The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1878-01-23
THE BALANCE OF TRADE.
ABsUEDIrY OF THE THEORY THAT We ARE
RICHER BECAUSE WE EXPORT MORE THAN WE
IMPoRT-AS ELUcIDATIoS BY CHARLES b.

RICHER BECAUSE WE EXPORT MORE THAN WE
IMPoRT--AS CALCULATION BY CHARLES Il.
MARSHALL
To THE EDITOR THE HERALD
In the excellent report OF the committee OF bank
officers submitted to tho meeting at the Clearing
House occurs reference to the improving con-
dition OF the country shown by the so-called
''balance OF trade" which said 10 be at present In
our favor instead OF against as In previous years,
and the writer OF the report would lead one
to infer that in his opinion this 10 desr-
able condition for nation 70 occupy per-
manentiy In respect to its commercial TRANSACTIONS
Now, have no disposition to cricise document SO
faithfully and ably written report, and winch
It Is nopcd will produce the best results IN averting
tho passage OF the silver swindIe but seems 10 me
that this balance of trade' theory is deuson which
ought be dspeled, facts show that what We are
Accustomed TO call favorable balance" III reality
an unavorable one aud tDa instead Of regarding tue
existence OF The former subject OF congralultion,
1t is in reality an inaicatiou OF national poverty
Now what are the facts IN regard 10 tue 'palance OF
trade SO term.uY They are tnese -Creditor nations,
nations which draw largely oi tue worlds wealth,
consequently rich na.ions, generally snow wnat
we would call an uaiavorao!e balance ., Of
lS42 the exports oi Great Britain exceeded
her imports by some E3s 100000 But was she men
in prosperous condiiionY Far from II. On the
trary poverty ana starvation were everywhere rIe.
rho wages oil tho best iacorcrs averaged out Sax 10
di-,ncls seemed If mast oveitake botn
pioyer aud employed From 1854 10 1876 tue imports
oil Great Britain were largely III excess OF the
exports In Year has this excess fallen much
below E24 900 900 exclusive OF bullion and specel ard
In 1876 The prepondcrance OF imports over exports
luo, estimating specie was fllS,37S, Ill From 1904
to ls74-a period oil twenty years-the excess Is
estimated 81, lO $50, IA Tnis includes both specie
Clearly, thcn, England has been growing poorer
during this period, according 10 the ''balance OF
trade, theorists But has she iact9 A morning
MN "a n shed N a q
prove that she Is becoming gradually impoverished
spending her oapita and savings, 50 to SPEAK out
somehow or other sho does not seem TO show it,
Pauperism has decreased within her borders, taxes
have been diminished (nota5iy the custom duty ON
sugar, which yielded f5 por annum, and which
has been done away with aitogether); her commerce
has steadily increased; her fleets cover every sou;
fl99s4 ss2 Is her poverty very serious after all
Now lake our own case From 1906 to 1875 the
"balance OF trade" was III our flavor" $50 tormed)
but three times, and always III times Of panic
and commercial DISASTER while during the periods OF
our greatest prosperity ana most rapid growth the
"Dalaucc of trudc' has been against as. Iu other
WORDS have, ia seasons OF prosperity ostensiby
bought from han we have sold 10 foreign c0un-
tries In 1858, after panic OF 1857 the conditions
were reversed and we had a "avuraule'' balance of
SS,672000 In 1852 IT was 81, 3l5,O0O and IN 1874,
after the panic oi 1875 IL rose 70 $lS.S76,0O0 All
these three periods we're certainly not prosperous
episodes IN our history.
With the exception OF the above period the balance
oil trade was invariably against US. and from 1855 to
1875 amounted 10 s24lO, 72l, 600 VIII any one
tend that tnis showing Indicated poverty while the
present indicates Weathr snould nardly tnnk so
facts DO consulted. But consider II II Is
not absolutely essential that a country which
does profitable business with other nat ons,
should ''baiance OF trade' against
IT? |, for instance, ship 1000 barrels Of
-four 70 the Liverpool market, which cost me, say,
$4,000 l expect " sell them ut profit, and as a
matter OF fact DO realize ON my venture, say 81 900.
thus have sum amounting to FL 200 or thereaDouts,
the total result OF my shipment BUY with this sum
200 of Manchester oottons. which import Into the
Uniied states. The Custom House returns show here
excess Of imports experts on this one rans-
action OF $1,000. But am p0orerY Am not richer
10 the extent OF this sum- and is not the country OF
which am citizen ricner as Welt
The late Mr.. Horace Greeley used to consider that
u Utoptan prosperity consisted in condition OF So
clety where all should sell and none should buy. This
what ''protecti0n" in vain seeks to accomplish.
But when Mr. Evarts SAID ION late occasion
that ii we would sell TO foreign nations we must buy
IL ON them be uttered trutn which annihiatcd the
'baance Of trade'' theory at blow. And Will add
that, II we sell ut profit TO foreign nations, we must
buy from them as expressed IN money valuos more
than give else trading at loss. True 1t Is
that our present exports are uay quidating our
deOls abroad, aud, far doing TINS, we may
CO. gratulato ourselves, but we cannot point to IL
otherwise than proof that we are not rich. When
real prosperity comes to u.s. and our debts
sh ould wish may return) to condition OF trade
when, our capacity TO consume bciug increased, we
shall take largely OF foreign products. And If orr i'm
ports then exceed our exports according to custom
house valuations there will DO nothing III this 10
ate apprehension On the contrary It should inspire
confluence and hope. l am, &c..
CHARLES II. MARSHALL.