The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1872-05-07
NEW YORK HERALD TUESDAY, MAY z, ls72-TKPIE SHEET

aDOVe
additional allowance OF five per cent
II Is often claimed that large sum should be
added TO the adverse balance OF trade as exhibited
upon the merchandise statement for the freight
paid to foreign shipOwnere who now do most OF the
ocean transportation.
In the absence OF correct data In regard to the
Bureau OF Statistics has estimated the amount to
be eight per cent on the declared value OF the mer
chandise; ana, as about siXtyeght per cent OF the
whole was carried in foreign Ships this item
amounts to $l69,O0O 900
Another item often added to our supposed foreign
debt is the annual expenditure OF Americans re-
siding or travelling abroad, estimated by Mr. Wells
at twenty millions per annum. But this s now
partially c0unterbaanced by the expenditures Of
foreigners travelling for business or pleasure in the
United States the number OF whom, both from Eu-
rope and ASIA Is already very considerable, and Is
every year increasing. There is, however another
source from which we receive much larger access
sion OF wealth than from foreign travel yiz.-immi-
grafton. The lowest estimate OF the amount OF
money brought into the country by immigrants is
$6s per capita, at which rate a sum OF nearly
$22, 900 0CO must have been added to our national
wealth by the 32l $50 immigrants who arrived on
our shores during the fiscal year ended June 80,
1871, an amount which would far outweigh the
loss sustained through the somewhat lavish ex-
penditures OF wealthy Americans travelling in
foreign lands.
the last item to be added to our estimate il the
interest which has become due upon the debt while
1t has been accrung, and upon the superstition that
the whole amount Of our foreign debt does not now
exceed $9O0, 900 00O this item would comprise about
$240, 600 OF t-say eight years. interest at an
average OF $50 ooo, 600 per annam eve ala not be.
1851 AS about onehalf of the amount received as
interest on American securities 81 has been REIN
We have now the following items-
Adverse balance of trade for eight years
Freight 70 foreign shpoWners lSSSS@S
Contingencies SW0,WO
Aggregate s7o2 100000
From the above statement 1t appears that the
debt we owe to Europe, incurred during the past
eight years, should aggregate about 702, 600 900.
But owing to the fact that credit abroad during
part of that period was not assured, our securi-
mate made by the Chief Of the Bureau Of Statistics
establishes the fact that the average discount dur
ing the period named was not in excess OF twenty
two per cent. In computing the aggregate of this
debt, the par value OF these securities must be
certained; and as they sold at an average rate Of
seventy eight cents on the dollar IL follows that
our debt to foreign nations amounts to 5000 GOO 900,
and our annual interest charge to "a, 900.
1t Is proper to add here that several heading
bankers, as wen as some of the ablest financial ed
tors, are firm in the belief that the value Of federal
securities alone, held in Europe exceeds
twelve hundred millions. A part or the whole Of
the discrepancy may be accounted for by the
fact that the computation OF 5000, ooo, 600 az
only those which are owned In Europe, and not
those which are held as collateras. It is well
known that the low rates OF interest," about one
| half those Of New York, have attracted from this
country borrowers for large amounts on the security
The most important question is, What have we
| received for this Indebtedness The reply IL,
! foreign merchandise. chiefly European products,
! ranging from One-sXth to One-fourth of the value
| OF our total importations.
| Upon the common assumption that our imports
| consist mostly of Injuries, this would not be a
pleasant exhibit, but such is far from being the
| fact We have borrowed large part OF the total
import and In order to tell OF what 1t consists, 1t Is
necessary to consider rule which has been proved
| by experience-vz., that the most constant ele-
| ment In our Importation, that which varies least
per capita, consists Ofartices Ofluxury or comfort
Wines silks, tobacco tea and coffee, fancy goods
and the like 1t therefore follows that the excess OF
imports which we have borrowed consists of
articles of necessity, such as metals, lumber,
leather, hides, wool, dyestufs ana other articles
which enter into the processes of domestic in
dustry. and most Of which are reproductive in their
| nature.
And this is doubtless the fact--thc war diverted
men from the accumulation to the destruction OF
| capital, and what we have borrowed is In some
| respects, simply replacement OF the capital de-
str0yed. 1t has therefore been force without
which we should have been hampered and crippled.
Had we not thus been able to borrow these articles
OF prime necessity, railroads, mills and works
Of every kind, and the opening OF new lands. would
have been far less In one sense IL may be said
| that by thus borrowing portion OF our tools O
production and distribution abroad we have placed
| ourselves in position which will make 1t easier
| for us to pay our debt owed both at home ant
abroad. We have borrowed productive power; ant
the possession OF this power, by enabling us to EN-
ductive power of another kind--that of human In
telligence and muscle as represented in the score
of thousands or able-bodied immigrants who lOc
annually to our shores This Influx constitutes
permanent addition to our weathproducing forces
AS to this debt being due on demand, and tn
alleged danger OF fiscal trouble from the sudden re
turn of bonds little need be said the fact that the
have been taken when credit doubtful
makes IL certain that they will be held, now tina
our credit Is assured II Is believed that our dan
ger is greater from too great facility in borrowing
yet more than from any sudden collapse of cred
and an imperative demand for payment OF what We
now owe. The export of United States bonds has
partly ceased but we are now borrowing railroad.
by exporting their bonds; IL behooves us to sc,
that we do not borrow railroads faster than We
| can DrOftably use them.