FOREIGN TRADE OF THE UNITED STATES 375 



covered from the first shock of the news of the European war, a num- 

 ber of ingenious newspaper writers and some men, whose reputation for 

 knowledge of foreign trade conditions is rather widespread, figured out 

 a golden harvest for our manufacturers and exporters. 



Their predictions of great and immediate profits were based on 

 statistics of the trade of the contending countries with the rest of the 

 world — a trade which they prophesied would necessarily fall into our 

 laps. They arrived at their conclusions in this manner : 



The exports of Germany, Austria-Hungary and Belgium amount to three 

 thousand million dollars. 



This is totally cut off. 



The exports of France, United Kingdom and Eussia total five thousand 

 million dollars. 



This will be reduced by say two thousand million dollars. 



Add this two thousand million to the lost trade of the other belligerents 

 and we have five thousand million dollars — which represents our opportunity. 



If we succeed in securing only one half of this we shall double our 

 export trade in one year. Side issues were lost sight of. The fact that 

 of Europe's export trade of some twelve thousand million dollars, two 

 thirds or eight thousand million represent sales of European countries 

 to each other, was ignored altogether. In this connection, the circum- 

 ■ stance that 80 per cent, of Belgium's exports were to European coun- 

 tries and 75 per cent, of the exports from Germany went to her immedi- 

 ate neighbors in Europe is of interest. England alone sold and still 

 sells the bulk of her products to countries outside the eontinent, only 

 35 per cent, of her exports being shipped to that part of the world. 

 The decreased purchasing power arising from the loss of their most 

 valuable markets by other countries and the withdrawal of European 

 capital, which financed a vast majority of the industries and public 

 enterprises of many countries, was not considered. 



" Figures can not lie " is an old adage, but they can be made to per- 

 form most amazing contortions. Let us consider for a moment the 

 application of statistics to the study of a single commodity. Eobinson 

 & Company — for instance — makers of picks and shovels, discover that 

 the Argentine imports, annually, $500,000 of these necessary imple- 

 ments, and that Germany has divided the trade in this line with Eng- 

 land, each sending about $250,000 worth a year. Because of the war, 

 Germany is eliminated — consequently Eobinson & Company have but 

 to slip in with their goods and fill the vacuum caused by Germany's 

 forced withdrawal. 



That is the situation as it appears after a careful study of the offi- 

 cial statistics, but when their representative arrives in Buenos Aires he 

 finds, to his surprise, that while it is true that 500,000 minus 250,000 

 equals 250,000, is it equally true that 250,000 minus 250,000 equals 

 zero. (That last 250,000 represents the diminished purchasing power 

 and decreased demand arising from the same cause which brought about 



