Evening star. [volume] (Washington, D.C.) 1854-1972, 1923-05-20
The Trade Balance Shifts.

pubic by the Department OF Com
merce appears the fact that during
the month Of March the balance Of
trade, which for nine years has un-
interruptedly favored the United
States, has swung to the other side.
In that month imports exceeded ex-
ports by about $4,000, 900, bringing
about an "unfavorable" balance for
the first three months Of 1923 to the
extent OF s5o,ooo,ooo. There Is cause
for consideration, though not concern,
In this showing.
An adverse trade balance means
that this country is buying more than
It sells. 1t also means, II maintained,
an outflow Of gold to pay bills. If the
imports continue throughout the cur
rent year to exceed the exports there
will be a material shift Of cash that
may substantially improve the rate OF
exchange and aid In the rehabilitation
Of the currencies Of the European
countries.
1t would appear that in large part
the excess Of imports 10 due to the
fact that American manufacturers
have bought heavily abroad Of raw
materials that were either not obtain
able here or that could be secured for
lower prices IN other countries. Also
1t Is indicated that the home market
has been better for American manu-.
features than the foreign, on account
of the higher prices obtainable here.
This means that European and per.
haps also certain Asiatic countries,
having less money TO spend than the
United States, and needing more, are
now sellers rather than buyers and
are quick. to take advantage Of the
absorbent conditions here and the
higher prices prevailing in the Ameri-
can market.
If the year shows a balance Of i'm.
ports over exports it will be only the
eighth in the last fifty-three in which
such a phenomenon has occurred.
There were adverse balances in 1871,
1872, 1873, 1876, 1888, 1889 and 1898.
Not for thirty years has the United
States in the course Of a twelve-month
period bought more than It sold. Pos.
sibly but for the war there would
have been a shift in 1915. The bal.
ance in April, 1914, was against US
by over $4,000, ooe-the last month
in nine years making such a show
ing-and 1t Is quite likely that had the
great conflict not broken a little later
that year would have shown a Euro
pean balance.
Recently warnings have been sound
cd by those In close touch with the
economic situation that the heavy
stock Of gold in the United States
would prove a source OF danger
through imitation Of prices and an
unwise expansion Of industry. II an
eastward movement OF gold occurs to
satisfy the trade balance this danger
will be lessened.
The truth is that conditions are re-
turning 70 normal. It Is not desirable
that the United States should indefi.
nitely continue to be the creditor ma.
ton. 1t cannot continue without
check to be a selling nation at the
expense Of its own people. who. in the
final analysis, must pay the cost Of
its command Of the world markets in
terms Of higher prices at home. A
wholesome competition may come
through the revival Of foreign selling
In the United States. with the result
Of a lowering Of prices to domestic
consumers.
Thus the spectacle Of an adverse
trade balance in March and the pros
pect Of q continued tendency in that
direction Is by no means a cause Of
anxiety. On the contrary. it may be
regarded as a symptom Of reviving
health in the world field Of industry
and trade.