174: STATE BOARD OF AGRICULTURE. 



it is strangeh' easy to £?et confused ideas, and it may not be unprofitable to 

 speak upon it briefly in the few minutes that remain. A common notion is 

 that what is called an adverse balance of trade, i. e., an excess of imports over 

 exports, is an undoubted national misfortune, whereas what is called a favor- 

 able balance of trade, i. e., an excess of exports over imports, is looked upon 

 as cause for great rejoicing. In the former case, we are told, the nation is 

 buying more than it is selling; in the latter it is selling more than it is 

 buying. In one case it must be ruining itself like any spendthrift; in the 

 other, like our thrifty neighbor, fast getting rich. To quote a popular writer, 

 "A family earns its own expenses, or more, or decays. A nation sells as much 

 as it buys or decays. This is 'the balance of trade.' When any one can show 

 how a family can earn $900 and pay out $1,000 yearly, and still prosper, we 

 may see how a nation can export 190,000,000 and import 1100,000,000 yearly, 

 and not grow poor." The same idea underlies the following extract from 

 an article in the International Review upon the American export trade :* 



"The most interesting and encouraging event that has occurred in our 

 commercial history for many years is the rapid increase of our exports during 

 the last few years, and their unprecedented excess over our imports since 1875; 

 reversing the balance which our foreign trade has recorded against us for 

 more than four score years. Year after year, and decade after decade, with 

 nearly the regularity of the seasons, or the rise and fall of the tides, the 

 excess of imports over exports has kept steadily on for over eighty-four years, 

 drawing out a long and formidable balance of our international account 

 against us; until at the close of 1875 this adverse balance of mercantile debt 

 had run up to the surprising amount of $1,726,037,547." The changed state 

 of trade has continued, so that at the close of the last fiscal year the excess of 

 exports for the previous eight years amounted to 81,307,253,941. This latter 

 is indeed a remarkable showing of the results of industrial enterprise in this 

 country in furnishing a surplus for the settlement of foreign obligations. 

 The fact is that we have in former years been securing enormous advances 

 from foreign capitalists for carrying on enterprises of various kinds, and not 

 tiie least among these a very costly civil war. We should find upon an examina- 

 tion of international exchanges in recent years, that tliis favorable balance of 

 trade has come about because we have been " taking up our paper," in other 

 words, paying off United States bonds held abroad. It is true that during 

 the war we spent more than we earned; we were borrowing and paying with 

 promises to pay. So, too, before the war, the prevailing balance against us 

 was to be accounted for in part, but only in part, by the fact that foreigners 

 were making investments in this country ; and such transfers of capital are 

 regularly effected through means of bills drawn against commodities exported 

 to this country. Some portion, also of this balance was the effect of the con- 

 stant stream of immigration pouring into this country. Every ship brought 

 capital of foreigners coming to make their homes here. 



A part of the balance also was settled by the surplus product of our gold 

 mines beyond what was required for inoney and in the arts. But taking away 

 tiie effect of these causes, there would have still remained an adverse 

 balance of trade, which represented neither capital borrowed nor capital 

 brought to this country by immigration, but the natural profits of a prosper- 

 ous foreign trade. Strange as it may seem, every nation is prosperous in the 

 long run as it has an "adverse" balance of trade. Every cargo from New 



* Vol. 6, page JO. 



