Foreign Commerce of the United States

Sources and Destination of Foreign Trade.

A study of the geographical sources of imports and destination of exports illuminates still more the changing character of foreign trade. In the years between 1876 and 1880 over half of United States im ports of merchandise came from Europe, while 83.1% of all ex ports went to Europe. Other countries on the North American continent supplied 23.2% of all United States imports of com modities and absorbed 10.4% of all merchandise exports. South America and Southern North America, which comprise what is usually called Latin America, supplied the United States with 31.4% of all commodities imported and purchased 8.7% of all ex ports. Asia was a source of supply for 11.3% of all merchandise imports but took only 1.7% of all goods exported by the United States in those years. Since that period, Europe has become a less and less important source of supply relatively and a com paratively smaller market for United States exports of merchan dise. United States imports from Europe which averaged 49.5% of the total in the five-year period immediately preceding the World War had fallen to 30.3% by 1929, to 29.5% by 1932 and to 27.3% in 1937. Exports to Europe fell even more in propor tion. Averaging over three-quarters of the total by 1900, they were 62.3% in 1910-14, 44.7% in 1929, and 40.6% in 1937.

There were minor fluctuations in the proportions of total im ports into the United States supplied by other countries of the Americas, but relatively little evidence of a trend. Asia, in con trast, showed a steady and substantial gain in its relative position as a supplier of United States imports, rising from 11.3% in 1876-8o to 15•3% in pre-war years, and reaching 31.4% in Thus Asia rapidly supplanted Europe as a source of supply for the United States market. Asia likewise became an increasingly valuable market for United States exports, more than doubling in relative importance between 188o and 1900, when nearly 4% of all United States exports were absorbed. By 1929 Asia took 12.2%, a ratio which expanded to 18.i% by 1932 and 18.7% for the first six months of 1939. Latin America also rose in relative importance as a United States market, accounting today for nearly 20% of total United States exports of commodities as com pared with less than to% at the close of the 19th century. Can ada also has become an increasingly important outlet for United States products, having more than doubled her relative importance since 190o.

These geographical shifts stem from the same causes which have accounted for shifts in commodity content of the foreign trade of the United States. The relative decline of Europe as both a market and a supplier is explained by the fact that the in dustrial growth of the United States has paralleled that of Eu rope although with a time lag. As the United States became an

exporter of more and more manufactured goods, markets had to be sought in Asia, Latin America, and Canada, since Europe had its own industrial products. Similarly, as the United States ex panded industrially it had less and less need for European manu factures and more and more need for raw materials. Asia became the chief beneficiary of this shift in emphasis, having by 1937 out stripped Europe as the chief supplier of the United States. (See Table XVII.) Commercial Policy.—Entwined with the economic changes just discussed, and exerting a varying degree of influence upon them, have been the changes in the political policy of the United States Government towards its foreign trade. Since 1839 there have been approximately 15 tariff acts passed by the Congress of the United States.

The policy of a protective tariff on some American products was well established by the year 182o. Textile products and some metals, for example, were definitely protected by that time. In 1824 duties were increased on cotton and woollen goods from 25% to 331%. The duty on raw wool, however, reduced the protec tion on woollens to about 18%. The Tariff Act of 1828, which was definitely protective along many lines, made a bitter issue out of the tariff which has continued intermittently for more than ioo years. The Tariff Act of 1832 continued the protective principle of the previous act. On an average, rates of duty on dutiable arti cles in this act were about 33% ad valorem. In the Act of 1833 provision was made for a graduated reduction in duties down to a uniform rate of 20%, which was reached in 1842. Within two months after the base rate was reached, however, the Tariff Act of 1842 was passed when high duties were re-enacted.

The Act of 1846 was moderate in its rates and most of the controversial articles paid 3o% duty. Cotton textiles were duti able at 25%. This act remained in force until 1857 when still fur ther reductions in the duties were made. The rates on most arti cles were reduced to 24%. This act continued in force until the Civil War.

During the Civil War period the customs tariffs were used as one of the many means of raising revenue. The necessity for revenue backed up by the protective principle established tariff rates on a plateau that continued without a substantial decline for 5o years. Although the customs duties on imports were en acted during the Civil War, partly as compensation for internal taxes on most domestic products, the excise taxes were quickly removed after the War on most important products, leaving the tariff rates highly protective after the need for the revenue had declined.