EXPORTS 75
An excels of exports may mean that most of the ocean carriage is done in foreign bottoms^ the excess being freight for carriage. Here again we see that if the business of carrying is taken away from ns^ an equal business of manufacturing the exports with which to pay the carriage is given to us. Any argument favoring the building up of our merchant marine is against the ^' favorable balance of trade ^' idea.
Items 4 and 5^ then^ do not seriously enter into the argument of the balance of trade^ because it is easy to see that value is given for value received. They are the only cases of an export balance that is not un- favorable. But, be it observed^ neither is their balance favorable.
Unlike the last two items we have discussed^ remittances to friends are gifts for which there is no return. In so far as an excess of exports means that people in America are sending gratuities to Europeans^ it is an economic drain upon America.
Our answer^ then, to the question which has been the subject of this discussion — ^is a balance of trade in favor of exports favorable? — ^is an unqualified negative. We have seen that the export balance induced by travel abroad and the use of foreign bottoms is lieither favorable nor unfavorable, and that the balance induced by the joint action of all other causes is unfavorable. Foremost among these other causes is the joint action of items 2 and 3 in which we have seen that item 2 must pre- dominate. We have seen that the gold question might be used to support our negative did it have existence in fact, but we have also seen that in modern times its existence in fact is negligible. The parts of fhe problem which outweigh all others in considering the economies of a modern nation like the United States are to be seen in a survey of items 1 and 2. If we include the terms interest, dividends, rent, profits, under the single term interest, then we may say that an excess of exports means that a coimtry pays more interest than it receives, that it is giving with- out receiving, that its resources are owned abroad when they might b^ owned at home.
Our conclusion is directly contrary to the current notion. So wide- spread and ingrained is the idea that an export balance constitutes a gaining trade, it is not sufQcient for us to disprove it — ^we must account for it.
Our ideas regarding the actions of states and nations usually find their counterpart in our ideas regarding individuals. Probably the idea that it is more profitable to export than to import receives currency through the idea that it is profitable for a man's sales to exceed his purchases. This idea is a true one only when we have in mind a part of his life, his business life — only when we exclude from the term pur- chases, his purchases for consumption. We usually reckon profit or income upon money or credit outstanding, but this is a potential profit
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