The daily Argus. (Rock Island, Ill.) 1873-1877, 1875-01-04
The Balance Of Trade and Specie Pay.
ments.

An adverse balance of trade is not
shown by the entries of the custom house
books. When these books record the ex-
port of $4,000, 600 worth of goods and
the import of $l00,000,00 worth, it is not
a fair deduction that there is balance of
$25,0O0,000 against us, which we must
hquidate with gold or evidences of indebt-
edness. For if the exported goods valued
at $75,OOO,O0O here were worth $S5,0OO,-
600 abroad, and if the imported goods
valued at $l00,O00,000 here were worth
only 1856, 100000 abroad, then the exports
and imports have just balanced each other
The cargoes sent abroad have just paid for
the cargoes brought home. There is no
balance against anybody. 1t is possible,
indeed, that the $75,00OOOO worth of
goods exported will sell for enough in the
English market to more than pay for the
wares entered at 100000, 900 at our Gus
m-house on the return voyage. In this
case the balance of trade would be in our
favor, aud yet the custom-h house books
would show an adverse balance of $50, 600.
600 1t is evident that the testimony of
these books is not to be relied upon at all.
so tar as the balance of trade is concerned.
A recent writer for magazine on the sub
ject gives good illustration of this fact.
He says:
Boston merchant will ship cargo of mixed
goods % the Sandwich Islands to he exchanged for
palm oil; this palm oil is shipped to England as a
t a material Tor manufacture, and sold for cash
the cash is Immediately invested in English manu-.
IacIured goods, which are brought to the United
states for sae. The outgoing cargo may have been
entered upon the Boston custom house books ar a
valuation of $4,000 only while the incoming cargo,
having accumulated the profits of two entire
changes o. Investment, the carriage of stocks
q vvnr and bU
ment, Is entered at a valuation of perhaps $4,000
This would show balance Of trade against the
be no balance whatever. but this diffe ence would
really represent the profits Of the vo age around
the world This is a common case plainly stated.
and represents the actual facts as regards large
proportion OF cur foreign trade.
There is no infallible criterion by which
the balance of trade can be reckoned.
Professor Cairnes says, in his recent book
10 determine the amount or extent of
the advantage derivable from foreign
trade is, and, venture to say, must
ever be, an absolutely insoluble problem"
As long as two countries trade with
each other, both must gain something.
For IT either lost, its demand would
cease. No merchant persists for years in a
business that does not gay. This mutual
gain cannot be reckoned. 1t consists large
" in the qualification of individual tastes.
Who is to weigh this qualification Can
any one tell the amount of advantage we
derive from the tea trade? If, however,
we take the definition of the balance of
trade which makes it simply the difference
between exports and imports, there is
clew, although not sure one, to the
amount. The books of the bankers who
deal in foreign exchange furnish this clew.
Ii they show that we have exported more
gold than we have imported. it is fair in
Inference that the balance of trade is against
US, because it is gold which finally settles
all deficits in international accounts, 1t is
not fair inference. however that the pre-
else amount of the adverse balance of trade
is indicated by the excess of the exports of
gold over the imports oft. five buy $780,
100000 worth of goods from England and
sell her sec, 100000 worth in the same time,
the real balance against us is $4,000, 900
lf,nOw,we float $50, 900 worth of bonds.
stocks, etc., on Lombard street. we will
have to export only $l0,00O,00O in gold to
make good our account, and thus the an
parent balance of trade will be but one
fourth of the real one. On the other hand
the bankers books can take no account Of
the enormous sums of hard money brought
to this country by emigrants These men
do not buy bills of exchange. They
bring their gold and silver on their per-
sons. 1t is estimated that German emf
grants have, within half a century,
brought into this country s500,000,0O0 in