Hawke's Bay Herald. WEDNESDAY, MARCH 15, 1899.

Hawke's Bay Herald, Volume XXXIV, Issue 11173, 15 March 1899, Page 2

Hawke's Bay Herald. WEDNESDAY, MARCH 15, 1899.

THE EXCESS (m IMPOSTS.

We recently had occasion to give some figures showing the increase in the amount of the imports and exports of merchandise of the United Kingdom. It was very noticeable from those figures that the amount of imports was very largely in excesß of the amount of exports. This fact has been attract, ing a good deal of attention at Home chiefly in connection with recent discussions concerning the alleged decay of British trade. A great many people have worked themselves into a state of acute apprehension. They argue that if Britain imports and consumes more goods than she sends out to the extent of £150,000,000 British industry must be languishing, British industry must be decaying, and our unhappy Mother Country must in fact be "living like a Btarved camel on its own hump." There is, of course, no doubt about the facts. In 1895 the imports into Britain were in excess of the exports to the extent of £130,000,000. The following year the excess had increased to £145,000,000, and in 1897 it had reached £160,000,000. At first sight this seems a very ominous state of affairs. It seems impossible that a | country can continue to import more produce than it exports for a | number of years in succession and yet remain in a sound financial position. What is the key to the mystery ? Sir Eobert Giffen, until recently the head of the Stastistical Department of the Board of Trade, has been investigating the matter, and the results of his investigations were given to the world in an address delivered before the .Royal Statistical Society a few weeks ago. We are glad to find that his conclusions are reassuring and that in this, as in bo many other cases,

figures by themselves are not safe guides in the pursuit o£ financial studies. He begins by pointing out that this state of things which is now causing such widespread alarm in some quarters has existed for at least fifty years — as far back, in fact, as we have any reliable statistics on the subject. In 1855, the date from which exact comparisons can be made, British imports were some £37,000,000 in excess of exports, and the cxc ss has steadily increased from tint time to the present day. It is to be noticed, however, that we are not alone in this respect. Both Germany and France are countries in which for years past the imports have been largely in excess of exports, and what is still more remarkable, it has been shown that there is an excess of imports over exports when the imports and exports of all the countries of the world are idded together. One would naturilly suppose that the totals of the world's imports and exports would be exactly equal, and the fact that they are not so. leads us to the conclusion that the figures of British mports and exports may be misleadng. That indeed is the case, for we Ind that while the exports are valued it the port of export the imports are ralued at the port of import. Now ;oods must have a higher value at the port of import than at the port of export or there would be no profit in trade, and consequently imports are invariably somewhat overvalued in proportion to exports It is difficult to say how far this over-valua-tion will account for the excess, but it must at all events form a considerable share of it. There is, however, another p oint which will account for a much larger share of the excess. England is a great shipping country, and does a large business all over the world in carrying goods and passengers not only between England and foreign countries but between one foreign country and another. All this of course is a highly remunerative branch of trade, but it is not taken into account in compiling the tables of importß and exports. No doubt the value of this service of transport and handling is paid in goods, and so swells the apparent difference between what we send out and what we bring in. Sir Eobert Giffen estimates that the earnings of ships at the present time must be not less than £70,000,000. Two very large factors in the excess' are no doubt the profit on banking and other commission business and the interests and profits from other countries from money invested by English capitalists. London is the banking centre of the world, and everyone knowß that banking is not an unprofitable business. English capitalists have also invested enormous sums with foreign governments and in private advances in foreign countries. All the profits of banking or money lending must be paid in the form of goods imported into Great Britain. The amount of these profits must be very considerable although it is impossible to appraise them with any degree of exactitude. Sir E. Giffen puts them down as amounting to £18,000,000 in the case of banking profits, and £90,000,000 for interest and profits on loans. When these various; sources of income are considered it will be seen that far from the excess of imports showing a languishing condition of trade it would be strange indeed if the excess was not considerable and continually increasing. If there was no such excess it would prove that we were carrying on our export trade at a loss so great as to swallow up the profits derived from shipping commisions and foreign investments, whereas it is o matter of common knowledge that the development of British trade in recent times has aroused the admiration of the world. Sir Eobert GifEen calls especial attention to the fluctuations of trade, and warns us not to jump to the conclusion that trade is decreasing because exports or imports fall off for a few years. As he points out, that may be due to a fall in prices rather than to a decrease in the amount of produce actually sent out or brought in. Or again it may mean nothing more than an exceptional activity in home trade or the existence of some circumstance temporarily affecting the purchasing power of some of our larger customers among foreign countries. He shows that the direction of trade is always changing. At the present day coal and shipping occupy the place in British commerce which in former times was held by wool, then by woollen manufactures, and then by iron and iron manufactures. This leads to the conclusion that the many complaints which we have beard during the last few years about the falling off in our foreign exports may not be well founded. The truth may be that British traders have been forced to specialise — to devote their energies to pushing their business in some particular lines and to let slip the trade in other lines where they could not reap the same profit. To sum up in a few words, Sir Eobert concludes, " Without a general survey of trade no opinion can be justified to the effect tbat a decline of English trade generally has begun or is at hand. The decline appears improbable because, with abundant capital and energy, people can exchange with each other indefinitely, can make and consume what they most require, and to a country like England, with a large credit in foreign countries, this would be sufficient to ensure all that they can want from abroad and ample prosperity at home."