The Washington herald., 1917-12-12
TRADEBALANCE
TOBE 5 BILLION
Holland Forecasts Condition
IN Commerce to Be At
tanned Next Year.


be able TO report that the trade
balance in favor Of the United
states for the four years of the
war Is, in the aggregate, between
$4,000. 200. 900 ana $1,000, ooo, 900.
This is Q unique a phenominal re-
cord.
The yearly trade balance in favor
Of the United States since the war
began will be found in September
to have been approximately $4,000
100000. The authorities now know
that the favorable trade balance up
to November 1 since the war began
was, expressed in dollars, $7,77S,-
900, 900.
OF course there were some on
sets, but, presumably, not to be
compared In magnitude with the
offsets against the favorable trade
balance reported each year for
. several years before the war began.
Sometimes that favorable balance
was estimated AT $500, ,o00, 900,
p sometimes q little less. One of the
leading international bankers said
in 1919, that our export Of cotton
had Of itself several times created
. favorable trade balance Of the
year for the United states, In one
instance as much as $500. 900, 900.
In other words our international
trade export and import substantial
ly balanced, leaving cotton out Of
consideration. The cotton felds Of
the South furnished the excess in
our favor in our international trade.
But there were many millions Of dol
lars which represented the invisible
or unrecorded obligations which we
paid to other nations. For instance,
there were traVelers' letters Of credit,
sometimes estimated IN excess of q
hundred millions q year. Since the
war began practically no letters of
credit have been issued. At least
none large enough substantially to
AFFECT oLf trade balance for the last
three years and a half.
Then there were charges for
freight and insurance, and q large
item was the payment Of dividends
and interest upon American securi-
ties which were held abroad. In
order to learn. what our favorable
trade balance In the years before
the war was it' would De necessary to !
subtract from the visible balance |
was though that these items were
large enough practically to extinsuish !
trade balance.
But the balance in our favor of
nearly 5000. 1000 which Is the ag-
gregate since the war began, is
presumably not greatly affected by
invisible items. The American securi- |
ties, which were estimated to ar.
create about g, 900 0OO, 900 which |
were held abroad when the war be-
gan, have been in considerable ana |
possibly in great measure returned. |
The dividends and interest upon thsse
securities are now for the most part \
paid to our own investors. Traveller
letters Of credit are eliminated. we
are still paying q large amount for
freight or insurance but the pre-
sumption is that this favorable trade
balance as well as the increase Of II
which will be maintained untu the
war ends and perhaps for sometime
arter is not to be greatly diminished
by so-called invisible itemS
IN ADDITION to the trade balance
Hnlch represents the excess Of our ex-
porte over imports there are the ad-
vances which have been rneda bv tha
government and also, to the extent of
many million dollars, by American
bankers to the allies. Should the war
De continued another year these ad.
Tances may be found to be in excess
or A,oo,00o,oo0 II these are to be
reckoned In the general international
nnanc1al condition a. we shall find n |
after the war il ended, then It II rea-
sonaole to assume that other natIons
will owe the United States probably
as much as $4,000 oooo0O, possibly A
much as SIS, ,ooo. 10000
One Of the leading msn Of finance In /
speaking this morning Of these figures /
said that 1t would be worth while for
those high In authority when speak,
ing 70 the public Of the magnitude of |
the financial obligations which the
country must assume In order to
carry on the war also to refer 10 the
onset which will be represented by the
debts other nations viii be found TO |
owe to the United States when the
war ends.
Occasionally there come hints from |
some who have given thought to this
aspect Of the situation that the Unit
ed States, by reason Of the oblisations
In our favor which our allies must |
some day meet, will surely assume |
permanently the position Of the world !
power, provided our Statesmen have
an eye to the future as well a. to
present exigencies. This man of f.
nancfal authority said that with all
the advantages pertaining to our po-
sitlon as a creditor nation we will
still be unable permanently to secure
a position as the leading money and
commercial power Of the world until
several important things have been
achieved.
One Of these is the establishment
Of general discount market. An
other Is such action as will make
certain the maintenance as we'll as
the increase of our trade with 9TH
er nations, especially South Amer
lea and the Far East. Furthermore
We must be In position to extend
the time for payment of the obliga-
tlons Of the other nations to the
United States, for it win be impos-
sible for all these obligations to be
met at once. This will entail fnanc.
ing which the European war has
entailed upon us and upon other
nations.
There Is no reason to doubt that
our international trade, or rather
our exports. win be maintained and
possibly increased from this time
on, 50 that there will be for years
visible and presumably favorable
trade balance for the United States
aggregating each year two billion
dollars, although that is a mere es-
innate.
BY HOLLAND.