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BALAKOVO—BALANCE

OF

TRADE

383,331, being 122 persons per square mile; Hindus from the arguments. A consideration of these ideas, and numbering 282,169, Mabommedans 6901, aborigines of recent discussions about imports and exports, appears 93,917 (chiefly Gonds), Christians 35, of whom 14 were accordingly to be needed, although the mercantile theory Europeans. In 1901 the population was 326,704, show- is itself exploded. The phrase “ balance of trade,” then, appears to be an ing a decrease of 15 per cent., due to the effects of famine. The total amount of land revenue and rates was application of a trader’s language in his own business to returned as Rs.l,18,835, the incidence of assessment the larger affairs of nations or rather of the aggregate of beinw Rs.0:3:6 per acre of assessed area; the number of individuals in a nation engaged in foreign trade. A trader police was 237. In 1897-98, out of a total cultivated in his own books sets his sales against his purchases, and area of 332,761 acres, 51,827 were irrigated from tanks, the amount by which the former exceed the latter is his &c. A large part of the area (554,313 acres) is stilly covered trade balance or profit. AVhat is true of the individual, with forest, the most valuable timber-tree being sal. it is assumed, must be true of a nation or of the aggregate There are no railways, and few good roads. In 1897-98 of individual traders in a nation engaged in the foreign there were 66 schools, attended by 3791 pupils. The trade. If their collective sales amount to more than their district suffered very severely from the famine of 1896-97. collective purchases the trade balance will be in their In 1897 the death-rate was returned at 84 per 1000, favour, and they will have money to receive. Contrarirising to 307 in the town of Burha. It suffered again in wise, if their purchases amount to more than their sales, 1900^ when in April the number of persons relieved rose they will have to pay money, and they will presumably be living on their capital. The argument fails, however, in above 100,000. many ways. Even as regards the experience of the BalakOVO, a village of south-eastern Russia, govern- individual trader, it is to be observed that he may or ment of Samara, 10 miles above the mouth of the Irghiz. may not receive his profit, if any, in money. As a rule It is one of the chief river ports on the Volga. _ Nearly he does not do so. As the profit accrues he may invest it 167,000 tons of grain are exported every year, while manu- either by employing labour to add to his machinery or factured goods are imported for a wide and wealthy prairie warehouses, or by increasing his stock-in-trade, oi by region. It also contains iron works. The population is adding to his book debts, or by a purchase of stocks or 15,995. shares outside his regular business. At the end of a given Balance of Trade.—This term belongs origin- period he may or may not have an increased cash balance to show as the result of his profitable trading. Even if he ally to the period of Political Economics when the mercan- has an increased cash balance, according to the modern tile theory ” prevailed, but it is still in use, though not quite system of business, this might be a balance at his bankei s, perhaps in the same way as at its origin. The “ balance of they in turn may have invested the amount so that trade ” was then identified with the sum of the precious and there is no stock of the precious metals, of “hard money, metals which a country received in the course of its anywhere to represent it. And the argument fails still trading with other countries or with particular countries. further when applied to the transactions between nations, There was no doubt an idea that somehow or other the or rather, to use the phrase already employed, between the amount of the precious metals received represented profit aggregate of individuals in nations engaged in the. foreign on the trading, and each country desired as much profit as trade. It is quite clear that if a nation, or the individuals possible. Princes and sovereigns, however, with political a nation, do make profit in their foreign trading, the aims in view, were not close students of mercantile profits, of amount may be invested as it accrues in machinery, or and would probably have urged the acquisition of the Avarehouses, or stock-in-trade, or book debts, or stocks and precious metals as an object of trade even if they had shares purchased abroad, so that there may be no correrealized that the country as a whole was exporting sponding “ balance of trade ” to bring home. There is no «money’s worth” in order to buy the precious metals also that what may be is in reality what largely which were desired for political objects. The “mercantile doubt happens. A prosperous foreign trade carried on by any theory” was exploded by Adam Smith’s demonstration country implies a continuous investment by that country that gold and silver were only commodities like others either abroad or at home, and there may or may not be a with no special virtue in them, and that they would come balance receivable in actual gold and silver. . into a country when there was a demand for them, accordIn another particular the argument also fails. In the ing to the amount, in proportion to other demands, which aggregate of individual trading with foreign countries, the country could afford to pay; but the ideas in which there may sometimes be purchases and sales as far as the the theory itself have originated have not died out, and individuals are concerned, but not purchases and sales as the idea especially of a “ balance of trade ” to which the between the nations. We see this in the dealings with foreign rulers of a country should give attention is to be found m governments. Goods are exported from the United Kingpopular discussions of business topics and in politics, the general notion being that a nation is prosperous when its dom, ammunition and stores and ships, which appear in statistics show a “ trade balance ” in its favour and. un- the British returns as exports, and which have really prosperous when the reverse is shown. In recent times been sold by individual British traders to individuals abroad; but these sales are not set off by any purchases the excess of imports over exports or of exports over on the other side which come into the international imports, shown in the statistics of foreign trade, has also account, as the set-off is a loan by the people of one come to be identified in popular speech with the “ balance country to the people or government of another, ihe of trade,” and many minds are no doubt imbued with the same with the export of railway and other material when ideas (1) that an excess of imports over exports is bad, goods are exported for the purpose of constructing railways and (2) an excess of exports over imports is the reverse, or other works abroad. The sales are made by individuals because the former indicates an “unfavourable’ and the here to individuals abroad ; but there is no set - o o latter a “ favourable ” trade balance. In the former case purchases on the other side. Mutatis viutavdis the it is urged that a nation so circumstanced is hying on its same explanation applies to the remittance of goods by capital. Exact remedies are not suggested, although the one country to another, or by individuals in one idea of preventing or hampering foreign imports as a means country to individuals in another to pay the interest of developing home trade and of thus altering the supposed or repay the capital of loans which have been received in disastrous trade balance is obviously the logical inference