an unmistakable inverse
correlation with that of the capital exports. Thruout, as the
capital exports rise, the excess of imports shrinks. Most significant
 for the present purpose is the fact that the marked expansion
 of foreign loans which began about 1904 is accompanied with
an equally marked decline in the amount by which the imports
exceeded the exports. It will be observed, further, that the correlation
 is direct and immediate. There is no indication of a lag;
the change in the balance of payments and that in the balance of
trade are synchronous. Of this exact concurrence, hardly to be expected
 on grounds of general reasoning, more will be said presently.
Such a reversal of the normal movement — one so considerable,
and persisting thru a decade — would presumably lead to noticeable
 consequences in the terms on which Great Britain got her
goods from other countries. It would tend to make those terms
less advantageous. Had the normal course of events continued —
a growing increase in the excess of imports — they would presumably
 have become more advantageous from year to year. The
reversal (or rather, marked slackening) of the current of payments
might be expected to lessen progressively the gain of Great Britain
from her exchange of goods with other countries.
On this precise topic, the greater or less gain secured by Great
Britain from her international trade under these shifting conditions,
 we fortunately have significant evidence. The statistics
inform us accurately about the imports and exports (in terms of
money value) ; and it happens that the figures showing the amounts
of the invisible items are almost equally accurate. Still more
I See pp. 259 ef seq.

GREAT BRITAIN, II