New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1889-03-15
FoREIeN INpEBrEDNEss.

Mr.. Gould's reported talk about the business
situation occasions much comment. Unfort-
unatey, this report comes from a Western
city and it will be remembered that some
what similar account of conversation with
Mr.. Depew, some time ago, came from the same
quarter. " turned out that Mr.. Depew was
not reported with absolute accuracy. 1t is
quite probable that the remarks attributed to
Mr. Gould were not exclusively his own. There
is local coloing about them, so to speak.
which seems to accord with the temper Of a
Western Spectator rather than with Mr..
Goulds known position as an owner OF rail-
roads.
But when Mr.. Gould Is reported as saying
that imports exceed exports, he doubtless re-
fers to the last calendar year, In which the ex-
cess was about S33, 100000. In January and
the previous three months the balance was on
the other side, as usual at that season; prob
ably in February imports again exceeded ex-
ports little. The point Of the comparison Is
that the excess of exports over imports was
formerly largo, so that foreign debt was ex-
tinguished TO an enormous amount, whereas
there is now some excess of imports, and for
eign debt is being increased. The small ex-
there were not other facts which Mr.. Gould
possibly mentioned, but undoubtedly had in
mind. A large annual excess Of exports is re-
quired In this country to pay interest due
abroad, and to compensate for undervaluations
of imports. In this respect comparison with
Great Britain is apt to mislead. British In
vestors have claims in every land on the globe,
from which interest returns to them yearly in
the form Of goods which are not paid for by
goods exported. But this country has an annual
debt to pay, because it is employing foreign
capital largely.
The amount of this annual Indebtedness can
not be separately estimated with much ac-
curacy. Bankers were formerly able to ascer-
tain closely the amount Of United States bonds
held abroad, but now the foreign debt Of the
Nation Is Insignificant, while railroad bonds
and stocks held in Europe, mining securities.
manufacturing stocks, land mortgages, and
ownership Of land and other property by for
eignets, have enormously increased. 1t was
estimated that within a recent twelvemonth
more than one hundred and City millions Of
foreign capital was thus invested here, on
which tho owners expect liberal returns. In
addition TO products which pay for articles ex-
ported, this country therefore has to export
each year other products to pay interest on for
eign capital employed here, or else IL runs into
debt. But the amount Of this annual interest
cannot be separately estimated. Railroad and
other corporations do not usually respond with
freedom 30 inquiries regarding the number and
location Of their stock and bond holders.
One other important difference exists be- 4
tween the official returns of this country and
of Great Britain. Most Of the British imports
are free Of duty, so that there is no temptation
to undervalue them. Most Of the goods inn
ported into this country are dutiable, and the
amount Of duty depends in great majority Of
cases in part upon the declared valuation Ac-
cordingly there has always been considerable
differentiation Of imports. But under the last
Administration, because Of the hostility Of Off
cials to the protective system the extent Of
fraudulent evasion OF duty is believed TO have
greatly increased. Official statements Of in-
vestigstions by that Administration, accuse
tons brought against officials under ii which
resulted in their discharge, and numerous COM
plants by merchants and manufacturers, arc
the basis Of this belief. Plainly, products have
to be exported sufficient to pay, not only for
the declared but for the actual value of imports,
unless the country runs into debt.
Thus 1t comes to pass that difference Of
about $1O,OOO,oO0 per month between the
actual value of exports and the declared value
Of imports is generally supposed to be neces-
sary to keep foreign accounts even and to pre-
vent increase Of Indebtedness abroad. A small
excess of imports at any time, therefore, means
TINT there has been large increase In foreign
investments of capital in this country. These
investments help development, and manifest
foreign confidence in American pros
perity, but upon them interest has to be paid,
while there is also possibility that part of the
sum invested may at any time be withdrawn.