growing poorer, just as a favorable balance of trade is no sign of a country's enrichment. An excess of exports over imports may be coincident with the depletion of a country's resources, while a reverse phenomenon may go hand in hand with the development of national productive forces, with the growth in well-being and in wealth. One must consider not the balance of trade, but the character of national production and consumption and the balance between these two when one wishes to pass judgment on national economic progress. One must also realize that even from the standpoint of international payments the exchange of commodities, though very important, constitutes only one among the many factors which go to make up the fiscal balances or the balance of accounts between nations. The balance between a nation's debits and credits is determined, in addition to the balance of trade, by the balance between what have been termed invisible exports and imports; these consist of the following items: 1. Interest on capital loaned to foreigners and profits on enterprises carried on directly in foreign countries. These are usually remitted in the form of commodities, thus increasing the visible imports of a creditor country and the visible exports of a debtor country. 2. Payments for transportation of goods and passengers in so far as these are carried in ships owned by foreigners; the fact that a ship is registered abroad is not a conclusive proof of foreign ownership; domestic capital may be invested in foreign ships just as it may be invested in other foreign enterprises. 3. Payment of premiums to foreign insurance companies, of brokerage and commission charges to intermediaries in merchandising centers; remuneration of foreign bankers financing the shipments. 4. Expenditures of tourists, and remittances by immigrants to relatives and friends in their native countries. 1 In considering the relation between exports and imports the fact is also often overlooked that exports are entered at the custom houses according to their cost at the time of exportation. As a rule goods shipped abroad are sold there at a profit. If the proceeds of all foreign sales are employed in the purchase of foreign goods an "unfavorable " balance of trade, equaling the profits derived from foreign sales, must be the result. It is clear that such an unfavorable balance of trade does not indicate the impoverishment of a country, but profits derived from its export trade. This fact was pointed out about one hundred years ago by Daniel Webster and by many others since, but it is seldom referred to in our present discussions of the relation between the value of exports and imports and of the causes and effects of this relation. REFERENCES Modern Tariff History, Chaps, V, VIII. ASHLEY, P. BASTABLE, C. F. BASTABLE, C. F. BISHOP, A. L. The Commerce of Nations, Chaps. XI-XIII. Fallacies of Protection. Outlines of American Foreign Commerce, Chap. VIII. BROWN, H. G. Principles of Commerce. Part II. COSSA, L. Introduction to the Study of Political Economy. DAY, C. History of Commerce, Chap. XVIII. FISK, G. M. International Commercial Policies, Chaps. II, IV. FAWCETT, H. Free Trade and Protection. GIDE, CH., and RIST, CH. A History of Economic Doctrines from the Time of the Physiocrats to the Present Day. GRUNZEL, J. Economic Protectionism. INGRAM, J. K. A History of Political Economy. HIGGS, H. The Physiocrats. -LIST, F. National System of Political Economy. PATTEN, S. The Economic Basis of Protection. RABBENO, U. American Commercial Policy. Part II. SCHMOLLER, G. The Mercantile System. SEAGER, H. R. Principles of Economics, Chap. XII. TAUSSIG, F. W. Problems. TAUSSIG, F. W. Taussig, F. W. Selected Readings in International Trade and Tariff Principles of Political Economy, Chaps. XXXIV-XXXVII. CHAPTER III INTERNATIONAL TRADE STATISTICS Trade statistics express in figures the facts of commerce. Inasmuch as goods passing national frontiers may be subjected to a more efficient statistical control than those which enter only into the domestic trade of a country, the larger part of trade statitstics deals with the international movement of goods. Need for Standardization. There is at present a lack of uniformity in trade statistics used by different countries; this makes satisfactory statistical comparisons extremely difficult. Differences exist regarding the classification of commodities, the methods of arriving at their weight, as well as the basis of valuation used in case of statistics registering the value of goods. The classifications adopted usually follow the classification of goods in the tariff of each country. The recognition of the fact that such classifications are inadequate for the use of business men and of others who seek trade information, which should be more detailed in character and in greater accord with current commercial terms and practices, has led to improvements in those countries where commercial interests were sufficiently well organized to insist upon a change. In Great Britain a conference of statisticians met in 1920 under the auspices of the United Kingdom Board of Trade. This Conference reviewed the entire field of official statistics and laid down uniform principles for all British Dominions. The calling of the Conference was the result of the recommendations of the Dominions Royal Commission which was appointed in 1912 and which spent several years in studying the natural resources and production of the Empire, with special refer AMERICAN CLASSIFICATION 39 ence to the possibilities of improving and extending InterImperial trade. While traveling throughout the Empire, the Commission was brought to realize how uncomparable were the official statistics of the several Dominions and how many were the discrepancies and omissions which characterized some special fields which they were investigating. The Conference proposed the establishment of a Central Statistical Bureau for the British Empire. A series of recommendations on procedure to be adopted in the more important statistical fields were also made. The recommendations with regard to trade statistics covered such items as uniformity in the statistical year and in the mode of valuation of imports and exports; a more careful tracing of the origin of imports and of the ultimate destination of exports; a clearer demarcation of transit and trans-shipment trade; and last, but not least, uniformity in the classification of imports and exports. The Conference recognized that no single scheme of classification could be recommended for adoption in all parts of the Empire, owing to differences in conditions existing in its component parts and to the fact that the items of the trade classification are to some degree determined by tariff requirements. However, the Conference reached the conclusion that in the matter of grouping items, uniformity in principle may be obtained. The Conference proposed that in order to get accurate and comparable aggregations of statistical data, the items be arranged not in one but in several groups. The classification scheme suggested is based on: (1) the component materials of commodities, (2) their purpose and use, (3) their origin with regard to primary or extractive industries. American Classification.-A new schedule governing the classification of commodities imported into the United States went into effect in September, 1922. It is based partly on the chief component materials and partly on the purpose and use of the articles. The groupings adopted are as follows: Animals and animal products, except wool and hair. Other vegetable products, except fibers and wood. Wood and paper. Non-metallic minerals. Ores, metals, and manufactures, except machinery and vehicles. Machinery and vehicles. Chemicals. Miscellaneous. The above ten groups are divided into subgroups according to the different kinds of materials or kinds of products, and each subgroup is further subdivided according to dis tinctive lines of industries or degree of manufacture of the articles. Individual commodities are shown under the headings in the last-named subdivision. The new classification lists 1250 classes, as compared with 710 classes listed in the classification which it superseded. The detailed classes are numbered in accordance with a decimal plan, which will facilitate future expansion or contraction of schedules in accordance with the demands of industry and commerce, without changing established class numbers. Returns to the Government are required to be stated in commercial units where such are customarily used in trade, or in pounds where no commercial units are in use. This permits the ascertainment of the fluctuations in the volume of trade, which was impossible under former classifications which, for a number of items, showed value only. Trade Statistics and the League of Nations.-The League of Nations has paid a considerable amount of attention to the matter of coordinating statistical information put out by the various governments of the world. In 1920, the Council of the League set up an International Statistical Commission on which were represented a number of inter |