The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1901-05-25
WHERE TRADE BA1ANoE GOES

when the work of the summer Is done.
WHERE TRADE BALANCE GOES
what has caused so much produce,
merchandise and specie Of the United
States to go out of the country without
the ordinary corresponding return2' is
a question recently propounded to the
treasury bureau Of statistics by Mr.
Dadabahai Naoroji, an Indian gentls-
man residing in London
Mr.. Naoroji in his inquiry addressed
to the bureau of statistics quotes the
recent figures showing large excess Of
exports Of merchandise and specie over
the net imports of merchandise and spe-
Gle. and says: I'm India a heavy net
excess always takes place because the
system Of government of India compels
a heavy tribute. i. e.. compels a large
drain of the produce Of India to Eng
land without any material return Of
merchandise or specie. But America is
not under such drainage system of an
alien foreign government: and [ there
fore desire to know the causes. and their
extents, OF such heavy net excess of ex-
ports of Americas wealth or produce.
and how this large balance of trade is
expected to be settled"
The following is an extract from the
reply of the chief of the bureau OF stat
istics:
During the period Immediately follow
ing our civil war great internal -devel-
opment of our railways and manufac-
turing occurred. Much foreign capital
was brought into the United States for
use in this development and during
that time and in subsequent years rall-
NJ los la crcs1xr
marketed abroad. The commercial re-
suits Of this development of railways
and manufacturing establishments, in
Guiding the opening of new fields Of pro-
duction, was an enormous increase in
the expectations and a disposition to
cause the development of manufactur-
ing was making it practicable to pro
duce at home from our own materials
much which was formerly brought in
from abroad. Thus the great business
development of the years 1870 to 1880
had a tendency to stimulate production
and expectation, but discouraged i'm
DOrtation, and. as consequence. ex-
ports exceeded imports in a constantly
increasing ratio The fact, however. that
large sums had been borrowed abroad
for the internal developments above al
luded to required payments of large
sums for the annual interest charges
and thus absorbed a part eff the pro-
CeeQS OF the surplus exports 4 ne earn
ings of foreign capital invested in great
enterprises in this country, other than
that obtained by the sale of bonds or
by direct loans. also require consider
able sums for the payment of the divi-
dends and profits Of the enterprises III
which ii was invested. The further fact
that internal commerce and investments
in internal developments were extreme
" profitable. reduced and temporarily
suspended shipbuilding in the United
States, and. as a consequence, the in
creasing traffic came to be carried mora
and more in foreign ships. and the pay
ment of the freightE thereon, especially
the freights upon imports, again alb
sOrbed a large additional amount of the
proceeds of the excess of exports.
Another factor to be considered is
that of the money expended by Ameri-
cans travelling abroad who usually take
their funds in the form Of letters of
credit and draw from time to time for
course proves an offset to that extent
against the balance which would other
wise be returned to the United States
in the form Of cash
Until recently these four great factors
ID the payment Of interest on Ameri-
can securities held abroad; % the pay
ment of earnings of foreign capital
invested in business enterprises in the
United States: go the payment of for
eign freights carried in foreign vessels,
especially ITelSntS on SoodS imported
into the United States: and "a the ex-
penditures of Americans travelling
abroad, have been considered the chief
cause of the fact that the exports of
merchandise 50 much exceeded the
combined Imports of merchandise, specie /
and bullion Within the last two or
three years, however, three further fac
tors have apparently been added-1)
the cancellation Of American indebted
ness abroad. including a return to the
United States of the railroad and other
securities thus held; % the sale OF for
eign securities in the United States,
such as the German, British and Rus /
sian securities which were placed upon |
the markets here during the last year,
and in most cases quickly taken to tho |
Of probably 500 100000 in the |
year; and (S) the credits which now
stand abroad in favor Of our exporters,
and which are permitted to SO stand be-
cause better interest rates could thus be /
realized than by insisting upon their I
immediate payment
The sums Of money represented 2g
these various factors which presumably /
about equal the excess Of exports over |