New-York tribune., 1922-09-24
Shipping and Financial Pol.
icies Should BE Shaped 10
Aid Bankers, Manufac-
turers, Economists Idea
ShouldAvoid Imperialism
Nation Rich and Powerful
Enough to Pursue Intel
ligent, Generous Policy
By Henry Raymond Mussey
OF Wellesleg College


IRepriated from current Political! Science
Quurtcrlyl
The year 1921 was the first since
the outbreak of the war in which
government credit operations did not
directly and markedly affect our for
eign trade. 1t therefore gives US
SINE intimation what to expect when
the world again settles down to the
humdrum routine Of working and
paying, after the mad orgy Of fight
ing and borrowing and spending
that extended from the beginning of
the war up to the end of 1920
Sober examination of the new state
of affairs is condition precedent to
any intelligent shaping of tariff and
trade policy, shipping plans, invest
ment schemes, political designs and
industrial and agricultural develop
ment.
During recent years the elementary
theory Of the balance of international
payments has come to be far more wide
ly understood in this country than ever
before, but politicians and business
men, for the greater part, still wander
in Cimmerian darkness when it comes
to making practical application of the
doctrine. They are still interested al
most exclusively in direct efforts to
promote export trade or to prevent the
products of foreign "cheap labor" from
coming into competition with their own
goods in their home market. They for
get the truism on which the theory of
international trade rests, namely, that
failing bankruptcy or reputation, the
sum total of debts and credits in the
foreign trade Of each country must bal
ance each year In this sense, and in
this only, exports must pay for i'm
ports" The international account may
be summarized under five chief items:
% Exports and imports OF merchan-
disc; CD exports and imports of gold
and silver; (3) interest receivable and
payable; (4) payments for current .serv-
ices, such as banking commissions, in
surance premiums, ocean freights,
tourist expenditures and immigrant
and emigrant remittances, and 90 the
temporary loan or the permanent in
vcstment of capital. For most modern
countries in most years the sum total
of the first four debit items is either
greater or less than the sum of the
corresponding credit items, and the diff
ference is redressed by corresponding
entry on the opposite side under the
fifth item, that is, by the borrowing or
port of capital works to create corre-
spending import or. export of goods.
Exports Of Capital
During the years 1s9S-1914 the for
eign trade of the United States was in
position of comparatively stable
equilibrium. Each year We exported
nearly half billion dollars worth of
goods more than we imported. In ad-
dition our net exports of gold and sill
yer amounted to the inconsiderable
average of $S,000,000 a year. During
these seventeen years our total trade
experienced a steady expansion, the
value of imports more than doubling,
and that of exports increasing in some
what less proportion. The relation Of
export to import values, however,
changed scarcely at all. An export ex-
cess, taking both merchandise and
metals into account, averaging S5S4,-
100000 during 18981901. was sue
ceeded by an average of $451 200, 900
during the next decennlum, only to be
followed by an average Of $603,000, 900
during the three years preceding the
outbreak of the war. The changing
character of our trade during these
years has been the subject of frequent
comment. Foodstuffs and raw mate
rials formed an increasing proportion
of imports, while our growing exports
contained a constantly rising proper
ton of manufactured goods. Business
was done at steadily rising prices, too,
so the increase Of trade was less in
volume than in value. For the present
purpose, however, the important fact is
the comparatively fixed difference be-
tween export and import values
Excess exports of merchandise, gold
and silver averaging half billion a
year were scarcely sufficient to balance
the annual charges We had to meet on
account of interest and current serv-
ices, chiefly freight, tourists expendi-
lures and the remittances made by i'm