Evening star., 1901-05-11
EXCESS OF OUR EXPORTS
FACTORS TO BE CONSIDERED IN
SEEKING CAUSES.
The United states Changing From a
Foreign Creditors BeinE Paid.


Indian gentleman 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 i'm
ports of merchandise and specie and says:
In India a heavy net excess always takes
place. because the system of government
of India compels a heavy tribute. l. g, COM
pels a large drain of the produce of India
to England without any material return of
merchandise or specie. But America is not
under such A draining system of an alien
~Ioreign government, and I therefore desire
10 know the causes and their extents of
such heavy net excess of exports OF Amer
ica's wealth or produce, and how this large
balance of trade is expected to be set
tied
DeycICpmcnt of Our fRcturcs.
The following is an extract from the re-
ply of the chief of the bureau of statistics:
During the period Immediately follow
ing civil war great internal develop
ment of our railways and manufacturing
occurred Much foreign capital was
brought into the United States for use in
this development. and during that time
and in subsequent years. railroad and other
securities were largely marketed abroad.
The commercial results of this develop
snent of railways and manufacturing es-
tablishments including the opening of new
fields of production. were an enormous in
crease in the expectations and a DISPOSE
tion to relatively decrease the impnrtatons
because the development of manufacturing
was making it practicable to produce at
home from our own materials much which
formerly brought in from abroad.
Thus the great business development of the
years 1870 to 1S,h had tendency to stimu-
late production and expectation, but dis
--COuraged Importation. and. as conse-
GGence. exports exceeded imports in a
stantly increasing ratio. The fact how
ever. that large sums had been borrowed
abroad for the internal developments above
alluded to required payments of large sums
for the annual interest charges. and thus
absorbed a part of the proceeds of the
surplus exports. The earnings of foreign
capital invested in great enterprises in this
country. other than that obtained by the
sale of bonds or by direct loans. also re
quire considerable sums for the payment of
the dividends and profits Of the enterprises
in which it was invested. The further fact
that Internal commerce and Investments
in internal developments were extremely
prortabIe. reduced and temporarily sus-
pended shipbuilding in the United States
anu as consequence. the increasing traf-
nc came To be carried more and more in
foreign ships, and the payment of the
freights thereon. especially the freights
upon imports. again absorbed a large add-
CesS of exports
Another factor to he considered is that
"1 the money expended by Americans trav-
. tlng abroad who usually take their funds
in the form of letters of credit and draw
from time to time for such sums as they
f"iulre, and this. of course proves an off
st TO that extent against the balance which
would otherwise be-. returned to the I-nited
states in the form of cash
Great Factors Considered.
nth recently these four great factors:
% IN" payment of interest on American
securities held abroad; (D the payment of
earnings Of foreign capital invested in
business enterprises in the United States;
C) the payment Of foreign freights car
ried in foreign vessels especially frefghts
on goods imported into the United States;
and a. the expenditures of Americans
travelling abroad. have been considered the
chief cause of the fact that the exports
OF merchandise so much exceeded the com
b1net imports of merchandise, specie and
bullion. Within the last two or three
years. however. three further factors have
apparently been added: % the cancellation
of American indebt edness abroad includ-
ing a return to the United States of the
railroad and other securities thus held; 81
the sale Of foreign securities in the United
States. such as the German. British and
Russian securities which were placed lpon
the markets here during the last year, and
In most cases quickly taken to the amount
of probably S1ooooo"oo in the year; and C)
the credits which now stand abroad in
favor of our exporters, and which are per-
mitted to so stand because better interest
rates could thus be realized than by in
= slStlnS upon their immediate payment.
The sums OF money represented by
these various factors which presumably
about equal the excess of exports over i'm
ports have been variously estimated and
up 70 the present time means of OBJ
tainlnS more than estimates have been de-
Vlsed- These estimates usually put the
amount paid to foreign vessels as freights
on imports at about 5000 900: interest on
and earnings of foreign capital. s75 $4,000
TO s1ofkprD. money expended abroad by
Americans. s75,trS.t-D To s1oOuOo go; Amer
lean funds invested in foreign securities
in 1850. about s1On.oD.so. and credits per-
mitted To stand abroad in 1899 and 1890
each $I1rn.ro to SlVpfDD,DOD; to which
must b. added the amount OF foreign
Indebtedness actually Cancelled by the re-
turn OF securities for which no definite
estimate has, so far as l aware, been
made.
The United States is rapidly increasing
her production. especially Of the minerals
and of manufactures for exportation while
the rapid development Of manufacture
Ing industries steadily reduces the relative
importations OF manufactured goods
though the raw materials required for our
manufacturers, especially those of tropi-
cal and sub-tropical nature which We can
not produce at home, constantly IN
Creasing. also the tropical foodstuffs
of which do not produce a sufficient
quantity to meet our own reuuirements
The fact that We are rapidly becoming a
creditor instead of a debtor nation Will
Il
annual balance for payment of interest on
our securities held abroad, and finally for
: the liquidation of those securities and to
this extent the absorption of our favorable
balance of trade will be rapidly reduced
while the present disposition to encourage
the establishment of our shipping indus
try in sufficient volume to carry our
growing commerce seems to Justify the
expectation that this drain upon our sur
plus may be at least somewhat reduced In
the near future. Our foreign credits as
above increased
= during the last few years. and foreign
obligations have been taken by investors
In the United States in large sums. but 1t
seems at least probable that two of the
factors which absorbed a considerable
share of the favorable balance viz, the
payment OF interest and indebtedness
abroad and payment of freights to foreign
vessels. viii within a comparatively short
time be materially reduced. and thus re-
Hulre q settlement with specie and bullion
of a larger proportion OF the trade hal
ance than has been the case In former