The Balance of Trade.-It will be noted from the preceding table that the value of the imports exceeded that of the exports by about £157,000,000. This is called the balance of trade. When the imports of a country exceed the exports in value, the balance is said to be against that country, but when the exports exceed the imports the balance is said to be in favour of such country. This is a survival of the old notion that the more a country exported in proportion to its imports the greater was its prosperity. That notion is quite exploded now. For the last fortyfive years the imports of the United Kingdom have exceeded the exports by many millions each year, the excess for the year 1897, as stated above, being £157,000,000, yet no one denies that this country has on the whole been exceedingly prosperous during that period. The fact is that this so-called excess is more apparent than real. It would take up too much space to explain in detail the reason for our imports being always greater than our exports, but we may state briefly that this is partly due to our receiving goods— 1. Against interest due on our investments in foreign countries, this item alone being estimated to amount to £75,000,000 per

annum.

2. Against payments made in this country, on account of India and our other possessions, to retired civil and military officials, &c.; and

3. Against freight due for conveying goods to and from this country-most of the ships and steamers engaged in our foreign trade being owned in this country, and the freight having ultimately to come to England.

As showing how freight alone affects the nominal value of our exports, we may instance a cargo of coal, say 3,000 tons, shipped to Bombay. The value of the coal at the port of shipment would be, say, £1,500, and the freight thereon, payable in Bombay, £1,500 more. Both these amounts would have to be remitted to England. This might be done by the consignee shipping, say, 600 tons of wheat, value £3,000, and remitting the bills drawn against the same to the shipper of the coal and the shipowner. The freight on the 600 tons of wheat would perhaps be £600, payable in England. The coal, when shipped in England, would be entered at £1,500, and the wheat, when imported, at £3,600. So here we should have an

export of £1,500, represented by an import of £3,600, or an apparent excess of import over export of £2,100 on this one item alone.

The above example, which is based on actual experience, is typical of operations which are going on every day, in a more or less modified form, and serves to show the fallacy of the assumption, as regards the United Kingdom at any rate, that an excess of imports over exports is prejudicial to a country.

In addition to our large import and export trade, there is also an enormous home trade. The exact proportion of this cannot be ascertained, but taking the population of the United Kingdom at 40 millions, and calculating five persons to a family, with an average expenditure of £150 per annum for each family, the value of the Home Trade would be £1,200,000,000, or nearly double that of our Import and Export Trade combined. This, of course, refers to Home Trade alone, i.e., actual consumption, which, of course, includes imported goods consumed in the United Kingdom.

Trade is divided into wholesale and retail. The term wholesale trade is used when goods are bought or sold in large quantities, and retail trade when goods which have been bought wholesale are sold to the public in small parcels or in single articles. Thus, a merchant is a wholesale trader; a shopkeeper is a retail trader.

The persons engaged in trade may be roughly classified into Producers, Distributors, Intermediaries, and Auxiliaries.

The Articles of Trade collectively are referred to as merchandise, commodities, goods, and productions, or wares.

Merchandise includes all articles, whether in their raw or finished state, which are bought and sold. In office parlance this term is restricted more or less to goods imported or exported.

Commodities are, properly speaking, articles of the first necessity either for comfort or for the purpose of industry. Thus tea, cotton, wool, &c., are commodities. The staple commodities of a country are its principal articles of commerce, e.g., cotton is one of the staple commodities of the United States, tea of India, silk of China, and

so on.

Goods are the articles in which a merchant or retailer deals, irrespective of whether they are sold wholesale or retail. This term is also used to distinguish the manufactured article from the raw or semi-manufactured material, e.g., "goods" and "yarns."

Productions or Wares are simply manufactured articles, such as earthenware, hardware, glassware, hollowware, cloth, yarns, &c.

Machinery is generally referred to as such, and is not usually included under any of the above heads.

