New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-10-11
THE DEPRESSION IN BILLS or FOE
EIGN EXCHANGE.

being III good WORKING Oluer dppediS h"ii
the renewed depression this week IN the
prices of bills on London. The rates at
which business was done yesterday would, IN
ordinary times yield the bankers a profit OF
about two per cent on the importation Oh
gold, and the best prices at which shippers Oh
produce and merchandise could sell their
sixty-day drafts to the bankers were three per
cent below the rates of a month ago. What
il the cause of this depression, and what does
it indicator
The cause is not as many believe, an eI-
cess of exports over imports iii our foreign
trade. May is the last month for which wo
have full official returns of he foreign COM
merce OF all the United States ports. The re-
port of the Bureau of Statistics shows that
the imports for that month were valued at
So, 800 900 in gold, and the exports, including
specie and foreign goods re6xported, Mt only
sJO,2OOOOO in gold. The exports of May in
cluded about 225,O00 bales Of cotton, valued at
$4,000 900 in gold. This is thee times the
average of the cotton exported in the subse-
duent months, the expectation of the new crop
not having yet fairly commenced. 1t Is not
likely that in either of the four months since
May the exports have been greater than
the imports, or even equal to them.
For the fiscal year ending With June 80, the
imports were valued at S6S3,O00,0O0 and the
exports at 56OS 100000. Leaving out Of the
account the exports and imports of specie, the
balance against us on the merchandise ac-
count for the year was over one hundred NIL
lion dollars. 1t may be said that all this COM
merce was not with Great Britain. We reply
that in effect the account of our whole foreign
trade is settled in London. 1t Is the same
substantially as though all our exports and
imports were made to and from Great Britain.
Again, it is objected against such comparisons
that q New Orleans merchant may ship cotton
to Liverpool sell it at profit of twenty per
cent, invest the money i'll cotton goods, and
enter them at New-York The result would
be that in this particular case the value OF
the import would exceed that of the export
twenty per cent, while at the same time New
York would owe nothing to Liverpool. But
we may also suppose that the agent or a
Manchester manufacturer sells cotton goods
in New-York at profit Of twenty per cent,
invests his money in cotton, and ships the cot
ton to Liverpool. This is the reverse Of the
case first supposed. Here the value OF
the export would exceed that OF the
import twenty per cent, while at the
same time Liverpool would owe nothing to
New.York. Thus we see that if this question
of profits is introduced, we must know which
nation supplies most of the capital. We have,
however, no reason to suppose that Americans
furnish more than foreigners Of the capital
employed in our foreign commerce. Certainly,
until the fact is clearly ascertained it is unrea-
sonable to assume that the difference between
the total values of our exports and imports
merely represents the earnings of American
capital.
But we do know it to be fact that the
people of the United States incur every year
immense debts to Great Britain and Germany.
United States bonds State stocks, munl-
cipal securities, railroad mortgages and shares,
and obligations of every kind, have been sold
in those countries to the estimated amount Of
between one and two thousand million dollars,
while the corresponding securities of European
nations are never seen on this side of the
Atlantic We may estimate, in round numbers,
that one hundred million dollars are now re-
quired each year to pay the interest on Ameri-
can securities held by foreigners. That inter-
est must be provided for precisely in the same
way that an importation of one hundred mil
lion dollars worth of foreign merchandise
would have to be met. There is also large
sum annually earned by foreign shipping in
bringing foreign goods to the United States.
Il il not clear if England and Germany
during the current year take one hundred mil
lion dollars worth less of United States bonds,
railway mortgages, &C., than the amounts they
have been in the habit of taking for the last
six or eight years, that they can take one hun
dred million dollars worth more of cotton,
corn, and wheat without affecting at all the
balance of payments is it not clear that a
United States bond, bought in London and
sold in New-YOrk, can be made to pay debt
quite as readily as gold or silverf We have
sufficiently demonstrated, we think, that it is
not difficult to suppose balance of trade, or
more correctly balance of matured indebted
ness in favor of this country to be the cause
of the present depression in bills on London
and of the consequent shipments of English
sovereigns TO New York.
The true cause is the postponement Of re-
mittances by importers in the United States
to their foreign creditors The importers,
unfortunately, in the present state of bust
ness are more in need of money than their
creditors in Europe. The former have debts
to collect which may not be promptly paid.
They might, if they bought bills on London
with which to pay their debts abroad, be
obliged to pay twenty per cent interest
on loans they would be forced to make in New
York. They may not, and doubtless in many
cases do not, have the money with which to
discharge their foreign debts. They are wait
Ing for their debtors to pay up, and mean