The evening times. [volume] (Washington, D.C.) 1895-1902, 1901-06-08

with its acre or SO OF ground, its fruht
and shade trees. and its vegetable and
flower gardens. Will replace the swell
tering nat of three or four stuffy and
lily ventilated rooms, such as millions
of people have been compelled . in
habit under the ole conditions. May
providence, capital, and business sa-
gacity unite to speed the time
The Significance OF Trade Balances.
The heavy trade balance in our favor
coupled with the circumstance that
several foreign loans I've recently
been placed in this country, has led
many more or less Web informed people
to assume that the United States is no
longer a debtor nation. but worlds
creditor This is an illogical assump-
ton. The enormous trade balances Of
recent years taken by themselves sim
ply prove that we are selling more than
we buy This is equally true of almost
every individual producer, and it is per
fectIy clear that the fact of a producer
selling more than he buys, does not
prove that he belongs to the creditor
class. or even that he is out Of debt
If the state Of the International trade
balances is to be taken as determining
whether a nation is a debtor or credit
or. Great Britain must be considered
the worlds greatest debtor. and India
must be given high rank as a creditor
country. for Great Britain constantly
buys more than she sells, while India
sells great deal more than she buys.
And yet II is well known that Great
Britain is. in fact, a creditor TO the
amount Of at least ten thousand million
dollars. and that India Is carrying an
oppressive burden Of debt.
There is, perha rs. nothing in the
whole science of political economy that
IS less clear to the most of people than
the real significance of trade balances.
England buys largely IN excess Of her
sales and continues doing 50 year after
year for the simple reason that she is
able 10, and can make the purchases
without distressing herself She Is in
a position similar 10 that OF a person
living chiefly OF largely upon q fixed
! income. She meets the adverse trade
! balance out of the income derived frcm
+ her foreign Investments On the other
hand. midas favorable balance is chief
( IL absorbed by the interest upon her
! debt and other charges upon her that
are incident to her relations with the
/ British Empire,
/ \ few years agO-as late as 1S92-it
/ was estimated that the foreign indebt-
/ edness Of the United States was not
! less than i've thousand millions Of dol
/ lars. some estimates being considerably
! higher. It is practically impossible for
Us to get strictly accurate figures upon
such a matter, for a large part Of the
European Investments IL America are
/ not represented by accessible records.
4 It Is also well known that European
/ charges against US on account Of
I freIghts fer ocean carriage amount to
/ a very large suH-it has been estimated
] as high as one hundred and fifty mil
lion dollars annually. Besides all this
: the expenditures of American travellers
( abroad run into high figures every year
{ greatly exceeding the sums paid out
( by European travellers IN this country
/ Whatever the aggregate Of the foreign
/ demands against Us may be, it is clear
! that the annual payments on account
/ Of them, whether in the form Of inter
/ est charges, dividends, freights. OF
! travelling expenses, must be Offset
/ against our trade balance before we
/ have anything to apply on the principal
! OF the indebtedness
/ Ourvast exports of recent years doubt
less have enabled US TO more than meet
the annual charges and make large
| we are very much in the dark as to the
| amount Of European capital invested
| in American business enterprises, and
I equally so as to the dividends received
! upon such investments, it IS a very
! hard matter 10 say how nearly we are
square with the world upon a general
balancing Of international accounts.
This, however, IS clear: These trade
/ balances are not being paid to US IL
money, for taking one year with an
| other we are exporting as much specie
as we are importing. To whatever ex-
tent the trade balance exceeds the for
/ eign charges against Us, just TO that
extent it is paying OFF the debt and
/ moving US along TO the position Of a
! creditor natiGn.
When that point IS reached it viii
/ have an important bearing upon the
general state Of trade between ourselves
and other countries. Logically, it VIII
tend to reduce our trade balances, and
I it viii DO so unless foreign countries
/ can pay for our products otherwise
than in cash. As the balance now
stands. II Europe had to pay for our
goods in money, that continent would
be completely drained Of specie in a
very few years But that point would
never be reached.
By the Inexora BILE laws Of trade heavy
I drafts upon the European money sup
ply would lower prices there, reduce
| purchases, and increase sales, which
would have the effect of maintaining, OF
at least promptly restoring, the equality
Of money supply in the various coun-
tries commercially connected. If We
then continue to sell we must expect tc
receive our equivalent in something
else than actual cash, for no principle
Of poiGcGI economy is better establish
ed thar q II nations having close com
! mercisI relations with each other viii