CAPITAL INVESTMENTS AND TRADE BALANCES WITHIN THE BRITISH EMPIRE.

The article focuses on capital investments and trade balances status within the British colonies. The article author applies deductively to a few individual countries the generally accepted propositions relating to the connection between capital investments and foreign trade conditions. Those countries of the world which have an excess of merchandise imports over merchandise exports are the capital lending countries, whereas those whose exports exceed imports are the borrowing countries. This is so, because the lending country must secure payment, in the guise of imports, not only for its merchandise exports but also for the interest upon its capital invested abroad in earlier years. Eventually the time will arrive when the annual payments which the lending country receives as interest on its foreign investments will exceed the new and additional capital which it may lend each year. Ultimately the annual interest payments of the borrowing country on account of capital previously obtained will surpass in amount the new capital which it borrows in each year.