THE PAST DECADE OF THE FOREIGN COMMERCE OF THE UNITED STATES The value of the foreign commerce of the United States grew during the past decade (from the fiscal year ending June 30, 1910, to the fiscal year ending June 30, 1919) as follows: The decade may be conveniently divided into two periods: the one, from 1910 to 1914, preceding the Great War, during which the exports rose 33 per cent and the imports 18 per cent; and the other from 1914 to 1919 when the rise in the value of exports was 205.6 per cent, and of imports 63.4 per cent. This phenomenal growth of our foreign trade, which became particularly pronounced after the second year of the war, attracted widespread attention. It is generally known that at about the same time commodity prices began their rapid advance, yet in many of the discussions of our exports and imports this fact is either overlooked or touched upon very lightly and does not play a prominent rôle in the conclusions reached. Even before the war, because of rising prices, statistics of "values" were not giving a true record of trade movements; since the great conflict they have been entirely misleading, and a careful analysis of value figures is necessary in order to make it possible to pass judgment as to how much of the increased value in our country's foreign trade represents an actual physical increase or a change in the character of commodities moved, and how much of it is due to price inflation. According to the index numbers1 of the United States Bureau of 1 Monthly Labor Review, Dec., 1919, p. 196. Labor the general level of wholesale prices rose in this country as The index numbers of the Annalist show an increase from 71 in The Economist's general index number for all commodities in It is extremely difficult to obtain an exact index of the rise in 2 The Economist, Jan. 10, 1920, p. 54. 3 J. J. MacFarlane, "America's Remarkable Trade Record in 1919," Com- lished by the Harvard University Committee on Economic Research, in the Review of Economic Statistics, for October, 1919. An estimate was made of the relative physical volume of our exports for 1915-1919 on the basis of one hundred commodities for which both quantities and values are given in official statistics. The commodities selected contributed about two thirds of the total value of exports, a sufficiently large proportion to make the estimate fairly reliable. As Mr. Berridge states, it is impossible to find a ratio of physical increase for each commodity because official returns do not give quantities for each article, and were this possible it would hardly have been practical. The labor involved would have been too great and not at all commensurate with the advantages to be derived. It is not necessary to enter here into a discussion of the methods of adjustment used by Mr. Berridge. Taking averages for fiscal years (1911-1914 = 100), he arrived at the following adjusted indices of quantities for all domestic exports. The view that in a period like the one under discussion value statistics do not indicate the quantity of goods moved is substantiated by figures showing the net tonnage of American and foreign sailing and steam vessels which entered at and cleared from all ports of the United States from and to foreign countries. One must admit that these statistics are not altogether conclusive as they show merely the carrying capacity of the ships which cleared and entered our ports ("net ton" equaling 100 cubic feet). They do not reveal what was the amount of cargo which the vessels actually carried from and into the country. According to the estimates made by the United States Shipping Board and by Mr. Berridge the quantity of exports in long tons for each of the fiscal years 1911-1919 was:* This would indicate that the physical increase in our exports between 1911 and 1919 was about 42.3 per cent. It is hardly necessary to point out that in discussing the relation between the value and the volume of trade one must consider besides changes in price also changes in the character of commodities moved; some of the growth in the value of our commerce is undoubtedly due to a much more rapid increase in our exports of manufactured commodities as compared with the exports of raw materials and halffinished goods. Considered by groups and measured in value, the following changes took place in the nature of the commodities exported from 1910 to 1919. There was a slight increase in the value of food exports in the first five years of the period; however, the increase was not sufficiently large to counteract the drop in exports, which occurred between 1900 and 1910, when, in spite of rising prices, the value of food products shipped out of the country declined from $545,474,000 in 1900 to $336,088,000 in 1910; the decline relative to the value of all exports was from 39.8 per cent to 21.5 per cent. The total for 1914 was $430,297,000, or 18.5 per cent of all exports for that year. The extraordinary rise in the amount of food exports during and after the war coupled with a sharp advance in prices brought up the export value figure for 1919 to $2,504,895,000 or 35 per cent of the total. The exports of crude materials for use in manufacturing advanced from $325,244,000 or 23.73 per cent of the total export trade in 1900 to $565,935,000 or 33 per cent in 1910. This relative position was held by the group of crude materials during the next four years, the exports having risen to $792,745,000 in 1914. The value in 1919 was $1,215,961,000 which, in view of the fact that prices more than doubled during this period, was a purely nominal increase giving raw materials only 17 per cent of the total value of exports. 4 The Review of Economic Statistics, Oct., 1919, p. 312. The most significant changes took place in the export of manufactures (those for further use in manufacturing and ready for consumption). In 1900 these exports were valued at $484,846,000 or 35.38 per cent of the total; in 1910, $766,981,000 or 44.85 per cent; in 1914, $1,099,632,000 or 47.17 per cent. The growth in the exports during the next five years placed the value at $3,337,676,000 or 46 per cent of the total. The relative changes in the quantities of domestic exports by groups were, according to the findings of Mr. Berridge," as follows: Group A consists of crude materials for use in manufacturing; group B, of foodstuffs in crude condition and food animals; group C, of foodstuffs partly or wholly manufactured; group D, of manufactures for further use in manufacturing; and group E, of manufactures ready for consumption. There was a decline in groups A and B and an increase in the three other groups, the growth being particularly pronounced in the case of manufactures ready for consumption. The decline in the exports in 1918 as compared with the preceding year is attributed by Mr. Berridge to the diversion of manpower from productive industry after the United States entered the war and especially to the shortage of shipping. This view is not shared by Mr. Austin, who is of the opinion that the falling off was only an apparent one, and that it was due to the fact that in 1918 more than in any of the preceding years goods were shipped on vessels under government control. According to the custom of the governments of most countries, including that of the United States, goods moved in this way are omitted from the records of the customs houses. The decline occurred in the movements to Europe, and as Mr. Austin points out, it is strange that it should have taken place at a time when Great Britain, France, and Italy were making a most insistent demand for our goods both to support their armies in the field and to feed and clothe their 5 The Review of Economic Statistics, Oct., 1919, p. 312. • O. P. Austin, “Our Unrecorded Exports," The Americas, Nov., 1918. |