New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-01-20
THE PROBLEM or FOREIGN TRADE.

The Unprecedented excess of merchandise eX
ports during the calendar year 1S96 Is to som"
extremely perpiexing. With foreign exchange
at such n point that it might be inferred exports
of gold were more likely 10 occur than imports
and after several mouths in which the value OF
shipments to other countries has greatly exceed
ed the apparent value of goods and specie I'M
ported men Of long experience find themselves
unable TO account for the heavy excess OF mer-
chandise exports at the end OF the year TO I'M
derstand the situation Is. indeed. not possible
unless full allowance is made first for under
valuation of Imports second for interest and
dividends payable abroad on foreign Invest
ments I'm this country and third for the heavy
operations in sterling exchange which are in ef-
feet loan TO London. Perplexity regarding the
high rate recently maintained for long exchange
is in measure removed If it is understood that
the bidding for such bills is In effect all attempt
TO renew loans about maturing.
Prior TO August | the situation was supposed
to be fairly comprehensive. The excess OF mer-
chandise exports over imports. $9Oo6o6ii; or
gold S26 500 $40. and Of silver $2SSiI Az. In all
$14G279 766 might be explained by supposing
that A whole years interest and dividends pay
able abroad had come ont Of the seven months.
as January settlements. owing TO the disturb
ance in December 1885, were mostly thrown
over into this year by banking arrangements.
This would account for about SlOUO,UO. Then
sales Of American bonds and stocks abroad. cf-
fected by Mr.. Morgan and others during the first
half Of the year were supposed to be about
$40 100000 in amount. Third. the undervalua-
tions dutiable imports nominally valued at
S22S 14j 300. which are by experts calculated to
take 1900, 600 to S3O.0OO.O00 yearly from the
Treasury. and if 50 must average about II per
cent on such imports. would account for sub
stantially the balance. Other differences of
moderate amount can easily be perceived which
might have varied the balance few millions
either way.
But after August the excess of merchandise
exports over reported imports was $2:a .1o6,jOI.
and as net imports Of gold were only $70.SOS.55S
in these months. and net exports Of silver
SIT 1880 1871. the specie movement settled for
only S5347j.171 Of the merchandise balance,
leaving $751; $50 736 10 he otherwise arranged
About August the Morgan syndicate started
confidence here and abroad in the sufficiency Of
produce exports during the rest OF the year TO
meet all foreign demands. so that an entire
change In the tide was produced. and the syn
dlcate though prepared to handle foreign ex-
change 10 the extent OF $1J.OOO,0OO. was not
obliged to do anything. But it is supposed that
through the exchange operations London was
virtually lending to New-York during August
and September. but has since been paid and has
incurred large indebtedness to New-iOrk.
The dutiable imports after August ! were In
nominal value $780, 59.39S, and on these the
undervaluations might have been as much as
S30OOOOO0. THIS would leave OF the five
months balance about Sl5l 100000 TO be other
wise explained. The half-yearly interest and
dividends payable abroad January were doubt
less this time anticipated. as usual. amounting
10 about S25.OOO,OO0. which would leave a bal
ance Of S12GOO0OO0 1t is commonly under
stood that the virtual loan 20 London through
outstanding sterling exchange amounts to $4O.-
100000. although the sum may be greater 1t
must be greater indeed. unless dhe sales Of
curities on foreign account In August and Sep
tember were larger than lave ever been sup
posed or the undervaluaiions OF imports have
been larger 1t will be observed that in one
way or another difference OF about $50, 600
remains to be accounted for. and this seems too
much 10 be added to the sterling exchange ac
count already allowed. since bankers are able
to calculate that account more closely Nor
does II appear that undervaluatons can have
been sufficient to explain the difference OF
dutIabe imports In 1895 fully 60 per cent came
In paying ad valorem duties only, end It 10 on