254

INTERNATIONAL TRADE

more favorable; the quantity of exports that would have served
to purchase a given quantity of imports shows a rise.
In the interpretation of the chart and of the figures on which it
is based a qualification needs to be borne in mind, tho one more
important as a matter of principle than as modifying the substantive
 results. In the calculations on the net barter terms no
account has been taken of certain items which in strictness should
be recorded and weighed. Chief among these are the earnings
from shipping services; others, less in amount but presenting the
same question of principle, are banking and insurance services and
the earnings therefrom. Here we have items which are in the
nature of exports. The British each year do work of freight and
passenger carriage for which they expect to be paid, and in fact
usually are paid, in that year. The concrete way in which the
British community receives the payment is thru the inflow of
imported goods; it is the money yield of foreign goods sent to
Great Britain and sold there which pays for the shipping services.
If this were the only “invisible” item in Britain’s foreign trade,
and if the recorded imports and exports, instead of being equal
in money value, showed an excess of imports precisely equal to
the money value of the shipping earnings, we could still treat the
situation as one in which imports and exports were equal. Shipping
 services are exports, and are paid for by imports. In such
case, in other words, we should have to consider solely the net
barter terms of trade; no other problem would be presented.
The significance of items of this kind, then, is different from
that of certain other invisible items, such as, on the one hand, new
loans made, and, on the other hand, income from loans made in
times past. Income from past investments, for example, means
that Great Britain is now receiving payments (which take the
form of imported goods), while she is now giving nothing. She
is sending out no goods or services in exchange. The loans and
investments whose income flows in were made in the past, very
likely long ago. The income accruing in the present is pure gain;
pure gain, that is, so far as concerns the present conditions of
international trade. What Britain receives on this account affects