International Trade Balance

The Department of Commerce has been conducting a careful investigation of this country's total trade balances with the rest of the world. Last week it revealed an unexpectedly large balance in 1924 "against" the U.S.

Merchandise exports last year were $4,621,000,000 and imports $3,641,000,000-or $970,000,000 in the U.S.'s "favor." But while earnings by ocean freights, and interest and dividends received on foreign investments amounted to $790,000,000, similar remittances abroad, plus tourist expenditures and emigrant remittances totaled $1,178,000,000, or a "loss" of $388,000,000. This reduced U. S. merchandise balance to $582,000,000. Meanwhile, imports of gold and silver exceeded exports by $222,000,000-bringing down the credit balance to $360,000,000.

If trade had stopped there, the U.S. would have been an international creditor. But, respecting the movement of capital in loans and security purchases, the country took in only $387,000,000 and paid out $959,000,000, thus running a debit balance of $572,000,000. When this sum is balanced against the previous $360,000,000 credit, it is found that in 1924 this country was actually a debtor to the extent of $212,000,000.

The statistics show that the country is absorbing foreign investments rapidly, mainly in exchange for goods, and that Europe is taking this way of balancing her many past indebtednesses to the U.S.