THE CHAMBER OF COMMERCE AND THE BALANCE OF TRADE.

Press, Volume XLV, Issue 7142, 1 September 1888, Page 6

THE CHAMBER OF COMMERCE AND THE BALANCE OF TRADE.

TO THE EDITOR OF THE PBESS. Sib.—Will you permit mc to point out an apparent error in the excellent address delivered the other day by the Hon. B. W. Parker. r After quoting figures showing that the exports for the past year were or greater value than the imports, Mr Parker said—"lt will be manifest that the balance cf trade is rapidly changing in favor of the colony." A century ago economists believed that an excess of exports was returned in bullion, and necessarily represented the profit on a country's foreign trade. But this fallacy has long since exploded. Bullion returned for excess of exports does not mean profit. Beturned by whatever medium, excess of exports does not necessarily imply profit. And in practice the inevitable law of commerce makes It impossible for bullion to be so returned as a rule. The balance of trade may mean a totally different thing In different countries. Its meaning in a lending country may be exactly the reverse of what it may be in a borrowing country. In a lending country excess of imports generally means payment of interest or money lent. In a borrowing country an excess of exports means (or ought to mean sooner or later) payment of interest on money borrowed. In a country which has neither borrowed nor lent, the values of imports and exports must always, under normal conditions, about balance each other. The only features for congratulation In the increase of New Zealand exports, I think, are that it affords evidence that prices are advancing, and that the money we have borrowed is becoming to some extent reproductive. But in a new country a falling off In the value of imports is almost always an evidence of depression at home and distrust abroad. An excess of imports in a new country generally implies that it is attracting capital from abroad. New capital cannot profitably come in sovereigns or bank notes. It must come in useful commodities. It is, of course, to be regretted that too much of the aggregate excess of the New Zealand imports has consisted of capital borrowed and uselessly squandered. No wonder that the value of our exports has been so slow to respond to our inordinate borrowings. Victoria is an instance of a pros Derons colony, with imports always in excess of exports. In I—B the Victorian exportwere only two-thirds of the value of the imports. With Mr Parker, lam delightto see our exports increasing. But 8 the value of imports were at the same time to increase and be in excess of the export-, I would beg to differ from Mr Parker, and would regard such excesses of imports as the more favorable "balanceof trade."— I am, £.c, STUD-JNT.