The method used in calculating the contribution of British shipping to the balance of payments is set out in appendix table Al. The credit items consist of the expenditures in foreign currency which would have to be made if all British trade was handled by foreign ships and the losses of foreign exchange at present earned by British ships. The debit items are in two parts. In Part A are the foreign exchange expenditures now made which would be saved and the foreign exchange which it is estimated would be earned from foreign shipowners if all British trade were handled by foreign ships. The difference between the credit items and debit items of Part A is the amount by which net foreign exchange receipts would have been lower or payments higher in the absence of a British fleet. The debit items in Part  consist of the payments at present made to foreigners for British shipping services less the foreign exchange receipts from foreigners at present. The difference between the total of the credit items and the sum of debit items A and  is the additional cost to the balance of payments which would have arisen in any year had the British fleet not existed, that is, it is the contribution of the fleet to the balance of payments.

Most of the items shown in the table do no require further comment, and figures are available for them for the three years 1952, 1958 and 1960, for which the calculation is made in appendix table A2. Items ten and thirteen, however, require further comment. If all British trade were carried in foreign ships, as an offset to the foreign exchange used in freight payments would be the purchase by those ships of stores in British ports. A figure is available for actual purchases, item thirteen, and also for the percentage of tonnage entered and cleared at British ports which was foreign owned. Item ten is then calculated by dividing the actual expenditure by the percentage of entrances and clearances which was foreign owned and multiplying by 100. The actual expenditure is shown as a deduction from debit items  instead of a credit because doing so preserves the significance of the difference between the credit items and the debit items A.