The sun., 1919-07-29
When the Whole World Dumps Its
Goods Upon Our Shores.


fiscal years of the war, showing in
round numbers sales abroad of some
twenty-seven billions of dollars and
a balance in our favor of some If
teen billions of dollars. Stupendous
as this mathematical mass Is, how
ever, 1t does not tell, 1t cannot of It.
self tell, the whole story of the fabu-
lous transformation Of our commercial
and financial relations with the out
side world.
For many years before the war we
had been scoring favorable trade bal
ances. At times the excess Of exports
over imports might be down to some
s70,00O,000 as In 1890 or to $75, ,0O0,-
900 as in 1895. At others 1t might
soar to 1904, 100000 as in 1901, or,
as in 1908, to $666, 100000. But, high
or low, In all those days before the
war our favorable trade balance was
nothing, In truth, but payment in
goods-payment on the instalment
plan-on our foreign debts.
AS debtor nation we always faced
the invisible balance against us
which must be met with our gold, our
securities, our breadstuffs, our cotton,
our oil-anything and everything that
our creditors would take from us on
account. That invisible balance
against US consisted in the main of
interest and dividends owed by us to
foreign holders of our securities. To
raise capital for our growing indus
tries we had sold our bonds and
stocks abroad to an amount estimated
all the way from six to ten billions Of
dollars.
But for two generations we also had
to settle with foreign ship owners
every year for tens Of millions Of dol
lars of ocean freight bills due on the
goods we were shipping on account Of
our debts. We had to settle with for
eign underwriters for millions of in
surance on those shipments. We had
to settle with foreign bankers for the
spendings Of our tourists across the
seas. We had to settle in the same
way for the remittances of our alien
population to their relatives on the
other side.
This invisible balance Of hundreds
of millions year we were ever taking
care of, or trying to take care of,
with our excess Of exports over i'm
ports of goods. And thus it was that
the Old World and, for the matter Of
that, Canada and others of the New
World could buy and buy from us, did
buy and buy from us, year in and
year out, with no worry on their part
as to the day Of reckoning, since II
we were always doing the selling we
were at one and the same time also
doing the paying.
1t has been estimated by Sir GEORGE
PAIsH and other international econo-
mists and financiers that for some
years before the war we had to pay
on our foreign obligations Of one sort
and another from fifty to sixty odd
of dollars a month, or from
half to three-quarters Of n billion a
year. If we did we were not dig
ging our way out of foreign debt; we
were digging in more deeply. This
must be so, for in the FIVE years be-
fore the war our favorable trade bal
ance averaged just short Of $500, ,000.-
900. In the five years before that 1t
averaged about $475.O00,000. In the
Ave years before that 1t avera ged Just
beyond $500, 100000. So on top Of the
goods now we sent gold, now we sent
now we sent both, to make
up the rest of what we had to pay,
always had to pay, abroad.
And to-day Instead of that former
average trade balance Of half a billion
iollars a year we have had one Of n
,illion in 1915, of more than two bill
ons in 1915, of some three and half
,illions in 1917 and 1918 each. of more
han four billions in 1910. We have
'een and are selling not as a debtor but |
is creditor nation. We have bought |
'ack the bulk, If not all, OF our securi- |
les once held abroad. We no longer |
end out interest and dividends; we
ire receiving them from far and wide. |
We are not paying ocean freight bills |
o foreigners so much as we are col
Getting them from foreigners.
II before the war We owed the out !
ide world every year three-quarters OF |
billion Of dollars on running account
here must be owed us now by the
utside world on the same account a |
'illion and a quarter Of dollars, for
he foreign debts to us, Government
md private, are placed at twenty bill
ons Of dollars. The difference in our
avor between paying out that old
hree-Quarters Of billion and receiv-
ng one and quarter billion is two
illions Of dollars a year.
1t is proposed by our bankers that
re shall Increase the foreign loans to
hirty billions of dollars. The inter-
st on that debt would be somewhere
ear one and threequarters of a
hlion Of dollars. The difference in
ur favor between paying that old