Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1908-01-16
TO KEEP OUT OF DEBT
IMPORTANCE OF a RATIONAL
TRADE BALANCE,
One of the Functions of Protective
Tariff Is 10 Restrict Imports as to
Enable the County to Pay All Its
Obligations

IF it had not been for this balance
Of trade in our favor, constantly hqui-
dating our obligations. our debts would
have become insupportable long before
now
This remark by the New York Press
is of weighty Importance, and should
receive from our financiers far more
attention than they habitually give to
the question of favorable trade bal
ances. The fact is that our moneyed
magnates are for the most part either
ignorant of Or indifferent to the part
played by the trade balance in main
tanning our supply of money and money
metals. 1t must be that they are igno-
rant, for if they were informed they
could not be Indifferent They ought to
realize the part played by protective
tariff in so restricting competitive inn
ports as to insure an excess of exports.
and therefore trade balance-money
coming to us faster than it goes away
from us. Yet if you should scratch the
back of an eminent financier it is ten to
one you would tickle either a free
trader or a man who knows little and
cares less about the tariff question.
The habit of depreciating the conse-
quence of favorable trade balances is
quite common among the superior
thinkers turned loose by our free
trade institutions of learning. They
point to Great Britain, a free trade ma
ton. with an average excess of i'm
ports over exports amounting to about
SS0O,O0O,0O0 year. as Il shining exam
pie of how a country can grow richer
in spite of adverse trade balances.
This contention is well answered by the
Press. as follows:
England is a creditor nation The
British adverse trade balance does not
represent what England owes at the end
OF each year. 1t represents the payments
on account by the debtor nations that owe
interest and principal to England, credit
or OF the world. Englands adverse trade
balance is the same as the pawnbrokar's.
The lender whose trademark is the three
gilded balls over the door of his money
shop advances his capital TO the borrow
er, who must pay over to the pawnbroker
share of the debtors product as long as
the debt stands uncanceIed. The debtor
exports to the pawnbroker incessantly ::
he imports from the pawnshop nothing
but receipts. Unless the debt is li1uidat-
ed, that sort of adverse balance of trade
against the pawnbroker leaves him with
oil Al
Canada or any other country remains a
debtor nation an adverse balance of trade
piles up a growing debt each year more
difficult to discharge. since more of the
resources of the debtor are required to
pay the mere interest"
One of the most important functions
of a protective tariff is to bar the door
against competitive imports. Not only
does this wise policy enable the United
States TO cancel its debts for goods
and materials purchased abroad and
have something left with which to
make good for some heavy outgoing
amounts of American money not visible
in the record of exports, but it has in
the past eleven years actually added
some billions of dollars to the supply
of money and money metals Still
more important. it has provided work
and wages for millions of Americans.
Great Britain has kept solvent because
of income derived from money loaned
and invested in other countries and
from the earnings of her merchant
marine. But for those sources of in
come there is no need to say what
would happen to a country which
bought $SOO00O.000 a year more than
it sold. The United States has neither
an oversee carrying trade nor any in
come from money invested abroad To
a country so situated large favorable
trade balance becomes an absolute
financial necessity if national bank
ruptcy is to be avoided. Such a sur
plus of income over outgo can only be
obtained by the restriction of imports.
This is why our eminent financiers
should give more attention to the pro-
tective tariff