EXPORTS AND IMPORTS.

Press, Volume LXIII, Issue 19142, 27 October 1927, Page 11

EXPORTS AND IMPORTS.

■•"Lbh*." wa * R *!'?•

TO THE EDITOB OT THE TRESS. Sir,—ln connexion with a series ot interesting articles appearing in your columns relating to this subject, invoked by a certain recent report made by the City Engineer, it is common knowledge to students of economics that goods which are transferred trora one country to another are rarely paid for in specie, but additional goods aio sent in exchange from tho receiving country to tho first exporter, tniu> avoiding tho expensive necessity ot transferring, and insuring in transit, gold (gold being the form of _ bullion most easily negotiated, duo. to its own intrinsic value). Where, however, a country's imports aro far in excess of its exports, bills ot exchange, in tho importing country will be procurable at a.rate above par, duo 1o tho heavy demand by importers to obtain them for remittance to their creditors in payment for their goods; whilst in the exporting country (for the sake of convenience, two countries only are being considered as exchanging goods) bills will be at below par. Further, when bills are either so tar above or so far below par as to be outside- the "speeio points," bullion will bo transferred from one country to another; but this movement of bullion will encourage investment from abroad into the country transmitting it, and this will tend to make the exchanging powers of tho countries concerned equal. The country which has "become subject to foreign investment, will, however, have interests mortgaged to a greater extent than is perhaps sound finance, and the profits of the public generally will suffer. Then, with due regard to the law of comparative costs, I consider that the more self-supporting 6r "self-contained" a country is. the better will be its chances of becoming progressive.— Yours, etc., INTERESTED.