THE PURCHASE AND SALE OF GOODS

There are three principal kinds of sales, viz., Direct Sales, Sales on Commission, and Sales by Auction. When a transaction is carried out by the principals, i.e., when the owner of the goods sells to the purchaser without the intervention of a third party, it is called a direct sale; when the goods are sold through a broker or agent, it is termed a sale on commission; and when the goods are sold by an auctioneer to the highest bidder at a public sale, it is a sale by auction. Thus, wool is sold by the farmer direct to the wool merchant; it might also be sold on commission through a wool broker in London, Liverpool, or Bradford; or it might be sold by auction at the London or other wool sales.

The goods sold may be ready for delivery at the time, or may be sold for delivery at some future time. In either case the following expressions are made use of to denote the conditions (or terms) of sale and purchase.

(1) Quality. The principal terms relating to quality are as follows:--

Sample or Pattern. In this case the seller guarantees that the goods delivered shall be fully equal to an agreed upon sample or pattern, which is frequently taken from and represents the bulk. The term "sample" is usually applied to specimens of agricultural or raw products (wool, cotton, mohair, silk, wheat, seeds, &c.); to food stuffs (butter, lard, &c.); to liquids (wine, spirits, oil, &c.) ; to semi-manufactured articles (tops, noils, yarns, &c.); and to certain manufactured articles (leather, sugar, &c.). The term "pattern" is applied chiefly to specimens of piece goods of silk, wool, cotton, &c., and other manufactured articles.

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Standard or Type.-A "standard" or type" is a sample or specimen representing a certain recognised and well known quality, for example, in the cotton trade "Fine Broach" signifies cotton grown in the district of Broach (India), of the quality or class known as "fine," sold on a standard fixed by the Liverpool Cotton Brokers' Association. Goods (mostly agricultural products) sold on these terms are usually for delivery at some future time. If, when the goods are tendered, they are found to be inferior to the standard, an allowance, settled by arbitration, is usually made.

Description or Brand.-In this case the goods are sold under some wellknown brand, trade mark, or description, a sample or standard being unnecessary; for example, "Hennessy's Three Star Brandy," "Bannermill 2 fold 40s. Mule Twist," &c.

On Approval means that the person to whom the goods are offered has the option of either accepting or refusing them after examination.

(2) The Price. When certain services rendered by the seller are included in the price of the goods, they are indicated by the following terms :

Loco signifies that the goods are to be delivered at the place of sale, or the place where they are lying, thus "loco Bradford" means that the goods are to be delivered in Bradford, the buyer defraying the cost of packing, railway carriage, &c., if incurred.

At Station signifies delivered at the railway station.

On Rail signifies placed in the railway company's trucks.

Free alongside (f.a.s.) signifies that the price includes all charges incurred up to and including placing the goods (in lighters or barges) alongside the vessel, ready to be taken on board.

F.o.b. (free on board) signifies that the price of the goods includes all charges (packing, railway carriage, dock dues or lighterage, &c.) up to and including placing the goods on board the vessel.

C. & f. (cost and freight) signifies that the price includes the cost of the goods, packing, railway carriage to the port, dock dues, lighterage, or other shipping charges, cost of bills of lading, and freight to the destination of the vessel.

Cf. & i. or c.i.f. (cost, freight and insurance) signifies that the price includes all the items enumerated above under the head of c. and f., with marine insurance in addition.

Franco (or "franco domicile," or "rendu," or "free") means c.f. & i. plus foreign import duty, railway carriage and other charges incurred up to delivering the goods at the door of the buyer; thus "franco Milan" means that at the specified price the seller delivers the goods at the buyer's address in Milan, free of all charges.

Landed terms (used in the import trade) signifies that the price includes lighterage (if any), dock dues, porterage, &c., and all charges incurred in landing the goods at the port of destination.

In Bond means that the goods are lying in one of the bonded warehouses and that the Excise or Customs Duties are unpaid, and will have to be paid by the buyer.