The Morris County chronicle. [volume] (Morristown, N.J.) 1877-1915, 1904-06-21
OUR EXCESS EXPORTS.
Have Helped to Pay Debts Owed
to Foreigners.

The New Haven correspondent, Mr..
Trueman, to whose questions on the
subject of foreign trade balances we
have already devoted considerable
space, does not yet understand what
we have received in return for our ex-
cess exports and comes to us with fur
Their arguments and questions. Mr..
rrueman's difficulty seems to be inabil-
ity to grasp the principles of foreign
trade. Till he understands those fully
he cannot comprehend the details. For
instance, he asks:
when during the past III years we
have exported merchandise amounting
to 50, III, ASS. 023 more than the imports,
besides exporting 81 ,46S, 155, 300 in gold
and silver more than we imported, a
S4,179,643, 1923, what could we possibly
have received that was not paid for as
we went along? AS all foreign capital
Imported into this country and invest.
ed here Is included In the above calcu.
lations, how can it be impossible for
us to still owe any foreign debts unless
we have received no equivalent for
some of our exports?'
A debt is not paid till an equivalent
is returned by the borrower to the
lender. Some people seem to think
that the giving of a note pays the
debt, but there is always subsequent
awakening for such people. Not only
must the amount iii full be returned,
but Oftentimes, if the debt be allowed
to run a great length of time, an
amount equal to or even exceeding the
debt itself will have to be paid in In
terest in addition to the principal.
What, then, is received in return for
this outlay of interestf That alone
will account for a large part of our ex-
cess Of exports OF mere handise and
gold and silver, which MIR. Truemau
correctly shows has exceeded $4,000
100000.
Our annual freight bill and the
amounts expended by Amer team tour
lists abroad added to the sun sent to
the old country are between three and
four hundred million dollars a year,
and if we did not pay these ILLS and
these exchanges in merchandise we
should have to pay them in gold
To divest the subject Of all confusion
and complexity let us assume thu the
money which has been borrowed by
our government and corporations and
individuals was an import, and when
returned it became an export and eed
not consequently be considered at all.
We think that the items of inter est
and dividends and rents and freis ht
and tourists expenditures and moneYs
sent abroad as gifts make up a large
portion of the more than $4,000,000 :
900 excess of exports during our his
tory. 1t will be impossible to specify
exact or even approximate amounts in
connection with these several items,
and the free trader can continue till
doomsday to ask the question, "What
have we received for our excess ex
ports?"
The honest student, however, will
see at once and acknowledge that we
must have received a full equivalent
and that If we had not during recent
years been able to show large excess
of exports of merchandise we should
have been compelled to part with our
gold to an equivalent amount. Mer-
chandise, being consumable and per-
ishable, decreases both in volume and
value, while gold retains its full value
from year to year and must add to the
wealth Of the country which imports
1t or keeps It, If we import from
abroad $1,000,000 worth of wine, for
which we must send abroad $1,000,000
worth of merchandise or gold, at the
rnd of few month. the wine has
neen consumed and we ave nothing
whatever to show for it, 1t has not
added to the wealth or the country,
while at the same time we have part
I'd with either 81, 100000 worth of gold,
which is stable wealth, or else $1,000
GOO worth of merchandise, which in
turn in few months may lose its
value abroad, but with which we have
bec- oble to pay an obligation to that
amount We are at the end of the
transaction neither better off nor worse
Off. II we export merchandise for the
wine we are no better off. If we ex-
port gold we are worse off.
Now let us reverse the transaction.
II we send $1.O00OO0 worth of grain
abroad and receive $l.000,O0o worth
Of merchandise or gold in return
we are either as wen or better off.
II, therefore, in the various transac-
tons wherein we export and import
the necessaries and luxuries of life we
can make payments in merchandise for
what we buy we certainly are at no
time any worse of, nor have we lost
any wealth. If, however. we must
make payments in gold for what we
buy we certainly must be worse of,
for in few months time we will nei-
Their have the gold nor the commodity
II. however. we can receive gold IN