The sun. [volume] (New York [N.Y.]) 1833-1916, 1916-06-24
Domestic Prosperity and Foreign
Trade.

small ratio Of the country's total for
elgn trade to its domestic trade In
order to show how readily external
commerce could be sacrificed In emer-
gency without a particularly harm
ful result to our prosperity. The
harm that this lie can do consists In
the responsibility which It may incur
for political obstruction of enterprise
which seeks to maintain or expand
our foreign commerce. We may not
have been SO dependent In the past on
the business done with other coui,.
tries as we will he In the future FOR
the employment Of u wealth produ-
cling capacity. but every business cir
cumstance of the times proves that
we are going to make profitable nc
tiyity for our industries only by n
diligent and intelligent cultivation Of
foreign markets.
Some Of the professors Of economics
have encouraged the delusion about
the relative Importance OF u exter-
nal and internal trade. They have
engaged in elaborate calculations of
the proportion of bulk obtaining be
tween the two and have been inclined
10 let 1t go nj that without attaching
the qualifications which must modify
first hand conclusions. Yet n little
reflection indicates the error 10 which
their statistical labors conduce.
Had 1t not been for the export trade
If the United States in the last half
century we could not have imported
the billions Of dollars of European
capital which facilitated the extension
Of the railways and the industrial eX-
| pansion and growth OF population fol-
lowing our civil war. Were II not for
the ability which the United States
now possesses to furnish capital and
credit to foreign borrowers. In add
ton 10 returning the capital hitherto
invested here by other countries, We
could lot exploit the tremendous ey
port trade opportunity that the Euro
penn war vouchsafed I us. Unless
we take full advantage OF this oppor-
I tunity our industries will languisi'
for lack of demand which will cause
the full use Of their capacity.
Already the fallacy Of the bunk re-
lation between II foreign and do.
nestle trade has been seized upon &c
point various pernicious arguments
The most common has been the con
tention that we should not lend money
abroad because It IL required IL
finance domestic expansion. One OI
the latest manifestations Of the error
appears In an article by CARL SNYDEI
In Golfers Weekly, where 1t Is urged
for the purpose Of proving that the
possibilities Of u industrial rrepar
edness against foreign military az
erosion are such that we could CLOSE
our ports overnight and undertake
to stand a twenty years Siege with
out any substantial result Of business
SuIiCiluk. "A Sbitui Stu'VhhVhN VI u
fallacy Is made thus:
me foreign trade OF the Un,tet
States, al compared with tho interna
trade, Is the smallest OF any of tn
great world Powers, The total in norma
times does not amount to more n a
or 9 per cent. Of our total product
whereas that Of England Is at leas
three times this. In other words: GU
foreign trade could be abolished and OF
per cent. of the total of the nation
trade would remain"
It would not. JUST how much q
the nations trade would be left witt
foreign trade cut off is a question
hut It would certainly be vastly less
than the % per cent. asserted, w
cannot prepare for a future Of peace
or war on the basis of any such as
sumption without counting disaster.
No analysis of trade relations car
stop short with a comparison of thu
mere bulk Of external and internn
commerce. 1t should for n thini
take account Of the effect which for
elgn trade has on making prices II
the domestic markets. All business 4
done on prices. 1t IL stimulated n
depressed In accordance with prize
advances or declines, and u foreign
trade Ia n very important factor II
our price movements. Again, M for
eign trnde constitutes IA very lnrg,
shnre Of domestic trade because
whether the goods and commodities
which we export or import nro In TN
shape Of raw materials or manufac
tured articles they pass through
many hands In this country.
The truth about domestic prosper
ity md foreign trade was ndmlrnbl.
set forth n few weeks ago In an nd
dress by DIR, PRATT, chief Of tn
bureau Of foreign and domestic com
m"rcc IN tn" Department Of Com
Inerce. Flo said:
AT tho present rate our foreign trad
wMl amount 10 $500. 900. 900 for tn
Aseal year ending July 1. 1919. GU