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ARE WE LIVING ON CAPITAL? 287
of our trade as ship-owners and commission merchants,
yet these being charges with which we are as much
enti~ed to debit foreign countries in the course of our
foreign trade as we are to debit them with the so-called
exports themselves. In order, therefore, to deduce from
the excess of imports a notion of the balance actually
due upon our trading transactions, we must add to the
exports the value of the freight and other charges which
we are entitled to bring into account, by which the ap-
parent excess of imports over exports treated as a bal·
ance of trade would have to be enormously reduced, per-
haps about one half. The remainder would correspond
roughly to the amount of interest which we are entitled
to receive upon our capital invested abroad. In reality,
then. when analyzed, the excess of imports about which
so many people are concerned does not at all imply
that we are diminishing our capital abroad. It merely
shows that our charges to foreign countries which the
imports are sent us to meet are much greater than the
so·called exports which appear in our trade returns,
and that, in addition we have an amount ofinterest to re-
ceive without sending a commercial equivalent abroad.
The facts which we find in studying the Income Tax
returns showing no diminution of our capital, but, on
the contrary, a very large increase, are thus in accord-
ance with a correct interpretation of the import and
export returns themselves. There is no question in
any of them of the nation living upon its capital, but
they all show, on the contrary, that our capital is
steadily increasing, and they are all consistent with
each other.
With regard to the increase of foreign banking
money, or short loan money belonging to foreigners
in London, it might be useful, in this connection. to
point out the necessary limitations of any such foreign
investments in this country. The amount of short
loan money held by foreigners in London is neces-
sarily conditioned by the limited nature of the short
loan market itself. If the amount of money people