The Washington times., 1915-06-20
NEXT YEARS TRADE BALANCE

year ending a week from next
Wednesday, we were estimating the
other day that we might get net
balance not higher than S400,000,-
900, but perhaps as high as
$30O,000,000.
That is to say, as we explained,
the greater part of our prodigious
excess of exports over imports since
the war began has gone to cancel
out the more than $300,000,000 of
current balance against US abroad
on the first day Of last August, to
pay interest and dividends owed
by us on American securities held
abroad, to settle ocean freight bills
against US by foreign shipping aud
to take care of the spendings abroad
of American travellers.
We thought that perhaps at the
outside 800, 100000 would take care
of all those accounts, leaving US, out
of our years trade balance Of bill
lion, some $3Oo,0o0,0oo to the good
to be applied to the repurchase of
American securities, to war loans to
foreigners, or in other ways that
might seem to enable the rest Of the
world to continue its stupendous
purchases from US, which it cannot
possibly cover either with an ex-
change of commodities sold to US or
with gold to close the difference be-
tween exports and imports.
Sir George Paish, however, esti-
mates that probably the amounts
against US which have had to be
covered by our trade balance of a
billion were even as high as $780,
900, 900; and if he is right there is
the immediate and exact explana-
tion of why, until very recently,
there has been no acute interna-
tional exchange emergency, in our
market and why there has been no
pressing need as yet for Europe to
sell US American securities in great
quantities and for US to take them.
After we cancelled out all those
obligations against us, whether they
were $700,000,00o or 100000, 900,
there was not vast net balance left
to be met by foreign nations, either
with shipments of gold to US or
sales Of American securities to US,
or both.
And as a matter of fact we our
selves largely disposed Of the prob
lem Of that net balance--whether
two hundred millions or three hun
dred millions, or whatever it was
by lending straight out again, as Sir
George Paish notes, some $24S,000,-
900 in subscriptions to foreign loans
of which Canada got $97,o00,oo0 and
France and Argentina, $146, 6,0o0,000
But a far different story will
write itself down in our coming fis.
cal year. This time we shall not
have standing against US and to be
wiped out a current balance OF
$500, 100000, as we did when the
war broke out; we shall not have
vast expenditures abroad by Amer.
lean travellers, as we had last yea,
before the war broke out; we shall
not have even such heavy remit
tances abroad by our alien popula
ton; before the year is out we shall
not have such large interest anc
dividend payments to make abroad
as formerly.
If, therefore, we run up a trade
balance of $1,000, 100000 in the fis
cal year now about to begin we shall
not have to deduct from it, to ge
the net, $SOo,OOo,ooO, $7oo,ooo,ooO
$600,000,000, perhaps not ever
$500,000,000. Furthermore, it i
quite likely that if the war contin
ues our foreign trade balance in thi
| coming fiscal year will be NOR
t than $1,oo0,0oo,o00, more tina,
r 81, 500, 100000, more than $1,750,
= 100000. Sir George Paish himsel
I declares that if we make it possibl
\ for foreigners to buy, when they ar
e not able to give US an equal valu
J. of commodities in exchange and no
Y able to give US gold, our foreig,
n trade balance in the next twelv
p; months might just as we'll be tw
1 billion as a billion.
, Here again is the full explanatio
v for the serious condition of all an
: the nearly desperate condition O
e some foreign exchange in our maj
h ket today. We are no longer wipin
t out with our trade old balance
r against US; no longer paying fo
n dead horses; we are running u
d clean credits; so the outside worlC
h particularly the belligerents, mus
= face-if Sir George Paish is right
: current bills-ret bills-again!
Y them somewhere around s5,000,0C
h every business day; s30,000,O0O e'
# cry week; SIPS, 100000 every mont
n and a billion and a half dollars b,