A favorable balance may therefore reflect national investments abroad as well as an excess of exports over imports. It may also mean that a debt is being paid, or that dividends are flowing out of the country. An unfavorable balance on the other hand may mean that the country is being assisted in the development of its resources, or that the country is drawing an in come from investments previously made.
It is, therefore, futile to consider whether a favor able or an unfavorable balance is the ideal to strive for. A mere comparison of the value of exports with the value of imports tells us nothing of what is actu ally going on.
11. The financial balance.—Of far greater signifi cance would be information as to the financial bal ance. Such information is always difficult if not im possible to obtain. Many times we can do little more than guess. We know, for example, that England, which had an unfavorable balance of trade amounting to over $786,500,000 in 1912, was receiving this excess of imports over exports by virtue of loans and invest ments abroad, freight earnings, charges for marine and fire insurance carried for foreigners by the com panies of England, of commissions for the buying of raw products, and of banking charges for the financ ing of customers of English and foreign sellers.
The shipments of securities which take place con stantly in normal times, are not known to the public and do not figure in statistics. The investors in Bel gium before the war were buying the mortgage bonds issued by mortgage companies in Northwestern Can ada; they were also absorbing many railroad securi ties issued in the United States and in Asia. But no one could tell with any degree of certainty the amount thus transferred and the figures showing the balance of trade of all the countries concerned gave no indi cation of it.
12. The balance of trade of the United States.— The statistics of imports and exports of the United States show an interesting condition: Fiscal year Imports Exports Excess of exports 1915 1,674,169,740 2,768,589,310 1,094,419,600 1916 2,197,883,510 4,333,482,885 2,135,599,375 1917 6,290,108,394 3,630,693,909 1918 2,945,65,5,403 5,919,711,371 2,974,055,968 1919 3,095,876,582 7,225,084,257 4,129,207,675 This phenomenal increase in a "favorable balance" is the direct result of the European War and the large purchases made by war stricken countries for recon struction. These purchases were made possible by
American loans granted to these governments. Thru these loans and to a lesser extent thru investments of private individuals in foreign funds, the United States has reached the position of a "creditor" nation. The balance in favor of the United States will in the future be a financial, that is to say, an actual one.
13. The value of trade business men make use of the valuable material that is available in government reports and statistical data. In study ing the possibilities of markets about to be entered, a careful analysis of the trade statistics of that coun try will frequently answer many questions and give a clear picture of the requirements of the market.
The most valuable statistical material relating to foreign trade is published in the United States by the Bureau of Foreign and Domestic Commerce. Two publications are issued, the Monthly Summary of the Foreign Trade and Commerce of the United States and an annual report, The Commerce and Navigation of the United States."The first may be purchased from the Superintendent of Documents at Washing ton, D. C., for ten cents a copy. The second is sold for $1.25. The statistics of imports and exports are given in great detail by articles and by countries. The articles are subdivided into raw materials, food products crude, food products prepared in whole and in part, manufactures serving as a basis for further manufactures, manufactures ready for consumption, and miscellaneous.
In addition to these official statistics certain large banks in New York prepare for their patrons advance information from data furnished by the custom house of that port.
Information as to the foreign material available to American business men is contained in the various year books, some of which are published officially, others by semi-official or private agencies. The Mex ican Yearbook, the Chinese Yearbook, and many others contain, besides statistical information, a wealth of miscellaneous information concerning the govern ment and the commercial conditions of the countries with which they deal. For ready reference the Statesman's Yearbook and the Almanac may also be found useful. Greater detail can of course be found in the official publications of the various nations.