The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1934-07-12

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Not Gold But Goods
The need for a realistic view Of the
foreign trade and international debt
situation Is set forth in a letter to
the president from George N. Peek,
special adviser on foreign trade, and
made public at the presidents sug-
gestion.
Analysis OF the facts contained in
it prove how difficult it is going to
be for America to continue its deal
ings with foreign powers on the pres
ent basis, let alone collect its debts,
and suggests the pertinent query as
to whether We are doing foreign BUSH
ness for fun. On the present basis
We will inevitably become sort of
international Santa Claus, sending
the products Of our farms and fac
tories abroad in return for promises
which never will be paid.
According to Peek's analysis, our
foreign trade falls into four histor-
ical classifications, the first period
being from 1896 to 1914, the next
from 1914 to 1922 (the war period
the third from 1922 to 1880, and the
fourth from 1880 to 1888.
A glance at the international bal
ance sheet for each Of these eras
shows the nature Of the problem we
are facing, even though it doesn't
suggest remedy.
In the IL years from 1896 to 1914
we showed an increase in the debt
We then owed Europe Of a round bill
lion dollars. Although we exported
$0.e53 900 900 more in goods than we
purchased. our immigrants and tour
lists sent and spent abroad $685. OO,-
600, leaving q balance of $2,773, 0OO, 900
which Europe owed us. This was in
creasd to $4,27l 100000 by shipping
services, dividend payments and
other items, but was Offset by serv-
ices purchased and dividends paid
abroad to the extent Of $5,27l ,OOO, 900,
leaving an unfavorable balance of
trade of q billion dollars. This in
crease in debt was represented by
foreign purchases of American securi-
ties to the tune of two billions, less
billion in such purchases abroad by
American citizens.
The second period was one OF ter
rifle dislocation because of the war.
We sent abroad goods worth $2l, 1885,
100000 In excess Of the amounts pur-
chased by us and wound up 1885,
100000 to the good on the books.
Freight and shipping services rem
dered and dividend payments collect
ed by us exceeded those rendered to
us and dividends paid by us by more
than three billions, but this fact was
somewhat offset by importation Of
81, TAG, DOC, 900 in gold. Therein lies one
Of the reasons for America owning
approximately half the worlds gold
today.
Tho debt increase of 10 billions was
represented by $6,779, 100000 in for
eign securities purchased by Ameri-
can citizens; 10000 o00, 900 in gov
eminent loans to foreign countries
(this being the adjusted figure) and
$2.222, 000, 600 in American securities
repurchased from abroad.
TO carry this load Of debt Europe
did two things. It borrowed heavily
in America, paying US interest with
our own money. and it sent us still
more gold. Is Is shown by statistics
10f lSI3 20 1879.
In that seven-year period we ex-
ported goods worth t4,976. O00, 600
more than we imported, but our tour
lists began spending abroad again
and this. with other factors, reduced
Europe's debt to us for the period to
42.572, 100000. This, Of course, was
added to the debt incurred between
1914 and 1922.
This debt increase Of 12.572. 000, 900
vas represented by American pur-
ehases Of foreign securities totaling
17.ll0. 100000. less foreign purchases
Of American securities totaling ~
ses,ooo0oo. Net imports Of gold dur
Ing the period were $l75. 900 900.
IN the deflation period from 1880
% 1893, Europe took home most Of
- money. but t. debt - u still In
exsassd 4l.76s 100000. We exported
ote3l ooo0oo more II goods than We
1aportsd and 1xcensss q collections
or payments represented the dif-
1Grence.
This difference v1s retEesented By
aaesrsase - An11Eiean securities bald
aAsead totaling 17.1oo 0oeNoo. al-
tkoosh -. at IL saz1s tina, feduoed
sR ha1din6S = lorstsn sscuittss y