St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1895-01-24
AN Exploded THEORY,

We infer from the occasional COM
ments in the editorials of some of
our contemporaries that the bal
ance-of-trade theory still finds Iodg-
ment in their brains. There was a
time not long ago when it was ac-
cepted as one of the fundamental
truths of economic science. AS the
wealth of men seemed to increase in
the proportion in which the sales of
the product of their labor exceeded
their purchases, it was an easy and
a natural transition to conclude that
the same result was true of the ag-
gregate of men constituting the ma
ton. Therefore, if the balance sheet
showed that we had sold abroad
more than we had bought from
abroad it was concluded that we
were in a prosperous condition,
while if we had bought from abroad
more than we had sold there it was
evidence that we were doing a los
ing business. One good effect Of
the educational campaign that has
been Waged for the last seven years
is the demonstration of the falsity
of this conjecture and the better
conception of what the trade be-
tween nations is.
Mr.. Ford, the statistician of the
treasury department, as feature of
his monthly report for November,
gives the amount by years from 1882
to 1892, inclusive, of the imports and
exports of foreign nations. If it be
true that nation is impoverished
if it sells abroad less than it buys,
and that it grows wealthy by selling
abroad more than it buys, then Rus
STA should be wealthieSt of the Eu-
ropean nations and the United
Kingdom the poorest. For the five
years from 1882 to 1885 the average
annual value of Russian imports
was in round figures 505, 100000
rubles, while that of the exports was
575,C00,00O rubles. In the next five4
year-period, from '87 to 81, there
was a rapid increase in what should
be source of wealth under
this theory, as the annual average
of imports was 400,000,0O rubles, and
of exports 721,OO0,0OO. The balance
due Russia as the result of her ten
years of trade from the nations with
which she has traded is 1000, 100000
rubles. Instead of making loans in
European capitals, Russia should
bestir herself and collect this balance
of trade and replenish her deficient
treasury, thereby restoring the SOL
vency of her paper currency.
Turning now to the United King
dom we find that that misguided
country has been impoverishing her
self at an astonishing rate. During
the period from 'S2 to SO the average
value Of her imports was 800, 100000
pounds sterling, while she exported
only 2z8,000,000 pounds of her prod
uct During the second five-year
period, from 'S7 to 81, she persisted
in this foolish policy, and the annual
average of her imports was 100000
600 pounds per year, while her eX-
ports were only 243, 0G0,0 900 pounds.
AS a result Of ten years experience
of this monumental folly this cred
itor nation of the world, as she is
termed, and as she in fact is, has
bought Of the rest of the world $685.
600 ,000poundS worth of their product
more than she has given them in eX-
change, and while Russia should be
the Wea1thiest of the European ma
tons, the United Kingdom should be
stepped in direSt poverty.
OH
Illustrations The eleven months
ending with last November cover
a period of extreme financial de-
preston in this country. No one
will claim that there has been any
degree of prosperity enjoyed by US.
Money has been scarce and prices
low. Consumption and production
have both been crippled, and yet
during this time we have been selling
abroad an excess over the things we
have bought abroad which should
have put and kept the country in a
very comfortable financial condi-
ton We bought abroad s614,OO0,OOD
worth of goods, and we sold abroad
S723, 900 worth, leaving a balance
due us of over $135, 900, 900.
In addition to this we sent abroad
over 100000 in gold in excess of
that which we received from abroad,
and an excess of some $34, 100000 of
silver. The net excess of our sales
over our foreign purchases is some
$25O, 200, 900. Instead of issuing bonds
to raise money to conduct the gov
eminent a commission should be es-
tablished and sent abroad to dis
cover who it is that is owing US this
$3.50, 900, 900, and collect it. To borrow
money when people are owing us
without making any effort to collect
what is due us is not very good
business policy. That is, of course,
upon the supposition that the ortho-
dox "balance of trade theory" has
any foundation in fact.
Well Secured
Chicago Record.