The Washington union. [volume] (City of Washington [D.C.]) 1857-1859, 1859-04-06
TaE RALANcE oF TRADE.

! This expression Is often used, but seldom under
stood 1t refers to theory, long believed in, that
where the commercial statistics of a country show
that its imports exceed its exports its trade must
be disadvantageous one. Whereas, in truth, such
statistics do not tend to establish that proposition
Other circumstances enter into and form portion of
| the material elements of conclusion The trade
may, in fact, be highly advantageous when the bal
by these statistics appears to be largely against
u.s. a really losing one, when they indicate that it
had been highly prosperous. Whether it is the one
the other, only be found by considering every
element that enters into the transactions that cons
tute the great whole The commercial statistics of
our country may show that, in given year, we have
exported three hundred millions of American pro-
ducts, and imported four hundred millions. But
whether the balance of the advantages of the trade
with, against us, cannot be known from these
two facts AS ordinarily stated, it would show bal
ance of hundred millions against us, whereas they
equally prove that we have made hundred millions
by prosecuting that trade. We sent abroad, what
| cost three hundred millions at home. When sold
| in foreign countries, we may reasonably expect
| profit of twenty-five per cent. If we invest the
whole amount of sales including first cost, and the
| profits, then bring home one hundred millions
more than sent away which, when entered in the
ordinary commercial statistics would show an impor-
tation of four hundred millions. In the common
mode of stating the matter, it would be said the
balance of trade hundred millions against us,
when in fact had made that amount of clear profit
upon the outward cargoes alone. In this case it
would not be true that we had bought
than we sold. We sold four hundred millions
of American products, and bought four hundred
millions worth of goods. The transactions would
amount to simply exchange of products Of
the same estimated value. But if the expenses of
transporting and selling our exports paid here,
then the profits might be less by that amount, and
the value of our imports would by that sum exceed
our EXPORTS On the other hand, if the profits ON
the outward cargoes exceeded rs per cent. beyond
cost of transportation, then that excess should be
added thereto, in order to show the real profits If
the outward cargoes should not net enough to pay
for goods purchased for importation, then there
would be loss by the amount of the difference. In
such case there would be real loss on the outward
cargoes and we should buy more than we sold. In
that case there would be balance against us. If
paid before the tide of trade returned in favor
there would be real balance to be made up in
money. Such trade would draw specie from us,
and, unless we included gold and silver among our
| productions, would render them scarce. But
while millions of our annual productions are con-
sumed in obtaining from the earth gold and silver,
can export to that extent without diminishing the
amount in circulation and use. But whether we
import export the greater amount of the precious
| n 4 Al L. 4 A e.
of trade If our home productions, of all kinds in
Guiding gold and silver, actually pay for all pur
chase abroad, there cannot be balance of trade
against us; while, on the contrary, if the amount
purchased out of the net proceeds of sales ex-
coed the cost Of the amount Of things sold,
| there must be a balance in our favor, whether
| it is paid to us in coin in other products
| that we may need 1t is true that occasionally
purchase foreign productions beyond our ability to
pay at the moment, and thereby become debtors
abroad Still, all such indebtedness, whenever il
unfortunately occursis soon cancelled in the ordi-
nary of trade by the increase of expectations
and the dimnution of imports In some countries
| we always sell of products than we pur-
chase of theirs while in others we purchase
than we sell. In all of these the balances only
are cancelled with specie The amount of specie
we receive in the is paid out in the other, and
usually without being brought home, and thus the
| specie account is balanced when the transactions
with all nations brought upon the balance sheet.
Each country, in buying and selling, does so to
make profit and the universal prosperity of COM
mercal communities all the world shows how
well they succeed The sum total Of buying and sell
/ H Il
ing must be equal unless there are losses by unpaid
debts, whether such buying selling is of the pro-
duce of the ocean, the field, of the mines. When
all the transactions of the work collectively
sidered the sum total of the products Of labor must
balance each other The profits upon the various
transactions constituting the grand aggregate must
be widely different. transaction may be profta-
bic to both parties but far more so to one than to
the other or losing 10 both, depending upon the sub
sequent disposition of purchases which may prove
advantageous or ruinous These profits, which are
the great object of trade do not enter into the ques
ton of the balance Of trade arising from original
transactions between and other nations. That
balance can never be determined from considering
the homo value Of our exports of the value Of our
imports, whether upon the homo or foreign valua-
ton. We must extend our investigation beyond
these before any reliable conclusion can be formed
The building of ships and freighting may be prof
1 N e.