EXPORTS 71
Account op thx United States with FObxion Ck)UNTBiES
Delni Credit
1. Imports (induding gold). 1. Exports (including gold).
2. Interests on American securities and 2. Interest on foreign securities and
loans held bj foreigners. loans held bj Americans.
3. Purchase of foreign securities, and 3. Purchase of American securities and
loans to foreigners, bj Americans. loans to Americans by foreigners,
i. Expense of Americans traveling 4. Expense of foreigners traveling in
abroad. America.
5. T7se of foreign vessels. 6. Bemittances to immigrants by friends
6. Bemittances by immigrants to friends left at home.
left at home.
A '^ favorable balance of trade ^^ is considered to be a balance in favor of exports^ an excess of exports over imports. Contrary to the general opinion^ we propose now to show that such a balance is in reality not favorable.
Since the debit side of onr international account from the point of yiew of the 'United States must always be substantially equal to the credit side^ an excess of exports over imports implies an excess of items 2 to 66 on the debit side over times 2 to 6 on the credit side. That is to say^ it implies an excess of one, any or all of them. Let us consider these in turn in the order given.
In 80 far as an excess of exports means that Americans are paying interest, dividends, rent, etc.^ to foreigners who own our resources and equipment, it is certainly unfavorable. This is tribute for which our foreign landlords return absolutely nothing. His draft is a draft upon our exports — economically he is paid with our exports. Many English- men own large farming tracts in America and these they divide up and let out to tenant farmers who render a very large part of the crop in rent The owners for the most part remain in England, and thus there is a large export from America for which there is no return. The tribute exacted by Germany of France in 1871 caused a large excess of French exports over her imports. When Home was mistress of the world, the wealth of the provinces was drained to her by taxes, tribute and rent for which no return was made. Her trade weighed heavily on the side of imports, yet it was a most "favorable^* trade for her. We are cheerfully told that the picturesque Bussian provinces in the Cau- casus flourish under an export trade five times larger than the import What does it mean? Probably that the greater part of the district is owned by Bussian noblemen living in St Petersburg, whose rents reach them through this heavy export trade. So in India, the *' home charges '^ of an alien government and the remittances of alien officials cause a permanent excess of exports over imports.
In regard to item 3 let us suppose that Americans were to regularly
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