Evening star., 1940-01-07
War Exports Increase Expected
To Exceed u. S. Trade Losses
Orders Resulting From Conflict Seen
MoterioIizing Earlier Than in l9l4-15

in 1914, sufficiently advanced in their
adaptation to a war economy to fit
this productive capacity into their
own military planning.
Orders to be Selective.
While we may expect to see some
war orders materialize early. we
may, however, also anticipate with
some confidence that these orders
will not be large by the 19l4-18
standards and they will be highly
selective. During the last war the
increase in exports to the belhger-
ents was by no means confined to
war materials even broadly defined.
Orders stopped over" very gener-
ously into other segments of the
economy. AS a matter of fact, out
of the total volume of exports to
the belligerents from 1914 to 1919
it is difficult to account for more
than from three to four billions as
definitely war commodities. The
indiscriminate importation of non-
war materials can and will be def
nitely obviated by careful war
planning. Outside the airplane in
dustry. war orders in the near fu-
ture seem likely to be limited to
trucks and tractors, perhaps cer-
tain types Of munitions, various ma
chine tools. oil and shipping Prob
ably Canadian plant expansion to
meet war needs will also create a
demand for heavy Industrial prod
ucts.
Whether, over the next year or
two, war exports will exceed the loss
OF normal peacetime exports is a
question to which a number of con-
slderations are relevant. That the
loss of the latter will be considerable
is not to be minimized. The fall of
the pound sterling decreases the
dollar values of currencies-and
consequently our capacity to sell
in countries which ordinarily take
three-fifths of American exports.
Both England and France have pro-
hibited the importation of num-
Der of luxuries and have seriously
limited the import of others.
Both the exchange situation and
the desire to tie the empire to-
gether as closely as possible by eco
nomic means governs England's
purchase of non-war as we'll as war
materials from the colonies.
Furthermore, the capacity of the
empire to supply its own needs both
for raw materials and fabricated
products has increased greatly since
1894.
U. S. Exports Decline Likely.
The close collaboration of Eng
land and France in the prosecution
of war aims involves not merely
the elimination of competitive bid
ding for imports, but also a pooling
Of resources as will definitely limit
the volume of imports. Such joint
action, in addition to the internal
economic programs in England and
France and to the exchange difficult
ties affecting American exports to
the whole sterling bloc. promises a
very considerable decline in the
volume of American exports to the
belligerents of non-war commodi-
ties.
The involuntary withdrawal of
Germany from foreign trade and
the dislocation to be expected in
the exports of England and France
create, it is true, gap which might
be filled by American goods. Un-
fortunately this potential demand
is concentrated heavily in countries
which find it difficult to increase
their purchases from the United
States. In the absence of long term
credits-and who is going to finance
them?-it is unlikely that the United
States will acquire much of Ger
many's share in the South American
market In sum, a considerable de-
cline in American exports of peace
time commodities is to be expected.
Will the export of war materials
supply this deficiency and perhaps
increase our net foreign balance?
It is interesting to note the esti-