covered from the first shock of the news of the European war, a number of ingenious newspaper writers and some men, whose reputation for knowledge of foreign trade conditions is rather widespread, figured out a golden harvest for our manufacturers and exporters.
Their predictions of great and immediate profits were based on statistics of the trade of the contending countries with the rest of the world—a trade which they prophesied would necessarily fall into our laps. They arrived at their conclusions in this manner:
The exports of Germany, Austria-Hungary and Belgium amount to three thousand million dollars.
This is totally cut off.
The exports of France, United Kingdom and Russia total five thousand million dollars.
This will be reduced by say two thousand million dollars.
Add this two thousand million to the lost trade of the other belligerents and we have five thousand million dollars—which represents our opportunity.
If we succeed in securing only one half of this we shall double our export trade in one year. Side issues were lost sight of. The fact that of Europe’s export trade of some twelve thousand million dollars, two thirds or eight thousand million represent sales of European countries to each other, was ignored altogether. In this connection, the circumstance that 80 per cent. of Belgium’s exports were to European countries and 75 per cent. of the exports from Germany went to her immediate neighbors in Europe is of interest. England alone sold and still sells the bulk of her products to countries outside the continent, only 35 per cent. of her exports being shipped to that part of the world. The decreased purchasing power arising from the loss of their most valuable markets by other countries and the withdrawal of European capital, which financed a vast majority of the industries and public enterprises of many countries, was not considered.
“Figures can not lie” is an old adage, but they can be made to perform most amazing contortions. Let us consider for a moment the application of statistics to the study of a single commodity. Robinson & Company—for instance—makers of picks and shovels, discover that the Argentine imports, annually, $500,000 of these necessary implements, and that Germany has divided the trade in this line with England, each sending about $250,000 worth a year. Because of the war, Germany is eliminated—consequently Robinson & Company have but to slip in with their goods and fill the vacuum caused by Germany’s forced withdrawal.
That is the situation as it appears after a careful study of the official statistics, but when their representative arrives in Buenos Aires he finds, to his surprise, that while it is true that 500,000 minus 250,000 equals 250,000, is it equally true that 250,000 minus 250,000 equals zero. (That last 250,000 represents the diminished purchasing power and decreased demand arising from the same cause which brought about
