Evening star., 1925-07-26
HOW A BILLION-DOLLAR
TRADE BALANCE SHRJJNK
Examination Shows That World Is Not
Sending All Its Money to Pay for
American Goods.

Cos .3sS-an excess Of exports amount
ing to S37,216,956.
When the value of invisible ex-
change" is taken into consideration,
the balance of trade as indicated by
export and import returns takes on
new significance.
Foreign securities publicly offered
in the United States during the last
fiscal year amounted to approximately
81 1881, SIS, ,000-which does not include
n number of loans privately placed
ana, in addition, a number of direct
industrial and commercial investments
have not been included in that total.
An item of considerable Importance
that must be taken into consideration
| in any analysis of our trade Is that
of tourists expenditures abroad. Dur
ing the calendar year 1924, which is
the latest period for which figures are
available, American tourists in Eu-
rope. Canada and elsewhere spent ap-
proximately $570,000,0o0.
Other Invisible" Items
Again must be added other ''invisi-
BILE exchange" items. among the prin-
cipal kinds of which are included in
terest on foreign capital in the United
States, freight paid to foreign ves-
sells. immigrants remittances abroad.
/ United States Government expendi-
lures abroad, foreign securities issued
abroad but sold to Americans, Amer.
lean securities formerly held abroad
| resold to Americans, other foreign in
vestments, such as establishment of
branches, purchases Of real estate, all
of which materially reduce the s.fa-
vorable" balance of trade.
The Importance of these invisible
items in explaining our international
| trade is shown by the fact that In
1924, when our favorable" balance on
the movement of recorded merchan-
disc amounted to $3.50, ,000, 900, the in
visible items were equivalent to rough
ly % per cent of our total exports
and "a per cent of our total imports.
Now, just to show by a few broad
strokes how the favorable trade bal.
ance" of a billion dollars Is absorbed:
Besides that we have coming to us
| nearly a half-billion dollars interest
on foreign Investments, and $4,000, 200
| due us on ocean freights. Then we
| must deduct half a billion dollars spent
by our tourists abroad, some $780,.
| 600 900 for what our Immigrants sent
to their home countries, some S55,
| 600 900 for our charitable and mission
ary expenditures abroad. 1t seems
| that the billion-dollar balance really
! did take into consideration some $40,
i 600, 900 paid for liquor illicitly brought
| into this country-which is not frac
J ton OF the amount really paid to the
| international rum runners.
Lose In Capital Movements.
+! Then, again, we have certain "capi
tai items These include foreign
loans that we have made and which
must be treated as an Offset to the
| favorable balance on merchandise ac
court, since 1t furnished our com
| petitors so much more cash to spend
Our new foreign loans Exclusive oi
refunding) in the last calendar yeai
amounted to $500. 100000 Europe sem
/ back $50, ,000, 900 in American currency
that had been sent abroad, so thai
makes $3.50, 200 900.
| Then we must credit the foreigner.
with 100000, 900 of American secur
| tiles they bought last year, with $45,
1 100000 paid on on loan obligation.
and with 5000, 900 paid off on thu
principal Of the allied dshL -