Page:Popular Science Monthly Volume 86.djvu/404

400 as the purchase and sale of commodities are concerned. On the contrary, the likelihood is that, aside from the securities problem, the movement of gold would tend in the opposite direction. Incomplete trade statistics show that the trade balance is running heavily in our favor, and that if present tendencies continue the balance of trade in favor of the United States will run considerably higher than in ordinary years. This is in part due to the prostration of European manufacturing industries, which has led to a reduction in our imports, and is in part the result of increasing exports of food stuffs and certain classes of manufactured goods, the demand for which has been stimulated by the war.

We must bear in mind that the United States, being a debtor nation, must normally have a surplus of merchandise exports over imports, if the exportation of gold is to be avoided. Estimates by leading authorities on foreign trade and foreign exchange agree that this excess of merchandise exports over imports must range somewhere between $400,000,000 and $600,000,000, in order that we may be able to square our accounts without the shipment of the precious metals. This excess of merchandise exports, whatever may be the correct figure, is needed to enable us to pay interest and dividends on foreign security holdings of from $200,000,000 to $300,000,000; the expenditures of our tourists abroad, estimated at $150,000,000 to $200,000,000; the remittances by Americans to friends and relatives in European countries, estimated at $100,000,000 to $150,000,000; and payments to foreign ship owners for freight, estimated at $20,000,000 to $40,000,000. With our merchandise exports running above normal and our imports running considerably below normal; with a likelihood that tourists' expenditures during the coming summer will practically disappear; and with the encouraging news that remittances in the past few months by persons in this country to friends and relatives abroad have materially decreased, it seems altogether probable that we shall have a real excess balance in the neighborhood of $300,000,000 a year which can be used for the repurchase of American securities.

As the war develops and the, need of foreign nations for munitions and supplies increases, due to the exhaustion of stores accumulated in peaceful times, it is reasonable to presume that our exports of merchandise may still further increase, and that our ability to absorb foreign held securities will correspondingly grow. There is no more reason why it would be wise for us to demand the return of gold for our credit balances than it would be for Europe to continue to draw upon our store of gold.

If we are correct that our commercial balance of trade is satisfactory, there only remains for consideration the possibility of achieving the ideal of controlling foreign liquidation in American securities upon our own terms rather than upon theirs. I believe that this is possible,