Aberdeen herald. [volume] (Aberdeen, Chehalis County, W.T.) 1886-1917, 1902-06-19
THE BALANCE OF TRADE
A Popular Misconception About
Imports and Exports.
THE MORAL CT wEBsTERs STORY

Country Grows Poor-A Few linz
portnnt Corrections In Figures.
FaIlacy of an Impression Repub-
licans Try to Create.
Administration organs have been
giving such undue prominence TO the
reported excess Of exports over i'm
ports that there is need for the public
not to confuse this fictitious balance of
trade with the status of custom values
and their relation TO our prosperity.
says the St. Louis Republic In round
figures, according TO government re-
ports, we have exported during the
past twenty-eight years goods to the
value Of Sc. 500, OO0, 900 in excess of our
iInportatjons.
One and quarter billions of this
amount is reported as the favorable
balance Of trade which accumulated
during the years 1900 and 1901. Does
this meap that if we continue sending
out 5000. 600, 900 worth more OF stuff
each year for fifteen years longer
we shall have all the available gold
supply Of the world:
Yet nothing can be further from the
truth. The Free Trade league has en-
deavored to correct the tables which
have been prepared by the treasury de-
partnent in dealing with imports and
exports. For instance, the correction
proves that there should be a reduction
Of at least 10 per cent in the values
given to American goods sent abroad
because OF the notorious fact that
many Of our exports are sold in Euro
pean markets below home prices. This
is especially true OF iron. steel. copper,
coal, lead. salt and a number Of patent
ed articles.
Importers must pay duties, and for
eigners are not averse to taking ad-
vantage of the privilege Of quoting the
prices Of their goods at less than cost.
This item would amount to 10 per cent;
also imported goods had to pay freight
charges amounting to about $50, DOC, 900
last year. according TO the government
statistics. The tariff tax aggregated
SOS. 1S6.141 in 1901. OF course these
were added to the cost Of imported ar
ticles
So that for last year 10 per cent
should be taken off the S1605. 219,S 74
which is given as the total value of our
exports, thus making $1.444. G91 ,S91 as
the actual cost to foreigners of goods
bought from US. On the other hand.
10 per cent should be added TO the re-
ported cost price Of articles imported
by US. Adding the ocean freights and
the tariff tax. we have an actual value
of S1.306,4 o5.S09 for imports in place
of $685.. los 244. the sum given by the
treasury reports. With these deduc-
tons and additions the ''favora ble'
balance Of trade shrinks TO $13S, 49, :.
OSS
Where does this balance go? Part to
foreigners from whom we have Dor
rowed money, part is spent abroad by
tourists, part in repayment of foreign
loans. part in investments abroad. part
in credits allowed TO stand abroad and
another part in payment of ocean
freights to owners Of foreign bottoms.
There can be no such thing as ia
vorabl balance of trade. Values must
be equalized. Because we export is
rather an evidence of past eXtrava
gance or Of Indebtedness which we are
trying hard to cancel. If we could i'm
port instead of export. we would have
more money. because we would be
clear of debt.
II was Daniel Webster who declared
in his great free trade speech in the
congress of 1924 that the excess of i'm
ports over exports in truth usually
shows the gains. not the losses, of
trade. He illustrated this remark by
the example Of merchant vessel
which, with cargo worth $4,000,
sailed from Salem. Mass. to Asia Mi
nor. there sold it and invested the pro-
ceeds in the merchandise of that coun-
try. then voyaged through the Mediter-
ports of Europe for $4,000 in money
and goods, with which she returned to
Salem, and. having sold the latter, de-
posted the entire sum in the very bank
which furnished the $4,000 to pur-
chase the original cargo thus showing
a clear profit on the voyage Of $1O0.-
600. Yet in this case the balance of
trade was against the country, be-
cause there was an excess of imports
over exports.
Said Webster in conclusion: 'If the
return cargo were found to be worth
much more than the outward cargo.
while the merchant, having paid for
the goods exported and all the ex-
penses Of the voyage. finds a hand
some sum yet in his hands, which he
calls profits. the balance Of trade is
still against him. and, whatever he
may think Of it. he is in a very bad
way. Although one individual or all
individuals gain. the nation loses;
while all citizens grow rich. the coun-
try grows poor. This is the theory Of
the balance Of trade"