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66 ECONOMIC INQUIRIES AND STUDIES
of carrying goods for others, or may have made large
investments abroad, on which it is entitled to dividends
or interest, while another nation may have its goods
carried for it, or may owe large dividends and interest.
In the former case, a large amount of imports is required
to set off the balance due to the nation concerned, quite
apart from what is required to set off the exports offi-
cially recorded as such. In the latter case a large
amount of exportation is required to set off the balance
of indebtedness with which the nation, asit were, Legins
its import and export account. The character of the
foreign trade of the two classes of nations is essentially
differentiated all the way through for those reasons.
It may be found afterwards that, in fact, a nation in the
first class exports as much, or nearly so, as the official
record of its imports; or that a nation in the second
class imports as much, or nearly so, as the official record
of its exports. But the inferences would be very differ-
ent as to the economic conditions implied. In the first
case the near balance of imports and exports would im-
ply that the nation in question is at the time lending
largely to other communities. In the latter case the in-
ference would be that the nation in question is borrow-
ing largely, for useful or useless purposes' as the case
may be. Before the statistics can be handled at all, in
short, so as to throw light on the economic conditions,
the standard of equilibrium has to be adjusted to allow
for the other elements described.
England, I need hardly add, is a conspicuous ex-
ample of a nation in the first class, its freight-carrying
and its investments abroad being both enormous. But
France, Belgium, Holland, Germany, and the Northern
nations of Europe are all more or less in the same
category. On the other hand the United States of
America, India, Australasia, the South American coun-
tries, and many more are all nations in the second
category, having their carrying trade done for them,
and having dividends and interest to pay to nations in
the first category. But there is much discussion on
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